What's the major difference between entrepreneurs and those who work for someone else?
I worked for a corporation for years, but always had an urge to start my own business. I have since had a few home-based businesses. Recently, a few friends have asked me if they should leave their jobs and start their own business. They have some great ideas, but being an entrepreneur takes a certain kind of personality. Before I share my feedback with them, I am curious what you all think makes for a good entrepreneur and how this differs from those suited for the corporate world.
A good entrepreneur is willing to sacrifice time and money to develop something they believe will give them more of both time and money. It takes tenacity and a lot of ambition along with the ultimate ability to stay positive when things don't go exactly according to plan. All entrepreneurs know that working hard is different when it is your business because you care more. But you also care more, so you can never leave it at work. The work is with you all day, everyday. If you believe in something and have the desire to do it, that is the start. It is mostly important to do it right, have a plan and be strategic about your approach. Know the industry and research every detail of it.
Jen, so glad you asked ....
... to name a few .... (1) freedom from politics, rude bosses, unfair performance appraisals and compensation, pink slips (2) freedom to develop the business concept on your passion and to enjoy the full economic benefits (3) requirements: discipline, drive, competitiveness, due diligence, emotional-relational intelligence.
The most successful entrepreneurs I've met and worked with all demonstrate the following traits:
Although these traits are often common in non-entrepreneurs, these traits are almost always magnified in the really good entrepreneurs. Entrepreneurs tend to lead and create with the traits above. Others tend to use the traits above only after the goals have been established and communicated with clear direction. I think risk vs. calculated risk applies too. My brother was honest enough about himself to know he is not willing to take the risk associated with starting his own company. He felt the risk was too high and not predictable enough so he is seeking employment with a company instead. I admire the honesty, objectivity, discipline and commitment that decision took!!
Echoing similar sentiments, the entrepreneurs I have been around have a strong belief in what they are trying to accomplish and have a strong sense of ownership over that. They believe strongly in the challenges they are trying to solve and are relentless in success and in failure. I'm actually one that is currently working for a company, and have also helped those that have start-ups. They are different environments also, but one thing that is important to assess is can one "afford" to make that jump? It's not a topic that comes up often, but it is a financially risky situation and being prepared for that is also critical.
Good luck to your friends in their pursuits!
Here is an excerpt taken from a paper I am writing that may be helpful.
To better understand what entrepreneurship is it is interesting to understand its roots as much can be learned from the etymology of entrepreneurship. The word entrepreneur is of French origin meaning “between taker” or “go between” which was first used to describe French military expeditions (Hisrich and Peters, 2002). The French later elaborated its meaning to include those who constructed bridges, harbors, and roads for military use (Berthold, 1951). The French subsequently evolved this meaning into a description of any innovator who took risk through a venture (Cunningham and Lischeron, 1991). The classic definition of entrepreneurship has evolved into various streams of definition based on traits and qualities, roles or functions of the entrepreneur in the economic process, behaviors, attitudes, and activities of the entrepreneur (Kaufmann and Dant, 1998; Say, 1803, 1815; Cantillon, 1755, 1931).
Another way to look at this is the difference between entrepreneurship, management, and leadership. While leaders operate in organization already established it is the entrepreneurs create the organization from practically nothing. It is the entrepreneur which creates the road, the manager sustains and maintains the road while it is the leader that turns that road into a highway. There are distinguishable differences between entrepreneurial management and entrepreneurial leadership. Shane and Venkataraman (2000) assert that entrepreneurship is a process in which the creation of products and services are discovered, evaluated, and exploited upon the seizure of opportunities. Zaleznik (1977) maintains that leadership and management differ in that management is focused on the coordination of processes and procedures. Yukl (2008) describes the difference between management and leadership in that leadership is focused on relationship and influence between the leader and follower. Winston (2009) makes the assertion that leadership is about relationship while management is about pro-cess. Bennis (1989) maintains that managers focus on: administration, are unorigi-nal, maintains, work with systems and structures, relies on controls and operating procedures, uses range that is limits the view, imitates, asks how and when, emphasizes the organization’s bottom line, is a status quo acceptor, takes orders like a classic Soldier, and does things right. Conversely, Bennis (1989) further maintains that leaders focus on inspiration and innovation, are original, develops others, is people centric, inspirational and trustworthy, has long range view, asks what and why, has foresight and vision, is original, is a challenger of the status quo, does their own thinking for themselves, and does the right thing. These concepts also support the differentiation between entrepreneurial management and entrepreneurial leadership (Gupta, MacMillan, Surie, 2004; Stevenson and Jarillo, 1990).
