The Technician and the Entrepreneur
There is a revolution occurring. It is changing business, changing families, changing lives. Information technology is now providing people like you and me the tools we need to work from literally anywhere. In today’s new marketplace, the entry cost to running a small technical business has changed from capital to courage.
Today all you need to become an independent contractor is your own toolbox, some technical skill, and a touch of gumption. The interesting part is that despite all this newly found freedom, the question I get more than all the others combined is how long did it take you to get stable and secure? The answer to this question is completely and totally based upon the path you choose, that of the technician or the entrepreneur.
Reaction #1: The Technician
Security and no money stress. Oh man, do I relate!
My wife kept asking me the same questions day after day. When we went surfing, my friends would ask, “How are you doing? You making any money yet?” The landlord didn’t exactly declare, “Oh, you’re going indy? Let’s just not worry about rent this year until you figure it out.” The fact is that money is a harsh reality that holds great sway in our daily lives. And no, I won’t skip out answering: it took me close to 2 years.
The question itself is deeply rooted in the thought process of a technician turned owner. In The E-Myth, Michael Gerber explains that almost every technician begins their business by looking inwards to define their skill, and only looks outwards after to ask, “How can I sell them?”
I started the same way. I had a bag of web skills (nice analogy, Peter) and a willingness to go so far above and beyond the call of duty, often for free, that it was somewhat ridiculous. I was thrilled to do whatever came my way. I was determined to survive, find more work and do the job I loved. And I did.
Hard work did not scare me, and the ability to control my day is a gift I treasure. I hit the pavement and learned to sell. My income was entirely dependent on my own efforts, my technical and my people skills. It was great when things went well, and exhausting when they didn’t. It took a little while but I thrived. I have not had a job in 7 years.
Reaction #2: The Entrepreneur
Do you want to own your own job or a build a business?
Reaction #2 came later and is a bit more complicated. It was born the day I realized I didn’t own a business, I owned my own job. That realization was nurtured by my mentor Tom when he began asking me questions. Questions like: what was my exit strategy?
Exit strategy? If you took me out of my business, there was no business. And that was his point. If I could not be replaced, then I just owned a job. And with all the clients I was trying to please, a pretty demanding one at that.Tom could travel for 6 month, not work a single day, and he would make more money than me.
Let me explain. I picked Tom as a mentor because he had successfully systematized his company so that it provided an income stream even if he was not present. The idea intrigued me. As our relationship progressed, Tom began to hand me books and talk to me. He explained the difference between a self-employed technician and an entrepreneur business owner.
Back to the E-Myth. The Entrepreneur starts with a picture of a customer. The whole business will be created in order to solve some problem for that customer. It is built purposefully with a structure and a vision. The owner is aware of the needs of the business, and personal income is not the primary driving factor. In fact, most entrepreneurs rarely make anything in the short term.
Think of it this way. Your job as the owner is to prepare yourself and your business for growth. To educate yourself sufficiently so that, as your business grows, the business’ foundation and structure can carry the additional weight. The business is there for one reason - for the customer.
A little about us: moving from Technician to Entrepreneur
I used to love the fact that everyone called me. I was the man. The owner. My clients were not buying a product, they were buying me, heart and soul. A few years back I finally got to the point where I wish everyone would stop calling me. I wanted to stop juggling so many balls. I might have quit. Then I met Tom and he showed me that you can own a business that doesn’t own you.
Today, Peter & I are no doubt transitioning to entrepreneurs. We see a huge need and are gearing up our business to provide a solution. No, I can’t tell you all about it quite yet. Come back around November for the big unveiling. We have turned away a lot of work this last month in order to make the time to prepare for the future. It’s scary saying no to so much money (I struggle with it every day), but it’s the first step.
We leave soon to a business retreat to review the last year, learn our lessons and write a plan for the future. I have a lot of notes and ideas. This is going to be good. I’d invite you all to join us, at least in spirit.
The Big Question
In response to the big question: I see freelancing as the most stable form of income I have ever had. It took some serious elbow grease to start her up, and consistent tune-ups, but for the lifestyle I have, I’ve rarely seen better.
Decide for the time being if you want your own job or to build a business. Both are great. They are simply different paths. What I love about the technical revolution is that today, the reality of owning your own job does not have the severe financial risk it once did. You can truly own your job and have a great life. We do.
Whether on not you choose the route of the technician or the entrepreneurial, Michael Gerber warns you will need to learn many aspects of running a business. You will need to cultivate the technician, the manager and the entrepreneur inside you. It will ensure your long term freedom.
And, if it is in your future, it will prepare you for the day you finally see your opportunity for service. Your chance to build a great business.
Only the risk takers achieve a much higher rewards… It’s a scary exploration for many that only want to stay in the safe zones. Get out of the safe zones is not an easy thing to do. Now a day, Internet has allowed many peoples to stay at home and accomplished tasks abroad. The dream of becoming a next Internet millionaire is still lingering in the smelling air. More freedom, more ideas, more technologies, and more of everything doesn’t mean we don’t have to plan things out before taking a jump into the untested water. I think talking about becoming an entrepreneur is easy, testing it will be a true life long learning experience. Though one must take risks and get out of the comfort zone to be able to truly taste the entrepreneur world.
Excellent Shane. I enjoy learning about the experiences and transitions of those who have become successful. See: I feel I have the drive like no other. All the demanding needs of my clients, not really “liking” my work, struggling to find work (enough to sustain my “job”), and in relation to the article, trying to transition from technician to entrepreneur is what keeps me where I am at my full time job so I don’t have that 40 hours a week to spend on my own business.
