Technology is also dramatically accelerating the rate at which markets—and therefore new businesses—are created or evolve. First of all, businesses that once required a huge upfront investment in infrastructure, equipment, and staff can now do a lot more for less. What can’t be automated in house can easily be outsourced to partners who are seamlessly connected electronically so that they become part of the “virtual” team. And then there are the businesses that have sprung up to provide technology solutions to entrepreneurs. Web design firms, search marketing specialists, third-party IT services providers, and all sorts of consultants represent just a few of the new types of business opportunities that have emerged.
■ Lifestyle drives career choices. Increasingly, surveys asking about job satisfaction bump up against the same fact: people are willing to forgo larger salaries to meet their ideal lifestyle goals. These generally involve more flexibility in work hours, less time spent commuting, and more time for family, hobbies, exercise, or interests other than those that actually generate income. Indeed, possessing a dream of a lifestyle that couldn’t be satisfied by a traditional job is one of the key reasons that people choose the entrepreneurial path.
■ Financial considerations. Many people simply don’t feel they can meet their financial goals by working for an hourly wage—or even a professional-level salary. The publicity given to young multi-millionaire founders and early employees of high-tech startups has fueled many people’s dreams. No surprise that a lot of people feel that they can achieve their financial goals more fully and easily if they’re self-employed—or employ others.
business BUZZ
words
“entrepreneur”
According to the Miriam-Webster Dictionary, an entrepreneur is one who organizes, manages, and assumes the risks of a business or enterprise. In his book Venture Capital Investor, David Gladstone says that one of the key characteristics of an entrepreneur is a desire for independence and autonomy. Furthermore, entrepreneurs would rather manage than be managed. Entrepreneurship, therefore, has much to do with a need for personal, as well as professional, control.
Does Failure Mean You’ve Failed?
One of the key defining factors for successful entrepreneurs is the ability—or rather, determination—to not view failure as failure. Rather than taking setbacks personally or becoming discouraged by them, successful entrepreneurs seize them as an opportunity to learn—and to apply that lesson to their next attempt. Indeed, many venture capitalists and other investors in entrepreneurial ventures won’t provide funds to anyone who hasn’t had at least one failed business.
There are any number of people who eventually made it big who tried and failed first. More than a decade before releasing its iPhone to huge success, Apple introduced an early personal digital assistant (PDA), the Newton, which died a quick death. The founder of FedEx, Frederick W. Smith, got a “C” on a business paper outlining his idea when he submitted it to a professor at Yale. The now-ubiquitous Post-its failed all the market tests that 3M routinely uses to determine whether to release a product to market. Scratch the surface of most successful entrepreneurs, and you’ll find at least one significant “failure” that they’ve used to gain valuable experience.
The Advantages of Entrepreneurship
As many books and motivational speakers will tell you, there are numerous advantages to the entrepreneurial life. These advantages fall into three general categories: personal, professional, and financial.
■ Personal benefits. Much of the payback people get from their entrepreneurial ventures is personal. Having the independence and flexibility to make time for family, hobbies, or other activities is a huge draw to the entrepreneurial life. It also provides an opportunity to do something you have a passion for than spend the majority of your waking hours performing tasks you have little real interest in. And, increasingly, location independence is a huge benefit: many people want to live in a particular geographic area—say, close to the mountains or by the ocean—or perhaps in a place where there aren’t an abundance of jobs. Avoiding long commutes is a growing priority, as is the ability to work virtually from anyplace to enable a more footloose lifestyle.
■ Professional benefits. You will also reap extensive professional benefits from your entrepreneurial endeavors. For starters, you can advance more rapidly than you would in a traditional office setting. You won’t be limited by what your boss thinks. You won’t be held back because you lack experience or seniority. You will succeed or fail on your own merits.
You’ll also be able to fully leverage your creativity and ingenuity. Rather than simply carrying out other people’s ideas or implementing their visions, you reap the professional benefits of any exciting insights or “ahas” you get. You can be aggressively proactive at pursuing exciting new ideas for products and/or services, and you can pave a path or create a legacy for those who come after you.
Finally, you will thrive due to the sheer adrenaline factor. Entrepreneurs are challenged and surprised every day, and because of this they grow at a much faster rate professionally than their counterparts in traditional employment situations. And because you’re the boss, you can invest in further education and training as you want or need it.
■ Financial benefits. The financial benefits of running your own firm can be substantial. Research performed by Thomas Stanley and William Danko for their best-selling book The Millionaire Next Door found that self-employed businesspersons were four times more likely to be millionaires than those in traditional employer-employee roles. Your earning potential is theoretically unlimited—you can go as far as your business idea will take you. You also benefit directly from your success. The fruits of your labors belong to you. You can take as much or as little out of your business as you choose. And you are untethered from the economic ups and downs—and whims—of a traditional employer. You make, and reap, the financial rewards of your own hard work.
The Challenges of Entrepreneurship
Naturally, entrepreneurship isn’t without its challenges—and risks. There are a number of things you will inevitably have to confront and surmount on your journey. Among other challenges, you will need to find ways to manage the following realities:
■ Your income may fluctuate considerably. You won’t have the comfort of that steady paycheck. What you sell to customers or bill clients is what you get. You will inevitably experience dry spells or have times when your resources are stretched. And you may need to look beyond your own means for the cash to grow your business or even to keep your doors open if times get tough.
■ You’ll need to be self-sufficient. You must be a disciplined self-starter. And depending on the type of business you start, your goals, or the speed at which you grow, you may be working on your own most of the time. You won’t have the traditional “network” of coworkers to turn to for support or assistance. If your computer breaks down, you’ll have to figure out how to get it up and running again—either yourself or by hiring outside help. You’ll either do your own books or find a good accountant. And you won’t have the built-in social structure of the traditional workplace.
■ You’ll work hard. This is a given of the entrepreneurial life: self-employed individuals tend to work longer hours than the typical employee. You don’t get paid for the time you’re not working. This means that you will lose revenue for each day you are sick and for vacation days. Moreover, it may take time to get adequately paid for the work you actually do; many entrepreneurs have to continue doing their “day” jobs until their entrepreneurial ventures are established.
■ You must be a fast learner. Unless you are a very unusual person, you will be largely jumping into the great unknown when you