[MUSIC] In this lesson, we answer the question, why you? As we've said, a mindset is a set of beliefs about oneselves, assumptions about the world and one's environment, and how one processes those assumptions and beliefs, in terms of guiding their behavior. At the end of this lesson, our goal is for you to feel much more confident in making critical initial start-up decisions, specifically what type of business do you want to start and what type of business owner do you want to be? We want you to have a much better understanding of the different business profiles associated with these different types of business owners and the intrinsic qualities required by these profiles. Let's take a moment to understand exactly who it is that we want to be. Someone who starts a business is called by several names, business owner, enterpriser, entrepreneur, economic cowboy, industrialist, job creator. These are just to name a few. Unlike the roles in Shakespeare's famous poem, the name does make a difference. While the essence of a rose is beauty and fragrance, it's not in any way altered by what it is called, that is not the case with the different types of business owners. The behaviors and responsibilities and the required capabilities of the different types of business owners do, in fact, make a difference. Before we take a look at the distinctions between different types of business owners, let's look at the different types of businesses. Not all businesses are created equal. They obviously differ in terms of industry and size, but they also differ in terms of how they were initiated and their long term goals. In terms of how a business is initiated, it can be built, typically called a startup. In this case, the businesses develop from scratch, typically in response to some innovation or market opportunity. An existing business can be bought, this would involve an ongoing operation that is not a franchise. This distinction is that, in these cases, the operation's assets, customer base and possible goodwill are purchased, but there is no commitment or obligation to the purchased operation's business model, operational procedures or even its name. The third possibility is that the business is borrowed. This is a term we reserve for the purchase of franchise, where the purchased business not only assumes ownership of his assets but is committed or obligated to the franchise's business model, and yes, it's name. In terms of different types of businesses' long-term goals, generally we have two types. Lifestyle and growth, they differ on many levels, but simply, lifestyle businesses are meant to be kept, to be sustained by the owner over time. Now that we've looked at the different types of businesses, we can return to our discussion on the different types of business owners. We're going to look at three types of business owners. A business owner is defined as being self-employed, where their source of income comes directly from customers or clients, in the case of services, in return for products or services delivered or provided directly from their own efforts. This latter condition essentially means they have no employees. There may be, perhaps, one or two clerical or administrative staff, but there's no one else producing the actual product or delivering the actual service. Being a commission-independent sales agent or independent marketing representative would also be included in this category of self-employed. If this type of business owner was characterized as a home, we would characterize their motivations in one of two ways. First, the choice of being self-employed is motivated by lack of employment, or undesirable employment, so essentially this home we're characterizing as the self-employed business owner is motivated by the need for shelter. In another case, the decision to be self-employed is motivated by the love of the profession, the love of the art, the desire to express oneself, and to get paid for it. In this characterization of the self-employed business owner as a home, the motivation is to admire one's art, to admire one's creation. Our second category of a business owner is referred to as an enterpriser. This is the owner-manager of a privately-held small business that does have employees, although it varies across the world, usually less than 250. The enterpriser's business is motivated by the desire to develop a business that provides a lifetime of financial support, along with a meaningful, fulfilled life for themselves and their family. It usually does not involve an innovation, and if it does, it's typically a process innovation, or what we will come to know as a target market innovation. It does seek to be profitable. And to have sustained growth, but it typically doesn't want to grow beyond the control of the family. Again, using our homebuilding analogy for this type of enterpriser, an enterpriser builds his home and maintains it in order to enjoy its benefits over the course of the life, in order to essentially live in it. Finally, an entrepreneur, the third and last of our types of business owners, is distinguished from the other two by two factors, innovation and focused accelerated growth. The entrepreneur's business is based on innovation from its very conception. The enterpriser may incorporate innovation into their operation, but the entrepreneur is the source of that innovation. The entrepreneur seeks accelerated growth. They certainly want to be profitable, but only to fuel the type of growth that allows them to scale their business, hopefully to bring about a bonanza purchase or the external infusion of massive amounts of investments. They certainly enjoy the money, but they typically weren't in it for the money. Completing our house analogy, the entrepreneur builds the home as part as his or her learning and development process, as far as building the perfect home. Frank Zappa, a famous rock musician from the 1970s and 80s, defined an artist as someone who could make something out of nothing and sell it. Using Mr. Zappa's definition, we're going to define an entrepreneur broadly as someone who takes the initiative to create value to exploit some opportunity in order to benefit themselves and society, regardless of the resources that they command. [MUSIC]
