Ep 300: The Worlds #1 Small Business Consultant & What It Takes To Love & Be In Business For Life with Michael E. Gerber

What does it really take to be in business and love it for decades upon decades, even up into your 80s and 90s?

Hi, I'm Jaryd Krause. I'm the host of the Buying Online Business podcast and today I'm speaking with Michael E. Gerber who is the mega seller of the book, The E Myth Revisited, which is the New York Times bestseller for two decades. Michael has written over 30 plus books now and other coaching books and Inc Magazine has gone on to quote Michael E. Gerber as the world's number one small business guru.

Now I've read this powerful book, the E-Myth, which was revisited and co-authored with my friend David Janine's who helped Michael rewrite this and he's been on my podcast many times as well. Now in this podcast episode, it's such a delightful episode. We talk about how Michael was able to grow the world's largest small business consulting firm. We talk about the alarming rate of businesses that fail and most importantly, why they fail and the reasons.

And then Michael talks about the eight step path to business success, he's been used across many, many verticals in business, many, many different business models for all different types of shapes and sizes of businesses. We also talk about the, when the eight step process works time and time and time again, what are the things that stuff this up?

And typically it's the people that are running the system that's that's eight step path and typically it's our emotional blockages and certain things that pop up in the journey of being a business owner, which is totally normal.

So I asked Michael what happens, know, to when people, you know, get in their own way, what are the things that you do to help coach people through those blockages, which Michael has a great answer for. We also talk about Michael's goal to get to 190 plus books written and how they're actually gonna pull this off.

Most importantly, what I think is super valuable in this conversation with Michael is his passion for business and you can see it and you can feel it within him. And he's in his late 80s and I ask him, is your actual secret?

How is it possible to love business this much? Now this is such a valuable episode. Michael is an absolutely lovely and amazing human being. I'm sure you're love it. This is an episode with one of the greatest business minds ever.

Check it out.

Michael, thank you so much for being on the podcast and I'm massive fan. was just telling you off air. read your book many years ago before I even knew David Janis that helped you with the evening three visited. And yeah, I feel honored to have you on the show and thank you for your time.

I'm delighted. I probably could suggest you read it more recently. Absolutely. I don't know whether you know it or not, but I published written and published 35 books. I have seen that. I did not realize how many you have published and you've got the e-myth, you've got the e-account, you've got many different versions of that book for different. Is it what I say?

Am I correct in saying that is for each different type of service? We have what I call the vertical market book and those are co-authored by individuals who applied the e-myth to their practice and grown their companies quite exponentially.

So there's the EMIT Powerpacks, the EMIT Attorney, the EMIT Accountant, et cetera, et et cetera, et cetera. There are 199 vertical markets when we get done. Right now we have 24 of them. Wow, so you're going for 199. We're going for 199, yep. And each of those will be a franchise. Franchise with that particular person who co-authored with you?

Yes, well we're gonna roll that vertical market bulk out to everyone in their industry. So every pilot factor, to every accountant, to every landscape contractor, to every HVAC contractor, etc. and so forth. And so we are quite ambitious about the rollout of that. we believe it's going to be a significant player in the field of what I call the smallest of the small.

Absolutely. Hitting hitting so many verticals. What was it that bridged the gap from having the EMF to be for all businesses to specializing in each one? Where did that happen? Well, very, simply, we have sold over two and a half million copies of the EMF revisited. But as we've done that, individuals come and ask, have you done that for counterpractors? Have you done that for HVAC contractors?

Have you done that for et cetera and so forth. And so of course, the answer is yes, of course we have. And then we said, well, why not publish a book specifically for that vertical market so that a HVAC contractor will be able to relate to the emiss as it's been applied to his or her practice. And that's how it started. It actually started by an attorney actually coming up and said, have you ever written the book for attorneys? And I said, well, no, but lots of attorneys have replied and he said, I'd love to co-author that book. That's how it started. Cool. Cool. Cool. And we said, well, fine. And it just gets so much more specialized, right? Like those stories from an attorney, what their practice looks like, because each business is so different, right?

Even an attorney business to an attorney business, there's differences in how they structure the model and stuff like that to a certain degree. But it's very, very specialized in that, in each vertical. It's interesting that you say that because what I have taken the position that every one of them are the same.

An accountant obviously is different than an attorney, an attorney is different than a chiropractor. But the only difference is their specialized skills. The business is not different. And so what you'll find to be interesting is that my chapters in every single one of those 24 now vertical market books, my chapters are identically the same.

