3 Tradeoff Every First-Time Entrepreneur Needs to Make (and How to Deal With Them)
Owning and running a business can be risky, grueling and downright dreadful. And that’s why we love it.
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One of the most common comments I hear from friends and acquaintances when they ask me about my business is "I'm so jealous you get to work for yourself." While it's meant as an innocent compliment, it unwittingly undermines the level of sacrifice and heavy responsibility that goes into running a business.
I was reminded of this while reading a recent Fortune interview with PepsiCo CEO Indra Nooyi, who is poised to step down from her role atop the iconic food and beverage giant. In the interview, she discussed the sacrifices she's made in her career--and said they were worth it. "I look at my job not as a job but as a calling, as a passion," she said. "I don't care about the hours."
Nooyi's message easily resonates with us as entrepreneurs. Owning your own business is the greatest labor of love there is, particularly in the early years. It also involves incredible devotion and sacrifice. Here are three of the biggest tradeoffs you have to make--and how to deal with them:
Abandoning comfortable surroundings
When I left my job in order to launch my public relations agency, Flackable, I described it as "jumping off a cliff." When you leave your job, you're not just losing a steady paycheck and benefits; you're forfeiting the perceived safety, security and familiarity that comes with working for someone else.
On the flipside, you're taking control and full responsibility for your earnings and career success. While a 9-to-5 feels safe, factors outside of your control like economic shifts, cyclical sales, mergers, restructurings and budget mismanagement can land you a pink slip completely independent of your performance.
You have several options to replace the comfortable surroundings you forfeit when you go independent. Shared office space, for example, can provide you with a sense of community and structured office setting at an affordable price. Enlisting the help of a financial planner can help you budget, save and invest for added financial guidance and security upon leaving W-2 employment.
Working long, sometimes thankless hours
When starting your own company, you have to kiss the idea of a normal 40-hour work week goodbye. A survey from the New York Enterprise Report found that on average, entrepreneurs work twice as much as regular employees. A Gallup poll had similar findings: Approximately 40 percent of small business owners work over 60 hours a week.
For a workaholic like myself, this was one of the easier adjustments. As an employee, I was often the one to turn the office lights on in the morning and among the last to leave each day.
The bigger adjustment was accepting that you're almost never fully off the clock. As Nooyi told Fortune, "There's one constraint we all have, and that's that there are only 24 hours in a day." To maximize your own impact and effectiveness each day--while maintaining your personal health, happiness and sanity--you must understand when to enlist help through technology, outsourcing, hiring and smart delegating.
Wearing multiple hats (including some that don't fit)
In larger organizations, tasks are delegated to specific employees in specialized roles. When you're working for yourself or running a company with just a few employees, you'll be the CEO, CFO, CMO, head of sales and chief bottle washer. This requires extra work on your end to perform these tasks and additional time educating yourself on how to perform them effectively.
When I launched my business, I knew how to perform my service. I knew how to market a business, and I knew how to sell. That was about it.
I had never managed a budget, let alone dealt with invoicing, human resources and the myriad of responsibilities aligned with business ownership. I read articles, watched YouTube videos and talked to other business owners to train myself.
After learning each of those roles, it's important to identify which roles simply aren't the best use of your time. If you're an independent financial advisor, the CFO role likely comes natural to you, but the CMO role could wind up becoming a challenge that takes your focus off of what you do best. Hiring a consultant or an agency to absorb all or part of that role can help you maximize the value you bring without neglecting vital aspects of the business.
It's not going to be easy. We're not "lucky" to work for ourselves; we earn our independence by taking on risks and grueling challenges in pursuit of our dreams.
Still, starting my own business was hands-down the best career decision I've ever made. If you dream of starting your own company, do it. Despite the challenges and sacrifices, you'll look back at the work you've done as a labor of love.