Why MOST New, Small Businesses FAIL Right After They Start UP! (4 Things You MUST NOT Do!)
According to the US Bureau of Labor, about 20% of small businesses fail in their first year. By year five, nearly 50% are gone. And after 10 years, only about 35% survive.
And no, it’s not because the owners weren’t smart enough or passionate enough or didn’t grind hard. It’s not even because they lacked money or investors or had a bad idea. No, it’s something else. Let me tell you a story about Lisa.
Lisa was great at making these amazing handmade soaps. Her house always smelled like a spa. People kept saying, “You should totally start a business.” And guess what? She did. She opened a cute little shop downtown. Everyone loved it at first, but 6 months in, she was drowning. She was exhausted. Sales were a mess. Staff kept quitting. And she hadn’t had a proper day off in weeks.
And worst of all, she started hating soap. This is the trap Michael Gerber talks about in the E-Myth Revisited. The myth that if you’re passionate and skilled, success will naturally follow. The real secret. Most small businesses fail because owners get…
…stuck doing everything themselves with no systems to help them out. Stick with me because I’m about to share why this happens and how you can build a business that actually works for you, not the other way around. So, here’s the big lie that trips almost every new business owner. It’s the idea that if you’re good at doing something, then you’ll naturally be good at running a business that does it.
And it sounds right, right? Like, if you’re a fantastic baker, starting a bakery makes sense. Or if you’re amazing at fixing bikes, opening a bike shop should be a no-brainer. But here’s the thing Gerber breaks down. Doing the work and building a business are two completely different jobs. Let’s go back to Lisa. She knew how to make soap. She was amazing at that. But when she started the business, suddenly she wasn’t just making soap anymore.
She was dealing with inventory, customer service, marketing, employee drama, rent, taxes. And none of that had anything to do with crafting lavender bars in her kitchen. That’s the myth, the entrepreneurial myth. And if you’re already running a business, you’re probably nodding along right now thinking, “Yeah, why am I doing a million things I never signed up for?” Don’t worry, we’re going to fix that. Let’s go deeper.
The three business roles. According to the E-Myth, every business owner isn’t just one person. They’re actually wearing three hats all at once. And this is where most people start to fall apart. First, there’s the entrepreneur. This is the dreamer, the big picture thinker. This is the part of you that stays up at night brainstorming new ideas and imagining what your business could become one day.
Then there’s the manager, the one trying to organize the chaos, make to-do lists, track orders, clean up the mess the dreamer made, and keep the wheels from falling off. And finally, there’s the technician. This is the doer. The one who’s actually doing the thing you love. Baking the cupcakes, designing the websites, fixing the bikes, making the soap. Most of us start businesses as technicians. We’re good at a thing, so we think, “Why am I doing this for someone else? I’ll do it for myself.”
But when you become your own boss, you don’t stop being the technician. You just add the manager and entrepreneur hats on top of it. Suddenly, you’re trying to build the future, manage the present, and do all the actual work at the same time. And that’s why people burn out. you’re stuck juggling three completely different roles that are constantly fighting each other. It’s chaos. And if you don’t intentionally step into those other roles, especially the entrepreneur, you’re not building a business. You’re just building yourself a full-time job with unpaid overtime.
So, the question is, which one of those roles are you stuck in right now? Because until you get all three working together like a team, your business won’t grow. It’ll just keep spinning its wheels while you get more and more tired. Business development phases. Okay, imagine your business is like a growing kid. It starts out as a cute little baby. You’re doing everything for it. You feed it, change its diapers, carry it everywhere. That’s what Larry Booker (Me, lol) calls the infancy phase.
And if you’re in it, you know exactly what I’m talking about. You are literally the business. Every order, every email, every little task, you handle all by yourself. At first, it feels kind of good because you’re in control. You’re the one making things happen. But it gets exhausting fast. Like you blink and suddenly you’re working 14 hours a day just to keep things running. And if you stop, the whole thing crashes. Then one day you think, “I need help.” So, you hire someone. Welcome to the adolescence phase.
This is where things get complicated. Because you’re still doing most of the work, but now you’ve got someone else asking you what to do. And guess what? You’re probably still micromanaging everything because no one else does it just right. So now you’re stressed and managing people. You gave away responsibility, but not really. You’re still hovering. And then this is where most businesses either stall out or collapse. You hit a wall. You realize this thing is eating your life and it’s not scalable. You can’t keep doing it all. You either burn out or you evolve.
That’s when you finally start building systems. Welcome to maturity. This is where the real business starts to happen. Instead of just hiring people to help you, you start creating systems so the business can run without you. Think about it like this. McDonald’s didn’t become a billion-dollar empire because they had the best burgers. They scaled because they had a system. A 16-year-old with zero cooking experience can walk in, push a button, and Big Mac ready to serve. That’s what Booker is talking about when he says a real business is built on systems, not people.
