With 19.8 million posts on Instagram featuring the hashtag #entrepreneur life, it’s easy to believe that being an entrepreneur is the best way to have the financial and life freedom you’ve always wanted.
But being an entrepreneur is work. Hard work and the failure rate is high.
Check out the 5 & 10 year statistics below. According to the U.S. Bureau of Labor Statistics (as reported by Fundera and updated in 2020):
Why do so many small businesses fail? There are countless variables, but the focus of this article is that the person should never have gone into business for themselves in the first place. After 15+ years of coaching, let me save you potential heartache and money. It’s time for some #realtalk
Did you see that stat above? 70% of small biz owners fail in their 10th year in business. If you’re playing the long-game, it is imperative to have a strong, and I mean rock solid strong financial foundation. What does this look like? Specifically, a minimum of 6 months of personal expenses and 6 months of business expenses in the bank.
If you have never worked within a budget, or you have a budget and don’t stick to it, you are not ready to start a business. There will be a myriad of things you legit need to buy and things you’ll be tempted to purchase that you don’t need. If you have not been able to exercise self-control in your personal finances, the same will be true in your business but with much more collateral damage to clients, employees and your family.
Being an entrepreneur means your strengths and your weaknesses are going to shining on the surface like cream on a latte. One of the most essential personal traits of successful entrepreneurs is that they are intrinsically (internally) motivated to hit goals. If the only time you get things done is when you’re up against a deadline, or when someone (a boss for example) is holding your feet to the fire, you are not ready to be a business owner. As an entrepreneur, it starts with you and ends with you.
I’m not talking about being introverted vs. extraverted. To be clear, if you don’t like people, do not start a business. “But Alicia, I’m selling virtual products.” Yes, but you will still be dealing with people: people who handle your website, your shopping cart, merchant account representatives, customers with complaints, and if you are going to grow and scale – employees, which while rewarding can be the biggest challenge of all.
If your spouse or life partner does not 100% support and encourage your desire to do this, it’s not going to work. Full stop. Don’t even try. There are personal sacrifices to be made, particularly in the start-up and growth phases. Your spouse has to be on board fully with these sacrifices. If not, in addition to the stress of building your business, you will be faced with complaints from the people you love most, marital disharmony and other energy-sucking drama that will cause you to be distracted,
I am PRO entrepreneurs. And I personally love living the entrepreneur life. In fact, the times I succumbed to the temptation of a regular paycheck, medical benefits and the illusion of security in a traditional J.O.B., I have regretted it. But this life is not for everyone. Take a realistic look at risks and benefits to decide whether it’s for you. The answer might not be a hard “No;” perhaps the answer is “Not right now.” You can always start small with a side-hustle before you take the full plunge.
What do you think? Let me know in the comments.
