What It’s like to be an Entrepreneur

Entrepreneurship is one of the fundamental aspects to any progressive and advanced society. By providing individuals (and organizations) with economic incentives to provide good products and services – jobs are created, wealth is created, and people receive money to finance their needs. In today’s modern world, we can thank vision minded entrepreneurs for the Internet, advanced medicine, and tremendous advancements in technology. This article will focus on entrepreneurship and what is it like to be an entrepreneur.

 

First, of course, the legal disclaimer

 

Please note that the information in this article is not to be used as consulting, accounting, or legal advice. The following information is provided with the understanding that this article is not a substitute for professional advice, and is merely for informational purposes. TheFinanceResource.com is not responsible for the use of any information contained below or for the factual accuracy of any statements made below.

 

The Article

 

Contrary to popular belief, the most successful entrepreneurs are not the ones that have taken excessive risk. It is important to think of your role as an entrepreneur as a professional – much like a doctor, lawyer, accountant, or dentist. Your profession involves building or acquiring business ventures, understanding their risks, applying the appropriate financial management, and rendering yourself (or your organization) a profit.

 

Entrepreneurship comes with its outstanding benefits and troubling downsides. Primarily, the benefits include the ability to be your own boss (both a blessing and a curse), the ability to create a vision and see it to fruition, and to possibly become very wealthy. The downsides are the long hours, uncertainty of income, and of course the possibility that your venture could fail. Many new entrepreneurs stake a significant amount of their personal wealth (if not all of it) into developing new businesses. Additionally, many entrepreneurs source debt or equity capital, which makes you (as the entrepreneur) accountable to a financial institution or private investor. If you have taken on a debt obligation, you will most likely be personally responsible for this debt should your venture not work out. As such, this can create a tremendous amount of stress for any entrepreneur.

 

One of the key factors to becoming a successful entrepreneur is, again, to be aware of the overall risk that you are taking before you undertake any business venture. Carefully examine the product/service you are selling, the market that you are operating within, and the possibility of how much money you can lose should the venture not work. Extensive research and development of a business plan is key to your success. The FREE Business Plan and property analysis tools offered for FREE by TheFinanceResource.com can help you effectively plan your venture.

 

The reason that most entrepreneurial ventures fail is because the owner or senior manager has not properly budgeted expenses. Most businesses are able to generate enough revenue to commence and maintain business operations. However, without properly understanding your fixed and variable costs, your business is destined to fail. Again, it imperative that you accurately develop a business model that focuses on your monthly outflows of capital. Always build in contingency costs as you will most certainly have expenses that you did not expect.

 

If you are having trouble developing a business plan that can effectively predict your expenses or revenues, you should consult a business planning firm or certified public accountant that can help you understand your startup costs, your monthly expenses, and your expected monthly income.

 

One of the most common problems facing any entrepreneur is burnout. As a new entrepreneur (or owner of a newly acquired business venture) you can expect very long hours for the first one to two years of operation. Seventy to ninety hour work weeks are not uncommon. This can take its toll not only on your mental health, but also on your family and friends. It is very easy to become so involved with your business that you forget about the important people in your life. Additionally, it is equally important that you not lose sight of the goals that you set for yourself when you decided to launch you business venture. It is always important to set reasonable goals for yourself, not only for the long term – but also in the short and intermediate term. Reward yourself nicely when you meet your goals. Remember, you started your business to generate income and build wealth for yourself – so enjoy it. Money is a means to an end, and not an end onto itself.

 

Another problem facing many entrepreneurs is the current economic climate in the United States and abroad. This creates additional stress for entrepreneurs as there is greater uncertainty regarding top line income. Again, outstanding business planning will build “stress” factors into your business model to ensure that your company can continue its operations despite moderate or substantial declines in revenue. Never underestimate your costs, and never overestimate your income.

 

Work like hell – that pretty much is the 75% ingredient involved with successful entrepreneurship. Chances are that you do not have a product that is so proprietary or special that it just sells itself (think iPod). As discussed earlier, the hours of entrepreneurship are long (and often lonely), and you must fully understand that everything falls on your shoulders. The buck stops with you. Although it is highly cliché, “heavy is the head the wears the crown.” There will be many nights fraught with planning, looking over numbers, seeing where you can make improvements, dealing with administrative issues, and worrying.

 

One of the other things you must realize as an entrepreneur is that a significant part of your profession will involve fixing problems. You will inevitably have problems with vendors, accounting issues, clients that are slow to pay, employee problems, customer complaints, and a whole host of other issues that you will face on a day to day basis. This is one of the most significant drawbacks to entrepreneurship, especially for new entrepreneurs that didn’t realize the immense effort required to run a successful business. The key for dealing with these issues (or is to have clear and decisive protocols that you will implement as each of these problems occurs. Learn for each problem, and see how it can be avoided in the future.

 

Overall, entrepreneurship can be extremely exciting and stressful at the same time. This article was short, and was designed just to give you a simple taste of what entrepreneurship entails. Again, a few final things to remember:

• Create a great business plan (underestimate revenues, overestimate expenses)
• Hire a great accountant that can assist you with the many tax/employment issues that you will face.
• Treat entrepreneurship as a profession – remember, it is your job to understand a venture, its risks, how to finance the venture, and how to operate the business properly.
• Understand that it make take time for your business to become profitable.
• Prepare for long hours and ongoing problems that you will face on a daily basis.
• Set short term, intermediate, and long term goals – reward yourself nicely when you reach them.
• Stay positive and work like hell!