Last week, we dove further into our comparison of entrepreneurship versus employment by proposing ways in which you can combat some of the disadvantages to employment. If you remember correctly, we wrote a comparison that outlined both the advantages and disadvantages of each last month. As stated previously, we don’t hold either choice above the other—it’s up to you to figure out which option would better align to your personality, preferred working style, and career goals.
In this post, we’ll zone in on the disadvantages of entrepreneurship. We’ll give a brief synopsis of the points from our first post, but feel free to refresh your memory by re-reading it before moving on with this post.
How to combat the disadvantages of entrepreneurship
If you recall, we described entrepreneurship as being self-employed and running solo (maybe as a freelancer or contractor) or as meaning you’ve started and/or are running your own business (with others eventually working for you). It can be a fairly broad category with different characterizations as there are numerous types (and exceptions to anything). We stressed the notion that it sometimes can be a bit glorified (i.e. all play and no work) with how it’s portrayed (ahem, looking at you, media) and you should make sure you know all of the nitty gritty details when you’re deciding on a path.
The advantages of entrepreneurship included: having more freedom and independence, the option for flexible hours, great potential for financial growth, unlimited scope, and great opportunity for both career and personal growth. We’ll re-outline the disadvantages (as they were explained in our previous post) and propose ways to flip them into positive (or better) experiences.
Combating difficult work-life balance by scheduling everything
A.K.A. Stress galore. As an entrepreneur, you have to invest a huge amount of time into starting your own company—for many years; you will find yourself working very long hours. You also don’t have a vacation or paid leave built into a contract from an employer, thus (as the owner of the business) it can be very hard to take time away. This can create an enormous amount of stress—you have to work extremely hard, but need to tread lightly so you don’t burn out.
When we say schedule everything, we mean everything. When you’re an entrepreneur, it’s very easy for the line between work and personal/family time to get a bit blurry. When you have an extensive, seemingly never-ending to-do list for work, it’s hard not to let that seep into what should be your personal time. Instead of just using your calendar for meetings and appointments, use it for everything. Schedule out your work to dos on a calendar instead of a list, and designate blocks of time for each. On top of that, schedule recurring time blocks for everything else in your personal life—daily exercise, weekly family game night, monthly brunch with friends…you get the idea. This could transform the way you work, and help you to avoid the dreaded entrepreneurial burnout.
Combating risk and investment by seeking mentors and advisors
Starting your own company is very risky, and many entrepreneurs and companies fail. Not only do you face your company failing and the financial risks that go with it, but you also have to deal with the legal risks and liabilities of starting a company. Entrepreneurship generally requires a large investment on your part, without any guarantee that you’ll get any return (i.e., if the business fails). Not only do you (usually) have to invest a lot of your own money, but you have to network and find others who are willing to invest in your company. Coming up with starting capital can be very difficult, as you need to see the big picture and have a strong business plan in place.
We’ve said it before and we’ll say it again, but networking should be your best friend when deciding to head down the entrepreneurial path. Seek out others who are experts in your industry, those who have already done what you’re trying to do (i.e. other entrepreneurs), and potential partners to see if they are willing to let you pick their brains. Many startups have expert advisors, though you typically allow them a small bit of equity in exchange for their help. In the long run, however, it can be a small price to pay for their expert guidance.
Also attend industry and entrepreneurial events and just talk to people—you never know who may be able to give you advice, connect you with investors, or even become a potential partner. Not only that, but even talking to others in the same situation as yourself (i.e. other entrepreneurs just starting out) can make you feel less alone,—this can calm some of the stress that comes with taking risks. Speaking of feeling less alone…
Combating loneliness with co-working communities
Being an entrepreneur can be extremely lonely, especially at first. All decisions are up to you, and you have the burden of all of the stress on your own shoulders. You don’t have colleagues to bounce ideas off of, and the success and future of your company are entirely up to you. On top of that, the long hours can deplete any time you have to socialize or spend time with other people, so it can be a very isolating endeavor.
Modern co-working spaces are one of the best things to happen to entrepreneurs over the past five to ten years. Not only do they give you a place to work that isn’t sitting on your bed, but they offer something that is one of the most important aspects of work and life—community. A co-working space allows you a perfect balance of autonomy with camaraderie, and the best part is that you get to choose how social you want to be. Unlike a traditional employment workplace, a co-working space allows you a community without the politics and competition. Not only that, but it allows you to use rooms for meetings, which can be the crux of entrepreneurship—you need to have more meetings when you’re trying to build something, but you don’t yet have your own office. Co-working places solve that, and allow for a more professional setting than a noisy, packed coffee shop.
Combat greater responsibility with planning, efficiency tools, and outsourcing
While being a “jack of all trades” can be enticing to many; it’s important to note that this doesn’t just mean you get to dabble in cool marketing ideas. You have to take care of all components of your business (at least until you have the finances and resources to hire and delegate). This starts with the legal paperwork required for setting up and registering your business and includes administration duties, accounting, dealing with taxes, and so forth. There is a lot of responsibility and behind the scenes, day-to-day work that goes into being an entrepreneur—it’s not just traveling around giving TED talks.
It’s very easy to get overwhelmed once you realize there are so many components and hats you have to wear as an entrepreneur. There are a few ways to avoid feeling like you’re going to be crushed by the weight of it all. First of all, planning is key—scalable planning is even better. When you’re first starting out, sit and think about how you’d like your business to grow, scale, and progress—what roles would you like to take on, what responsibilities would you like to continue with, and what tasks would you like to hand off to someone else? For example, if your biggest strengths lie in marketing and business development, but a huge chunk of your time is taken up with back-office demands (accounting, administrative, etc.), you might consider that as one of the first things you’d want to take off your plate. You can consider hiring someone/outsourcing the work, or you could invest in software/tools that take care of this for you. That way, you can get back to what you’re good at and focus on growing your business.
Combat financial instability with a sound financial plan
Being an entrepreneur means you don’t have the stability or security of a regular paycheck. In fact, for the first few years, most money goes right back into growing the business, and you won’t see a healthy paycheck. Your finances are entirely dependent on the success and growth of the company—even if the company grows, it could have a slow period which can negatively affect your income.
If the world of finance isn’t your forte, then we hope you’ve already heeded our point about seeking mentors and advisors. Putting a financial plan in place—not just for your business, but for your personal life—is a crucial first step down the road of entrepreneurship. Sure, things can be in flux and change, but if you have some semblance of a plan you won’t be so caught off guard if things go south. It’s very important to have a budget for your personal life when you’re an entrepreneur (again, lines can blur—avoid this), and we’ll again say the words we’ve said before—pay yourself first! We don’t necessarily mean you need to pay yourself a salary right away (many entrepreneurs don’t), but it wouldn’t hurt to save even a small amount for a rainy-day fund, be it for yourself or for your business.
Entrepreneurship can be a glorious thing, and we have seen so many amazing advancements in Fintech alone within the last few years due to new entrepreneurs. Entrepreneurship can has been glorified a bit due to puff pieces on all its attractive aspects, while the day-to-day hard work and grind that’s required is often overlooked. We’d love to call on all entrepreneurs to share your stories and share your knowledge—be receptive to people reaching out to you for advice, and don’t shy away from sharing the unsexy bits of entrepreneurship. But as we say, don’t focus on the problem so much as looking to the solution.