Their chapters are each unique. So my chapters are identical to the same. It doesn't matter if you're an attorney, if you're an accountant, if you're a counter-practice, etc. and so forth. This is the logic underlying the creation of that business. Of course, an attorney does this and an accountant does that and a counter-practice does the other thing. And it's specialized skills of each of those vertical markets that are different.

And so we've made a very, very clear point that the E-Myth is applied to every single one of those vertical markets before we ever published a vertical market book and had this profoundly positive impact upon every one of those industries, every one of those professions. I can see the impact. But listeners, it's obviously what you're doing is you're building out an E-Myth and then you're specializing in each business model. It be a business top.

By helping them get out of the day-to-day, the operations like you talk and become a business owner, the business becomes a lot more scalable. And then to use those systems to scale that business rather than the business owner having to operate and be the technician in the business. Being able to serve more people in a better way. It's just a beautiful thing that you've created. This is how you do the law. This is how you do the business of law.

This is how you do chiropractic. This is how you do the business of chiropractic. The business of law and the business of chiropractic are identically the same. one, system two, system three, system four, et cetera, et et cetera. But the practice of chiropractic and the practice of law are obviously different. So obviously then, how do you practice law? How do you practice chiropractic? How do you practice psychiatry?

How do you practice medicine? And how do you practice the business of psychiatry? How do you practice the business of law, et cetera and so forth? Our position is in identically the same way. Yeah, I wanted to ask you around that. Having it be identically the same way in how you practice that. Some people might be stuck in their business and thinking, all right, I want to, and they read the book. Let's just say for law.

How do they take what they've got down, that they're working in the business and as an example, they have this dream of not working as much in the business and being able to scale it and serve more people and then work backwards from that dream to where they are now.

I know the whole book is about this, but what are some of the things that people do really, really well and what are some of the people that start up when they're trying to create these systems and processes within their practices?

In our experience, we've been doing this for over 40 years. In our experience, they're not doing anything well. And when I say that, understand what I mean by that. 97 % of all small businesses fail before they reach their 10th year. It's alarming. 97 % of all businesses fail before they reach their 10th year. Business is a tragedy. And it's a tragedy because nobody knows how to do it. Now hear me when I say nobody knows how to do it.

Elon Musk says only 2 % of all companies succeed. Elon Musk says only 2 % of all companies succeed. Tim Jones said only 1 % of all companies succeed. Is that consistently true? And each of these extraordinary entrepreneurs say the very same thing. So what's missing in this picture? We don't know how to do it.

We do. And so we teach them how to do it. Step one, step two, step three, step four, et cetera, et cetera. I call it the eight-fold path. Essentially, I'm saying that every entrepreneur, two entrepreneurs, is eight different people. They wear those eight different hats, right? A dreamer, a thinker, a storyteller, a leader, a designer, a builder, a launcher, a grower. The dreamer has a dream.

The thinker has a vision, the storyteller has a purpose, the leader has a mission, the designer has a client fulfillment system, etc. So I'm saying there's a methodology for all this. And until one learns that methodology and applies that methodology, it's going to fail.

I'm saying that methodology is the same whether you're an accountant, an attorney, it doesn't matter. So to learn that methodology is crucial. And we teach that methodology first to walk somebody through the process, call them the eightfold path, the eight steps, that's crucial. So we walk somebody through those eight steps, 90 minutes for each step, to introduce them, to introduce you to those eight tests, those eight personalities.

So you can say, I have a dream, I have a vision, I have a purpose, I have a mission, I have a job, I have a practice, I have a business, I have an enterprise. So what is your dream? My dream to transform the state of small business worldwide. So what is your vision? To invent the McDonald's of small business development services. So what is your purpose, et cetera, and so forth and so on and so forth?

I'm simply saying we walk you through that process and as we walk you through that process something happens. We create the platform upon which a great growing company is designed, built, launched and grown. And in the process of doing that something magical happens.

It's amazing to take it from like a 97 % failure rate for businesses in their first year to having that significantly decreased by using the right, wearing the right hats and understanding how to execute all those eight. What is the dreaming room? You've got the online dreaming room. Tell me about that. What is it? How does it work? What does it look like? The first four steps. I have a dream, I have a vision, I have a purpose, I have a mission.

What is a dream? It's the great result there to produce. What is the vision? It's the form the company needs to take in order to realize that dream. What is the purpose? It's the story that resides at the very heart of that enterprise. And what's the mission? The mission are the steps one needs to take in order to lead someone through that process.

The dreamer, the thinker, the storyteller, the leader, that's the dreaming room. Dreaming room one. Dreaming room two is the job, the practice, the business, the enterprise. What's the job? It's your client fulfillment system. What's the practice? It's your client acquisition system your client fulfillment system, which I call your three-legged stool. Your three-legged stool is your franchise prototype.

Essentially, I'm saying that every small business, a franchise. What kind of a franchise? A business format franchise. Why a business format franchise? Because it's crucial to create the turnkey business you're setting out to create. Once having created that turnkey business, it becomes the turnkey enterprise to the business is your management system to seven turnkey practices plus the turnkey management system.

What's an enterprise up to seven turnkey businesses plus the turnkey leadership system. So the whole path creates the prototype for what I call your great growing company. You got to build the methodology, the system on which your great growing company is going to be designed, built, launched and grown. That's a process. And the turnkey process, every single person can walk through.

With this turnkey process, you're putting human beings into this turnkey process. And I've noticed this myself for me with a dream, a vision, a purpose and a mission, those first four. And people in a similar sense when they're acquiring a business is, you know, have your dream, your vision, your purpose, your mission and the steps to go away and do it. And it's like anybody that wants to achieve anything.

As human beings, we have things that pop up and the system works, right? Like the system, like what you've built, it works and it can work for everyone, but everybody's different because we have our own things and emotional blockages and things that get in the way. Do you speak to that and help people work through some of that stuff because there's so many blockages as human beings that get through this.

Like what are some of those major ones that people face that's... And essentially to work through that or just simply say don't do that. Right. It's like the power of now, right? It's like the power of now where Eckhart Tolle says if you're just holding on to this thing, don't just drop it. It's as simple as that. And then people have their own stories around, well, I can't because they have a narrative around why they can and can't do things.

Yeah, it's not that stupid because it isn't going to get you anywhere. Right. So it's not that stupid. Let's go back to a dream, a vision, a purpose, a mission. What's your dream? What's the great result you're here to produce? Great. Let's say that you got to know because until you know, you ain't going anywhere. And we're not going to step two until we complete step one. And we're not going to step three until we complete step two. And I'm not going to step four until we complete step two.

It's that clear a mandate. Right. And what I found is similar thing is before anybody starts any of my programs and courses and goes through like the before they go through the how to I guess of it, like you've got your vision, your purpose, or so your dream vision, purpose and mission.

Those first two are probably the most crucial thing that I think when people butt heads against some of their things that their stories and their narratives like, why I can't do this or it's too hard.

whatever the story is, I don't have enough time, don't have enough money, and all those sorts of things that may be popping up for different types of people. It's coming back once you have that dream and that vision.

It's when you come up against those hardships, it's like part of that vision and that dream has been lost and sort of put on the back burner, but when you re-remember it, then you get the fire in the belly to push through. Is that what you've seen and you always refer people back to start to re-remember their dream and mission?

Yeah.

We're gone.

Exactly. Right.

Or we're done because we're not going anywhere. The problem with most coaching is allow the client to take them where the client wishes to go. I don't, I don't because they're not going to take me anywhere.

They're not going to take me anywhere. That's of any value whatsoever. Cause they don't know how to do it. Once you come to the realization that they don't know how to do it. And because they don't know how to do it.

They've created the living hell they're living in and everybody fails because I know that everybody fails. I don't know where they want me to go. I go where I know they need to go. And I persist with that. I don't persist with that. They're going to fail. Like my capsule teacher when I was 11 years old going on bus from Anaheim, California to Hollywood, California, had to take two buses.

I'd get to Merle's studio and Merle would have me pick up my saxophone, no not that way, this way, no not that way, this way, no not that way, this way. And he would do that and do that and do that and do that until I did it this way, his way. Why his way? Because he knows how to do it. And that's why I'm going there. If I were going to do it my way, he'd say go home.

No more. You're wasting my time. said that to me when I was 11. He said that to me when I was 12. He said that to me when I was 14. He said that to me when I was 16. He said that and said that and said, go home.

I don't want to see you again. Understand? Go home. I don't want to see you again. Why? Because it's a waste of my time. That's the big thing, right? Is you've got a lot of coaches now that start out coaching and then doing it for a financial gain for themselves.

So they will take the clients that they don't necessarily want to work with, they need to work with, and they will deform, mold and change their system to suit them because they need those clients, right? But the best coaches, the best mentors, they have a system, they have a process, they know it works. If people come in and they use it and work it, they're gonna get results.

If they don't, they should say, away because it's wasting not just their time, but wasting that person's time. They're each person can be spinning their wheels in front of each other, short, you're here because I know something you need to know. That's what a great coach says. You're here because I know something you need to know and you know you need to know it. The point you decide you don't need it, goodbye. I teach what I know works. I don't teach what doesn't work. And I've spent a lot of time, a lot of energy learning what works.

