In Nigeria, “I am a Business Owner” is loosely used by most entrepreneurs, big and small. Yet, most of these businesses can’t survive without the presence of their owners as they are not automated.
You real question that you need to ask yourself is that; are you really a business owner? Or are you just running a self-employed venture thinking you are a business owner?
Let’s have a thorough look at this:
What differentiates a business owner from a self-employed person?
It is not the number of staff members that you command that matters, there are some indices that we use to measure this:
- Passive Income: Can you leave your business for 6 months and still be making money from it? If you can’t, then you are still running a self-employed venture and you are yet to become a business owner. Business owners generate money from their businesses and it doesn’t necessarily require their presence and input.
- System: A system is an economy entity that produces for you without requiring your physical presence. If your business isn’t automated in the sense that it requires your presence to function optimally, then it is a “self-employed” venture.
- Leverage is using little effort to produce amazing results. A system functions effectively because there is a leverage oiling it. A business leverages on other people’s time (Employee), money and resources (Investors). Leverage is an advantageous condition of having a relatively small amount of cost yield a relatively high level of returns. Time and resources are limited and as such, we have to ensure that we multiply our efforts by leveraging them.
- Network is the distribution channel that serves your business. This is what the big businesses that you know understand and leverage on. Dangote is a fantastic example. He has huge distribution channels that help him move his products as he desires.
These are some of the characteristics that distinguish Business ventures from self-employed ventures; Passive Income, System, Leverage and Network.
Business owners work on building their businesses to become big businesses.
What differentiates a Self-employed venture from a Business venture is that for a self-employed venture, you work for your business. You can be the boss but you are also the number one employee of the business as you are controlled by the business, while as a Business Owner, your business works for you.