Being an entrepreneur is not all sunshine, rainbows and big piles of cash.
When you decide to start a new business, there are long hours, sleepless nights, financial risks, distractions, and customer and client expectations.
In this series of articles, we’ll focus on the pros and cons of being an entrepreneur, focusing here on the cons of your entrepreneurial journey.
The cons of being an entrepreneur can be extensive and are in no way exhausted by this list (sorry, that’s the truth).
But, to all problems, there is a solution, right? So let us review our top 10 cons that many entrepreneurs have to deal with and see what antidotes there are.
Buckle up. The seatbelt sign is on.
#1: Long working hours
When starting a business, you’ll need to invest significant time into your business to ensure it succeeds.
You’ll likely have to work long hours, which can mean sacrificing time with family and friends or your interests. Want to go out this weekend? Sorry, that might have to wait… till next year.
This can be especially tough for entrepreneurs juggling a full-time job, family obligations and other commitments.
Outsource. As soon as you can financially do so, stop doing menial tasks like accounting or even the work itself.
For example, if you are a designer by trade, outsourcing some work is the only way to grow your business and survive the long hours.
#2: Financial risk
A business is not guaranteed profitable, so you may lose your invested money.
In fact, you might lose even more than your investment if you are found to be a negligent director!
Startups can be surprisingly expensive. Accountants fees, Software as a Service like an email, domains, hosting, websites and more can rack up monthly expenses.
Do you have enough money to build the product or service you want to share with the world?
What if something goes wrong, or you’ve missed an important detail?
Do your financial research. It’s important to thoroughly analyse the venture you are considering and calculate its potential return on investment before taking the plunge. Consider what you are selling and what is the real profit margin.
You should also try to get funding from investors or other sources to reduce the risk of putting too much of your own money, savings and kids’ college funds into your venture.
Predicting a venture’s success and when a business takes off can be difficult.
You’re responsible for everything, and success is not guaranteed; you may lose everything if the company fails.
There is no exact science to being an entrepreneur and building a new business. Did you know that in the UK, it’s been reported that almost 60% of small businesses fail in their first three years of life? Source: https://www.beauhurst.com/blog/startup-fail-scale-exit/
Do your market research again. Before investing in a venture, make sure to do thorough market research. This will help you solidify the business model and strategy before launching.
Additionally, always have an emergency fund saved up if things don’t work out as planned.
#4: Need for diverse skills
You need to have knowledge of multiple aspects of running a business, from marketing and accounting to sales, legal issues, and more, or you will put yourself at a disadvantage.
The expectations of an entrepreneur to be everything to the business are insane and, frankly, unrealistic.
You didn’t get into being your own boss to learn how to do bookkeeping, right?
Hire help. You should strive to find and hire team members to fill in the gaps in your skill set. This way, you can maximise efficiency and ensure no critical tasks are left unfinished.
#5: Stressful environment
Entrepreneurship is high-pressure and often fraught with difficult decisions and challenges. You will experience highs and lows, moments of joy and despair.
You are responsible for everything – the success or failure of the business, its reputation, financials, employee satisfaction, and so much more. Yep, being an entrepreneur is a lot to manage!
Find balance in your life. Make sure to take regular breaks from work.
Spend time with your family, friends and loved ones. Exercise regularly to stay healthy and clear your head.
Maybe take a vacation. It’s not all 100% entrepreneur mode all the time.
Ensure you’re getting enough sleep and eating correctly as well – these are essential for staying focused and motivated in the long run.
All these will help reduce stress levels so you can make better decisions, perform better, and have more fun.
#6: Lack of job security
If a business fails, there is no job safety net like there is with traditional employment. You may have to start over and look for other work.
It can be a chilling reality when you realise you are responsible for your regular paycheck, and your passion might not pay the bills.
That’s the cold hard reality of being your own boss.
Have a backup plan. It’s important to have a contingency plan in case the venture fails. Have multiple income streams, build up savings, or consider taking out insurance that can help protect your finances in an emergency.
Consider taking a part-time job or freelancing on the side until the business is more established.
Or even staying employed if your current employer will allow you to work on your own business (do check this one – some contracts can be harsh).
This way, you will have some income coming in, and you won’t have to worry about being unable to pay your bills.
#7 Difficulties finding funding
It can be hard to secure sufficient capital to operate a business unless you have strong contacts in the finance industry or access to other resources.
Banks aren’t keen on funding startups anymore, and taking loans or credit card debt to pay for your venture could lead to financial ruin outside of your business.
Research the different sources of funding. Still, discuss options with banks, venture capitalists, and angel investors. You may also want to look into crowdfunding or getting a loan from family and friends.
Do some networking – join local business groups online or in your community, attend meetups relevant to your industry – you never know who you might meet who has investment capital to burn.
#8: Increased competition
In today’s market, increasing numbers of startups with innovative ideas compete for customers and attention.
If you’ve got a good idea, it’s guaranteed someone else would like a slice of that cake. Expect copycats and idea thieves.
Get creative and focus on areas of your business where you can differentiate yourself from the competition. Every market has competition, and every market has idea copycats.
If someone copies your idea, that means you’re onto something good, and you should push harder to the market. But remember: they haven’t done all your hard work; they’ve just seen the end result.
Stay agile to pivot quickly in response to market conditions or customer demands.
#9: Time-consuming tasks
From managing staff, attending meetings, handling customer complaints and resolving disputes, the daily duties of entrepreneurs require an investment of time and energy that can be exhausting.
There is always another fire to put out.
We’ve laboured this point now three times: delegation is key. Leverage your team and outsource work wherever possible.
Hire professionals to handle tasks like accounting, bookkeeping, customer service and marketing that you don’t have the time or skillset to do yourself.
Also, use technology to automate customer onboarding, payment processing and marketing processes.
#10: Difficulties scaling up
Growing a business requires new skill sets, which many entrepreneurs lack or do not have the resources to acquire quickly enough to stay ahead of their competitors.
As soon as you start your own business and build your idea, you’ll realise you don’t know everything about business.
Suddenly, there is a need for marketing, accounting and customer service expertise.
Get proper training and education. Take courses or attend seminars designed for entrepreneurs to learn how to build a better business.
You can also look for mentors who have already been successful in your industry, as they can provide valuable insights and advice that could help you scale up faster.
Additionally, create strategic partnerships with other businesses that can support you in a time of need, such as technical experts.
Are you ready to battle through the downsides of being an entrepreneur?
Entrepreneurship has many advantages and disadvantages, and we have covered only some of the disadvantages of being an entrepreneur in this article.
The world of entrepreneurship isn’t for everyone.
But if you’ve always said you could do more in your life, becoming a business owner and self-employed might just be the test you’ve been looking for.
Good luck, fellow entrepreneur.