“You can’t always get what you want… but if you try sometimes, well, you might find, you get what you need…”: The Rolling Stones
By Wolf Richter for WOLF STREET.
“Everything else being equal, would you rather – be your own boss or work as an employee for someone else?”
This question that Gallup asked is dear to my heart. I’ve been my own boss at the WOLF STREET media mogul empire since 2011. It has been the most enjoyable job I’ve ever had. Flexible hours? I’ve never worked as many hours as I have been in recent years, but it doesn’t seem like work because I have a blast. Long vacations? This is a 24/7 business, I’m the only underling, and I have the worst slave-driver boss in the universe who makes me go on vacation with a laptop and work. It has been financially rewarding, but not right away.
Another massive benefit is that ageism doesn’t exist for me. All that matters is how well I do my job. I don’t have to worry about getting sacked by a 35-year-old, to be replaced by someone who’ll be like a breath of fresh air or whatever.
So I’m hugely in favor of being your own boss. But I also see the financial risks. Many small businesses struggle; they’re a lot of work for the owner, and often not financially rewarding. And when they run out of the owner’s money, they get shut down. That’s the fate of many. But many others become very successful.
“You can’t always get what you want, you can’t always get what you want… but if you try sometimes, well, you might find, you get what you need…” comes to mind. The Rolling Stones nailed it.
The answers to the question whether you’d like to be your own boss were astounding:
- 62% would rather be their own boss
- 35% would rather work as an employee for someone else.
Turns out, wanting to be an entrepreneur isn’t the wish of some small risk-seeking group of crazies, but of nearly two-thirds of adult Americans.
The survey was based on 46,993 members (18 and over) of the Gallup Panel. Of them, 6,986 self-identified as business owners; 4,030 said they have seriously considered owning their own business; and 35,167 said they have not seriously considered owning their own business, according to the study.
Financial risk.
Those that want to be their own boss were asked: “How much financial risk would you be willing to accept in order to become your own boss?”
Starting your own business is risky, everyone knows that, and many such efforts don’t work out. But over half (52%) are willing to take a “fair amount of risk” or a “great deal of risk”:
- A great deal of risk: 14%
- A fair amount of risk: 38%
- Only a little risk: 37%
- None at all: 11%.
Why start a business?
Among people who either already own a business or want to start a business, the two top motivations were #1 being your own boss and #2 making more money. So, more control and more money (both in bold):
| Most Important Reasons for Starting/Wanting to Start a Business | Business owners | Want to start a business |
| You want to be your own boss | 57% | 60% |
| An opportunity to earn more money | 54% | 60% |
| Desire for a more flexible work schedule | 42% | 45% |
| To pursue a passion project | 30% | 45% |
| To fill a need in the market for a specific product or service | 23% | 20% |
| To make a positive impact or change in the world | 19% | 36% |
| Someone you know encouraged you to start a business | 15% | n/a |
| You wanted to leave the corporate world | 15% | 22% |
| Family or generational expectations | 14% | 16% |
| To support your community | 11% | 24% |
| Someone you know wanted to be a business partner with you | 10% | 10% |
| Laid off or lost previous job | 9% | n/a |
| Concern about job becoming obsolete because of technology | 3% | 9% |
| Unhappy in current job | n/a | 19% |
| Friend/Family member encouraging you to go into business with them | n/a | 10% |
| Other | 8% | 4% |
Most helpful resources for starting a business.
Business owners were asked which of the following had been particularly helpful in being able to start your business. The #1 and #2 most helpful resources are in bold. Note #3, personal savings. We’ll get to the three in a moment:
| What was particularly helpful in being able to start your business? | |
| Prior work experience in the industry/field | 60% |
| Encouragement from people you know | 57% |
| Personal savings that could be used to fund the business | 45% |
| Personal or community networks (mentors, chamber of commerce, etc.) | 29% |
| Software and other technology to assist with routine business tasks | 20% |
| Funding through loans | 12% |
| Training programs on how to run a business | 10% |
| Other | 6% |
| Government programs or services to help business owners | 6% |
| Funding through investors | 4% |
Obviously, #1 (prior work experience) would be a great resource to have: If you already know what you’re doing, you’re way ahead. In my case, I’d never run a website, had no idea how to do that, had no idea how to make it get traction, and didn’t know anyone in the business. That was a tough place to start from, and is not recommended. It took more time and ate up more resources. But it eventually worked out.
Obviously, #2, encouragement, is great especially from your family who will have to deal with the fallout. My wife encouraged me because she got tired of listening to this stuff that I’m now publishing. But others looked at me askance, and some essentially ridiculed my efforts.
Money.
Obviously, #3 – personal savings – is super helpful. Even if the business doesn’t require a lot of upfront investment, it’s possible that revenues aren’t materializing right away, or maybe for years, and personal savings have to be used to tide the owner over until the business starts generating enough cashflow.
I would have never started my business without enough savings. The risk I was willing to take was not making significant amounts of money for a few years. I would not have been willing to risk becoming homeless or whatever. So if the business makes enough money right away – such as consulting in your prior industry with your former clients – great. If it doesn’t, personal savings are key.
The alternative to personal savings is money from equity investors. And then you’re not really your own boss anymore because now you have a board of directors to answer to. But enough money from investors can perform all kinds of miracles – such as hiring lots of expensive staff and renting a fancy office long before the business generates the first cent of revenues, and some of the biggest companies today started out that way.
Not enough money.
People who would want to start a business, but haven’t done so yet, cited financial reasons as the #1 and #2 biggest obstacles. And the #3 obstacle was seen as “inflation,” which is interesting in its own right.
| The biggest challenges or obstacles you think you would face in starting a business? | |
| Lack money needed to start a business | 60% |
| Concerns about the personal financial risks of going into business | 50% |
| Inflation | 33% |
| Needing to learn more about starting/managing a business | 33% |
| Lack of confidence that business would succeed | 26% |
| Government regulation, permitting, bureaucracy, red tape, etc. | 25% |
| Access to business loans | 24% |
| Interest rates on business loans are too high | 22% |
| Lack of time/Time management | 18% |
| Marketing or customer acquisition challenges | 17% |
| Family situation (e.g., health, child or elder care) | 13% |
| Difficulty finding employees | 11% |
| Access to technology and equipment needed to start a business | 11% |
| Feeling alone or isolated as a business owner | 7% |
| Supply chain | 6% |
| Limited technical knowledge | 6% |
| Loss of unemployment benefits | 5% |
| Family expectations | 5% |
The KAPOW! moment during the pandemic continues.
Whether it was the extra time, the free money, or pretending to work from home… for whatever reason there was a huge spike in new business formations, starting in the summer of 2020 and reaching a very high plateau. And then new business formations have continued to move along the high plateau, against all expectations.
New business formations in April were still up by 48% from April 2019, based on the three-month average of applications for federal Employer Identification Numbers (EIN) with the IRS, according to data by the Census Bureau.
A business only needs an EIN if it has payroll, if it is a corporation or partnership, and for some other purposes (trusts, estates, etc.). An EIN is not required to be self-employed or to start a business that doesn’t have employees; the owner’s Social Security number is enough. An EIN was not required to get PPP loans during the pandemic; a Social Security number was enough. This data here covers only EIN applications for typical businesses. EIN applications for trusts, estates, tax liens, etc. are removed from this data.
The Census Bureau categorizes EIN applications based on the data submitted in the application.
Businesses that have a high likelihood of creating a significant payroll are categorized as “High-Propensity Business Applications” (HBA).
About 32% of all EIN applications have been HBAs, and the number of these applications is up by 33% from 2019 (purple line)
Businesses indicating a date for the first payroll are categorized as “Business Applications with Planned Wages” (WBA), a subgroup of HBAs. They’re ready to hire and have funding to meet that payroll. These businesses are most likely to grow their payroll and become significant employers. Only about 11% of EIN applications fall into this category. And the number of applications is up only 13% from 2019 (green).
