Not All Business Owners Are Entrepreneurs
RESEARCH TRIANGLE PARK, N.C. (TheStreet) -- What is an entrepreneur? A standard definition is someone in possession of a venture, idea or innovation around which he or she builds a business. It is a person who takes risks to succeed. Today's entrepreneur has become almost synonymous with "business owner," but the reality is that there are many business owners who are not entrepreneurs -- they are not pursuing a "new idea."
Entrepreneurs and business owners face significantly different issues. When using the term "entrepreneur," think about people (and their companies) that want to become the next big thing, the next Facebook, Apple (AAPL), Google (GOOG), Amazon (AMZN) or Zappos. They are not in business simply to achieve a level of income to support their lifestyle. Entrepreneurs want more than to pay the bills today; they want future wealth.
|When it comes to deciding whether to found a lifestyle or growth company -- a community bakery rather than a potential multinational, for instance -- it comes down to understanding your personal and professional goals.|
Entrepreneurial companies are oriented to growth and expansion. From inception to death, they live and thrive (or die) on innovation, adaptation and implementation of a technology, product or service. From day one, entrepreneurial companies are focused on growth and recognize that they will need funding to achieve growth. Entrepreneurs are savvy and see the trade-off between size and control.Lifestyle companies, on the other hand, are created to fund the day-to-day desires and needs of their owners. Lifestyle companies may be highly successful and grow to substantial size, but the key difference between a lifestyle-based and entrepreneurial company is the degree of control the founders are willing to surrender to external parties. Most lifestyle companies are closely held, with a limited number of investors who tend to be "related" in some way, such as being family, or friends. Lifestyle companies are referred to frequently as "mom and pop" stores. When it comes to deciding whether to found a lifestyle or growth company, it comes down to understanding your personal and professional goals. What are the roles various constituencies -- family, friends, investors, suppliers, creditors, banks, employees and the community -- will play in your life and business? One important fact to understand about business ownership is that regardless of the type of company you have, the concept of "being your own boss" is contextual. You may not work for someone else, but you will answer to a lot of people. The same constituencies influencing what type of business you found will ultimately be stakeholders in your decisions and hold you accountable. You will work for your customers, investors, board and any other party that has a stake in doing business with you.
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