Starting your own business as an entrepreneur can be one of the most rewarding experiences that life offers. It is also important to keep a certain level of perspective about this process. Although a rare few can experience immediate success with their efforts, it is more accurate to describe entrepreneurship as the planting of an acorn.
You must first place the acorn in the ground to get the journey started. You will need to invest time and money into the resources which are necessary to help that seed grow. There are no guarantees that you will get results, but nothing will come your way if you don’t pay attention to this tree that you want to grow one day.
If the tree begins to rise from the soil, then all of the hard work and patience you put into that process will feel like it was worthwhile.
Some acorns refuse to turn into trees. Squirrels might dig up your idea and steal it for themselves. Most entrepreneurs find themselves trying something new within 1-3 years because their business doesn’t turn into a successful enterprise.
The advantages and disadvantages of entrepreneurship attempt to balance the risk of a new idea with the rewards that happen if it takes off. “Starting a company extracts so much energy and conviction that not having a clear-cut goal and meaningful mission can hamper your success,” said Sami Inkinen, co-founder of Virta Health.
Do you have what it takes to become an entrepreneur?
List of the Advantages of Entrepreneurship
1. Being an entrepreneur means you get to be your own boss.
When you decide to follow the life of an entrepreneur, then you are giving yourself permission to pursue what you are passionate about in life. You get to be the person who is making every decision, pulling all of the strings as you push forward with this opportunity. You get to use your strengths and skills to make a real difference in your life and those in your community.
Some people stay in a bad job because they need to “pay their bills.” Some might “work for the weekend” as a way to justify their decision to stay in a place where they are miserable. It isn’t always easy to be an entrepreneur, and you might not ever get rich, but there is a better chance that you will be happy.
2. Entrepreneurs get to discover who they really are.
Most entrepreneurs break out of the 9-5 daily grind because they become dissatisfied with office politics, the barriers to promotion, or an uninspiring workplace environment. You might be encountering all three of those issues right now. When you decide to follow a path toward your own business, then the only obstacles that get in the way are the ones that you allow to remain.
“Don’t assume that borrowing lots of money can make your startup fly,” advises Barnaby Lashbrooke, founder of Time Etc. “There are many things to the business other than investors, and it’s possible to succeed with your startup without breaking the bank.
3. Entrepreneurs get to dictate their own schedule (to a certain extent).
If you like the idea of putting in 40 hours per week and then coming home to relax nights, weekends, and holidays, then being an entrepreneur is probably not the best choice to make. You are going to be working 20-40 extra hours each week if your goal is to be successful with your startup venture. “If you’re starting something on your own,” said Sallie Krawcheck, co-founder of Ellevest, “you better have a passion for it, because this is hard work.”
Where you gain an advantage is in the flexibility of your time commitments. You are not stuck trying to manage a 9-5 schedule. If you need to take a day off, then you get to do so. Want to take a vacation? Then make the time to go. You don’t report through a chain of command any more.
4. Every day is different when you’re working as an entrepreneur.
Embracing entrepreneurship means that you are going to have a schedule that is different every day. There are no consistent routines in this world. Some experts would even say that if you experience two similar days in a row, then you should re-evaluate your business model. You have to stay hungry for every opportunity that comes your way. If you become complacent for any reason, then someone will take your place. This advantage can ensure your creativity.
“Do not focus on the numbers,” advises Cassey Ho, who is the founder of Blogilates. “Focus on doing what you do best. It’s about building a community who wants to visit your site every day because you create value and offer expertise.”
5. There are fewer restrictions to worry about in the world of entrepreneurship.
When you begin to work for yourself instead of for someone else, then the independence that this experience creates is something that cannot be duplicated by any other professional opportunity. You are in total control of your destiny. You might earn more than some entrepreneurs, but less than others. Some people might work more than you, but others could be working less.
There are numerous structural options to consider too. You might choose to work from a home office. A shared office space might be a better solution for you to use. Entrepreneurs can work from a coffee shop, at the beach, or while taking a road trip with their family. “If we tried to think of a good idea, we wouldn’t have been able to think of a good idea,” said Brian Chesky, co-founder of Airbnb. “You just have to find the solution for a problem in your own life.”
6. You can still earn what you are worth as an entrepreneur in your early days.
Many entrepreneurs like to bootstrap their ideas to help get them off of the ground. You might struggle to find investors for your idea, so any profits you earn go back into the company instead of your checking account. The reality of entrepreneurship is that a rational salary is always possible if you are willing to structure your finances around your basic needs. Your discipline in selling will lead you closer to the Promised Land.