The biggest increase came from businesses with a low propensity to end up with a significant payroll, tiny shops, similar to the WOLF STREET media mogul empire, with entrepreneurs essentially striking out on their own. They accounted for about 68% of all EIN applications, and the number of applications was still up by 58% from 2019 (red line).
In April, there were 432,517 total EIN applications, including 139,496 High Propensity Applications (HBA), of which 44,875 had planned wages (WBA). The remainder, 293,021 applications were from businesses with a low propensity to end up with a significant payroll.
The chart shows the KAPOW! moment in the summer of 2020 that has barely let up since then though the pandemic-era free money is long gone. The red line is astonishing – businesses with a low propensity to become significant job creators. It represents Americans striking out on their own, often only on a wing and a prayer.
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I made $11,000 the first year I went into business for myself (after leaving the dreaded investment banking world after the Dot Com bubble burst. Best decision I ever made, but it was not without its early challenges.
I was always told to have enough savings in the early years. Best advice ever…
As a corporate cog, I see a different image than the beauty reflected in the mirror of self adulation that small business owners claim too experience.
Everybody works for a living. Small business owners, a small dog with a loud voice.
Thankfully, we are satisfied with enough that we lost the incentive for protesting inequality in whatever form it may take..
I hear what you are saying, but I will just say that being my own boss instead of working 100+ hour weeks as an investment banker has been much more fulfilling. I am 47 with 7 rental properties that are all paid off, so I don’t really work much anymore. I never would have gotten there if I had stayed in that awful desk job.
That last chart is the best. Really good data to break it down like that. Just looking at the EIN count would not tell the real story.
Agree.
Basically it appears that a tiny percentage of startup businesses start up with employees.
Which makes sense…a one man band can forgo compensation and live off savings but an employee isn’t going to work for free…so a lot more startup capital is going out the door…which greatly limits the number of those kinds of startups.
The question is how many one man bands can transition into employer companies and the likelihood is a small number too.
Despite some huge numbers being tossed about like 25 million “businesses” (with only 155 million employed workers?) to me the most likely stat is 5 million or so employer businesses…and a *ton* of those make $100k/500k or less in annual revenue…which really casts real world entrepreneurialism in a new light.
“Basically it appears that a tiny percentage of startup businesses start up with employees.”
Make sure you read the chart correctly: Recently, there have been between 45,000 and 65,000 startups PER MONTH that have a first payroll coming up (applications “with planned wages,” green line). That’s around 10% of the total.
In terms of your last paragraph: Why do you keep bashing small businesses and their role? What’s your hang-up? Don’t like it that people get off their butts and do something on their own? Or is this just part of your generic USA-bashing that you have been engaging here for years?
It remains a very good question how many of such companies are simple pass-throughs formed on the back of TCJA, which were also given a huge boost by the covid give-aways
Well the real question we should ask is how many family employment level jobs are we creating. The path for most of us is paved with a union level job.
My friend Steve’s story:
He and his wife worked at the same government agency for 30 years. They retired moved from the DC area to a beach town in the Carolinas and purchased a nice home for $600K and it is now worth ~$1M. In addition to their home they have a decent nest egg managed by their broker. Their pension pays them close to $200K per year. Steve is college educated, his wife is not but her pension is larger because she went to work for the same government agency straight out of HS.
Me: I am also retired but I never worked for anyone. I am college educated but my real education came from life experiences.
I don’t have a pension but I have accumulated commercial properties that are now debt free worth about $2M. I also have a nice nest egg but I manage my own money, with most of it T-bills now. On paper, my net worth far exceeds Steve’s. However, my income only runs between $7,500 to $13K/month depending on vacancies. Even though a property is free and clear of mortgages, there are still carrying costs.
I would say Steve’s life is better and safer. He doesn’t deal with lawyers, accountants, government bureaucrats, vacant properties, tenants etc..
Steve has a very happy life and most people would love to have his life. Although my life has a lot more risk, I am happy too. I hate the government bureaucrats, especially when they have their own agenda and I have to get lawyers involved, but I love all the other challenges. Keeps my mind busy.
Steve planned his life very carefully. Worked his way up the government ladder but always had to report to someone. He always had security but he also paid his dues gritting his teeth while sitting through mandatory government classes on social engineering.
I kinda of flew my life by the seat of my pants without having to report to anyone. The only one looking over my shoulder was one God’s angels. :)
You own assets that will at least track inflation with net worth and income.
Steve has a promise of an IOU from a deeply in debt government that has historically demonstrated that it will inflate its way out of debt.
Please note that Gabriel openly states that he has the majority of his nest egg in T-bills. So he too, is depending on the promise of payment from a over-indebted government. In fact, I’d argue that the entire world is depending on the promise of payment from over-indebted government, especially all those companies in the military industrial complex…
Like Gabriel, I moved much of my cash into T-bills as the interest rates climbed. I have been using the interest to enhance my own operations. At the end of the day, this is about OWNING and CONTROLLING productive capacity and/or assets that generate income, period.
Federal pensions have a CPI-linked COLA.
When Gabriel writes about his friend “Steve” it reminds me of my best friend (to make it easy I’ll also call him “Steve”). He started at a 4 year college with me but dropped out and got a 2 year JC “fire science” degree and at 22 he was making more than I was as a “college grad” as a union “fire fighter” (in a Suburban Bay Area with fancy homes and almost no fires). He married a school teacher (who stopped working for about ten years when the kids were little) and they are retired now with combined pensions of over $300K/year plus full medical dental and vision worth about $40K/year. Looking back I should have skipped the 4 year college to become a firefighter and started slowly buying investment properties at 20. I would be richer today (and have worked a lot less hours) if worked a 10 day a month firefighter job for 30 years (so I could retire with a 90% pension) and built my apartment investment business a lot faster if I had 20 days off a month rather than building it working nights and weekends like I did.
Few people realize just how good a job being a fire fighter is. There was a group in W Palm Beach that were all millionaires. They had great wages and bennies, hardly any calls, and started businesses out of their stations doing taxes for folks.
sounds like make believe or some sopranos style “no show” job.
Crazy Florida shi….
Sounds like me (except I worked and did not accumulate assets) and my neighbor across the street. He worked as a legal assistant to judges in the federal court system and retired after 30 years. Has 100 percent retirement pay and wife retired teacher. I suspect their retirement is 200k. Buys a new Mercedes every year lives in a million dollar home . His dad achieved the highest civilian pay grade for government. I have no pension but some great life experiences including an attempt at starting my own business with about 300k at 60. The start up failed and I am aged out of returning to work . No regrets on my part and I continue to enjoy each of my experiences unlit death or destruction of my brain occurs . Wolf since 2011 that’s 13 years!!
It’s difficult to start your own business when the tax man is constantly taking your hard earned money, suddenly that small profit is taxed down to nothing. No it’s not easy.
Now with everything being shipped getting taxed and all yearly transactions over 400$ made thru pay pall, square etc. also taxed, makes it extra tough for the beginner.
If you drive a car I’ll tax the street, if you get to cool I’ll tax the heat. The Beatles.
But you and your business have huge tax advantages… retirement funds, healthcare, many other deductible expenses that you cannot deduct as regular W-2 employee. It’s worth checking those out.
Howdy Lone Wolf. I fell in love with Schedule C a long long time ago.
You are the perfect example of working for yourself Wolf. Yes, it’s a lot more work. It’s financially challenging at times, but if you like what you’re doing it’s the best of all worlds and well worth it.
That said, I think if folks knew how much hard work and risk and sacrifice and money… and sometimes failure, is involved in getting a successful business up and running profitably, a lot of them would respond that they’re happier and better off working for someone else.
