Too many people ask, “how can I be an entrepreneur” instead of asking the more important question: “should I be an entrepreneur?” In recent years, entrepreneurship has been marketed as a get-rich-quick scheme.
This has led many to look at starting their own business as their escape from a “pesky” 9 to 5 job. Moreover, the self-indulgent, narcissistic social media culture has glorified entrepreneurship as the ultimate rejection of dependence, and many youngsters see it as a statement of independence.
The truth is that entrepreneurship is none of those things. When you’re in business, you’re serving a target market. And you’re as duty-bound to providing value to your customers as an employee is to delivering value to you.
In terms of income security, you start off with more risk than any of your employees. While that pays off in the long run, you’re not immediately better off for choosing to start your own business. It is important that you see entrepreneurship objectively.
Entrepreneurship: Pros and Cons
There are certain advantages and drawbacks to being an entrepreneur. While you go through the list below, make sure you consider your personal preferences. One man’s risk is another man’s thrill. Pay attention to your capacity for follow-through and risk tolerance as they’ll inform your decision.
Advantages of Entrepreneurship
- Relative freedom – As an entrepreneur, you’re not entirely free as you have a customer base you’re responsible for, but you get to choose the ways in which you’d rather be bound. For many, picking the responsibilities that bind them is a plus.
- Flexibility – As long as you decide wisely, you can design your schedule to give you as much flexibility as you wish. Compared to a standard job, this prospect is a lot less confined.
- A higher degree of control – As an entrepreneur, you have a higher degree of responsibility, but it comes with a lot more control over your venture and, consequently, your destiny.
- Higher profits – This is one of the greatest perks of entrepreneurship as you get to make the most from your business operations. For many, this can be the motivating factor that multiplies their motivation.
Drawbacks of Entrepreneurship
While you make the most off of your business in the long run, you also stand to lose the most when you start your own thing. At some point in your future, you’ll be given perks for being a business owner, but initially, banks will hesitate to give loans, and landlords might prefer employed tenants over you, a budding entrepreneur. This speaks volumes regarding the level of risk you take on at the earlier stages of your business life.
Unless you’re an heir to a billion-dollar estate, you can’t expect to delegate everything right off the bat. Entrepreneurship is frontloaded in terms of effort and investment. You will work more than your employees as you try to get your business off the ground. This is a temporary drawback, though, as things get easier as time goes on.
Entrepreneurs might look cool showing off their freedom, networking events, office meetings, and income on Instagram, but the reality is that entrepreneurship is a lonely endeavor. Those who pursue it with ambition and an exclusive focus reach the top but find themselves secluded with no one around who relates to their problems. Some are often surrounded by Yes-men and can’t even lean on anyone for advice.
Reverse-Engineer From the End-Goal
If you’ve read the above portion and decided you want to be an entrepreneur, the most valuable advice I can give is to start from the end. What do you want to happen at the end of your journey?
Is your goal to create a multi-million dollar business and sell it to a larger business group? Because if that’s the case, you’re better off creating a brand that isn’t tied to your personality. On the other hand, if you wish to propel yourself into the public sphere as a business mogul, you may want to position your businesses around your personality.
Typically, there are three end-games for a business.
Create a Small Equilibrium
This is the kind of business talked about in Company of One by Paul Jarvis. A business that considers equilibrium as its end-game isn’t meant to get very big. IT is meant to create value on a small scale and earn its workers and owner enough money for them to have a work-life balance they’re content with.
Sell Off the Business
If you opt for this trajectory, you scale your business and automate it so you can make yourself redundant. Upon reaching this point, you can sell off the business to the highest bidder. Profit takes priority over control in this model.
Go Public or Go Home
This variety of business is meant to go public to be eventually traded on the secondary market. This is a hybrid between selling off and retaining control. You retain control of your company to some extent, but as a publicly-traded company, you have the responsibility to your shareholders.
The end-game you envision for your business is related to your “why.” Why do you plan to start your business? If you seek financial freedom, the best way to have the most is by scaling and selling your business.
On the other hand, if you feel rewarded by having a sense of control, then selling off a major chunk of the entirety of your company doesn’t make sense. Finally, if you genuinely enjoy the process of running your business, then a small business at equilibrium will grant you the best sense of flow.
How to Transition From a Job to a Business
If you’ve decided on the end goal of your business, then all that’s left for you to get started is to put in place a transition plan. Getting your business off the ground can be a daunting task, and if you’re launching your first business, it can feel all the more complicated. Here are the three logical steps that take you from an employee to a business owner.
Solopreneur Service Brand
If your current job function can help businesses, you’re in a great spot to get started with building your business. Accountants, video editors, photographers, marketing specialists, writers, software developers, and even executive assistants are in a great position to offer their services to multiple businesses.
By offering a personal service to a diverse client base, you switch from relying on a single employer to having multiple customers. While you do not get employment benefits, you can get a higher collective sum by charging a premium.
Scalable Service Brand
The next step in your business journey is to switch from being the single service point to having multiple employees doing your previous job. Let’s suppose you’re an accountant. Though having multiple bookkeeping clients offers you more flexibility and ownership of your practice, it is still a job as long as your income is directly tied to your labor. Once you hire other accountants, though, you have transitioned into proper business operations.
The final stage of your journey consists of subtracting yourself entirely from the operating equation. You started as a service-providing employee within a one-person operation. And with the previous step, you graduated to the role of a business manager within your practice. By automating your business, you claim the role of owner to the exclusion of everything else.
The main benefit of doing this is earning your free time. Once you have enough time, you can expand the business, launch new ventures, or sell the operation. You may wonder how you can turn your scalable service brand into a self-operating establishment.
For that, you need to hire the right business manager and create appropriate operating documentation. Those topics are too complex to be simplified in this piece, but the linked articles provide insights into the respective areas.
Biggest Obstacles to Entrepreneurial Success
Now that you understand the different destinations of entrepreneurship and a reliable path you can take to turn your job into a business let’s discuss the obstacles you can expect on your journey. I do not want you to feel like you’re facing exceptional circumstances when things don’t go according to plan. Knowing that you’re not alone and that certain disruptions are to be expected can give you the assurance you need to follow through.
It can seem like you’re putting in effort with the needle not moving at all. This is to be expected, and you should not be discouraged. Ultimately, it only takes a few agreements for the results to snowball. Make sure you have enough working capital and stay lean in the earlier days of your business.
Hiring the Right Employees
This problem occurs at the scalability stage, especially if you focus on skills and hire in a rush. It is advisable to have the right company culture in place and to hire character and train skill instead of the other way around.
When you start off as a solo performer, you may hesitate when it comes to giving up control. Trusting others to do what you previously did can be scary. But trusting your hiring judgment is the only option you have. If you can’t let go of a small role, you cannot grow.
Entrepreneurship can be rewarding for individuals with the right risk tolerance and high levels of personal responsibility. Though it isn’t a method to get rich quick, it can certainly get you more wealth in a shorter period, provided you’re willing to put in the money and the effort. The best way to get started in business is to turn your job into a solo-service business which you later scale by hiring and delegating. While the path is simple, it isn’t easy. You should expect obstacles and retain your motivation despite not seeing results. It will be tough, and you’ll have some sleepless nights, but in the end, you’ll be glad you went through it.