This is my new series about entrepreneurship. Once a month (starting next week), I’ll be profiling creative and inspiring individuals who are building their own businesses. (Look over at my categories list–there’s a new category!)
Sometimes economic crises and personal circumstances come together to make entrepreneurship the best option for building a good life. My husband and I have been entrepreneurs for twenty years. But entrepreneurship isn’t for everyone, and it isn’t easy. It is, however, challenging, exciting and rewarding.
Through the stories of people who have taken on the risks and rewards of entrepreneurship, this series will offer information, inspiration and foresight to people who are dreaming of being their own bosses (you can see the first three of of those stories here, here, and here).
Do you know what makes an entrepreneur? Take this brief true or false quiz.
- Entrepreneurs are more willing to take financial risks than the general population of non-entrepreneurs.
- Entrepreneurs are more money-motivated than the general population.
- Entrepreneurs succeed where other people fail.
- Entrepreneurs are people who follow their bliss.
- Entrepreneurs find ways to avoid problems.
Answers: False, false, false, false, false.
There are many misconceptions about entrepreneurship, which is why 95% of small businesses go out of business within the first two years. If you’re considering being your own boss, this is what you need to know:
- A study conducted by Stanford and Princeton showed that entrepreneurs are more cautious than the general public about financial risks. It’s true that there are unavoidable risks to owning a business, but entrepreneurs practice risk management. They don’t bet/pay more than they can expect to gain; and they don’t pay/bet more than they can afford to lose. They possess well-developed critical thinking skills and they consistently use them.
- Money is not their primary motivation. Here’s what entrepreneurs value over money:
- autonomy and independence;
- personal fulfillment and personal growth;
- service–they want to make things better;
- challenges–they like to identify and solve problems!
- Entrepreneurs fail just as often, probably more often, than everyone else. They don’t, however, give up. So let’s talk about those 95% of new businesses that go out of business. The Stanford and Princeton study show that those people probably weren’t entrepreneurs. They went into business for the primary motive of financial independence (likely it was their only motive). To say that they failed, while the 5% succeeded, is to misconstrue the facts. In the first two years of business, everyone stumbles, falters, encounters seemingly insurmountable problems, and fails to make big profits. Failure and success rates are not the measure of an entrepreneur. Perseverance is. Non-entrepreneurs quit. Entrepreneurs stick it out. Why?
- Do entrepreneurs stick it out because they’ve identified their bliss and they’re pursuing their passion? No. Entrepreneurs do not chase after their own pleasure. They work while the general public watches television. They work because they are driven to develop their ideas. They work because they don’t want to be stuck in a boring job which won’t allow them to explore, discover and grow through life. But work is work, even for entrepreneurs. So what sets them apart from employees who merely put in their hours to collect a paycheck? Entrepreneurs make their work interesting, enjoyable and fulfilling, because…
- Entrepreneurs like challenges. They don’t see problems as “problems.” They see them as opportunities to invent solutions. They are motivated to solve problems because they believe they’re accomplishing something worthwhile. They believe their products and services will in some way make people’s lives better–easier, more rewarding, more fun, more prosperous, healthier or wiser.
Are you surprised about the character of entrepreneurs? And if you are one, what advice to you have to share with those who would like to be self-employed? Or if you would like to be an entrepreneur, what are your most pressing questions?
56 thoughts on “Dream of being your own boss? Why and why not to become an entrepreneur…”
Excellent post, Tracy. You’ve covered entrepreneurs very accurately, though of course there are some exceptions. I’ve had friends who worked the structured 9-t0-5 jobs (and what you and I would probably think of as repetitive and boring), but because the reliability of the work and the benefits were essential to their needs, they were able to rise to the occasion and create their own solutions and improvements, and find genuine excitement and satisfaction in the workplace.
I also have a college friend who is a true entrepreneur by all the definitions, except along the way she has lost the ability to see problems as opportunities to invent solutions. She has a very hefty trust fund that very few realize is there to bail her out. She has all the trappings, but she lacks the spark, the enthusiasm and confidence.
Absolutely, there are always exceptions. And thank you for pointing out these. I try to keep my posts to a limited word-count 500-600 words, and therefore count on our discussions to elaborate…
I love and admire you, Marylin. You always have such astute insights.
Amen! Being an entrepreneur is a lifestyle. I have grown up in a family of entrepreneurs and ever since being a kid entrepreneurship has been an inspiration. We would play “business community” with my siblings…sometimes for several days in a row! This post tells the story behind it: http://tableofcolors.com/2013/02/21/kaijas-winter-salad-with-kale/
I just went and read this inspiring story–and recommend you do, too!
Thank you so much for sharing it! Fabulous–and it’s encouraging to hear about Detroit’s creative solutions to its economic adversities.