…as ‘assistant mgr’, and lead counter face at the moto shop, I was often mistaken for the owner (a great one). When one of those moments arrived with a: ‘…you’re not?…’, query, my rejoinder was: “…oh, heavens, no! I like to sleep at night…”.
may we all find a better day.
Dustoff,
Glad you showed up, I was going to go negative on some of these comments….(as I’m just a pissed off economic loser, ya know)
That wasn’t cycle salvage on Piner was it? Because I have bought quite a few things there. Probably not because Moto implies all dirt, and they had EVERYTHING.
Anyway, here’s a good metric for all info posters (and even media moguls) to check out….the “formal” biz of rating what passes for “truth” for mass consumption is BIG MONEY.
That’s why this little back alley media shop is the only place I put my social media two cent thoughts…besides, the counter guy is an ok fella and knows econ……which I detest, but is a big part of this world, and can’t be ignored.
https://en.wikipedia.org/wiki/Citation_impact
NBay – would have to meet you for coffee with a whiteboard and markers and a couple of hours to chart the long-term spaghetti of Sonoma County moto shops ’60’s-to-’00’s. (I use ‘moto’ in the interchangeable, euro-sense, having converted from Enduro/dez to road racing when I left SoCal for good in ’77). I occasionally worked over at Salvage, when needed, but that was after Dennis had sold out to Brian of Cycle Pro (the ‘home’ business on Piner, with its own history) around the turn of the century, who moved the operation to Bluebell Dr. Sold yet again, it subsequently closed during the pandemic…
good confirmation of what drives information, my Journalism101 prof intimated as much way back before the flimsy gates of the ‘Fairness Doctrine’ had been breached for broadcast…best!
may we all find a better day.
Bluebell………where Lasercraft began, just to finish our “things in common circle”, which Wolf has tolerated…..best to not overdo it, yes? This isn’t Facebook.
Finally clear on leaving SD in ’77 confusion, you went back and forth a bit. Was scared enough on Sunday morning rides to finally leave road alone (except for transport) and broke enough bones to quit that and dirt. Desert sounds like it would have been fun, though, when young. Just like Steve McQeen!
Best we skip coffee, and it would take several weeks to answer all questions we both probably have. But mainly because I’m packing bad baggage from the whole Vietnam thing….guess you are rightfully proud of what you did, and also don’t know any of the bastards that got rich making it happen….I do. Many of their offspring and other relatives are into variations of the same shit….my sister stays in touch with most all, (stay in their wills, and just more family oriented, as girls are) there are only a couple I can tolerate. But everyone in the USA is a hypocrite in that sense.
Saw a couple commenters that really like your comments and especially sign-off whereas Wolf has thankfully deleted posts where I lost it.
Later buddy.
But I can post negative stuff that is true….usually.
June 6, 2024 — Carbon dioxide is accumulating in the atmosphere faster than ever — accelerating on a steep rise to levels far above any experienced during human existence, scientists from NOAA and the Scripps Institution of Oceanography offsite link at the University of California San Diego announced today.
Look, Nbay, you’re on the wrong site to keep posting this stuff.
That give anyone any business starting ideas? Or perhaps DOWNSIZING ideas, starting with pastimes, possesions, and diet!
End Soft Rant.
Ok Wolf. Number one, it is your site.
Got it. I’ll stop such posts till main stream Econ simply can’t ignore such things as an econ factor….(Or be nuanced like dustoff?)…fairly soon I expect, though.
Apologies.
i’ve owned 3 businesses and the first one failed because of what you mention. it was truly impossible to do it the straightforward, naive way. many of these businesses will give up. the only ones to make money will be the contractors bringing the spaces up to code and the taxman and licensing agencies and office supply stores.
instead, slip under the radar by buying a failing business as quietly and cleanly as possible. you’ll be grandfathered-in in terms of regulations, licensing, and inspections. they wont really know you exist.
then:
1) make a lot of money
2) never pay for anything
work nonstop (like Wolf) so that every expense is a business expense. make sure to have a good (read expensive) accountant.
Howdy bungee. As far as accountants go, I found my self teaching them. Went through quite a few. Finally had a son who became one. Teaching him currently how a small business operates LEGALLY Tax wise……
Hi Debt-Free-Bubba,
(i’m not a bubba, but I am definitely debt free!!)
there was an accountant at my accountants office who I was dealing with. I asked whether or not I have to pay some amount and he kept saying that I “should.” I kept asking if I “have to.” I finally went to the owner/head accountant and asked her what this was all about. It wasn’t about legality, it was about whether I was giving the government money that I would much rather keep. I never had to deal with him again and he was gone shortly thereafter, but from our conversations I suspect he was politically motivated against me.
Even if its legal, if it is a red flag or just looks funny, I will pay it and consider it a “have to.” I do not want even the appearance of impropriety and i never suggested doing anything illegal. That is why you get an expensive accountant that has a name and does a lot of business. If you get audited by the feds, even if you are squeeky clean, you will want to die. My accountant isn’t there for any accounting (i never even glance at their reports). They’re there to keep the gov happy, paid, and not looking at me. And if they do look at me, my accountant has all the answers.
i’m not trying to be cynical, just realistic towards the mindset of a successful small business owner imo. Lots of well meaning, sincere people start and fail because they thought the system was reasonable and simple. Some rules make sense for a big operation, but for the little guy are completely absurd. small business owners have to stay legal, but if they take the rules in good faith it gets real expensive with nothing to show for it.
Yeah, you can write off a ton. So you shouldn’t have many taxes if you understand taxes.
Wolf is gifted with math I presume so that does make things go smoother.
When I started I did not understand taxes but a few years in the concept just kind of “clicked”. And after that the strategy became clearer.
That is a weird statement. It is actually backwards considering businesses have huge tax advantages. Businesses get to deduct expenses that an individual cannot do.
The taxman hits individuals much harder than businesses.
Sorry, “individuals ” should be “paid employees “.
Paid Employees Or “The Aggrieved” 😂
” It’s difficult to start your own business when the tax man is constantly taking your hard earned money, suddenly that small profit is taxed down to nothing. No it’s not easy.”
The dumbest comment repeated ad nauseam by those who right off their toilet paper expense and pay no taxes.
One reason why I never became a full time building contractor is because I can’t turn it off at night. Retired now, building several hours per day and I still can’t turn it off. I remember 40 years ago doing a big job on a high end beach house. The lady said she was amazed that I showed up to work at 7:30 every morning and just started in working; cutting rafters, doing forms, whatever. She noticed that I didn’t stop and figure stuff out. It was then I realised I did it all night, in my sleep, daydreams, etc and visualised the building progress every step of the way. Still do it. If I have a difficult problem to solve it is like counting sheep to get to sleep, then wake up and everything is crystal clear.
When I flew bush planes for a living it was much much easier. In the cockpit you are the boss and no one tells you what/how to do your job. In fact, it is against the law for the owners, managers, whoever, to interfere unless you are a safety problem. It was a pretty good situation because you have total independence and if you also work scale then the more you produce the bigger your paycheque is. I remember one pay day one of the owners looked at my pay stub. He said, “That’s what I like to see. I know if you’re making good money then so are we”. And I never used to worry about the next day, even if a tough flight was looming. Things always change so worrying was just a waste of time.
Lots of worries if you run your own business, and I highly respect those that do and are able to balance everything. If you work for a good boss/owner then you want to do the best you can for them. Always. The good ones are few and far between.
They say the subconscious does most of the work for you. It’s like you gather 1,000 puzzle pieces and lay them on a table. While you sleep these gnomes come in and slowly work on it as the months pass…
Boom! Then you know how knights fought in the Middle Ages. That’s some useful knowledge ;)
The Mrs & I started building our empire 32 yrs ago.
Gabriels post above sums it up well.
Wolf, I hope you never have to fire yourself.
Keep up the good work.
