ARE YOU AN ENTREPRENEUR OR A BUSINESS-PERSON?

The term business-person and entrepreneur are sometimes used interchangeably although they mean different things
An entrepreneur is a person who conceptualizes, initiates and materialize a business process which is entirely unique and original. In other words an entrepreneur is someone who starts a business from a fresh idea and makes it work or applies an existing idea differently.
Merriam-Webster defines an “entrepreneur as a person who organizes and manages any enterprise, especially a business, usually with considerable initiative and risk.” The key words here are initiative and risk.
A business-person on the other had is someone who start a business on an existing market platform laid by the entrepreneurs. In this context entrepreneurs are business people but not all business people are entrepreneurs.
Being an entrepreneur is a difficult task. You have to discover your way through the market and get your brand or the product established. A businessman needs to be smart and invest in an established brand at the right time to make money.
How can a business-person become an entrepreneur? By injecting freshness, uniqueness and creativity in their business.
This is because it is easier to survive tough times as an entrepreneur than as a business-person. In entrepreneurship, there is less competition because products on offer are unique and easily differentiated. You have probably heard the classic idiom, “Don’t re-invent the wheel.” Personally I believe this idiom is fundamentally flawed and grossly mis-applied in dozens of situations.
It says that if something works, it should not be changed.
Nonetheless, almost all situations, the wheel is never perfect and there are better designs, better ways of doing something. In this case it makes sense to re-invent the wheel. As Mark Twain once said, “Even if you are on the right path, you’ll get run over if you just sit there.” In late 1990s Barclays Bank introduced unsecured loans, a very unique product at a time when many banks were dealing with high rates of loan defaults and non-performing secured loans.
Other banks decided to adapt a wait-and-see approach on this ‘weird idea’ . I was personally amazed when a whole sales team from the bank invaded my office with forms ready to give anyone money without collateral.
New ways
It took almost half a decade before other banks realised there was money to be made by giving unsecured loans. What is more, the security they held so dearly did not guarantee repayment. By then Barclays had grown tremendously, establishing itself within the unsecured loans niche where it has remained unchallenged.
Another example is Equity Bank. Although it existed as a micro-finance institution for close to 20 years, it only attracted national and global attention in the late 1990s.
During that time Kenya was experiencing its worst post-independence financial crisis in the banking industry with most institutions closing their countryside branches. To make profit, they had to charge customers very high ledger fees and raise the minimum account balance.
But Equity amazed both its competitors and customers. As relatively new establishment without financial expertise and muscle, it started opening branches in the very places where the big banks where shutting down. In total defiance of logic, the bank waived ledger fees and set up almost negligible minimum operating balances. Once again, the rest of the industry adopted a wait-and-see attitude.
After redefining the banking rules and succeeding, other banks followed suit. It did not invent banking, but invented new ways of dealing with customers and new services that suited the mass market. Equity lived up to its slogan, “The Listening Caring Financial Partner”, moving from business to entrepreneurship.
In his book, Diary of a Mad Businessman, Delano White writes, “Business innovations generally start within small businesses. The greatest innovations are not thought up in corporate boardrooms. They originated in dorm rooms, working lofts and basements. Creativity drives business and our society. Without the initiative taken daily by ground business owners, society would be at a standstill.”
What we need to improve our economy and our lives is more entrepreneurs and fewer business-people.
This article is derived from The Art of Entrepreneurship by Murori Kiunga.
mkiunga@queenexpublishers.co.ke