So if you want to learn what works, do what I'm asking you to do. If you don't, find somebody else. It's just so simple and so straightforward. I think there is too much fluffering in how things work and how things don't work, especially as society changes and gets more politically correct and adhering to a bunch of different things, which we won't get into that route.

But I wanted to ask you, since we do talk about buying and selling online business a lot in this pod, have you bought a business before? I know that you're very into helping people with the start phase and the grow phase and scale phase. Have you ever bought a business? Have you ever sold a business in epsilon one?

I want to have a dog. Just do one. Just do one. I like that, right? How many of you have been in business now? It's like decades. Is it more than four decades? Four? How many years have you been in business now? It started in 1977.

Okay.

Yeah, so multiple decades and multiple decades. I love it. And I'm now I'm now 88 years old. I love that. And to hear you speak with the fire in the belly and the passion that you have is just super inspiring for people. I know a lot of people just, you know, want to get into business just to make money, right? And yeah, business can make money, but there's so much more to be done in business and just money. And it can be so fulfilling. And it seems like you really love what you do.

What are some of the things that you've learned along your journey that have had you stay in the same business, just do one business like you say, and still have this level of excitement for it? I started in 1967. I started with one very, very clear thought in mind. The most successful small business in the world is McDonald's. What was it that Ray Cross did? Starting at age 52.

Starting at age 52, never graduated from high school. So obviously he never went on to college. He was a peddler of malted milk machines. So what did Ray Cross do? What did he know that nobody else seems to know? You've got to understand when you think about it, McDonald's is over 40,000 stores. The average franchise company has fewer than 20 franchises.

What is it?

That Ray Kroc did that nobody else does. Very, very, very simple. Very, very, simple. First of all, Ray Kroc went to work on McDonald's, not in it. He didn't work in the store. Nobody else does. Ray Kroc had two offices from day one. He had his corporate office and he had his first store. And he went to work on that store, didn't work in that store, to perfect that store before he ever opened store number two.

So the very first thing was to protect that store, that first store, that first office before you open up office number two. What do we mean by protect that first store? The word turn key. Turn key lives at the heart of McDonald's. Every single one of those doors does exactly the same thing.

in exactly the same way, for exactly the same reason to produce exactly the same result. I learned that. So that grows me to learn how to do that in a business that was completely unlike McDonald's, small business consulting. So I started a small business consulting company to mirror exactly what Ray Kroc did at McDonald's. That's how I started.

And I started with a dream, a vision, a purpose, and a mission. My dream was to transform the state of small business worldwide. My vision was to invent the McDonald's of small business development services. My purpose was to tell a story on which every great growing small company would depend, would live, would thrive.

And my mission was to lead those small business owners forward. Dream, vision, purpose, mission. Dream, vision, purpose, mission. Now what? Now my client fulfillment system. Now I had to create my McDonald's of my operating system of small business development services, my operating system of small business development services, my turnkey prototype of small business development services, my McDonald's store.

Then I had to create my client acquisition system. What was my client acquisition system? Knocking on doors, calling on every business in the neighborhood and inviting them to a pre-seminar. What was that pre-seminar?

He frustration in a small and growing business and what to do about them. And the guy who called on every small business had a script and he memorized that script or he never left my office. And he memorized, hi, I'm with and this is how you make a hamburger. This is how you make a pie. This is how you make a burger. This is how you make a pie. This is how you put the top on.

This is how you put the bottom on. Like this, like this, like this, like this. And kids can do it. So another very critical part of this is we did not hire professionals and consultants. that's cool. like this. Corporation, we hired kids. We created a turnkey solution to every problem in a small business. This is how you do it. This is how you do it. This is how you do it.

And every one of our consultants memorized the script. It was insane, Jared. Nobody thought you could do what I set out to do. It was impossible, but we did it. So what did we do? We simply mimicked McDonald's. We became the McDonald's of small business development services.

That's amazing. Congrats.

And so at what stage did you, so you built out your dream, vision, purpose, mission, and then you built out the backend of it, you your operations and your client acquisition. Then the lead generation, then the client acquisition system, the franchise prototype, and then replicating the practice, which is the franchise prototype to create a business up to seven turnkey practices comprise a business plus a turnkey management system up to seven turnkey businesses, 49 turnkey practices, create an enterprise because the turnkey leadership system, I'm saying this to you, I say this every single time I speak about this. Why?

Because every single time we did it like this, and therein resides the secret to it, and therein resides the passion to it. Because nobody on the planet has ever done that. Congratulations. And so how, what did it look like from going from creating the franchise to multiple franchises and many sort of franchise. have franchise.

