What’s The Difference Between an Entrepreneur and a Business Owner?

I ‘ve been thinking about what makes an entrepreneur ever since I read in Rework that there ‘s no such thing as an entrepreneur. Their argument is that the activity of entrepreneurship should not sound like an elite club.

Rework is a great book (see my Amazon review) but I don ‘t really buy this argument for a few reasons. The first is that I believe in elitism! But my main reason is that I think that it is vital to distinguish between someone who is a business owner (BOs) and someone who has an entrepreneurial mindset.

This isn ‘t a theory-based distinction. Its one that a grown on me from watching many Business Owners in action, sometimes as a customer, sometimes as a consultant. It ‘s not even based on a clear distinction between sectors. I ‘ve witnessed an entrepreneurial spirit in the voluntary sector when it has been spectacularly lacking in the private.

What Distinguishes an Entrepreneur From a Business Owner?

Here ‘s my beginners’ list of differences so you can tell one species from the other. Please feel free to add to it in the comments below.

  • Business Owners whinge about the competition setting up close to them or otherwise edging in on ‘their ‘ territory. Entrepreneurs use competitors to test their product, refine their service and learn about the market.
  • Business Owners expect the business to come to them merely by existing, or applying the use of passive forms of marketing. Entrepreneurs go out and get the customers and are active in building up relationships and contact networks.
  • Business Owners view the customer as a necessary evil on the road to making a buck. Entrepreneurs see it their life mission to help the customer by solving their problems, even pre-emptively. When customer needs change, they listen and adapt.
  • Business Owners build their service around what they want, what their little dream is, and hold onto it for dear life even in the face of universal indifference. Entrepreneurs are prepared to ditch their dearest idea when the profit margin shows up blank.
  • Business Owners are afraid of change. They want to keep things are they are. But the market is never still. Entrepreneurs see innovation not as an optional extra for brainstorming events, but part of what they do and have to do on a daily basis.
  • Business Owners think only in hierarchical or traditional ways of business structuring. Entrepreneurs are instinctively flexible, using freelancers, outsourcing, online tools and the rest to keep margins mean and bureaucracy lean.

I exaggerate for effect. To use a classic Allen phrase, There is some overlap in Venn diagram terms. I do exaggerate… but not by much!

So, which are you then?

More to the point, which am I?

Image credit: thenext28days.

Why Your Non-Entrepreneurial Family and Friends Don’t Understand What You Do

This blog post title is very long. And, yet it should be longer: Why Your Non-Enterpreneurial Family and Friends Don’t Understand What You Do, And Why You Should Stop Trying to Make Them.

When they Hear the Word “Business”, They Think Tesco, HSBC or the Local Hardware Store

They do not think… my brother, my daughter. No matter how many times you try to explain that the local corner shop is a “business”, and someone has to supply them with a shop-fitting service, shelves, screws, glass, doors and the like, they will rarely put two and two together to realise that maybe your carpentry “business” can supply the products and services to them, and, charge for it.

So, it makes even less sense when finally, you win that larger contract with Tesco for a shop-fitting service. Tesco!?

It can be very frustrating. But, only those who’ve been entrepreneurs themselves can understand what it means. In the same way, athletes may struggle to explain their committment to not heading out every weekend with their friends to get wasted. Or, mental health professionals may come across as snippy when they fail to join in the current trend of laughing at mental illness.

If you’re not in the zone, it’s difficult to understand.

They’re Not Risk-Takers

The self-employed, freelancers, contract workers, small business owners, large business owners or any combination thereof are by definition risk-takers. Depending on how your financial and home assets are arranged, and what decisions you make, you may be risking some of the following:

  • Your regular income
  • Your home and lifestyle
  • Your spouse or your childrens’ luxuries
  • Your reputation
  • Your peace of mind, and ultimately mental well-being
  • Your employees’ job stability
  • Your entire business

This is what your non-entrepreneurial family and friends cannot understand about what you do. They’re not by nature, risk-takers. That’s not to say every risk taker should start a company. Some prefer to jump out of planes. I put it to you that those who do jump out of planes (in preference to starting a business) are more likely to think you less insane.

Are You?

Some of us are skilled at dealing practically with risk and managing the stress that accompanies it; some are not. Some of us thrive on the pressure; some do not.

Now, I know at this point that there are those of you who consider themselves to be entrepreneurs, who will retort, but I’m an entrepreneur, and I’m not a risk-taker!

