This may sound like an extreme statement to make, and it’s probably not advice most should follow, but for many of you, this advice will ring true at a deep level. If you do some research and follow the recent trends, you will see it’s not so extreme to say that the employment landscape is shifting dramatically. Many people will be forced to make tough career decisions and its best if you can make them on your own terms.
Being your own boss has a type of allure that most people are attracted to. Working when you want, how you want, calling the shots, building your own empire, and taking every Friday off are just a few perks for successful entrepreneurs. However, don’t plan on that lifestyle right away. The first thing you should do is determine whether you are ready to be an entrepreneur.
Quitting your job is risky, but with high risks, there are high rewards. Here are 8 great examples of why you should stop making someone else money and start earning on your own.
1) Be In Control of Your Own Destiny
How many stories have you heard where an employee was close to retirement and the company fired them before they could cash in. Layoffs are usually decided by upper management executives. You’re lucky if these executives even know your name. They don’t know what you do. They identify you by anonymous numbers. Yet, even if they don’t know you, they still have the ability to shatter your lifestyle and financial security. What’s worse is that the person who knows your performance – your direct manager – might not be able to save you because he’s on the chopping block too.
The unfortunate fact is that corporate politics even play a role in whether or not you’re picked for layoffs. Maybe you didn’t attend that after-work gathering or maybe you just decided to stay away from the water cooler. If you don’t play the game, you’re bound to lose. Not everyone is cut out for corporate politics, but you’d be surprised at how much motivation and confidence you have when you’re selling your own product instead of someone else’s.
If you’ve ever been a part of layoffs, you know how traumatic it can be, especially for people who have worked for the company for decades. While you don’t know if entrepreneurship will land you dozens of employees, you can make a point to avoid random layoffs.
2) Corporations Will Never Appreciate Your True Worth
A corporation’s motivation when hiring someone is to get the most work out of them for the cheapest price. Your salary is negotiable, and no one works up in pay when an applicant has more skills. You bid high, they bid low, and somewhere in the middle is your salary. A company wants more bang for their buck, and avoiding salaries, health insurance premium, and other perks means your job is more valuable when outsourced.
The paradox is that companies always want the brightest in the field. However, the brightest in the field aren’t working for other people, or they are executives at high end companies. Entrepreneurs are often bright people with great ideas who can’t continue to report to middle managers who care more about timesheets than products. These people build their own solutions during their own time, even if some of the financial backing is from investors.
The point is that creating your own product is often better than fighting to have your ideas heard in corporate. Not only do you need persistence to be heard, but you also won’t have the financial rewards.
This doesn’t mean your efforts won’t be in vain if you do it alone. There are some benefits with corporations. They usually have the funding and resources in place. Before you quit and prepare a prototype, make sure you have the finances for marketing or at least speak with investors who will back your product. Crowdsourcing such as Kickstarter has also been a life-changer for a budding entrepreneur and inventor.
3) Technology & Automation Can and Will Replace You
Let’s face it – if the company you work for can find someone or something cheaper to do your job, your position is at risk. Even if you’ve been with the company for decades, they will replace you if your paycheck costs an overage in budget. Jobs such as travel agents and data entry clerks have seen an abrupt downward trend in available jobs.
We have a client who is one of the leading minds in artificial intelligence technology today and he assures us that AI will have a profound effect on a number of industries labor force in the not-so-distant future. As he put it “What AI will do to many industries will be the equivalent of what the automobile did to the horse and buggy industry. Change is coming and those who can successfully adapt to the new world we have entered will have the most control over their own destiny.
Still need more proof? Watch this video called “Humans Need Not Apply” made by YouTuber, CGP Grey, which illustrates the rise in technology & automation that is already here. This new technology will undoubtedly displace millions of jobs across many industries.
The positive spin to this is that new technology also offers robust income sources for people who can learn to work with it. The Internet offers a global opportunity for you to set up shop with a low startup costs.
Of course, setting up shop is the easy part for most startup businesses. You still need to factor business expenses, marketing, and having your own resources. Instead of your job being outsourced, you could be the one outsourcing to an outside vendor.
Marketing is the most expensive of these three examples. While the Internet offers an easy outlet for revenue, it’s also extremely competitive. You’re not just competing with local companies, but also companies and individuals across the globe. Ask yourself “What do I offer that others don’t?”
4) The Middle Class is Shrinking
Decades ago, dads went to work and moms stayed home and took care of the kids. The average middle class worker had many decent paying jobs to choose from, and one parent made enough money to support a family. That’s not true anymore. Most families need two incomes now and many times even two paychecks isn’t enough. Wages have certainly not kept up with the rate of inflation but there are other factors too.
Gone are the days of working at one company for 20 or 40 years and retiring comfortably. Most middle class jobs can be outsourced to other countries or even local contractors to save companies money. Many of these jobs are skilled factory workers or paper shufflers who provide a service but aren’t valued as employees. Outsourced jobs created a 3.2 million job deficit since 2001 in the US. Even with a so called reduction in unemployment rates, there are still 1.1 million Americans out of work for more than 27 weeks.
Here is a video made by Benjamin McCray that illustrates the point quite well:
However, there is opportunity to be the outsourced contractor. In other words, that outsourced job goes to you as a contractor instead of you as an employee. Instead of going to a job with little or no potential, you can make your own potential. Plenty of companies still need the functionality that a middle class worker provides, but they don’t want the HR and added cost of benefits. This means you can still perform the same function, but trade “employer” for “customer.” You still need to manage your own resources, including health insurance. But, you have the opportunity to incorporate these costs into your hourly rate.
