Running a start-up and branching out into entrepreneurship is often held up as the remedy for all those who hate answering to a boss. But what’s best, running a start-up or a 9 to 5? Here are some downsides of entrepreneurship that are often forgotten.
It can take years to get a return on investment.
Entrepreneur, put in the hours, do all the hard graft and often fund the venture but it can take years to see any real return on the initial investment of time and money. For some, the time and expense it takes to get a venture up and running is prohibitive. By contrast, a 9 to 5 job rewards for time and hours spent from the get-go.
Customers can be more demanding than the boss.
The customer is always right, that’s how the saying goes. But in the real world customers are often fully aware of their rights and can be super demanding especially when it comes to new start-up businesses. The world is super competitive and often if a business does not jump to the customer’s demands they will simply go somewhere else. Unless you have a unique selling point or a patentable idea, customers simply have a lot of choices, you will soon realise that customers expect the very best in service, price and convenience. If clients go elsewhere it simply means entrepreneurs cannot keep the lights on. A 9 to 5 job on the other hand may have its own arbitrary targets and deadlines but let’s be honest regardless, you will still get compensated for the work you do whatever the outcome.
Access to funding.
The financial world is often stacked up against entrepreneurs. A new business may find funding will be hard to come by. Loans will need years of accounts or trading history and investors are reluctant to invest in projects that don’t have any traction. Entrepreneurs who have quit their day job often cannot show sufficient regular income, so unless they have some other form of income or have a large amount of equity in an asset such as a house, banks will be reluctant to lend to them. By contrast, an employed individual can get easy access to loans as long as they can show proof of income and a decent credit report.
Holidays are few and far between.
Entrepreneurs especially in the early days are constantly firefighting and working hard to grow the business. Although exciting, it can mean that entrepreneurs may go through long periods without taking a break. Furthermore, solo entrepreneurs may have to factor in the cost of the holiday and the cost of lost business into the equation. By contrast nine to fiver’s are often afforded the luxury of paid holidays.
Entrepreneurship by its very nature is stressful. Finding new clients, growing the business, and concerns about revenue are things an entrepreneur is constantly worrying about. This can lead to increased levels of stress and anxiety. Although many jobs are stressful, the stress of not knowing when the next paycheck is yet to clear is not for all. It’s unlikely you will have to face this level of stress in a job.
The focus is often on the high rewards of successful entrepreneurship but since 90% of these businesses fail it may be wise to look at the impact if a start-up venture folds. If an entrepreneur makes any personal guarantees for loans or investments they will be personally liable. If they have not set up a private pension they may not have built up any pension during their period of entrepreneurship. An entrepreneur’s credit report may take a hit due to a failed venture. Entrepreneurs may also find it difficult to set up another business or access funding for a while after a failed venture. If an entrepreneur decides to go back into employment, future employers may look at the journey into entrepreneurship with suspicion.
As we mentioned earlier entrepreneurs work hard. This can have a devastating impact on personal relationships. Many marriages and relationships break down under the stress of entrepreneurship. There are only so many times an entrepreneur can cancel on a friend before they become an ex-friend. Entrepreneurs often do not have the benefit of work colleagues to share the burden. As the boss, everyone is looking at the founder for answers, so, even if an entrepreneur is lucky enough to have a good-sized team behind them entrepreneurship can be isolating.
Money doesn’t always equal happiness.
Obviously, the purpose of any entrepreneur is to build a successful business. However, if money is the sole objective of an entrepreneur they may find that once they have reached their destination there may lurk a lingering emptiness. In fact, entrepreneurship is so hard and so demanding it is unlikely an entrepreneur will be successful if their sole driver is money since they will simply burn out during the lean times. An entrepreneur should not go to all the trouble of setting up in business to just simply create another ‘job’ for themselves.
This article is not written to put you off entrepreneurship, it’s written to make you think about the pitfalls that are often forgotten during the exciting process of launching a new business. So what’s best? Entrepreneurship or a day job? It depends, if you don’t mind uncertainty, intensive hard work, meeting new people and selling to them, entrepreneurship may be for you. If none of the above works for you it may be best to stick to the day job.
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