I’m a hard working individual. I guess my work ethic was instilled upon me by my parents. I’ve always believed in under promising, but over delivering. The problem is this work ethic can be taken advantage of. Not only by employers, but also by yourself when owning a business. Let me explain.
It’s something I didn’t think about when I first started my business. My thought process when owning a business was it was the way to wealth, and I believe I am still correct about this belief. What I didn’t think about was the scarifies with time it took to create a business. It is possible instead I could take home a decent salary working for a company.
I’ve owned a business for over ten years now. It’s hard running a small business. Being an entrepreneur can sometimes be a thankless task. You are taking risks and may not have anything to show for it. You can be burning the midnight oil many nights with little income to show for it. You have to wear many hats, and sometimes you don’t have the capital or human capital to get the work you need done. So what happens? You work yourself to death, and typically wind up doing an eighty hour work week. At today’s current minmum wage of $7.25, that comes out to be a little over $30k annually. Especially at the beginning, you might barely take home this amount in the first two years in business.
So What Can You Do About It?
The one equalizer in the world is everyone has the same amount of time. Others might be richer, have more resources, better connections, etc., but we all have the same amount of time available to us. How effectively we use that time is what sets us apart. Make sure the time you have is used wisely.
If you are working for someone else, understand hard work usually pays off in one of two ways: Directly by your boss seeing your results and rewarding you for your effort or indirectly by gaining skills which can get you a better paying job somewhere else. Unfortunately, it sometimes takes moving on to a new company to get better pay.
As a small business owner, realize it can be short term pain for long term gain. It’s part of the risk of being a small business owner. The eventual goal is you are making a decent income and the business is sizable part of your net worth.
It’s common for entrepreneurs to think about creating companies and building them. From my experience, it’s rare an entrepreneur thinks about their exit strategy. I have too many friends that they and the business are one and the same. If they leave, the business falls apart.
The goal as an entrepreneur is to build a business that can exist without you, or can be sold to someone else. Doing consulting work, while nice in pay, is not a sustainable business plan. The ultimate goal of any business owner is building a business based upon a product or service. With consulting you aren’t building anything, and it is probably best to work for someone else. The book “The E-myth Revisited” talks about this in depth, and I highly recommend you read it.
In the end it’s short term pain, vs. long term potential gains. You’ve heard the phrase, “The harder I work, the luckier I get”. That axiom is somewhat true. Understand though, you are taking risks with a lower salary for an eventual higher payout. Make sure you realize this calculation anytime you take a new job, start a new business, or start working with a new customer. Every job you do has a risk/reward. Make sure, if you are working for minimum wage, that the eventual payout is higher. This payout can be in various forms. This can be a bonus with your employer, stock options, or an exit strategy when you sell the company you created.