Entrepreneurship is the act of starting and running a business. And all businesses, from neighborhood coffee shops to multinational corporations, have one thing in common—an entrepreneur started them.
Starting a business has the potential to provide financial independence, flexibility, creativity, job security, and personal growth. But entrepreneurship also comes with financial risk, a significant time commitment, a lack of employer benefits, and perhaps years of uncertainty. In fact, nearly half of all new businesses fail within the first five years, and as few as 25% survive as long as fifteen years.
So, given the odds of success, why do some people choose to start a business? Many people believe that entrepreneurs are born—that the ability to run a business successfully is just something in one's DNA.
But that's just not the case.
While it's true there are personal qualities that may help people succeed as an entrepreneur, there's more to it than simply being a "go-getter" or having a "vision" for success. Being a successful entrepreneur requires the ability to evaluate market conditions, make a solid plan, overcome obstacles, and simply persist long enough to find success.
How can you determine if entrepreneurship is right for you?
What’s Your Risk Tolerance?
There is no getting around it: starting a new business venture requires risk. First, it takes time to consider all the options and to create a solid plan. If you're excited about a business opportunity, it may not seem like work at all. Nevertheless, the time you spend planning a venture could be spent doing something else.
Then there's financial risk. Dedicating yourself full-time to a new business means it's difficult to have a regular job and enjoy the income & benefits it may bring. In addition, many businesses require some kind of investment to get started. From legal expenses incorporating a business or obtaining any required licenses to buying equipment or leasing a storefront, money is required. Some entrepreneurs fund a new business with savings, but others take out loans to get started—loans that are typically secured with their personal property.
Some people have no problem tolerating this sort of risk. But if you're someone who experiences anxiety at the thought of professional and financial risk (or if you simply can't afford to go without income when getting started), full-time entrepreneurship might not be for you. Another option is to start very small by running a side business in your spare time as proof of concept. Depending on the type of business that interests you, starting small can serve as a proof of concept that can minimize risk.
Are You Happy Working for Someone Else?Some people are perfectly content spending their time working for a corporation. In many cases, a job offers a secure paycheck, benefits such as healthcare and retirement, plus the comradery of working with others. For the right person in the right company, a "regular job" is a proven pathway to personal and professional success.
On the other hand, other people may find it challenging to find a job they enjoy. Or they may want the ability to assume more responsibility and reap the rewards that come directly from their individual contribution.
If working for someone else leaves you unsatisfied—and you're intrigued by the thought of being the animating force of your own venture—entrepreneurship might be a good fit.
Is There Something You're Deeply Passionate About?Considering the obstacles and uncertainty of starting almost any business, having a business idea you're passionate about can really help. If you genuinely believe that what you could offer is better than the alternatives, deeply felt passion could even be a competitive advantage.
Passion, however, doesn't always make a great business. For example, you may love flower arranging and be super talented, but what if there are ten other florists in your area? How would you earn the business of hundreds of people who already have a relationship with a florist? It's one thing to be passionate about arranging flowers, but the ability to communicate that passion to others through marketing is where someone finds success.
What’s Next?An interest in starting a business is great, but nothing tells the true tale like real-world experience. If you're still on the fence about entrepreneurship, consider the following steps:
Entrepreneurship isn't for everyone. It requires hard work, tolerance for risk, and a willingness to take the lead on every aspect of a business. By closely examining your personality and lifestyle preference, you can make an informed decision as to whether entrepreneurship may be for you.