Real Estate Investor · Austin, TX · Member since 2009 · 118 posts · 76 votes
E-Myth, written by Michael Gerber, discusses why most small businesses fail. While it's not a real estate focused book, it explains why most real estate investors fail. There are three parts to the successful small business person: the technician, the manager, and the entrepreneurs. Most of the people who get into their own business are the 'technicians' who do all the day to day work. However, they don't create a vision or plan, nor do they create systems or processes. And when things hit the fan, they end of quitting. A real eye opener and explained very well.
This is an excellent book as is the sequel, The E-Myth Revisited. As I read it I felt like the author must have been looking over my shoulder as he wrote it. A must-read for anyone who owns or wants to own his or her own business.
This is an excellent book as is the sequel, The E-Myth Revisited. As I read it I felt like the author must have been looking over my shoulder as he wrote it. A must-read for anyone who owns or wants to own his or her own business.
I've only read the E-Myth revisited. That was probably one of the 5 best books on small business I have ever read! I like how everything is based on a system and roles within the system...something that plagues small businesses all of the time.
Looks like we are all in agreement... Michael Gerber has some great insight and the E-Myth revisited provides insight that every entrepreneur (that would be us real estate investors) must understand in order for our businesses to grow.
You know, you emphasize a good point. Too few real estate investors really consider themselves entrepreneurs or true business owners. Most are 'technicians'. As Michael Gerber puts it, "The technical work of a business and a business that does technical work are two totally different things.'
In a small business like real estate where we are dealing with complex situations and deals. I think this makes sense in the Pie stand business, but to replace ourselves in our real estate business would be risky and for most of us, not cost effective.
It would cost me at least 75k a year and more in training to hire someone who can replace me.
Jeff, while you have a hugely valid point, I think we can all look at what we do and take out the "tasks" that must get done, but could be done by anyone. (i.e. signs, marketing, posting ads online, stuffing envelopes, running paperwork around for signatures) and can have someone else do that while we focus on the $ producing activities like lead generation, appointments, negotiations.
That individual may only cost 15-20k a year but could possibly double your production or even triple it since you are free to create more business or handle the deals that really need you attention while you are still filling the pipeline with future business. While I don't know your particulars, but if you are creating 100k in profits a year, I would love to pay someone 20k to make an additiona 80k and releiving the tasks associated with increasing that revenue.
In the end, I think Gerber forces us to find a way to put our efforts into motion without our direct and constant imput, to systemize everything. To replicate our businesses. To enable us to open up a new market if we so choose.
Imagine how wonderful that would be. To know that your main operation is running, and you break off into a new market, implement systems, rinse and repeat.
Often I think our egos get in the way, mine included, that we think our business is successful because of our direct effect in it. We even put our names in the titles, which makes it even harder to break away.
If I am able to handle the workload, I would rather pocket the 20k and post ads online. If you are a realtor this might make a ton of sense, but it my position, everyone I hire cuts my profit by a lot.
I dont follow sports and dont have a family so I have 20 more hours I can work a week comared to the other guys. To each his own.
Jeff, IMO you have a valid point and it depends on other factors not mentioned here. Others have made very good points and Paul is probably right on in his article, but drop back and punt...
What is your goal? Jeff, you might be able to hire some foreman types, develop systems that can be accomplished by others, expand in different geographic areas and grow your business to a multi-million dollar operation, taking contrcats with with major banks for all the ORE they obtain, agree to buy it all right after foreclosure. While in the end, you may become very wealthy doing so, there will be a growing period that takes you to that point during that period you might not be so happy....is it worth it to you?
I agree with the others and in the total concept, don't forget it is also a choice. I grew my business to the point of being an admisntrator of my overall business and had others cranking the work, had I kept going I might have made more money, but that was not my goal, doing the deal, having hands on and assisting people was more important to me than having brain damage as an adminstrator/CEO.
Many other factors come into play, your age, family, where you do business and the market potential....tons of considerations in setting your business goals.
I agree with Jeff. I think how we operate our business is really a matter of personal preference. There are some valid points in E-Myth. Though, some may have different styles and ways of doing things when it comes to running their business.
I gave this to my wife as she was starting on her music business. She loved it, bought it in Japanese to make sure she had all the fine points down and applied it religiously in every decision she made. The result is 10 locations, autonomous staff and a new-born son (1 week old!) which she can look after while ticking things over from home. EXCELLENT book.
I was intrigued by this quote by Michael Gerber in E-Myth (page 199). Not quite sure what he means though. How do you guys interpret it?
"There is no such thing as undesirable work. There are only people who see certain kinds of work as undesirable. People who use every excuse in the world to justify why they have to do the work they hate to do. People who look upon their work as a punishment for who they are and where they stand in the world, rather than as a opportunity to see themselves as they really are. People like that don't bring life to the idea of the work they do; they bring death to it."