Everyone knows at least one wantrepreneur (wannabe + entrepreneur, not to be confused with Profitpreneurship). They are that person in your life who will “make their move” and launch the next Facebook after one more year of saving, one more promotion, one more kid finishes college, etc., etc., etc.
I don’t know about you, but these people crack me up. They want the image of being an entrepreneur with the security of a steady paycheck. I applaud your creativity wantrepreneurs; you are probably smarter than the majority of actual business owners (present company excluded, of course).
Over the holidays, I attended a party where one of the attendees answered my obligatory “What type of work do you do?” question by stating she was opening some form of animal-based franchise business. After a brief discussion, I determined that it will require a massive amount of investment and risk for this possible business to potentially generate $10,000 per month (max) in presumed profits.
I think the last sentence deserves explanation:
Massive amount of investment and risk:
- Startup businesses generally require between $50,000 to $250,000 to get up and running.
- And within the first year of opening, 25 percent of all startups fail, and by five years, the figure increases to 55 percent. The top cause of failure is often general incompetence.
Fake business: A true business does not require the owners to work for free in order to operate. Although many true businesses start this way, I don’t feel that a business is a true business until it can operate without subsidized labor supplied by the owners. The lady I was talking to would be working in this business until it got up and running. She would likely be doing this in exchange for equity, or her share of the presumed profits.
Presumed profits: This lady was previously an auto executive easily making six figures, plus perks and benefits. If the business paid market rate for her time, it would likely run out of cash in under a year. True profits are profits paid after everyone is compensated properly for their time.
Entrepreneurship still sound glamorous wantrepreneur?
Now, despite my generally negative look at wantrepreneurs, I should add that I do indeed love and support entrepreneurship. When a solid business idea is approached with a systematic and pragmatic mindset, its success can be very rewarding. However, reaching this goal takes a lot of blood, sweat, and tears. And, even after all this work, not all startup businesses are destined for success. So before you jump on the always fashionable entrepreneur bandwagon, it’s important to differentiate between fantasy and reality. After you do that, you may find a better plan of action is to thank your boss for giving you that job you pretend not to like.