Working for the man can mean you never get no Satisfaction.
They like to remind you that you’re Under My Thumb.
I have No Sympathy for those Devils.
It’s hard to break away with the wife and kids screaming Gimme Shelter.
You end up a Beast of Burden.
It’s hard, but you gotta Get off that Cloud.
Start your own business and strut like a Little Red Rooster.
Be the man, the Street Fighting Man.
The hours will be long, burning the oil like a Midnight Rambler.
But with hard work, time and a little luck, well, Wild Horses wouldn’t be able to drag you away.
Let me chime in with some Huey Lewis. “I’m takin what their giving cause I’m working for a living”.
I never had the balls to start a business. Kudos to you guys!
This reads like poetry to the initiated.
It was shockind ane eye opening to see that 60% of people saw money as being the biggest obstacle to having their own business. That would be the last of my worries. There is always a way to get funding, with so many potential pathways available.
There are some businesses that can be started part-time while you are still an employee – the Wolf Street media empire is like this, but there are many others. Doing this gives you a chance to try out your ideas, and see how much money you can make in how many hours.
Best pieces of advice (courtesy of Resale Rabbit): don’t hire an employee until you absolutely don’t have enough time to do everything yourself.
After Vietnam, I went to college on the GI Bill and got my Engineering Degree. I then worked as an engineer for a Fortune 500 firm in manufacturing back East (Connecticut) and rose to Plant Manager in 7 years in a 1,000 employee location manufacturing non-ferrous rod, wire, strip and other metallic products. I was the youngest Plant Manager in the Company. Over the next few years, I got an MBA in Finance (for kicks).
All was good until I saw the writing on the wall…..foreign sourced products our customers were buying were eating our lunch. So in 1982 I took a job in a large oil & gas company and moved my young family to California. Big change!
When oil went in the tank a few years later (1986), I left the company and went out on my own as an Engineering Consultant. I found work in Texas in oil & gas operations and moved the family there where I grew my small company.
Things were good for several years and I had by then partnered with a few senior operations guys like myself and we continued to run the business as an LLC with each of us independent contractors. We did well and I retired after 20+ years.
No pension, and just living off savings and SS. No wife as she passed away 15 months ago. No debt, good health, no worries. Oh, I have a small dog…
My work career jumped all over the place, but the decades I was on my own was the most rewarding on a personal basis. My clients loved me as I treated them all like they were special…..well, because they were!
Thanks for posting this. By reading it, you can tell that you never know where your life will take you, and it also makes it clear how quickly it goes.
This is the first posting I’ve seen by you that was so subjective and so one sided, so individualistic. Where’s the data on the number of small businesses that fail? What is the average number of working hours for a small business owner? Average income? Is it right that the tax system favors entrepreneurs rather than workers? How about life expectancy?
Is there no alternative third way? Workers’ Cooperatives?
Small businesses are often under the control of giant suppliers.
1. This wasn’t about businesses that “fail” — it was about the desire to be your own boss among Americans, based on data from Gallup; and it was documented by business starts with Census data. So RTGDFA
2. One topic per article.
3. Maybe someday, I’ll write a separate article about businesses that “fail” — which actually means small businesses that vanish, meaning whose EIN becomes inactive, because:
• the owner sold it,
• or the owner retired and shut down the business,
• or the owner started a new business with a new EIN and integrated the old business into it,
• or the business failed in the classic sense that it didn’t make money, and the owner gave up or was forced to give up.
All this is thrown into one bucket, summarized by one business failure number: it’s just EINs that vanished for one of the reasons I outlined. And people cite this figure as failure, when in fact it might have been a sale of the business, or the retirement of the owner, or the owner starting a new business with a new EIN and integrating the old business into it. It’s worth an article just to push back against this dumb notion that small businesses fail all the time and aren’t worth it.
Howdy Folks. Its in the blood is only way I can explain it. If you have it in you, it just happens and nothing will stop you. Was told since a teenager I was wrong by family, friends. So, some of you 3% ers have a great opportunity right under your feet. Good Luck
For a physician to be his own boss in a solo practice, he had better choose a small town in the midwest. In any urban area in the United States, when he tries to credential with the insurance companies, they are just going to say no. When he sees a patient as a doc outside the network and he sends a bill to the insurance company, the check goes to the patient. The patient usually keeps the money and just goes somewhere else.
It’s just business.
The antidote is for the physician to join a group or hospital large enough that the insurance companies must do business with them.
Physicians accepting cash only are met with the majority of people who expect their health insurance to pay for their office visits. Health insurance will buy lots of prescriptions and procedures, but not much health.
There’s a lot going awry in our healthcare systems, including the problems you describe. At the other end of the spectrum, PE firms have been buying physician and dental practices left and right in massive roll-ups to the point where the antitrust folks are looking at them in some markets. And this has become a really bad deal. PE firms should not be in healthcare.
Insurance companies should not be in the healthcare business either.
My doctor doesn’t seem to have those problems. His biggest problem is trying to get paid by people with fly by night insurance. He has a long list of insurance companies that haven’t paid him and those customers need to pay out of pocket.
Your average family practice guy or gal is easily paid out of pocket. They are not where the money issues come from. Those issues come from insurance companies, hospital managers, and those super specialists who think they’re really special.
Wolf,
Everyone who reads your site is very glad you made the plunge.
The world is better for it.
Agree
I’m torn on the subject. I’ve worked at a job before where I was living on the road in hotels and working 70+ hours a week, sleeping 4 hours a night, and trying to save the sinking ship at a company where 90% of my coworkers needed to be fired and half of them in jail for defrauding the company and committing felonies. I definitely have the work ethic to run a business. When I was at that job my mind never stopped worrying and thinking about all the accounts and customers and who needed to be doing what where. Even as a lowly laborer I dreamt of firing half my coworkers and superiors.
It made me old fast, before 27 years old I had blood pressure so high I’d get random nose bleeds and severely dizzy. Clocked in onetime at 160/110 on the blood pressure cuff.
At this point I’m okay to drive a truck down the road doing nothing but watching the hours pass and counting the miles making a lower middle class household income. If only it was enough to make the household part true.
Maybe it’d be different saving your own company and being able to make decisions that need to be made and not passively watching management steal from the company you’re trying to protect or watching low level workers sabotage things or milk the clock out of spite. That job completely turned me off to being a business owner. Maybe a sole proprietorship. I dunno, then you deal with “the valued customer.” All that glitters ain’t gold.
Toxic work environments are a different kettle of fish altogether. I’d leave asap and save my sanity. Got fired from a place like that once – best thing that ever happened to me lol.
A properly run business is fun to work for and it’s a lot easier to run a biz properly if it’s yours. Finding that niche is the hard part tho and it does take a lot of thought plus some luck.
My father had a nice corporate job, could have gone fairly high, but decided to go out on his own. He declared bankruptcy twice, put his family in poverty. My much older sister’s college was paid for but I had pick up my tab. After graduation I bought my parents new appliances with my new income because they couldn’t afford it. Don’t get me started on their later life – my mom had to work until 70.
I resent my father to this day for ruining my teen years and I know my mom resented him by the time she died.
Like restaurants, the vast majority of new businesses do fail. If you want to follow your dream and be your own boss, great, but just remember failure will affect those you are responsible for, and most likely you’ll fail. If you do don’t make it don’t be shy about going back to a corporate job – my father couldn’t or wouldn’t.
This aspect to “following your dream” is one that most people don’t consider. A man with a family has a lot more to worry about than himself. Most businesses fail. What percent and how quickly will always be a matter of debate. I doubt if EIN tracking is a good method. Many are just side gigs or a remnant of a past attempt at self-employment. When a man has failed a few times, he has dragged his wife and kids through a lot of crap. I believe that a parent has the obligation to avoid this and provide a better environment for his household. At some point the wife throws her suitcase on the bed and leaves.