5) Money Doesn’t Equal Happiness
Don’t make money the main focus in your decision making process. Even NFL stars say money doesn’t buy happiness. People who have money are well aware that it only plays a small role in their overall happiness. There are plenty of examples for all to see of rich & famous people that are miserable.
You might think taking another job with a higher salary is your path to happiness. How much of that new salary will you spend? What type of increase can you expect? Employees leave companies for $5,000 more a year but accumulate $10,000 more in expenses. Then, they’re no longer happy with the new salary and job. It’s the revolving door syndrome where people go in with high expectations and end up in the same place they started.
Quitting your job is not the answer to financial problems, but it can often be the the first step on your road to happiness. You might not be rich, but you can play with your kids for an extra hour in the morning without asking permission. Entrepreneurship also has the added benefit of getting out what you put into it. It’s still risky, but hard work and dedication can mean not only happiness, but the freedom and finances to relax.
6) Starting a Business Has Never Been More Affordable
The costs of starting a business has never been as low as they are today. Depending on the business you choose, you can start with as little as a few thousand dollars and be up and running. If you don’t have the money to start there are many new ways to finance your business that did not exist 10 years ago like crowdfunding, equity funding, accelerators, peer to peer lending, etc.
There are more resources & tools at an entrepreneur’s disposal than ever as well. There are so many services for small business today that can help entrepreneurs in a multitude of ways and there will be more coming. See our Resource & Tool Pages for just some of the services that can help a startup in all stages of development.
7) The Peer to Peer Economy is Just Getting Started
The Peer to Peer or Sharing Economy is just getting started. This new business model is providing countless opportunities for people all over the world. This era will be known as the rise of the micro-entrepreneur. One only need to look at Airbnb to see where this can go. Airbnb was started by a couple of college students in 2008 with an idea to help people find housing when hotels were all booked. Airbnb matches homeowners who are looking rent them rooms with people who need the rooms. Airbnb is now a $20 billion company. There are many other examples of Peer to Peer companies like Lyft, Taskrabbit, Elance, Zirtual, Lending Club, Kiva, Patch of Land, and the list goes on.
Here is an excellent TED video featuring Emily Castor of Lyft. Emily does a great job of explaining the opportunities in the sharing economy. Emily also talks about her own experience of quitting her job and following her passion. She goes on to describe how the sharing economy can be a safety net for the American people. This new sharing economy will allow anyone to monetize their service or expertise to anyone looking for that service or expertise.
8) Sense of Accomplishment
There is no other feeling quite like the feeling of starting your own business from the ground up and creating something special that started out as just an idea in your head. It is a feeling you will never get working for anyone else. A start up is a labor of love and it will be difficult in the beginning. You will face many obstacles and challenges and there will be times of great uncertainty. This is normal and all part of the entrepreneurial journey. During this journey you will learn a lot about yourself too, your strengths, weaknesses, and it will also test your mental fortitude.
My brother and I did our first start up in 1994. It was a brick and mortar business that we started from scratch. We trained 50 employees, most of which knew nothing about our business model. We put in 100+ hour weeks for the first 6 months and then went down to 80 hour weeks the following 12 months.
We went to the bank and leveraged all of our assets and had everything riding on this business. The stakes were high for us, but that only served as further motivation. We went through a huge learning curve and made a lot of mistakes. It was a true baptism by fire.
We went into further debt after opening and it took us well over a year to even start to become profitable. Many people may have thrown the towel in during that first 18 months and it would be difficult to blame them, it was a tough time. We made a lot of mistakes that cost us and it was our sheer will to survive that got us through those days.
When I reflect back to that time it was one of the toughest business years of my life, but I would not have changed a thing. The sweetest victories in life come from conquering the toughest challenges. It is basically what the human experience is about, a long series of highs and lows where we find our pleasures when we can.
Things got easier after the first 18 months and by our 5th year we were generating a multi-million dollar revenue stream and became extremely profitable. That same year we opened our second location and did it all over again, but it was much easier the second time.
Don’t Quit Your Job Without Self-Assessment and a Plan
We’ve talked about why you should quit your job, and it’s understandable if you don’t have any type of backup income, or even just a plan for what you should do after you leave. We should note that it’s alright to take baby steps and create an actionable plan before you take the big leap.
Before you create your steps, you need a goal. Maybe you want to start a consulting firm. Maybe you want to write a book. Maybe you want to be an astronaut. Write down your goals, and then start writing your plan. You’ll find that writing out your plan makes it more real and easier to focus on. If possible, start creating your business on your spare time while you still have an income stream. Maybe you can do both until your business can support you.
Also, ask yourself why you want to be an entrepreneur. If the answer is money, you will be disappointed with this choice. True entrepreneurs do not do this for the money, yes we all like money but it’s not what drives us. If it was only about money, we would get a job and start working our way up the ladder (which we can do very well) by putting in half the work and having much less stress in the process. Getting a job would be the easy thing to do for us but we know we would not be happy working for someone other than ourselves.
We do this because we are very independent by nature and like to have control over our own destiny. We do this because we are restless souls with a million ideas bouncing around our head that we want to bring to life. We do this because we are passionate creators and want validation for our ideas. We do this because we know we can change the world in our little way. All the while, we know if we work hard and focus on our business, the money will follow and we view the money aspect as more of a side effect of our venture.
Nobody in their right mind would go through the start-up process and stick with it through thick and thin just for money. Those of us who have been there know that makes no sense. Especially knowing that 75% of all startups fail.
Whatever your decision, look before you jump. Go into this with your eyes wide open and know what you’re getting yourself into. With the proper mindset and expectations, entrepreneurship can be the best experience of your life. Good Luck my fellow Entrepreneurs!