Management has been shown to have a large effect on the productive efficiency of large firms. But the majority of the labor force in developing countries works in enterprises with fewer than five workers. Do the practices of the managers of these firms matter for efficiency? We develop a set of 26 questions that measure business practices in marketing, buying and stock-keeping, record-keeping, and financial planning. These questions have been administered in surveys in Bangladesh, Chile, Ghana, Kenya, Nigeria and Sri Lanka. As in Bloom and Van Reenen (2007), our measure is self reported, but independent auditors blind to the survey measure report measures which are very highly correlated with the self-reports. We show that variation in business practices explains as much of the variation in outcomes – sales, profits and labor productivity and TFP – of microenterprises as in larger enterprises. Using panel data from Sri Lanka, Kenya and Nigeria, we show that better business practices are associated with higher business survival rates and faster sales growth. The effects of business practices is robust to including numerous measures of the owner’s human capital. When we examine the variation in business practices themselves, we find that owners with higher human capital, sons and daughters of entrepreneurs, and firms with paid employees employ better business practices. The effect of competition has less robust effects.