We had to learn and learn and learn and learn. We made every mistake anybody could imagine making. We failed, we succeeded, we failed, we succeeded, we failed. It's been just a presence all these years. I've literally been practicing what I'm talking about. Not growing a great growing enterprise, but practicing what I'm talking about and teaching it. Practicing, teaching, practicing, teaching, practicing, teaching.

That's what has inspired me all these years. past decade, I left Emeth behind. This past decade, I created Michael E. Gilbert Company. And Michael E. Gilbert Company was not to grow a great company, but to design, build, launch, and grow the new Emeth. Over the past decade, I've been working on designing new methodology to take us beyond Emeth to truly, again, transform the state of small business worldwide.

I've now written and published 35 books. 24 of those books are the vertical market books. But a number of those books are Awakening the Entrepreneur Within, Beyond the E-Myth, E-Myth Mastery, et cetera, et et cetera. And as you read those books, each of which takes a different position, you'll learn so much, Darrin.

about what I've learned and what we've done. Going to school. So, yeah, congratulations. So what was the purpose of leaving the E-Myth behind and then Michael E. Gerber Company is with the books?

So seems like the books are like the client acquisitions, really. That's a very personal thing because I was divorced to my now ex-wife. It's a long story. I've written about it. messy. But it's not something I want to talk about here, but just understand that I left E-Myth behind.

I still own close to 50 % of Emus, but I haven't spent any time in Emus for over a decade. New, 20 years now. My new wife, Luz Della and I have created Michael E. Gruber companies and created a whole subset of new tools and processes to do what I call transforming Emus. That's cool. That's cool. I've heard great things about your wife from David who has said it's absolutely amazing to work with her and you.

So yeah, very happy for you guys and where you're going and just the level of passion you guys have for this is, it's just so inspiring for people that people can see that you can be in business for a lot longer than a decade and just sell and then just do nothing. mean, yeah, I'm sure you wouldn't need to do this. Is it because you just love it? is it because you just get so much fulfillment from it? How does this work? What does this look like for you?

Steve Jobs said in one of his last speeches, it's the passion. But when he spoke about the passion, he wasn't talking about the passion to serve. He wasn't talking about the passion to grow. He was talking about the passion to create. It said in Genesis, born in the image of God, I've added to that, born to create, and I've added to that, born to create a world fit for God. We're here to create.

And there is where the passion comes from. To create, to create, to create, to create. And as you begin to absorb that, you begin to appreciate that, you realize that I'll be creating for my very last day, because that's what I love. And I spend all of my time creating. like how you mentioned Steve Jobs said, and you're with it as well, it's not about serving first. seems like, as I hear you say, creation is what we're doing.

Whole life, it's a natural thing that we're doing is we're creating a life and we're building a life and we're always creating things in our life. But service, like when we create in a way that's a filling to us, it can serve others. So service becomes secondary to creation, right? We always put ourselves first, like put your air mask on in the airplane, serve yourself first, which is through creation, which is also going to allow you to, that just your cup full can spill over into others.

Where it seems like in my age and decade where I'm at in business is a lot of people are service first and not really filling up their cups first, which is a dangerous thing, right? Because how low are they going to do four decades or more in business if they're doing it that way? He was consumed by his desire to create. Everything he created served. It wasn't the serve that drove him, but the creation that served him.

And so when you begin to understand that, born in the name of God wasn't born to serve, God was born to create. Create what? Everything. And when you begin to understand everything, everything to do what? To create and to continuous process. It's not the mountain you're climbing, it's the process you're evoking. And as I do this, something new occurs.

And as I do that, something new occurs. And something I just do the other, something new occurs. And it's a constant process, constant, it never stops. And because it never stops, that's where I find my passion. My passion is the constant pursuit of creation. It's nothing more exciting, more than the discovery of something new. I'm with you all the way. That's beautiful. Creation is so fulfilling.

And I think we, need to tuck into that, especially when we've, I don't know, conditioned throughout society to be put through these different systems that may not be help us or aid us in creation. Whereas when you tap into that, creating in your business, creating in life, so much more fulfilling.

So Michael, thank you so much for your time. It's truly inspiring to see what you built, what you continue to build and how you continue to create and what that does for everybody else. So thank you so much for your time.

You're late. Absolutely.

So we'll put a link to michaeletgerbercompanies.com. Is there anywhere else we can send people that they can go and check out?

what you're up to with this, what you're big about. They can reach me at michael at michaeliegerber.com. Just reach out, I'll be here, God willing, and I'll engage them in the grooming room.

Sounds lovely. Thanks again, Michael.

Thank you everybody for listening.

Thank you. Love you too, Bye bye.

You too. Bye.