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Michael E. Gerber
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Michael E. Gerber

Why small businesses stay small

Named the trap almost every owner falls into: being brilliant at the work and terrible at owning the business that does it.

USA

Gerber's argument, made in The E-Myth Revisited, is that most small businesses are started by technicians — a good baker, a good plumber, a good designer — who assume that being good at the work qualifies them to run a business that does the work. It does not, and the two jobs are almost unrelated.

The result is an owner who has bought themselves a demanding job with worse hours and less security than the one they left.

The prescription

Work *on* the business rather than *in* it: build the systems, documentation and roles that let the work happen without you. His framing is to build the business as though you intended to franchise it, whether or not you ever would.

What they teach

Technician, manager, entrepreneur

Three roles every owner has to play, and most people are comfortable in one. Recognising which one you avoid tells you what your business is missing, and it is usually the manager.

Document the work so it can leave your head

If a task exists only in your judgement, you can never delegate it and never take a holiday. Writing down how something is done is the unglamorous work that decides whether you have a business or a job.

Build it as if you were going to franchise it

A useful test even if you never sell. It forces the question of whether the business could run without you — which is also exactly what a buyer is paying for.

Where to start

  1. The E-Myth Revisited — The book almost every business owner is eventually told to read. Our own breakdown of it is at /books/the-e-myth-revisited.
  2. emyth.com — The coaching business built on the method.

These links go to their own work. We summarise and point — we do not republish it.

Who it suits

Any owner who is the bottleneck, works in the business every day, and cannot see how that ends.

And who it does not

Repetitive, and the systems-and-franchise framing suits repeatable service work far better than bespoke or creative businesses.

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