Entrepreneurship isn’t something you should walk into blindly, especially if you want to succeed. The failure rate for entrepreneurs is high, with 20% of new businesses failing during the first two years of opening, 45% floundering during the first five years, and 65% closing up shop within the first ten years of existing. According to the U.S. Bureau of Labor Statistics, only 25% of new companies actually remain in business for 15 years or more.
If you want to be in that 25%, you can’t start a company haphazardly. You must enter entrepreneurship with a game plan and, more importantly, the right expectations.
It’s easy to jump into entrepreneurship, believing the road to success will be short and allow you the freedom to sleep in on weekdays, work for a few hours every day, and spend time traveling the world or doing whatever else fulfills your wildest dreams. But the reality is much different.
That’s not to say entrepreneurship can’t lead to flexible work hours and a new, fun lifestyle. It’s definitely possible to achieve that, but owning a business doesn’t immediately (or, in some cases, ever) lead to the glitz and glam or Instagram-worthy images people post. It’s still a worthwhile road to travel down. After all, entrepreneurship can provide a more rewarding career, the ability to work anywhere, leadership experience, a strong network, and much more.
But don’t go into entrepreneurship expecting success to come quickly and easily. Instead, there are six hard but honest things every entrepreneur must assume when starting a business.
1. Your stress levels may increase
One of the reasons you may get into entrepreneurship is to decrease stress. Not having to answer to a boss, work with difficult clients, or handle tasks you don’t enjoy sounds like it’d be a straight shot to lower stress levels. But in all honesty, your stress may increase from being an entrepreneur.
According to a 2019 report, 64% of workers who started a business expected to have lower stress levels after building their company, but only 55% experienced that reality. This insight makes sense—being an entrepreneur can require you to work long hours, juggle many different hats, and forgo a social life to maintain your business. All of that can increase your stress levels significantly until you’ve found a flow that works for you.
2. Your lifestyle may look different than expected
When you think of starting a business, what do you imagine? Do you foresee yourself sitting in a quiet park in the middle of a Monday, taking vacations on an island in Italy, or barely working on the weekdays? If so, while these are achievable dreams, that same 2019 report indicates that less than 30% of entrepreneurs enjoy this reality on a day-to-day basis. Additionally, 70% of new business owners expect entrepreneurship to empower them to be healthier, but only 54% say they’re healthier after starting a company.
Ultimately, your lifestyle may not be what you imagined when you saw yourself creating a business. You may not be on vacation every month or replacing Monday afternoons at work with time in the park. You also may not be any healthier than you were as an employee. But these things can change as your business grows and you build processes and great teams.
3. Financial risks are inevitable
This one may be an assumption you already had, but it’s still good to keep it on your radar. Financial risk is such a significant part of entrepreneurship, and worrying about it is normal. Around 53% of people hoping to start a business worry about inconsistent income, and 27% worry about earning less money.
Of course, not everyone is nervous, and you may fall into this category. According to the 2019 report, 72% of people believed they’d earn more money after starting a business, but only 55% of people actually did. That’s still a good percentage, but nonetheless, it’s a wake-up call that you should have the right financial expectations when starting a company.
4. Failure is common
Throughout your entrepreneurial journey, there’s one thing you can expect over anything else: you will fail. That doesn’t mean your entire business will fail. But some of your marketing ideas will fail, some of your sales strategies will come up short, and some employees you thought you poured into effectively will feel undervalued. Failure is a part of the entrepreneurial journey.
When starting a business, you should assume you’ll fail many times, but the ability to learn from your mistakes and try again will make you a successful leader and entrepreneur. Failure doesn’t have to define you, but it should be embraced by you since it’s a norm.
5. Mentorship will keep you going
You may not have a lot of people who can give you advice on how to grow and sustain a successful company. That’s why mentors will become your best friends. Having people in your life who’ve gone before you to build great businesses will be the very people you need to continue along your path and overcome any obstacles that arise.
Mentors can share their experiences with you and highlight the right directions to move forward in. And with that guidance, you can learn best practices, areas of opportunities, and pitfalls to avoid.
6. Your path may look different
Everyone’s entrepreneurial journey looks different. What someone did to experience success may not be what you do to experience success. This insight may sound counterintuitive, especially since this article just mentioned how much you’d benefit from mentorship. However, your mentors’ paths may be different from yours. Even the entrepreneurs you’re learning from through books and masterclasses may have different paths than you.
That doesn’t mean their guidance is useless or their expertise isn’t valid, but it does mean that some tips may work and some may not. As an entrepreneur, you must assume there will be variations in your startup journey versus someone else’s simply because you’re different people running different companies with different employees. Those three things alone will make your path unique in particular ways, and that’s okay.
Don’t be afraid, be knowledgeable
Knowing what to assume when starting a business shouldn’t deter you from entrepreneurship. It also shouldn’t make you afraid of pursuing this path or believing you can succeed. However, it should provide a healthy dose of reality so that you know what to expect and don’t become discouraged by every obstacle. Knowledge is power, so knowing what could happen on your entrepreneurial journey will ensure you don’t crumble when problems arise because you’ve already assumed they’ll happen.