How to move from employee to entrepreneur

Would you sacrifice 20% of your salary in exchange for a share of company profit..?

Stephen Newton

By: Stephen Newton
Blog

Are you an employee or an entrepreneur? In a previous article, I outlined what I believe are the characteristics of each…and it caused a little bit of a stir!

I think it’s because it hit a nerve with both sides: with entrepreneurs that agreed with me; and also with those who, after reading the article, felt badged as ‘employees’ when they really aspire to be entrepreneurs…

There is a distinct irony in this for me. One characteristic that entrepreneurs possess is the ability to work in shades of grey, rather than in the plain black and white that an employee tends to need.

Think about this for a second: if you’ve put yourself neatly into one of two categories, are you operating in black and white? Instead, can you step back, adjust what you’re looking at, and see the space between ‘Employee’ and ‘Entrepreneur’ as a journey? Try looking at the space as a continuum (the grey) – one you can move along, in either direction, as and when you choose throughout your life.

At any moment in time, you may decide that you want to sit firmly at one end, or that you want to sit somewhere between the two. You can be an entrepreneur without having built a billion dollar company. Similarly, you can display entrepreneurial behaviours without actually being an entrepreneur.

If you do have entrepreneurial aspirations, being able to identify the gap (the grey) between what makes you more of an employee than an entrepreneur is the first step to being able to close it.

Many disagree with me. The debate about whether entrepreneurs are born or made lives on. Nature or nurture: can you really move from right to left? Entrepreneurs, academics and business people have all taken a stance on one side or the other. But I firmly believe it is possible, that everybody has what it takes to be an entrepreneur – it’s just a question of mindset.

The debate got me thinking. My partners and I have stated many times that we are building a firm of entrepreneurs. Many find that curious as (with the exception of my partners) my team are all technically employees.

However, we believe being an entrepreneur is a state of mind, not a job title. Few possess it naturally, but it is within everyone’s reach. This is why we like to continually find different ways to involve our team in Elixirr’s entrepreneurial journey.

Being an #entrepreneur is a state of mind, not a job title.

Not everyone wants to make the journey from employee to entrepreneur, (and interestingly, not many firms want their employees to make it either!). But for us, having a team of employees is not going to create value for our firm or, more importantly, for our clients (large organisations who are facing hugely disruptive market forces).

Looking at the characteristics of both sides, it struck me that the single biggest thing entrepreneurs are able to do that others really struggle with is take financial risk – putting a steady income on the line to pursue a business passion. Taking this risk is what it means to be an Elixirr partner, so we wanted to find a way to really prepare our team (traditionally employees in the world of management consulting) for the reality of partnership.

So we asked ourselves, what if we offered the opportunity to give up a percentage of monthly salary (say, 20%) in exchange for a share of the firm’s profit? It would allow the team some access to the risk-reward aspect of becoming a partner, that’s what. This is exactly why we’ve just made this offer to all of our leaders and top performers…

It’s an interesting quirk of human behaviour to note that if we asked a group of consulting professionals to join the partnership, the majority would say yes, but asking them to sacrifice salary might feel to some like a different question… Bearing in mind that being a partner means putting 100% of your income at risk, do you think the majority of our team accepted or turned down this offer..?

This kind of opportunity drives different behaviours in people. In some, it inspires creativity, ambition and motivation. In others, it seems to drive more negative behaviours like stress, fear, or feeling a little blinded by the challenge presented. These are the people who are only seeing the two distinct categories – ‘Employee’ and ‘Entrepreneur’ – they’re missing the opportunity to cross the gap in between.

I’ve been thinking through what it is that has enabled me to take a chance and put my income at risk (and believe me, it hasn’t always paid off!) in pursuit of my entrepreneurial passion. I think it’s the belief that I’d always be able to earn a buck and sustain my family, by getting back out into the market, getting another job or an interim contract if it all went wrong. And actually this is true of most people – it’s just that not all of them believe it.

I’m proud to say that the majority (70%) of my team did accept our offer – a sharp increase in value to clients (and proof that we are a firm of entrepreneurs!). I hope that they make some great rewards. In fact, I know that they will, not only because the firm’s doing great, but because now they have an ownership mentality.

I suspect that the 30% who didn’t take it up are waiting to see how it pans out in the first year. Again, that’s mitigating risk – a luxury entrepreneurs don’t have. The market will dictate what (if anything) it is willing to pay you. This is the single most important learning point on anyone’s journey from employee to entrepreneur, and I’m delighted to see my team move one more step along theirs by deliberating this offer.

If you do have entrepreneurial ambition, by considering these characteristics and where you sit on the continuum, you can work out what you need to do to get to the other side. As long as you’re always striving to sit on the left, you’re in the right place. It’s a journey and it doesn’t necessarily happen overnight.

My advice to employees who aspire to be entrepreneurs?

If you treat the firm that employs you like you own it, the sooner you will.

Get less fixated on income and security and more fixated on creativity, passion and success. It gets easier every time you do it. Remember, it’s purpose above all else that drives the entrepreneur.

Real economic value is not created by those who centre their world around what society expects (go to uni, get a job, save your salary, buy a house etc – this is all fuelled by the concept of the monthly salary!). Real economic value is created by those individuals who do something exceptional. And everybody has this ability inside them.

So many people who lack self-belief are driven by fear rather than purpose. This is the fire I’m trying to light in my team. Wouldn’t it be amazing if we were able to unleash a bunch of entrepreneurs out there by helping our ‘employees’ change their mindsets?

Will it work? Only time will tell. Watch this space…

This article was originally published by BusinessZone.co.uk