“Selling is not a pushy, winner-takes all, macho act,” advises Subroto Bagchi, co-founder of Mindtree. “It is an empathy-led, process-driven, knowledge-intensive discipline. Because, in the end, people buy from people.”
7. Entrepreneurs can choose to pursue any idea they want.
The only thing that limits your pursuit of a dream as an entrepreneur is your imagination. If you think there is an idea that you can follow, then go after it with everything that you have. Build that app which you believe could change the world. Tell your story by writing an autobiography. Sell your artwork online, even if everyone tells you that artists don’t succeed. Follow your instincts, and there is an excellent chance that a good idea will seem like a great one to all of your future customers.
“In the age of transparency, honesty, and generosity, even in the form of an apology, generate goodwill,” advises Alexander Asseily, founder of Jawbone. It’s okay to be embarrassed by the first iteration of your product. Entrepreneurship succeeds more often if you’re willing to launch early instead of waiting until it is too late.
8. You get to be more involved with your community as an entrepreneur.
The flexibility in your schedule that you can have as an entrepreneur is an excellent way to become more involved in your community in a variety of ways. You can serve at your local food back, coach youth sports, or find other ways to tie your volunteer work to your efforts with a new business. These opportunities will help you to network with others, promote your personality and brand, and build your business while you are helping others at the same time.
“My advice is to focus on the importance of forging a long-term relationship, whether with colleagues, partners, or customers,” said Sheila Lirio Marcelo, founder of Care.com. “It is often easy to get caught up in short-term decisions.”
9. Entrepreneurs get to be the innovators of their industry.
Entrepreneurship succeeds when you get to put an idea out to your targeted demographics before anyone else. Bringing something first to the market is an exciting adventure. It may not always be a story that ends in wealth, but it is one of the absolute joys of this process. You get to be on the forefront of problem solving for your community. You’re turning your passions into revenues. It doesn’t take a lot of money to get started either. As long as you have the drive to be an entrepreneur, then you can innovate.
“If you tune it so that you have zero chance of failure, then you usually have zero chance of success,” advises Reid Hoffman, co-founder of LinkedIn. “The key is to look at ways for when you get to your failure checkpoint, you know to stop.”
10. Every day is exciting in the world of entrepreneurship.
No one can say it enough times. You are going to be working your butt off when you decide to become an entrepreneur. There will be 18 hour days that you’ll need to endure. The work will be harder and longer than anything you can remember doing in your life. Holidays are just another working day. Want to have a weekend free? Then you’ll be working from 3am to 11am so that you can spend the afternoon with your family.
The amount of excitement that you will experience during these long days is fuel that keeps you going. You never really know what to expect when you wake up in the morning. There are new problems to solve, customers to meet, and ideas to pursue.
List of the Disadvantages of Entrepreneurship
1. The world of entrepreneurship is going to dominate your life.
Your productivity as an entrepreneurs is what will direct you toward success or guarantee your failure. There are no off days when you embrace this journey. You might have had fun playing Farm Town or Mafia Wars back in the day on Facebook, but that option disappears here. If you’re not working, then you’re not earning. There are no paid lunches, no weekends off, no holiday pay, and no benefits. It is you vs. the rest of the world.
You don’t need to be engaged 24/7 to have a chance at success in the world of entrepreneurship, but you will be working a lot more often. “My day starts with a yoga class, then I typically work from 8am to 5pm,” said Antonia Townsend, founder of Enclosed. “Then I take a break to play with my pup outdoors. Somewhere between 6-10pm, I usually put in another hour or two.”
2. Entrepreneurs do not have a guaranteed paycheck waiting for them.
If you want to earn money as an entrepreneur, then it is up to you to make that happen. You don’t have a guaranteed paycheck waiting for you after every pay period like you would with a traditional employer. It is up to you to chase your money. That means you need to send out the invoices, find the people who don’t want to pay, and avoid the clients who think you should work for free because they can give you “exposure.”
Don’t fall for the trap of “free marketing.” Exposure doesn’t pay for your groceries. It won’t make your car payment. If you went to your mortgage company or landlord and said, “I have exposure to pay you this month,” what do you think would happen? Find your perfect client, then find more of them to start bringing in some profits.
3. The world of entrepreneurship requires leaders if you want to be successful.
There are entire books written by industry experts on this specific disadvantage of entrepreneurship. You can boil down all of their advice to one basic observation: if you don’t have an internal drive that can push you forward every day and inspire others to follow your lead, then this isn’t the project for you to pursue.
