If you are a small business owner or are interested in investing in your business you have probably heard of the book “The E-Myth” by Michael E. Gerber.

In his book Gerber describes why most small businesses fail and what to do about it. He offers great knowledge and insights about the reality of running a small business. When you start a business you put so much on the line, work harder than ever and often invest your life savings. It’s a huge commitment and you need to make it work. I think this book is an excellent read to help you make your business survive and thrive. Here I share my key takeaways.







The infancy stage – The technician is finally free from a job, but he is constantly working. He starts to work more and more and dropping some balls. The business is the new boss. Then they realise that the business needs to change in order to survive.

Adolescence – The owner decides to hire someone with experience, and this person slowly begins to do take on a number of tasks. Most owners end up practising management by abdication rather than by delegation. The owner becomes more absent and doesn’t know everything that is going on with the business. Until this doesn’t work anymore – either the business begins to decline its performance or the staff member resigns and the business owner is left feeling lost. When that happens some businesses become small again, until eventually the business owner loses interest. Some might keep growing fast until it’s unsustainable. Or they might keep going and burn out.

Maturity – This is not a consequence of the first two phases. A business can be launched as a mature company. This is a business created with the entrepreneurial perspective in mind and systems in place, following the entrepreneurial method. This model looks at a business as if it were a product – what will it look like to the customer? How will it stand out? And it needs a clear picture of the customer. The entrepreneur looks outwardly, while the technician looks inwardly. To the entrepreneur the business is the product. 






1. Your primary aim – what do you value? What do you want your life to be like?

2. Your strategic objective – a very clear statement of what your business has to ultimately do for you to achieve your primary aim. This is the vision of your finished product, and not a business plan.

3. Your organizational strategy – complete strategic objective, then create organizational chart – what positions are needed? What are the responsibilities for each position? Have clear jobs, that becomes clear to any new staff members. Replace yourself with a system.

4. Your management strategy – develop a management system. This is a system designed into your prototype to produce a marketing result.

5. Your people strategy – people want to work for people who have created a clearly defined structure for acting in the world. This structure is called a game. You must communicate this game well to them, linking your primary aim, strategic objective, organizational strategy and the operations manuals. The game has to be genuine, and a game that you would play yourself.

6. Your marketing strategy –  forget about everything but your customer and feed your customer’s personality. The food (sensory input) has to be compatible with the unconscious mind. Consider 2 pillars: demographics and psychographics. This is who your customer is and why he buys.

7. Your systems strategy – including hard systems (unliving things), soft systems (animate, can be people, and ideas),  information systems (information about the interaction between the other two –  like cash flow, forecasting, etc). All those pasts are important, and it’s very important to have a selling system (which is a soft system).


I hope you enjoyed reading my key takeaways. Investing in a business is a huge decision and you want to make sure you are well prepared to make it work. This book certainly helps and gives valuable ideas of how you can run your business like a company.

Do you have your own business? What do you think about Gerber’s ideas? Let me know in the comments below 🙂

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