Each year Americans start one million new businesses, nearly 80 percent of which fail within the first five years. Under such pressure to stay alive--let alone grow--it's easy for entrepreneurs to get caught up in a never-ending cycle of "sell it--do it, sell it--do it" that leaves them exhausted, frustrated, and unable to get ahead no matter how hard they try.

This is the exact situation Mike Michalowicz found himself in when he was trying to grow his first company. Although it was making steady money, there was never very much left over and he was chasing customers left and right,...