I’m a customer facing business you’ll never be your own boss. Customers will be boss. Many of them have irrational expectations.
Gotta add my opinion: I managed/owned residential income property and had to give up a portion of my brain to thinking about eventualities: bad tenants, plumbing probs., etc at all times. Never a dull investment moment. Worked as a manager and felt that the greatest business problem was relying on employees, not issues with customers, the business itself or competitors. Looked into many business opportunities, but, in the end, stuck with salaried employment.
Less anxiety, more time with my kids, steady income.
My parents owned and operated a few small businesses. I remember my mother saying that they didn’t own the business; the business owned them.
So true. There are always bosses somewhere.
Grew up on a farm working 10 hour days for 21.50 a week. That was 3 meals a day and fifty cents on Saturday. Long hours and hard work as my father was a sharecropper. The land owner was a great man to learn from and about. Working with the Corps of Engineers he was the engineer draining SE Missouri with the canals. Working for the neighbors for fifty cents an hour gave me a reason to behave and take my girl out on the weekend for a movie and dinner. Life was good and I was healthy growing up but left at eighteen for my service in the Marines.
This opened my eyes to the fact there was a real world out there. Boot was a three month vacation as I arrived at 135 lbs. and graduated at 175. Good food and 8 hours sleep does that to a farm boy. Two weeks leave between boot and ITR, infantry training, and then six months helicopter school and off to two trips to Southeast Asia, had good and bad experiences.
Bounced around a couple years going to college, working at chemical plants and ended in an oil refinery. Worked my way up the food chain to foremen and into an office job in stock accounting. A couple years of college math working on an engineering degree definitely helped.
This was the beginning of finding a home. The company was a major so had a savings plan along with retirement. One of the savings was a government program whereby the company could put a% of the Capital budget in a fund where the employee could receive the amount provided we contributed the same as the company. Most Oldtimers didn’t sign up until a couple years later. This made the first years rough for those signed up. The extra cash was hard to come by! Program was changed whereby it wasn’t advantageous for the oil companies so it was discontinued.
It was also the time of the computer arrival. Needless to say I took an interest, began to learn accounting, dollars along with the barrels of oil. Somewhere back in history some one had separated the two. In the beginning the learning curve was rather steep and I was back to the 10 hour day. When computers came along I picked that up also.
My worth was in knowledge of operations of refining. Learning how computers operated combined with prior knowledge awarded me with many project installations and the headaches. As Paul S says above, I solved design problems in my sleep and found the solution neatly printed the next morning. Stiff fingers and cursive just won’t work. Neither does my 9th grade typing class now.
31 years in refining, 15 in Operations and 16 in accounting were enough to retire 24 years ago. Now I play the market to keep my self entertained.
Fortunately for those who experienced bad things/time with a company I never had any problems. True there were some I would have preferred never to have met but Marine training took over and I was once accused of picking and choosing my battles. Luckily I never lost any.
One was the result of a 6 million dollar entry using my account in moving corporate money to a foreign company. That one earned me a phone call early in the morning from a VP informing me about it and that a young lady would call with the process and value to be entered. I know this was done, not as a favor, but to quite any auditor’s question.
An old Gunny once reminded me there were two ways to become known. Work hard and be consistent or make a mistake! Well I made my share and knew most of the top management so never encountered any I didn’t like.
Part of my career was training new civil engineering graduates and after a few years it became very clear to me that there are two very distinct groups of workers, either private or public sector. Public ones were happy working in a large group of similar minded people, a stable environment in all respects, 40 hour weeks, regular pay checks etc. The private ones couldn’t stand it and by year 2 of a 3 year program they had started part time consulting and after their 3rd year they were gone. These were 21 or 22 year old males mostly. Many of them became my friends for years and in later life they admitted that they perhaps made less money than I did, but never regretted it. After a while I started asking early on what their fathers did to see who was going to stay, not surprisingly sons of government workers stayed and sons of entrepreneurs left very fast. My father was a teacher and I knew early on that I was a public sector worker as well, although during the stasis of middle life a move was tempting. Obviously a confessional day for all today, are you going to bless us Wolf?
When I was a U.S. Patent Examiner, I was temporarily on staff to the Commissioner’s office to try to find ways to reduce the turnover in the examining corp, Their training to fully independent examining competence took about three years and was expensive, whereupon most of them left to join law firms practicing patent law.
I found that most examiners who stayed were first-generation college graduates, while those who left were offspring of college-educated parent(s).
As has been my experience so often with government, recognizing a problem is useless because a solution is precluded by this-or-that regulation or law.
In this case, civil service hiring was governed by veteran’s preference and various identity political policies which did not include preferential hiring of first-generation college graduates.
Many businesses already have momentum by the time someone decides to be their own boss. Not uncommon to consult, blog, build a side project or whatever else while employed.
“If only I had the money” might translate to “I don’t know how to start”. At least sometimes – which might explain why it’s the most common reason why someone didn’t start but only 3rd on the list of what matters for people who did.
There’s also the toe in the water side hustle version of startup which can work given time. In my case I had a contract career that allowed time off between contracts so had to get something productive going vs sitting around staring at walls and blowing cash.
Took few tries to get it right but sure is nice not having to deal with anybody’s mistakes but your own.
What a ridiculous question!
“Everything else being equal, …”
There is almost nothing equal! They are completely different beasts. They’re less similar than apples and oranges. Like comparing apples to hamburgers: they both feed you.
In the past, I’ve started companies that failed and companies with moderate success. In worked 100h weeks on occasion and loved it, was proud of it. I’ve also worked at truly amazing big companies and loved that.
There is nothing better and working on something you believe in and that you control and that can be accomplished, with care and luck, on either path.
Now I’m retired and write software for D&D type games, just because i want to. I work more hours than before I retired.
Brian: I think you have figured out. If a person’s definition of work and play are completely different, that person should probably be an employee.
If their definition of work and play is pretty much the same, they should think seriously of being their own boss as they will find it most rewarding whether they get wealthy or not.
Brian,
The first part of your comment is funny. Clearly, you don’t understand the important fixed expression “Everything else being equal,” and how/why it’s used.
A dictionary might help you:
https://www.merriam-webster.com/dictionary/all%2Fother%20things%20being%20equal
Or Wikipedia even:
https://en.wikipedia.org/wiki/Ceteris_paribus
I understand it just fine. It’s a misleading and ridiculous phrase when almost nothing is the same. It makes them sound similar when they’re not. Having some things in common does not mean they’re similar.
All else being equal, would you rather be immobilized and hand-fed hamburgers or live freely in someone’s vegetable garden? Both will feed you.
Ridiculous. Not “wrong”. Ridiculous.
LOL, you still don’t understand the phrase. Click on the links I gave you. You’re not forced to stay ignorant. It’s a choice.
Kudos! Best, practical self-test that I’ve ever heard of to help one analyze whether to take either entrepreneurial or employment fork in the road. Wish I had learned this 50 years ago.
Learned long, long ago that at least half of workaholics are running away from being a husband and father.
The other half of workaholics say they are doing it all for their families. Just like Walter White. In reality they are doing it for their self aggrandizement.
Be advised your wife and children know what you are doing.
30 years ago I would not have understood what you are talking about. Now I do.
I spent the last 20 years running IT shops for mid-sized companies. I never had a boss because the CEOs never had a clue what I did. I just did the job well and they trusted me to do it. Early on, the problem was department funding. I quickly learned to carefully track the value IT brought to the company and made sure we were profitable to the organization. I always got whatever I needed.
I subtly discuss these ideas with my 3 sons who are 15, 13, & 9. They have no idea what they want to really do, which isn’t surprising. I poke them with ideas of being their own boss, even though I still recommend college. Trying it before kids and a mortgage I feel would be key. The experience/knowledge matters and that’s why we discuss things they are into. I just helped the 15 year old flip a FB Marketplace Rickenbacker 4003 bass guitar on Reverb. He plays bass and knows how to evaluate a used guitar and researches the market constantly. He made a profit of $1300 bucks for about 5 hours of “play”.