I don’t quite understand how you actually transition as I don’t think I quite understand the entrepreneur’s role in a self-employed state. My clients will buy my services/products (pretty much me) unless I hire employees or subcontract design out while I work the simple programming.
Shane:
You might want to take a look at a book called “Cashflow Quadrant” by Robert Kiyosaki. In he describes four types of income “E”, “S”, “B”, and “I”.
* “E”mployee income - think W2, salary, 9 to 5 type income. Taxed like crazy.
* “S”elf Employed income - think 1099, potential for large amounts of income (and large taxes).
* “B”usiness owner income - keyword is “owner” not “CEO”. This is owning stock in a business, not managing it. Passive income.
* “I”nvestor income - income made because money was invested. Dividends from stocks, real estate revenue, licensing. Passive income.
Most people make income from only one quadrant, typically the E or S. But the only way an E or S can make more money is to work harder. You have heard of the phrase “There are only so many hours in the day”. The B and I on the other hand make money by working smarter. Smarter decisions, smarter investments, more education.
One of the main ideas I got from Kiyosaki is that you need to turn your E and S income into B and I income. From your post, it sounds as though you are making S income and are trying to build the business structure to turn it into a B. Your mentor Tom appears to have a B type business, which gives him the freedom and flexibility to travel without working.
Good luck, you are starting on a long journey and I wish you the best of luck.
@eric - that is exactly what we are putting together. I’ve read most of Robert’s books. Peter & I play Cashflow every so often - its a great game. In fact I’ve had the opportunity to chat with him back stage at a few events while the Learning Annex was my client. I was surprised by how nice both he and his wife were. We actually got to talk business and education for about 45 minutes with them at one event. The first book Tom handed me was rich dad poor dad.
What I find fascinating though, with the recent changes in technology is the sudden accessibility to be self employed to the masses. This was a tough article for me to write because I was trying to hit 2 points.
#1 - it used to take serious money and courage to become self employed (let alone an B business). With the advent of broadband technology - you can now live a pretty amazing lifestyle being a 1 man show from home. That is new in my lifetime.
#2 - Explain the difference between technician (what do I have that I can sell) - notice all the I words and an entrepreneur (what do clients need that would improve their lives). This is mostly a state of mind, though it leads significantly different behavior patterns. It is the core difference between an S & a B business owner, but I do not believe that either will get far without some focus on self and some focus on customer.
Jeremy - I have an answer for you but want to think about it first.
Excellent Shane, I can’t wait.
I had a pretty good day yesterday as I developed a nice design (that I like too which is pretty rare) for one of the clients I am working with. I got a lot of good feedback from a lot of people which really brought my spirits up.
It has helped to become more relaxed and be comfortable with my skill set after I have refined them over the years. I too and just starting out with freelancing even though I have been developing Web sites for around 5 years. But I’ve found that as more and more people start liking my work they start requesting my services and I am not trying to sell them as much.
This has somewhat made me feel more like an entrepreneur. Am I on the right path?
Hey J,
I’ve been thinking a lot about this. The fact that you are pondering this and reading and consuming and learning means you are on the right track. I’ve been debating internally about what the differences are and how they apply to my life and others. Peter & I are in an interesting place right now. Our old business plan (do you have a business plan?) no longer presents the future we see for our business. It was a phenomenal little document and was really instrumental in helping us transition to where we are at now. That said, it won’t get us further and we have acknowledged that. What’s tough for me is that we don’t have the new one all worked out yet.
As the CEO / entrepreneur in the enterprise, that kind of excites me and freaks me out all at once. The part of me that yearns for a blank canvas to create is completely excited. The part of me that likes to make decisions and get things done is in complete paralysis. Simply put, if I don’t know where the business is going and what its goals are, how do I make decisions? We have hundred of things pulling for our attention minute after minute, day after day. If I don’t know where we are going, how do I decide what is important and what is a distraction from that goal. And if I can’t prioritize, then everything begins to look important, urgent even. And that is a tough place to be. I often see this as a core issue for the technician. Since they do not have a concrete end point beyond “get this project done”, or “make this client happy”, or something generic like “make more money”, they are unable to make any kind of long term decision. Their business is at the whim of their clients. And if your current clients rule the future of your business, then you are not the owner, you just have a job, working for them.
So - task #1 - create a business plan. I have a post coming in 3 days on how to not work for free which should also help out with critical tools in the business planning stage.
Awesome. I will start on a business plan and check back in 3 days to refine it. Right now I have yet to set any goals goals so in a sense I have no mountains to climb and plateaus to reach. I am getting better and my business is getting bigger, but with no goals and action plan I see that I am trying to measure without a scale, if you would. I appreciate the follow-up Shane.
As far as building your business plan - check out my post on the why of business: Figuring out the why. I found that starting with my personal life goals was the best place to begin. Once I knew what I wanted out of my life, I could begin to tailor my business to help me get there.
Peter made a great point the other day. When working on your list, some of the things will be earth shaking, but most of them will be little things that make you smile or intrigue you. Things that would be cool.
I just found your blog and have already read the first 10 posts your RSS feed sent my way.
There is a ton of great material on this site and I am anxiously awaiting more posts to show up in my Google Reader.
Currently I’m going through your Entrepreneur Blogs I Read post. I see several on there I already read, and several I’ve never heard of.
Regardless, thank you for the great site and keep up the good (albeit hard) work.