Entrepreneurship and owning a business can be wonderful, however the myths attached to the entrepreneurial lifestyle and business ownership are steeped in misconceptions.
Owning a business is a licence to print money! I just shake my head when I hear people who work in government, healthcare, or industry and don’t have to worry about where their next paycheck comes from, tell me that people who own businesses have it easy and have a licence to print money. These people have no idea that the 60% of business owners either lose money or are making a marginal income. In other words most business owners would be financially better off if they got a real job that had regular pay, benefits and a retirement plan. Yes, owning a business can be profitable, and can lead to financial freedom, but the risk and the costs are many.
Doing What You Love can Make You a Lot of Money: I honestly believe that you should be doing what you love, however this doesn’t always translate into making money. Recently I was approached by a small business owner who loved what she does, serving her customers and building relationships, however the business isn’t making money. The financial reality is that in order to continue doing what you really love you need to find a way to make the business transaction profitable. In other words you need to create enough money to enable you to continue to have a viable business. Without profits it is impossible to pay yourself, your staff and to survive. Most entrepreneurs get into business because they are passionate about what they do, they think if they love what they do, others will love it and exchange that love for money. The reality is that most businesses fail. Yes, do what you love by all means but make sure you can figure out how you are going to put food on the table.
Owning a business means you don’t have to worry about a boss! Working in a company where you have someone keeping you accountable can be difficult if you believe that you should be able to work without constraints. When you own your own business you don’t have a boss, you have many bosses. You are required to be accountable to your customers, partners, your suppliers, your employees, and the government. Imagine the stress of being held to task by bankers who want to know where their money is, or staff who want you to be at their beck and call to help them solve the latest drama in the business. I know many business owners who would gladly trade the tension of dealing with the demands of the business for a boss that paid them regularly and left them to go home at the end of day without the worries and financial burdens of owning a business.
Owning a business enables you to write off many of your expenses: It is true that owning a business can have some financial benefits that working for others might not. There are some expenses that can be written off, like office space, some transportation costs, and even some communication costs, however taxation laws require that these write offs be legitimate business expenses. Fraudulent write offs can be costly for entrepreneurs when they are audited. The reality is that in order to be able to write off business expenses you need to have business income. Building a business that has substantial income to enable one to write off business expenses takes considerable time and effort, much more so than going out and getting a job in most cases.
Owning your business will make you happy! If you are not happy with your life before you start your business, chances are that you will be less happy when you own a business. The relationship between business ownership, making more money and happiness is tentative. The stress, lack of work life balance and financial uncertainty of owning a business often leads to relationship failure and home lives that are less than fantastic. Happiness and business can mix but happiness must be intrinsic to the life of the entrepreneur irrespective of the business.
As a serial entrepreneur, I want to tell you that you can have happiness, freedom and money, through business ownership, however there is considerable time, energy, effort and investment that are required to even have a chance at being successful. As a successful entrepreneur and multimillionaire recently told me, being in the right place at the right time had as much to play in his success as did his energy and effort. Ultimately he realized that his happiness was not dependent on his business and financial success and sold out to pursue other passions. The myths and misconceptions of business ownership are many, yet for those who are able, strong and lucky, the rewards can be plentiful.
Dave Fuller, MBA, is an Award Winning Business Coach and the author of the books “Profit Yourself Healthy” and “Pivotal Performance”. Ready to take your business to mythical heights? Email dave@pivotleader.com