While successful entrepreneurs may tell you that starting your own business is hugely rewarding, and that everyone should pursue entrepreneurship as an ultimate goal, there are a substantial number of reasons for why entrepreneurship may not be the ideal choice for a large number of people. So before you ditch the salary, consider what it takes to be a successful and effective entrepreneur. Here are fifteen reasons why you should not be an entrepreneur.
15. Long Working Hours – Working under someone else, you can expect to work a set number of hours and very rarely any more. When you become an entrepreneur, you have to work an endless number of hours. The days stretch on and you may have trouble getting home often if at all. Work will also come home with you, becoming a focus of attention in your home life.
14. Sacrificing Quality Time – As a new entrepreneur, you will find yourself sacrificing time with your family, your friends, your favorite hobbies and past times, and many other aspects of your life. Your new business will consume you for long periods of time, likely to the point where you go from the red to the black, which could actually take a number of years.
13. Hard Work – As an entrepreneur, you will find that the work load never ceases, no matter how many hours are in the day, or how many employees you bring on for assistance. Growth always leaves room for “more” – so don’t think that success will allow you to kick back. Furthermore, the more people you bring on board to take over you own responsibilities, the more people management you have to do, thus reducing your own productivity. You’ll want to find good, passionate workers who can manage themselves.
12. Difficulty Finding Investment – In order to become an entrepreneur and open your very own business, a substantial investment will be required, and many new entrepreneurs have difficulty obtaining financing on their own. Now that we’re in the middle of an economic downturn, investment deemed high risk may be even more difficult to find.
11. Uncertainty – Simply put, entrepreneurship is an uncertain endeavor. Even if you go into the process with planning, anything can happen and you cannot be prepared for it all no matter how you try. The entire entrepreneurial process is about hoping for success, but never really knowing where things will turn. While there is some level of certainty in business, there is also a large amount of discomfort for hopeful entrepreneurs who do not know where things will lead.
10. Dealing With The Problem Of Inconsistent Income – Startups typically are backed by cash, but there isn’t a never-ending pot of gold on tap just for you and your company. The fact of the matter is that you and your bank manager will probably become quite well acquainted. If you have poor skills in dealing with the intricacies of business finance then setting up your own company is probably not such a good idea (unless your father happens to be rich and altruistic).
9. Risk Of Failure – The problem with investing capital into a new business is that if the business tanks, you will lose all that money. If you had to take out a bank loan, or a second mortgage, in order to come by the money that you required, then you will have to find a way to pay that money back without having a job or a business to assist you. But what can be even more damaging is the sense that you failed, you weren’t good enough, you’re idea was poorly received by peers. Before you set off on your journey as an entrepreneur you should seriously consider whether you are mentally resilient enough to cope with the possibility of failure.
8. Lack Of Reward Begats Lower Motivation – When running your own business, there really is no telling when you will be rewarded or even how you will be rewarded. You may hope for a bigger bank balance or aspire to develop an industry leading product, but that can’t happen without motivation and drive. Becoming an entrepreneur essentially means taking risks in hope of receiving reward, but without ever really knowing when the reward will come. If that’s something you can’t deal with, then starting your own business is not the ideal choice.
7. Personality Problems – So much of being a successful entrepreneur relies solely on your ability to generate buzz, to garner a following, to create something out of nothing. If you are a quiet and introverted person, you’ll probably find yourself at a disadvantage compared to a seasoned and confident businessman.
6. Finding Good Staff Is A Challenge – Any budding startup is not much more than an idea backed by people. You could outsource the development of your service or product to 10 average offshore programmers, but they still won’t be as good as one excellent (and more expensive) programmer who believes in the product and can come into the office each day. The trouble is, brilliant programmers are hard to find and even more difficult to keep.
5. Dealing With The Possibility Of Failure – If your business fails, you will be losing much more than a way to pass the time. You may lose your home or other vital assets if you cannot meet repayments. Any unsecured debt that you have accrued on cards or loans will still need paying, which means your credit rating will take a beating. There’s also the potential damage to your self confidence, which will make it more difficult to start another business in the future.
4. Working With A Tight Budget – Raising the financing that you need as an entrepreneur is not simple. If you are a first time business owner, you will have difficulty convincing a lender to work with you, which can make entrepreneurship quite difficult. So when it comes to kitting out your office you’ll need to think of every possible way to save and get the most out of every single cent.
3. Managing Cashflow Is Tricky – Without knowing when your next paycheck will come, and with bills, loan repayment and other expenses looming, becoming an entrepreneur can be financially demanding.
2. The Lack of Benefits – By becoming an entrepreneur you will lose out on the 401k, health benefits, life insurance and other benefits that working for a normal company would grant you. You can acquire them your own self, but usually for a much greater cost.
1. Dealing With Negative Feedback – Who will you turn to in times of stress? Who can you trust? As an entrepreneur, you have no real support system to turn to, which can spell disaster for many budding businesses. You need to create a culture where negative feedback is a good thing, in fact, it should be encouraged and fostered into acceptance. If you want your product to be taken seriously then it has to be great, so there’s absolutely no point burying your head in the sand any time someone points out a flaw.