Should you become your own boss?
Do you have the traits of an entrepreneur? In this article, you'll learn what it really takes to be your own boss and how to figure out whether or not you should start your own business.
Should I be an entrepreneur?
It may seem like this question has an obvious answer, but think again.
Being an entrepreneur is not better or worse than being an employee. It's just different.
Starting your own business comes with a lot of unrecognized headaches.
There is certainly the potential to make a lot more money than being employed, but most entrepreneurs don't end up on the higher end of that spectrum – most entrepreneurs make a pretty average salary.
Not only that, but 70% of businesses fail within 10 years. Here's why:
- Bad fit between team and project: 40% of businesses
- Lack of time and involvement: 38% of businesses
- Lack of capital: 31% of businesses
- Poor market analysis: 29% of businesses
One thing is for sure, not everyone in the world should be an entrepreneur.
That being said, if you're really cut out to be an entrepreneur, you should not work for someone else.
You have a certain kind of energy and creativity that just won't be utilized in most traditional corporations, and that will leave you frustrated.
If you feel like starting your own business and giving entrepreneurship a go, you most likely should.
In this blog post, I'm sharing my insights about how to make the jump and what you should consider before.
The glorified entrepreneur lifestyle
Too many people are dreaming about the entrepreneur lifestyle, imagining themselves working a few hours per day, then sipping coconuts on the beach the rest.
It just doesn't go down like that.
Sure, you might get there one day (but even then, you'd be bored out of your mind – if you're a true entrepreneur), but the road there is often very long.
And what dictates whether or not you should become an entrepreneur, is whether or not you're willing to take that long road.
If you shake and fret at the thought of working 14 hour days, without seeing results, potentially for years… yes, years.
Then you're going down the wrong path.
Entrepreneurship is for people who don't mind that struggle.
If you love challenges, responsibility, and don't mind pain and hustle, theres a good chance that entrepreneurship is for you.
What is an entrepreneur?
So, if entrepreneurship is not all about that fancy lifestyle, what does it mean to be an entrepreneur then?
Before we jump into the good stuff, let's just quickly declare the definition of an entrepreneur, how much money they make, and whether you need to get a degree to become one.
What's the definition of an entrepreneur?
The Oxford definition of what an entrepreneur is:
“A person who sets up a business, taking on financial risks in the hope of profit.”
That sounds pretty good to me. The only thing to add here is that in modern time we don't really need to take that much of a financial risk.
There's many businesses you can start that barely requires any up front investment (affiliate marketing is how I started). You can also raise money from an investor without any personal risk.
So, the risk today isn't that high for most businesses.
What does an entrepreneur do then?
An entrepreneur solves problems.
The tricky part about becoming an entrepreneur today is about finding an area where you can provide value and satisfy a demand.
That's what we'll cover in this blog series on how to be an entrepreneur.
How much does an entrepreneur make?
In case you're wondering how much entrepreneurs actually make, here's a table listing the average salaries for entrepreneurs across the globe.
The average salary is not low, but most entrepreneurs aren't making much more than $50 000 per year, which could come as a surprise to some people.
A general belief seems to be that entrepreneurs makes a lot of money. In reality, you just hear more noise from the entrepreneurs that do.
|United Arab Emirates (UAE)||$2722|
*Data in this table is based on various sources and reflects the average salaries for entrepreneurs and founders.
Do you need a degree to become an entrepreneur?
The short answer is no. You don't need a diploma to become an entrepreneur.
In fact, I personally wouldn't recommend anyone to go to school to become an entrepreneur, unless it's a very specialized education program that is inline with what you want to focus on.
However, you do need to be learning. Being an entrepreneur, you need to know a broad spectrum of topics related to running a business.
You don't need to a jack of all trades, but you need the basics in accounting, marketing, technicals etc.
In my experience, school isn't the best way to learn the practicality of these traits.
Online education triumphs the traditional school system when it comes to learning entrepreneurship. But you really don't need to go out and spend thousands on expensive certificates or courses all of a sudden either.
Most can be found for free on the internet.
You usually learn them as you go about building your business. When you feel you have a lack of knowledge, you'll find the resources you need to move forward.
Should I start my own business? Pros & cons
It is certain that there are both upsides and downsides to being your own boss, and the question “should I start my own business” can only be answered by yourself and by considering both of them below.
Upsides of running a business
1. No income roof
Life becomes more interesting, because only you decide how much money you want to make. There is literally no income roof, and it all depends on you.
2. Location independence
You have the option to build a location-independent business, that could allow you to work from wherever and whenever. Starting an online business is also the easiest and probably the best choice for your first business.
3. Choice of industry
You can easily transform work into play by finding an industry you are passionate about. The most beautiful thing (even more so than the financial success) with having your own business is that you get to choose what you do.