I think entrepreneurs work harder. I worked for a few and they all lived their work and loved it. Me, I not so good at marketing myself they way I need to. I am currently retired but doing small Human Resource type gigs on the side. I lose business because sometimes I don’t jump up and say, “I can do that!” Maybe I’ll get better at it as I go along.
You will definitely get better at it, Kate. It’s a learning process, and the fact that you’ve already noticed where you’re losing business, shows that you’ll not lose that business in the future unless you don’t actually want that business (the cool thing about entrepreneurship, is you get to decide whether you do, or don’t want a particular business relationship).
Great post. I think entrepreneurs love what they do (which I admire), therefore they are willing to work – or do whatever it takes to achieve or attain success. I greatly admire anyone who is an entrepreneur!
I think you’re right, M., that people who love what they do are willing to work harder and more.
But sometimes there’s a lot to be said for just hanging on to a job. I admire people who can faithfully go through the grind, even when they don’t really want to show up every day.
The grind can be tough, especially if you’re clocking in somewhere that’s less than appealing to you. However, when I find myself in that situation I just remember how thankful I am to have a paycheck and luck I am to have a job! 🙂
I like your attitude 😀
This post came at a pivotal moment for me – I quit my job and am starting my own company while writing my first book. I’m definitely an entrepreneur. I’m hoping that now, at 29, I finally found the “thing” every entrepreneur looks for…
Looking forward to learning more from your experiences!
Very interesting, C, how we so often connect at pivotal times in our lives…
Wishing you all success and happiness!
What a lovely post Tracy! In the back of my mind, my dream has always been to open up my own bakery or pastry shop. I’ve been intimidated of entrepreneurship for about a million reasons. I’m looking forward to your new series- hopefully I can draw inspiration from those who have bravely paved the road before me! Also loved your characteristics of entrepreneurs- I was completely surprised!
I’d love to support and encourage you, Heather. They 3 keys to successful entrepreneurship are patience, planning and perseverance. I’m convinced you could have a successful bakery/pastry shop, as long as your motive is not to get rich quick. Most people who succeed, start small, on the side of their day jobs, and gradually transition into their true-love career full time, as they gain experience and confidence.
Excellent post, Tracy! I would love to be an entrepreneur, but I think I have too many pressing questions …
Start with one question at a time. 🙂
This is a fantastic post. I have come to these crossroads several times in my life and I agree that the reasons for going down the entrepreneurial route are those that you mention (autonomy, fulfillment, service, challenge) rather than money.
One by-product of autonomy is the ability to be family-flexible. You can choose to be home after school with your children every single day (even though you may then need to work past mid-night when they are in bed to get all your work done), you can take time off in ALL the school holidays, you can get to visit your aging mother or take time off when she visits you, you can take a 3-hour lunch or none at all whichever works out best for you and your family; and even though all the time you need to work very hard to make it all work. This family-flexible independence is worth ten times the security of paid employment.
Exactly. I know a restaurateur who is a single parent. He opens his restaurant from 10-2 (after he gets the children off to school), then closes his restaurant so can pick his kids up from school, hear about their day, make their supper and get them started on homework. Then he opens again from 5-9 (they’re young teens, they can do their supper dishes and put themselves to bed if necessary). He is able to balance important family time and earning this way. I think he’s brilliant.
Look at you embracing the categories of your blog….made me smile, having gone through the category-crisis phase of it, and now seeing it well and alive…:)
I believe that not many people are actually capable of being an entrepreneur, and I don’t think that is a bad thing. There are different walks of life for everyone. I admire entrepreneurs’ determination and vision, but have also seen their work ethics destroy families or relationships. For me, the private sphere always, always comes first. I sacrifice a lot of money for that, and I am fine with that. Finding a balance can be really difficult. Many folks have told me that I would be great at being an importer or owner of a wine store, but that is completely incomprehensible to me: I would not want to sell the good stuff, I am passionate but I vigorously don’t care about money, so I would just be completely lost…
But then again, I am working as a freelancer right now, and that does have its perk (and has none of the financial up front investment risks)…:)
Oliver, I entrepreneurially found a way to make categories work for me! 😉
And I believe that to be a free-lancer is to be an entrepreneur.
The misconception is, that entrepreneurs are highly money-motivated. In my opinion, the people who allow business to destroy family and personal life, are NOT successful entrepreneurs. They’re merely another brand of workaholic.
But I agree that not everyone is capable of being an entrepreneur. I do, however, want to dispel the misconceptions that keep the capable people from building a rewarding lifestyle for themselves. And I want to identify the misconceptions that falsely entice people into going into their own business (people who buy franchises are especially vulnerable to this). I hope to spare them a ton of heartache.
