In the last decade, we have seen a lot of people on social media (who call themselves gurus) promoting the idea of starting a side hustle, launching a new business, and beginning an entrepreneurship career. They made it like everyone on the planet should be a business owner and we all can be successful entrepreneurs.
But this whole idea seems to be far from being true. Being self-employed needs a lot of dedication, hard work, a strong mindset, sacrifices, and a lot of other necessities. Let me ask you a question, do you believe that being self-employed is right for everyone, or it isn’t?
In general, successfully self-employed people are not only happier than their traditionally employed friends, but they also tend to make more money. Even still, only about 10% of the American workforce is self-employed. Because it’s not right for everyone or is it?
In this article, we will discuss if is it right for you to be self-employed? Or as they love to call it “entrepreneur”. without any further ado, let’s get started.
what can you expect from being an entrepreneur?
Owning your own business isn’t all Lamborghinis and mansions. In fact, the reality of self-employment and the journey from getting started to creating a business that can sustain even a middle-class lifestyle is a whole lot different than those financial guru ads would lead you to believe.
P.S: If you want to know the truth about entrepreneurs’ lifestyles, We have a more detailed article where we revealed the truth about the showcased millionaires’ lifestyles.
Successful self-employment is one of the most rewarding and fulfilling things you can experience, but the truth is most new businesses fail. Being successful is an outlier it’s not the norm.
We believe everyone is aware of the potential advantages of self-employment. From unlimited earning potential, to schedule flexibility, to even some pretty nice tax benefits. But one of the aspects that all financial gurus leave out of their ads is the risks involved when running a business.
We know, you are desperate to quit the job. You want to be solely responsible for generating your own paycheck, even if that means taking a long hard road with plenty of ups and plenty of downs. For you, it’s the only way that you would be happy earning a living.
You and most people nowadays that work from 9 to 5 get enough punching a time clock again or being at the beck and call of another boss. But like we mentioned before this lifestyle may not be for everyone. So before you give your two-week notice, here are a few things you need to consider.
4 questions you should ask yourself before starting a business
how do you handle stress and risk?
As with almost everything in life, the possibility of greater reward comes with greater risk, greater risk equals greater stress, and the stress that comes with not knowing for sure if or when you’ll earn your next paycheck, that’s pretty intense.
And if you have employees, payroll stress is magnified many times over. Employees should get paid first there are some serious consequences for not paying your employees.
Without mentioning payroll taxes, you don’t even want to think about stiffing the IRS. By the way, as the employer, you’re responsible for matching some of their payroll taxes and sending them to uncle sam on time. You don’t want to be late because then you have penalties and interest.
Also, consider your jobs within the business. Meaning when you’re employed at a normal job you’re typically responsible for like an area of the business or maybe even just simply some duties within the business, and when you go home in the evening your job is usually over and you can just kind of turn it off until the next day. That allows you to like unwind and spend time with friends and family with really little concern or worry about the company.
We are not saying that a normal job can’t be stressful, it absolutely can be. And if you’re in a position that requires you to carry home stress with you, we hope that you’re compensated well for it. but in general terms, most employees can mentally turn off their jobs after a few hours.
On the flip side, if you own the business that’s just not a luxury that you have. You are responsible for every single aspect of that business from customer acquisition, to managing inventory, to managing the office, managing profit and loss, paying the employees, making sure that you’re paying the correct amount in taxes, washing windows, washing toilets, and everything in between.
You might think, why wouldn’t I just hire people to do these jobs for me? Sure, you can outsource some of these duties, but employees and hired professionals are expensive and they don’t always do what they’re supposed to do anyway.
As a business owner, you need to consider any shortcoming in your organization is ultimately on your shoulders. You are 100% responsible for 100% of the business. There is no one else to blame, even if someone else is at fault. If you hired a weak link, it’s up to you to recognize that, then remove and replace that lane.
Okay, so you’ve decided that you can handle these stresses and that’s probably not all of them but you’ve decided that you can handle them. Then let’s move on to the next question that you should ask yourself before starting a new business.
do you have a good business idea in mind?
There are endless ways to make money, but there are also endless ways to lose money. And they’re both equally hard to recognize sometimes.
If you have no idea what type of business you’re interested in or if you’re searching online for that simple cheap idea that’s going to make you rich. You probably ought to rethink what you’re doing. Especially, If you’re looking for an idea that’s going to make you rich overnight, stop looking it does not exist.
Some guru is just going to sell you a course and they’re going to get rich off of your naivety.
Now, sure outliers do exist and some people get incredibly lucky and find an idea or make a small investment that makes them stupid rich but people also win the Powerball lottery too. That doesn’t mean you should quit your job and put everything you have on lottery tickets.
On the flip side, if you already have an idea in mind, that’s a good indication but have you found a way to test that idea with as little risk as possible?
It’s always better to lose a little money by testing an idea with proving methods than it is to lose a whole lot of money by jumping into an idea blindly.
Finally, the hard part in every business is to determine how to test your idea, how much would you spend on tests, when to stop, and when to continue.
Do you have enough capital to implement your idea?
Starting a business isn’t cheap. A lot of good business ventures fail either simply because they couldn’t fully fund their idea or they didn’t have the necessary funds to weather the storm while growing the business.
Wait a minute, If you don’t have the money you can just raise it? That’s completely true. But bringing in outside money whether it’s borrowed funds or investors brings a whole new set of issues to consider.
Do you have the skills?
As we mentioned when discussing stress, you are in charge of every single position in the company and usually in the beginning, not only are you in charge of every position usually you are ‘every position’. (Because employees are expensive)
You will need to be really honest with yourself about your strengths and weaknesses. This is not the time to have an ego and think that you can do everything best. Outline every job within your venture and write a basic job description for each. There will be things that you just aren’t good at, you’ll have to decide if those things are important enough to hire out or if you can limp along and handle it yourself until you’re able to afford somebody.
We are not necessarily trying to discourage you, but it is crucial to know about the dark side of starting a new business. We need to create balance because we’re shown the positive side of entrepreneurship and self-employment and usually it’s an extremely exaggerated version of the positive side.
Most successful self-employed entrepreneurs will never own a Lamborghini, nor would they want to. Once you realize how hard money is to make, you’ll work just as hard to protect it. Extravagant spending usually doesn’t fit with the mindset of a self-made entrepreneur.
As we mentioned earlier, being self-employed is an incredibly rewarding career if you can make it work for you. So if we haven’t scared you off yet and you’re still excited about your idea, maybe, just maybe entrepreneurship or self-employment is right for you.
There are several studies that investigate the question: Are entrepreneurs born or are they made?
That discussion goes back to the nurture versus nature debate and there have been very mixed findings on that topic. We found an article on entrepreneur.com that we liked and if you’re still questioning yourself you should give it a read too.
The answer is entrepreneurs are born. The personality traits that tend to push us towards starting multiple businesses, those signs are with us from birth. But there’s a catch.
Those studies only looked at people most likely to start a business, not people most likely to start a successful business. It would seem as though successful entrepreneurs are made. They’re made through the lessons that they’ve learned by putting their heads down and getting the hard work done.
Let’s look back at the original question this article set out to answer: is self-employment or entrepreneurship right for you?
If you want it to be and you’re willing to put in the work that it takes to be successful, then yes. It is for anyone that’s willing to get out there and do the work that’s required. It is not an easy path but with a little luck and a lot of hard work it is an incredibly rewarding and fulfilling path.
We hope you found value in this article and we sincerely appreciate you reading till the end of this post. Thank you, and now get out there and do something special.