When people think about entrepreneurship, it often the possible lifestyles that people think about. The freedom of working your own hours, control of your business, the money being able to retire at 30 etc… Often the other parts of a career as an entrepreneur can be forgotten. So here is a brief breakdown of the good, bad and ugly sides of entrepreneurship.
The best part about being an entrepreneur for many people is the lifestyle it brings. The chance to be your own boss, making the decisions and seeing something that you built grow, is highly attractive.
Another great benefit is you can impact on the world, a lot of entrepreneurs find that the most motivating factor rather than money. Just look how Mark Zuckerberg has changed the world with Facebook. What about Google’s founders Larry Page and Sergey Brin?
Obviously with success comes money, a lot of money. Most of the richest people in the world started their own companies. Even if your company isn’t as big as those you still have a good chance of making more money than if you work for someone else.
Another reason why people choose to be an entrepreneur is the excitement it brings. The varying daily challenges that keep you on your toes. You will probably feel more fulfilled than the usual 9-5 job, since your responsibilities are down to you. You will be constantly learning every day which is what we are all about, learning and moving forward.
Also we excel when we are passionate about something and when you have your own business it will feel like your little baby which you can nurture and grow.
So sometimes starting your own business works and you become successful and rich, but more often than not this isn’t the case. With about 80% of new businesses failing within the first year there is quite a high failure rate. This is normally due to lack of capital and/or bad management.
The lack of capital is the bad part to entrepreneurship. Not having the security that comes with a regular income is often what puts many people off. At the early stages of starting a business the lack of revenue coming in can represent a problem if you have many bills to pay or family to support. It is easier when you are younger and have fewer commitments but you might have to rough it for a while.
If you’re not careful you can also find yourself in a lot of debt and if your venture then goes belly up, you can find yourself in serious financial troubles. It is paramount to stay within your means and look at the long term future of the business rather than the short.
Watch out for those just looking for a piece of the pie. If your company does start to gain momentum you may start getting people looking to join purely in the hope of a pay off. These are not always the most helpful of people. When looking to hire people it can be difficult to spot these types.
Sometimes working as an entrepreneur you can get carried away only thinking about the potential future success which can sometimes be detrimental. If you enjoy the journey of building a successful start up rather than just the outcome you will be a better leader.
So the ugly side of entrepreneurship. Money can be the factor that leads to the ugly side. Every venture needs capital to be raised, whether it comes from savings, support from family and friends, bank loans or investors.
If you do borrow money from family and friends, it can cause problems when it comes to paying them back. If your start up becomes very successful then those who lent you money may try to claim more than you expect. Dealing with that situation, should you come across it, can be difficult and can ruin relationships.
Looking for investment from investors is a very desperate situation a lot of the time, since there is a lot of competition and this can lead to young entrepreneurs falling into traps. There are many bad investors out there looking to take advantage of inexperienced start up founders, by conning them out of equity with false promises.
Sometimes the lust for control can also become overpowering, leading to distrust and paranoia. Not trusting employees as you feel they may be taking advantage of you is harmful to the business and is something you need to watch out for. Make sure you get the right employees in the first place; it’s worth the extra effort.
Small businesses tend to be a high risk of being victimized by fraudulent activities. This is why entrepreneurs need to have a high regard for the protection of their data. If not, all the hard work you’ve put in could be wasted if you go out of business because of fraud.
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