To be an entreprenuer or not to be

[nphx]

11 years into my 2nd small biz IT related. Its comfortable now. I have started to select good customers and when a pain in the keester offers me an out - I am always helpful to get their son or new vendor what they need to takeover since they can certainly do it for less and better. A bit better in seeing that profile client coming and not so hungry to persue it.

Now as fruits of labor come in - i try to find ways of bringing long term employees along. I'll have to deal with that because im obviously looking at ER scenarios for me - and how to put some security into the loyal employees. At a really really smaller scale I need a Warren Buffet type acquisition where the business viability and customers and employees are appreciated.

 

[armor99]

But you still had a "boss" giving you orders. Maybe some people need a "boss" because they can't figure out how to bring home the bacon on their own. Once you have your own business, it's hard if not impossible ever to work under somebody else's control whether he's good or bad. To me having a "boss" is infinitely worse than working.

One day I very much hope to do as you have done. I think you are absolutely right. No matter how much you might like your job, or how great you boss might be, ultimately.... you are still pulling the yoke for someone else. How can I ever be truly happy, when the product of my own labor is not actually mine to own? No matter how much I get paid at a company, the return on investment for the company will always be higher than the rate they are paying me. True... there is far more security in a job, than going it alone, but without risk, there can be no reward. The only thing I need to do now is find an area that I have some aptitude for, and am interested enough in.. to go at it for many years. And then.... I think I will finally be happy.

 

[mja]

No matter how much I get paid at a company, the return on investment for the company will always be higher than the rate they are paying me.

I hate to nitpick, but that's not strictly true, in my opinion. Picture a slacker employee, who doesn't get the job done, but continues to get paid. It wouldn't make any sense to keep that employee, but it's not unusual to see people who do exactly that at government jobs. Many (most?) politicians are fine examples of "employees" that generate a negative ROI.

 

[Milton]

I think the key here is as the business owner, you CAN tell the customer/client that you don't want to do business with them! I only did this a couple of times in 13 years, but it sure made me feel good and I didn't have to worry about being fired.

It depends.

Although most wage slaves don't have much real freedom, a salaried employee with a high-demand skill set can often refuse to do specific types of work, or too much work ... and the employer will have to accomodate them, or they will 'jump ship'.

Conversely, many small business owners have only two or three major clients, to whom they must kowtow or risk jeopardising their entire business. And this is also true of some very large businesses: e.g., few consumer products companies can afford to argue with huge retailers like Walmart or Costco.

I think many entrepreneurs work harder and longer hours than the average salaryman to keep their customers and grow their businesses.

Yes, I agree. Certainly the entrepreneur has much more incentive than a salaried employee, whose long-term future with the employer is dependent upon factors entirely beyond his or her control.

Like "Peter Gibbons" said in Office Space: "It's a problem of motivation, all right? Now if I work my ass off and Initech ships a few extra units, I don't see another dime; so where's the motivation? ... [M]y only real motivation is not to be hassled; that, and the fear of losing my job. But you know, Bob, that will only make someone work just hard enough not to get fired."

My clients often try to tell me what to do and when to do it. If they need something, they might need it now. I have to do it or lose the client. My associates sometimes have problems with this concept.... I ask for something on Friday (because a client asked) and they say they have plans for the weekend and can't get it done. So I do it myself, or have the associate grumble because I made him miss his weekend.

Of course, I could tell my clients to wait. But I think I would lose my biggest and best clients if I did so.

Martha, I don't know your practice, the nature of your clients' typical problems, or the strength of your client relationships. But it strikes me that the key sentences in the above passage are (1) "If they need something, they might need it now", and (2) "I could tell my clients to wait. But I think I would lose my biggest and best clients if I did so".

Perhaps it would be possible to ask your clients how time-sensitive each new assignment is. The assumptions that everything is urgent, and that your best clients will drop you like a hot potato if you don't jump through arbitrary hoops, might not be warranted.

 

[ScooterGuy]

Former entrepreneur

Back a couple of decades, I started my own company. I did this out of sheer desperation, since my science field had just tanked (Iit was pretty obscure to begin with, and the Fed stopped all research funding). I became a medical-technical writer, free-lance researcher and a microcomputer database programmer (remember Paradox and RBase?).

I broke even the 1st year, made a profit the 2nd year .... I got so successful that my wife at the time stole the business out from under me during the divorce. What I'd taken 3 years to build, she ran into the grolund in 6 months.

I tried twice more, but never had enough capitalization to get past the 1st year.

Following the subsequent divorce, nervous breakdown, depression and being disowned and dis-inherited (mother: "your ex-wife is my best friend and she would NEVER, EVER lie to me ...), I did pick up jobs, & did well until I ER'd with my now DW.

Being an entrepreneur is a very RISKY way to live -- it's feast oir famine -- if your SO or spouse isn't on the same page as you, or has 'hidden agendas,'it is doomed to failure.

