Just because you start a business, doesn’t mean you’re an entrepreneur. In fact, I consider a very small percentage of business owners to be entrepreneurs.

There are four distinct types of start-up ventures: non-profit organizations, lifestyle businesses, salary-substitute businesses and entrepreneurial businesses.

Non-Profit Organizations

Not only are non-profit organizations not entrepreneurial, they’re not businesses. A business is intended to make a profit. Obviously, non-profit organizations are not.

This doesn’t mean we, as entrepreneurs, should think less of non-profits. In fact, they often have the purest intentions. Unlike businesses, they aren’t directed and driven by profit margins. Thus, these organizations have the capability to contribute to the common good more than an everyday business.

Over the next year or so I’m going to be working with two of these outstanding non-profits with audiences of young entrepreneurs (Junior Achievement and Lemonade Day). You should check ‘em out!

Lesson: If you start and run a non-profit organization, you’re not an entrepreneur.

Why? Because you’re not making a profit.

Lifestyle Business

Let’s say you love to bake cakes. And you notice that other people enjoy baking cakes, but they’re just not as good at it. So, you start a cake baking service and a class to help these people. Also, this provides you with an income by doing something you love. This is an example of a lifestyle business.

Lifestyle businesses provide the owner with a way to make a living by doing something they love. They aren’t meant to be outrageously profitable. But this doesn’t mean lifestyle business owners are thwarted from becoming entrepreneurs.

So, you own a cake baking service that also holds classes. In the daily grind of baking cakes you develop a new way to bake a cake with pockets of frosting on the inside. Your customers love this cake. You start a webinar detailing how to make this cake and sell admissions to other cake baking agencies across the country. Now, you’re an entrepreneur.

Lesson: If you just want to start a simple business to pursue a particular lifestyle, you’re not an entrepreneur.

Why? Because you’re not offering anything new or innovative.

Salary-Substitute Businesses

Dry cleaning, restaurants, hair salons and most services are classic examples of salary-substitute businesses. These types of businesses provide their owners with a similar level of income to what they would earn in a conventional job. The vast majority of small businesses fit into this category.

Additionally, the vast majority of young businesses fit into this category. If you’re offering a gutter cleaning service, initially you’re not trying to clean every gutter in America. You’re goal should be a small percentage of households in your neighborhood. Just enough so you won’t have to flip burgers, right?

Luckily most of these types of businesses are scalable, to the point that they can become entrepreneurial. For example, you clean a few gutters in your neighborhood the first year. The next, you expand to other neighborhoods. After that, you spread your services across town. Then you expand into other cities and subcontract that work. All of the sudden you’re business is too big to handle yourself. Now, you’re an entrepreneur.

Lesson: If all you want to do is replace your steady income, you’re not an entrepreneur.

Why? Because you’re not trying to grow your business.

Entrepreneurial Business

Everyone has junk. People have three options when it comes to their junk: keep it, throw it away, or try to sell it. Selling it sounds good! One way they can sell it is through a garage sale. But these people don’t want to have to deal with a garage sale. This is where an entrepreneur (i.e. Ben Weissenstein) comes in.

The problem: People don’t want to manage their own garage sales.

The solution: Offer to organize and run the garage sale for a cut of the sales.

However, Grand Slam Garage Sales was only a salary-substitute business. Until… they began selling franchises. What started as a simple service has become an entrepreneurial business as they are selling their services across the country.

Lesson: If you bring a new product or service to the market by seizing an opportunity, you’re an entrepreneur.

Why? Because you’re intending to make a profit, you’re offering something new, and you’re trying to grow your business.

And when you’re rich, consider taking that $1 salary.

So, what if I’m not an Entrepreneur?

The difference between an entrepreneur and a business owner usually comes down to the mindset. And when you consider yourself to be an entrepreneur, you are more likely to start thinking like an entrepreneur – that means big, innovative ideas.

So don’t be afraid to tag yourself with the ‘entrepreneur’ label, even if your business doesn’t technically count: it might be a self-fulfilling prophecy.

More: 3 Ways Entrepreneurs Differ From Business Owners

If you enjoyed this article, you should get JuniorBiz by Email. Thanks for reading and leave your comments below.

