Monday, April 21, 2008

No One Wants To Be An Entrepreneur

Statistic: 90 percent of new businesses fail after 5 years.
This is not a new statistic. In fact, you've probably heard about this before. Naysayers (which often include everyone from your spouse to the convenience store cashier) have probably cited this to you millions of times.

Psychologically, it is difficult for people to become an entrepreneur because no one really likes risk--especially if they believe that they have high chances of failing. Sigmund Freud called the concept the "pleasure principle," which states that a person always drives to seek pleasure and avoid pain.

This is why most people perceive leaving your job to start your own business as not just inviting failure, but literally standing on its doorstep and banging down the door. The entrepreneur's worst nightmare is waking up and realizing that he's lost everything except the shirt on his back.

It's risky, scary, and you've heard so many horror stories about it. And it's not just that, everyone around you is saying, "No, don't do it."

And yet, some people do it anyway. Some win the first time. Others fail and fail repeatedly until about fifth time when they suddenly understand the magic formula.

A friend of mine thought her husband was crazy when he used up their entire life-savings to buy old antique bottles. He later made a killing on eBay, but for a while, she was worried that she was going to feed her kids some fried glass for dinner.

90% percent of businesses fail? The good news is that it's just probably just an urban legend like those safety signs in gas stations forbidding you to use your phone. No one really knows if it's true, but it's better to be safe than sorry.

The true picture in small businesses is that 50 percent of small business survive in the first five years. That's your half-full glass right there, if you ask me. And what's more startling is that most companies don't fold because they were failing, the close because the owners have lost interest in it already.

However, given the challenging year in store for America, what do you think? In the middle of the entire hullabaloo of the political fever, subprime meltdown, and the current recession, is now the best time to be an entrepreneur?

Or should you still keep your day job? Only you can answer that question.

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