Entrepreneur vs. Self Employed Business Owner

Author: Brandon Kennington
Topics: Blog on Jun 13th, 2009 | 14 responses

There are literally millions of small businesses. Some are one person and some are a few hundred employees. There are so many small businesses, it almost seems that everyone is doing it. Almost everyone IS doing it. It is a smart thing to do, just for the tax benefits alone. But just because you are self employed and own a business, doesn’t make you an entrepreneur. The difference between an entrepreneur and a business owner is the mindset of how you go about building your business.

Take an example: an Interior Designer, an Architect, Lawyer, or even a Doctor. All could own their own business, large or small, but if the business depends on the talent of the business owner to be there and perform the work, then the person is just self-employed. As an entrepreneur, the mindset and therefore the daily tasks are slightly different. As an entrepreneur, your daily routine is working on designing the systems to keep the business running, and then putting those systems into action. In both cases the self-employed or entrepreneur might work 50-80 hour weeks. The self employed person works to make money, while the entrepreneur works at making money work for him.

Observe a day at your work. Are you building the business or are you running the business? If you find that you are running the business, don’t be surprised if you still are working the same “job” after 20 years and ready to retire with nothing to show for it. If you are simply running the business, your business is your “job”, with no fringe benefits paid for by someone else. However, if your mindset going into work every day is, “What system should I put in place to automate the [fill in the blank] part of the business today?”, you have a mindset of an entrepreneur.

Entrepreneurship is an art. It takes practice and requires a lot of knowledge of disparate areas of business. It also takes a certain mind set, which unfortunately, many business owners never seem to learn. The baby boomers are now retiring, many of whom are self employed business owners with no money to retire. They ran successful businesses for 30 years or more, but sadly they never learned that running a business and owning an automated business are very different. And after 30 years they result in two very different outcomes.

Make the best use of your time today and every day. As the saying goes, “Give a man a fish, and he’ll eat for a day. Teach a man to fish, and he’ll eat for a lifetime”. If giving the fish is doing the daily work of the business, while teaching others to fish means the work is now repeatable on its own, then be the one teaching others to fish. Be the one focused on building the systems that can be repeatable without you. That is where real value is created. And in the end, the sum of those values determines the worth of your businesses.

  • http://www.infinitetlyevolve.com Joel

    I have just started listening to your podcast and find the advice very applicable, but am not really sure how to achieve this. I have a t-shirt biz that I am currently working on outsourcing to India, but I am finding myself working extremely hard yielding little to no results. We just got our first RND line printed composed of the 3 designs and the basis of our company is to help support a charity. For time reasons I bought a template, but finding it super difficult to integrate a shopping cart. So at this point our site is a bunch of pretty pictures with good intentions. We also just got done with a fashion shoot. So I’ll be working on the aspects of this. I have quickly realized pounding the pavement is yielding me no results and am finding it hard to have a vendor take our line on for the risk of us being an “indie brand.” I am quickly realizing that I am just creating another full time job that’s business model won’t give me the freedom I so desire. So how would I automate my business based on my particular product? I have ideas to pay anyone who submits a design and we use it. gets a t-shirt and a cash incentive. After all I am just one brain and my creativity will dry up trying to come up with all these concepts. So what would you suggest for shipping to customers and placing orders, and setting up a design submission? I know our website is still undergoing work. So I have no product to offer. My questions are more based on optimizing and efficiency. Thank you for your time and any advice.

    Joel

  • Matt Dotson

    Hi Joel, Thanks for listening to the show!

    You may want to listen to our shopping cart podcast episode for more of the pros/cons of different shopping carts. Having a working shopping cart is a good first step, and is obviously better than a beautiful one that no one can use. Don’t try to do everything in one shot, it’s an iterative process. Do the minimum you need to make it functional, and then later you can go back and update it. A template is a good idea, but find a template that’s specific to a shopping cart, not a general purpose template. It can be hard to find good templates for shopping carts, so look at this as a temporary solution until you can get your own web design.

    For shipping and fulfillment, use Shipwire’s fulfillment services. You send them the T-Shirts, their software integrates with your shopping cart and they ship out the merchandise when you get an order. This is a huge time saver!

    I think you’re on the right track with wanting to create a contest for T-Shirt designs, but I think it would be difficult to attract enough designers to your website to be successful hosting the design contest on your site. I would use a design contest hosted on a design site like 99 Designs.