4. Help improve the world
Innovation is what the world needs to move forward. Knowing that you're having a part in that can give you fulfilment and joy.
5. Constant learning
As an entrepreneur, you never stop learning. In the early phase of your journey, you'll be forced to learn a whole lot about everything that has to do with running a business. It might not always be fun in the moment, but you'll definitely recognize the need to constantly learn new things as something positive.
6. You get out what you put in
As an entrepreneur, you're paid according to your performance. If you generate good value, you'll receive the rewards. Getting this acknowledgement can be worth gold and can give you a great sense of accomplishment.
Downsides of running a business
1. No guaranteed salary
You're not guaranteed anything. You could potentially be working hard for years and make peanuts. You might have to take loans, borrow from family, and cut your living costs.
2. Less time with friends and family in the beginning
Unless you have a large amount of money to invest, you'll have to invest a large amount of your time. This means a lot less time with friends and family – in the beginning (long-term: goal is to get back your time).
3. It can be lonely at the start
Often times, you'll start from home, and have no office or coworkers. That in combination with having less of a social life overall – can be really difficult for some people. Of course, you can always put yourself in a work environment where you meet other people (like co-working spaces).
Consider a gradual shift
When thinking about taking the step to start your own business, many people get the picture of jumping out from a cliff.
While there is some resemblance, it doesn't have to be nearly as dramatic as that.
Mental preparation is key. Especially if you have people depending on you.
The best way to take the step to start your own business is to do just that – take a step. A gradual shift is easier both financially and emotionally.
Typically, I recommend setting up an 18-month plan for transitioning from your current employment.
It might not seem as exciting, but you're more likely to succeed if you think it through and have a proper plan in place.
Here's some things to consider:
- Can you decrease your hours at work? Tell your boss about your intentions, and if possible, create a plan together for how you'll transition out of your workplace over time. Usually, they'll respect your honesty and appreciate the heads-up.
- How much money have you saved up? How many months worth of living do you want in your saving account before quitting? Always have a financial plan. I recommend having at least 12 months of savings (enough to get by – not live comfortably).
- What is the worst possible scenario? Can you get your job back, or are there other employment opportunities? Make a plan for what you'll do if everything fails. Writing this up can greatly reduce stress because you'll see that the risk isn't as big as it appears.
Important traits of an entrepreneur
Do you have the traits of an entrepreneur? Not everyone does.
Don't get me wrong, just because you don't have all of these traits, doesn't necessarily mean you can't qualify as an entrepreneur.
Some of these traits have to be developed with time. But, consider the general gist of this list, and be honest with yourself – if you have very few of them, chances are slim that you'll enjoy the entrepreneurship journey.
You're an entrepreneur if you're a person who:
1. Thrives with a performance based salary
Being an entrepreneur, you get paid by performance. If you can't produce enough value, you won't get paid. Income can be very unstable at times.
2. Love innovation and creative work
Being able to solve complex problems is essentially why you get paid. To do that, you need to use your creativity a lot, and always be innovative. The good news is that most people have this faculty – they just haven't discovered how to use it.
3. Have higher energy than most people
This is not a game for the weak who value comfort over progress. Entrepreneurship can at times require tremendous energy. If your ship is sinking, you're gonna need to put out maximal effort to stay afloat.
4. Prefers more freedom over more money
Many entrepreneurs end up making ridiculous amounts of money. But it wasn't their goal – at least not their primary one. Most people who started their own ventures did so because of freedom, and lacking it wasn't an option.
5. Have great resiliency and patience
It's very likely that you'll be working hard for a long period of time without seeing any results. Succeeding as an entrepreneur requires a high level of resilience and patience.
6. Enjoys building things
Entrepreneurs are artists and architects. They are all about finding better ways to do things and don't mind carrying stone after stone all day long just for the sake of building something.
7. Consider yourself action oriented
The thing that really separates entrepreneurs from straight-A students and top-performing employees is not their skillsets, but their ability to actually get stuff done. To succeed as an entrepreneur, you need to be a person that makes things happen, no matter what excuses you can find.
Should I be an entrepreneur?
Only you can answer that question.
Here's three final questions to ask yourself:
- Does it feel like the upsides outweigh the downsides for you?
- Do you have the traits of an entrepreneur?
- Are you willing to temporarily sacrifice some of your life quality?
If you feel a strong yes on all three, you know what to do.
Don't try to think of an excuse. Your brain will surely find one, and then you'll end up never starting your own business.
Take the leap of faith, and go out and start building your dreams – today.
That's it for now. Hope this helped you figure out whether you should become an entrepreneur or not.
Let's move on to making it happen.Mark lesson complete