Today’s media celebrates entrepreneurship — SXSW Interactive, Planet of the Apps, and nearly a dozen entrepreneur-focused reality shows — and can encourage many first-timers to start a small businesses without understanding what they’re getting themselves into. Soon, they may find themselves drowning in a sea of regulations, employees’ needs, and clients who aren’t paying invoices on time.
The good news is, even though small business ownership is tough, many agree the rewards are better than a traditional 9-to-5 job. Below are three misconceptions the media often promotes about small business ownership. This is how to deal if you found yourself believing the hype.
1. You’ll be your own boss.
While true on one level — there is no “boss” to answer to — on another level, this often-touted benefit of small business ownership couldn’t be further from the truth. When you start a small business, you essentially swap the reality of having one boss with the reality of having additional people to answer to.
A small list of people you’re accountable to can include lenders, investors, bankers and landlords – all of whom expect regular updates; customers, who can be as demanding as any traditional boss; regulators, who can multiply with your growth as a small-business; and your own employees.
But, here’s the flip side.
While there can be a lot of people holding you accountable, the excitement of running a small business can be like nothing else. When you find yourself overwhelmed by how many people need things from you, try to take a step back and look at what you’ve built. You’ve created a business that has become successful enough to impact the lives of all of these people.
When the demands of small business ownership become too demanding, take a break and prioritize your to-do list. Delegate what you can, and ask for extensions where possible. Remember: although it sometimes doesn’t feel like it, the overwhelming majority of people you’re accountable to are on your team. When you need help, ask for it. You might be surprised by how those around you are willing to help lessen your burden.
2. You’ll have greater work/life balance.
As the saying goes, “Entrepreneurs are the only people willing to work 80 hours a week to avoid working 40 hours a week.” It’s a fitting description of the life of a small-business owner, where work never really seems to end. Even late at night, there’s always something else to do: answer emails, address inventory concerns or reconcile accounts. Because of the workload, many small business owners can attest to going years without a vacation.
Now for the good news.
While you may end up working more hours when you own your own business, if you love what you do, it may not feel like work. Although you might have a less traditional schedule as a small business owner, there are flexibilities in other ways. You may be able to mix business with pleasure — for example, a working vacation, or research that interests you that could also be a business deduction. Instead of thinking about the quantity of time away from work, consider the quality of all of your time and how entrepreneurship can make all of your time more fulfilling.
3. It’s a great way to get rich.
There’s no quicker reality check on this myth than doing taxes at the end of the year. While success stories make compelling viewing and some small business owners do become wealthy, the vast majority of businesses don’t ever hit $1 million per year in revenue, let alone profit.
Oxford University affiliate 80,000 Hours reports that 50% of entrepreneurs make less than they did (or would have) as salaried workers. In fact, many business owners end up making less than they did as employees, often for more hours worked, and with considerably fewer benefits. Only about 30% earn more.
You may not get rich, but…
Although there may not be a pot of gold at the end of the rainbow, there can be a comfortable life spent doing something you love. Investing in an accountant you trust who specializes in helping entrepreneurs can be key to a successful life as a small business owner.
Being a small business owner isn’t easy, but there are often silver-lined flip sides to every challenge. And although some days may not feel like what you bargained for, take comfort in the fact that most other small business owners are facing the same challenges you are…despite what you may see on flashy reality shows or hear on trendy podcasts.