Is Entrepreneurship Right for You?
For most Americans, starting a business is a dream. Many see it as an opportunity to break out of the proverbial rat race, while others resort to entrepreneurship after they lose their job. Regardless of what provided the cause, the lure of entrepreneurship is higher now than ever. The runaway successes of companies such as Facebook and Google have filtered down to casual entertainment, such as movies like The Social Network and shows like Silicon Valley and Shark Tank. Entrepreneurship is now so much on the national consciousness that universities have added programs in entrepreneurship to capitalize on these trends.
Pervasive through all the flash and pomp of "Hollywood entrepreneurship" are a lot of misconceptions of what entrepreneurship is, what it looks like, and how entrepreneurs themselves live, work, and act. Most entrepreneurs are glorified and characterized as dysfunctional geniuses, but is that accurate? Is entrepreneurship even a realistic career choice? Most of these questions come down to this:
Is entrepreneurship right for me?
Starting a Business Just Isn't That Risky
Let's start with a bang: The statistics you've heard all of your life that 9 out of 10 businesses fail is simply wrong. Starting a business can be risky, but the risk comes from the wide range of potential outcomes, high and low. With a traditional job, you're always entitled to a minimum wage, but you're also going to be capped out at some point because it will become cheaper to hire someone to replace you than to keep you on staff. For entrepreneurs, you could earn a million dollars, or you might not earn a penny after expenses. It's the fear of those low-end that scares most people.
However, few if any businesses operate on the low end, and if they do, not for long. The fact is that most businesses do survive for a considerable period of time.
- The SBA calculates that 53% of businesses survive the first 5 years
- Almost one in three businesses survive for 10 years
There is also a misconception that most businesses are started by younger tech geniuses, which is also false.
Admittedly, some businesses are more successful than others, but entrepreneurship provides the opportunity for direct return on investment, unlike working in a business as an employee. In my time working with entrepreneurs, I have formed many, many more companies than I have shut down. Of the ones I've shut down, many did not understand that...
Entrepreneurs Work Longer and Harder
Entrepreneurship is not something you want to do if you enjoy your time off. If you enjoyed homework in school, you'll take to entrepreneurship well. There's always something to do, tasks to be done, customers to contact, etc. Entrepreneurs work long and hard, and they never really stop.
- 39% of entrepreneurs work more than 60 hours per week
- 88% say they can never completely stop thinking about their business
- 1 in 4 feel overwhelmed by the day-to-day tasks
It is not just quantity, but quality as well. Not only will entrepreneurs spend more hours working on their businesses, the hours they spend are more stressful than the average worker.
- 91% report fulfilling 3 or more employee roles in the office
- 2x as much stress as maintaining a spousal relationship
- 3x as much stress as raising a child
- 4x as much stress as maintaining personal finances
If you've ever fought with a spouse over money, you've barely scratched the surface of the stress an entrepreneur feels on a consistent basis. Whereas your spouse might be dependent on you for their livelihood, an entrepreneur's staff are all dependent upon him or her for their own livelihood, and an entrepreneur will often see his staff much more often than he or she will see their own spouse. Instead of having one boss, an entrepreneur has dozens, if not thousands, of bosses in the form of customers constantly demanding attention. This stress can build up, and many entrepreneurs develop substance abuse issues to cope if they cannot find another outlet.
Yet, despite all the time, stress, and risk...
Entrepreneurship is Satisfying and Fulfilling
An overwhelming number of entrepreneurs do not just enjoy being business owners, they LOVE it.
- 40% say they "signed up" for the pressure
- 7 out of 10 describe themselves as "very happy"
- 9 out of 10 are happier than working for someone else
- 35% describe themselves as "extremely happy"
For comparison, only about 1 in 3 Americans identify themselves as "very happy" or happier. More entrepreneurs identify as being "extremely happy" than the average American describes being even "very happy." Despite having to manage cash flow, responsibilities, and long hours with no time off, entrepreneurs are so overwhelmingly happy with getting to be their own boss, setting their own schedule, and making their own decisions that those pressures drop significantly.
Another common theme is that entrepreneurs get the opportunity to "eat what they kill." In traditional employment, there are rarely incentives for individuals to put themselves out there, to take risks, or otherwise strive for more. However, in my experience working with entrepreneurs, the thrill of closing a big client, making a profit, or launching a product can be a singularly more fulfilling event than anything they ever did as an employee. Not only that, but those experiences can happen often, making entrepreneurship a continually rewarding experience.
In my years of practice, I've devised a test to determine whether entrepreneurship is right for you. It's a two-part test, and finishing both parts is necessary prerequisite to determining if entrepreneurship is right for you, at least in my opinion.
Watch this, right now:
Did you make it to the end of the video? How do you feel? Pissed off? Motivated? Do you already have that one potential customer on the phone?
The beauty of this video is that no one watches it and remains neutral. Half of people will immediately push back against Alec Baldwin, thinking that he is a sociopath and a complete nightmare to work for. This half will immediately sympathize with Ed Harris' and Jack Lemon's characters and want to defend them against this suit-wearing terror.
The other half of you will draw energy from that video, feeding off Baldwin's energy, and turning it into motivation. I know sales people that play that video before meeting with big potential clients. I know sales managers that play that video in sales meetings. I watched that video twice while writing this article.
If you're in the second category, you may be right for entrepreneurship. Why, you might ask? The first group have a form of narcissism that can be deadly in an entrepreneurial environment. Narcissism pushes back in the face of a stronger opponent. Instead of seeking cohesion, narcissism creates discord, subterfuge, and conflict. If you have ever had a narcissistic boss, you know exactly what it is like to have the better idea rejected because it wasn't your boss' idea.
The second group, however, are energized by the speech; not just motivated, but spurred almost to the point of volatility. These character traits are a necessity in entrepreneurship because you will need to establish a goal, prioritize that goal, and set yourself subservient to that goal. As an entrepreneur, you are not the goal, only a tool towards achieving that goal. If you cannot disintegrate those two priorities, you will never be willing or able to take advice or receive input from your team in order to achieve success. Unfortunately, I run into a lot of narcissistic entrepreneurs.
I have a reading assignment for you. READ THIS BOOK! Cover to cover, no shortcuts. Audio book is acceptable.
That book is not only one of the most controversial books of all time, it is also the single most influential book cited by top CEOs, only second to the Holy Bible.
That book, while it has many critics, has such a league of followers, that the list has its own Wikipedia page.
If you can read that book in its entirety, and you are still wanting to start a business, then yes, entrepreneurship is right for you.
Surprisingly enough, the most difficult decision in starting a business is the decision to start a business. A business owner once told me that the most difficult decision is the next decision you have to make. After you make the decision, you realize that that decision was not so difficult, but the next one is the tough one. However, he did have one caveat: the decision to start a business was the hardest decision he ever made. Yet, in spite of that, he did not regret that decision.
We all have many regrets in our lives, and for many, not taking the risk and starting a business ranks as one of the biggest. Don't fall into that trap. If you're ready to get started on the road to entrepreneurship, give me a call.