What are rewards and challenges of entrepreneurs?

Answer 1

It happens every day, and probably more frequently now than ever before.

Maybe it follows that groan of despair as the gas tank and the checkbook balance both approach 'E' and its still four days before payday. Perhaps it's a layoff or a pay cut. Maybe it's just a feeling of urgency or uncertainty when a close friend loses a job, or an evening news report of another plant closing.

Whatever triggers it, you decide it's time to break out of the 8-to-5 rat race, quit punching someone else's clock, and "go into business for yourself."

"Look," you explain to your spouse, "the home-based business industry is booming. Did you see those folks on TV? They only work a few hours a day, from home, and they are already debt-free. We can start our own business and eventually quit our jobs."

I've felt your pain … and your enthusiasm. Yes, you CAN do this. But there will be some unexpected challenges, and you will be more likely to succeed if you prepare for them in advance.

The challenges are often not at all what one might expect. The biggest challenge, by far, is the paradigm shift from 'employee' mindset to 'entrepreneur' mindset. This won't happen overnight; nor will it happen automatically. You must self-consciously recondition the way you think.

How DO you think?

This article contrasts two mindsets, that of 'employee' and that of 'entrepreneur.' Bear in mind that the discussion is on the way people think, not what they are doing.

An employee is used to thinking of value in terms of time and effort. For instance, if an employee takes an hour to create a tool or device, he would sell his creation for the value of the hour he spent making it, plus the cost of materials and "a little extra" for profit. If he thinks of himself as worth $25/hour and raw materials cost $10, then $40 would probably be close to his asking price.

An entrepreneur would realize that his device can save someone five hours of work. So the value he perceives for his device is attached to its utility. How long it took him to create it would be irrelevant. An entrepreneur might see the same device as worth $200 if the person using it is able to avoid $250 or $300 of expenses he would otherwise incur.

For an employee, time is money. For an entrepreneur, leverage is money. Employees 'work hard,' and their efforts and rewards are linear. Entrepreneurs 'work smart' and their efforts and rewards are exponential. For instance, an employee makes a widget in an hour, two widgets in two hours, ten in ten hours. An entrepreneur would be more inclined to sell widgets or teach people about widgets, because these activities are scalable. That is, he can teach just one person about a widget in an hour, or in that same hour he could teach a thousand people the same thing. It takes no more effort to teach a thousand people than it does to teach just one. However, with more students comes greater benefit. The entrepreneur understands these economies of scale and takes advantage of them. Employees don't, and may even think that this sort of leverage is, somehow, dishonest or immoral. He might reason that since the effort of the teacher didn't change with the size of the class, the benefit to the teacher shouldn't grow with the number of students.

Employees tend to think win-lose. There's a saying, "Employees work just hard enough to not get fired, and employers pay them just enough to keep them from quitting." An attitude of 'just getting by' is common for someone in the employee mindset, but is unthinkable for the successful entrepreneur. Unfortunately, many budding entrepreneurs are deceived by unrealistic promises and projections, and they may expect their new venture to run on auto-pilot after they get a web site up and run a few ads. Doing as little as possible, and doing as much as possible, are polar opposites. Successful entrepreneurs are always in the latter group.

Employees tend to think of getting, where entrepreneurs tend to think of giving. What are the main concerns that a prospective employee brings to the interview? "How much will you pay me, what are the medical benefits, how much time for vacation?" Entrepreneurs are more focussed on, "What are your needs? How can I help you? How can I help you save money?" Again, these are polar opposite ways of thinking. Entrepreneurs hire employees, not the other way around. And employees get by while entrepreneurs get rich. Which would you rather be?

Finally, employees tend to think short-term, and entrepreneurs think long-term. An employee wants to get paid this week, and an entrepreneur realizes it may be months, or maybe even years, before his business is paying well enough to support him. It's the difference between pumping water and planting seeds. If you start pumping, you will get water quickly, but the flow stops when you stop working. If you plant seeds, you will eventually get fruit. And you will continue to get fruit long after you've planted your last seed.

There are other challenges, to be sure: uncertainty, financial struggles during start-up, long hours, non-supportive spouse or friends, changing markets, etc. But the biggest single reason that entrepreneurs struggle is because they haven't learned to think like entrepreneurs. It's not technique, or the 'opportunity' or the market. It's attitude.

Fortunately, there is no great mystery in overcoming this one major challenge. It's a matter of desire and discipline. Simply find successful entrepreneurs and ask them what books they recommend. Then, turn off your TV and start reading. Saturate your mind with the wisdom of those who have already succeeded. Read about what they have done and how they did it, then model your own efforts after theirs. At the same time, shield yourself as much as possible from the 'employee' mindset. Be aware that your thinking habits are deeply entrenched, and it will take consistent effort over time to change.

The Bible speaks directly to this when it says, "For as he thinketh in his heart, so is he ," and "Keep thy heart with all diligence; for out of it are the issues of life." Many are the testimonies of people who thought success was "out there" - some goal to be reached or thing to be obtained, and then discovered afterward what God has been telling us all along.

In short, if you think like a successful entrepreneur, and work like a successful entrepreneur, you will be a successful entrepreneur. The only person standing in your way is you.