Photo by: danorbit

If you are here because of Junior Achievement, you should read this. If not, you should still read this but it might not be as relevant.

As some of you know, I recently (about 4 hours ago) had the opportunity to meet a whole slew of incredible people. I was invited to sit on an entrepreneurship panel for Junior Achievement in Denver today and I’m writing this to thank everyone involved.

I made a mistake

First off, I want to clear something up. Thanks to a nice young lady, it was brought to my attention that during the presentation I implied my business is more important than my education. This is absolutely not the case and my apologies for misspeaking.

I believe my comment was, “I have spent more time on my business than my other classes.” What I meant to say was, “My classes and my education still have priority over my business, but when I finish working on my class work, I work on my business. Then my business time accumulates and happens to take up more of my time than my homework.” I hope that makes sense.

In fact, my education at CSU is the very reason I started this business. The majority of the articles I will write on JuniorBiz.com are a direct result of something I have learned from one of my business classes. More than anything, this business is an extension of my education and the articles I write are intended to educate others about business and entrepreneurship.

If you are contemplating going to college, I’ll make your decision much easier. GO TO COLLEGE! Do whatever you can to continue your education past high school. Your education is the one thing you’ll never lose and the one thing that will never be taken away from you.

Personally, being a student at CSU has done remarkable things for my business as well. I would list them but it would take a long time and it’s outside the scope of this article.

If you are the person who brought this to my attention, please leave a comment below so I can acknowledge you. I can’t remember your name but I think it started with an ‘R.’ Thanks.

Back to thanking people

The first people I should thank are Lucinda Kerschensteiner, Annette Paetzel and Jenn Venerable. They are the chain that brought me to Business Week’s eSummit. Lucinda introduced me to Annette, and Annette introduced me to Jenn. Then after a few minutes of begging, Jenn agreed to let me serve on the panel. This is evidence of how important it is for an entrepreneur to network within their communities.

I also met two presidents today! Robin Wise is the President and CEO of Junior Achievement – Rocky Mountain, Inc. Scott Bemis is the President and Publisher of the Denver Business Journal. That’s the most amount of presidents I have ever met in one day. I enjoyed conversations with both of them and I really appreciate it.

Then I had the honor of being on the panel with two impressive, local entrepreneurs. Jim Talaric’s company, Fusion Specialties, specializes in mannequins and is responsible for the mannequin Old Navy commercials. Darrin Foster, owner of Oogie’s Popcorn, has had his all natural, flavored popcorn featured on the Rachel Ray Show. The popcorn was delicious. After hearing their stories I realize I have a lot of work to do.

Then, of course, I want to thank all of the students. You guys are incredible. I hope I’ve convinced and inspired you to continue with entrepreneurship. From the few of you that I talked to, I can tell the entrepreneurial wheels are turning and it was exciting to meet you all.

If any of you ever have any questions, please leave them in the comments area below this article or any other article on JuniorBiz.com. If you want to contact me by email, you can do that here. I strongly encourage you to contact me because I love hearing about your businesses and answering your questions.

In fact, I am inspired by you guys. So it’s really more of a favor to me than anyone else. I will reply to every email and comment but it might take me a few days. I’m going camping this weekend!

Everyone involved in the entire program was overwhelmingly nice to me. It was weird. I felt like a celebrity for a day. Thank you and I would love to do it again next year.

If you like what I’m doing, then you should Get JuniorBiz by Email. By doing this you will receive an email every time I post a new article on JuniorBiz.com. I have quite a bit planned for my business and this is a great way to stay updated. Plus, you’ll learn a bunch about entrepreneurship. You can Get JuniorBiz by Email here or submit your email address in the orange box above.

Do you know someone who wants to start or improve a lawn mowing service this summer? If you like what I’m doing and really want to help, you can purchase a copy of the Official JuniorBiz Lawn Mowing Guide. It’s priced at $11.95 for the paperback and $8.95 for the eBook.

Remember to leave your questions, comments and suggestions in the comments. Or, you can just say ‘hi’ so I know you were here.