Thinking Like An Entrepreneur

Thinking Like An Entrepreneur

Originally published July 20, 2006

This year, millions of Americans will start businesses or become self-employed. Many will have run their own businesses before, but for the majority, it will be their first time as a business owner. So they have to learn how to think like an entrepreneur.

I’ve run my own businesses for 20 years, and I love it. Being an entrepreneur has brought me many benefits: a large measure of independence (not as much as you’d imagine, but still a lot), choosing the people I work with, the opportunity to be creative, building a company that reflects my values, and I’ve also done pretty well financially.

You’ll find, however, there’s a big difference in being someone else’s employee and in working for yourself. How do you learn to think like an entrepreneur?
— Money: From now on, every dollar is YOUR dollar. Even if you were an employee who always watched the company’s bottom line, you’ll have a whole new respect for money when every dollar spent or unearned could have ended up in your wallet.

You’re going to view expenditures a lot more carefully. For instance, if you worked for a Fortune 500 company, you probably didn’t think a lot about  office supplies. But when every dollar is YOUR dollar, that $29 label maker may seem unnecessary, especially when you know the same $29 could be used  on clothes for your kids.  

You’re going to have to make different – more personal – financial choices than you did as an employee: Should I increase my advertising to grow my business or take a vacation? Should I upgrade my production equipment or remodel my kitchen?

— Control: One of the best things about being your own boss is that you get to make the decisions. You no longer have to follow seemingly senseless corporate mandates. But with control comes responsibility, and you’re going to find you’re overwhelmed with the number of decisions you make.

There are the really big decisions when you first start, such as what kind of business to go into, what kind of financing to seek, where to locate. But the hundreds of smaller choices can be just as intimidating — whether to exhibit at a trade show, what kind of insurance to buy, when to hire employees, which tasks are most important, and on and on. It can be exhausting, rather than exhilarating, when so many decisions end up on your desk.

— Humility:  Few things instill as much pride as earning your own living. When you do that in a business you’ve built yourself, you have the right to be especially proud.

But with that pride comes a lot of other stuff too, such as running errands, stuffing envelopes, apologizing to obnoxious customers, emptying the garbage. I once heard about a man who had been a corporate employee his whole life and finally became self-employed. When he went to start work and realized there was no one else to order a desk, phones, or office supplies, he decided to go look for a job.

— Risk: Perhaps the biggest change of all is going to be your relationship to risk.

As an employee, you take care of your career. As such, it’s typically wiser to take fewer risks and thus make fewer mistakes, especially if you work for a big corporation.

In your own business, however, taking fewer risks and making fewer mistakes isn’t an option. You have to choose strategy, decide on which products or services to sell, which customers to pursue. It’s likely that at some point you’ll have to dip into your personal savings to pay bills. When you hire an employee, you risk not being able to pay yourself.

Whenever you incur major debts, you’ll have to give a personal – as well as a business guarantee. Thus, you’ll be risking your personal assets, such as your home, to build your business. That’s scary.

But take heart! It is possible to learn to think like an entrepreneur. I, for instance, am much more comfortable with bigger risks now than I was 20 years ago.

One of the great benefits of being an entrepreneur is you discover and develop many talents and traits you never realized you had. You’ll find you may truly enjoy thinking like an entrepreneur.

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