What Kind of Entrepreneur Do You Want to Be?
You are an aspiring entrepreneur, eager to dump the corporate grind and work to the beat of your own drum, but you can’t come up with that killer idea to save the world. What are the alternatives that will give you the independence you crave, and challenge your business acumen?
Technically, I believe an entrepreneur is anyone who manages his own P&L and doesn’t meet the government tax definition of an employee. Beyond the traditional new product or service model, you can always buy an existing business, purchase a franchise, join a multi-level marketing (MLM) company, or simply go out on your own as a consultant.
Of course, there are a million variations which can make the difference, like work at home versus an office, or online versus storefront, but these are secondary to your basic role. In deciding which of these startup models is right for you, the best place to begin is to ask yourself why you want to own a business rather than be an employee:
- You have the technology to change the world. If you want to nurture a product into full bloom, a traditional startup is your best bet. Of course, you get the challenge of filing patents, developing a product, and defining the revenue model. With an existing business, MLM, or franchise, the technology and process are already set.
- You really just want to be the boss. If your answer is that you want to own your own business because of the freedom it will bring you to manage an operation, try a franchise or join an MLM, or start selling your online courses. There are many online course platforms available that can help you get started in no time. The base organization will define what you have to do, when you do it, and how you do it, but the success is all in the execution.
- You want to make lots of money. New startups build from scratch and go for broke. Many wind up literally broke, but a select few do make lots of money. Franchises, on the average, make less money than other types of businesses, but they have higher success rates. Consulting businesses rarely scale, so you may do well, but are not likely to make lots of money. MLMs are like the lottery, minimal investment, with low odds of any success, but a few people hit it really big.
- You are doing it to satisfy someone else. Too many people are running a business because their father always expected them to take over for the family, the spouse has been nagging you to do it for years, or they want to prove something to a sibling or peer. If you have a choice here, at least pick a less risky franchise, or a minimal investment MLM.
- You’re looking for something to keep you busy. If you have startup funds in hand, you are one of the lucky ones who can start or buy any business you want. If you lack hands-on experience, a franchise may be ideal for you, because you’ll get help with everything you need to set up your business. On the other hand, if experience is your strong suit, why not highlight and share it through consulting?
Whichever business model you pick, you need to make a serious commitment to the effort, or you will likely fail. I have a friend who starts a new business every couple of years, sort of like a hobby. After a few months, she gets tired of the grind or runs up against a couple of tough problems, so she rationalizes that the economy turned bad, or someone misled her, and she walks away. A different business model probably won’t solve this problem.
If you still aren’t sure where you fit, I recommend working for someone else for a few years to gain knowledge, contacts, capital, and learn more about yourself. Then take the plunge with one of the above business models. You will soon know whether you are having fun, and that’s the most important criteria for any aspiration. Enjoy.