Top 12 Disadvantages Of Being An Entrepreneur
Entrepreneurship has become ‘sexy’ in recent years and everybody wants to be a business owner. The odds of being successful in this endeavour have also never been better with the rise of the internet, e-commerce and online courses.
Successful Entrepreneurs enjoy freedom in their lives. They don’t have bosses breathing down their necks, they can choose where to live and what hours they want to work.
With this freedom comes a whole lot of responsibilities and the life of an entrepreneur can be extremely tough, especially when you are starting out. If you don’t practice discipline as an entrepreneur, this will more than likely be reflected in your bank balance at the end of the day.
In thus articles, we look at the biggest challenges and obstacles facing entrepreneurs in today’s climate.
1. No Guarantee Of Success
When we start a business, we dream of driving a Ferrari down a coastal road in the sunshine without a care in the world and this couldn’t be further from the truth. Starting a business full time is like jumping off a cliff. You have to invest everything you have in the opportunity with the belief that you will succeed.
The reality of the matter though is that businesses are more likely to fail so the odds are actually stacked against you. As an employee or intrapreneur, you know you are going to get your wages and you if just do enough to keep your job; you are relatively secure.
Even if you work hard in your business, there is not guarantee that the money will come in to keep your business afloat so you need to work hard and work smart.
When you look at the current pandemic situation, businesses have been put out of business after 20 years of work through no fault of their own and while the opportunities for online business have never been greater, there is still no room for thinking it’s going to be easy. Setting up a successful business is hard and there is no guarantee of success.
2. Huge Amount Of Stress
Starting a business is one of the stressful undertakings you could ever imagine, especially if there is not enough money coming in to cover expenses. You better prepare for some sleepless nights if you want to start a business and this is true even if you have a lot of money.
Time is the most valuable asset we have as human beings and while you can buy everything else with money, time can not be renewed, we can’t get a refund so we want to spend it in the best way possible.
Passive income is the goal, to earn money while we sleep so that we can spend our time in a way that maximizes our return on investment. Getting a business to this level is the goal without doubt, but it is a lot easier said than done, you need to put robust systems in place, hire great employees or you can achieve passive income online through blogging, Youtube or even E-commerce when done correctly.
The point is, even if you have money, you will immediately become stressed if you are spending your time and it is not generating income. Even if you are not going to go broke, launching a business is an incredibly stressful time when you don’t know if it is going to work or not at the early stages.
3. Work Longer Hours
When I started out in business, I thought ditching the 9-5 would allow me to spend more time on my hobbies while also easily scaling the business and that I would have plenty of time for both. This is around the same time I cam face to face with the phrase:
“I ditched the 9-5 and ended up with a 95.”- Aidan Lehane
This means working 95 hours a week and it couldn’t be more true. While you can be an employee on auto pilot and think mostly about your hobbies and planning your weekends, a business requires your undivided attention almost all of the time to grow.
To this day, I still work 12 hours a day, 7 days a week even with enough passive income to comfortably survive. It is something that the entrepreneur quickly understands is needed and the successful ones will grow to embrace this crazy schedule and wouldn’t want to be doing anything else.
If you are not willing to invest long hours, entrepreneurship might not be for you.
4. You Have To Perform All The Functions Of Your Business Starting Out
A lot of people have the misconception when they start a business that they will be spending all of their time doing the things that they love. If you are a baker, you dream of baking the finest cakes and the sales and everything else will look after its self.
If you start out as a web designer like me, you think you will have an endless supply of customers and you can spend all of your time making web pages.
The first thing that is going to hit your square in the face is SALES. Sales is the life blood of any business and when you are starting out, you are your only sales person. As someone who is relatively introverted, getting out making sales was tough for me. I listened to a Youtube channel that said he went out door to door with fliers looking for business and that worked so that’s what I did. It was extremely hard but I eventually got sales. I then discovered the phone and that was even more successful but extremely tough. We moved onto other avenues like Business Exhibitions and Networking events as we expanded but it is all hard work and slow progress.
You are also in charge of Finance, tax, marketing, customer relationships and the list goes on and on. As you expand, you can outsource these roles but you have to know starting out that you will need to do all of the grunt work and find time to do all the operational work as well. There is no plain sailing, especially in the early days.
5. You Need To Deal With Rejection
Rejection is something you are going to have to get used to as an entrepreneur and you need to know that it is not personal. People may reject your service because they genuinely are not interested and that is perfectly ok. Other people might genuinely need your service and you might know this for a fact but they still reject you and this can be a little bit harder to take.
I started out calling around business to business and people rarely reject you to your face directly but some of them do and you quickly realise that has more to do with them that it does with you.
I then moved to the phone and cold calling which was a different story, rejection was everywhere on the phones and people had no problem being rude, hanging up and even being outright hostile over the telephone.
The phone was again very successful but hard work and stressful but I had a business that was up and running with a good mix of customers.
The fact is that if you are not able to deal with rejection, Entrepreneurship will be an extremely difficult undertaking for you. You need to be persistent and develop a thick skin to survive in the world of business.
6. Very Hard To Get Up And Running
Business are tough to get off the ground and it takes an incredibly amount of hard work, sacrifice and being uncomfortable to get those first customers.
