In Me 2.0, Dan Shwabel writes “over the past few decades, the media has brainwashed us into thinking that most start-up companies fail” (p. 77) and goes on to site a source that says 2/3 of start-ups survive at least two years. Yet in Illusions of Entrepreneurship, Scott Shane states “most start-ups do not succeed; the typical entrepreneur forms a business that is gone within five years” (p.109). Yet even Shane admits that just because they are “gone” does not mean that they “failed”. Only 18% fail and the rest “survive” or are closed by the founder (p.100).
The statistics on new business success are equivocal. I stick with the “1/3” rule of thumb – 1/3 lose money, 1/3 just break even, and 1/3 earn some degree of profit. Starting a business is risky and a lot of work. While some founders become extremely wealthy, most work more hours and earn less money than their corporate counterparts. So why do people do it?
Satisfaction – the kind driven by the autonomy, flexibility, and greater control over their lives that being their own boss provides (Scott, p.109).
There are five main things we can have degrees of satisfaction with at work: pay, opportunity for promotion, supervision, co-workers, and the work itself. A lot of people think pay tops the list, but the two most consistently important sources of satisfaction are satisfaction with supervision and satisfaction with the work itself.
These are the two kinds of satisfaction the entrepreneur has the most control over. So it makes perfect sense that despite the odds of success, running your own business makes people happier than working for someone else and that’s the main reason why entrepreneurship might be right for YOU.
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