Why do some businesses succeed and others do not? There are a lot of reasons: the economy, competition, product issues and the list goes on and on. But that really isn’t the true answer, though, because otherwise how can one business go through tremendous challenges while another is forced to just fold up and go away?
The answer is usually found in the mindset of the owner and/or manager. An entrepreneur can get through the challenges, looking forward to the day when the current issue is resolved, but knowing that something new will be right behind it.
If you’re starting your first business, there are a lot of things to learn. But one of the most important skills you’ll learn doesn’t involve education at all. It means changing how you think.
Here are some of the most common differences between an employee mindset and an entrepreneur mindset:
- An employee generally thinks in the short-term. An entrepreneur thinks in the long-term.
One of our clients came up with a great new invention. He knew he needed a patent and it would take time to perfect the model first. It took five years to take that first step. And it cost hundreds of thousands of dollars. During that time, his business continued to lose money. But he still had to pay his bills and he did it by taking any job he could find, cashing out all of his investments and borrowing money from friends and family. It took a lot of faith to get those through those first five years.
By the sixth year, the patent was done, the prototypes built and he was ready to take on sales. In that year he made mid-level 6 figures. He doubled that in the 7th year and had a 30% increase in the 8th year. In the 9th year, sales exploded to 4 times what he’d done in the previous year. His business is now very profitable and holds a valuable patent.
If he’d quit in any of those first five years, the business would have just died. In those first five years, he had to deny himself a lot of things like a new house, cars, trips, expensive perks and the like. In the end, it all paid off.
- An employee is working for a paycheck. An entrepreneur works to build assets.
What is your focus? Are you ready to look beyond the paycheck at the end of the week or month?
- An employee is time-focused. While some entrepreneurs are similarly time-focused, the most successful are often value-focused.
If you are paid by the hour, day or any other unit of time, you are paid based on the hours you put in. If you are value-focused, you are paid when you complete a project or provide a specific result. Entrepreneurs are rewarded for results, while employees are often rewarded for putting in hours. Where is your focus?
- An entrepreneur owns a company. The company owns the employee.
Okay, that might sound a little harsh. Obviously the company does not own an employee, but the fact is that if an employee leaves a company, either voluntarily or involuntarily, that will end their relationship. If an entrepreneur divests himself of a successful business, he has an asset that he can sell.
- An employee needs a job. An entrepreneur creates jobs.
- An employee wants to be protected. An entrepreneur knows that he is responsible for creating his own security.
- An employee looks for an opportunity. An entrepreneur creates an opportunity.