You want to build something that works without needing you in every corner of it every second of the day. So, ask yourself, what phase are you in? Because maturity isn’t about the age of your business. It’s about how you run it. Franchise thinking. Hustle is not a business strategy. I know that sounds kind of controversial, especially in a world where everyone’s glorifying 18-hour workdays and rise and grind mentalities. This is where E-Myth hits hard with something super practical. If your business depends on you hustling non-stop to survive, you don’t own a business, you own a job.
Booker says, “You have to build your business like you’re going to franchise it, even if you never plan to. Because think about franchises. You think the CEO of McDonald’s is flipping burgers in a back room somewhere? Definitely not. That place runs like clockwork because they built systems. Not just systems for making the food, but systems for everything. Hiring, training, inventory, customer service. Every single part of the business is designed to work without needing one superstar employee to hold it together.
Imagine you had to run a coffee shop and the barista who knew everything quit. If your whole business crashes because one person leaves, that’s not a business. That’s a dependency. Systems are like recipes. You don’t rely on the chef’s memory. You follow a repeatable process that guarantees the same result every single time. Now, imagine doing that across your entire business. That’s franchise thinking, not how can I do this better, but how can someone else do this without me?
That’s how you stop spinning plates and start building something that grows without burning you out. Finally, the part we all have been waiting for. How to build a business that runs without you. So, you’re probably thinking, “Okay, all this sounds amazing, but how do I actually get my business to run without me glued to every single thing?” The good news is it’s totally doable. You just need a plan. First step, stop trying to be the superhero who does everything.
Seriously, I know it feels like if you don’t do it, it won’t get done right. But that’s exactly the mindset that keeps you stuck. Instead, start writing down how you do things. Not just make a soap or answer an email, but every step, like a recipe. Imagine you’re teaching a friend to make your favorite dish from scratch. You wouldn’t just say, “Cook it until it’s good.” You’d say, “Heat the pan, add 2 tablespoons of oil, wait for it to shimmer.” Same thing with your business. Document every process. How you take orders, how you handle customer questions, how you package and ship.
Once you have those step-by-step instructions, you can train someone else to do it. And this is key. You don’t just hand it over and hope for the best. You test it, refine it, and make sure it works every time, no matter who’s doing it. Second, focus on systems that work without you. Set up templates, checklists, schedules, anything that makes the work repeatable and predictable. It’s like building a well-oiled machine, not a one-person circus. Think of it like this. You’re not the star player anymore. You’re the coach who designs the plays, motivates the team, and watches the scoreboard. That’s how you get your time back. That’s how your business becomes a vehicle for your life.
It’s not overnight, but this little-by-little approach is the secret sauce to building a business that actually works for you. If you have been watching this far, it means you are serious. So, I have something special for you before we wrap up. I want to leave you with something super practical, a seven-step blueprint that breaks down exactly how your business grows and evolves. Think of it like leveling up in a video game. You don’t just jump from beginner to boss fight. You go through clear stages that get you stronger and smarter. Here’s the deal. Every business goes through these phases, whether you realize it or not.
Knowing them lets you play the game, right? Step one, the entrepreneurial vision. This is where your big dreams start. You picture what your business could be. your mission, your goals. It’s like setting the GPS before a road trip. Step two, organizing for success. Now you start mapping out how things will work. Your team, your roles, your workflow. Imagine building the frame of a house before you add walls. Step three, building systems. This is the juicy part, crafting the playbooks and procedures that make your business run smoothly. Like the recipes in a cookbook, these systems help anyone deliver the same great result.
Step four, staffing smart. You bring in the right people, train them well, and empower them to do their jobs. Think of it like assembling an all-star team instead of just filling seats. Step five, marketing with meaning. Here, you focus on attracting the right customers consistently. It’s not shouting into the void. It’s about making connections that matter. Step six, financial mastery. You get a handle on the money side, tracking profits, expenses, and knowing exactly where you stand. Like keeping score in a game so you know if you’re winning. Step seven, continuous improvement.
No business stays the same forever. This last step is about tweaking, innovating, and growing. like upgrading your gear as the game gets harder. When you nail these steps, your business doesn’t just survive, it thrives. And you, you get to enjoy the ride without burnout. Keep this blueprint handy. When things get messy or overwhelming, come back to it. It’ll help you steer your business toward the life you really want.
Remember! You want to build something that works without needing you in every corner of it every second of the day. Never seek to be the one doing the work, that’s what employees are for. Run your business, be the boss, be the expert… YOU are the backbone!
Because maturity isn’t about the age of your business. It’s about how you run it. Screw a Hustle mentality… That’s bullshit and hustle is not a business strategy, it’s an allowance to struggle and accept it as a good thing… I know that sounds kind of controversial, especially in a world where everyone’s glorifying 18-hour workdays and rise and grind mentalities.
Let me be clear and know this! If your business depends on you hustling non-stop to survive, you don’t own a business, you own a job.
So, there you have it. The complete lowdown! You now know the truth about why most small businesses struggle, the three roles you’re juggling that drain your energy, and the phases every business goes through as it grows. So, what’s your first step going to be? Whatever it is, take action!
Until next time.