Here is a tool that I created which may be helpful...
Discover your entrepreneurial leadership fitness!
The Person-Entrepreneurial Leadership Fitness Instrument (PELFI) © questionnaire is a tool an entrepreneur or business owner can use to measure the latent components which make up entrepreneurial leadership fitness in which the higher the fit the higher the likelihood for entrepreneurial leadership success. This tool will be helpful for business owners and entrepreneurs seeking to understand how their leadership through the entrepreneurial new venture process can have implications for sustainment, success, and growth.
At the end of the questionnaire participants are able to request a summary report of their results by entering an email address at the end of the questionnaire. The questionnaire should only take from 5 to 10 minutes to complete. Data will only be reported in summary format and no individual responses will be highlighted in the results of this questionnaire. All responses to the questionnaire are kept confidentially anonymous.
Who does this questionnaire help?
This questionnaire will be helpful for:
(1) Nascent entrepreneurs - those who are searching for the business idea or who are involved in business planning,
(2) Existing business owners - those who have officially established their business,
(3) Entrepreneurs - CEOs, executive directors, and presidents currently involved with sustaining and growing their business,
(4) Experienced entrepreneurs - those who have been in business for period of time or have sustained and grown two businesses, and
(5) Serial entrepreneurs - those who have started and sustained three or more businesses as well.
What this questionnaire covers…
Concepts pertaining to the qualities of an individual person such as:
• Absorption of uncertainty, Foresight, Vision, Confidence Building
• Business Framing and Planning, Performance and Improvement Orientation, Ambition, Awareness
• Marshaling or Gathering of resources, Underwriting and Path Clearing, Diplomacy, Bargaining, Convincing, and Encouragement
• Business Implementation, Decisiveness, Synergy, Commitment Building, Inspiration, Enthusiasm, and Team Building
This tool measures entrepreneurail leadership fitness components aligned to an evidence based scientifically validated framework comprised of entrepreneurial leadership theory and the entrepreneurial new venture process. See table below...
Entrepreneurial Leadership --->Entrepreneurial Venture Process --->PELFI component:
Uncertainty Absorption --->Searching --->Venture scope
Challenge framing --->Planning --->Performance orientation
Path clearing/underwriting --->Marshaling --->Entrepreneurial savvy
Commitment builder/realism --->Implementing --->Leader-follower orientation
Also concepts of risk-taking, proactiveness, innovation as well as business satisfaction are examined.
Let us continue the conversation about entrepreneurial leadership come visit the Entrepreneurial Leadership Blog and join the conversation today!
To add on to what others have already mentioned, the following key qualities sets an Entrepreneur apart from the rest. The courage to chase a dream, determination to succeed and grit to face the downs, the responsibility of taking along the team members who just trusted the vision and tagged along.
To be an entrepreneur it takes to be a very organized and determined person. As you know Jen, it is not an easy task and there are moments of desperation, where you want to run away from all the hats that an entrepreneur has, marketing, financing, sales, etc, etc. I would ask them how sure they are to leave everything behind, take a new journey, be patient with the new outcome and always positive? Good luck!
You must believe in yourself and be determined to get things done everyday.
One thing I can tell you for sure is that you will have challenges, maybe sooner than expected. You must keep the faith! It is not easy running your own business, that is why not everyone can do it, be strong.
1) The willingness to physically and mentally sacrifice short-term goals in lieu of long-term goals.
2) The ability to contribute in several different areas of a business.
3) Being able to make pragmatic decisions with limited resources.
4) Being able to work efficiently with limited resources.
5) Deep expertise and knowledge of the business at hand.
6) The ability to stick to a long-term vision and know when it's prudent to pivot.