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The E-Myth model

Why every Startup is built seat first: each Role is written down before anyone fills it, an agent fills it, and you hold the approvals.

Michael Gerber's E-Myth says a small business stalls when its owner does every job and writes none of them down. A Startup here starts from the other end: every seat is written first, and an Agent fills it.

The seat, not the person

Gerber's rule is to define the job before anyone does it. Here that definition is the Role contract: why the seat exists, what judges it, its Limits and how much it does alone.

The contract belongs to the seat. Swap an agent for a person, or for another agent, and the seat keeps the same Verbs, Processes and numbers. Role contracts lists every part.

One seat, written down

Take the Billing Specialist on the Finance Team. Its contract fits in six lines:

PartThe Billing Specialist
Why the seat existsSo every finished piece of work is billed, and every bill is collected
What judges itHow many days a bill waits to be paid
Its standardSends every Invoice within one business day of the work being done
What it does aloneRetries unpaid Invoices on the dunning schedule, under a Mandate
Where it stopsRefunds up to $100; a larger refund waits for an Approval
Who it hands toHands off to the Customer Lead, escalates to the Finance Lead

Nothing in it names who fills the seat. An agent can hold it on the first day, and a person can take it in year two, under the same six lines.

Owner, manager, technician

Gerber names three jobs every business needs done at once. Each maps onto the chart.

Gerber's jobWho holds itWhat it does here
Owner, who works on the businessThe FounderSets the Goals, answers the Approvals, rules on every escalation
Manager, who keeps it runningEach Team's leadOwns the Team's Processes and Metrics, answers its seats' escalations
Technician, who does the workEvery other seatCalls the Verbs its Role allows, to the contract's standard

The founder is the only owner. The managers and technicians are agents unless you seat a person.

Who sits in each seat

Gerber's founder does every job first and hands them over one at a time. Here a role agent fills every seat from the first day, because the contract already says how the work is done.

You hold the Approvals, not the seats. Whatever crosses a seat's Limit, and every call the law reserves to a person, comes to you. You can still take a seat yourself, and the contract binds you as it bound the agent: see who fills a Role.

The business is the prototype

Gerber's franchise prototype is a business that runs the same way in anyone's hands. A Startup is that prototype as data: its Teams, Roles and Processes are records, so a Template copies the whole chart into the next Startup.

Each week you work on the prototype, not in it. Read the Role Reviews, answer the Approvals, and change a contract in one sentence when a seat misses.

Next

Part 3 of six chapters on how the business works. Work moves between seats as a Workflow. How a Workflow runs is next, with the Billing Specialist's own as the example.