Michael E.Gerber

would like to express my deepest gratitude to the many people with whom I’ve worked to produce the ideas that are presented in this book, as well as for the support needed to complete it.

To Ilene Gerber, my wife, partner, and editor, without whose intensity of purpose, dedication to the truth, and love for the work, both in our business and in the rest of the life we share together, neither this book, our business, nor our marriage would have been possible.

To Shana, Kim, Hillary, Sam, and Alex Olivia, my children, who have given to me more than they have received, in ways only a father can truly know.

To all my associates at E-Myth Worldwide, present and past, whose commitment to the ideas in this book, as well as to each other and our clients, have given meaning to the words by living them, even when it was impossible and when there seemed to be no good reason for doing so.

To all our thousands of clients over the years who have put their trust in our integrity, and, in the process, caught us at least as much as we taught them about what it means to transcend scarcity with excellence.

To Nancy and Bob Dreyfus, my sister-in-law and brother-in-law, whose wisdom, love, and generous spirits have touched me more than they can possibly know.

To Virginia Smith at HarperBusiness, whose caring, intelligent friendship has seen me through the most dismal moments of writing with a gentle, open, and willing nature that enabled me to be myself in the moments I least wanted to be, without apology or explanation.

And, finally, to all my readers who continue to support my work so enthusiastically

some sort. Statistics tell us that by the end of the first year at least 40 percent of them will be out of business.1

Within five years, more than 80 percent of them—800,000—will have failed.

And the rest of the bad news is, if you own a small business that has managed to survive for five years or more, don’t breathe a sigh of relief.

Because more than 80 percent of the small businesses that survive the first five years fail in the second five.

Why is this?

Why do so many people go into business, only to fail?

What lesson aren’t they learning?

Why is it that with all the information available today on how to be successful in small business, so few people really are?

This book answers those questions.

It’s about four profound ideas, which, if you understand and take them to heart, will give you the power to create an extraordinarily exciting, and personally rewarding, small business.

Ignore them, and you will likely join the hundreds of thousands of people every year who pour their energy and capital—and life—into starting a small business and fail, or the many others who struggle along for years simply trying to survive.

IDEA #1 There is a myth in this country—I call it the E-Myth—which

says that small businesses are started by entrepreneurs risking capital to make a profit. This is simply not so. The real reasons people start businesses have

This book, then, is a product of the last fifteen years, as well as a product of the fifteen years that preceded them. It was almost exactly eight years before The E-Myth was published that I founded our company, E-Myth Worldwide, which has provided the fuel and experience for the point of view I have shared with those of you who have read The E-Myth, and with those of you who are about to read this book.

In the years since The E-Myth was published, many of my readers—as well as many of our small business clients—have asked me to clarify specific aspects of The E-Myth point of view so they could better apply it to their businesses. This book answers many questions that The E-Myth has raised over the years, offering both new and previous readers the opportunity to approach their businesses with renewed vigor and a sharpened mindset through an expanded experience of The E-Myth principles.

Toward that end, I have attempted to answer the most important questions I have been asked about the principles covered in each chapter by means of a running dialogue with a wonderful woman named Sarah (not her real name) with whom I’ve spent quite a bit of time over the past year. Sarah’s experience in business, her patience, intelligence, and passion have helped me to address the