The E-Myth Book; Ch 1-5 Flashcards

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Define E-Myth.

The myth of the entrepreneur. Gerber says most small businesses are not started by entrepreneurs, despite the romantic belief.

What is an Entrepreneurial Seizure?

The moment where a person realizes they can start their own business.

Define the Fatal Assumption.

If you understand the technical work of a business, you understand a business that does that technical work.

What is the 'real tragedy' when a technician falls to the Fatal Assumption?

The business that was supposed to free the technician from limitations of working for somebody else actually enslaves him. Signup and view all the answers

What are symptoms of someone who has an Entrepreneurial Seizure? (Select all that apply)

Exhilaration Signup and view all the answers

Looking at business owners, what is the average balance of Entrepreneur, Manager and Technician?

10% Entrepreneur, 20% Manager, 70% Technician. Signup and view all the answers

List traits of a Technician.

Tinkerer Signup and view all the answers

List traits of a Manager.

Craves order Signup and view all the answers

List traits of an Entrepreneur.

Control oriented Signup and view all the answers

What are the 3 phases of a business's growth?

Maturity Signup and view all the answers

What occurs during the Infancy stage?

The owner is the 'Master Juggler'; trying to accomplish everything. Signup and view all the answers

What occurs during the Adolescence stage?

The owner decides to get help. Signup and view all the answers

At what point does the Adolescence stage kick into effect?

At the point in which the owner realizes that in order for the business to succeed, change has to occur. Signup and view all the answers

Describe the difference between Management by Abdication versus Delegation.

Abdication is the act of abandoning responsibility - or running. Delegation is selectively handing off a task/role. Signup and view all the answers

Define an owner's Comfort Zone.

The boundary within which he feels secure in his ability to control his environment. Signup and view all the answers

What are the 3 courses of action that can be taken once the owner's Comfort Zone has been outgrown?

Going for Broke Signup and view all the answers

According to the SBA, how many small businesses close their doors each year?

More than 400,000 per year. Signup and view all the answers

Describe 'Going for Broke'.

When a company keeps growing faster and faster until it self-destructs of its own momentum. Signup and view all the answers

What occurs during the Adolescent Survival stage?

The owner is consumed by the business - ultimately causing the owner to explode. Signup and view all the answers

Study Notes

E-Myth Overview

E-Myth refers to the myth that most small businesses are started by genuine entrepreneurs, challenging romantic notions of entrepreneurship.
Entrepreneurial Seizure describes the moment when an individual realizes their ability to start a business and believes they can do it better.

Fatal Assumption

Fatal Assumption is the belief that understanding the technical aspects of a business equates to understanding how to run a business in that field.

Technician's Tragedy

The "real tragedy" is when a technician, believing they’ve escaped traditional employment, becomes enslaved by their own business.

Entrepreneurial Seizure Symptoms

Symptoms experienced: exhilaration, terror, exhaustion, despair, representing the emotional rollercoaster of starting a business.

Business Owner Balance

Typical balance for business owners: 10% Entrepreneur, 20% Manager, 70% Technician, illustrating the predominance of technical skills over entrepreneurial vision.

Traits of Business Roles

Technician traits include being a "doer," enjoying tinkering, focusing on present tasks, and having an interest in practical execution.
Manager traits are characterized by planning, a desire for order, focusing on past experiences, and pragmatism.
Entrepreneur traits include being a visionary, a dreamer, seeking control, future-oriented, and craving change.

Phases of Business Growth

Businesses grow in three phases: Infancy, Adolescence, and Maturity.
In the Infancy stage, owners act as "Master Jugglers," with the business identity intertwined with their own.
Adolescence begins as owners realize change is necessary for success, often triggered by a crisis in the earlier stage.

Management Approaches

Management by Abdication involves abandoning responsibility, while Delegation is about selectively handing off tasks to others.

Owner's Comfort Zone

The Comfort Zone is defined as the boundaries where an owner feels secure and capable of managing their environment, with varying limits for Technicians, Managers, and Entrepreneurs.

Actions After Outgrowing Comfort Zone

After exceeding the Comfort Zone, owners may choose to: downsize (Getting small again), take significant risks (Going for Broke), or navigate the pressures of survival (Adolescent Survival).

Business Closure Statistics

Annually, more than 400,000 small businesses close their doors, indicating high turnover in the industry.

Going for Broke Defined

"Going for Broke" characterizes a company's rapid growth that leads to self-destruction due to unsustainable momentum.

Adolescent Survival Stage

During Adolescent Survival, the owner becomes overwhelmed by the demands of the business, potentially leading to burnout or breakdown.

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Description

This quiz covers key concepts from Chapters 1-5 of 'The E-Myth' book by Michael E. Gerber. Learn about the myths surrounding entrepreneurship, the entrepreneurial seizure, and the fatal assumptions that can hinder business success. Ideal for those studying entrepreneurship and small business management.