Is Entrepreneurship Your Calling? Everything You Should Know Beforehand

Many are tempted by the prestige and fame entrepreneurship is associated with. Indeed, successful founders gain multiple benefits, from unlimited wealth to overwhelming glory.

However, there is a lot of risks behind that novice entrepreneurs neglect. Before rushing into the startup journey, it`s crucial to understand whether you actually need this or not. For some, the drawbacks of business undertaking turn out to prevail over its advantages which results in a quick failure. Today we`ll analyze the key pros and cons of entrepreneurship to help you make the right choice.

Entrepreneur Job Overview

To get an accurate picture of what entrepreneurship is like, let`s consider its main advantages and drawbacks.

Advantages

• Experience. Developing a company from the grounds empowers you with a vast expertise in various business areas, from product management to marketing fundamentals. By managing many processes by yourself, you acquire necessary skills and abilities very quickly. In a large corporation, it can take years to get a similar experience.
• Fast development. The main competitive advantage of startups is speed — everything happens much faster than in traditional business. Every day you have to cope with loads of challenges, change strategies, make decisions — just to survive. This is a powerful incentive for the development of not only professional skills, but also personal qualities.
• Career boost. Your success directly affects the success of your startup. A business grows, and so do you. The venture world opens up numerous career prospects and valuable networking opportunities. After all, doing business is prestigious for your personal brand in the future.
• Responsibility. As founders have to take on a lot of duties, they possess much influence. Being responsible for many processes is challenging but yet helps you grow both professionally and personally.
• Freedom. After all, entrepreneurship means independence many people are striving for. You don`t have to obey someone`s orders, but set game rules yourself. This provide a lot of space for creativity — you can generate ideas and implement them in the way you like without asking for someone`s permission.

Drawbacks

Apart from numerous benefits, being an entrepreneurs suggests many challenges you have to constantly cope with to stay afloat. Let us list the major ones.

• High failure risks. The cold statistics shows that only 10% of entrepreneurs achieve success, while the rest is bound to fail in a year after launch. If your product is not needed on the market or you fail to grow quickly, you risk losing a lot of time and money. This is how the venture market grows: you have a little chance to succeed, but if you do, you can hit the jackpot.
• Uncertainty. A life full of adventures has a downside. Frequently, you don`t have any idea whether your project will take off or not. Many founders can`t resist working under the conditions of a constant pressure and uncertainty. It means you have to be mentally prepared for vague prospects. Here mature companies have an advantage.
• Unfixed working hours. Working 8 hours 5 days a week is not about startups. At early stages, founders have to live for their business and stay up all night developing new strategies or analyzing the market. In addition, until you hire good managers and executives, you will have take on their responsibilities.
• Chaos. A small team cannot cope with the entire flow of cases and questions, so mayhem at early stages is inevitable. How big it will be depends on the efforts and competence of the founders, and the entire team. For some, the struggle with the managerial mess only makes the stronger, but others fall short.
• Emotional burnout. The lack of a schedule, constant emotional and informational overload, high risks, overwhelming responsibility may result in emotional burnout. Therefore, you should be stress-resistant to overcome a lot of problems on a regular basis.

Startup Risks

If you haven`t been scared by the challenges above and still want to be an entrepreneur, let us walk you through the risks you will have to encounter.

Market risks

The market environment is constantly changing being filled with new players, products, and trends. All these might affect the demand for the product you`re developing. Therefore, entrepreneurs have to act quickly until the customers` needs or market tendencies change dramatically.

Product risks

To reach demand, your product has to meet customers` needs and wants as accurately as possible. However, you can`t always know for sure what your target audience really wants. Sometimes entrepreneurs come up with the solutions that were relevant at the development stage but end up needless by launch. To minimize these risks, you should build a long-term strategy and forecast consumers` behaviour correctly.

Team risks

In the early stages, a startup is very dependent on the founders and the team. Each member is crucial as the desired result is compounded of joint efforts. Make sure you hire brilliant specialists, particularly, for the strategically important tasks like product management and market analytics.

Financial risks

The main pain of any founder is fundraising. Many startuppers end up broke because of not finding an investor or alternative ways to get the project funded. Here it`s essential to build a strong business model and plan. The former refers to the way your company will generate income and the latter stands for particular actions you need to achieve it.

To optimize risks, address financial analysts for professional help. In addition, take advantage of such tools as unit economics and ROI.

Operational risks

They include possible problems with the startup equipment and technical aspect. Sometimes the product fails due to the poor website or app malfunctioning. It`s necessary to make sure everything works seamlessly so nothing prevents customers from enjoying your product/service.

Legal risks

Frequently, founders don`t the legislation of their country which may lead to serious troubles. Are there any prerequisites for the startup's business to be banned or severely hampered? For example, if all consent to the processing of personal data will need to be obtained in writing, the startup's conversion rate may decrease. Get acquainted with the law that regulates entrepreneurship in your region to avoid problems in the future.

Tax risks

It is important to understand what the chances are that taxation may change, and how this will affect the business. Learn what taxes and in what amount you need to pay, where you need to be a tax agent to prevent any problems with the law or your budget.

Conclusion

The aim of this article is not to make you change your mind if you`ve decided to be an entrepreneur. We want to inform you on all the risks and challenges so you know what to be ready for in advance. Sometimes people get blinded by the success and money startups are associated with. As a result, they make hasty decisions and get disappointed by the harsh reality.

Our mission is to enable you to make smart choices so you find your calling and enjoy what`re doing. Weigh all the advantages and disadvantages we`ve listed and if your commitment prevails over the risks, probably, that`s what you should devote your life to.