Back in 1986, I picked up a book that stopped me in my tracks. It was called The E-Myth: Why Most Small Businesses Don’t Work and What to Do About It by Michael Gerber. I remember reading it and thinking this was a completely different way of looking at business ownership.
My wife and I both grew up in family-owned businesses. We understood the grind, the opportunity, and the weight of it. When I read The E-Myth, it clicked in a way most business books never do. It wasn’t theory. It was the reality I had watched play out in the businesses around me as I was growing up.
I’ve gone back to that book many times over the years. In 2001, Gerber republished it as The E-Myth Revisited, and the core message stayed exactly the same. By then, I had started and sold a business, launched a consultancy, and worked with dozens of owners. I also had the privilege of meeting Michael Gerber personally and spending time with him. His message hasn’t changed since he started E-Myth in 1977, and there’s a reason for that. It works.
The 7-step business development program Gerber outlined in 1986 is as relevant today as it was then. For family business owners especially, it offers a framework that can change how you think about what you’ve built and where it’s going.
Why Family Business Owners Fall Into the Technician Trap
You Built the Business. Now the Business Owns You.
Most small businesses are not started by entrepreneurs. They’re started by technicians who have an entrepreneurial seizure. An accountant opens an accounting firm. A plumber starts a plumbing company. A skilled tradesperson with family connections launches a family business.
The problem is that being good at your trade has nothing to do with running a business. What got the business started is not what will grow it, stabilize it, or make it transferable to the next generation.
In family businesses, this pattern gets layered. Not only is the founder often trapped inside daily operations, but family members who join the company tend to inherit the same habits. Everyone works in the business. Nobody works on it.
What It Actually Means to Work ‘On’ Your Business
Working on your business means designing it as a system, not just running it from day to day. It means building something that can function and produce consistent results without requiring you in every room.
For family business owners thinking about succession, this distinction is not just useful. It’s critical. You cannot hand off a business that only runs because you’re carrying it.
Gerber’s 7-Step Business Development Program
Here are the seven steps Michael Gerber has taught since the beginning of E-Myth. I’ve worked with clients on all of them. I’ve also watched what happens when owners skip one.
Step 1 – Know Your Primary Aim in Life
Your business is an extension of you, not the other way around. Before you can build the right business, you need to know what kind of life you’re trying to build. What matters to you? What are you willing to sacrifice, and what aren’t you?
For family business owners, this question carries extra weight. Your primary aim likely includes what you want this business to mean for your family, your community, and the generation coming after you.
Step 2 – Define Your Strategic Objective
Your strategic objective is what you want the business to give you. That usually means money, freedom, flexibility, or the ability to exit on your own terms. It’s easy to lose sight of this when you’re deep in daily operations, but if you don’t define it clearly, you’ll build toward nothing in particular.
Step 3 – Build Your Organizational Chart
This is the foundation of a turnkey business. You need to know every role in your business before you can build systems around those roles. In family businesses, this is often where things get complicated. Family members frequently fill multiple roles, and those roles are often undefined.
Creating a clear organizational chart with defined responsibilities for every position gives the business a structure that doesn’t depend on who fills each seat. That matters a great deal when you’re preparing for transition.
Step 4 – Develop Your Management System
Every function, every problem, every outcome in your business should trace back to a system. Great business owners manage their systems, not just their people. When the system is sound, the output is consistent, predictable, and profitable.
If you’re spending your days putting out fires, it’s usually because the system that should prevent those fires hasn’t been built yet. This is one of the most common conversations I have with owners early in coaching. Understanding how your systems connect to the five foundational areas of your business is a good place to start that work.
Step 5 – Create Your People Development Process
You can’t build a real training program until you have documented systems. Most business owners try to do this in reverse. They hire someone, hand off work, and then wonder why things aren’t done the way they want them done.
Document the system first. Build your training around it. This is especially important in family businesses where the assumption is often that people already know how things work. Written processes close that gap.
Step 6 – Design Your Marketing System
A business will not survive without a functioning marketing system. Not a one-time campaign. Not a referral or two. A repeatable, intentional process that generates new customers and keeps existing ones engaged.
Family businesses often rely heavily on word of mouth, which is valuable, but it’s not a system. Your family business story can be a powerful marketing asset, but it needs structure to actually drive results.
Step 7 – Implement a Comprehensive Systems Strategy
See everything in your business as a system. When you’ve done that work, you can step back from daily operations. You can bring in capable leadership. You can sell the business if you choose to. You can build a succession path that actually works.
Gerber’s core argument is that great businesses are not built by genius. They’re built by determination and by design. The business owners who rise above the daily grind are the ones who are committed to building something that doesn’t require them to be in every room every day.
What These Steps Look Like in a Family Business
Applying this framework to a family-owned business is not always straightforward. Family dynamics affect every step. Roles blur. Conversations that should happen at the conference table happen at the dinner table instead, or don’t happen at all.
What I’ve seen work well is treating the business and the family as two separate entities that need to serve each other. The business needs structure, clarity, and defined roles. The family needs communication, shared values, and a plan for what comes next.
Working through Gerber’s seven steps with a family business context means being honest about which roles are filled by family loyalty rather than by fit, which systems actually exist and which are held together by one person’s memory, and what the business would look like if the founder stepped away tomorrow.
That last question is uncomfortable. It’s also the most important one.
Ready to Build a Business Your Family Can Count On?
If you recognize your business in any of this, you’re not alone. Most family business owners are working hard in businesses that still depend on them more than they should. That’s fixable.
Glenn Smith Executive Coaching has worked with more than 100 businesses over 30 years, helping owners build the structure, systems, and leadership capacity to create businesses that run, grow, and transfer on their terms.
If you’re ready to start that conversation, reach out for an initial consultation at glennsmithcoaching.com.
