077: What Kind of Entrepreneur do You Want to Be? [Podcast]

Everyone is an entrepreneur – technically speaking. The question is, what kind of entrepreneur are you? And perhaps more important, what kind do you want to be. You make money to live, and depending on who you are and what you want, how you make money and who you serve is the key question. This is a quick look at some pros and cons of where you are that I hope will help you think a bit about where you would like to be.

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Three Entrepreneurship Models – What Kind of Entrepreneur are You?

The Employee Model

Most people do not think about this model as being an entrepreneur. This might explain why so many corporate workers are miserable and lacking in growth. But the reality is, if you are serving others and getting paid for it, you are in business. (The definition of business is the exchange of money for goods and/or services.)

Here are some characteristics of the employee model of entrepreneurship.

• Stability – Perceived to be stable. The reality is that working for a corporate job, especially in a larger company, is not stable or predictable. Right now someone could be making a decision that will impact your job, without warning.
• Risks – As an employee you do not have a financial investment in the business and therefore you do not risk anything other than your income. But, you do not control the risks. Stupid or risky decisions could be made and are often beyond your control.
• Source of income – As an employee, you have a single source of income. In other words, you are a business with a single customer. This is one of the greatest risks in the employee model.
• Control – Most employees assume they have little control of the overall decisions. This is an assumption and using the Company of One model presented in Resumes are Worthless, you can begin to gain influence and take more control.

“If you are serving others and getting paid for it, you are in business. #CompanyofOne”]

The Lifestyle Model

When people come to me wanting to start a business (and sometimes raise capital) they have conflicting views about their goals. So the first thing I want to do is help them decide what kind of business they want. I find most people are talking about a desire to be a lifestyle business. In this model, the desire for lifestyle is first, and income and business growth is second. People start a lifestyle business for the following reasons:

• Freedom of time, or the ability to work when and how they want.
• Freedom of location. Lifestyle entrepreneurs may want to travel and work at the same time or just work from wherever they want.
• Grow a business for my kids or grandkids.
• Be in 100% control.

The Grow and Sell Model

What kind of entrepreneur do we normally think of? What kind of entrepreneur risks is all for the big payoff? We are talking about the likes of Bill Gates, Michael Dell, Steve Jobs, and so many other founders who have taken a company from small to very large. Of course while we can think of these who have taken their companies to the big time, there are millions of these kinds of businesses you have never heard of. They are just starting with one person, or a small team serving a specific niche, or just have not made their way to the household name. Most never will. There are also millions who have gone away and closed their doors.

This model is about a big gamble. They are not looking for small change or lifestyle, but instead are betting it all for the future payday, the time when they walk away with millions in their pocket.

Here are some characteristics of this kind of model.

• You lose control due to the need for capital and team members.
• Slow growth is unacceptable.
• You and the team work like a dog.
• The payoff is later, often 3-10 years, if at all. Everyone can make a salary (not always), but they typically will not make as much as in the employee model. The payday comes when you sell the business or take it public in an initial public offering (IPO).
• The potential payoff if huge, depending on the sales price and the percentage you own at the end. (In this model you almost never own 100%, and you might own much less that 10%).

“The grow-and-sell model of business has a payday way in the future. #entrepreneur”]

[reminder]What do you think? What are other pros and cons of each type? Which would you like to be living? Where are you now?  [/reminder]

Resources

• Discovering the Entrepreneur in You
• Making a Living from Amazon FBA

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[reminder]What kind of entrepreneur are you working to become? [/reminder]