Employee or Entrepreneur?

 During the current election, the question of jobs and the economy are setting the agenda. One of the proposals being made is that increased tax cuts and extending tax cuts will lead to more investment, more entrepreneurship and thereby solve the economic problems the country faces. An entrepreneur is defined as: "one who organizes, manages, and assumes the risks of a business or enterprise."  Obvious, the assumption that entrepreneurs are the "job creators" is a false assumption, they are investors in risk. The essences of entrepreneurial activity is "creative destruction."

The entrepreneurial investor can chose to invest in people by building a business. But they can also invest in the capital assets of a company and liquidate the liabilities, i.e. fire people (employees); or they can invest in lottery tickets (Wall Street virtual products IPO's, swaps, etc.). They can invest in  anything that offers an opportunity to make a profit. Only one of these creates jobs, the entrepreneur who invests in people. What kind of entrepreneur are you going to be?

I find very misleading the assumption that there is a distinction between employees and entrepreneurs. Some say that entrepreneurs create jobs and jobs creates employees. This is assumed to be the equation. So we are presented with the question:  

I have found many people who seem to think that to be the entrepreneur is to be the boss and have control over the whole enterprise. They don't have to be "workers" because they are THE BOSS. It's their (or other peoples money that they control) that gives them the power to "boss," they claim. It certainly works for the entrepreneurial corporate raider



and investment banker. So my question to you is

Which would you rather be

 an entrepreneur or an employee?

  But for the rest of us, those of us who actually work for a living and make a meaningful contribute to society and our community, my answer to this question, and the theme of this Blog, is

I better be both to be successful. 

 

 

The entrepreneur who does NOT see him/herself as an employee is a fool. To be an entrepreneur means that you are your own boss but you can't be boss unless you have an employee. And that employee is you long before you hire anyone else. And if the project fails, you are going to fire your last employee -- yourself. Only then can you go on to the next project, i.e. as long as you hold on to a losing proposition you are employed by yourself you are not freed until you fire yourself.

Control may feel good until you find that you are also accountable to all your stakeholders including yourself and your family for what comes from the responsibilities that control imposes upon you. 

If you are unemployed then you are a failed entrepreneur, and if you are a failed entrepreneur then you have been a poor boss to your sole employee -- YOURSELF. 

Entrpreneurship A woman's point of view

This video is from the TED Channel

Gayle Tzemach Lemmon: Women entrepreneurs, example not exception

Entrepreneurship is "one who organizes, manages, and assumes the risks of a business or enterprise."

Let me steal your profit: -- Have you ever encountered this?

 The seller and the client relationship can sometimes become really tricky, especially when you are selling a service. Here is a fun example.

Where the jobs are

There are many different reasons to set up a business or a career where one does. To be close to suppliers, raw materials, customers, transportation, etc. are some of the most common reasons. In the complex world of international commerce, these choices are even more critical. The commitment to locate is not a short term decision, despite the internet. Cost advantages in one sphere may be suddenly over turned by an environmental, technological, economic, social or political change in another.

Careers are the same way. Different skill sets are need for different industries as we all know. Steel workers concentrated around the big steel plants in the Mid-west and Great Lakes, oil workers around Texas and the Gulf of Mexico, actors in California and New York. Part of any sole/soul proprietor's business and/or career planning should include a realistic appraisal of the occupational distribution the area where you plan to settle. One place to turn for useful information is the U S Department of Labor's Mapping out a career: An analysis of geographic concentration of occupations

In a nutshell:

What you do for a living and where you live have a lot to do with each other. Explore the connection between occupation and location

Are You a Social Entrepreneur?

Entrepreneurship is not just a "capitalist" idea for making money. It is the dream of creating value where an opportunity is perceived. Social entrepreneurs see opportunities in the problems our society faces. They see the challenge and are willing to assume the risks of finding solutions to these problems. What are the Key Traits that go into making a successful social Entrepreneur?

This Harvard Business Review 2009 interview with John Elkington, Founder and Chief Entrepreneur, SustainAbility presents some ideas about what makes a good social entrepreneur.

Exit Planning: Planning for failure can never come too soon

I work, and have worked, a lot with entrepreneurs and entrepreneurial "want-a-bes" in the earliest stages of their enterprise formation. After listening to the things which fire their passion -- the germ of their idea, their pride of inventiveness, and their dream of wealth - they will ask for my help to find money for the project. Before I even consider the project, I ask them one key question, "And what is your plan B?" This determines whether this is a real prospect or a Dreamer. My exist plan for Dreamers is -- "Conclude the interview", "Move on" "But do it politely."


Dreamers use up your time and they don't pay for any advise you give them.


The recent catastrophe in the Gulf of Mexico with British Petroleum (BP)'s Deep Water Horizon explosion and the oil well rupture has capture the national and international news. The crisis is now two months old with no immediate end in sight. This disaster brings home the cost of not having a Plan B.


Now you might ask, "What does BP, a multi-billion dollar international corporation, have to do with me and my small business? The answer is Everything.


Every oil well drilled is an entrepreneurial venture risking $100s of million dollars. BP has the experience and resources for opening new wells. One would think that they would have a plan B in case of failure or accident. But in their narrow, "get it done quickly and cheaply" mind set they have put not only the project at risk, but the company,and all the contingent stakeholders as well. These include those who depend upon the company for their livelihood, the investors, especially pension programs, their neighbors including the fishing and tourism businesses and the tax payers of the states and the nation whose oil they had been given a lease to exploit.


