Some thoughts about entrepreneurship

Entrepreneurship drives our economy, creates new inventions and trends, allows you to set your own work hours, and is never boring. Sounds like the perfect career. The tools on this website will give you information, training, and encouragement to make your business dreams a reality. However, there are some downsides that you need to know about:
  • Virtually all new businesses fail, or "morph" into something else within a few years.
  • While people say that the best way to become a good entrepreneur is to get your feet wet and fail- banks and family aren't forgiving when you lose their money.
  • Entrepreneurs get paid last - after taxes, employees and vendors.
  • While we're on the topic of taxes... businesses usually pay about 40% of their profit for taxes (15.3% Social Security/Medicare + 20% federal + 5% state). This is 7.65% more than if you were an employee (because your employer pays 1/2 Social Security/Medicare).
  • Failure doesn't mean that you don't make any money - it means that you don't make enough to live on - or you can earn more doing something else. A big problem is trying to figure out whether to give your business more time to grow, or stop it before it bleeds you.
  • If you fail, business owners don't get unemployment insurance.
  • If you want to get a mortgage, your self-employment income will be scrutinized. Most business owners try to take as many deductions as possible to reduce taxes, but that reduces the income you can report to your banker.
  • Getting health insurance is currently a problem for the self-employed. If you aren't healthy, you won't get it, or will pay a high premium for it.
  • You aren't paid regularly - you are only paid when your customers pay you. If there is a delay, you have to fund all your overhead and inventory until you are paid.
You need to balance these against the downsides of a regular job, your personality, your obligations and your goals.

Regardless of the direction you take, we wish you much success!