1. Because you really need a job: Even as the economy is showing signs of life, the job market still sucks. I get it. I've been one of those people who, months into a downturn, thought "Hmmm, what if I started my own business?" But I should have looked a little deeper. Back in 2002 I teamed up with a woman who had run her own business for years to start a marketing consultancy for professional gurus. I figured, I loved to be around smart people, had a Rolodex of contacts and strong background in media, and I had a partner who knew the ins and outs of running a small business, so why not? But what I really wanted was work on my own terms.
We needed capital to pull together marketing materials--something that I really didn't have. We needed to invest in a designer, an accountant, and the legal procedures to properly incorporate our business--expenses that felt like amputations. All I wanted to do was the business development and the client work, none of this business-planning stuff. After six months I had a heart to heart with my partner and realized: I don't want to start a business, I want to be hired to do work I'm good at. Big difference.
Sure there are businesses that have sprung from necessity, but unemployment is one of the worst reasons to become an entrepreneur. You are spending your resources at a time when you need them the most. The best time to consider entrepreneurship is when you are employed and drawn to doing something else. Then you can truly answer the question of whether you are committed enough to provide steep outlays of time and money to give your business the care it needs.
There's nothing wrong with wanting to take the bull by the horns when you are unemployed and drumming up your own work, but determine what it is you want: a paycheck, or your own business?
2. Because you want to work less. More flexible work schedule? Check. Fewer hours? Not exactly. Despite what I've read from people who have whittled down their workweeks to four hours, I still think that people who start businesses for a more leisurely lifestyle are not crazy, just delusional.
Some people eventually achieve a momentum and can allow others to do much of the heavy lifting, but by no means does this happen without a whole lot of elbow grease.
When we first formalized our business, my partners and I enjoyed the freedom of creating our own hours, but that didn't mean we could reduce them. And frankly, the more established our business became, the harder it became to do things on our personal schedules. Clients and investors could not be slotted in when it was convenient for all of us. Opportunities happen when they happen. Later when we received venture capital and hired staff to help us, we still had a lot of work to do--just a different scope of it. As we built a workplace that allowed for such things as varying commute times and child pick-ups, we still needed to adhere to the same general hours our employees did so that we could be available when they needed us, and then for everything else that came up.
The entrepreneur's challenge is not "How can I make money doing not very much?" It's "How do I fit the rest of life into my day?"
3. Because you are sick of working for someone. You hate your boss--fine. You hate the politics of the office place--got it. But starting your own business opens up its own new set of challenges. Have a customer that won't pay? It's your problem. And now you no longer have someone else to blame for your own shortcomings. You may have hated red tape and the onerous chore of reporting into someone and keeping a record of everything, but now if you aren't on top of things, you screw yourself.
The first time I struck out on my own I was 25 years old, and I was no Mark Zuckerberg. About four months in I was paying rent but mentally I was my own worst enemy. Was my work any good? I no longer had a boss to tell me what I could be doing better; no in-house mentors, or someone to vent to. I wasn't seasoned enough to be confident in my work.
Companies are political by nature because society is political by nature. You can't thrive in your business unless you've mastered people and processes. If you are so oppressed by your boss or your workplace, consider another job before you consider building a business.
People who become entrepreneurs solely to avoid authority and the everyday realities of working with people are like teenagers who, when their parents are out of town, drink themselves into oblivion. Sure, there's no one there to yell at you while you barf your brains out, but you still suffer.
4. Because you want to become rich: Don't get me wrong--there are entrepreneurs who have built massive wealth, however they didn't likely go into business to get rich. They went in to reinvent the way that we search for information online, or because they love to cook and kept finding opportunities to expand the way they expressed that passion, and then they realized they could make money doing it. Entrepreneurs who become rich do so because they love what they do. It has meaning for them, so much meaning that they are willing to do whatever it takes, at weird hours, often at high personal inconvenience and risk, to do it. Making money doing it becomes inevitable.
If you perceive starting a business as your golden ticket, think again. Think about the why. A rule of thumb: Ask yourself, even if I knew I wouldn't get rich doing this work, would I still do it? If the answer is no, that's OK. A lot of people who made a lot of money building businesses have felt this way. But do you really want to do something that's not meaningful for the possibility that you might make money doing it? Now THAT is what I call risky.
A lot of businesses bombed in the Web 1.0 days that were built on less than passion. The need to make money doing what you love leads to innovation. The need to get rich leads to stupid decisions.
I once had the privilege of sitting down with a very wealthy tech entrepreneur who was working on his third startup. He said that the most valuable thing his wealth bought him was freedom. He was now free to build businesses that were meaningful, not just profitable.
5. Because you want to become famous. We are really spoiled here in Silicon Valley, where entrepreneurs are often treated like rock stars. You don't even need to be profitable out here to get attention. But most of the world doesn't work this way. Actually, all of the world doesn't work this way. Even the businesses that attract huge press and attention will die if they aren't well run. (I won't call out the usual suspects, but just think Web 1.0). Rather than think, "How can I become famous?", ask yourself "How can I create something deserving of attention?"
Mike Robbins, a great thinker and friend, recently wrote about this need we all have for recognition. It's a perfectly natural desire. Where this need becomes problematic is when we feel that fame is the only form of recognition that can validate us.
"...There does seem to be a collective belief in our culture that becoming famous and well-known is an important goal and a key element to being successful and fulfilled in life. No matter how many big examples we've seen over the years to the contrary, many of us still get caught up in the elusive and ego-driven chase of fame. And, even though some of us have no specific desire to be “famous,” most of us think that if we had that (more money, greater influence, better body, perfect relationship, enhance ability, more exposure, etc.) then we'd be happy or feel like we'd made it.
...What if, instead of standing back in self-righteous judgment, we used these recent examples ... of fame chasing in the media to give us an opportunity to learn more about ourselves, get in touch with what truly matters to us, and practice being more of our authentic selves in life – instead of chasing attention or acknowledgement."
One of my entrepreneurial heroes is not someone you've read about. She amassed a small fortune with her business. And then when it didn't serve her any longer she stopped and started a family with a considerable nest egg. Another entrepreneur I know loves the process of starting businesses and leaves them to be run by others, often never getting the credit for making them sustainable. He's in it for the thrill of building something worthy of notice.
If getting attention is your reason for starting a business, take note: There are much easier ways of becoming famous.