Does Entrepreneurship Make You Rich?
In a world full of Instagram flexing and faking it ‘til you make it, many young people think of entrepreneurship as a straight line to wealth and success. They see influencers and businesses on social media that have seemingly blown up overnight, and think that starting a venture will bring fast money.
Amid all the ‘glamor’ of entrepreneurship, the harsh reality is often overlooked – not all entrepreneurs are rich, and the road of owning your own business is certainly not a fast lane from rags to riches.
With great upsides come great risk
While some entrepreneurs may achieve significant wealth in their career, many (some would even argue most) others face financial struggles and setbacks along the way. Plus, about half of all businesses fail in their first five years. Sure, your venture may get VC backing and go viral, or, it could be a long road of high-interest business loans and failing your way forward.
The reality of risk:
Starting a business requires significant investment of both money and time/energy. Entrepreneurs often put their savings, livelihoods, and even personal relationships on the line in pursuit of their businesses. As I mentioned before, not every venture will succeed, and failure can come at a steep cost.
If a business does fail, the repercussions can extend far beyond just financial losses. If you’ve put your house up as collateral on a business loan, for example, and end up needing to default, that could lead you down a path of personal bankruptcy and homelessness. Plus, all of this could tarnish your credit history, making it difficult to secure loans or financing in the future. This is why it’s essential to work with a mentor or business coach who can explain the ins and outs of using LLCs, dedicated business banking accounts, and accredited accountants to help you set your company up for success.
In business, money can be tight for a long time
Even for the most successful ventures, sometimes bills come due at the wrong time. Owning your own company requires meticulous financial planning and management at every stage.
Unlike a regular salaried job with a consistent paycheck, many entrepreneurs don’t even take a salary from their venture until their business becomes profitable. From securing funding to hiring costs, taxes, and insurance, financing a venture is hard work.
Don’t believe the myth that entrepreneurship is glitzy
It’s true what all of our elders have told us: there’s no shortcut to true success. Don’t believe social media or anyone selling you a lie that owning your own business is the best way to get rich. Entrepreneurship is an incredible journey requiring dedication, hard work, and a willingness to take on significant risks – if you know that going into it, you’ll be a better business owner in the long run.
The best success stories are built on calculated risks, careful planning, and the courage to ask for help. As you consider starting your path to entrepreneurship, consult with your community and with purpose-driven mentors who can help you wade into these new waters. After several ventures and over a decade of owning and operating my own establishments throughout LA, I have many hard-earned lessons to share! To set up a mentorship call with me, contact my team today. And no matter where your career leads you, keep educating yourself, keep a positive attitude, and know that sometimes the hardest roads are the most worthwhile.
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The image used in this blog is by Laura Chouette
