What is an Entrepreneur?

29 01 2012
English: Harvard Business School

The best answer I found comes from the Harvard Business School professor, Howard Stevenson.

“Entrepreneurship is the pursuit of opportunity without regard to resources currently controlled.” – Stevenson

Back in 1983, Stevenson told entrepreneur and teacher Jon Burgstone, “people tended to define entrepreneurship almost as a personality disorder, a kind of risk addiction. But that didn’t fit the entrepreneurs I knew,” he said. “I never met an entrepreneur who got up in the morning saying ‘Where’s the most risk in today’s economy, and how can I get some? Most entrepreneurs I know are looking to lay risk off—on investors, partners, lenders, and anyone else.” As for personality, he said, “The entrepreneurs I know are all different types. They’re as likely to be wallflowers as to be the wild man of Borneo.”

Stevenson’s definition focus’ on entrepreneurship as a process. “They see an opportunity and don’t feel constrained from pursuing it because they lack resources,” says Stevenson. “They’re used to making do without resources.”

The perception of opportunity in the absence of resources helps explain much of what differentiates entrepreneurial leadership from that of corporate administrators: the emphasis on team rather than hierarchy, fast decisions rather than deliberation, and equity rather than cash compensation. (1)

“Every time you want to make any important decision, there are two possible courses of action. You can look at the array of choices that present themselves, pick the best available option and try to make it fit. Or, you can do what the true entrepreneur does: Figure out the best conceivable option and then make it available.” – Burgstone

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How an Extra Frappe a Week Saved Chris Over $700

22 05 2011

Meet Chris, a freelance artist making a living off the art he sells on Art.com. Three times a week, Chris goes to Starbucks and drinks his tall Strawberry Soy Frappe as he responds to business related emails. Chris loves the atmosphere. What’s better than being productive, and having less distractions while enjoying the strawberry bliss? The problem is, not to mention long lines, the $733.20 per year he hands over to Starbucks.

One afternoon, determined to save his money, Chris looks for options to keep the money where it belongs… in his pocket. Welcome Option A:

Option A [Cutting Cost]

Chris decides to cut his expenses by ordering one less frappe ever week to save money. He still spends the same amount of time working in Starbucks each week, but the free internet is not enough to keep him paying.

(One less tall Strawberry Soy Frappe at $3.75 plus an extra $0.60 for soy, or $4.70 after tax. After a year, that comes out to a savings of $244.40. His total price will change from $733.20 to $488.80.)

Option B [Strategic Option]

Cutting expenses can only save you so much. I always recommend looking into more strategic options for developing your wealth. Consider Chris’ other options. Chris really does not want to give up a Strawberry Soy Frappe every, but he still wants to save money. Chris recalls his Starbucks routine; waiting in line for his frappe, finding a table, opening his laptop, and responding to work emails. He averages 30 minutes at Starbucks when he goes. What if he decides to come an extra afternoon every week, assuming he can profit from that added time?

Chris searched Craigslist, and realized that people will pay $20 to $50 dollars for computer lessons… $20 to $50 for that! Excited, Chris posted his first ad under services offered.

Hello Craigslist friends! Yesterday I was a geek. Yep, I hate to say it but I was. Don’t worry, I am cool now! Guess what, though?! I am still a computer genus even now that I am cool. Let me show you the circuit… I mean, how it works 🙂

Do I have references?! Definitely! Ask my neighbors, parents, or old high school teachers. If you spoke to my grandmother, she would tell you how she could not even turn on her laptop before our training sessions… back when I was uncool 😉 Now she even has her own blog (probably town gossip)!

Send me an e-mail with a proposal bid for my services (i.e., $XX for X hours X times per week). I’m available Tuesdays or Thursdays at Starbucks for 30 minute lessons. I look forward to hearing from you!

– Chris

Within a week, an older man responded offering $15.00 for his 30 minutes of availability to teach him the in’s and out’s of the internet; something Chris can do in his sleep. Chris took the offer. Since he can switch clients anytime, $780.00 a year from the old man sounds pretty good to start (assuming he can keep the man paying that long).

Chris decided to do some research over Starbucks as well, looking for a coupon or two. Instead, he found all sorts of savings from Starbucks. Using a membership card, he gets free birthday beverages, free syrups and milk options such as soy, free refills on brewed coffee or tea and free beverages after every 15 purchased. Chris also downloads the Starbucks Card app on his phone, where he can order his drink ahead of time and not wait in the rush hour line.

Chis actively changed his savings. 1 tall Strawberry Soy Frappe at $3.75 with free soy, at $4.05 after tax 4 times a week comes out to $789.75. That is including his 13 free frappe bonus. He saves about 9 minutes in line every time using the Starbucks app, creating an extra 27 minutes of productivity during his normal Starbucks routine. One day a week, Chris grabs his Strawberry Soy Frappe, and teaching internet browsing to the man.

Chris looks at the numbers, scratches his head, and looks back again. Spending an extra 3 minutes a week due to the time he saved, Chris is feels like he is making $5.00 a minute after this deal. Huh? Well, that is $5.00 a minute for time he normal did not spend working. Since he can do 9 extra minutes of work each normal visit, he does 27 minutes less work during the rest of the week. So for an extra 3 minutes (and a tall frappe) every week, he can make $15 dollars more than how he started out.

So how much is he actually saving? With option A (at 2 frappes a week), his total savings is $244.40. In option B (at 4 frappes a week with a 3 minute expense), Chris saves $723.45. Three times the amount of the conventional option A! Chris spends only $9.75 a year now. I think I will take option B, and but the $700 into savings for a later time.

Most of us do not have to give up anything, but we do need to start doing something. Play it safe, and make a small time investment researching alternatives to your own personal routines. What ways can you spend less time and produce the same results? How can you save yourself, or another, money? Than again, maybe we can brainstorm excuses instead… such as, “I am so busy. What do you think? I have time to kill?!” To all thinkers like that, all I hear is, “I am lame and do not care about my sanity. I will create stress instead. Leave me to my traditional ways of being. I am lazy and more than likely always right, anyways.”

Bonus Tip: You can actually earn free coffee as a reward for your daily spending. And you don’t even have to open a credit card. Open an online checking account through PerkStreet Financial and get a free cup of coffee as your reward for every $200 in spending. This isn’t a promotion. This is for the life of the account. This reward system includes free cups from Starbucks, Dunkin Donuts, Bruegger’s, and Peet’s Coffee & Tea. This will create about an extra $15 dollars in savings annually. You never know, maybe he will use all this knowledge and include a Starbucks beverage in his lessons for a little extra cost; creating his own Starbucks affiliate marking scheme!

Followers, in the comment section below, tell us in what ways you save time and/or money on your every day tasks? What was the change of lifestyle like, if any? Thanks!