The E-Myth Revisited

Sarah hates pies. She opened "All About Pies" three years ago because her aunt taught her to bake, because friends told her she was crazy not to, because she saw a way out of her old life. Now she gets to the shop at three in the morning, leaves around ten at night, and does the bookkeeping after that. She is deep in debt. When Michael Gerber asks her how she feels about her business, she tells him she cannot stand the smell of pies, the thought of pies, the sight of pies.

Sarah is the protagonist of *The E-Myth Revisited*, and she is also almost every small business owner Gerber has met across twenty-five years of consulting. The book runs on a single argument: most small businesses fail not because their owners lack grit or talent, but because they have mistaken a job they were good at for a business they could build. Gerber calls that mistake the Entrepreneurial Myth. He spends the rest of the book showing what it costs and how to escape it.

The Myth That Kills Small Businesses

The Entrepreneurial Myth is the assumption that most small businesses are launched by entrepreneurs deliberately taking calculated risks with capital. The reality is almost the opposite. Most small businesses are launched by technicians having what Gerber calls an Entrepreneurial Seizure. A baker, a hairdresser, a software engineer, a chiropractor wakes up one morning, looks at the boss running the shop, and thinks: I know as much about this as he does. Any dummy can run a business. I am working for one. The seizure follows. The technician quits, signs a lease, and becomes a business owner.

Then the Fatal Assumption kicks in. The Fatal Assumption is the belief that if you understand the technical work of a business, you understand a business that does that technical work. These are two different things, and treating them as the same thing is the single most common cause of small business failure. Knowing how to bake a pie does not teach you how to run a bakery. Knowing how to write code does not teach you how to run a software company. The skill that made you a good employee turns out to be your worst enemy as an owner, because it convinces you that you already know what you are doing.