One of the great American dreams is to own a business. As a coach, I work with many people who want to leave the world of employment and work for themselves, those who want to start a new business or a second business or those business owners who wonder why their business aren’t more profitable. I also lead a class of coaches-in-training where we talk about the mind sets of employees, entrepreneurs and business owners (both small and big business). It’s a fun class and lends itself to some rich discussion.
One of the most beneficial sources of information for people in any of the above mentioned situations (since The E-Myth by Michael Gerber) is a book by Robert T. Kiyosaki, www.RichDad.com , entitled Before You Quit Your Job: 10 Real —Life Lessons Every Entrepreneur Should Know About Building a Multimillion-Dollar Business. I highly recommend it whether you're thinking multi-million or not.
So what are the differences between the motivations of an employee and an entrepreneur? Most employees are motivated by a need for security and most entrepreneurs are motivated by a desire for freedom. Yes it’s true that in order to have that freedom there are risks involved. It’s been reported that 95% of all new businesses fail in the first five years, I believe that figure is closer to 80%, but regardless, it is a high number. So what is the failure rate for new employees…ever thought of that? What if the job doesn’t last or the employee’s not a good fit or whatever…is there any real security? If a business fails, what is it that fails, the entrepreneur or the plan? What is the definition of failure anyway…was nothing accomplished or just not as much as the owner wanted? Certainly you can see why I say this is area rich for discussion.
When I hear someone say they want to start a business on a shoe-string, they have little or no sales experience, don't particularly see themselves as creative, they want to keep the same salary they’re making in their job and want to find some good employees who can do the work so they can spend more time traveling and with family….I usually know they haven’t done their planning. It really is true that failing to plan is planning to fail. A business must be created before the business is begun.
Most people are surprised to hear me say that not all small business owners are entrepreneurs. I think there is a definite difference in the mindset…most entrepreneurs are really idea people, this coupled with their ability to take big risks and use other people’s resources really well (they don’t want to manage people, they, hopefully,hire people who already know what to do) and they know how to sell. They must after all enroll investors into putting resources into their company. Most employees on the other hand, hire people they can manage or control. Some how we think security and control seem to go hand in hand.
Small business owners (like me) would be considered to be self-employed entrepreneurs or self-employed period. I certainly don’t see myself as having the entrepreneurial mind-set. I own my business, but I have a job; because very simply, if I don’t work, I don’t get paid. I employ myself. Yes I can set my own hours, work with who I want to, I do outsource work, have passive income, savings, all part of the American dream and I could get-by, but life is not about getting by. Is it? I could hire other coaches to work under the Moving On umbrella…..but the question then becomes do I want to be an employer? There is a price to pay for going bigger and there is a price to pay for playing small.
The job of the entrepreneur, in the true sense of the term, is to design a business that can grow, employee many people, add value to it’s customers, be a responsible corporate citizen and bring prosperity to all who work in and on the business.
Kiyosaki says if you can leave your job for a year or more and it will run smoothly and still prosper, you have a big business; if you can only leave it for a month or so and it still runs smoothly you probably have a job. I think it’s fair to say many small business owners can’t or don’t ever leave. Over 30% of Americans take less than 7 days vacation per year…..both employees and the self-employed. Is that also a part of the American dream? I think not.
Fear of failing is the number one reason why people do not succeed in life or don’t succeed to the extent they would like to. This occurs not just in business but in all aspects of life. If you’re interested in leaving the world of working for others and starting your own business or expanding your business to play bigger, one of the suggestions of Rich Dad is to get a job with a Network Marketing company in the evenings. A part time job of this type can teach sales and leadership skills, and even management skills that will enable you to be more prepared to be a business owner. Yes, you’re keeping your day job for the security, but at the same time you’re gaining experience with the second job…extremely valuable experience. And if you can’t make a success in the Network Marketing business…what does that tell you about your probable chances of making it as a big business owner?
We’ll talk more in the next edition of what you need to know before you quit your job. Until then….what is your personal American dream and what steps are you taking to make it happen? What will be different when you 'arrive' at the dream and how can you enjoy the journey?