On the other hand, my wife owns her own small salon. Only herself and low overhead has been great, but she does have customers. They are the boss and it can be exhausting managing expectations. The one difference? She can fire them anytime she wants. You can’t fire anyone when you aren’t the boss.
You can fire a customer, but they can go to an online ratings site and stab you in the back. My small business owning friend says 10% of the customers generate 90% of the complaints, and these miscreants are active on social media.
Dealing with unruly humans at your business can be exhausting. Take a lesson from wolf… tell them they are idiots, then block them or kick them out. Then go to the comment section and explain why they are stupid idiots and why their views are BS. Then go drink a beer.
If you’ve got a good business they will come back.
Lol!!!
Sounds like the “Soup Nazi” from Seinfeld.
Important to understand that the customer is not always right. In fact, there are many you can’t afford to have.
Flash – coming from a now-melted retail past, recognizing, and then sending that type of customer down the street to the competition had a double benefit…
may we all find a better day.
I left government employment as a Patent Examiner in 1977 and opted to be grandfathered into the civil service defined benefit retirement plan, which was being phased out.
That pension was the funding I needed to sustain myself and family (wife and 5 children), as I undertook several enterprises that were interesting to ME, not some employer. Among them: Built our own house, which I still live in and enjoy as MY creation. Developed and eventually sold a prize registered angus cattle her and now lease the pasture to a neighbor. Sold timber on the stump off my land. Bought a surplus school building and converted it into a piano-teaching studio for my wife. Participated as a founding board member a non-profit corporation which acquired and restored a fire marshal- condemned concert hall that had been donated to a now defunct women’s’ college by Andrew Carnegie. But for the board’s enterprise, it would have been torn down. Participated as a founding board member of our local health clinic.
Most importantly, I was home and available to my wife and children, all o whom have done well.
I’m 93 now, inactive but with precious memories.
Wolf, How did you get so darn smart, or whatever?
As an old guy (over 70) it would seem that for any “desire”, be it business for self, moving, getting a promotion, all “desires” in life, the first thing on the list should come from the Rolling Stones….”if you try sometime,….”
How many dreamers “try”? 40 years ago, I got this definition, framed it and it hung on the office wall my entire career where everyone who worked for me or around me could read it.
INITIATIVE
Why to some people succeed and others do not?
In the simplest terms, successful people act and others don’t. Successful people do something every day.
Even if they stare out the window they are constantly thinking up ways to do their jobs better.
Try it yourself, try to come up with an idea this week that will make it easier to do your job or allow you to do it at less cost, quicker, or more effectively. If you come up with an idea a week, you’ll be amazed at the result. Most people don’t have one idea in a lifetime.
It all boils down to one word – Initiative-. That’s what the world pays for in money and honor.
Be your own boss? First step is to gather initiative, it is the key that unlocks the door.
I would add one more: Seek opportunity; and learn to recognize opportunity. We are all presented with a very small number of opportunities. “success is where preparation and opportunity meet”. Not my words but great words nonetheless. Print it out and hang it on the wall.
Well said Louie…Few opportunities present themselves over the course of a lifetime.
You have to be aware of them and in a position time and money wise to capitalize on them.
They are often the difference on a financially successful life or not.
To your point Wolf, being self-employed can be all consuming. Physically and mentally. So, once the newly hatched entrepreneur makes it past that first milestone of barely making ends meet and living hand to mouth, finding work/life balance is yet another learning curve they have to get through so the business doesn’t kill them (in fact, running a business is a lifelong learning process). But to another of your points, we can be our own boss for as long as we are physically and mentally able to continue making the donuts. This is something most are going to need as lifestyle creep and inflation have outpaced retirement savings. I love what I do, too, and when I begin to feel sorry for myself due to all the stress, I remind myself that it’s better than hating what I do or the boss or people I work for. I will do what I do until the people I’ve surrounded myself with can’t prop me up in my chair and pull the string on the back of my neck anymore. I would add a written business plan to the list of helpful resources. In our practice, we see people start what could be fabulously successful business models but never put pen to paper to write a plan. All business owners have a “plan” in their minds for what they want for and from the business, but scant few draw those plans from their minds to the sheet of paper. This act has ENORMOUS short and long-term benefits. Sharing that written plan with others adds even more power to it. If you don’t write a business plan on the regular, you WILL pay more tax than you had to and spend money you didn’t have to. Period. This adds significantly to the wind speed drag for new business owners. Great post. As always.
Great comments as usual one and all to match the usual well written interesting article.
I choose self employment as a natural fit because :
1: I grew up an only child and enjoyed doing things on my own.
2: I always saw opportunities that few did.
3: I wanted control over my lifestyle. I made enough to live comfortably, raised a happy , well educated child as both parents shared child rearing responsibilities, and always worked only 2 weeks a month.
4: Found many employers were true debt slaves and often treated employees poorly in my early career working for others, disrespecting others to get things done to cover their own butts.
5: Hard work at times but the freedom, quality of life was priceless.
You can have the best of both worlds. I worked in healthcare and found my nitch. Not the top job, but something I licked. Nice to have a pension.
During that time I developed several side hustles related to my hobbies. Again it is not work when your doing something you like to do. My only advice is to keep it small and never have employees.
Side hustles are where you can make some bank. At one point (and for several years), my side hustles contributed 25-30% of our household income. That’s what helped us get a head start as we never spent it… we invested income from that (after buying tools and materials. Labor was *free*).
My 1099 work actually pays a much higher hourly than my W-4 employment… but no bennies.
I joke with my W-4 boss that I only show up for the health ins & self-direct 401k.
“Your Own Boss” is a bit like a married guy claiming to be “His Own Man”.
Once you cut through the BS, everyone works for the government. And the self-employed also have bosses…….lots of them…….they are called customers.
So as someone who swum against the tide and manufactured instrumentaion and specialty radars for over 50 years, here are a few words of advice:
1) you may start as a sole proprietor, but as soon as possible organize as an S-Corp or LLC…..both offer legal tax advantages and some liability protection. If you continue to grow, convert to a C-Corp.
2) the problem of medical insurance for the self-employed is almost insurmountable, especially when starting out. You either need to have an employed spouse who can get you and your offspring on their coverage…..or get ready to spend at least $1000/month for substandard coverage of you and yours under the ACA. Of course there is a third alternative for you and yours…..just never get sick or injured or go nuts or contract a disease. Medical is still the most common cause of bankruptcy.
I will disagree with your comment of everyone working for thr government as being a bit overly harsh and hyperbole of an unrealistic libertarian.
That said, you hit the nail on the head eith thr rest of your comments, especially medical insurance. I would posit that the bass-ackwards healthcare system in America is the biggest obstacle to entrepreneurship.
I wouldn’t mind working for myself but I’ve had enough a-hole bosses.
Seriously, a little to old to go that route now. I would say if I could do it all over again I wouldn’t have wasted my time with getting college degree. I would have just started working, and then figuring out a way to make a living without working for a paycheck.
A lifetime of people telling you what to do causes some damage.
I think owning your own business is the best way to get really rich (just look at IRS stats), BUT…
Let’s also looks at some of the downsides, mainly healthcare. If you’re mid-30s with a family in a corporate job, you’re a prime candidate to start your own business. You have the energy and have acquired some expertise. Unfortunately, your healthcare costs for you, spouse, and 2 kids is $24K per year ($6K you pay, $18K paid by employer). Plus that $6K deductible.
People who say the US is the “land of entrepreneurship” are kind of nuts to me. If healthcare were nationalized, entrepreneurs would not have to worry as much about moving out of the corporate life. There could be so much more innovation, but no, we get stuck in corporate life and the sweet advantages of that employer benefit.
