As the college Class of 2018 ventures out into the working world, many of the graduates will choose to work for themselves, or at least entertain the thought. A variety of factors — less security in the traditional job market, more innovation (especially through social media), a desire for more fulfilling work and independence — has […]
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As the college Class of 2018 ventures out into the working world, many of the graduates will choose to work for themselves, or at least entertain the thought.
A variety of factors — less security in the traditional job market, more innovation (especially through social media), a desire for more fulfilling work and independence — has led to a steady trend toward entrepreneurship among graduates in the past 10 years.
Recent surveys of graduating classes found nearly half want to become entrepreneurs after graduation. The Wharton School at the University of Pennsylvania, for example, saw a quintuple increase in its graduates starting their own company during a seven-year study period, according to Business Insider.
Slightly more than 50 percent of small businesses fail in their first four years, according to Small Business Trends, but those startup-failure rates apparently don’t deter grads.
I am amazed at the dramatic increase in interest among students across all disciplines in starting a business.
While it’s wonderful to have that dream, it’s daunting. Most don’t make it. Most have no idea what they’re getting into. Those who do have to embrace the whole challenge, from learning every step of the way to taking action.
But there are plenty of cautionary tales they can learn from, And here are five factors that college graduates should seriously consider before taking the leap.
You can’t do it all
Young entrepreneurs quickly get in over their heads when they wear too many hats or aren’t sure which hats fit. This is especially common among inventors and technologists with superb ideas but no business-building skills. Very few people are both inventors and operators. Most successful entrepreneurs must determine early on which category they fall into and find a complementary partner/company to provide the skills they lack.
Indecisiveness is crippling
Entrepreneurs cannot be stagnant. Lack of action due to fear of making the wrong decision impedes success and growth. There is inherent risk in starting a company, and, in order to become successful, we must be willing to take risks and make bets along the way.
Motivation is not the answer
Working long hours isn’t enough. It’s the development of new habits that drives lasting behavioral changes. There’s a brief period of motivation required early on when improving our work habits. However, once we make a change in our behavior — be it ever so small — and it becomes a habit, it overrides the need for motivation.
College debt may slow you way down
This can snuff out one’s hopes starting out. Getting access to capital is a challenge many small-business owners face, but it can be particularly difficult when you’re saddled with student loans. Being in debt makes self-financing that much tougher and taking on the entrepreneurial dream much harder. Sometimes, having a “normal job” while experimenting with a new company is a good way to mitigate this burden.
Being overly optimistic is dangerous
It’s easier to believe in your business when you’re growing it, but there will always be setbacks and you have to be prepared, starting with adding a cushion to your budget. It’s amazing, all the costs associated with starting a business. The only thing you know for sure about a planned budget is that it’s wrong — and 99 percent of the time it’s wrong in a negative way for the business.
We do not need to sacrifice our lives for a business. You have to decide early on if it’s worth all the sacrifice. It certainly can be, once the foundation is set, and if you have a passion for it.