Entrepreneur or “PermopreneurTM”? Which are you?
Entrepreneurs are heralded by the business community as key contributors to the success of the US Economy; probably one of the most resilient economies in the world (even in a recession). New products, technologies and business ideas are the objectives of millions of aspiring Entrepreneurs throughout the world. Yet, there is an 80% failure rate in the first five years of a new business’s life in the United States. Much has been written about the reasons for such a high failure rate. Let’s consider just one factor – maybe they are not Entrepreneurs at all.
My definition of an Entrepreneur is an individual or group of individuals that take an idea, and develop that idea and manage their business to the point where it becomes sustainable. A sustainable business is an enterprise that can generate cash flow levels that support itself on a going-forward basis. It is no longer depending on investor funding or credit to support its operations. Investors that have believed in an idea, invested in an “Entrepreneur” and eventually saw their investment disappear due to company failure, know exactly what sustainability or the lack of it means to them. More than likely that Entrepreneur may have not been an Entrepreneur at all, they may have been a PermopreneurTM.
What is a “PermopreneurTM”? They are those individuals or groups that take an idea and create a business based on that idea, but are unable to generate enough cash flow to sustain their operation on its own. There are two types of PermopreneursTM; The first type are those that are blessed with the gift of turning ideas into business opportunities, and are very secure in their abilities to know when to turn the business over to professional leaders and operators. They usually employ professional operators to help raise additional funding and direct the company to sustainability. The second type of PermopreneurTM is either intentionally or unintentionally headed toward failure. They are very skilled at convincing investors to finance their idea or technology, skilled employees to join their company, and they believe they can operate their way to sustainability. Unfortunately, they don’t have the leadership ability and operating skills to keep the company from eventual failure. The end result is another failed business with a bewildered promopreneur wondering what happened with a following number of devastated investors and employees. A more sinister version of the PermopreneurTM has no intention of taking the company to sustainability. Their “rush” comes from raising money to support a luxury life-style while they look for the next idea, and the cycle is repeated. They have no intention of taking the company to cash flow sustainability. They know there are plenty of investors that fail to do a proper job of due diligence and are greedy enough to feed the PermopreneurTM ego with lots of opportunities.
I have had experience with Entrepreneurism for many years, having worked with Entrepreneurs and I have held the title myself. I have tremendous respect for those Entrepreneurs and PermopreneursTM that have successful track records for creating sustainable businesses. If you consider yourself an Entrepreneur, it would be worth your time to do a self-evaluation to honestly determine if you have the skills (not just the desire) to direct your business idea all the way to the goal line -cash flow sustainability. If you are not sure, then look for the right time to hand off the company to a skilled leader and operator and consider yourself a successful PermopreneurTM.