The media widely applauds the success stories of entrepreneurs such as Steve Jobs, Mark Zuckerberg, Elon Musk or Jeff Bezos. Magazines are full of stories of ordinary but brave people who left a corporate job to pursue their dreams and be their own boss.
Rarely, we can find articles about unsuccessful ventures and their owners who were unlucky enough to have to return to their corporate jobs. For sure, entrepreneurship can be compared to a roller coaster ride without seat belts, if you consider the statistics that say that 80 percent (or even 90 percent) of new businesses fail.
On the one hand, I have always been encouraged by positive examples of people who have achieved success and built their dream companies; but on the other hand, in the face of these unfavorable statistics I had my doubts whether or not I am prepared to start my own company. Or is it even for me?
Pressure vs. decision
The statistics for new ventures are impressive: more than 500,000 companies are created each month in the US. As I look around, many of my friends have tried their hands in running a new business. Undeniably, becoming an entrepreneur is a trendy thing to do.
This hype puts additional pressure on those who still have a full-time job and work for somebody else, instead of being the creator of their own “true success”. This pressure is comparable to that which I experienced during the second year of my university studies. Many of my colleagues found their first jobs in their sophomore year of university and those who didn’t felt as if they were lazy and that they have missed a once-in-a-lifetime opportunity to build a meaningful career.
Nevertheless, I believe that entrepreneurship should definitely be an option that everyone should consider. And even though not everyone is meant to or built for running their own business, the decision about whether or not start business should be based on our own preferences, cold calculations and with consideration of the surrounding environment (personal and economic) and not based on passing trends or impulsive emotions.
First step: weight the pros and cons
My preparation for making this type of decision was a longer process, where I slowly started to feel that I could get out of my comfort zone, which, for sure, is a decently paid full-time job and create something that transcends my day-to-day work. At the beginning, I started to look for different materials that described entrepreneurship with all its ups and downs.
I listed all the pros and cons of becoming an entrepreneur, and named all the fears and threats that I expected to face. I enumerated all advantages and opportunities that I saw in being my own boss. I wanted to know for sure if I was aware of obvious issues and problems, and to avoid unnecessary disappointments and learning from my own mistakes.
I gathered all this information in a SWOT analysis, and surprisingly discovered that on the list there were items that I hadn’t considered at all before (you can find the entire list of strengths, weaknesses, opportunities and threats in the picture attached above).
Second step: select most important features and evaluate them
When I collected all my thoughts in one place, I was ready to choose which of the written features were the most important for me. I am a big fan of the Pareto rule that says that 20 percent of things usually provide 80 percent of the most important results.
The most obvious advantage of being an entrepreneur for me was the strength to be my own boss. Being in charge and making the important decisions regarding your business can be fulfilling, but it can also be challenging. I can imagine that the stress and responsibility might be significantly higher in my own venture, and I would need to learn to cope with them effectively or they might spoil all fun of running the business in the future.
I was also sure that in my new venture I will only need a short period of time before I will see results of my work (I assume that changes would occur rapidly because they would mainly depend on me) and that the possibility to work for myself will increase my motivation.
Another huge advantage of being an entrepreneur is the possibility to have control over my own work schedule (I can choose when to take time off and work the schedule that suits me best). But herein also is hidden one significant weakness, that could transform into the a threat that when there will be no clear limitations; the temptation to work longer and harder might increase, and consequently I would not have any free time for other activities and hobbies that I really like now. I knew that this feature would be very important for me, and I would need to work out a proper work-life balance and experience gained while working in a corporate job.
Third step: verify connections between features
When I assigned values to the different features I found out that there was one significant weakness that I was seriously afraid of. This was insecurity and the lack of a regular monthly paid salary, especially when the business was first started.
I was aware that my salary would depend on how well business went, and that I might lose my stability and the ability to make long-term plans. I clearly remember the story of my friend who, after 2 years of running his own business decided to come back to his previous corporate position, because he wasn’t able to achieve stability in his own company and he was overwhelmed by the responsibility for the salaries of his employees. I remember that he couldn’t sleep well for a couple of months because of this complicated situation, and I was sure that I wanted to avoid such a emotional roller coaster.
Obviously, if everything went well and my company was successful, my salary in the long-term could be even higher than in a corporate job, but the prospect of an inconsistent income or even lack of money might leave me feeling overwhelmed by problems.
The analysis that I conducted for myself opened my eyes to the positive and negative aspects of becoming an entrepreneur.
I discovered that to limit the impact of weaknesses that were directly connected with threats such as worse quality of relationships with family and friends (entrepreneurs have the highest divorce rate of any professional category) and feeling highly unmotivated and disappointed in case of the company’s failure, I needed to plan actions that would maximize the possibility of my success and still secure my income during the time of the company’s growth.
I am also now convinced that for such opportunities as: more time for my family and other hobbies, and the ability to arrange my day as I please (lack of necessity of an 8 hour work day) and choosing the perfect place to work (home, house on the beach or office), I want to take the more difficult path and try my chances as an entrepreneur.
The SWOT analysis mentioned in this article is one of the sample SWOT analyzes available for free in the CayenneApps SWOT application. You can explore these examples using this link.
Do not hesitate to mention in comment section any other strengths, weaknesses, opportunities and threats from your own experience. What is your experience of being an entrepreneur?