“Own businesses” are different from startups or family owned companies. They are inherently small and are meant to remain the same for the foreseeable future. They can take the form of shops, consulting offices, restaurants or freelance activities. Such business activities are far less innovative and disruptive than startups and aren’t typically conceived to be scalable.
Typical capital structures used in the case of own (small) businesses are closely held small LLCs and the founders may or may not have business partners that own a stake in the company ownership. There is always a strong identification between the owner and the company, often reflected in the name of the enterprise.
Many people (especially at an older age) are drawn to setting up their own business to capitalize on their own prior work experience and network. More rare are enterprises founded by mid career managers or youngsters but they do exist. The majority of own (small) business owners are lured to this path by the independence that it entails as well as the desire for lesser degrees of complexity and bureaucracy.
Autonomy and independence
More agile decision making
Broad span of control across every little detail
Possibility to shape the team to one’s liking
Expert and competent environment
Early stage freelancer (Entry level)
In this case, the person and the business are one and the same. As a freelancer you do not yet have a team and are leveraging your functional expertise. Primarily operating on a contractual basis with either one big client or multiple clients for varying lengths of time.
Local champion (Amber level)
A small and well-established business which is usually focused on an offering for a specific geographic location. At this stage a team and business infrastructure are being built, it is the first big step from freelancing to entrepreneurship (including significant investments).
Broadly recognized own business (Bronze level)
A business which is becoming scalable; growing both through expansion and a diversified offering. At this stage its brand is already broadly recognized also outside of its initial geographic area.
Well known and respected own business (Silver level)
A business which has an established brand which is top of mind for consumers/customers and who has an edge over competitors for various product offerings and geographies allowing it to successfully command a significant price premium.
Best in class own business (Gold level)
A business which has achieved market leadership and whose brand has become synonymous with prestige. It now provides a top-quality offering across various customer segments and geographies while successfully commanding the top price in the market.
You can start your own retail shop or small business already at a young age and with no experience beforehand though its difficult and rare
The typical entry point is from more experienced managers and executives that decide to leave the larger and more structured organizations (or are asked to leave) and decide to set up their own enterprise. Experienced people come with a wealth of knowledge, great connections (especially customers they bring with them) and some net worth they can invest in the company.
Requirements here are minor. Typically its key is to have a mentor (prior owner or senior partner).
More than course of studies, the resume/cv counts here (with specific sector experience) and especially the network.
Typically small businesses, boutiques or shops are handed over to heirs at retirement or sold to coworkers or outside buyers.
The personality of someone suited to establish her/his own (small) business typically has some of the following character traits:
The freelance/independent path attracts people who are:
Own (small) business owners and independent/freelancers, especially at the start of their new venture, work either alone or with very few team mates. This brings them to a broad role set up. They develop the product, seek customers, identify and hire the team, manage the admin tasks to the forming enterprise... all in all a very eclectic role.
Below is a guideline of how much you can earn per day as an independent/freelancer. It should be noted that there can be a wide range based on the sector, your seniority and the specific situation/customer need as well as the country you’re working in.
$500 to $1,000
$1,500 to $2,000
$3,000 to $5,000 (+success fee if/in case of important transactions)
You typically are able to set your own pace even if it’s your business and requires a lot of your attention.
Less frills, perks, and structure/support you were used to in larger and more established enterprises but that is a choice (or may be, the only alternative if you lost your job). In some cases, parts of your own net worth can be at risk. Similarly, your own reputation and name are on the door.
If you raise money from family and friends, you may face huge ethical dilemmas and a certain degree of discomfort.
Going down the freelance/independent route may take you off the traditional job market and make it difficult to re-enter later on if you want/need to but, typically, this is very seldom the case for experienced managers and executives that set up their own business or become independents later in their careers.
This path fits people who are/have: