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Why so many small businesses struggle

I’ve just started re-reading The E Myth Revisited, a book written by Michael E. Gerber back in 1995 that I bought and read many years ago.

The book explains that one of the main reasons small businesses struggle is because a small business owner needs to be three people – a technician, a manager, and an entrepreneur - but very few people are truly capable of being all three.

The majority of people start their business because they are really good at doing ‘technical’ work, but they were doing it for someone else. They decided doing it for themselves was a much better idea and fell victim to the assumption that if you understand the technical work of a business, that you understand a business that does technical work. Gerber explains that this assumption is the root cause of most small business failures. The technical work and a business that does the technical work are two totally different things.

As a member of a range of small business groups, I see this exact thing being talked about. It’s a common thread across all groups, all industries, and all business sizes. People are crying for help with their small businesses. They started their business with excellent technical skills but the lack of business skills is catching up with them.

The small business journey

People start off full of exhilaration and excitement, geared up to work for themselves doing something they love. They’re happy to work long hours to get it all up and running and find customers.

Over time, however, the long hours become too much, but they can’t stop or they won’t make ends meet. The excitement turns into fear, which is replaced by exhaustion, and finally, despair. All the while, the business is barely profitable, and they are losing their love for the ‘technical’ skill the business was founded on.

All they can manage to do is get through each day. There’s certainly no time for entrepreneurial thinking; there’s no head space to consider strategy and future growth opportunities when it’s taking every ounce of energy to do the doing. Manager responsibilities like planning, organisation and risk management have long been dropped - even essential business tasks like bookkeeping and marketing fall by the wayside.

Help for your small business

If you’re in the trenches right now, it’s time to do something about it. There are many different services out there set up to help small businesses. Sometimes the best first step is finding a sounding board. Someone you can download to, clarify your thinking with, and get ideas from. Get in touch, any time, if you need a sounding board for your business challenges.

Author: Pip Mehrtens | May 2021


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