  • Brandon

    Joel,
    Have you checked out http://www.CafePress.com? If I was in the t-shirt business, I would eliminate the entire business side of it, and remain the creative guy. With CafePress.com you can build a shopping cart directly within CafePress, and you don’t have to pay any up front costs like supplies or printing equipment. It is all done virtually for you in real time. The t-shirts are printed for you and shipping and payment is all handled for you. You simply upload your designs and collect the commission checks each month.

    If you go this direction, you can be up and running in a few hours. And potentially cashflowing right away. This is important to begin the cashflow even if your margins are less than if you built the entire business from scratch. Once you have cashflow, you have the luxury of working out the details of building your own site and fulfillment as Matt says above.

    CafePress is used by all sorts of people to do the messy work for them. Do you watch Bill O’Reilly. Have you ever noticed he has t-shirts, coffee cups, and door mats he plugs at the end of each episode. Do you think he actually buys the product, stores it, and ships it to his fans? No. He simply plugs in the CafePress script on his website. And voila!! He doesn’t have to staff a single person for it.

    These are the things that are becoming available everyday. Simple solutions that allow entrepreneurs to build businesses over night. All you need is a good idea and the knowledge that these tools exist. You supply the good idea, we will show you the tools. Hope that helps. Good luck!

  • Joel

    Thanks Matt and Brandon for you feedback. I have been listen to your podcast I would say consistently soaking up all I can and plan to implement the Odesk.com resource as soon as I can. Saying that, if I would listened to more of your podcasts it would have answered a lot of questions.

    I do however have answers for you Brandon and Matt, as well as more questions. I thought about going with cafepress, but the unique concept of our t-shirts texture and innovative ink process would make it impossible to do so. I have explained to my contact in India, who is a solid acquaintance. He assures me that he can reproduce it for at least 2/3 the cost including getting it to me or a fulfillment company. The great aspect of off shoring is that it is completely 100% designed, stitched and structured to give it that unique look. The only other issue is QC for the product before shipped out. Is that something I can set up with the fulfillment company? Also being overseas and happen to be in Canada at the moment I have heard about tariff tax, and I was wondering if either/both of you have experienced this? As far as the design contest… it may be easier to go on odesk and set a fixed price bid and give the individual certain criteria, and see what happens. It seems that this method would be much more effective with cost/time.

    Thanks again for all your help, and I look forward to taking this business concept a duplicating it multiple times in business and personal.

    Joel

  • http://domainingmanual.com/2009/11/domainvestors-tv-episode-26-passive-income-and-domaining/ Domainvestors.tv Episode #26: Passive Income and Domaining | Domaining Manual

    [...] Entrepreneur vs. Self Employed Business Owner – AutomateMySmallBusiness.com [...]

  • http://thegreatofficeescape.com/are-you-an-entrepreneur-or-are-you-just-self-employed/ Are you an Entrepreneur, or are you “Just” Self-Employed? – The Great Office Escape

    [...] is some overlap between terms, of course – entrepreneurs are self-employed by definition! This article explains it all quite well too, especially the differences between building a business and simply [...]

  • stuti

    thank you sir for defining entrepreneur in such a simple way.

  • Life Coach Valj

    Great info! I spend all my time of efforts that emphasize my strengths…Sites such as fiverr.com make it affordable for me to do so!

    Valarie Johnson, Certified Life Coach
    http://www.thewonderfulnow.com

  • Fiverrway

    Yes, indeed, fiverr seems to be an amazing way to really boost your business. If you like fiverr you’ll find interesting some extra info about fiverr and fiverr world.

    http://fiverrway.com/top-20-best-micro-job-sites-december-2010/

    Thanks and wish you Happy New Year!!!

    Christian

  • Yehia Hassouna

    thank you for helping me in organizing me thoughts about this issue.

  • http://webmama.co.uk/ Ecommerce Software

    Wow it is amazing.I think I should try it into my
    Ecommerce Website that it can get a lot of visitors..
    Thanks for this blog.I’ll share it with my facebook friends.

  • http://www.vikgillsocialmedia.co.uk Vik Gill

    All true and worth repeating! I think Robert Kiyosaki makes a similar point in ‘Rich Dad. Poor Dad’ making a distinction between self-employed people and business owners. I know which one I’m striving to be! 

  • Charleen Larson

    That’s a good point you make about running the business vs being run by it.  Even with Fiverr it’s not set-it-and-forget-it, but I’d rather be a project manager than a grunt.

  • Sandygmx

    I am wondering if working for a Direct Sale Organization (DSO) such as AVON where women are considered self-employed–yet we are constantly creating plans for selling our product–would we be considered entrepreneurs??