Entrepreneurs have become heroes in America. They have come to symbolize what is right about this country. Increasingly, countries in Europe and Asia are seeking to emulate American models for entrepreneurship.
Entrepreneurs have become heroes in America. They have come to symbolize what is right about this country. Increasingly, countries in Europe and Asia are seeking to emulate American models for entrepreneurship. It is no wonder that you’d like to join their ranks. Here are some of the risks you should think about before launching a business. Your family will thank you.
Most businesses fail
Surely, you’ve heard that before. This honestly means that your business — yes, yours — is more likely to fail than to succeed. You are more likely to put money in than to get money out of your business.
Entrepreneurship is all consuming
Most entrepreneurs find their businesses become the focus of their attention, eating all of their time and energy. Even when entrepreneurs are with their families, their brains are engaged in the problems of the business.
You will have two kinds of friends answer your question, “What do you think of this idea for a business?” One set of friends will say, it sounds great, regardless of what they think, because they are telling you what you want to hear. Another group of friends will say, it will never work and why, even though they likely have no basis on which to make the judgment.
First customers lie
For many businesses, the first customers you find represent a group of people looking for exactly the service you are starting. They may be willing to pay more for the service, and likely require much less marketing than the average customers. There simply may not be enough customers willing to pay the price you need to make money.
Entrepreneurs see opportunity everywhere
An entrepreneur driving across the desert will pass an abandoned gas station and think to himself, “I could make a go of that place.” Most of the time they’re wrong.
Founders don’t always win when their businesses do
Steve Jobs was famously booted from Apple Computer by John Scully, who had been hired as the new CEO. That was not unusual. It was unusual that he was able to make over $100 million before he was booted. What was shockingly unusual was that he was recruited back to the company when it tanked. Many founders are long gone when success finally comes and have no part in it.
Entrepreneurs may divorce more
While no reliable data seems to exist on the topic, anecdotal evidence suggests that entrepreneurs divorce more than others. This may be a result of the financial stress of entrepreneurship, though the problem seems to be as prevalent among successful entrepreneurs as anywhere.
Entrepreneurs are heroes for a reason. In the face of impossible odds, they throw themselves into their work with passion that most of us can’t muster and create jobs and opportunities that benefit countless people. Even when entrepreneurs are fabulously successful, the benefits to the community may exceed the benefit to the founder. Families, however, often pay a price for entrepreneurship. Before you launch a business, engage your spouse and family in a discussion about the risks and costs. Make sure you have their full support before you proceed.
Devin Thorpe, husband, father, author of Your Mark On The World and a popular guest speaker, is a Forbes Contributor. Building on a twenty-five year career in finance and entrepreneurship that included $500 million in completed transactions, he now champions social good full time, seeking to help others succeed in their efforts to make the world a better place.