Also, you have to factor in quarterly tax payments, 12% social security payments, and self-employment tax. All these are hard for newbies to understand and require a ton of discipline to not get hit hard at tax time.
I definitely agree that you need savings and a freakin’ solid business plan to have the best chance of success.
Regarding healthcare: It does not have to be this way. It is the way it is because some people want it that way. Lyndon Johnson’s famous quote: “things are the way they are because some people want it that way”.
Sensible countries have a national health plan. Medicare for all could be a thing. All the citizenry would have to do is lobby their reps for it instead of the way it is now where the financial beneficiaries of the current system lobby for the status quo. It could be done.
We would truly have a nation of entrepeneur’s if this ever came to pass.
Our national healthcare is a mess simply because of a stupid law that took effect immediately after WWII. Wage and price controls were still in effect so businesses started offering healthcare to get around wage caps. Then it was stupidly decided that this could be deductible for the business same as wages.
Dumb.
Interesting that entrepreneurship is so much higher here than in Europe in spite of this. I don’t think it’s a factor
I think you are confusing correlation with causation.
I think people don’t think about entrepreneurship as much in Europe simply because of worker protection laws that make working for a corporation less painful than in the U.S.
Most entrepreneurs I know aren’t corporate people looking for a different work environment, they are people who want to own and build and answer to themselves. Plus a few older people who seek self employment of necessity because of age related layoffs, ie they become more costly than new hires for the same skill set.
And health insurance is not the barrier you describe. Lower income entrepreneurs easily quality for sizable Obamacare subsidies, and once income outruns those subsidies, you are well into the 100K category for a family, not a fortune by any means, but above national median income.
Health insurance is not health care. We allowed corporations to take over the doctors who find it difficult to survive in private practice. My last primary care doc was in a concierge practice because he couldn’t make it on what the insurance companies were paying alone. In a one-on-one conversation, he shared that he didn’t go to medical school to do assembly line medicine… he truly wanted to help people. And he did. One of my saddest days was when we moved away from him.
My wife’s neurologist just kicked all insurance to the curb. Cash only. No insurance accepted. No Medicare, Medicaid, or private corporations. $500 an hour – take it or leave it. Cash at time of visit. No future billing, no accounts receivable, nada. Why? Because Medicare paid him for 15 minute patient visits. He spends at least an hour with each patient because he is thorough and does a full exam each time. He’ll randomly call to ask questions between visits to check on her progress. Just like a real doctor. We even have his mobile number that he answers. He purged his practice of probably half his patients rolls… and he’s happier… the remaining patients are happier (no long waits because he was overwhelmed with clients) and now only has a practice of patients that are engaged and follow his advice. I’ve heard him fire a patient who refused to follow his advice…. because he can.
Medicare for everyone is not the answer. That’s just more bloated bureaucratic malarkey. Get the insurance companies out of medical care and gut big pharma that can advertise 24/7 on every channel and then r*pe patients to cover the marketing costs and political “contributions”. Before there was “health insurance” (there was only catastrophic coverage), doctors visits were affordable. Once the insurance scam came into being, costs escalated.
My wife was prescribed a drug last last year. The *pharmacy* (which was owned by the health insurance company) pre-billed Medicare for $184,000 worth of a drug (nearly a year’s supply) and tried to stiff us with the co-pay. Lo and behold, the drug got pulled from the market as being ineffective less than two months later. I didn’t pay the co-pay as I canceled the credit card they had (their system wouldn’t let me remove it) prior to any shipments (we had stipulated that approval was required before charging the card). Our share of the $140K was in the neighborhood of $24,000. Eff ’em.
“Get the insurance companies out of medical care”
10000%
Imagine how expensive auto insurance would be if you used it every time you bought gas. No wonder Blue Cross bills the hospital $300 for a gauze pad.
Don’t have any ideas for new business and not enough time for hobbies and projects just being a 40hr/wk worker.
I think if we as a society and or the govt wants more people to start sustainable businesses to hopefully get more tax revenue and employment, we should quit interfering with the markets and racking up massive debt that’s a burden to society through inflation and therefore business as well.
I think as a 40hr/per week worker you don’t understand markets either so you are just repeating dogma you are fed by your corporate overlords.
That doesn’t make sense. Corporations love debt and market manipulation and I’m strongly opposed to it as said in my comment as well as opposed to their tacky, annoying ads and invasive apps that they try to shove at people from every direction. What corporations are speaking out against debt and dollar debasement? I haven’t heard of any. Corporations are overlords for politicians, not me. Corporations just want people to keep spending money, so they lobby, and influence with campaign contributions, the house, senate and administration to deficit spend, not caring about the repercussions of the massive debt that weighs heavily on the country, and the future that their own children will inherit. I understand well that markets have for a long time been strongly influenced by the fomo risk on mentality of gambler investors not buying on fundamentals and fueled by the colossal money printing dollar debasement and interest rate suppression carried out by the fed, the board of governors of which were appointed by the Republican and Democrat US senators that the people of this nation continue to elect due to being largely uneducated, uninformed, careless or ignorant of the actions of tptb.
I started my own business in 1995 right after our wedding. Our photographer had a sour attitude, didn’t really want to be there, and produced a disappointing end product.
With my love of photography and a firm belief in myself that I could produce a better product and run a better business than many people, I jumped headfirst into the wedding and event photography business.
By attending many seminars, finding mentors, lots of independent study, 24/7 devotion, and a bit of start up capital, I purchased all used Hasselblad equipment and asked my mentors if I could photograph events for them.
They were astonished with my level of service and the photographs that I produced. The customers were pleased every time! Slowly, I gained the experience and the self-confidence to launch my own advertising campaign and begin to acquire customers . One of my mentors said to me, “you crazy Italian: if you have a chance to either be a good photographer or a good business/marketing person, please choose to be a good business/marketing person”.
I was excited about the ability to improve my work with every event and with every single action and thought, that I put into my work.
After acquiring: errors and omissions, insurance and liability insurance, I knew that sky was the limit.
Never again did I think about scheduling because my job was now 24/7. I always quoted people a fair price and worked with them to make their dreams a reality. I put the customer first: EVERY SINGLE TIME!
Marketing seminars were just as important to me as photography seminars. It did not take more than several years to have more business than I could handle.
Every single event was amazingly fun. Everybody was always on their best behavior and dressed to the nines. Having to work with beautiful bridesmaids was …
I exceeded my own expectations in terms of becoming the best that I could be. I shut the business down at its height because I wanted to not miss out on raising my son. Then I moved on to being an employee once again, but never relenting on self improvement and 100% customer satisfaction.
Because of this, I can say unequivocally and unchallenged that Wolfe is doing all the right things. A successful entrepreneur has all the qualities that I demanded of myself. So when I come to this website, I know that I will get a product that has been carefully researched and not only includes magnificent content but more importantly: the author’s SOUL!
Everyone wants to be the boss of a business that is successful but try getting folks in at the onset? Near impossible. As the pay is terrible the hours are bad, but show them the sale price price later on and everyone says they would have made it work.
I volunteer to work with business owners and a lot of wannabe business owners through a large national organization.
When I meet someone who “wants to have my own business,” the first question I ask is: “What can you do, make, or sell that will cause people to want to give you money?”
We’ve (meaning academia and the media, really) built this cult of The Entrepreneur thanks to people like Musk and Gates.
I often advise Get-Z’s who want to be entrepreneurs to go work for somebody else for a few years, learn how to do something people will pay for, and learn a little bit about how business really works.
I remember an auto dealer (multi-franchise operator) whose son had recently graduated college telling this story: His son came into his office and asked the father which store he was going to run. His father reached into his top desk drawer, pulled out an envelope with $10K cash (this was in 1982 money), and a set of keys to a new Buick.
