In the second of a three part series, serial entrepreneur and investor Josh Comrie explains why choosing the level you want to play at before you invest in building a business, is key.

At least two or three times a month, I have the same, typical conversation with a friend, associate or acquaintance wanting business advice. Weโ€™ll call them a โ€˜Wantrepreneurโ€™ or WP for short, using Seth Godinโ€™s term for someone keen to break the shackles of salaried employment.

WP: Hey Josh! Iโ€™m keen to make my side gig my fulltime thing / start a business. Can you give me some insight on how to move ahead?
JC: Sure. What are you trying to achieve?
WP: Well, I have an amazing idea for a new swipe app. Itโ€™s like Tinder for the over 60โ€™s, to enable grey power to get back into the dating game.
JC: *In head – wowsers* Ok, that aside, what do you want to achieve?
WP: Ummmโ€ฆ To get Grandad lucky again!
JC: Right, I get that! But I mean you – what are YOU personally trying to achieve?

Can you complete this sentence: โ€œIโ€™m starting this business because…โ€?

This may or may not surprise you – many people I know and have met over the years donโ€™t actually consider what it is they want from the business, until a year, three, five or however many years into starting the business.

Whyโ€™s this a problem, you may ask? Well, if you donโ€™t know what youโ€™re trying to achieve, you may end up with something you actually donโ€™t want or enjoyโ€ฆ

In my eyes, all business owners fall into one of four categories โ€“ the lifestyle business, the operator, the owner, or the entrepreneur.

Theyโ€™re all equal but one of them will be the best fit for you, even if it’s just for a season. It may change, but itโ€™s contingent upon your situation.

1) The lifestyle business

As the name suggests, itโ€™s just that – a gig (whether itโ€™s on the side or the sole trader) that takes up 1-15 hours of your week.

Youโ€™re more focused on the experience and ensuring it doesnโ€™t complicate the rest of your life, rather than it being the thing that consumes it. (The rest, other than, perhaps the entrepreneur, will allow themselves to be engulfed – trust me.)

You do it for cash flow, fun money and maybe to see what itโ€™s like to have another gig. Itโ€™s highly likely to just be you in the business.

2) The operator business

This ranges from a self-employed tradie, right through to a business turning over $5m or so per annum.

The key here, is that youโ€™re the centre of this business – it lives and dies by you, and you wonโ€™t have a business if youโ€™re away for more than four to six weeks. Itโ€™s the wagon wheel concept – youโ€™re the hub, and your team, partners, suppliers, etc are the spokes. It all relies on you.

These businesses can be immensely profitable; the first services company I founded was like this. I loved it, but I didnโ€™t have a holiday for four years. It was a great business that was returning me up to $1m personal income per annum, but shit, it was tiring.

3) The owner

Now youโ€™re living.

This business has a management team, possibly a board, and youโ€™ll have multiple offices, product or service lines. Change will be more difficult and communication will have become a challenge. Cash flow is critical, as your expense base is so high and unfortunately, so will be your stress levels.

Whilst you donโ€™t need to be there day-to-day, the business really does function best while youโ€™re around. You may be about to bring in a โ€œManagerโ€ – the person whoโ€™s not you, to run the business. Or you may have tried and failed to do this already.

The single toughest hire youโ€™ll ever make, by the way, is the one to โ€œreplaceโ€ you.

4) The entrepreneur

This is potentially the pinnacle founder, but also the one that requires the most experience.

There are so many lessons I learnt while going through the operator-owner-entrepreneur journey, and I know how hard it can be to leapfrog.

This business type is one truly started with a very clear end in mind. You are a cog in the machine from the outset, not the machine itself. You constantly look for ways (and people) to remove yourself from the business – you may not even work in it everyday. Youโ€™ve planned your personal exit for a long time, and have clarity around who your stakeholders are and how to serve them from the outset.

Decide before you start

โ€œWhy donโ€™t I just start playing at the ‘entrepreneur’ level then?โ€ you ask? Well, you can, and if your desire is to have a super focused period of time in that business, running like hell towards the objectives before exiting – then do it.

Youโ€™ll probably carry the most risk, however, as youโ€™ll be scaling fast, taking bigger bets, and loading the team with specialists from the outset.
Negative cash flow, debt, fundraising, etc are all hallmarks here.

If you want a small, lower risk, job-oriented business (which is a great business to have), work out on day one which of the first three categories you want.

This can grow and change over time. But donโ€™t end up like too many people I know – feeling stuck with a seemingly great business but one they hate as they didnโ€™t know what they really wanted from the outset.


Josh Comrie is a multi-time founder and an active angel investor. Read Part 1 of THIS SERIES HERE or Read Part 3 of THIS SERIES HERE.


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