Start-ups are popping up all over the place, but is being a business owner really for you?
Remember the promises we made to ourselves when we were young? Those daydreams about all of the things we were going to do when we got older?
I’m not talking about those kiddy dreams about pitching for the Yankees or becoming the first astronaut to visit Neptune, I’m talking about the goals we developed late in high school or in college.
During those days maybe you started making clothes for your friends that were well received, so you decided to head to New York to try your hand at a fashion business. Or maybe you’ve taken your mother’s recipes — that you couldn’t care less about as a child — and decided you wanted to open your own little café or luncheonette.
But somewhere in-between coming up with that idea and settling into the real world, those entrepreneurial ambitions started to subside and began to be replaced by hefty bills and an immediate need for employment. Plus, the pressure from your folks to “get a real job” didn’t help your level of ambition all that much either.
Most of us throughout the years have heard the advice of following your dreams, doing what you love, monetizing your passions, blah, blah, blah — but is that really better than finding a job and having a consistent paycheck, a daily routine and some level of job security?
Stuck in jobs
It’s a question that many people go back and forth on, especially those people who are currently stuck in jobs they hate.
And we all know that trying to turn a passion into a full-time business is risky, but just how risky is it? To be an employee or to be an entrepreneur — for many, that is the true question.
According to the U.S. Small Business Administration seven out of ten businesses shut down within two years and only 25 percent last for 15 years or longer, which shows just how large the potential for failure really is when starting a company.
But that shouldn’t discourage people from wanting to be a business owner, said Scott Shane in a Washington Post interview. Shane is a professor who teaches entrepreneurship at Case Western University.
He says quitting your job in order to start a business might not be the best game plan; instead you should work your business and your 9-to-5 simultaneously, which will better help your company get off the ground.
“Unemployed people tend to not start as successful companies on average as people who are employed do,” he said. “You’re not going to get as many successful businesses with young unemployed people as if you put your money into encouraging entrepreneurship among employed middle-aged people.”
In short, it takes a consistent flow of cash in order to add the things to your business that it needs. Being able to use your own capital to build your company — at least in the beginning stages — is preferable to starting out under any kind of debt.
In fact, Shane says if you hate your job but love the field, it’s best to stay in your position and learn all you can about the industry, that way it will be easier for you to build and maintain a customer base — especially if you’ve already established a good reputation within that industry.
“Most people start businesses to pursue customers with similar products or services as their previous employers,” said Shane. “What helps to organize a business is industry knowledge, and that knowledge is learned by doing.”
But not all future entrepreneurs are working a 9-to-5, and many don’t want to wait until they’ve mastered their industry before they start their companies.
A good portion of wannabe entrepreneurs still happen to be students, and many are eager to leave the college world for the business world, regardless of how huge the risk of failure is.
Take Eric Zhang for example a student at UC Berkeley who dropped out for a short while to pursue his dreams of starting an online company. Zhang has an opposite view of some experts that say people should wait to gain experience and money before starting a business.
The variance in philosophy could easily be attributed to generational differences, as many young people who begin start-ups may feel waiting for years is just too conservative, and if one waits until there’s no risk involved before starting business, they’ll be waiting forever.
No pain, no gain
“Entrepreneurship is never about ‘I’m going to wait until the risk is lowest,” Zhang told a California news outlet. “It’s always about taking every opportunity, even if the risk is high. And if you take 10 opportunities and you fail nine times and succeed once, then you’ve still succeeded.”
Many experts also say that having more than one business idea is key since the potential for one business failing is so significant.
Also, having a lot of resiliency is equally important when taking that entrepreneurial leap, due to the many no’s you may get and the amount of doors that will close before you even get a chance to get one toe across.
So again, the main question is should one be okay with being an employee if they ever had entrepreneurial ambitions or should they just throw risk and caution to the wind and hope it doesn’t blow back and painfully strike them?
The answer may lie in a person first defining what success is to them.
If success is being able to be good at a particular job — whether you love it or not — while making enough money to pursue outside interests like traveling, shopping or dining out, the entrepreneur’s life may not be worth it for you.
But if just learning how to cope at your current job, while your mind is always on your passion, and you’re willing to take on the huge potential of your business not thriving, you may want to give being a company owner a shot.
Not always either-or
Also, it’s important to remember when it comes to deciding whether to stay at a job or start a business it’s not always either-or.
Not every start-up has to have Facebook-like ambitions, and people can work at their jobs, while still trying to turn the dreams of their youth into something profitable.
As a matter of fact, that’s what many experts suggest you do.
Story provided by ConsumerAffairs.