One of the significant aspects of entrepreneurship is that it’s an option for virtually anyone who wants to do it.
Every type of person — every age, sex, size, race, religion, color — can become an entrepreneur if that is what they decide they really want to do. And Northwest Arkansas is a great place to be an entrepreneur. We have it all here.
Yet, despite this widespread human potential and the nearly perfect environment for building a growing business of almost any type, fewer people become entrepreneurs than those who become something else. Why is that, do you think?
For the past 17 years, I have asked students in my New Venture Development Class at the Sam M. Walton College of Business at the end of the semester to write up the five or 10 things they were most surprised to learn about entrepreneurship. Here’s a quick rundown on some of the most common things they come up with that would have kept them out of business ownership before taking the class:
- They thought they would have to invent something new, yet most new business owners are working in mature industries with proven demand for the products and services they provide. Or they thought a startup had to be technology-based, and they didn’t know anything about that.
- They thought that all new businesses would have to raise outside equity capital. They were unfamiliar with “bootstrapping” and the critical differences between debt and equity capital and were surprised to learn they could keep 100% ownership of their business.
They thought starting a business required taking a vow of poverty and that most new business owners couldn’t pay themselves anything for years. They thought they would have to work 16 hours a day, seven days a week for years before getting any payback and couldn’t have a family or any personal life if they owned their own business.
- They thought that owning a business was riskier than having a job and had never considered that working for a company was like owning a business that had only one client or customer. They could be fired for any reason at any time due to no fault of their own.
- They thought that the financial rewards of owning a business only came from what you could extract from it on a daily basis and never considered the value they could build in it that could possibly be extracted later (one of the primary tenants of entrepreneurship).
- They thought that all entrepreneurs go broke at least once before becoming successful, and they didn’t want to have that happen to them.
- They thought the only path to business ownership was starting from scratch and never considered the other entry options of buying an existing business or buying a franchise.
With this small sampling of misconceptions I don’t think are unique to students, is there any wonder why more people don’t become entrepreneurs? I don’t think so.
It’s why a big part of what we do at the Walton College is to try and expose our students to as many different types of entrepreneurs and small business owners and their individual stories as we can. We want them to see that they, too, could become an entrepreneur someday themselves.
Mark Zweig is the founder of two Fayetteville-based Inc. 500/5000 companies. He is also entrepreneur-in-residence teaching entrepreneurship in the Sam M. Walton College of Business at the University of Arkansas, and group chair for the Northwest Arkansas chapter of Vistage International. The opinions expressed are those of the author.