But, dear God, there's nothing like building and owning your own business. It takes over your liue, 24/7/365. Nothing ... except possibly ER with a comfortable life, spent with a hot wife.

 

[Milton]

Mother: "your ex-wife is my best friend and she would NEVER, EVER lie to me ..."

Ouch.

Being an entrepreneur is a very RISKY way to live

Yes, that's true. It is not for everyone, and only those (relatively few) people with a real passion to be their own boss should attempt it. I think it's regrettable that so many success books advocate self-employment for the masses as some sort of panacea.

if your SO or spouse isn't on the same page as you, or has 'hidden agendas', it is doomed to failure.

I would go farther and say that this is essentially true of any plan or project (including LBYM) undertaken by someone who is married.

 

[BunsGettingFirm]

But, dear God, there's nothing like building and owning your own business. It takes over your liue, 24/7/365. Nothing ... except possibly ER with a comfortable life, spent with a hot wife.

First let me say that I absolutely am in awe of your perseverance.

As for that last paragraph, is that a good or bad thing? For us active types who want or need to occupied by some grand ambition, it could actually be tonic. OK, ok, if I had ER and hot wife both lined up at the same time, I'd choose that, but to have hot wife, I'd need to delay ER by quite a few years.

 

[tryan]

hmmm, here's 2 ways to have the "spouse thing" play out in a successful business start-up:

1) they are a partner carrying half the load and sharing in the decisions.
2) they have nothing to do with it ... work a separate job ... stay home with the kids ...

Anything in between (e.g. wants to make decisions but not "work") is doomed to failure.

DW has nothing to do with the RE. We own stuff she's never seen (let alone step foot in). That's what works for us.

 

[kcowan]

Ouch.
I would go farther and say that this is essentially true of any plan or project (including LBYM) undertaken by someone who is married.

When I quite big corp and started up my company, it took a couple of years to realize that my DW as not committed to it. After separation and divorce, my entrepreneurial success took off. Current DW is much better suited to me even now retired.

 

[BunsGettingFirm]

I have found a number of good companies to buy, but the hardest part for me psychologically is taking that pay cut even though in a total comp sense when I count the principal/equity payments and other extras (shh..), I'm actually making more money. I know in a few years I'll be making a heck of lot more than most day jobs at mega corp. How do you guys who have done it take that first step? Is it because you just have an unshakeable belief in the business or because you simply thought the self-directed route is your calling?

 

[Fireup2020]

I do not have the patience to be an entepreneur. I see too many people with their "own businesses" who are "at work" wherever they are. No thank you. My free time is truly mine. But, thank you to those entrepreneurs who I do patronize in one form or another - you do work hard for my money

 

[retire@40]

I do not have the patience to be an entepreneur. I see too many people with their "own businesses" who are "at work" wherever they are. No thank you. My free time is truly mine. But, thank you to those entrepreneurs who I do patronize in one form or another - you do work hard for my money

I'm not sure why you think it takes "patience" to be an entrepreneur.

Maybe you meant to say "perseverance" or "persistence." In any case, you are right that not everyone has what it takes to be a successful entrepreneur.

Actually, during your non-free time you are working hard for the entrepreneur of your company as one of his money-making tools.

 

[RDamien]

I'm not sure why you think it takes "patience" to be an entrepreneur.

Maybe you meant to say "perseverance" or "persistence." In any case, you are right that not everyone has what it takes to be a successful entrepreneur.

Actually, during your non-free time you are working hard for the entrepreneur of your company as one of his money-making tools.

It's all about the numbers I suppose, and the intangible rewards like satisfaction and "quality of life".

If you're working 24/7 for 100k and I'm working 40 hours a week for 75k plus benefits, I'm fine with the 75k. If you're working 70 hours a week for 500k and I'm working 60 for 125... you win!

In the end though I see a lot of people in this thread convincing themselves their way is best. Which it probably is, for them. I have a boss, my father was his own boss. If you asked him though, the company was his boss. He answered to it in many ways.

All that said, can anyone recommend some good books for a prospective entrepreneur? I have some ideas but I find it easier to see specific examples of successes and pick and choose parts of them to incorporate into my own situation.

 

[retire@40]

...can anyone recommend some good books for a prospective entrepreneur?

The E-Myth by Michael Gerber

 

[thefed]

Well, I havent read this entire thread, so it may have 'drifted' a bit....but I certainly am an entrepreneur. I own 2 bonafide businesses as well as a couple rental properties. I havent worked for another company for 3 years....I'm 25 and loving it. BUT, I actually HATE one of my businesses because I have to WORK too much. ER is my goal, and I will ER ASAP. All I think about is retiring. I do love the gravy jobs that come along once or twice a year (example: clearing about 8k for a job that I will have worked 35-40 hrs on this month)....but the day to day grind, phone calls, a$$-kissing customers, angry customers, etc is for the birds.

