“Be your own boss!” “#Girlboss!” “Turn your passion into a platform!” “Push your business forward!” We’ve all heard the ads, the TikToks, the influencers and Shark Tank investors telling us we can be the next Oprah or if not that, then we can turn that fun candle-making hobby you do on the holidays into a full-blown business where you set the hours and make bank doing “what you love.”
It’s in the windows of every book store and it’s the subject of half the TedTalks on Youtube. Entrepreneurship! The art of building a business from the ground up, being your own boss and setting your own hours. It sounds incredible; Reading about the big players of today being just like the lot of us in the days of yesterday. I mean, if they could do it why not you?
Statistically, there has been a rise in small businesses in the past few years, especially after the COVID-19 pandemic forced many people out of their jobs and with it, their typical incomes. According to the Washington Post, an estimated 19% of adults have started or are in the process of starting their own business in the past three and a half years and out of those new business owners, only around six percent of them are under the age of 34. New boss babes are popping out of the ground faster than mushrooms in this day and age, but how fruitful are they?
Although it can depend wildly on the industry you enter, LinkedIn estimated that gaining a profit will take anywhere from one year to four years.
Though that sounds promising, research by the U.S Bureau of Labor, found that approximately 75% of new businesses will survive their first year and closer to 50% will make it past four and into a fifth year.
Owning a business is—in a word—tough. In multiple words, owning a business means playing a game stacked against you in every sense. In a sea of bigger and louder competition, it’s all too easy to be swept away, especially when the companies at the top don’t just drown you, they can change the entire current. Larger competitors can change your market’s price at a rate you can’t control because, in a larger market, there’s a ripple effect. In economic recessions, price gauging or closing suppliers, the smaller companies always get hit the hardest.
But you can handle it. You’ve scraped and saved and you don’t need to spend money on more than maybe a couple of hires—if that. You’ll do this on your own if you must! After all, statically speaking 58% of small business owners work at least 50 hours a week if not more the first few years. Those are more hours you’ll be working per week for most likely less pay than you had at your old job. On the bright side, this way you’re getting paid to do what you love, right?
Unfortunately not. Most time spent on a start-up isn’t for the product or service you’re selling, but the upkeep. Taxes, rent, market research, utilities, supplies and events to name a few, and if you have an employee, you are to pay them at least the minimum wage your state claims for your industry.
If numbers, IRS phone calls and paperwork filing aren’t for you, there’s always outsourcing those jobs. Then again, that is more of your revenue being spent and less profit being earned. So there’s a choice to make: Do you spend the money or the time? Or better yet, do you have either to spend?
Marketing will also eat into that business loan money, too. Even if you stick to free publicity from social media and word of mouth, any sales, giveaways or collaborations you do will often involve labor and products for free or reduced prices in exchange for being seen in your field by potential customers. Exposure doesn’t pay the bills, but the people who you’re exposed to just might. But even then, there is no guarantee that marketing tactics will work and when they’ll work.
Every business will have its ups and downs and small businesses are not built with the stability to handle every adversity blown their way. On average most startups will fail within those first five years. But if you have the grit and the patience and the perseverance for it, let’s say you get past that threshold and after a few years you can finally claim you can support yourself on this business alone. What happens next?
Any new inventory space or change will need to be budgeted before implemented so any expansions will need to be slowly coming. Come payroll, your employees will need to be paid their dues before you can, so be sure to keep track of that revenue. Check your orders, and check your emails. There will incidentally be delays or interferences every so often so account for those in your budget.
What if you get sick or need to take an absence? You set your own hours but time is money. Have you trained your employees to be able to handle the load without you? Do you have a general manager? Are more people needed? You might need to hire more people if the budget allows it. You’ll need to account for situations where you may not be present. A growing business can’t stop when you do.
As a business owner, you will spend more time in the long term working for that business than you would an employee in someone else’s business. You’ll be an employer expected to manage payroll, employee benefits, hiring and training of those you pay and they will be legally obligated to that pay whether or not your profit margins can afford it. Networking with other businesses and your clients will be crucial to keeping loyal customers and gaining more. Your business won’t just be a 9-5 job you can clock out of at the end of the day. A business is a commitment that consumes every aspect of your life because you will always care more about that business than anyone else. There’s always sacrifice with no guarantee of reward and from day one everything is stacked against you.
For some people, this doesn’t change their willingness or even their ability to succeed. They are people who thrive in stressful environments, or who have so much dedication to their mission that those stressors are worth it. The risk can be worth taking if the reward is, but that isn’t the case for everyone. Not everyone is meant to take on that level of commitment, and not everyone wants to. Hobbies don’t have to be monetized, and skills don’t have to be used in only personal endeavors. A job can just be a job you work for a paycheck and leave at the end of the day.
Entrepreneurship is a level of commitment that not everyone is made for, nor should aspire for. It’s challenging, precarious, stressful and all-consuming. To be your own boss isn’t any more or less valid than to be someone else’s employee. A career does not have to define who you are if you don’t want it to. If you honestly believe entrepreneurship is for you, do not take this article as doubt in your capabilities, but as a reminder of what lies ahead. I wish all who take such a road the best of luck in their endeavors. To those that don’t, never let anyone else define your value on your placement in your career, you are no less important and integral to your work than anyone else.