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Choosing the Right Business Model For You

Marvin L Storm

October 31, 2008

 What business or business opportunity should I get into? As the Director of Blackstone Hathaway, a franchise management and marketing company, as well as franchise business consulting, I have been asked this question four or five times a week for the last twenty plus years. Years ago I would share my thoughts on this question by discussing various types of businesses in vogue at the time. However, over the years I have come to realize that it is not so much the specific business that is important - although certainly the specific businessis important - but a more important question is “what type of business model” is the best fit for the individual asking the question. Let me explain.

There are generally five options for someone who is transitioning from the world of traditional employment to the entrepreneurial environment. These options are different for every individual. Depending on background, aptitude, stage in life, income expectations, and the eventual exit horizon, the option chosen will vary.

To help you better understand each of these options, brief overviews are covered below:

1.      Extreme Entrepreneurs. These are individuals for whom starting a business is the best strategy. This choice is best for individuals who are true entrepreneurs. There are two extremes of true entrepreneurs. At one end are the individuals who are the happiest sailing their own ship, making all of their own decisions, and who usually have ten new ideas before getting out of the shower in the morning. They get their rush from invention. They rarely take the time to develop a business plan. They launch one business, get bored after it is up and running, and either sell the business or turn it over to others to manage and they are off to the next venture.

On the other end of the spectrum are those individuals who like to make their own decisions and sail their own ship, but are more focused on the job at hand and stick to one business for years. They are multi-skilled individuals who enjoy marching to their own drums, instead of worrying about what others think of them. They are inventive, but not irrational in their view of the world. These are the people who never fit into the world of traditional employment, and once they spread their wings of entrepreneurship, they catch market updrafts and build very successful businesses.

2.      Buypreneurs. These are individuals for whom the best choice is purchasing an existing business and becoming business owners. These individuals are more security conscious and have a standard of living to maintain. They generally have a much lower threshold for risk. They are not innovators and even though they have entrepreneurial profiles, they are very much in moderation. They still have a strong desire to do their own thing, but are not creative enough to think of a business concept from scratch. They tend to be able to improve on things that are already working and proven. They also tend to be much older and better capitalized. Their exit horizon is generally much shorter, so they do not have the luxury of time to wait for a business to grow over a period of years.

3.      Franprenuers. These are entrepreneurs who are a perfect blend between the Extreme Entrepreneur and the Buypreneur. They are usually aggressive people, but do not have the desire to start something from scratch. They are generally younger, although not always, and want the run-up in valuation that comes from starting a business from scratch without the risk of a pure start-up. Franchising is the perfect business model for these individuals. They are executors, motivators, and drivers; they have a strong tendency to be a part of something bigger. They are team players. They have a strong value system and tend to be extraordinarily customer-centric. Franchising offers the perfect outlet forFranpreneurs to extend themselves, because franchising allows the Franpreneurs to start a business from scratch without the business being a pure start-up. Franpreneurs generally want a longer exit horizon than Extreme Entrepreneurs or Buypreneurs . However, some members of the Boomer generation are able to execute at this higher level because their experience and background enables them to quickly succeed and achieve a highly profitable exit in half the time of other, less experiencedFranpreneurs . You can reduce the risk for a business start-up if you start your own business with a business start-up guide for owning a franchise today, whether it is a business franchise or retail franchise. Franchise information on franchises and franchise opportunities is readily available on the Internet by just typing franchise into Google.

4.      Mepreneurs. Those who do not have the capital or the entrepreneurial aptitude are generally better off to sell their expertise. These individuals, in general, are highly knowledgeable in a specific discipline. Consultants are much like brain surgeons. They know where to cut, how deep to cut, and how to extract the tumor in a fraction of the time that a general practitioner would require. They can be worth their weight in gold. They gain an enormous amount of satisfaction in helping others, which is what gets them out of bed in the morning. They also crave variety and are easily bored with repeating the same routine day after day. They relish change, challenge, and being able to see the results of their work in weeks—not years. They enjoy moving on to the next consulting gig.

5.      Maybe NOT-preneurs. This fifth option in answering the question of what type of business model suits you best - might turn out to be “none.” When serious thought is given to this question, the realization dawns that being any type of entrepreneur is not in the cards for you. It might be that your risk profile is too conservative, the capital is not available, or perhaps juggling 10 things at once is frightening to you. Whatever the case, some people should NOT go into their own business, but should remain in the traditional employment environment.

There is no right or wrong answer. The best choice is what is best for YOU. Regardless of which of the first four personality types you are, the bookTransitioning From Employee to Entrepreneur will provide you with valuable insight about how you can transition from the world of traditional employment to that of an entrepreneur.

If you decide that becoming an entrepreneur is for you, and you find the business model that is right for you, then you can focus on the specific type of business you want to get into. To help aspiring entrepreneurs through this process, I wrote this book,Transitioning From Employee to Entrepreneur, www.marvinlstorm.com. that addresses the challenges of making the transition from the traditional employment environment to the exciting and rewarding world of entrepreneurship.

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