IMHO, I'd rather work 55 hrs/week for MYSELF and make, say 50k/yr, than work 35-40hrs week for someone else and make80k. Because I KNOW if I'm making 80k, the work I'm putting in is worth more than that...and I dont sell myself short for anyone!

One thing is for sure...I certainly do drop the 10% or so of customers that even INDICATE they might be a PITA. BUT, a few that I ALMOST dropped but didnt for one reason or the other turned into big $$$...by referrals or other reasons all-together. But maaaan is it nice to say "You know what,I dont think this is working out. Good Luck!" The look on their faces is priceless...

 

[unclemick]

Hmmm - isn't it sort of a belly button thing? For instance I had a duplex/dabbled in real estate for 15 yrs but never really scaled up(I knew how and could have) but after a while ' I knew' it wasn't my thing.

Sort of felt that way about 'my own business' - being trumped by the 'romance?' of the Space Program 1966 - 1993.

heh heh heh -

 

[Milton]

I'd rather work 55 hrs/week for MYSELF and make, say 50k/yr, than work 35-40hrs week for someone else and make80k. Because I KNOW if I'm making 80k, the work I'm putting in is worth more than that...and I dont sell myself short for anyone!

Huh?

 

[retire@40]

Huh?

You have to have a certain mindset to understand that concept.

In other words, he'd rather bust his hump for himself than do it for someone else, even if there is less of a cash benefit in doing so. It's not the fact that there will be less cash at the end of the day. It's the fact that you are not making yourself into a tool for someone else.

It's all about being your own master.

 

[Marquette]

Weird.

Or maybe I'm the weird one.

I do work for myself, for an employer, and for other businesses as a contractor. The work I do for myself is for fun and prestige and to fill some gaping hole in my soul. If I were doing it to make money, though, it'd be because it's a calculated risk that I'll make a lot more in the future if I forego the earnings now and pour myself into the effort. It's in the same vein as LBYM. Delayed gratification of another sort.

You still need to sell what the market wants, though, so are you really your own master?

Likewise, for my working hours, I can choose to sell them to a business as an employee or as a contractor. Even as an independant contractor, I'm not my own boss, I'm just as free to choose who pays for my hours, but I'm still doing what the customer (either my salaried employer or my client) needs done.

Then again, I'm one of those disenfranchised gen-x'ers with no brand or company loyalty.

 

[Milton]

Thanks for the explanation. I still don't get it, though.

It's not the fact that there will be less cash at the end of the day. It's the fact that you are not making yourself into a tool for someone else.

The fact is, if you are working you are always a tool for someone else. Although an entrepreneur doesn't have a boss per se, he or she still has clients/customers (whose whims must be attended to).

It's all about being your own master.

Well, you're only truly your own master when you're not working.

Assuming equal expenses, an annual income of $80,000 would lead to FIRE sooner than $50,000. And fewer hours of work (35-40 per week) obviously provides increased leisure time in pre-retirement.

 

[retire@40]

Thanks for the explanation. I still don't get it, though.
...Assuming equal expenses, an annual income of $80,000 would lead to FIRE sooner than $50,000. And fewer hours of work (35-40 per week) obviously provides increased leisure time in pre-retirement.

I forgot to mention a lot of entrepreneurs have another characteristic.....stubbornness.

 

[Jay_Gatsby]

You have to have a certain mindset to understand that concept.

In other words, he'd rather bust is hump for himself than do it for someone else, even if there is less of a cash benefit in doing so. It's not the fact that there will be less cash at the end of the day. It's the fact that you are not making yourself into a [-]tool[/-] fool for someone else.

It's all about being your own master.

Fixed that for you....

 

[retire@40]

Fixed that for you....

That too

 

[Average Joe]

Were I an entrepreneur or an entrepreneuse, I might be reticent to refer to myself as such conversationally.

French words may sound très chic to those who fancy themselves among the crème de la crème, but pretentious verbal dingleberries are the linguistic bete noir of the hoi polloi (not a French term, but maybe just as alien and alienating to the hoi polloi). Could it be that sometimes the raison d'être of the imported bon mot is as a verbal accoutrement for haute monde poseurs to show their élan, savoir faire, and blasé je ne se qua? If conversing or writing in English, mimes may often be the best source for appropriate French terminology. Exhibit a: the preceding.

In other words - I'd probably be more comfortable with the handle "businessman" if it referred to me - but it doesn't.

 

[Milton]

Personally I don't see any problem with using French words, always provided that they are used, spelled and pronounced correctly.

Unfortunately, words / phrases like "cache", "hors d'oeuvre", "Notre Dame" and "foyer" are verbally butchered by 99% of Americans. And one all too often sees the most ridiculous misspellings of, e.g., "beaucoup", "Champagne", "liaison" and "voilà".