Starting a Business in the Right Frame of Mind

What is the difference between an entrepreneur and a business owner?

That is not a riddle that will regale your friends. If you were looking for a snappy answer like, 'A business owner is a slave to his business and an entrepreneur is in the business of turning his employees into slaves,' then keep looking. The joke was only half-right. A few business owners might be a slave to their business, but the true distinction is a person's mindset.

Some people try to set up a business by the book. They educate themselves about the service or product. They find the financing. They doggedly dot their i's and cross their t's. They hustle for clients. But without the entrepreneurial mindset, they struggle.

Let's look at a hypothetical illustration:

Sam likes his work, he even excels at it. He has a knack for doing what he does and gets paid a respectable $69K a year for doing it. What Sam doesn't like so much is his boss. When a big project comes through, his boss expects Sam to work extra hours without extra compensation and then takes all the glory for himself. Sam's mindset becomes, "I don't need this; I can start my own company and pay myself for my work." So he does. He snags a few clients from his current accounts, finds several more though his connections, hires a couple of professionals to join him and trains them the way he wants. Things start off fine enough, but after awhile a few cracks develop. Some of the customers are late in making payments and Sam is now having to handle those collections himself. He is also having to do the bulk of new sales because he doesn't trust his employees to close a deal. He hires new employees to get some relief, but is so busy trying to stop new cracks that he never seems to find time to train them thoroughly. In short, he is being spread too thin. Swamped beneath all the income, outgo, ordering, shipping, receiving, filing, reporting and processing, Sam is one unhappy business owner. He never latched on to an entrepreneurial mindset.

How would an entrepreneurial frame-of-mind have managed things differently?

Sam may own the business now, but he never stopped working for his company; he still works for a company, just a different one. An entrepreneur will work on his company, building it with structured systems the way a mason would build with bricks. Instead of doing the essential but assignable tasks himself, he'd have spent more time training his employees how to do those tasks. Instead of micromanaging his employees, he'd trust them to be responsible tor handling the routine aspects of the business. Instead of working harder for more hours, the entrepreneurial approach is to look for ways to work more efficiently. The entrepreneurial mindset is open to seeking help, whereas Sam's attitude was to do it "all by myself."

Ownership is having a set of legal documents on file. Entrepreneurship is a lifestyle. The entrepreneurial lifestyle orders the day such that time is the treasured commodity and money is a tool. The entrepreneur understands that the old saying Time is money is often a fallacy. Sometimes money can be used to buy more time.

One means that many entrepreneurs have used to buy more time is by selecting a professional employer organization (PEO) company to handle some of the administrative burdens. A start-up business may find it's better to contract with a PEO to handle the preparation of the payroll, to administer benefits plans, and to reduce other legal liabilities.