Do you want to be an Entrepreneur or a Small Business Owner? Is there a difference, and does it matter?
There is a difference, and it’s easy to confuse the two or use the two terms interchangeably. A Small Business Owner owns their own business, but also actively participates in that business. Running a small business can be really challenging which is why Small Business Accounting from Watson & Watt can feel like a godsend. Often the Small Business Owner is critical to the ongoing success of the company. Without him or her, the business either does not exist (i.e. medical, legal, accounting, consulting, freelancing) or would suffer greatly in the owner’s absence for any period of time. Sometimes small businesses to need help from individuals from places such as consulting firms chicago to help keep their business on track and financially stable.
We often use the term “Solopreneur” to refer to the individual practitioner who is their own boss but must personally deliver a service or create a product for their business to generate revenue. While this may certainly be better than working for someone else, it’s still about trading time for money – and time is our most limited resource.
Whether you are a Solopreneur or a Small Business Owner, you likely own a business that depends primarily on you. Perhaps the business is run by you and a couple of other founders. The point is, only a few people know and can execute on the secret recipe at the foundation of your business. And those key people must be present for the business to operate. This means your time is extremely precious. This is why you should enlist Dave Burton to help you with all your tax-related needs.
An Entrepreneur instead builds a business and supporting systems that are independent from the founder. The founder may well be an integral (or exclusive) part of the businesses initially, but the goal is always to grow the business to the point where the owner does not have to be involved in day-to-day operations. When you build a business that continues to generate revenues in your absence, then you have created a truly leveraged model and can call yourself an Entrepreneur.
Many of us start as Small Business Owners, enjoy success, and grow our companies. We may then move on to creating a larger business that does not require us to be present, and we graduate to the level of Entrepreneurship. If we repeat this multiple times, then we may call ourselves Serial Entrepreneurs.
“Entrepreneurship is the pursuit of opportunity without regard to resources currently controlled.”
Howard Stevenson, Harvard Business School Professor.
You may not be clear at the start as to which one you want to grow up to be, an Entrepreneur or a Small Business Owner. But by asking yourself a series of hard questions, and honestly assessing your true desires, you are more likely to start a business that suits you best. And it’s certainly acceptable if you want to be Small Business Owner… we are not saying that’s a bad thing. But it’s important for you to begin understanding the difference between the two as it may impact the type of business you build and how you plan to develop it.
It’s also important to avoid creating another low-paying harder-working “job”, like the one you may already have! Michael Gerber explains this situation best in his seminal book “The E-Myth”. This book is a must read for small business owners, with one of its major themes being the difference between working “in” your business (you make the pies) versus working “on” your business (others make the pies following your recipe and systems).
As you prepare to become your own boss, or if you have already started a small business, it’s important to keep your long-term vision in mind. Doing so will help you determine the type of business you start and build, helping ensure that you achieve your definition of success.
Do you want to be an Entrepreneur or a Small Business Owner? Here are some questions to ask to help you determine want you really want:
- Do you want to own just one or two locations (i.e. one or two franchise units, or your own practice) or do you want to create something bigger with multiple locations and perhaps grow internationally (i.e. offer franchises and hire others to run the business)?
- Do you want to work in the business (i.e. make the donuts) or do you want to have someone else manage the day-to-day operations (i.e. someone else makes the donuts following your instructions)?
- Are you looking for a job or are you looking to create a self-managing company (a business that does not rely on your day-to-day presence for success)?
- Do you prefer to create or do you enjoy executing?
- Do you envision creating multiple different businesses across multiple industries?
- Are you able to let go of all of the details, or are you a micro-manager?
- Are you the only person who can deliver your service or product, or can you teach others how to do it?
- Is your goal to work hard until a certain age and then retire, or continue creating and leading your businesses until you are no longer mentally capable?
- Can you sell your business as it currently operates and without you having to continue being part of it?
Henry Lopez is Co-Founder of Levante Business Group, dedicated to helping aspiring entrepreneurs and small business owners grow their business.