Note: Article originally published on Poached Mag.
In recent years, the term “entrepreneur” has made its appearance more and more often. Most of the time, it pops up in a glamorous context, in success stories where you hear of guys in their early 20s making their first million, or raising $XX amount of investment capital. The ambassadors for entrepreneurship boasts an all-star line-up as well: Steve Jobs, Richard Branson, Mark Zuckerberg, Jack Dorsey…
If you want to get technical, the Oxford dictionary describes this terms as:
A person who sets up a business or businesses, taking on financial risks in the hope of profit.
Many of us see only the glitz of setting up a business or being a small business owner, but just as many fail to recognise the bit on taking on significant “financial risks”, and only “in hope” of profit. In addition to the financial risks, there’s also a whole other aspect to that, known as opportunity costs, or how much you are willing to give up in order to chase this dream of starting your own business.
Don’t get me wrong. It’s an amazing thing to have the entrepreneurial spirit. It’s just that when it boils down to whether you should start your own business, or not, the decision on whether or not you should become an entrepreneur either a) from the get go i.e. upon your graduation, or b) as a mid-career switch, should go really beyond just “I have a great idea!”
Consider these before you even think of leaving that cushy day job.
1) Are you an entrepreneur, or an entrepreneurial individual?
If you’re thinking of being an entrepreneur and being one who actually has what it takes, you probably already exude the following traits (sorry but stereotyping is rather necessary just for this purpose): self-starter, highly competitive, confident, creative, disciplined, passionate, and have a good measure of leadership and people/relationship skills. Having these qualities make you an entrepreneurial individual, and we bet you’re going to do great in a company or startup who embraces you for the awesome person that you are, and qualities you possess.
Being an entrepreneur however, takes these traits one step further – you need to start a company from scratch, meaning that you will need to eventually handle issues such as incorporation, accounting, renting an office, getting office equipment, staff management, filing of taxes, etc. Whether you choose to outsource the administration or not, the burden is ultimately on you.
And speaking from experience, this portion of work often takes time away from doing what you actually signed up for. Sorry that this is a damper, but it’s better to go in with your eyes open.
This is a concept I wish I was introduced to earlier into my journey as an entrepreneur, rather than at the end of it, 5 years later. Nevertheless, sometimes you start off thinking you want to be an entrepreneur, to weld the power of creating something from nothing, to bring your ideas to life – and only in the midst of that journey do you realise that what you had initially set off to achieve has changed dramatically, taking on a character that you only wish you could understand and a direction you can’t seem to follow.
2) Do you have what it takes to shoulder the “financial risks”?
Some entrepreneurs get super excited, and dump in their life savings towards building their dream, only to be sorely disappointed when their ideas don’t take off they way they envisioned. First, you need to understand that a great product or service has to be coupled with as flawless an execution as possible. Secondly, you need to remember that being passionate and determined means that you don’t give up at the first setback and keep pushing forward.
Startups usually take a good amount of time to break-even, and some startups, depending on their nature, take longer than others. So it’s good to know that you will need to have some sort of financial buffer to tide you through this period, even if you choose to bootstrap for a while.
If not, perhaps you can consider being a slasher instead, and start your own business as a side-line project as your toil away at your day job till it starts earning enough to support your lifestyle.
If you’re blessed with a background where you never have to worry about financial lack a day in your life, good for you. But for the rest of us, it’s critical to know that your startup/small business is going to go through the reality of business cycles even if it has achieved break-even: one day you’re up, the next you may be down. This goes back to the concept of “high risk, high returns”, and only you can decide for yourself how big of a bullet you are able to bite.
After all, you chose to give up the comforts of a fixed monthly salary.
3) Just how much are you willing to give up to chase your dream?
Remember, this is your idea, and this is your dream. You may have battled objections from parents, friends and other loved ones. You may have given up your day job, pumped in your savings. In a nutshell, you sacrificed a lot to make your business happen. Part of being an entrepreneur sometimes also means zero work-life balance, because every single waking moment you have, you wish to dedicate it to making your business even better.
If you decide from the start that you will not fall into this routine of working insanely long hours, then I challenge you to find an entrepreneur (the real kind who made it on their own, not the kind who just didn’t want to put “unemployed” as their occupation) who can honestly tell you that they have never gone through 16-20 hour work days, 7 days a week for an extended period of time.
So yes, there will be a lack of sleep, and for some, a lack of social life, simply because you no longer have time outside of your work, or you just don’t have the necessary cashflow to enjoy a good meal. So think about the toll it’d take on your friendships and relationships as well.
That being said, it’s not at all a picture of doom and gloom. When you eventually make it to the Entrepreneurs Hall of Fame, or when people start recognising your brand or your name, it can all still make sense.
Disclaimer: I’ve just ended my 5-year run as an entrepreneur, so forgive me if I sound a little more than jaded. Do drop me a comment if you wish – promise I’ll reply.
Image Credits: Inc., Embrace Disruption, Jootix