My first website was for a friend that I did for free and then I went out into the field to show off my work and get more customers.
My first day out with the fliers and I was about 2 hours in with no success. I went to Mcdonalds on Grafton street in Dublin for a coffee and I decided to give it 1 more shot of going around to businesses. The very next one I went into I got my first customer, an antique dealer who needed a website.
On the second day with the fliers, I added another 4 customers and I was off and running.
Next up was the phones which was tougher but more successful as I was ringing people that I knew needed my services.
What I found was that the people ranked on page 1 getting all the business were happy to chat away and politely decline but the people on page 2 and 3 that really needed more traffic were rude, obnoxious and hostile. I started wondering were the people willing to listen there because they listened when they weren’t there or was it because they were successful that they didn’t mind having a chat. I concluded that the better people will naturally end up at the top of the pile.
Scaling from those initial customers is still extremely tough but you should start getting word of mouth inquiries and learning how to market online as you go after that initial phase but scaling comes with its own challenges.
7. Less Friends & Loneliness
As an employee it is easy to keep in touch with your friends and when they want to go out on a Saturday, you have no reason not to go. People know your boundaries, when you are free and you can get into a nice routine with a good social life.
Starting a business requires all of your attention and effort and if you want to be out in bars or out partying on the weekend, entrepreneurship might not be for you.
You may be used to working in an office and having people around you all the time but when you start in business, you are going to be spending a lot of the time on your own.
Your relationship with people changes too as everybody will need to come to terms with the new you and that is in business. Your friends, family, girlfriends and boyfriends might say things like, I like you the way you were and try to talk you out of starting a business.
They think they are doing the best for you or they don’t want to see you reaching a new level but you can end up with a break up, losing friends and even seeing less of your family as you tend to your new business which is just like raising a new born child.
If you can get used to being alone, it can actually be one of the most valuable skills you could ever master.
8. It Takes A Long Time & Growth Is Painful
When you start a business, you need to be in it for the long haul. Nothing is going to happen overnight but if you keep working persistently at the right things, you can grow a substantial business.
It might take 3-5 or even 10 years and there are many stages of that growth that each require a different level of skills and abilities.
Starting out as a one man band, you can do everything yourself, then you need to start outsourcing business processes. You then need to hire operations staff and move into sales. You then have to hire sales staff and move into management. You then need to hire management and become the CEO. You then can sell the business, seek investors or start expanding through investments and acquisitions.
A business that wants to stay small isn’t going to work in most cases and if you want to create generational wealth, you should start with this mindset from the very start.
The internet has created a new level of one man bands that outsource on the internet and can scale with strategic partners as opposed to staff but growing a successful company involves a lot of work and it is going to take a period of years, not months to make it happen.
9. You Take All The Risk
“Only an idiot would start a business with a loan” – Mark Cuban
Yet, that is what many people do and even if your business is not successful, that loan will need to be paid back. There is no need to go into debt to start a business in the current digital age but if you do, you need to be sure that it will work.
The best way to do this is to model success and seek advice from people who have done what you want to do already. Don’t dismiss their advice like it doesn’t apply to you, that advice may have come at a considerably cost to them and it is one that you can avoid or mitigate with proper direction.
At the end of the day, not only can you lose your capital but you can also lose the money you would have earned from working a regular job, The Opportunity Cost.
10. Doesn’t Suit Everybody – Intrapreneurs Can Create With Someone Elses Capital
Needless to say, without of the work involved in starting a business and all of the different roles you need to play, entrepreneurship isn’t going to be for everybody.
If you don’t fancy making sales calls or working longer hours, if you don’t want to sacrifice your social life, it might be best to stay as an employee.
Intrapreneurship involves creating new streams of income for a business where you are employed and it carries a lot less of the risk from doing it all yourself.
You could get a job in sales first to find out if it is something you can do or you can work to learn an industry which will have additional benefits from just working for a pay check.
Another option would be to start a business in your spare time and see if you can grow it to a full time income.
Starting a business is a full time commitment that wont suit everybody and requires a whole lot of though work and planning to do successfully.
11. Your Clients Become Your Boss
Many people hate the thought of having a boss and that is what pushes them into the world of business. Starting out though, they quickly discover that their initial clients become their new bosses and they can be even harder to please.
Until you can get operational staff into your organization, you are likely to be taking order directly from your customers and it can actually be worse than your old boss.
As you scale you can zero in on your ideal client and remove those clients that you dont fit the exact model you want to scale including troublesome clients.
12. Most Businesses Fail
The odds are against you when you start out, the worst thing you can do is think that it is going to be easy, it’s not.
Less than 10% of businesses make it to 5 years and only 10% of those businesses make it to 10 years.
It is probably best not to start a business that you will grow out of in time and you need to start something that is scalable and that you potentially sell down the road.
Ending On A Positive Note
It has never been easier to start a successful business, you just need to know the best ways to go about it and I have discovered plenty of them in the last 10 years, including blogs just like this.
If you are interested in starting a business, check out our top 10 books for aspiring entrepreneurs here or get in touch at insidergrowth9@gmail.com to set up an additional consultation for a limited time only.