He said something to the effect of “Go out and get a job elsewhere, make all the rookie mistakes with someone else’s money, and then come back when you think you knot it all and we’ll talk.”
I learned a little too much while getting my MBA and decided that I didn’t want to do anything more than small side hustles until the kids get older.
I was in a class where we had a live talk with Barnett Helzberg (Helzberg Diamonds billionaire). Someone asked what his biggest regret was. He said it was spending so much time on flying on planes to grow the business while his kids were young.
If you are you own boss you can fire the bad customers (if you have enough others). If you work a regular job you can fire the boss if you can land another position. Or you can sell a commodity and be at the mercy of the market.
I really enjoyed this article and comments. It’s good to hear that other professionals had similar experiences. The first few years out on my own were hard, but my family is so much better off because I took the leap.
On a couple of occasions I’ve been offered the keys to the castle. “Thank you but no thank you” was my reply in both cases. I’d rather show up and collect a paycheck than have the weight of the business on my shoulders.
My job security is simply being too valuable to replace.
I quit my well paying tech job with stock options (of course, exercising the ones I could take with me) and took a great opportunity (and risk) . I cashed out my 401k, stocks, etc to buy this opportunity. I had a young family, mortgage, and fortunately, my wife had a decent job with decent health insurance and benefits. This was in 2008 just before the Great Recession really hit. I had no idea what was about to happen.
This was 16 years ago and so many things could have gone wrong. I worked hard, found mentors, studied, and just got lucky many times.
I had five grey haired business mentors during that time. All of them have passed now, but this is where I really learned my education.
Technically, I am in the 1%, but I am small potatoes compared to some of the folks near me. I am comfortable, these people are wealthy. My kids work, their kids experience. Just things that most people in the world do not understand. Then, I think of average Americans making $70K a year. I try to understand, but I really don’t. Take care.
Marketing is the hardest part of Entrepreneurship.
Thanks Google /s
Would never go back working for somebody else. Looking back at the amount of time wasted on pointless meetings/activities is insane, while working for an organization is insane. Not to mention personnel drama.
I had to work full time + part time till night on my own business for couple years. Luckily it worked out. Most people just want the glory from the beginning though.
This post and comments caused me to stop, think and remember … I by necessity and preference consume a lot of news/info, and it is good to be provoked to reflection as opposed to the grind of action and reaction most self-bosses must navigate. Rock on.
I ‘stumbled’ into a self employment opportunity while working my way through college (engineering). I continued with it after graduation while working in my career field. There came a time that I had to make a decision and went into it full time. It went well, until I burned out :-(
One thing I want to mention is that while still in school I filled my electives with Accounting 1 & 2, Economics, Speech, Small Group Comms, etc. Also Zig Ziglar and Dale Carnegie. Needless to say I firmly believe many small businesses fail due to not managing the numbers and poor communication skills.
Growing up as the son of retired military and then both school any college administrators I felt for sure I would go to work as a government bureaucrat or as a minion for a big company. I became self employed in 1993 and have been self employed ever since. My original partners had savings and I had the ability to take a pay cut down to $30k annually and I have never looked back. Currently making $1m for the third year in a row and paying $350k in taxes each year.
I find this whole discussion incredibly interesting. Especially as someone who has worked in multiple situations (corporate job, entrepreneur, managing partner (with investors who had significant say), consultant, etc). With many of my entrepreneurship being side hustles while I held a corporate job.
What I have found in my experience is that people talk a good game about not wanting to work for the man, but when the rubber hits the road, they prefer the comfort of a steady paycheck without any risk.
Twice in my life I have worked on side hustles than involved me working with outside help. In those cases I offered them either a modest, but assured paycheck, or an percentage of the profits. A ridiculously,overwhelming number of them took the steady paycheck.
One the first project, I completely understood the other guys thinking. His choice was working for 400 hours for $10,000 ($25 per hour) or taking a percentage of the profits that probably would work out to $15,000 or slightly more, but could also be zero. He took the definitive amount (and I don’t blame him), but he could have made a little more by gambling (I think $16,500 ish). Considering he needed the money, I 100% do not blame him for gambling.
In the other situation, I literally found a gold mine. During the 2007-2008 crisis, the corporate company I was working for had a huge opportunity to greatly reduce one if their expenses. It required a decent capital investment, but it was clear it would pay off. Unfortunately due to the housing crisis, the higher ups panicked and cut off all capital investment. All of it. The project was completely cut even though it was a given it would save them a ton in expenses.
After talking with multiple people in the company and outside the company, it was clear that doing the project would save them at least a million in expenses. So I worked with a bunch of people within the company and worked out a contract where I would front all of the upfront capital investment and do all of the work. They would then use this software and we would split the percentage they saved in expenses each year.
The company overall was reluctant, but every individual in the corporate chain was eager to see the project done. So to get an agreement, I had to agree to give the company an option to buy everything for a very cheap multiple of expenses saved.
I spent a ton of money implementing and configuring the software. A ton. I was working 100 hours per week and spending money like crazy. I had to work with (and pay out if my pocket) a dozen people to do hardware and software configurations.
Every single person I worked with, when I approached them and told them the details of the project, they were really excited. They thought it would make a ton of money
So since I was cash flow constrained, I offered each of them a percentage of the profits rather than a wage. Most would agree that they would do better by taking the percentage than the wage, but 10 out of 13 took the wage.
What was so mind bending is that for most of these people, it was a side job. They had a regular 9 to 5 job and the work for me was a side hustle on the side at night. They could easily afford to gamble because it wasn’t costing them anything but time. Their children were still being fed, etc. Most were doing this as an interesting challenge, not a money making venture.
Even though my projections were really good and it was fairly clear it would be a money maker (and everyone agreed and was somewhat jealous that I had the opportunity) the project blew expectations out of the water. The company saved far more than expected. Ridiculously more. My share of the savings more than paid for the project after just one year. Just the first year provided a ridiculous return.
Good for me. Yay.
More importantly to this thread article, what amazed me was how many people didn’t want to gamble na dtake a percentage of that. The three people who did greatly benefited. They made a ridiculous amount of money for the effort they put forth. Good for them.
What amazes me is thise that didn’t. Most of the people I worked with did not need the money. They did the work for me for an hourly wage that was insignificant for them. Furthermore they knew beforehand that they could make more by working for a percentage rather than an hourly wage, but they just wanted the money upfront.
The biggest facepalm was a particular programmer I really needed. It was a specialized skillset. When I talked to him, he instantly knew the project would be insanely profitable. He was stoked about the project. Just from a purely intellectual standpoint he was excited to do the work. I initially offered him a percentage, and he declined. He wanted a paycheck. Then we negotiated an hourly rate.
He was really intregal to the project so he crushed me on the hourly negotiation. Afterwards I realized I could have gotten him for half if what he negotiated because he was so excited. The thing was, he lost tens of thousands, maybe more, by not taking a percentage of a project he was excited enough about to do as an interesting side project.
He made $15,000 for his work. Great for him considering he thought if it as an interesting challenge. He could have made $100,000. Probably way more if he took the percentage.
TDLR, I really doubt the percentage of the respondents on the surveys you quote because I think people talk a bigger game than they are willing to really live with. At least in my experience.
I also want to reinforce what a couple of posters have said above.
One of the biggest obstacles to entrepreneurship in this country is our crazy healthcare system. It is insane. Personally I know I would have worked more towards starting businesses that would employ people except that the healthcare question intervened.
I’ve been on both sides of the fence
Worked in the government for many years with many bosses, some good , some bad, and retired with a good pension. Now, I’m my own boss, running two businesses.
Sad to say, I look back on the government employment as the “Good old Days”. I would take those days over this bull s$it self employment any day of the week. It would take me a long time to list all the reasons, but may do so if anyone is interested.