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What I Learned from Michael Gerber in 1986

Written by Gary North on June 6, 2015

Twenty-nine years ago, I bought a book by Michael Gerber. The book had a captivating title: The E-Myth. I did not know it at the time, but that book was to become a classic in the field of business start-ups.

I was so impressed by the book that I invited him to speak at one of my conferences. It is always a little risky to do this. If you find an author who has written an exceptionally well-written book, you usually find that he is a competent speaker, but not a spellbinder. In Gerber’s case, I hit the mother lode. He was one of the most effective speakers I ever brought to one of my conferences. I invited him back the next year.

I did a video interview with him, but unfortunately I’m not able to locate the original copy. He was one of those interviewees who make the interviewer look good. The interviewer asks a few questions, and the interviewee just keeps rolling. Also, he never says “um.”

I have not picked up that book in 29 years. I am now going to summarize the book. With almost any other book, I would hesitate to do this. But that book profoundly shaped my thinking. I want to give you its thesis, 29 years later. I don’t have to review it. It is indelibly etched into my memory.

1. When you start a business, you must recognize that this business has two aspects: job and business.

2. What distinguishes the job aspect from the business aspect is this: a business can be franchised. A job cannot be.

3. If a business cannot be franchised, most of the time and money that you put into the business to build it will be lost when you retire or die.

4. To keep this from happening, you must design the business, before it opens, to be capable of being franchised. This way, the business creates capital value: self-sustaining income. Capital value can be capitalized: sold.

5. A successful franchise operation should be capable of being cloned by somebody with minimal training. You provide the training materials.

(For the rest of my article, click the link.)

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