Only you can know why owning your own business is appealing to you. It could be a combination of some or all of the reasons just discussed, or even one that was not mentioned. Whatever the reason, it is wise to identify what motivates you to be an entrepre¬neur. It will help you understand what is important to you and give you guidance when making decisions. The old adage “Know thyself” is particularly relevant here. The following questions will help you determine whether owning a small business is a good fit for you:
1. Am I passionate about my product or service?
2. What is my tolerance for risk?
3. Am I effective in making decisions?
4. Am I willing to take on numerous responsibilities?
5. Will I be able to avoid burnout?
The Many Varieties of Entrepreneurship
entrepreneurship is marked by diversity—that is, there is great variety both in the people and in the firms that are entrepreneurial. As a potential entrepreneur, you can be encouraged by this diversity; you do not need to fit some narrow stereotype. Let’s consider some of the variety we observe in the entrepreneurial world.
FOUNDER ENTREPRENEURS VERSUS OTHER BUSINESS OWNERS AND FRANCHISEES
“Pure” entrepreneurs are founders who initiate businesses that bring new or improved products or services to market. They may also be artisans who develop skills upon which they can start their own firms. Or they may be enterprising individuals, often with marketing backgrounds, who draw on the ideas of others to launch new ventures. Whether acting as individuals or as part of a group, founders bring companies into existence by surveying the market, raising funds, and assembling the necessary resources. The process of starting an entirely new business is discussed in detail in Chapter 3.
At some point after a new firm is established, it may be purchased or taken over by a second-generation family member or another entrepreneur who was managing the company. These “second-stage” entrepreneurs do not necessarily differ greatly from founding entrepreneurs in the way they manage their businesses. Sometimes, these well-established small firms grow rapidly, and their orientation will be more akin to that of a founder than to that of a manager. Nevertheless, it is helpful to distinguish between entrepreneurs who start or substantially change companies and those who direct the continuing operations of established businesses.
Franchisees comprise yet another category of entrepreneurs. Franchisees differ from other business owners in the degree of their independence. Because of the guidance and con¬straints provided by contractual arrangements with franchising organizations, franchisees function as limited entrepreneurs. Chapter 4 presents more information about franchisees.