This is a simple, yet poignant story, about Sarah, a business owner who Michael E. Gerber introduces in the first chapter of his bestselling book, The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It 

See the young Woman Baking Pies.

See the Young Woman Start a Business Baking Pies.

See the Young Woman Become an Old Woman.

Sarah, an overwhelmed, overworked, three-year business owner of House of Pies, (made up name), receives an education about what makes businesses successful, as we all do, when reading The E-Myth Revisited. By the way, E-Myth stands for, Entrepreneur-Myth.

In this article…

I will share 3 of the 6 lessons for building a business that actually works which any new entrepreneur who is thinking about starting a business as well as those who have already taken the plunge into small business ownership might find useful. These lessons reflect the learnings I’ve taken from Sarah’s example as well as from entrepreneurs I’ve interviewed recently who are small business owners.

Ready for lesson 1?

Lesson 1—Yikes! A lot of small businesses fail. 

The education begins with a projection about the one million businesses that open yearly (I’m using statistics from 2013) …

–30% will close in the first year;

–Of those who survive the first year, 70% will close in five years;

–Of those who survive the first five years, another 80% will close in ten years,

–Of one million businesses, in ten years…42,000 thousand businesses survive or 95.8% close.

Sobering, yes?

The good news is that while the statistics are daunting and Sarah, the overwhelmed baker has a tearful moment while Mr.Gerber interviews her (spoiler alert), Mr. Gerber’s lessons champion the small business owner with an alternative approach for surviving and thriving as a business.

Those lessons are yours and mine as well.

Don’t be one of the businesses that close.

Lesson 2—Many new businesses are started by skilled technicians who want to continue to work as a skilled technician…Is that you?

Where were you before you decided to start your business? Or, if just thinking about starting a business, where are you now?

Most people, like Sarah and myself included, probably you too dear reader, were working for someone else and generally pretty good at what we were doing. We were technicians, trained in a certain skill or technique: massage therapist, mechanic, carpenter, salesperson, realtor, bookkeeper, actuary, teacher, counselor, insurance agent, personal trainer, chef, doctor, CPA, etc.

When asked, why they decided to start their own businesses, people say…

  • I was tired of working for someone else.
  • I wanted the independence to shape my vision.
  • I liked the idea of being my own boss.
  • It was exciting to set my own hours, for example, so I could meet my children at the bus stop and overall,
  • It was appealing to do my own thing plus
  • I was being encouraged by friends, family and current customers.

So, the enthusiasm is solid. Talent is solid. We’re strong technicians. What’s the problem? Here’s Mr. Gerber’s admonition…

If all you want from a business of your own is the opportunity to do what you did before you started your business, get paid more for it and have more freedom to come and go, your greed–and that may sound harsh, but that’s what it is–your self-indulgence will eventually consume you and your business.

Think about that for a while…

I’ll admit that over 20 years ago, that was my mindset. When a family friend, who happened to be successful owner of a medical and hospital equipment company, commented that he would be interested in knowing when my business would be expanding to other areas of Houston, I smiled, yet thought to myself then, what is he talking about? I just want to serve my clients, set my own hours and get paid decently, avoid the trappings of managing others, being on call and driving an hour to and from the corporate workplace everyday. I was tired of the office politics, long hours and staffing holidays.

So naïve and I’m embarrassed to admit, I lost money. Actually, I didn’t have a lot of respect for money then. A real problem. Yes, I made my schedule and filled it with clients, doing some extra jobs on the side until my schedule was full. Exhausting…yet, I loved my work and nothing was too much to ask. I’m a doer.

The remaining lessons provide the technician in Sarah, as well as in you and me (should you decide you’re one of us) to wise up, smell the delicious coffee (we made) and get real. Get a box of Kleenex (I prefer Puffs) and read on. Oh, have some pie, Sarah’s treat. 🙂

Lesson 3—Being the technician, the doer, isn’t enough to run a business. Meet your other two business personalities…the manager and entrepreneur.

Sarah is aging fast. Why? Because she is doing the technical work, baking pies herself and doing everything else.

She continues to wake in the early hours of the morning and work throughout the day, coming home late each night only to set the alarm to do it all over again. She hasn’t hired enough help, much less trained people to do the baking. She wants to do it herself…that’s her special brand.

Customers love her and admire her special treatment. Lots of positive feedback. They ask for her and the orders keep coming.

It’s great, until it isn’t.

After a while, Sarah’s smile disappears. She’s tired. Mistakes happen. Sarah is more irritable and it shows. She is beginning to dread each day baking the pies she felt inspired to create. The people who help her aren’t too crazy about her either.

Sarah is essentially a 1-woman show that is about to fold. As is, it’s unsustainable.

Heed this Gerber message…

Being a strong technician and understanding the technical work of a business is not the same thing as understanding a business that provides the skills of a strong technician.

According to Mr. Gerber, Sarah’s business is in the Infancy Stage and is not atypical for new businesses.

At this juncture, if Sarah chooses to make some changes she will advance to the Adolescence Stage. Otherwise, she will join the nearly 96% of business owners who close.

In Part 2, Sarah decides to make changes and learns about two other parts of her business personality that the technician must accept…the manager and entrepreneur.  The plot thickens.

The takeaway is…

Whether you call yourself an entrepreneur or small business owner, building a small business that actually works requires more than a skilled, talented technician willing to work hard. Look for Part 2 and find out how Sarah can transform her business and manifest her dream as all three business personalities…the technician, manager and entrepreneur meet.

I’m interested: What inspires you as a potential or current business owner?

Want to talk business? Starting a business? Contact me, I’d love to schedule time to learn more about your interests, dreams and challenges.