Many entrepreneurs get into business without clearly considering why they want to run their own business and how big they intend the business to be in the future. This can be debilitating. If you don’t know where you are going and why you are choosing that route you are likely to strive for aimless revenue growth that may cause you to end up in a place you never intended to be. It is therefore essential to take stock along the way on your entrepreneurial journey and define what your aspirations are and why they are important to you.
An entrepreneur’s aspirations can range from survival, to lifestyle, to growth, to extremist revolutionary.
A survivalist is a person who goes into business just to create enough money to meet their basic needs. Their ambitions are to feed and clothe themselves and their families and as long as those goals are met they are likely to be satisfied. Spaza shops and independent car wash operations are very often survivalist type businesses.
A lifestyle entrepreneur is a person who runs their own business so that it can provide them with a certain lifestyle. Being an independent business owner may provide flexible working hours or the opportunity to live in a coastal town. Such entrepreneurs can very often be found running franchise operations or single retail stores.
Growth entrepreneurs are business owners aiming to create a growing enterprise, an operation that develops past just a single location and normally has a regional or national footprint. Examples of growth entrepreneurs include restaurant chains, national logistics companies or multiple location consulting firms.
Extremist revolutionaries are those people who aim to create an organisation that will one day be listed on a stock exchange and/or have a global impact. They take on large amounts of risk to facilitate high growth and often need substantial amounts of capital to make their business models work. Examples of extremist revolutionaries in South Africa are Adrian Gore (Discovery), Stephen Saad (Aspen Pharmacare) and Pam Golding (Pam Golding Estates).
These different types of entrepreneurial businesses can be viewed on a continuum from survivalist at the one end (low risk, low return) to extremist revolutionary at the other end (high risk, high return). Knowing where on the continuum you hope to end up can make a substantial difference to the amount of capital you need to raise, the business strategies you employ, the management team you recruit and the marketing plans you put into place. Mapping out where you want to be can therefore help with making decisions about many other aspects of the business.
Your motives for wanting to be a business owner should inform your aspirations. People are driven to be entrepreneurs for different reasons, some people are forced into it just to survive and therefore land up in a survivalist business. Others want to be in control, to lead a certain quality of life, to feel empowered, to build meaningful relationships and make a decent living. They are likely to be lifestyle entrepreneurs. Other business owners want to empower others, to create meaningful employment for others, to build an enterprise that will exist when they are gone and create wealth in the process. They fall into the growth entrepreneur category. You also get the entrepreneur who wishes to disrupt an industry, to create global reach, to change the way things are done and create substantial wealth. They are the extremist revolutionary.
All business owners, new and old, should take some time to write down what it is that they want to get out of running their own business and allow those reasons to inform their medium- and long-term plans for their business. This can create relief for some business owners who may realise that they don’t need to grow exorbitantly to meet their needs; it can also provide inspiration and motivation for those entrepreneurs who want to change the world.
Strong alignment between the entrepreneur’s reasons for running their own business, their growth plans for the future and the strategy and tactics they employed in the managing the enterprise, will mean that the organisation is far more likely to serve its purpose and flourish as it does so.