Each year, thousands of individuals are overcome by the desire to start their own businesses. So what on earth possesses somebody to give up a steady monthly income, guaranteed holiday and sick pay, a risk free working environment and a team of people to support and help them, in order to work on their own, twice as hard, for much less money, no guarantees and loads more risk? Well, the answer is not as simple as you might first think.
Michael Gerber, author of best-selling book “The E-myth”, concluded from his extensive research that there are 3 types of people who set up their own businesses. The first type and the one most people associate with new businesses is the Entrepreneur.
Entrepreneurs are are normally identified by having a big vision of the future and a constant need for change. They may well have had a number of jobs over the years, but they have never really been satisfied in any of them. They will usually regard their bosses as slow moving and lacking in vision. They will never feel that their bosses and peers understand them as in their own eyes, they are unique. They are more than likely to take risks that don’t go down too well in the organisation that they are in.
Whilst many entrepreneurs go through this phase when they are very young, such as Richard Branson and Alan Sugar, this is not always the case. For example, Duncan Bannatyne did not start his first business until he was 30 and Ray Kroc, the founder of McDonalds, did not start until he was 57, although there were many signs of his entrepreneurial nature before that point. The reason that entrepreneurs decide to leave the rat race to set up their own business is because they have a bigger vision than the people they are working for.
The second type of person who goes into business for themselves is the Manager. These people are normally identified by their need for control and stability. Good managers will have built up a lot of experience in a few positions over the years and as their confidence grew, so did the importance of their role in the organisation. This advancement was probably the biggest driver for them, until the time that they reached the top of the tree they were in and then they had nowhere to advance to.
Unlike the entrepreneur, the manager is rather risk adverse. They have spent most of their working life managing people and problems, reducing risk and creating calm out of chaos. The reason why managers decide to set up on their own is because they are forced to, either through redundancy or lack of support from their superiors. Either way, this is normally aided by the fact that something in their mind makes them believe that they will not be able to get an equivalent or superior job elsewhere.
The third type of new business owner is the Technician – these are the people that actually do the work: the plumber, electrician, accountant, solicitor, hairdresser etc. They generally live in the moment and as long as they are able to do what they’re good at and get suitably rewarded for it, they are happy. They generally take pride in what they do and like to be left alone to get on with it. If they were appreciated and had interesting work every day, then they would probably stay employed. The technician does not necessarily have a vision for the future nor do they want to manage people, they just enjoy what they have trained for years to do.
Like the manager, they generally do not leave employment unless they are forced to do so, either by redundancy, or more likely the fact that the organisation where they work is not allowing them the freedom to do what they do best, and they feel over managed and under appreciated. They might be able to get a job elsewhere, but fear that all employers will be the same.
Many people think that the majority of business are started up by the entrepreneurially-minded people, those with visions of creating something new, who will go on to be the next Richard Branson or Bill Gates. But Michael Gerber’s research proved the exact opposite. Only about 5% of businesses are started by entrepreneurs, while 15% are established by managers, and a staggering 80% by technicians. So how does this help us, if we’re starting up or growing our own business?
A business starts when it sells something. There is nothing better than picking up your first job and getting paid for it. I still remember with joy collecting my first ever cheque from my first ever client. The quicker you can start selling something, the quicker your business will take off. This is where the technician has an advantage, as they can get up and running very quickly just by doing what they did previously, sometimes even with the same customers.
Managers need something to manage, so the quickest way that they can get started is to buy an already established business, or more commonly, buy a franchise, which is basically a ‘business in a box.’ That way, they do not need to be able to do the work, just manage the process and people, which is what they’re best at.
Entrepreneurs probably have the toughest start, which is turning their idea into reality. To hit the ground running, most entrepreneurs will have done most of the initial work necessary while they had a job elsewhere, working evenings, weekends and sometimes during work-time, to get the product to market.
So the best way to get a quick start in your business is to understand whether you are an entrepreneur, manager, or technician, and to structure the business accordingly. To grow the business, you then need to learn the skills of being a business owner. You can learn by trial and error, but a quicker and less stressful way is to find a coach or mentor who can help you find the strategies that will help you take your business to the next level.
If you’d like to find out more about how we can help your business, why not come along to our free ThinkBIG workshop? This monthly business planning and growth workshop is helpful for both new and established businesses, and will get you thinking about your future vision and how you can make it a reality.
You can visit our What’s On page by clicking here to see all our upcoming events, or just call the office for a chat on 02380 560833.
We look forward to helping you kick start your business!