Entrepreneurship is a high-risk/high-reward venture. In today’s world, more and more individuals are shedding conventional wisdom about securing the 9-to-5 and going out there to chase their dreams. People like Elon Musk and Mark Zuckerberg are revered around the world. Few actually manage to succeed, though: as many as nine out of 10 new enterprises fail.
Many people romanticise entrepreneurship and underestimate the sheer amount of effort that goes into building a business from scratch. Entrepreneurial hero-worship is a problem: calling an entrepreneur a genius is, in a very real way, a grave insult to the hard work and dedication they’ve put in. There are a lot of misconceptions people have about entrepreneurship.
Reality is often far from expectations. Let’s see how:
“I will be in control of my things. I will have more time for those vacations I have been postponing. I will have more cash at hand and, of course, nobody can say a word to me since I’m my own boss.”
You will be working harder than you have ever worked in your life. Everything you own belongs to the company now. For the first several months or even years, your business won’t generate significant revenue and you will have to live on the edge. Your personal life, relationships, health, and finances will all be hit hard. And the customer, your boss, will rarely be polite, reasonable, or even pay on time.
However, always remember that your business is an idea that’s worth fighting. You’re in for a world of pain, but buckle up and face the challenges head-on to achieve success.
“Everything will work out smoothly. Investors, friends, and family will love it. Customers will shower me with millions of dollars.”
A good business idea is only worthwhile when executed properly. Execution is the difference between success and failure, and it is the number one hurdle most new entrepreneurs fail to overcome. You need to have a solid game plan to accommodate every possible contingency: how do you approach investors? How do you market your product? How and where do you source supplies? How do you find the right team? How do you deal with government compliance?
You will have to find viable answers for thousands of questions like these ones. And even when you have a good plan, things might not actually go according to it.
There is a significant element of chance. You need to be prepared and you need to have backup plans (and backups for your backups!) to ensure resiliency.
“The investors love me! They’re my pals: they believe in my idea; we hang out together and it’s going to be an easy ride.”
Any relationship involving money is inherently fragile. It’s important to develop a strong relationship with your investors, but it needs to be based on trust and your ability to deliver. While a great elevator pitch might be enough to secure your first round of funding, remember that investors are investing their money with an eye on the returns.
Building long-term investor confidence means building and executing a business plan that actually succeeds.
“I have the best idea. My product is going to take the world by storm.”
Your product is not the world. Every business involves so many interconnections and relationships that go far beyond your product. Even if your product is a game-changer, you’ll need to account for all of these factors if you truly expect it to succeed.
You need to hire the right people to build an ideal core team. You need to ensure reliable relationships with both suppliers and retailers. You need to build promotional campaigns that are data-driven and based on consumer insights.
Engage with other stakeholders like interest groups and the government and build strong relationships. And while doing all of this, you need to balance your finances and ensure you have the operating capital to keep things working on the ground. Even giants like WeWork have gone bust due to maladministration.
At the end of the day, success doesn’t come easy, and it isn’t assured either. Still, if you have the grit and you’re willing to put your future on the line, entrepreneurship offers rewards unlike any other career path. Become an entrepreneur if it’s the right path for you, but be aware that the reality might not match your preexisting ideas.
(Edited by Evelyn Ratnakumar)
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)