Yesterday I promised to even things out in my post on the Top 5 Reasons to Become an Entrepreneur. Today I write on why not to become an entrepreneur. This is a tougher topic for me to write authentically as I’ve been playing entrepreneur for the past four years and have no real desire to turn back. Consequently this article took me twice as long to write. I also found myself elaborating more as I poured more and more thought into each point. The result is what I feel are the top 5 cons of entrepreneurship.
#5 The Work
Put simply it never stops. As an entrepreneur you cannot ever run out of things to do until the business is gone. If you aren’t busy ordering supplies, tracking inventory, getting the books in order, finding customers, finding advertising space, working out glitches in the product, negotiating with a supplier, negotiating with a customer, seeking funding, optimizing your website, figuring out payroll, or one of thousands of other tasks out there then you can be refining your business plan to maximize growth.
In some periods I put as many 15 hours a day into my business, and looking back I didn’t always get 15 hours of work out of it. The book Getting Things Done is one of the key materials that has taught me how to make the most of my work time and allowed me to have a personal life at all. I am in the process of reading it for the third time and can partly attribute so many successes to the advice in it. For $10 it’s practically free.
#4 The Investment
A business isn’t started for free. The financial commitment can be significant if you are opening a store or be as little as the cost of a domain name and web hosting (if you seek these things for a business venture then get in touch with me). The former is a lot more likely than the latter, so there is start-up capital you must find and odds are its coming out of your pocket or a loan secured by your most prized assets.
However the money invested is only part of the equation. You also have to examine your opportunity cost. What is your next best alternative for the money and time you put into the business? What kind of retirement fund will you have on a $5000 investment with the power of compounded interest? What sort of income are you losing by putting your time into this venture instead of your next best alternative?
#3 The (lack of a) Pay Cheque
A regular pay cheque is a lovely thing to have. It pays bills, buys food, and makes sure you can always get those nice consumer comforts like the latest gadget or DVD. With the popularity of direct deposit, money just “appears” in your account every two weeks.
When you are starting up such a regular pay cheque is very difficult to get. If you are lucky enough to have an outside investment that pays you a salary or have enough revenue coming in to be able to always pay yourself a certain amount (and invest the rest in the business) then you at least have regular income in the short-term. In the long-term the only way that cheque will keep coming is if your company continues to succeed.
Most likely you will be taking a severe pay cut, and without outside funding you are risking no money coming in at all. Unfortunately the companies issuing your bills won’t be very understanding about this.
#2 The Risk
You take on risk when you start a business. This risk, like with other investments, is why that coveted upside exists. Points 3 and 4 wouldn’t be a big deal if you were always guaranteed to succeed. Instead you must do your absolute best, make the decisions you believe are right, and accept that your life will be pot marked with failures (and valuable lessons).
I had the opportunity to listen to Jim Estill speak recently, and one of the major points he emphasized was “Fail Fast and Fail Cheap”. You cannot avoid taking risks in business, and consequently you can’t avoid failures.
#1 The Discomfort
As human beings we tend to find change uncomfortable, but there isn’t much room to be in a placid comfortable nook when you’re an entrepreneur. You must constantly be willing to try new things, make decisions without nearly enough information, and the worst fear inducer of all, take risks. The very nature of this kind of life prevents you from hitting the standby button on your brain and just slogging through the work handed to you oblivious to its meaning or consequences (not that this is how all employees work all the time - it’s just you have that beautiful option). Having to constantly grow, change, and do things out of the ordinary can bring on terrible fear along with excitement. Your outlook on life, the acceptance of your previous “40 hour work week” peer group, and the role you play in determining your future will all be drastically different.
Every other entrepreneur I have spoke to mentions that entrepreneurship is a roller coaster of emotions - it will be the source of your highest highs and your lowest lows. That’s definitely been the case for me and every business owner I have ever met. Riding a roller coaster 24 hours a day… not something everyone wants.
There’s are a lot left to hit on the entrepreneurship issue. Stay tuned for part 3 where we break away from lists!
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1 comments:
Huh. Interesting article. I want to run a business and become an entrepreneur, so this is helpful. You definitely highlight the cons behind becoming an entrepreneur. I still would like to try it, as it's been a dream of mine for a while. Lately I've been thinking that I'd rather buy a business instead of starting one from scratch, but I haven't had much success looking for one. A franchise? Something home-based? Do you have any suggestions? Thanks
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