The thing is – you are. If you are not dependent on someone else for your wage, if you make your own money, if you secure your own contracts, if you are responsible for the delivery getting there on time, or the salaries of others, you are taking risks. I’m not saying that’s a bad thing. Life and business would be rather dull if we never took risks. (I reserve the right to choose not to jump out of planes however!)

The thing about risks, like a Physics experiment, is that everyone finds their own level.

  • You may be comfortable running your business by the seat of your pants; I am not. You may have everything in a 10-year plan; I, however, do not. We all find the level of risk we are prepared to cope with, and try to minimise the rest.
  • Some will minimise it by seeking out larger, regular customers and relying on those for the bulk of income, and state that they feel more comfortable with that. Others will look at that same state of affairs and deem it too risky, preferring instead to continue to pursue new customers.

Your non-entrepreneurial friends and family are employed by someone else because it’s generally considered to be more secure. Whether it really is, in our current financial crisis, is irrelevant. Perception is reality.

They Can’t Fit What You Do Into Traditional Categories

“But what do you do!?” It something we laugh about. Especially freelance IT professionals. How to you explain a tweet to a non-computer user? How do you explain coding? How do you explain that you design cool website buttons for a living?

Is your week varied? Does it sometimes involve late nights in the workshop, or long days at conferences? Are two weeks ever the same? Might a morning begin with great intentions of getting through that stack of emails, and end with an impromptu meeting somewhere unlikely? How do you explain it when “work” involves croissants and coffee and chatting at BizCamp Belfast?

When a product or service appears intangible, it can be even more difficult to put it across, even to those in the service industry. And, sometimes when you do make them understand, they’re flummoxed as to why anyone would pay for that service. How does a lifetyle guru explain what they do? It can seem a little #thirdworldproblems.

It’s easier for adults to learn, if the new stuff is presented in the context of stuff we already know. Sometimes IT professionals will say that they “work with computers”, or “teach people how to use computers”. I’ve even resorted to using the word “machines” with those who don’t know what a computer is…

That’s not to say they’re wrong, or backward, or I’m right and all-knowing. It just is. It’s just that we live and work in very different contexts. When explaining, KISS.

They Don’t Know Who Pays You

“But, who’s your boss!? You know, who pays you!?” is a common cry. Many family and friends, used to the employer (big boss) and employee (little person) arrangement, are alarmed when the big boss appears to be absent from the equation. I admit, it alarms me sometimes! And, yet, it is one of the reasons I love being self-employed. There’s no-one of whom to ask permission. Except @thesensei, of course.

When you reply, “I’m my own boss!”, this causes further confusion, as family, especially, know your tendency to daydream, or your aversion to mornings! They rarely see your professional side.

Alleviate Their Fears Gently

  1. Don’t bash them over the head with your bohemian notions of freedom to create. This will confirm all their suspicions! Instead, reframe your responses to their questions in the language that makes sense to them.
  2. Avoid going in the opposite direction and morphing into an overbearing, pin-striped moghul overnight. Let them see you in work mode only sometimes. Take the softly softly approach; ease them in gradually.
  3. Unless you live with the person (who will want to know), minimise the bad news; maximise the good. People ask how business is doing, but do they really need all the details? Experience has taught me that they can’t really handle it. And, they will respond without knowing the full facts. Restrict conversations to the positive highlights.
  4. Refer to the successes of other entrepreneurs in their social circle. This creates the feeling that you are not off your trolley, if others they know operate in a similar way.

A few big wins, evidence of organisation, tangible proof of regular money coming in, appearances in the press, or mentions by others they know all help to alleviate their fears, though I suspect they never really go away…

What are your thoughts? Have you tried, and failed, to explain what you do? Do those closest to you get it? Are you a risk-taker or not? Do you have any tips?

Image credit: lixinyiphoto.

So What is This Thing Called ‘Business’?

I could give you a definition of ‘business’. That’s always useful. But quite boring. You don’t need to read a blog to find out that. So I’ll do something else instead. I’ll give you some metaphors.

Metaphors are powerful. They excite the imagination. They illuminate the sense. They fire up the will. Even when it comes to a word as initially dull as ‘business’.

Management thinkers have traditionally employed two mataphors to explain their understanding of business activity and often justify actions that to others seem unpalatable. That is why the first has played a part in Business Ethics over the years, while the second has became a much beloved of motivations speakers and venture capitalists in the 80’s. Continue reading “So What is This Thing Called ‘Business’?”