In this study, we link discussions about management development in small firms to the work environment of small business managers. In particular, our aim is to examine management development as an experiential process carried out in daily managerial practice. Using structured observations of managerial work, we found that small business managers operate in work environments with rich opportunities for learning. However, we also found that various and unexpected interruptions and problems typically fragment their workdays. In addition, such managers lack peer support and guidance and have few external interactions and little internal communication. As a result, small business managers find themselves in a learning dilemma that, in the long run, may limit their creativity and innovation. Based on these empirical findings, we draw conclusions about support for work-based management development in small firms.