The Risks Of Entrepreneurship
Welcome To The World Of Do Or Die
Hey, yeah, you. Are you thinking about striking off on your own and becoming an entrepreneur? Think it's going to be a walk in the park and that you're going to make easy money. Well, I don't know how to tell you this but you really need to take a step back and re-evaluate what you're getting yourself into.
I'm not saying to not set off and do it. Follow your dreams! You just need to be aware of the risks coming your way. They are all manageable if you're prepared. If not though, you might find yourself back to the 9-5 grind all over again.
Below we'll be going over what you need to be ready for in your journey to entrepreneurial prosperity.
Abandoning The Reliable Paychecks
In most cases, you'll have to quit your current job in order to make the time for setting up your new endeavor. A lot of times this means dropping your career and losing everything you've worked for.
If your somebody living the life of luxury, you may have a backup plan. That could involve another line of work readily available at a moments notice, or an option to jump back into your previous field if all goes wrong with your start-up.
Opening Up Your Personal Safety Net
Now, before you panic. You might not necessarily have to spend your savings to get your business going. 90% of startups are funded by angel investors, crowdfunding or government/bank loans. You have to have help getting your business off the ground. I strongly recommend you do not dip into your own savings unless you have to.
You never know when something comes up and it's better to have the money than to not.
Depending On Cash Flow
A line of credit, if you have one, will come in handy. But in order to survive, you need to secure a regular cash flow. This is extremely difficult and a lot of the time overwhelms the entrepreneur with stress.
You can very well position yourself for a profitable year, but you will still struggle with the day-to-day necessities if your revenue doesn't match or exceed your costs in a timely manner.
Bills can add up quickly, and if you don't have enough revenue to support your outgoing cash flow, you're going to be in a bad spot. Address this issue weekly, if not daily.
Relying On A Key Employee
When you first open shop, you're not going to have a vast team working alongside you. Oftentimes you'll be working alone or with one other. Best case scenario you'll have a small group working around the clock to get the business off its feet and keep it standing.
You'll have to put an overwhelming amount of trust into them, especially if their uniquely qualified and would be hard to replace. Not to mention the lower than average starting salary amount.
So if you hire a lead technician to work on your product over the course of a year, you better be sure you can trust them because your money, time, and business rest in their hands.
Sacrificing Your Time, Health And Sanity
You might as well kiss your free time goodbye if you're new to the entrepreneurial scene. The hours, in the beginning, are long, arduous and stressful. You'll spend countless hours doing work and putting in time in order to make your company successful. Any remaining time you have will consist of you worrying about what you haven't or have done thus far next steps and if what you're doing makes sense in the long run.
You will lose sleep.
You will miss out on personal time.
You will carry more stress than usual.
Don't worry though, because the rewards of entrepreneurship far outweigh these personal risks. You really just need to keep looking ahead with an end goal in sight. Keep an open head, a positive attitude and everything else will fall into place eventually as long as you don't give up.