More and more Americans are leaving the corporate world to start their own business. While some strike out to create a new industry or move in an entirely different direction, most decide to start businesses in the industry they have worked in throughout their corporate career.
Basing your startup in a field you know well offers many obvious benefits. Contacts, peers and clients can be transformed into co-founders, employees and customers. Familiarity with the market or manufacturing process, on-the-job training from their previous employers and even access to groups and associations in their industry are just a few of these clear advantages.
But, not all is perfect. There are some downsides to having a corporate background before becoming an entrepreneur, and they are more likely and pronounced if one has spent a long time in corporate America. Here are the key disadvantages:
In the corporate world people get accustomed to and even dependent on many things that just don’t work in an entrepreneurial environment. Complicated organizational charts, detailed and specific processes, reliance on big-brand suppliers, and similar things create a rigidity that takes away the nimbleness of their small business. Don’t try to beat the big guys at their own game; you need to be quicker, more responsive, and more creative.
When you know how much your paycheck is, when it is coming, and the likelihood that it will continue to come in the future, it eliminates a lot of the hardest parts of financial planning, stress and management. With your own business, especially starting out or in growth spurts, you may have no income or even negative income for days, weeks, even months. (I took no pay in my first company for 1 1/2 years!) If you are not accustomed to this, it can be jarring and disruptive, and create issues in your family and community affairs. Plan accordingly, and prepare yourself for this potentially huge change in your life and lifestyle.
Many people leave corporate America feeling under-appreciated, unfulfilled, and/or completely burnt out on working for someone else. They are essentially jaded towards the corporate environment, and swing much too far in the other direction. They may hire only or mostly friends and family, maintain no routines or timelines, and favor “going with the flow” over planning and strategy. While it is your business, remember, it IS A BUSINESS, and you have to have your priorities straight. Sure you can ditch the dress code, take a vacation when you normally wouldn’t or promote a more “relaxed” culture in your office, but don’t throw the baby out with the bath water. Corporate America makes big money for a reason, and you shouldn’t stray too far away from their models.
Leaving the corporate world to start your own business is exciting and liberating, and can very well lead to improved fortunes, lifestyle and satisfaction from your work. But, if not properly done, can have quite the opposite effect. Have you made the transition to entrepreneur from corporate America? I’d love to hear your story in the comments below!