With The E-Myth Contractor, Michael E. Gerber launches a series of books that apply the E-Myth to specific types of small businesses. The first is aimed at contractors.This book reveals a radical new mind-set that will free contractors from the tyranny of an unprofitable, unproductive routine. With specific tips on topics as crucial as planning, money and personnel management, The E-Myth Contractor teaches readers how to:Implement the ingenious turnkey system of management-a means of creating a business prototype that reflects the business owner's unique set of talents and replicating and distributing them among employees and customers.Recognise and manage the four forms of money-income, profit, flow and equity.Harness the power of change to expand the company.The book also provides help on a larger level, leading readers towards becoming business visionaries by relinquishing tactical work and embracing strategic work, by letting go to gain control. Once put into action, Gerber's revolutionary ideas promise not only to help contractors build successful businesses, but successful lives as well.

Michael Gerber: founder and CEO of E-Myth Worldwide

The E-Myth Contractor
Why Most Contractors' Businesses Don't Work and What to Do About It

Chapter One

The Story of Richard and Anne

I didn't have to invent lies—my tongue did it by itself, and I was often astonished at how clever and farsighted a tongue can be.
"A friend of Kafka"
Isaac Bashevis Singer

Every business is a family business. To ignore this truth is to court disaster.

This is true whether or not family members actually work in the business. Whatever their relationship with the business, every member of a Contractor's family will be greatly affected by the decisions a Contractor makes about the business.

Unfortunately, unless some family members are actively involved in the business, many Contractors tend to compartmentalize their lives, seeing their business as separate from their family. These Contractors see their business as a job, and therefore none of the family's business.

"This doesn't concern you," says the Contractor to his wife.

"I leave business at the office and my family at home," says the Contractor, with blind conviction.

And I say with equal conviction: "Not true!"

In actuality, your family and business are inextricably linked to each other. Believe it or not, what's happening in your business is also happening at home.

Consider the following, and ask yourself if each is true:

• If you're angry at the business, you're also angry at home.

• If you're out of control in your business, you're equally out of control at home.

• If you're having trouble with money in your business, you're also having trouble with money at home.

• If you have communication problems in your business, you're also having communication problems at home.

• If you don't trust in your business, you don't trust at home.

• If you're secretive in your business, you're equally secretive at home.

And you're paying a huge price for it!

The truth is that your business and your family are one—and you're the link. Or you should be. Because if you try to keep your business and your family apart, if your business and your family are strangers, you will effectively create two worlds. Two worlds that can never wholeheartedly serve each other. Two worlds that split each other apart.

Let me tell you the story of Richard and Anne.

Richard and Anne were married, with two children. They lived near Sacramento, California. They dearly loved each other, were active members of their church, participated in community organizations, and spent "quality time" together. All in all, they considered themselves one of the most fortunate families they knew.

Richard had worked as a framer for 8 years while diligently studying at nights for his Contractor's license. When he finally had his license in hand, he started his own home-building firm.

Before making the decision, he and Anne spent many nights talking about the move. Was it something they could afford? Did Richard really have the skills necessary to make the business a success? Was there enough business to go around? What impact would such a move have on their lifestyle, on the children, on their relationship? They asked all the questions they needed to answer before going into business for themselves.

Finally, tired of talking and confident that he could handle whatever he might face in business, Richard committed to starting his own home-building company. Because she loved Richard and did not want to stand in his way, Anne went along, offering her own commitment to help in any way she could.

That's how Best Construction, Inc. got its start. Richard took out a second mortgage on their home, quit his job, and set up shop in their garage.

In the beginning, it went well. A building boom had hit Sacramento, and Richard had no trouble getting framing sub-contracts from the hard-pressed builders he knew in the area. His business expanded, quickly outgrowing his garage.

Within a year, Best Construction employed four full-time framers. It also employed a bookkeeper named Robert to take care of the money. A young woman named Sarah handled the telephone and administrative responsibilities. Everyone worked out of a small office in a strip mall in the middle of town. Richard was ecstatic with the progress his young business had made.

Of course, managing a business was more complicated and time-consuming than working as a framer. Richard not only supervised all the jobs his people did, but he was continually looking for work to keep everybody busy. In addition, he did the estimating, collected money, went to the bank, and waded through illimitable piles of paperwork. Richard also found himself spending more and more time on the telephone, mostly dealing with customer complaints and nurturing relationships.

As the months went by and the building boom continued, Richard had to spend more and more time just to keep things rolling, just to keep his head above water.

By the end of its second year, Best Construction employed 12 full-time and 8 part-time people, and had moved to a larger office downtown. The demands on Richard's time had grown with the business.

He began leaving home earlier in the morning, returning home later at night. He rarely saw his children anymore. But Richard, for the most part, was resigned to the problem. He saw the hard work as essential to building the "sweat equity" he had long heard about.

Money was also becoming a problem for Richard. Although the business was growing like crazy, money always seemed scarce when it was really needed. He had quickly discovered that Contractors were often slow to pay.

As a framer, he had been paid every week; as a Sub-Contractor, he often had to wait—sometimes for months. Richard was still owed money on jobs he had completed more than 90 days before.

When he complained to late-paying Contractors, it fell on deaf ears. They would shrug, smile, and promise to do their best, adding, "But you know how..."

The E-Myth Contractor
Why Most Contractors' Businesses Don't Work and What to Do About It. Copyright © by Michael E. Gerber. Reprinted by permission of HarperCollins Publishers, Inc. All rights reserved. Available now wherever books are sold.

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Excerpted from E Myth Contractor: Why Most Contractors' Businesses Don't Work and What to Do about It by Michael E. Gerber
All rights reserved by the original copyright owners. Excerpts are provided for display purposes only and may not be reproduced, reprinted or distributed without the written permission of the publisher.