Thinking of starting a business? Kudos to you. Hold on tight, it can be a wild and woolly ride.
You can take some of the scary out it by understanding the huge philosophical distinction between being an entrepreneur and being a business owner.
It’s a commonly held belief that by simply taking a risk in business one has achieved the status of entrepreneur. While that may be true from a strictly etymological perspective, the culture of modern business and entrepreneurship might suggest otherwise.
To better understand the distinction, let’s take the case of two men in business. One imaginary plumber we’ll call Joe and one, very real, Bill Gates. On some level, both of their businesses are similar.
On a philosophical level, however, the two approaches to business couldn’t be more different. Those differences can be tracked all to the way to the “back of a napkin” stage of business development.
Bill Gates saw that personal computing would become the central focus of our business and personal lives, and set out to control the operating system that forms the very foundation in over 90% of the world’s computers. To ensure full market penetration and adoption, he also took control of the markets and the means of delivery.
Gates didn’t invent the technique of controlling both the product and the market. In fact, the entrepreneurs who did invent that technique were the same luminaries that are the pillars of American business. Names like John D Rockefeller, Andrew Carnegie and even Thomas Edison are all associated with total market domination. Love him or hate him, Gates is in good company.
Joe the Plumber’s vision, on the other hand, while no less worthy, was somewhat smaller in scope. Recognizing a demand for installation and maintenance of plumbing systems, Joe set about creating an organization that provided a high paying and sustainable job for himself.
Joe makes a decent and respectable living. But he can’t take time away for a vacation with his family or the business will suffer, and revenue will fall precipitously.
Joe certainly can’t afford to get sick.
So he toils away, no matter the conditions, content to be his own boss. But Joe has scores of bosses. Customers, lenders, contractors, suppliers, Joe is answerable to them all. His dream of personal freedom has given him an eighty hour workweek with no exit plan or escape route.
Which business would you rather run?
It deserves to be said that Bill Gates is the product of one of the richest families in the Northwest US. He’s not what we might call a “self-made man”. But the track record for lottery winners suggests that having money isn’t enough to guarantee financial success.
In fact, it’s a useful exercise to answer the question, “If I had an unlimited amount of money, what type of business would I start?” From there, determine how to, as Theodore Roosevelt said, “Do what you can, with what you have, where you are”.
Spend some time to determine what type of business person you are and you’ll have a stronger and better supported organization, no matter the form you choose.