Monday, May 18, 2009

Book review: The E-Myth Revisited by Michael Gerber

The E-Myth Revisited (Why most small businesses don’t work and what to do about it) – Michael Gerber

This book looks at why 80 percent of small businesses fail within five years of starting. The mindset of the business owner is looked at and analysed to determine why the business fails. The mindset of the business owner and how they think of their business is a significant factor in the success of the business.

The author introduces Sarah, a small business owner struggling to keep the business running. The author walks through a conversation with Sarah explaining the reasons why her business isn’t working and what she needs to think about for it to work. The author uses storytelling and examples to give the reader a clear picture of a certain situation or problem. The steps in the ‘life’ of the business are considered in detail to give the reader an idea of stages a business must pass through to become successful. Lessons in franchising are considered and the way of thinking Ray Kroc (from McDonalds) used to build his massive empire.

What I gained from reading this book:
This book makes it very clear why many people fail at running their own business. The concept that people should work ‘on’ their business and not ‘in’ it is so important in my eyes now after his explanations. As the author states, this book is not a ‘how-to’, instead it is a ‘what to do and why it needs to be done’. The author strongly believes that ‘how-to’ books don’t work if you don’t know ‘what to do and why’ first.

This book has really got me thinking about issues I had never considered before. I want to one day open up a small business and this book was just what I needed. Through my university studies I have already studied plenty of ‘how-to’ but those studies never considered the ‘what to do’ and ‘why’. Now that I know what I need to do and why it needs to be done I can look again at the how-to books to properly prepare myself.

Although I haven’t started my business yet (it could be years from now), I now feel much more confident in building a successful business because I understand why many people fail and why. This is the number one gain I received from this book, the understanding that three years of business study never even considered. I wish I read this book three years ago.

Extremely insightful to the realities of small businesses and their owners. Identifies the reasons why many businesses fail and what to do to avoid being one of them. The use of storytelling and examples are very good at painting a detailed picture of the concepts to learn.

This book is not a ‘how-to’ so people expecting this may be disappointed. While some people may like the storytelling the author uses, other people may find it distracting. Apart from that the book was very well done.

Recommended for: Anybody interested in small businesses.
I recommend this book for anybody wanting to start a small business of their own and those who have already started one. If you haven’t started yet, this book will give you a great starting point to understand what you need to learn and why you need to learn it. For those who have already started a business, this book will get you to look at the business in a new way that will no doubt improve your chances of success.

Genre: Small business

Overall rating: 9 out of 10 stars

Australians can buy the book by clicking the picture below:

The E Myth Revisited

Where to from here:
After reading this book I would read one of the ‘how-to’ books on specific topics the author mentions. I would recommend reading MBA in a day by Steven Stralser to get an overview of business skills. From there you can go into more detail on each topic.

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