Does Income Make It a Business?
Of all the questions I’ve been posed in the last forty years, the one that usually hurts the most feelings is when a business owner mistakenly thinks he or she is an entrepreneur and I correct them.
The fact is, most small business owners are just that – not entrepreneurs, not visionaries – just folks who have bought themselves a job. They’ll work for themselves for years and then, after all that hard work, if they’re lucky, they’ll sell their company to some other poor soul to labor for next to nothing for a few more decades.
Here’s where some of you cry out, “But Gerber! So-and-so is a millionaire and did it all selling imported widgets online!”
NOT an entrepreneur. Still just a small business owner.
Income doesn’t make you an entrepreneur any more than owning a sports car makes you a race car driver, and too many people today are forgetting that. In the age of drop shipping businesses and cheap imports from the third world, there has likely never been a better opportunity to set up a money-making company to provide you a second- or even third- stream of income.
If you do it well, you can retire with a lot of zeroes to the left of the decimal point in your account balance. If you do it correctly, you can keep adding to that account balance.
What makes it exasperating for me is that the reason most often cited for small businesses failing – troubles related to cashflow and all the resultant drama – are often absent in the age of the drop shipment. We all know “that guy” who makes thousands each week simply clicking through orders and ensuring his customers get their widget.
In a lot of ways, though, he is simply a franchisee of the people that built the systems he’s using. PayPal, Shopify, Amazon, eBay.
In other words – companies that really were started and grown by entrepreneurs. Our Amazon seller is no different than the people that bought Ray Kroc’s franchises in the fifties and sixties. They paid their money, they purchased a system that works, and they profited directly from it.
Now, our new-age online business owner isn’t a bad person. They certainly have a great opportunity to make money and the same rules that apply to any business can still be applied to them-
· Create systems and structures to ensure the customer experience is the same every time
· Document how every facet of the business is to be operated
· Start by moving yourself out of the smallest tasks to be completed
· Spend time working on your business, not in your business
In the end, our online reseller can still be classified into one of the same three categories I first documented three decades ago in The E-Myth books – they’re a Technician, a Manager, or an Entrepreneur, and no matter what their account balance is, the success and longevity of their company will be defined by how they choose to manage it – good, bad, or otherwise.