A debate has long waged over who is or who is not an entrepreneur. Do entrepreneurs have to be the founders of their businesses? The obvious answer is no, McDonald’s “nurturer” Ray Kroc is the most example of that.
And speaking of Kroc, in the world of franchising most people have believed that while the franchisor is most definitely an entrepreneur, the franchisee was certainly not, since they were merely buying someone’s concept. On the surface that sees to make sense. After all the franchisor is the one who created the business’s concept and assumed all the original risk.
But when you think about it, don’t franchisees assume their own risks when buying a franchise? In addition to the risks that come with starting any business, when you buy a franchise, the franchisee may have to find a location, hire people, launch a marketing campaign, bring in customers and clients and just get the job done. There’s also some degree of risk in choosing a franchisor. What if the system turns out to be weaker than you thought? Or something goes wrong with the franchisor’s suppliers?
This really thoughtful article on TechCrunch really helped crystallize for me that franchisees can be entrepreneurs. The author of the post Vivek Wadhwa (an entrepreneur and academic from University of California-Berkeley, Harvard Law and Duke University) was himself struggling with the question and found the answer in Good Capitalism, Bad Capitalism, a book written by the Kauffman Foundation’s Carl Schramm and Bob Litan who said there are two types of entrepreneurs: “’Replicative entrepreneurs’, who constitute the vast majority of small businesses (such as restaurants and dry cleaners), and ‘innovative entrepreneurs’ the rare few who bring new products/services to market or who pioneer new production methods.”
This makes great sense to me. Most people know the names of the innovative entrepreneurs: Bill Gates, Sam Walton, eBay’s Pierre Omidyar and franchisors like Ray Kroc and Fred DeLuca.
But the replicative entrepreneurs are more anonymous. Some have built chains within chains, or crafted multi-million dollar companies from the mundane (accounting, auto repair or even window washing). And of course as Wadhwa points out innovation can be applied in replicative situations, which is actually rampant in franchising. It was a franchisee that came up with the now legendary Big Mac.
So let’s put the debate about who really is an entrepreneur behind us. After all, entrepreneur is just a word. It’s not whether you created the concept or started the business, but the actions you take, the risks you assume, the growth you demand that makes you an entrepreneur.
Rieva Lesonsky is founder and president of GrowBiz Media, a content and consulting company that helps entrepreneurs start and grow their businesses. Follow Rieva on Twitter @Rieva. Visit SmallBizDaily.com to read more of Rieva’s insights on small business and to buy her newest book, Marketing 101: Quick Tips for Marketing Your Business.