Entrepreneurship. Rhonda Abrams
such as attorneys, IT consultants, webmasters, and bookkeepers).
■ The business generates current income for the entrepreneur, rather than creating ongoing income streams that could continue even if the entrepreneur were to leave the business.
In other words, in solo sustainer businesses, the business sustains the entrepreneur, while the entrepreneur sustains the business. Once the entrepreneur stops working, the business stops—period. In essence, the entrepreneur is the product that the company sells, and is the sole income generator for the business. There is no business independent of the entrepreneur.
SMALL BUSINESS
When someone uses the term “small business,” they usually mean a business that’s intended to grow to a reasonably healthy size and stay there. The goals of the venture’s founders typically include:
■ The business is designed to be a career for the owner.
■ The business also provides jobs for others.
■ The business is designed to produce ongoing, annual income for the entrepreneur.
■ The business may be capable of building value independent of, and lasting longer than, the entrepreneur’s personal involvement.
■ The business is small enough for the owner to be able to control it, yet big enough to be able to support growth.
Ideally, a business like this will develop value in addition to the annual income it produces for the owner and the paychecks it generates for employees. With good planning and development, many of these businesses can be sold to others when it comes time for the entrepreneur to retire. They can also be passed down to family members or employees. Most independent, one- or two-location businesses fall into this category, such as restaurants, construction companies, auto repair shops and dealerships, retail stores, and small business or personal service firms.
Social responsibility and social entrepreneurship
Increasingly, entrepreneurs want to achieve more than simply profits with their companies. They want to do something positive for the environment or for humanity. Where once they might have formed a nonprofit organization, they now want to harness the energy and efficiencies of a profit motive to achieve positive social goals. See Chapter 17 for more on this topic.
Smaller businesses such as these may seem far less exciting than high-growth start-ups, although they’re also less risky. They tend to use proven business models, and they can reach out to established support networks, such as industry associations and consultants, for assistance.
HIGH-GROWTH START-UPS
The entrepreneur who starts this kind of venture has a different kind of ambition than those who launch other types of businesses. Yes, they may start small, but their vision doesn’t stop there. These entrepreneurs have plans to grow big. Their goal is to develop a company that will expand into a major enterprise—one worth many millions of dollars. They envision a company so substantial that perhaps it will become a household name, with publicly traded stock. Or they may hope that an even larger corporation might acquire the business in the future.
Google founders Larry Page and Sergey Brin right from the beginning hoped to make it really big by creating search technology that would harness the chaos that was the early Internet. Ray Kroc saw the possibilities in a small hamburger-franchise and grew the McDonald’s empire from a single burger stand, based on his vision of applying mass production concepts to a service industry (food preparation). And every day, venture capitalists are presented with business plans from would-be entrepreneurs whose definitions of success go well beyond merely earning a decent living.
High-growth start-ups are the types of new companies that get a lot of press. These exciting, innovative businesses aspire to new heights and strive to break new ground. They’re also risky. Since an entrepreneur creating a visionary venture wants to build a company with huge potential, they often have to put personal considerations—such as the business’s ability to generate current income for them or provide them with financial stability—second to the need to find a concept that can support the growth of a large enterprise.
Because visionary ventures inevitably involve finding and securing big markets—or developing new products or technologies—they typically require a great deal of money to get started. This means that the entrepreneur not only has to spend a lot of time seeking financing, but they also will probably need to give up a significant portion of the company’s ownership to investors.
REAL-WORLD RECAP
Your company vision
Ask yourself the following questions to help determine the kind of company you want to build:
■ How big a company do you want to build?
■ Do you want to work by yourself or with others?
■ What business values or corporate culture do you want to create?
■ What are your business skills?
Your business vision
Now that you’ve determined the level of importance of each of the Four Cs, and figured out which of them suits you, you can start thinking at a fairly high level about the type of company you want to build and run.
■ How big a company do you want to build? As you begin to think about your business, keep in mind that the business itself may dictate the size. Some people deliberately keep their business vision small: They want to be sole proprietors and have no interest in employing others or growing a business that requires more than their particular input. Those with professional skills like accounting or business consulting often fall into this category. Big ideas often require big companies to make them come to fruition. It would be impossible to run a furniture manufacturer that has mass-market reach with just three employees. A lot of this comes back to control. It’s hard to maintain a high degree of control over a larger company—although some people certainly try.
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■ Do you want to work by yourself or with others? This is a critical question. You may be a self-sufficient type who prefers being in control of every aspect of your business over delegating responsibility or partnering with others. Or you may be gregarious and socially inclined and need others to support you, to bounce ideas off, and to socialize with. Or your business may absolutely require others with complementary skills to make it a success. Your preferences in this regard will determine the type of business you’ll start.
■ What business values or corporate culture do you want to create? What’s important to you about the nature of the business you build? How will you treat your employees? Interact with your community? Relate to the world in general? What code of ethical conduct will you adhere to when doing business? Management style plays into this: You may prefer a buttoned-down, traditional workplace. Or you might want to foster a more fun environment that includes scooters, video games, and even nap rooms. Here’s where your commitment to socially responsible behavior comes into play, as does your vision of how you want others in your organization to view you. Do you want to create a role for yourself as a traditional authoritarian boss or to nurture a more collaborative, “flat” organizational culture? Some companies are committed to valuing families, allowing four-day workweeks and guaranteeing that employees can leave at 5 p.m. Your business values represent an important aspect of your business vision.
ENTREPRENEUR’S WORKSHEET
Your