This thesis focuses on the realist life mode analysis, especially the independent life mode, and the empirical field of entrepreneurship – running a small firm. The aim is to broaden the general understanding for entrepreneurship to include non-capitalistic rationality through application and development of realist life mode analysis. The application of the analysis is done by studying different social phenomena within the field of entrepreneurship. The two phenomena in question are expansion of small firms and trust between an entrepreneur and an employee, and flexibility in small firms. The problem concerning this theoretical application has to do with showing how life mode analysis can be used to explain that entrepreneurship does not have to be about capitalism. The problem concerning theoretical development has to do with identifying social relations and mechanisms that constitute the everyday life of entrepreneurs. The study has been carried out as a qualitative interview study and it is based on the methodology of critical realism. Concerning expansion and trust between an entrepreneur and an employee, my study shows that as an expression of an entrepreneur’s socio centric life mode specific way to interpret reality trust can be an obstacle for employing extra labour-force outside the own firm. Trust can also be an obstacle for an existing relationship to function smoothly if the entrepreneur and the employee live different life modes. However, my study shows that trust can also function as a possible incitement for employment. My conclusion concerning flexibility is that the concept of flexibility, defined with a starting point in the capitalist principles of the economic market, is occasionally misused in literature. My structural perspective shows that not all small firms are driven by these motives powers. Capitalistic small firms do exist and are to be described as flexible, but not all small firms. The size of the firm conditions entrepreneurship in many ways but it does not condition the rationality. My study also shows that the independent life mode as described in the theory so far characterizes simple commodity production and not production of services. Structural changes seem to have resulted in two different life modes for independent entrepreneurs; a commodity specific independent life mode and a service specific independent life mode.