Over my 40 years, I have witnessed many people start businesses. Some of these businesses fail, and some actually become successful. However, I have met very few actual entrepreneurs. Entrepreneurs are hard to find, although people with companies are everywhere.
Josh, what the heck are you talking about—with entrepreneurs? Business owners and entrepreneurs are two entirely different people with totally different mindsets. It is easy for people to get confused because entrepreneurs start businesses. So, let’s take a look at some of the differences in philosophy between the two.
Business owner. The business owner creates themself a job. They are usually the ones working most of the hours inside their business. They rarely trust anyone else to handle the business. They do not think about expansion, franchising, licensing, and multiple streams of income. Business owners are in love with their business and take everything about their business personally.
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Entrepreneur. The entrepreneur creates the business as an asset. The entrepreneur depends on others to help build their businesses. Entrepreneurs usually have multiple companies. From the start, the entrepreneur builds a business to sell, transfer, out-source, expand, franchise, license, advertise, and exploit numerous income streams. The entrepreneur does not take things personally; it’s all business.
True entrepreneurs are a rare breed, but they are not born that way. Many people are born with the instinct that working a job doesn’t feel right. For example, for me, joining the military was easy. Taking orders, waking up early, and marching in formation was all simple mindset for me to follow. No issues here.
However, for many people, this structured daily life conflicts with their deeply rooted core values. They like freedom and choice and to have a choice in how they spend their day. I never needed this freedom, so this is where the business owner and the entrepreneur start their journeys. They both know that working a 9-5 job doesn’t “feel” right and clashes with their personality.
Their journeys diverge. The business owner runs off to start something that they feel they will like. They get a huge bank loan to open a physical business and buy a ton of products upfront. They spend capital thinking that every business is thriving; they do little in research or market analysis. The business owner is not thinking of where the company will be in five years. They want to do most of the work themselves, to save money.
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Entrepreneurial second-level thinking. The entrepreneur performs second-level thinking before even considering starting a business. Entrepreneurs know that business is one of many asset classes, with the others being crypto, investing, real estate, and commodities.
Entrepreneurial lifestyle. The entrepreneur evaluates their total portfolio and lifestyle to figure what size and scoop they would like to grow their business. They also factor in how much time they can dedicate to their business. They understand that time is the earth’s most valuable resource.
Market research. Next, the entrepreneur looks at the current market and what businesses are flourishing. They understand that they may not have direct knowledge of the market they want to enter. Again, they do a time analysis of whether they should attempt to learn the skillset or hire someone who has the skillset.
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Build an asset. The entrepreneur creates multiple exit strategies before they start the business. For example, they might start a business with the intent to have a manager run 97% of the company in 2 years. Or the plan may be to make the business profitable and sell it to another entrepreneur. That’s right; entrepreneurs also buy businesses. Remember, they are an asset.
Adding value. Value is probably the most significant difference between the business owner and the entrepreneur. Entrepreneurs understand that they must add value to sustain a successful business. An entrepreneur’s mission is to solve other people’s problems for a profit.
To solve other people’s problems, they will need a deep understanding of who they are targeting and the issues affecting their target audience. I wrote more about this in “New Business? Identify, Target, and Mesmerize Your Audience.” The business owner is trying to solve their personal problems—usually financial or ego.
Build relationships with the audience. Now that the entrepreneur understands what their target audience is facing, they have to produce value, usually for free. Yes, to build a long-standing relationship with their audience, you will need them to “know, like, and trust” you.
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This portion of a business takes a reasonable amount of time. Let’s do some second-level thinking. What kind of phone do you use? I use a Samsung. When did my relationship with Samsung begin? Probably twenty years ago, well before they made phones.
So, when Samsung created a phone, I already knew and trusted them. Their brand equates to value in my eyes. I bought my first Samsung phone in 2012 and have been a loyal phone customer ever since. I also purchase their laptops and tablets regularly. I am a loyal Samsung fanboy.
It takes 13 touches. People say that it takes 13 contacts (or interactions) before someone will make a buying decision. The entrepreneur understands this and builds content, advertising, emails, and more, knowing that they must form this relationship with their customers to build long-term success. The business owner sets up shop and expects everyone to come to them. I write about this mindset in “Nobody Owes You Anything.”
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Automation. Finally, the entrepreneur runs their business with the intent of making themselves 100% replaceable. They can be outsourced, automated, or managed away. That is how entrepreneurs can buy and sell businesses; they are not the vital element of the company. Take a step back and look at a dentist’s office. The lead dentist is a business owner, and if they left, the business would collapse. They can only sell the business to another dentist, making the company their full-time job.
But what if the dentist created a dentist workshop where the dentist could conduct more training? The lead dentist can set themself up as the manager of the corporation. They could hire dentists and other specialists to train the young dentists. When it is time to sell, the successor doesn’t need to be a dentist to run the business.
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Are you a business owner or an entrepreneur? To be honest, we will most start with the mindsets of business owners. I know I did. I started a blog and had no idea what a business was, let alone an entrepreneur. We all go through it; however, some of us keep learning and growing.
I want to write a couple more articles in this series. First, I will share my experience of starting a blog (about a year ago) to making money (small amounts) as a Kindle publisher. It has been a fantastic ride and one I plan on continuing for infinity.
Next, I want to speak on how to best position yourself as an entrepreneur before starting your business—things like books to read, courses to take, and things to look for on your journey. Also, you can build a general audience before you even have an idea about your business. Your audience will give you a unique starting point in your career as an entrepreneur.
I look forward to writing more on this topic. I know I was a hot mess when I started, and over the course of a year, I was able to refine my mindset. I am bringing you the best from Josh 2.0. Good Luck!
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Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
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