The Fatal Assumption of Small Business Startups



"Most small business owners are not particularly sophisticated business people. That’s not a criticism; they’re passionate about cutting hair or cooking food, and that’s why they got in the business, not because they have an MBA." — Andrew Mason

So you want to start a business? … Watch out for the fatal assumption of small business startups.

Starting a Small Business Based on The Fatal Assumption Can Turn Your Dream Into a Nightmare

If you know how to do something well, should you start a business?  If all it took was being good at one thing, then yes.  But it doesn’t.

And that’s the fatal assumption.

In The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It, Michael E. Gerber, writes about how a technician starting a small business can make a fatal assumption and turn their dream business into a nightmare scenario.

Starting a Business Means Playing Multiple Roles

Just because you’re a master of your craft, does not mean that you know how to run or operate a successful  business, or play multiple roles.  And you might not like some of the roles.

And similarly, don’t assume that if you are your own boss, that you will be a good one.

When you start a business, you have to wear a lot of hats.  Many more than just the technical work or the specific job that you might enjoy.

The Fatal Assumption When You Start a Business

The fatal assumption is that because you know how to make pies, you can start a successful pie business. But it takes more than making great pies to be a great business.

Via The E-Myth Revisited,:

"That Fatal Assumption is:

if you understand the technical work of a business, you understand a business that does that technical work.

And the reason it’s fatal is that is just isn’t true.

In fact, it’s the root cause of most small business failures!

The technical work of a business and a business that does that technical work are two totally different things!"

Your Business is Not “A Place to Go to Work”

If you start a business just to make a place to go to work, chances are it won’t be a great place to go to work.

Via The E-Myth Revisited,:

"But the technician who starts a business fails to see this. To the technician suffering from an Entrepreneurial Seizure, a business is not a business but a place to go to work.

So the carpenter, or the electrician, or the plumber becomes a contractor. The barber opens up a barber shop. The technical writer starts a technical writing business. The hairdresser starts a beauty salon. The engineer goes into the semiconductor business. The musician opens up a music store.

All of them believing that by understanding the technical work of the business they are immediately and eminently qualified to run a business that does that kind of work.

And it’s simply not true!"

Your Technical Know-How Is a Liability

Is your technical knowledge an asset or a liability?  According to Gerber, it’s your greatest liability.

Via The E-Myth Revisited,:

"In fact, rather than being their greatest single asset, knowing the technical work of their business becomes their greatest liability.

For if the technician didn’t know how to do the technical work of the business, he would have to learn how to get it done.

He would be forced to learn how to make the business work, rather than do the work himself."

The Technician’s Nightmare — You Become a Slave to Your Business

It happens.  What started off as a dream, quickly becomes a nightmare when you take on the role of the business owner.

Via The E-Myth Revisited,:

"The real tragedy is that when the technician falls prey to the Fatal Assumption, the business that was supposed to free him from the limitations of working for somebody else actually enslaves him.

Suddenly the job he knew how to do so well becomes one job he knows how to do plus a dozen others he doesn’t know how to do at all.

Because although the Entrepreneurial Seizure started the business, it’s the technician who goes to work.
And suddenly, an entrepreneurial dream turns into a technician’s nightmare."

Avoid the Fatal Assumption when you start your own business.

You Might Also Like

Why Some Small Businesses Fail

The Entrepreneur, The Manager, and The Technician

The Fat Guy and The Skinny Guy