Setting your own schedule. Working from anywhere. Pursuing your dreams. Becoming an entrepreneur can set you up for a thriving, successful, and fulfilling professional life. But do the benefits of entrepreneurship outweigh the down sides?
If you strive to become your own boss, like 580m+ other entrepreneurs, many perks await you — from greater happiness to higher potential earnings.
Table of contents:
- What are the benefits of entrepreneurship?
- What are the down sides of entrepreneurship?
- Tips for aspiring entrepreneurs
What are the benefits of entrepreneurship?
1. Flexible work schedule
Despite 76% of employees wanting greater flexibility in their roles, major employers — such as Amazon, Disney, and Starbucks — started requiring employees to work in person following temporary remote work. Many fought back against these policies, with some succeeding in getting added flexibility.
But entrepreneurs never have to worry about a CEO taking away their flexibility. They set their schedule from start to finish. For example, they could sleep in and work more at night, or get up earlier and finish in the afternoon.
2. Aligned values
Non-entrepreneurs, such as corporate workers, often sacrifice personal values for the sake of employment. Nearly half of workers reported they may leave their company because of misaligned values. However, entrepreneurs can ensure their company always aligns with their beliefs.
For example, they might feel passionate about saving the oceans via social entrepreneurship or growing a software company that helps small businesses. Regardless of what they care about, they can start a business that integrates their values and beliefs.
3. Improved leadership skills
As baby boomers pass the torch to millennials, they must equip them with solid leadership skills. Unfortunately, over 6 in 10 millennials regard their current leadership development as inadequate.
Entrepreneurs, for their part, improve their leadership skills every single day. They speak and present to stakeholders, such as employees and investors. They provide a guiding role in marketing and branding. They represent the head of their organization, a role that forces them to practice leadership in a way corporate workers often cannot.
4. Greater happiness
Substantial evidence demonstrates that entrepreneurs tend to live happier and healthier lives than their worker counterparts. One Harvard study even found that self-employed women had lower rates of diabetes, low blood pressure, and a decreased risk of obesity, and that those who worked for themselves tended to exercise more.
Though entrepreneurship still induces stress, anxiety, or fatigue, research demonstrates the physical and mental benefits of becoming an entrepreneur.
5. Larger networks
Research shows that entrepreneurs maintain networks twice as large as non-entrepreneurs. Entrepreneurs regularly seek out co-founders, investors, beta testers, employees, mentors, and others.
Having a strong network grants you several benefits, including the ability to:
- Validate business ideas
- Collaborate with others
- Find future employees or partners
6. Retain profits
Entrepreneurs retain whatever money they make through their business. They can then make decisions — increase their own salary, invest in hiring other employees, grow their business, or do whatever else they feel makes sense for them.
Regular workers usually cannot make more money unless they get raises, bonuses, or promotions — all of which are at the mercy of their managers.
7. Potential higher lifetime wealth
In the short term, entrepreneurs may make less than corporate workers. Most of the money will likely get reinvested into the business, leaving them a limited amount for their own salary. However, successful entrepreneurs stand to benefit from a higher earning potential than employees, since they reap the full reward of their company’s growth.
So, while corporate workers benefit from greater stability, high performers cannot match the earnings of a thriving business owner.
8. More learning opportunities
In the early stages of business ownership, entrepreneurs juggle a dozen different roles. They must figure out how to create a product, market it, manage their operations, and more.
While initially overwhelming, the role of an entrepreneur gives you the unique opportunity to learn critical business skills. Regular workers typically stay in their lane — marketers learn about marketing, financial analysts learn about finances, and so on. Only entrepreneurs handle and learn all aspects of running a business.
9. The ability to pursue unconventional ideas
Layoffs have resulted in employees speaking up less and taking fewer risks, per Harvard Business Review research. But taking risks or pursuing unconventional ideas gives people a sense of accomplishment, especially if that idea turns into a successful product or business.
Entrepreneurs can regularly test and validate their ideas, then pursue the successful ones. Corporate workers deal with office politics, which often means playing it safe for the sake of job security — especially during economic downturns.
10. Greater impact
Successful entrepreneurs tend to have a greater impact in their industries and communities. They often bring in game-changing ideas to their markets. They provide employment opportunities.
While entrepreneurs deal with high failure rates, they position themselves to make a greater impact in their roles in the long run.
11. Personal branding
Through their work, many entrepreneurs develop a personal brand — which can set themselves up for success long after they stop running their businesses. They can grow followings on platforms such as LinkedIn. They can then churn out content to establish themselves as industry leaders while promoting their businesses.
What are the down sides of entrepreneurship?
Despite the benefits of entrepreneurship, there are down sides you should consider before pursuing it.
Long hours
Running a business, especially in the early stages, takes up a huge amount of time: 82% of entrepreneurs work more than 40 hours per week — with 19% working over 60. Worse, only 57% of business owners actually take vacations.
Though many employees work long hours, entrepreneurs often take on more strenuous, tasking schedules.
High chance of failure
For every 10 entrepreneurs that make it, 90 fail. A sizable 10% flounder before reaching their second year.
Every worker can encounter failure in their roles. However, running a business means investing hundreds of hours of time and thousands of dollars in an idea — with a high change of failure.
Lower pay
Many founders reduce their pay to ensure the success of their business. One quarter of small-business owners choose to pay themselves nothing. Half of US founders bring in less than $100k, which resembles more of a mid-career salary for many professions.
Entrepreneurs have higher potential earnings, but can get paid much less than corporate workers. This also doesn’t include the more complex nature of insurance and taxes, which entrepreneurs must figure out for themselves.
Greater vulnerability to burnout
Over 6 in 10 entrepreneurs report struggling with burnout, a condition defined by exhaustion, detachment, and stress.
Long hours, higher rates of failure, and uncertainty takes a toll on an entrepreneur’s mental state. And because entrepreneurs tend to have worse work-life balances than non-entrepreneurs, they may struggle to recover from burnout.
Tips for aspiring entrepreneurs
If you want to become an entrepreneur, stack the pros against the cons — but make it personal to you. Consider asking yourself the following questions as starting points:
- Do the main benefits matter to me (e.g., do I care about flexibility)?
- How would these down sides impact my life (e.g., can I manage working long hours)?
- Does my current lifestyle make sense for entrepreneurship (e.g., can I afford to become an entrepreneur)?
You may not care about burnout or working long hours, for example, which may make entrepreneurship a viable career choice for you. On the flip side, entrepreneurship may not make sense for you if you struggle with burnout, networking, or multitasking.
In reality, not every entrepreneur transforms into a wealthy billionaire. Many jump over hundreds of hurdles just to fail in the end. So, if you want to become an entrepreneur, treat it like a career choice — with all of its many benefits and flaws.
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