Thinking like an entrepreneur
In my last blog post about escaping the rat race, I said there is a difference in mindset between entrepreneurs and employees. If you want to break out of the rat race you must ditch employee thinking – this may be a challenge for people who have got used to receiving a paycheck every month.
Employee thinking steers people to become obsessed by status. The motivating drivers for employees may be salary grades, company cars, size of office, and a whole host of other things which build up their status in the eyes of other workers. In short, it’s an ego trip. It doesn’t help the employee, as the continual lust for more and more can cause problems within the culture of the company, and can be detrimental to teamwork and company productivity if allowed to get out of hand.
The entrepreneur’s mindset is different. There is a pride in the business, and a willingness to do whatever task is required for the good of the whole company. It is not status driven, or salary driven – though, in the early days of entrepreneurship, it is sometimes difficult to extinguish thoughts about how the money coming in compares to the old salary! Thoughts of recognition from others become completely irrelevant, and an entrepreneurial boss is unlikely to walk on by if he or she spots something wrong – they’ll fix it there and then.
What are the differences in mindset, then? Firstly, the concept of ’salary’ disappears; the idea that you need to swap time for a fixed amount of cash which you receive each and every month. For the company employee, this is a bitter pill to swallow, and somewhat scary! Entrepreneurs think about building wealth and for them the important thing is not salary, but profit.
From this first step in changing your thinking, it becomes easier to accept the other differences. Alex McMillan, founder of Club Entrepreneur, in his book on entrepreneurship outlines concisely the ideas that need to be revised on going from an employee to an entrepreneur. For example, the employee thinks, “I need a good pension scheme”. However the entrepreneur thinks, “I need a capital gain to retire on”.
The worker thinks, “I want a promotion”. The tycoon thinks, “If you want to get to the top, start there”. A really important example that McMillan mentions is about security: “I need a secure job”. If you had a million pounds to invest, it would be foolhardy to sink it all into a single company share – you really need to spread the investment across several sectors and several asset classes. So why should the world of work be any different? Having a single job is the same as investing all your money in a single stock – all the eggs are in one basket, and these days there is no such thing as job security. If that last sentence is the only idea you take away from today’s blog, then I’m happy. For the entrepreneur, it is not important to have a ’secure job’ – the goal is to be ‘financially free’.
One final thought: when you are an employee you are simply a company resource however high up the ladder you climb; you will, generally speaking, be on a fixed income. If you take that step towards enterprising thinking, you will quickly realise that your income becomes unlimited. And to get to that point involves the entrepreneur mindset, a lot of hard work, use of leverage, and the ability to eventually extract yourself from the venture – either by automating and outsourcing; or by selling for a capital gain, and then starting the next big thing. So do you think like an employee or like an entrepreneur?
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