Entrepreneurship is not the fastest or easiest way to financial security. If accumulating wealth is a priority, and finding personal fulfillment through meaningful work is not hugely important (and it certainly is not a moral issue to choose one over the other, it’s just a personal preference), it makes more sense to focus on building a standard corporate or professional career, by climbing rung by rung up the proven, stable ladder.
P.S. I recently met two couples who got talked into buying a wine store a year ago, because they love wine. I’m thinking (based on my observations about how their business is going, or rather, how it’s not growing and how poorly they appear to understand and respond to their customers) they made a mistake. Let me repeat, entrepreneurs do NOT pursue their bliss–that’s a misconception.
One more thing–successful entrepreneurs rarely invest heavily up front. They do like you’re doing; they build the business until the business itself can invest in making larger profits. (It’s the banks and the realtors who want you to believe that you need to invest our own capital!)
Sounds like a wonderful way to be your own boss and call your own shots. You do offer some excellent advice, Tracy.
I do, however, have a very distinct memory of working briefly in sales. I really didn’t enjoy that side of the business and spent most of my time writing. (It was for a weekly paper.) I know sales and marketing are key to getting the word out about your product and yourself if you want to succeed as an entrepreneur. Given this, I’ll stick to writing.
I’m also not at all comfortable with the sales end of being self-employed or free-lancing. I don’t have the personality or the stamina for it. Fortunately for me, my husband is good at that end of the equation, therefore we do work as a team. I do the writing, he handles the marketing.
How do you manage to write without marketing yourself?
Your question makes me feel like I should be running for a publisher or an agent. 🙂 At some point, I might follow thru on that. I’ve linked my blog on a few social/career sites. I know I should do more. But, right now, I’m just happy to have a venue to post my writing … other than my journal.
Blogging is a great venue for writers! 🙂
Many who take the leap often do so when they are good at the job they have and think that they would be better off working for themselves. It’s prudent to think about what you can’t do and how much it’s going to cost to fill the roll. For example, a superstar accountant might think that her potential is limited because she produces so much more than she gets paid. Before striking out on her own, she may want to consider how she got her clients, who did the marketing, who pays the bills, who takes care of the computer and office technology when there is a problem… and the list goes on. I’ve seen many people ignore the necessary support structure and end up spending valuable time doing it themselves or overpaying because they didn’t understand other aspects of business outside their expertise well enough.
Absolutely–you’re 100% right, and this is an important point.
This totally supports my view that people who strike off into entrepreneurship thinking that it will give them more money, are going to be frustrated and feel like they’re failing.
The money-motive would be the wrong motive for going into business for oneself. If that accountant was willing to earn less in order to set her own schedule, work on the projects that mean the most to her and deal primarily with clients whose ethics she whole-heartedly respects and endorses, she could be happy as an entrepreneur. But if she goes into it thinking she’ll make more money than she did with a large firm, she’s headed for heartache.
Tracy, this excellent post has certainly given me new insight in the world of entrepreneurship, thank you. The key seems not to start a business with making money in mind, certainly not at first. It is definitely persistence and hard work and not giving up that matters most. Also having vision. I admire people who have this entrepreneurial spirit so very much but I wonder if you almost have to be ‘called’ to it rather than drumming it up? How great it must be to be a free agent and have your own business from start to, well, ongoing 🙂
I do think that it takes a certain kind of personality or life-long experience to be comfortable with entrepreneurship. When I was 24, I was told by a mentor in a large non-profit organization (for which I assumed I’d work for the rest of my life), that I was entrepreneurial. I was surrounded by entrepreneurs who taught me a lot. I also place huge value on personal growth opportunities and am fairly suspicious of the idea that wealth creates happiness. So, I agree– a person probably as to feel “called.”
Although I have met a number of people who were “called” by their circumstances. Their career-climate or their health or the economy changed, and they couldn’t get jobs, therefore were to invent an entrepreneurial way of supporting themselves.
Yes, I think that being ‘called’ by their circumstances has happened to many people in today’s economic climate, particularly those in the late 40s and 50s. I turned to my writing after I lost my job for the second time 2 years ago so adverse circumstances forced me into doing the one thing that I had dreamed of all my life. That, and finding my role changing into that of my daughter’s carer as well as her mother when she was diagnosed with Asperger’s Syndrome.
What a wonderful start in entrepreneurship you had when you were in your 20s. I too really believe in personal growth opportunities as being of primary importance.
I also know that I can learn an awful lot from you Tracy 🙂
We can learn so much from each other, I think. 🙂
I’ve always found that I learn best from people I admire. Books and words are good foundations, but I need to see things put into practice, by humans who are living out their lives in a positive way, rising to challenges and overcoming adversity.
You have such a wonderful way of expressing yourself Tracy, thank you 🙂
That compliment means a lot to me, Sherri. We all need validation. I’ve been working really hard, for years and years and years, to become better at expressing myself. You’ve helped me see all that work as worthwhile.