My clients, and prospective clients, don't have the resources of a BP. They don't necessarily have the experience or access to the expertise in their business that BP has. But going into a new business venture carriers the same risks of failure. And while the size their potential losses may be no where as large in absolute terms, they are proportionately infinitely larger for these entrepreneurs than they are to BP.


The lesson here is that BP did not have a Plan B for the Deep Water Horizon well venture. This is proving to be very costly for the company and all its stakeholders. Because there is no Plan B, it could even mean the end of the company as we know it today.


As sole proprietor of your business, you have placed everything you have at risk of success and at risk for failure. If you opt for some protection you might wrap yourself in a corporate form such as a LLC, Limited Liability Corporation, but even that will not totally protect you from the risks of failure.


So how do you protect yourself or at least minimize the risk of failure?


You do so by planning FOR FAILURE. I strongly recommend that you consult the following book if you doubt me - The Ten Commandments for Business Failure by Donald R. Keough.


Oh, I know, this is not the "positive thinking" that new age career/business coaches and gurus preach in their books and seminars. They teach you to think positively, develop a positive attitude, and practice "the Secret". They preach and practice the "build it and they will come" philosophy. But just as a candy bar in the late afternoon can give you a temporary sugar high, these doses of magical thinking don't stay with you very long, become habit forming and lead to a fat, obese ego at the risk of "personality diabetes".


Planning to fail is not negative thinking. Planning to fail is rational, realistic thinking. Planning to fail is like walking into the crowded theater, looking for the exits, and making note of the best route to take out of the building in case of fire. With such a plan, the show can be much more enjoyable. While you don't expect to use the plan, in the rare event that there is a fire, you know what you have to do to survive. Many others without such a plan will more than likely panic and their survival becomes problematic.


Planning for failure can also be planning for success.


At the end of the show, your escape plan can now be your exit plan. That is, you know where the exits are, you see the crowd moving toward the front exit and becoming stuck as they slowly make their way through restricting doorways. You, on the other hand, walk in the opposite direction, go out a side door, and get into your car thus beating the traffic. You succeeded in enjoying the performance and you saved yourself time and effort in the process by having an exit strategy or plan.


Planning for failure can help you to reduce your loses and planning for success can help you to maximize your profits. Planning for both contingencies is called EXIT PLANNING.


When is the best time to build your Plan B? At the same time you are building your Plan A. Too many people build their houses with all the doors opening into the house. If you look around, you will see that most businesses, because of fire codes, have their doors open out. That is their basic Plan B in case of emergency.

The big question today for everyone involved in the Gulf Deep Water Horizon venture is: "How do I get out of this catastrophe alive?" As we see from the news reports, nobody apparently planned for failure. Today they are simply trying to survive and if they do survive,for years to come they will be paying the price for their failure to plan for failure.

Do you have a Plan B? What is your exit plan for failure? What about for success?

Here at B. R. Bainton Associates, we are prepared to help you evaluate your risks and coach you in developing you own exit plan. If you have questions or comments please contact us at brbainton@gmail.com

Social entrepreneurship - Charity Water

Access to clean safe drinking water is considered by many in the developed world to be a right. Today some people in the west are beginning to recognize the value of clean, potable drinking water and its shortage in much of the world. They are also recognizing the interrelationship between access to potable water and public health and economic development.

I am not surprised that there is a problem. When I served in Peru in the early years of the Peace Corps I encountered and observed a big contradictions in our USAID Alliance for Progress and the Food for Peace program. The former was designed to help develop the rural economy. The latter,The Food for Peace program, addressed the nutritional needs of children through support to school lunch programs in rural Peruvian villages. The program supplied dry milk, rice and other surplus agricultural products from the US. On the surface, this seemed to be a great idea for improving the health of the children. However, there was one big problem -- dirty and contaminated water.

The local water supply was limited in the villages I visited. The same stream or pool was used by humans for drinking, washing food and clothing, and by animals to drinking and in some cases to irrigate crops. From a public health perspective, These uncovered streams and cisterns carried water of very questionable quality.

The problem I noticed was at the schools where the dry milk was being mixed with the contaminated water. Mixing dry milk with contaminated water produces a nutritional rich environment for the waterborne diseases found in the local water supply.

Working with other Peace Corps volunteers and the Programa del Agua Potable, in the Peruvian Ministerio de Salud, we were able to obtain 8 army surplus water pumps to start a program of placing wells at the local schools. Villages were encouraged to dig the wells near the schools to make potable water available for the school lunch program. Village that did this, lined the wells and purchased the pipe for the pump were given a pump. We had more requests that we could supply. The program was such as success that the Peruvian authorities took over the program. They bought pumps available on the local market and made them available under the same conditions.That experience has stayed with me over the past 50 years.

Today water is an even more crucial resource in the developing world. When I came across this video of Charity Water I felt this is an excellent example of social entrepreneurship that can have a lasting impact on those served.

Scott Harrison and Charity Water in inspirational story.I hope you enjoy it

Social Entrepreneurship CASE STUDY: Solar Panels and Economic Development in Guatemala

From Time.com Here is a story about the what a little energy can do to change the life a peasant and turn him into a local entrepreneur.

Entrepreneurship Case Study -- An alternative energy company

From time to time in these posts, I will be presenting links to cases of successful new business start-ups and the resources to help you as an entrepreneur to focus your thinking and assist you to turn your dream into a reality.

Solar energy has been around for years now. But getting a solar business started and making money has been another issue.

Recently the Commonwealth Club sponsored as talk by Dr. Richard Swanson entitled Solar Cells at the Cusp.