The Downside Of Being An Entrepreneur

So many books hold being your own boss or running your own business out as the holy grail that I sometimes think it can be misleading. Because I have stressed the role that side incomes can play in scalable financial magic, and because I now work for myself, I worry about over-idealizing the entrepreneur as the only path to wealth and stability.

Don’t get me wrong, I love working for myself. When I get to start a work day by jumping in the ocean, then heading back to my backyard and doing consults or writing under a beach umbrella it feels awesome. When money comes in from putting something new into the world that I loved making and think is really great, there is nothing better.

But it is not for everyone. There is a serious downside.

As more and more books seem to be pushing people into self-employment as the key to freedom and wealth, and as the economy makes regular jobs harder to come by and hold, I think that there are some things that people may overlook:

  • Regular salary is a thing of the past. Every penny you make is directly tied to something you did. Have a bad week and that reflects itself in your bottom line. There are also fluctuations on your customer side as well. Some weeks will not be as busy as others. Screwing around or losing focus has a very real cost.
  • You are never not at work, especially if you work from home. It bleeds into everything. You try to separate time, but when you know that responding to something “real quick” on a Sunday afternoon can mean an extra $500, it feels idiotic to chance it and wait till Monday. The advent of smartphones makes this even worse and enables you to check in on everything at any time. I just recently disabled my notifications to stop myself from doing this.
  • Because you are maybe doing something you love and maybe work from home people sometimes do not see you as actually working. Whether its the wife asking for things to be done while I am working, because I am after all at home, or family thinking I can just be called upon to do whatever whenever, sometimes people act like I sit on the couch and play video games all day. I am in fact far busier and working every minute of my work day than I ever was in a wage job.
  • Your identity is hard to separate from your work. Especially if you are doing something you love. As Jay-Z said “I’m not a businessman, I’m a business, man. ”
    Failures in business feel like personal failures and thus you work and work. Criticisms of your work feel like personal criticisms. There is a deep psychological cost to this that is just now starting to be discussed.
  • There is a haunting fear that at any moment the jig will be up. Some call it Entrepreneurial Terror. It is a fear of failure that almost everyone I know who works for themselves share. I know that I can have a week where I double my sales goals, but if that Sunday – a day I don’t even work – comes and goes without e-mails asking about the course or money appearing in the account I can freak out if I don’t catch myself. Thankfully I know meditation, and other entrepreneurs are borrowing techniques from Buddhism to  special forces training to combat it.
  • You risk turning a great passion into a bad job. Some people simply do not like what money does to something that they love. You may love doing readings and magic, but hate doing it professionally. It happens.

Please don’t read me as saying that you should not start your own business. For me, the rewards FAR outweigh the risks and I have never been a very good employee anyway. It is not a path for everyone though. It takes drive and sacrifice and a willingness to take risks.

Of course, in today’s economy the risks of getting downsized from your steady job are actually running as high as the risks of entrepreneurship. You are not likely to fire yourself after all. But anyone who does take the plunge into working for themselves should know that beyond the hype that they read in the books, there is a cost that not everyone talks about.

About Inominandum

Author. Sorcerer. Consultant. I have 30 plus years of experience making magic a reality for myself, my clients, and my students. For a complete background go to www.strategicsorcery.net
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13 Responses to The Downside Of Being An Entrepreneur

  1. Pingback: On being an entrepreneur… | The Ideosphere

  2. Reject Dogma says:

    Yeah, so, I threw in my unsolicited comments again. Kind of a downer, I know.

  3. Inominandum says:

    Not at all. This is great. It IS wonderful being an entrepreneur and I find no fault with your post. It is simply that some people are not suited to it and many books and articles pretend there is just no downside.

    I love Tim Ferris, but if anyone thinks that even Tim really works a Four Hour Week is in for a rude awakening..

    • Reject Dogma says:

      I love it too. But sometimes I kick myself for running a series of businesses at stuff I was good at over more than a decade before I finally addressed my lack of education.

      An MBA makes more sense in your late 20’s than early 40’s. Hopefully someone that needs to hear this will key into what I’m saying…

    • Well, for starters, I know for a first-hand fact that Tim Ferriss does not work 4 hours a week – he actually works about 50-60 hours a week, he just enjoys what he’s doing so much that he doesn’t feel like it’s actually “work” – which is both a good thing and a recipe for burnout. He’s also apparently a really douchey jerk in person which wouldn’t surprise me given his marketing and audience targeting. Anyways.

      I dig this post – because it’s true, although Reject Dogma made some excellent points, too. Thank you gentlemen for giving me afternoon reading material 😛 But I think adopting (or trying to adopt) some of the skills and thought processes that go along with being a successful entrepreneur has a lot of benefit for both magic and for being a regular employee in general, especially given the shifting economy. Body of Work by Pamela Slim discusses how to cohesively tie together the things you’ve accomplished (regardless of area of life, field, etc.) and use those threads to package (and repackage) your personal or business brand, which is something that is infinitely useful to employed people as well as entrepreneurs (hell, even magicians.)

  4. Sarow says:

    One more thing. I noticed when people think you own a business, they think you got cash (when you dont) and quickly become fair weather friends.

  5. Anonymous says:

    There’s another downside to entrepreneurship that people don’t seem to consider — when you work for yourself you wear *all* the hats (at least for a while) whether it’s something you’re good at/skilled at/enjoy or not. That means being everything from your own accountant to your own maintenance person. Of course as your business grows you can afford to pay other people to do things you don’t like or aren’t good at or don’t have time for but you have to have enough success to get to that point first and until they you’re *it*. Also if your business continues to grow and you take on staff you then have to manage them.

    I know of a lot of visionary, genuinely talented and hard working people who are very good at what they do, but they are *not* suited to running all aspects of a business or managing employees. Being a successful entrepreneur requires the self-knowledge to know where your skills lie, to learn additional skills quickly and comprehensively, and to leverage the resources to plug the gaps. It’s no where near as easy as the popular books make it out to be.

  6. Lacerti says:

    Recommended book: The Cashflow Quadrant by Robert Kiyosaki. In it the author describes the four ways to create income. He draws a cross and places E in the top left for Employee, S in the bottom left for Self-employed, B in the top right for Business and I in the bottom left for Investor.
    E ¦ B
    —–
    S ¦ I

    The biggest difference is between the left side (E and S) where income is created by trading time for money and the right side (B and I) where systems and money are leveraged (what you call scalability). He states that there’s nothing wrong with being in any of the quadrants but it’s important to realize that each one holds different values and sacrifices or risks different factors to uphold them. None of the quadrants are really easier than the others but the results vary. After all, the right side is not limited by your personal efforts. BTW, if the income from your business stops when you do, your an S. If you can leave for a year and your business still increases, you’ve mastered the B quadrant. Think food truck vs MacDonald’s.

    I also heard a speech of his where he said that anyone not involved in the I quadrant at any level is essentially committing financial suicide because it’s the only way your net worth can compensate for the devaluing dollar over time.

  7. Ngawang says:

    Entrepreneurial terror is a very accurate way of putting it. I know that when a few days go by without getting paper orders, I start to freak out.

  8. Your last bullet point: that was me at the tail end of making my living as a DJ. A totally worthwhile experience for several years that needed to be turned back into a “mere” hobby lest I start taking hostages. That, I believe, was shortly before we met, dovetailing with my transition into the first tech bubble.

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