Connecticut entrepreneur Anthony Price, Founder and CEO of LootScout, has released a new book, Get the Loot and Run: Find Money for Your Business.
The book is written for every type of business owner—from those who are launching a startup to those who are operating billion-dollar businesses.
Get the Loot and Run can help business owners find capital from little-known grants, low-interest loans, government funding, and one-of-kind bank programs. Author Anthony Price has started several businesses on a modest budget and helped raised millions of dollars for businesses. In Get the Loot and Run, he shares his experience on the front lines of advising companies.
Read an excerpt from Chapter 1.
WHAT ARE YOU: ENTREPRENEUR OR SMALL-BUSINESS OWNER?
My universe was shaken to its foundation, like a building crumbling to the ground under the force of a 9.0 earthquake, after reading Ben Lamm’s guest column in Entrepreneur magazine: “Stop Calling Everyone an Entrepreneur—They Aren’t.”
I thought this was typical Silicon Valley propaganda, from a hotshot in a hoodie and jeans. But after my less-skeptical self emerged, I began to think there was merit to what Ben was espousing. Ben, the founder of several companies and CEO of a startup, believes that the “entrepreneur” label has become as ubiquitous as Nikes on NBA-wannabes. He says that a lot more people are qualiﬁed to manage a “Jamba Juice than take companies from inception, through market traction (paying customers), funding, growth and eventual IPO or exit.”
I full-heartedly agree. Ben comes from a world where solving big “hair-on-fire” problems and scaling a business as fast as possible are crucial to owning a market and attracting OPM: Other People’s Money. This business template requires a steady stream of capital to be pumped into the business as fuel, which most businesses don’t have. The money that your small business burns through is yours, or if you are lucky, your family’s, friend’s or the bank’s. In reality, a startup business has a limited amount of time to build a business with paying customers, or it will fail. Think of Chobani yogurt in your refrigerator—it’s expiration date is a constant reminder that it will not last forever.
The pressure comes from investors. When you play with OPM, investors are the house, they make the rules, and they want to make lots of money (10, 20, or 30x return or more) from a liquidity event (an exit from your business within ﬁve to seven years as a result of selling or going public). In Ben’s view, the mission is the domination of an industry from the playbooks of Facebook, Google and Amazon.
ENTREPRENEURS TAKE BIG RISKS
Entrepreneurs view problems from a unique perspective. George Bernard Shaw, the playwright, said, “The reasonable man adapts himself to the world: the unreasonable one persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man.” Entrepreneurs are the unreasonable men (and women), risk-takers, but not gamblers. To them, gambling is working at a job they don’t like, with no future for advancement, for a boss who doesn’t value them. Entrepreneurs are confident in their abilities to solve big problems, assemble a team and scale. They are a special group of people who believe in their vision, talent, version of reality and work ethic.
Blaze Pizza, a restaurant concept started five years ago with two stores in Southern California, plans to open 100 to 150 stores a year, starting in 2018. Blaze creates made-to-order pizzas in an assembly-line style, similar to Chipotle or Subway, and cooks pizzas in three minutes. Its cooking innovation is the “secret sauce” that opened the lunch-crowd market to pizza. Blaze makes its own dough, fresh, and from scratch. The company has attracted a lot of attention on its social media channels. LeBron James, the perennial NBA all-star, is a spokesperson and early investor in the company, choosing an equity deal over a multimillion-dollar deal from McDonald’s.
The biggest differentiator between an entrepreneur and a small-business owner is that the former wants to solve big problems, grow quickly and takes huge risks. Think Facebook, Google, and Tesla. Facebook has over two billion monthly users, and its mission is: “Give people the power to build community and bring the world closer together.” Google is the most visited website on the Internet. Its mission is: “To organize the world’s information and make it universally accessible and useful.”6 Founded in 2003, Tesla Motor’s mission is: “To accelerate the advent of sustainable transport by bringing compelling mass market electric cars to market as soon as possible.”
SMALL AND POWERFUL
A business consists of coordinated activities that deliver value to customers with the intent of generating a proﬁt to its owners. There are twenty-nine million small businesses in the U.S., which represent 99.9 percent of all businesses. The U.S. Small Business Administration (SBA) defines a small business as having fewer than 500 employees; organized for profit; has a place of business in the U.S.; operates primarily in the U.S.; is independently owned and operated, and is not dominant in its ﬁeld on a national basis.
Michael Gerber, the author of The E-Myth states, “There is a myth in this country—I call it the E-Myth—which says that small businesses are started by entrepreneurs risking capital to make a profit. This is simply not so.” Most small business owners make the misguided assumption that because they know the technical work of the business, they understand the business that does the technical work. These are two different things, just as being a home baker doesn’t make one competent to run a neighborhood bakery or a corporate chain of bakeries.
Small business owner does not equal entrepreneur. Gene Marks, a Forbes.com contributor and proud small business owner, said it best in his piece, “The Difference Between an Entrepreneur and a Small Business Owner”: “Entrepreneurs take risks.” Gene goes on to say that they take much bigger risks than business owners do. Marks’ dad was an entrepreneur in the mid-nineties who dreamed of delivering his proprietary bookkeeping software to the world. At the time, Gene and his dad were both certiﬁed public accountants (CPAs), who took on Intuit’s QuickBooks and the Year 2000 bug. Unfortunately, they lost.
Gene is not afraid to say he is a small-business owner. He likes stability and is satisfied with knowing what the future holds. Gene says that in contrast, entrepreneurs are never satisﬁed with the status quo. The typical pizza store owner is content making a good living with one store.
Compare Ben Lamm’s vision of a startup business on steroids with how most small businesses start. Look at your favorite small business. For example, the guy (Jim) who owns the automobile repair garage down the street probably started because he either worked in the family business or got tired of working for someone else. Jim doesn’t have a grand vision to be as ubiquitous as Pep Boys. Sure, he wants to make money, but the love of his craft, freedom from a boss, quality of life, and a sense that he can shape his destiny are all reasons that usually motivate someone to start or buy a business.
JUST DO IT
Customers determine winners in business. But a decisive factor for your future success comes down to how you answer this question: Will you be an entrepreneur or a small-business owner? Entrepreneurs take big risks to create something new, while small-business owners provide goods and services that the market needs right now. Each has its own value.
Life as a small-business owner is appealing. There’s no disputing its impact on the American psyche. In our winner-take-all society, we need balance between big-risk takers and steady small businesses. Ben states, “Entrepreneurs, at their core, are rare, transformative and risky. They are going to propel the society forward with big leaps of creative disruption. Small-business owners give us a stable base that de-risks the moonshots and protects us from the fallout of failures.” Our economy needs both the entrepreneur and the small-business owner.
To succeed in business, you have to know whether you’re playing as an entrepreneur who is ready to change the game, the industry, the world, or as a small-business owner seeking to make an impact on a smaller scale. If you’re trying to change the game, put on a pair of Shaquille O’Neal’s size 22, because that’s what changing the game feels like. Your choice whether to be an entrepreneur or small-business owner will affect how you start, fund, manage, and grow your business.
TAKEAWAY: Decide what you will be. Choose one.
For more from Anthony Price, read the IDH blog:
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