The Entrepreneurial Marathon
After reading “Entrepreneurs and the retirement trap” by Rick Rodgers on VentureBeat, I was all set to write a post about the perils of forgetting to include some of big business’ “perks” into your planning… and then I read “The Forgotten Challenges of an Entrepreneur” by one of my favorite entrepreneurial bloggers, Martin Zwilling and realized that, as usual, he hit the nail on the head (which meant I didn’t have to).
One of the things that many entrepreneurs enjoy about their own business is freedom from the constraints of life in a large enterprise environment. The downside, of course, is that the way large enterprise environments lure in eager, talented employees year after year, is because they make sure to offer incentives that hold more than a little bit of appeal.
I wrote about this last week, in the discussion about intrinsic vs. extrinsic motivators. For an entrepreneur getting a new venture off the ground — even before you try to piece together a “package” to offer prospective employees — you need to consider what you need for yourself. Because if you can’t stay motivated and productive, you certainly can’t expect that of employees (present or future ones).
In addition to the warning on VentureBeat about not ignoring retirement planning (vital advice, if ever there was any: no entrepreneur wants to spend years building a business, only to spend their “retirement” as a greeter in Walmart), Martin — in response to a D&B Small Business blog post — adds a few other nuggets worth keeping in mind as well.
Long-term daily job grind
Robert Kiyosaki refers to this, in his “Cashflow Quadrant” model, as being “self-employed” versus being a “business owner.” At it’s core, self-employment is a trap that many would-be entrepreneurs find themselves in, en route to their business ownership goals. The self-employed trap looks like the employment trap, only with all of the hassels of business overhead and far less stability.
Formal training courses
My favorite thing about my corporate job was the training. I had internal training resources at my disposal with our in-house “university” program, and I had access to high quality training by external firms, as long as I got my boss’ approval.
And, unlike some people, it wasn’t a paid opportunity to play hookie: it was some of the best learning I’ve had in years, because it blended the value of a classroom setting with the motivation of hands-on, readily applicable subject matter (which I never experienced in school).
Personal wealth management
Starting a new business can be a crash course in financial management — even for those of us who’ve spend years ducking and weaving to avoid the subject as much as possible. However, there is a difference between tightening your belts (even to the point of cutting yourself in half) when things are lean, versus proactively planning for your financial future.
A new business is a great excuse to not have the “time” to take this problem on. But, conversely, it’s also the best excuse, because money is often just as scarce as time — so you might as well take the opportunity to figure out how to manage it, before you find it managing you.
Business must be more than the money
Again, this is critical. If you are going to spend day in, and day out on something, there needs to be a reason to do it beyond getting paid — because, as far as extrinsic motivators go, for most of us, it’s a pretty weak option as time marches on. (And, if you are in the minority, for whom this is enough reason, then more power to you.)
Passion is a key theme among entrepreneurs, and there is a reason: when things are hard, you have no money, your family is mad at you, your friends have stopped trying to invite you out because you’ve turned them down so frequently, and even your dog has moved on to get her daily dose of TLC from the neighbor, if you are not passionate about your venture, the easiest thing to do will be to give up.
The last item Martin includes on his list is an interesting one, but I’m not sure I agree with its importance. Martin writes:
How society perceives you. As a young entrepreneur, everyone looks up to you for running your own business. But later you find that you may be perceived by many as a person without job security, unlike your classmates or ex-colleagues, who are sought after or being placed in well-known large company or multinational positions. Even worse, you find that your business domain has developed a negative stigma through no fault of your own, as has happened to investment banks, mortgage brokers, and many nightlife businesses. It’s no fun to hide your business role rather than proudly proclaim it.
While I understand his point, I’m honestly not at all convinced that this point is really any worse for an entrepreneur than it would be for an employee — and, in fact, I imagine that if you were an employee in one of these fields, it would actually be worse.
As an entrepreneur, you’ve had to hone your other skills — ranging across the spectrum of disciplines: staffing, financial management, marketing, product development, customer service, etc. — in order to run your business. If you are an employee who is working in a suddenly tarnished sector, odds are greater that you are a one-trick pony with limited options.
What would you think is better? To be an entrepreneur whose business was a major supplier for Enron? Or to be a Director-level employee at Enron?
Personally, I think the entrepreneur is better off when it comes to personal branding and re-marketing themselves to prospects. I think the poor employee is going to spend most interviews trying to compensate.
All in all, Martin makes an exceptional point, though: a new venture must be approached as a long-haul. Big exits in a couple of years are great fantasies, but if you are approaching your business with that expectation, then not only are you likely to be making unwise business decisions (see Jason Cohen‘s story of how building a business for him to keep made it valuable enough for someone else to want to buy), but you’re also probably not bracing yourself for the long-term reality of your work.
If you approach your business as a sprint, you may get out of the gate quickly, but odds are you’ll be sitting on the grass when all the marathon runners pass you by. Pace yourself. It’s a long trip.
Alora Chistiakoff is an entrepreneur, blogger, strategist and project manager who has been developing online business and technology for startups for more than a decade. She co-owns The Indigo Heron Group, Inc., a web strategy firm in Austin, Texas