Procrastination cannot live in this world. You must staple your pants to the chair, knuckle down on your work, and stay there until it gets done. “Some days you’re smiling and thinking you’re going to make this thing rock,” advises Hamdi Ulukaya, founder and Chief Executive Officer of Chobani. “Then the next day, a pipe breaks, and your costs look too high. You have to learn to keep your eyes on an ultimate goal. If you lose sight of it, then you need to get out.”
4. You must be patient with the process when you become an entrepreneur.
People can claim anything on the Internet and pretend that it is true. It won’t take you long to find bloggers claiming to make millions of dollars each year. How about those affiliate marketers who earn $60,000 per month? If it seems too good to be true, then it probably is when you’re looking at the potential return you could earn one day.
Most entrepreneurs fail to earn $10,000 in their first year of operations. Earning nothing is more common than earning more than $50,000 in your first twelve months. If you can stay in business for five years, then an average salary is in the $75,000 range if you’re working at things full time.
5. Stress levels are high in the world of entrepreneurship.
Meditation is the most common habit that people have when they pursue an idea as an entrepreneur. They make time for it because the stress levels are so high when you are scratching and clawing for a successful opportunity with everything that you’ve got. 1 in 3 people say that they worry all of the time about something when they’re working for themselves instead of someone else. Loneliness is a problem for a similar number of people in this field.
Exercise is another great option to consider if you need to limit this disadvantage. If you burn calories every day with a workout routine, then you are less likely to take out your irritation on others or yourself. Then try to greet each new day with an extra helping of gratitude.
6. There are taxation consequences to consider as an entrepreneur.
If you decide to become an entrepreneur in the United States, then there is a good chance that you’ll start as a sole proprietor. It’s the cheapest and easiest way to begin a business when you’re bootstrapping. That means you’ll be paying the employer share of Medicaid and Social Security withholdings out of your earnings because you serve as both. Although there are new pass-through rules for the 2019 tax season that can lower your income tax responsibilities, most entrepreneurs find a higher tax bill waiting for them if their idea is profitable.
“Most first-time business owners forget to make quarterly estimated tax payments the first time they have self-employment income,” says Mike Piper, a CPA who writes about investing on sites like Oblivious Investor. “They’re used to have taxes withheld from their paychecks.”
7. Funding can be a significant problem for entrepreneurs.
There are investors who might be willing to take a chance on your idea, but that is not a guarantee. You might find angels or venture capitalists who want to take a risk, although the odds of that are usually slim-to-none. You might attempt to do some crowdfunding, even though you might not get any money from this work.
Most entrepreneurs are self-funded. If you don’t have any money in the bank right now, then start small. “Start as small as you can,” advises Gretta Rose van Riel, founder of Hey Influencers. “When I started SkinnyMe Tea, I had $24 in the bank and I was entirely self-funded.”
8. Entrepreneurs still have a boss that they must manage.
You might be free of the 9-5 grind and the workplace politics when you start working as an entrepreneur, but that doesn’t mean you get rid of the boss. Your investors are going to expect regular reports about your progress – especially if you have angels or VCs in the picture. Your customers will give your consistent feedback about the quality of your goods and services that you will need to hear. If there are returns, service issues, or problems with your supply chain, then you get to manage those issues too. You still have more freedom than the traditional employment relationship, but you must continue operating within a specific set of guidelines.
Verdict on the Advantages and Disadvantages of Entrepreneurship
Entrepreneurship can put you on a rollercoaster of emotions every day. It is an exciting world where your imagination is free to run wild. Every idea becomes a potential opportunity to find success. For many people who decide to embrace this lifestyle, the promise of more independence is worth the extra financial risks that are possible.
You will be working more hours than ever before if you decide to take on this journey. There will be days when you need to drag yourself out of bed. Your family might wonder what happened to you since you’re always in the office doing something. It is a challenging lifestyle to balance when you have family responsibilities too.
The advantages and disadvantages of entrepreneurship create the potential for you to live the life that you want. Even if it takes several years to start earning the profits you want, it can be a very happy life waiting for you.
Keith Miller has over 25 years of experience as a CEO and serial entrepreneur. As an entrepreneur, he has founded several multi-million dollar companies. As a writer, Keith's work has been mentioned in CIO Magazine, Workable, BizTech, and The Charlotte Observer. If you have any questions about the content of this blog post, then please send our content editing team a message here.