The creation and management of a company represent an exciting adventure, often carried by the desire for freedom, innovation and success. However, behind the rewarding image of the independent leader are also hiding more bitter realities. Knowing the pitfalls related to this status before getting started allows you to better prepare for it and anticipate the difficulties. Here are ten major disadvantages to be an entrepreneur that mark entrepreneurial life.
1/ Financial uncertainty
Unlike the employee who receives a fixed income, the entrepreneur is faced with variable, even irregular income. Turnover fluctuates according to the seasons, won contracts or economic hazards, which makes cash sometimes difficult to stabilize. It happens that the first months – and even the first years – are particularly trying, the activity struggling to take off while the current loads (rent, wages, supplies) must be settled. This uncertainty requires a solid budgetary culture and rigorous management to avoid putting the business in danger at the slightest blow.
2/ The permanent pressure
Being at the head of a structure involves bringing responsibility for each decision, whether it is the choice of suppliers, recruitment or commercial strategy. The manager is constantly asked to solve problems and arbitrate between several priorities. This pressure, stimulating in small doses, can quickly become heavy. The entrepreneur must then find a balance between the requirement inherent in his role and the need to preserve his mental health, under penalty of sinking into chronic stress.
3/ The lack of safety net
Unlike employee employment where protection systems (unemployment, health insurance, provident) exist, the entrepreneur benefits from more limited guarantees. In the event of a failure of the activity, the fall can be brutal, affecting not only the finances of the structure but also those of the manager. Likewise, prolonged sick leave can compromise the proper functioning of the company, especially if the responsibilities are not distributed. It is therefore important to anticipate by subscribing suitable insurance and by setting up a team capable of maintaining the course in the absence of the founder.
4/ Personal sacrifices
The success of a company requires considerable investment in time, energy and resources. Extending days are legion, especially at start-up, and it is not uncommon for weekends and holidays to be compromised. In addition, the leader often exposes herself to painful choices concerning his personal life: certain family or friendly events can go into the background if an emergency deadline arises. In the long term, this situation can create an imbalance, hence the importance of defining clear limits to reconcile professional ambition and personal well-being.
5/ The loneliness of power
Once the statutes have been filed and the activity launched, the leader often finds himself in front of himself to validate his strategic orientations. This loneliness is particularly felt during moments of doubt, when there is no higher hierarchy to seek advice. Even surrounded by competent collaborators, the founder carries the ultimate responsibility for decisions, which can generate a feeling of isolation. In this context, integrating a network of entrepreneurs or requesting a mentor can offer precious listening and welcome decline.
6/ Administrative complexity
France offers a dynamic ecosystem for businesses, but administrative and regulatory procedures are deemed to be heavy. The manager must deal with a multitude of declarations (VAT, social contributions, taxes, etc.) and remain on the lookout for legal developments likely to impact his activity. This complexity requires specific time and skills, even though the entrepreneur would often want to devote himself more to the development of his offer. Calling on a chartered accountant or a lawyer can help unload part of these constraints, but represents an additional cost.
7/ The difficulty of recruiting and manager
As soon as the company grows, the need to surround yourself with talents becomes pressing. However, recruitment is a delicate exercise: it is necessary to attract competent profiles, train them, while meeting their wage expectations and their career ambitions. A casting error can be expensive, both financial and human. In addition, the manager, sometimes little trained in team management, must learn about the job to manage, motivate and build a strong corporate culture to promote cohesion and productivity.
8/ Fierce competition
Unless you occupy a fully innovative market segment, the entrepreneur often finds himself in the face of already well established competition, which can benefit from notoriety or superior means. To make himself known and earned market share, he must offer a differentiating offer, stand out by his quality of service or his innovation. This permanent struggle to exist can prove to be wearing, especially since large groups or international competitors frequently have an advantage in terms of resources and networks.
9/ Legal and tax risks
A simple poorly written contract, an abusive clause or a default on the customer side can lead to legal disputes likely to immobilize the company for long months. In the sectors subject to specific legislation (food, health, finance, etc.), an error of conformity can lead to financial sanctions and tarnish the reputation of the brand. In addition, an unfavorable tax audit can heavily penalize the treasury. These legal and tax issues require constant vigilance, as well as a regular update of his knowledge.
10/ The unpredictability of the market
Finally, the entrepreneur faces an economic and technological environment constantly changing. Trends are changing, innovations follow one another, and consumer expectations are transformed overnight. Whether it is the health crisis, a cyclical reversal or a new ecological standard, no sector is immune to major turbulence. This uncertainty obliges to remain agile, to regularly revise its strategy and to accept that the questioning is an integral part of the entrepreneurial adventure.
A demanding course, but trainer
Despite these ten disadvantages, many leaders who perceive entrepreneurship as a challenge as exhilarating as they are. Admittedly, pressure, sacrifices and financial uncertainty are not easy, but they forge unique skills: adaptability, resilience and innovation capacity. These qualities are valuable for those who want to shape their destiny and lead projects with high impact.
Provided you are fully aware of it and prepare for it, being an entrepreneur can live as a great opportunity for personal and professional development. Moreover, each difficulty crosses consolidates experience and nourishes precious expertise for the future. In the end, if the constraints are very real, they also participate in the singularity and the richness of the entrepreneurial journey.
