Friday, March 2, 2012

5 Reasons Why You Should Not Quit Your Day Job to Start Your Own Business

Many of us believe that entrepreneurship--founding and running our own businesses--is the one true path to riches and the good life. Perhaps inspired by stories of legendary, self-made businessmen, old and new--from how John Gokongwei restored his family's fortune to how Injap Sia built a giant-killing fast food restaurant brand from scratch--we dream and daydream of retiring early and enjoying the rest of our lives living off the fruits of our own business ventures. Anecdotal statistics like how one out of every ten new businesses fail within a year of founding do not deter us, maybe because the promised rewards of success greatly outweigh the possibility of failure.

Contrary to popular notion, however, there are valid reasons to not get out of the rat race. A lot of us downplay the benefits of a thriving, stable, and adequately-paying career, especially given the amount of effort and hard work that is often necessary to maintain it; in wanting to become entrepreneurs we do not realize that we would have to give up this valuable asset for a risky undertaking, a trade off that unfortunately does not make sense for everyone. In this post, I present a few points that will hopefully paint a more realistic picture of entrepreneurship in our minds and help us better decide if a shift from being "someone's employee" to being "our own boss" is really the best way to go.

1. Sometimes the "politics" that you run into as a business person is even worse than the typical "office politics." If as an employee you're tired all the difficulties with interacting with your superiors and coworkers, as a business owner it's highly likely that you'll experience much of the same problems--if not more--with your partners, suppliers, customers, and your own employees.

2. Your business would be much more vulnerable to economic shocks than a stable career. If the economy turns sour, as in a recession or financial crisis, an employee might lose his or her job, but a business person often stands to lose everything. Arguably, it would be easier for an employee to find a new job or source of income than for an entrepreneur to recover a lost business (which does not in any way mean the that the unemployment woes in the US and parts of Europe are trivial).

3. Not everyone will find it easy to sell something. Running your own business involves selling substantially more stuff than what a regular person normally could (or would). Unfortunately, generating revenues on such a scale takes a lot more that most of us can give. Before you even think of founding your own enterprise, try selling something--anything--to someone first and see how well it suits you.

4. Anyone who tells you that money is not an issue in founding a business is delusional. Unless you can come up with a Silicon Valley-level business concept to attract venture capital or angel investor funding, your idea won't go anywhere if you can't fund your idea yourself. And no potential partner would be willing to be a part of your venture if you can't even shoulder a portion of the risk by investing your own money. Unfortunately, it would take many of us quite a number of years of working and saving before we raise enough funds for a decent business.

5. As an employee, you're expected to be very good at one specific task and work from 9 to 5; as an entrepreneur you need to do EVERYTHING on your own 24/7. If you think you'll have more free time and a balanced life if you run your own business, you're fooling yourself. Whatever dreams of early retirement and "living the life" you may have would require a lot of effort and hard work first. In other words, if you're predisposed to laziness and half-assed work, entrepreneurship is not for you.

via The New York Times

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