The E-Myth Revisited by Michael E. Gerber

The E-Myth Revisited is one of the most important books ever written for small business owners and aspiring entrepreneurs. Michael Gerber identifies the entrepreneurial myth — the false belief that most people who start businesses are entrepreneurs — and explains why the vast majority of small businesses fail within the first five years of operation.

Gerber argues that most small businesses are started by technicians who love doing the technical work of their craft but have no understanding of how to run a business. A great chef who opens a restaurant, an excellent carpenter who starts a construction company, or a skilled accountant who launches a practice — all of these people are excellent at their technical craft but have no idea how to be a businessperson, a manager, and an entrepreneur simultaneously.

The solution, Gerber argues, is to think of your business as a prototype — as if you were going to franchise it to thousands of locations. This mindset forces you to create systems, processes, and documented procedures that allow the business to run consistently and excellently regardless of who is doing the work at any given moment. McDonald’s is the model: a mediocre product delivered with extraordinary consistency through brilliant systems.

The book follows the story of Sarah, a pie baker who almost destroys her business by falling into the e-myth trap, and shows how she transforms her operation into a systemized, scalable business. This narrative device makes the abstract concepts tangible and memorable for readers in any industry.