Pros and Cons of a Career as an Entrepreneur
According to the U.S. Small Business Administration (SBA), entrepreneurs are business owners or managers of a corporation, enterprise or small company (www.sba.gov). If you are unsure whether or not to embark in creating your own business check out these pros and cons to help you decide.
| Pros of Being an Entrepreneur |
|---|
| Independence and chance for flexible workdays* |
| Usually direct all business actions for a company* |
| Chance to make your business ideas and vision become reality, with 25% of new businesses operating for 15 years of longer* |
| Help the economy through innovation and employment*** |
| Cons of Being an Entrepreneur |
|---|
| Your business is solely your responsibility* |
| High-level of personal and financial investment* |
| Requires a high level of self-motivation** |
| Business failures will occur, with 7 out of 10 businesses failing in their first year** |
Sources: *U.S. Small Business Administration, **Minority Business Development Agency, ***U.S. Bureau of Labor Statistics.
Job Duties, Salary and Career Info
Defining who is an entrepreneur is tricky, especially if the entrepreneur possesses other professional titles. As the SBA outlines, most entrepreneurs are owners or founders of a company. They help establish a business, usually as a small one, and then work to expand the business in hopes of earning more profits. This typically leads to increased employment of workers. As the U.S. Bureau of Labor Statistics (BLS) states that entrepreneurs are the driving force of a market economy (www.bls.gov).
Specialization and Salary
An entrepreneur usually works as the manager or top executive of his or her company. If the company becomes a corporation, the entrepreneur might become a board member for the corporation along with other individuals. This is more of an organizational difference than responsibility difference. Nevertheless, an entrepreneur tends to maintain influence on the general direction and planning of the company they started.
As a general manager of the company, an entrepreneur has to consider the capital and human resources available when making business decisions. The BLS states that the average annual average salary for a general manager was $117,200 as of May 2014. In corporate settings, an entrepreneur that maintains their managerial and directorial responsibilities is often called a 'chief executive officer' (CEO) and are typically also simultaneously a board member. The annual average salary of such a position was $180,700 in May 2014.
Career Skills and Requirements
Many of the benefits of being a successful entrepreneur come after gaining years of experience. The SBA calculates that there is an annual turnover rate of 10% of new and closing businesses. The SBA also highlights that seven of ten new businesses close in their first two years, while only 25% of all new businesses operate for a span of 15 years. This means most entrepreneurs must be ready to fail, but also to try to start a new business again after failure.
Education
An entrepreneur should be relatively knowledgeable about business administration. The BLS states that most company executives have a bachelor or master's degree in business administration or liberal arts subject. Therefore, an entrepreneur should probably have at least an undergraduate degree.
What Is Looked for in an Entrepreneur
According to the Minority Business Development Agency, a department of the U.S. Department of Commerce, all entrepreneurs need leadership traits, a high level of motivation, a willingness to learn from and make mistakes and a competitive spirit (www.mbda.gov). Because entrepreneurs tend to work for themselves and start their own businesses, there are few job postings seeking entrepreneurs. Job postings for entrepreneurs tend to focus on training aspiring entrepreneurs. Many of the traits recommended by the Minority Business Development Agency are highlighted in job postings found in May 2012:
- A New York firm sought entrepreneurs to help with starting an online greeting card company. Candidates were expected to be positive, goal oriented and aggressive towards obtaining their objectives. Bachelor's degree preferred, but not required.
- A business coaching company in Hartford, Connecticut, would like to help professionals with a 4-year degree and five years of professional experience start their business through training courses and classes.
How to Maximize Your Benefits
If you desire to work as an entrepreneur, there are some ways to maximize your existing qualities and make it more likely that your venture will succeed. The BLS notes that the strongest skill to have as an entrepreneur is the ability to network. Continuously growing your networking circle, for example by attending national entrepreneurial conferences, could help you make new connections and pursue new business ventures.
You can also stand out by learning more about international business and global competition. The BLS states that understanding international trends in business, either through experience or schooling, helps you prepare to handle market trends that are beyond the scope of your local economy. It may also increase your opportunities to seek new business ventures anywhere in the world or to tap into new markets and surmount language or cultural barriers.
Alternative Career Paths
If you desire to use your innovative and competitive side in your career, but are not interested in a career as an entrepreneur, you may consider working as a company's CEO. To work as a CEO, you do not need to be the company's the owner or an entrepreneur because you would be a corporate board member. As a CEO, you would help manage and direct a company's major operations, work to maintain the company's image and uphold the mission the original business owner had for the company. According to the BLS, as of May 2011, CEO's earned an average annual salary of $176,550.
If you enjoy the supervisory details an entrepreneur tends to handle, becoming an administrative service manager might be another potential career. This career entails managing a company's capital and facility. This may include considering how capital is used, what goods or services are being purchased, if the company's finances allow paying back loans and credit, and determining how to increase efficiency in the workplace. The BLS reports that, in May 2011, an administrative service manager earned an annual average salary of $87,000.
