When you Google this question what you find is:
“A person who sets up a business or businesses, taking on financial risks in the hope of profit.”
To us an entrepreneur is:
“A person who gains trust by giving value and solving problems, who does so at a profit.”
So let’s break that down.
What is Trust?
To understand sales is to understand what makes people trust us.
The money we make matters to us. Because the time that we took away from what and who we love, to make that money, matters to us.
So when we want to sell something to someone, no matter how useful we think our product or service is, no matter how much value we think we give our customers – if they don’t trust the value we are giving they won’t buy.
So the first step to being an entrepreneur is to know that we can establish trust.
We do this by having research or facts behind what we are doing. It needs to be a proven product or service. Or else how will our clients know that what we are selling with help them the way we say it will?
It’s impossible without trust.
What is Value?
The second step, once we feel confident that what we are selling is trustworthy, is to show and give value to our customers.
Showing value is advertising. It changes as our customers’ needs change – and that happens all the time. Showing value is a promise. Every time we show value we have the possibility of building or breaking the trust our customers have in us.
Sometimes showing value could be a that the cost of what we are selling is cheaper, maybe the customer gets even more for the same price, or we are adding something new to what we are selling without changing the price. These are just some examples of how we show value. It makes our already trustworthy offer even more exciting or valuable to customers.
But remember if we show value that we don’t deliver on what we promised, or what value we showed customers, we lose trust. And once that happens, when we lose trust not because we are untrustworthy, but because we couldn’t do what we said we would do, it is a lot more difficult to get back that trust.
In business, life in life, our promises matter more than anything else.
Giving value is how we keep that promise. How deeply we care about our customers who trust us. How we make them feel special and how easy it is for them to understand or use whatever we are doing to give them what they need.
It is also means what we actually do. How do you give value? What are you doing to solve the problems your customers have? How do you make their life easier? How do you offer them a solution?
This is why we become entrepreneurs. Not because of money. But because we want to give value to as many people as possible. And to make the way we give them our value matter to us.
What is Problem Solving?
Like I said earlier, our customers’ needs are always changing. And that’s because of many reasons: technology, economics, politics, large forces that move and shift our priorities and the choices that we all make daily.
These choice and priorities determine the challenges we face in our lives.
A challenge could be as simple as: the price of electricity has gone up and we need a TV,washing machine or laptop that uses less electricity.
A challenge could be that things are getting more expensive and our salaries aren’t keeping up with how much things cost, we need to be clever with our money and choose products that do more than one thing, or find a service that helps us make better decisions about what we buy.
It could be that new research has shown that when we eat less carbs we are healthier. All of a sudden everyone wants alternatives to food that doesn’t have carbs.
Whatever the customer needs are, it is our job to solve their problems, to be the first business they think of when they are faced with a new challenge. And often, if we are able, our job is to know what the next challenge will be, so that we can be ready when the change happens. And if we can’t predict it, that we can find a solution quickly and let them customer know that we have solved their problem in a way that gives them the most value.
At the end of the day, entrepreneurs are problem-solvers. We enjoy challenges and finding the best solution to our customers challenges.
What is Profit?
Once we have established that we are trustworthy. Once we have shown and given value. What do we get?
Because we could d that working for a company that does something similar to what we want to do, right? We could go work for them and still solve our customers’ challenges and help them.
The reason, apart from many others, is profit.
When we work for someone, no matter if we work longer hours, or how good we are, mostly we get paid the same amount of money. If we have a good idea that makes a difference, it is the company we work for that gets the reward even though it is our idea. Yes, they might pay us some money as a thank you, but it’s not the same as if we made money every time someone receives the value we wanted them to have.
If we want that, if we want to get paid for every single time someone gets value from us, then entrepreneurship is for us. Because it means we aren’t using a company to build the trust or to show the value. When we do that ourselves we are able to give value and therefor profit.
When you are running your own business, you are paying for everything. It’s different from a salary. A salary you get for working, you get to take that home and enjoy that money. But even that amount of money has to pay for the same things every month – rent, food, electricity, water, maybe school and other things that you pay for every month, using your salary to do that.
In the same way, when you are running a business, you don’t take home all of the money you get from customers who you gave value to. You have to pay those who helped you give that value. You might have a store, or an office and need to pay rent. There are many things that you might need to pay for to make sure that you can always keep your promise and give your customers the value that they need from you.
The different between being an entrepreneur and an employee is that when you are an employee you are giving your time and skills for a salary, and when you are an entrepreneur, you are building something bigger than yourself and the limited time you have to give more value than you could possibly give as an employee with only 9 hours a day.
So that means that you are able to help more people as an entrepreneur. And because of that, if the business belongs to you, you are able to make more money than you are able to as an employee.
What Is Financial Risk?
So, our definition isn’t the same as the Google definition.
The Google definition talks about financial risk and ours doesn’t.
So let’s talk about that.
When you are an employee the only thing you are really losing is time away from the people you love and the things you love doing. And in return for that sacrifice you are paid a salary, which means you are able to live knowing that at the end of the month you have a certain amount of money coming to you. This means you can build a life that uses that money monthly. The bigger your salary, the more things you are able to pay for every month.
As an entrepreneur you are responsible for everything. You started this, and you have to make sure that everyone that is helping you is looked after – because they are employees, and they are sacrificing to help you.
The financial risk you take as an entrepreneur is that, for many entrepreneurs, they have to use their own money or the money of someone else, to begin that business. It might be that they need ten people working for them, an office, computers, phones, and who knows what else. That is the starting point for the business in order for it to grow.
The entrepreneur either uses their own money, taking the risk that he might lose that money, or takes money from someone else, meaning that he now has to pay it back – again, a risk. Because if they aren’t able to give them the money back, they are in debt, and there are serious consequences.
Entrepreneurs, when deciding on a business, understand that there is always risk. The way they decide if they want to take on that risk based on the amount of profit that risk might get them. In other words, is it worth it?
At First365 we have seen many entrepreneurs grow and establish brands without any financial risk, which is why we do not include it in our definition. Today with the internet it is possible to reach customers and sell with the technology that you are using to read this article right now. We are enabled in a different way than entrepreneurs from twenty years ago.
Does it take longer to build a business without money at the start? Yes. But when you are young and know that you will be learning and making mistakes along the way, and you aren’t employing anyone yet, you are able to take your time and find ways to give value that uses the same technology that we all use every day.
We hope this helps you understand what it means to be an entrepreneur. And we hope you will use First365 as a platform to help you in your journey.
If you have any questions, just say hi.