As you have helped me…and your hard work is paying wonderful dividends 🙂
Well done, it’s a very nice and sophisticated post. Though I have to disagree on point 3. According to me, that is what makes an entrepreneur an outstanding one that he creates solutions and makes innovations happen where other people fail due to various reasons. Entrepreneurs however, don’t see the first obstacle and give – they just don’t move the path and try it again until they succeed. Their determination towards issues is the key that distinguishes them from others.
I think we probably agree on this, but are disagreeing about semantics, what it means or looks like, to “fail.”
I think the mark of an entrepreneur is exactly what you said. Looking at it from a different angle, I might say that in confronting a particular obstacle, fraught with problems and frustrations, a non-entrepreneur will name that obstacle “failure” and will quit. An entrepreneur will consider that same obstacle a lesson learned, an opportunity for innovation, a chance to improve.
So, I think we’re saying the same thing.
I am taken aback to read that “doing what you love” may not be a key ingredient for successful entrepreneurship. I am happy to read about the power of patience and persistence, however. And I am looking forward to future posts…
Oh, I do think it’s imperative to LIKE what you’re doing in order to be successful as an entrepreneur. But sometimes turning the thing you most love into the means by which you have to make a living, can turn into a heartbreaking and disastrous escapade. Often, the entrepreneurs who make the most money, are the ones who are doing not so much what they love, but what they happen to be quite skilled or talented at; they went through the door that was easiest to open.
What a great post Tracy! I grew up in a family of entrepreneurs and I have seen huge fortunes built up and huge fortunes lost in a few months. I do believe that entrepreneurship success is the combination of many factors. Some we can control such such coming up with a great idea and being very skilled but some – unfortunately – are totally out of control.
I look forward to reading to your new series.
Happy Halloween, Tracy.
Happy Halloween, to you to, dear F.
You bring up an important factor. There are economic and market trends and changes that no individual can control, and entrepreneurs are sometimes the most vulnerable to them, because they have invested more and risk more. I think, however, that those who gain and lose fortunes are often those who can psychologically afford to, because for them, it’s often much more about the game of success than about the fortune itself. And their so optimistic and courageous, that they see it as one missed goal in the game. They brush themselves off and move onto the next play. Not everyone can do that–and that’s why I really believe that those who see wealth as security (not everyone does see wealth that way!) need to be very prudent if they wish to also become entrepreneurs.
Wonderful post! XXXOOO P
Sent from my iPhone
What a great new category and series, Tracy! Looking forward to reading more about it. I certainly agree that entrepreneurship is not for everyone. 🙂
Definitely not for everyone. I hope to clear up some of the misconceptions about who it is, and who it is definitely not for, and hopefully it will inspire and encourage those for whom it could be a happy option.
It’s not always easy to be entrepreneurs but I like it very much. I’am free to decide my daily routine.
I’m thinking it might be even more difficult in Germany than in the United States?
And I’m impressed by the quality of your work, and that you have managed to be an artist-entrepreneur, which is, I think, the most difficult kind of entrepreneur to be.
Oh yes, it’s difficult!
I don’t know in which country is more difficult.
In Germany you need a good C.V.
I do a lot of things. I teach to draw, I write books and the main thing: I draw every day and every day I show my work in my blog. I work together with galeries, I have many exibition …….
It’s hard work — sure — but I like it and do it with my heart.
I think that no matter what country an entrepreneur is working in, it’s not very likely she’ll succeed unless she really puts her heart into her work.
It definitely shows, that you do! 🙂
Yes, you have right.
To work is the first you have to do to have luck and to be successful!
Right on target!
Dear careful comment readers–
Joseph Hafner is the Wisconsin entrepreneur behind the company “Sparkling White Smiles,” which offers incredibly-low prices on high-quality teeth whitening and dental guards. I’ll be featuring him in my entrepreneur series early in 2014.
But you ought to check out his company now and do me a person favor, vote for him to be considered for a special grant that helps deserving American small businesses grow their markets (you can take my word for it that he deserves it). The vote link is at the top of the page in blue and has the words “mission-main-street-grants”
Not quite sure how it happened, but my son, daughter, and son-in-law each run their own entrepreneurial business. I had an entrepreneurial grandmother, but the three young people never knew anything about her.
I have a hunch you fostered inquisitiveness, creativity, a fondness for adventure and the spunk that comes from a bit of self-confidence.
Whoa, you give me too much credit. No self-confidence, but I did want my kids to have it!
I doubt that I give you too much credit. From the things you post on your blog, I can hardly imagine that you did the opposite–Surely you didn’t belittle them for asking questions; nor teach them to conform to the lowest common denominator; nor relay all the terrible things that would happen if they dared to step out of their comfort zone and try something new… I’m sure you have been a wonderful parent.
Aw, shucks. Thanks. 🙂