“Being your own boss” has a particular charm for office workers who can’t wait to get out and be the next Mark Zuckerberg or the guy behind Mang Inasal, Edgar Sia II.
But too many new entrepreneurs start a business without knowing the real score about debt, quality of life, and making mistakes; these things look very different from an entrepreneur’s office than they do from an employee’s cubicle. Here’s a short reality check.
Time: You’ll probably be working more, not less. But you may be enjoying the experience more.
When starting your own business, nine-to-five literally ceases to exist. As your own boss, you will be “in charge” even during your downtime, and even downtime will start to look pretty slim. You’ll be worrying about your business before going to bed, thinking about what you’ll need to do the moment you get up.
But if you’re in business for the right reasons, none of this will matter: you’re likely to work harder than you ever did when you were an employee. And surprisingly, it’s not always the profit motive that gets you going, as INSEAD Assistant Professor of Entrepreneurship Hongwei Xu found out in a study of 60,000 subjects from Stanford University.
“Non-pecuniary motivations are more important than monetary motivations for people to start a new business,” Professor Xu told the INSEAD Knowledge publication. “One is autonomy: People want to be their own boss. The other is identity fulfillment, which is more about people having a vision about a product or a service.”
Debt: Borrowing money is not always a bad thing, but it’s tricky to manage correctly.
Getting into debt is sometimes unavoidable; necessary working capital won’t always be available when you need it, and a loan or a line of credit can help tide you over when things get tight.
“All debt is not bad; what is bad is the way it is structured, the way it is contained,” explains entrepreneur and motivational speaker Nozier Bucha. “The key is to develop a structure in your business where you borrow what you need and only what you really need, and feel less threatened by it.”
Entrepreneur and personal finance blogger Fitz Villafuerte suggests that certain types of debt are actually good. “When we talk about good debt, you’re borrowing so you can earn more,” Fitz explains, using the example of taking a loan to buy new computers for an Internet cafe. “I can use my cash instead on marketing and advertising my computer shop so I can earn more. That’s where it becomes good debt—you’re leveraging your money so you earn more than the interest that you’re going to pay.”
Responsibility: Being your own boss also means being more responsible for your mistakes.
Perhaps the hardest thing to face about making mistakes in your business—more than the loss of profits and the trouble of having to correct your errors—is owning up to them. As the boss of your own enterprise, the buck stops with you. “Strong leaders own their mistakes,” explains Nanci Raphael, author of The Entrepreneur's Guide to Mastering the Inner World of Business (Greenwood). “They don't take on a victim's role of making up excuses.”
If the mistake isn’t a fatal one for your business, then it has value as a learning experience you can leverage for your enterprise’s further growth. “The beauty of making a mistake is that we can learn and grow from it. You have the opportunity to do it differently next time,” says Raphael, contrasting an acceptance of mistakes versus the natural tendency to find blame elsewhere. “There is no learning that can happen when you're a victim because you are dodging what you did. And growth and progress are stunted.”
If the idea of making mistakes scares you, maybe you should reconsider. “People who are afraid of failing shouldn’t become entrepreneurs,” says Martin Zwilling, founder and CEO of small-business provider Startup Professionals. “A degree of failure should be expected—and, in my opinion, worn like a badge of honor. It would stand for bravery—or at least mark the psychological feat of overcoming your fears.”