I just finished reading Tony Hsieh’s Delivering Happiness* and it got me thinking a bit more about the whole meaning of entrepreneurship. Tony was a natural entrepreneur and he went through many business ideas when he was a kid. That first part of the book was the most enjoyable for me because it shows how an entrepreneur thinks. There are opportunities to make money everywhere and natural entrepreneurs are the one that will take advantage of those situations.
*Tony Hsieh is Zappos’ CEO. It seems this book is out of print because Amazon only has the comic version. Check your local library if you want to read the old full version.
I am not a natural entrepreneur. I never came up with any business or scheme to make money when I was a kid. I guess the allowance was easy enough for me and I didn’t have the drive/guts to be entrepreneurial. My dad on the other hand loves being his own boss. He can’t stand working for other people and he can smell opportunities everywhere.
Here are some of the businesses he had.
- Chicken farm: Started with 200 chickens in a spare bedroom and went up to 20,000 chickens in a year or so on an actual farm. Unfortunately, they all got sick and died.
- Pig farm: Not sure exactly what happened here.
- Document copy store: Similar to Kinko’s.
- Home appliance store: He expanded too quickly and lost this business due to too much debt.
- Trading in antique Buddha amulets: This is a big business in the Thai community.
- Sold durians from a truck in LA: Didn’t last long with this one because he didn’t have a permit.
- Thai restaurant: He cooked and ran a small Thai restaurant for many years.
- Liquor store: He ran a liquor store for a few years.
- Pawn broker: He lent money while holding on to various types of collateral.
- Bronze Buddha shop: Commissioned and sold bronze Buddha statues.
He also had a bunch of regular jobs, but those usually didn’t last long.
My brothers and I on the other hand went the normal route and worked regular jobs. While I always had one idea or another, I never really took the risk to follow through until last year. Even then, I was certain that we would be fine financially before I quit my corporate job. I’m beginning to think that my dad’s struggles dissuaded me from being an entrepreneur.
Being an entrepreneur isn’t for everyone. There are many downsides to it and it’s not for the faint of heart. Here are 7 downsides of being an entrepreneur from my experience.
7 Little Downsides Of Being An Entrepreneur
Success is elusive. The list of my dad’s businesses is impressive, but it’s an illusion because many of those businesses failed. According to the Census Bureau, only about 50% of new businesses survive over 5 years. An entrepreneur can’t be afraid of failure or taking risks. My dad has a very high risk tolerance because he had to fight his way through life since he was a young orphan. On the other hand, I had a pretty cushy childhood and I’m not very gutsy.
You need money to make money. My dad didn’t have any support networks or financial backing. He usually started a new business with the bare minimum capital required and as soon as there was one big financial bump in the road, he wouldn’t be able to handle it. Tony Hsieh used up all of his resources (millions) to back Zappos. If he had less money, Zappos wouldn’t have survived the dot com bubble.
You need to gain expertise quickly. My dad has degree in education and worked as a salesman before he started the chicken farm. He just went to the library and talked to local farmers on how to raise chickens. That’s the way he did things. He never cooked in his life before he purchased a Thai restaurant. He jumped in and learned on the job. Entrepreneurs have to be able to jump in with both feet like that.
You will spend all your time on your business. My dad was always working when I was a kid. Running a business will take all of your time. From finding the right employees to the right human resource software for payroll management, there will be an endless amount of things to do for your business. Entrepreneurs will sacrifice all their time to make their business a success. My college friends who started their own businesses were chained down to their office desks for years. They couldn’t take a vacation or anything. It’s rough on the family. Even a small side venture like Retire By 40 is taking up about 4 hours/day of my time (including weekends.) I can easily spend 8 hours a day or more doing blog related stuff.
Healthcare is expensive and many entrepreneurs go without insurance. Healthcare is a huge issue now in the US, but it’s not new. When we immigrated to the US in the 80’s, we didn’t have health insurance for many many years. It’s just one more bill to pay when you’re trying to run your business. I’m very lucky that I’m covered under my wife’s current employer sponsored plan.
You’ll have problems with your employees. I think this is a given. This is especially true in the hospitality industry like a restaurant. An employee may show up drunk, late, or not show up at all and the turnover rate is high. It’s hard to keep an employee happy with the low pay scale. It’s just another headache to deal with as a business owner.
It’s hard to save for retirement. It’s hard to save for retirement when you’re concentrating on running a business. I think most business owners rather spend money to improve their business than save for retirement. Some businesses can be sold when the owner retires and that can be their retirement fund. My parents have some assets, but they will have to depend on the kids when they get older. That’s partly due to our Asian heritage, though. The kids are expected to take care of their parents.
It’s not all bad
Of course, being an entrepreneur has a lot of benefits too. I left my corporate job last year and I’m much happier now. As I mentioned before, I don’t have a very high tolerance for risk so I’m not planning to bet the farm on a business anytime soon. For now, I’m happy with making enough money to help pay the bills and being a stay at home dad.
I know many readers and bloggers dream of starting a business and being self employed. I hope I didn’t scare you off with this article. It’s just my experience growing up with an entrepreneurial dad. As for me, I hope to minimize most of these problems and maintain a balanced lifestyle as I continue my own entrepreneurial dream.
photo credit: flickr calsevan