Over the decades, in my writing and in speeches, I have relentlessly promoted the idea that more people should become entrepreneurs. Some people, though, are what a friend calls “unentrepreneurs” — they work for themselves but should have stuck to being employees.
There are plenty of reasons why certain individuals are unsuited to becoming entrepreneurs. Starting a business involves risk and hard work; if you prefer security and predictability, self-employment is not for you. If you are unwilling to spend evenings, weekends and holidays working, then forget it. If you are poor at adapting to change and don’t want to shoulder responsibility, the same applies. Stress is almost guaranteed for anyone establishing a start-up. If that prospect scares you, it’s better you take a safe job.
Some are lulled into thinking that entrepreneurship is all excitement. In fact, much of it is a dull grind — it is generally a long-term commitment that requires dedication, patience and the ability to avoid distractions. Typically, it involves periods working seven days a week — and even 15-hour days. All the successful founders I’ve partnered have made significant sacrifices in their lives to pursue their dreams. Many have deferred taking holidays, buying a home or even starting a family in order to devote all their capital and energy to their business.
Generally, starting a new venture as a “side hustle” or a part-time enterprise means it never takes off. Such undertakings only become serious when you go all-in: place an all-consuming wager on your future.
Unfortunately, most new businesses generate minimal income for their proprietors in the early stages. So anyone thinking of becoming an entrepreneur needs to calculate whether they have enough money to survive this phase, which might last a year or more. Realistically, it is worth doing the calculation to decide if it makes up for forgoing the additional earnings you would receive in a job.
Quite a few entrepreneurs probably earn less than the national living wage. Entrepreneurship isn’t about making a fortune, at least in the initial stages.
I come across plenty of professionals — in banking, law, accountancy and so forth — who can never really afford to leave their institution because they are so well compensated and have built up large personal overheads, such as mortgage payments and school fees. Sensibly enough in the circumstances, they are unwilling to diminish their lifestyle significantly to chase after a high-risk ambition that might end in disappointment.
Starting a business is fashionable, and in 2019 there were more new companies created than ever before. Five million people in Britain now work for themselves. I hope they all do well — and enjoy the freedom and independence that working without a boss can deliver. But, inevitably, many enterprises will fold, or at least fall short of the promise envisioned by their creators.
There are compromise avenues — such as freelancing and franchising — that can reduce the challenges and hedge the risks, but everyone who works for themselves, in whatever format, must possess buckets of resilience and accept that the entire undertaking may prove a waste of time and money.
Many of the brightest and best-qualified young people shun the risky life of an entrepreneur for safer gigs such as law, management consulting and big-company finance. These don’t offer much adventure but they are considered prestigious: you can mix with the elite and become part of the establishment. Your career is highly structured, your downside limited. The opportunity to be creative and really add value is diminished, but not everyone is suited to being a revolutionary.
In truth, most who prosper as entrepreneurs do it because, for them, there is no alternative. They feel a compulsion to forge their own path, to take control of their destiny. They cannot bear the idea of being a mere cog in a large machine. Often, they accept a lower overall standard of living than they would otherwise have enjoyed by taking orders from an employer. They take the plunge into the choppy waters of entrepreneurship because they like adventure, because they must chase a vision, and they have the self-confidence to ignore all the threats and negatives.
It is not the right direction for the majority, however, and will only lead to unhappiness and failure for those who are not committed heart and soul.