Most of us want to be entrepreneurs because we want to be our own bosses. We want the freedom to work according to our schedule and earn money in our sleep.
However, entrepreneurship is not easy, it’s full of challenges and barriers that need to be overcome and sacrifices that need to be made. In this post, we will discuss 5 main disadvantages of entrepreneurship so you are aware of what you are signing up for.
Disadvantages of Entrepreneurship
1. Financial Uncertainty and Risk
When you decide to start your own business, you will likely have to invest your own money into the business to get it running. Despite your best efforts, there is no guarantee of success and all the money, time, and effort you pour into the business can go in vain.
Apart from that, you can have days with sales through the roof and days with no orders or clients at all. The profits from those good days have to be reinvested back into your business to make up for those bad days and grow your business.
What do you do then?
However, there is a solution to this. Many people think they will have to quit their current job to start their business, but the truth is you don’t. You can use your free time, the weekends to start a side hustle that can be turned into a profitable business. You grow your business slowly and when it generates to replace your job, you quit your job and invest all of your time into scaling the business.
2. Work-Life Balance Struggles
Work-life balance is not really a thing for entrepreneurs, at least not until your business generates a stable income.
As an employee, when it’s time to clock out you can go home, play games, watch Netflix, or enjoy family time and stop thinking about work. If you want to travel, you can quit your job, go on vacation for months, and start looking for another one when return, but unlikely to happen for business owners.
Your work becomes a part of your life and there will be no boundaries. You may have to work while having your meals, or parties because you don’t want to miss out (or say no to parties), or texting with your partners to discuss business matters or with your clients while you are at the cinema with your partner. Even when you are resting, you may still be thinking about your business, how to improve marketing, how to train your employees, and more. It will be difficult to draw a line between work and life.
The struggle of having a work-life balance is inevitable. In the early stages of your business, you have to be willing to sacrifice your personal life in order to succeed. You may miss your son’s basketball game or cancel a family dinner that was 2 months ago. But all of these are to provide a better future for you and your family.
Once you hire a competent team, delegate your tasks to them, and automate your systeem, you will able to separate work from your personal life. But until then, know that you will be working all the time.
3. High Levels of Stress and Pressure
The level of stress and pressure an entrepreneur has to deal with is enormous. Apart from working long hours every day without holidays, you are responsible for everything in your business, such as compliance with the law, ensuring timely product and service, delivery, hiring employees, identifying and mitigating potential risks, and even mistakes your employees make.
Furthermore, you are the one who makes all the important decisions that can make or break your business. Having the capabilities to make wise and quick is essentialin entrepreneurship. Many entrepreneurs are forced to make prompt decisions without enough information and time to consider all the risks associated, which puts tremendous mental stress on them.
Another thing in business that can lead to enormous stress is unpredictability, you will go through emotional rollercoasters that keep you awake at night. One day, you’re on top of the world because you landed a big client. The next day, that client ghosts you, your employee quits, your website is down and everything just goes wrong.
How to overcome this? Develop a business mindset and be kind to yourself. Mistakes are guaranteed in the entrepreneurship world, we all make mistakes what’s important is we learn from our mistakes and never give up.
Allow yourself to make mistakes and never think that it will be over, people fail because they give up not because of the mistakes they make. Failing a business doesn’t mean that your entrepreneurial journey is over, there are other paths to success.
When things get a little bit overwhelming and you feel like you can’t breathe, take a break. Do something you enjoy, whether it’s watching a movie or listening to the music you love, and come back stronger every time.
4. It Can Be Lonely
The journey of entrepreneurship can be lonely sometimes. When you’re an entrepreneur, especially in the early days, it’s often just you, your laptop, and the deafening sound of silence. You may be stuck in your room for days without meeting anyone. You will stop going to social events, say no to your friends, and drift apart from them.
Even when you hire a team, it’s all about work and you are unlikely to be friends with them, because most people don’t want to be friends with their boss.
However, Isolation and loneliness are not all bad, they teach you how to be strong and be your own amuser. It also gives you a chance to make new friends who share the same passion as you.
By attending entrepreneurs’ social events, you can make friends and expand your network. These connections not only provide support and guidance during your most difficult times but can also provide valuable insights and knowledge that take your business to the next level.
5. Legal and Regulatory Complexities
Understanding the law and regulations is crucial in business. It protects your business from common pitfalls such as losing your customers, costly fines, business suspension, which all can be detrimental to your business.
When I began my entrepreneurial journey, it was overwhelming and I was afraid that I would break the law and end up in court. Registering a business name, paying taxes, and ensuring I wasn’t infringing on other people’s patents or trademarks.
Some laws and regulations are obscure and difficult to anticipate, and it will be impossible to know all of them. But here is what you can do:
- Perform thorough research and know the laws and regulations related to your business to the best of your ability
- Hire an attorney who specializes in your industry
- Find a mentor for advice and support
- Hire qualified professionals such as accountants to ensure stay in compliance with legal requirements (e.g. taxes)
Laws and regulations are subject to frequent changes, therefore it’s impossible to keep up without hiring professionals.
Conclusion
Entrepreneurship is not without its own disadvantages and in order to be successful, you have to make sacrifices. But know this, the sacrifices you make today are going to be worth it in the future.
“You will come to know that what appears today to be a sacrifice will prove instead to be the greatest investment that you will ever make.”
— Gordon B. Hinckley
Read this post to learn the benefits of having an online business.
Want to start your own online business but don’t know where to begin? Check out our free guide on “How to Start An Online Business”. This guide gives you a step-by-step roadmap, guiding you from brainstorming ideas to choosing the right business model, all the way to launching your business.
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