Most entrepreneurs don’t decide to go into business for themselves until later in their careers. Why is this so? What are the things that people learn, acquire, recognize, etc. during this time?
Entrepreneurship is a journey to the land of the unknown. It needs all your time and attention to nurture and evolve, need you to leave your that 9 - 5 day job to focus more on it. The outcome - uncertain. When you have just started with the job, it’s not so easy to let go of it. Knowingly or unknowing you have that expectation that your bank account will be refilled with a certain amount of money at the end of every month. You see your entire career path as you’re young and just got into the job; you see a promising career and more importantly highly paying secure prospects. So, when the feeling of leaving all that to start something that’s uncertain and unpredictable comes in, people often don’t do that at the earlier stage of their career.
However as time fly by and you hit that stage of your career when there’s no further growth, you’re doing the same thing day in day out. You start to have that feeling of doing something that you were really passionate about (Hyytinen & Maliranta, 2008). You now with having some secure finances, a secondary source of family income from other members and the new generation of your family starting to earn, you get that sense that there’s nothing to lose by going into entrepreneurship journey. I’ve seen this first hand with one of my supervisor who always had that fire in the belly to start something of his own. He actually tried while doing the job which didn’t give much fruit as he was never able to dedicate much time to it. Some year back, he left his 9 - 5 job to start his own business, he left the job which was paying him a package of 40 lakhs annually after having worked for over 18 yrs. in the company. That would certainly have been a hard decision regardless but a much easier one to make during the later stage of the career than it was at the start of it.
For someone working in an organizational setting, you can learn about how things work, what are the requisites for a successful project and much more. You see a lot of other people living by the dreams that you had. You see their role model, their friends succeed and progress in their life living the dreams you have (Zozimo, Jack & Hamilton, 2017). Whenever you’ve your own business, you’re often put into hard situations, you need to make an instant decision which might be hard ones but with some experience in the organization you worked for, you can develop this skills. You will certainly also be able to deal with a certain level of unknown. During this phase, you will have to tinker with the business idea, the viability and even when everything works, you can’t be certain that it’ll sell out like you thought of. One starting off, later on, would obviously have observed several other people following that path and their different decision makings to make an informed decision for oneself. One would also have realized that the struggle involved to start it and thus chances are high that he/she won’t be frustrated too much during the journey.
Hyytinen, A., & Maliranta, M. (2008). When Do Employees Leave Their Job for Entrepreneurship?. Scandinavian Journal Of Economics , 110 (1), 1-21.
Zozimo, R., Jack, S., & Hamilton, E. (2017). Entrepreneurial learning from observing role models. Entrepreneurship & Regional Development , 29 (9), 889-890.
Entrepreneur is a person who is willing to convert a new ideas into a successful innovation [Paul, 2016]. He/she is able to make an idea salable and it turn creates more job opportunities and adds value to the mankind. Entrepreneur forces creatives destructive across markets and industries by developing new products and business model that make market dynamics and help it grow. Facebook is a latest and popular communication platform and after entering Facebook many other telecommunication channel are expire. So, in simple terms entrepreneurs buy at certain piece and sell at uncertain prices [Wang , 2017]. The one who can make good revenue despite the market being volatile and uncertain is a successful entrepreneur. He/ She takes risk and gets benefits if the venture is successful. An entrepreneur is a person who is daring and whole thrive in uncertainty. So becoming an entrepreneur is most risky job and they might have higher chance to fail then success. In world wide only 10% entrepreneur are only successful. They are Elon Musk, Jeff Bezos, Steve Jobs, and Warren Buffets and successful Nepali entrepreneur are Biswash Dhakal, Amit Agrawal, Pavitra Gautam, Anish Shrestha etc. So in entrepreneurial life has uncertain life and full of risk. Becoming an entrepreneur would mean to own one’s tasks/jobs, organize activities ad manage and run an enterprise assuming the risk of a business. Being an entrepreneur would mean independent and having control over one’s life so an entrepreneur
we are not a mature person. So most of entrepreneur don’t decide to go into business for themselves until later their career. Because every person wants always in safe side so they don’t want to take a full of risk. Few of aspiring person only take a risk and wants to be Jaff Benozes, Bill Gates, Warren buffots [Wasserman, 2008]. They all started their business from small enterprise then finally created a large firm. As an Entrepreneur we learn, acquire, recognize a lot from our ventures;
Experience: To build a great business, one must know the ways vital business components are made. One must understand things like cash flows, profitability, business management, organization and motivation. But youngsters are still learning these things. One needs to have various business experience and skills. Also, knowledge and experience of handling unforeseen challenges like improper government policy, debt, insufficient inventory, etc is also a must.
Network: One of the most important personal skills for entrepreneur is networking. Entrepreneurs need strong connections and networks with peoples who will eventually help them in their entrepreneurial journey. But youngsters don’t have strong networking skills or networks. So, for most peoples, it takes a lot of time to build network, so in order to build their network they have to halt and postpone their entrepreneurial journey.
Capital: Capital is a vital ingredient to start a business and to seize the opportunities when one arises and to start a business, a huge amount of capital/ money is needed. Peoples at a young age might not have this amount of capital to start their entrepreneurial journey and to accumulate the required capital they postpone their venture by working in different jobs[Kurdi, 2017]. During this long period of time, peoples learn to acquire capital and how to properly use them.
Kurdi, S. (2017). 3 TYPES OF CAPITAL EVERY ENTREPRENEUR NEEDS . Retrieved from egyptinnovate:https://egyptinnovate.com/en/innovation_digest/3-types-capital-every-entrepreneur-needs
Paul, B. (2016). Entrepreneurship and small business : start-up, growth and maturity. New York : Palgrave Macmillan.
Wasserman, N. (2008). The Founder’s Dilemma . Retrieved from hbr: https://hbr.org/2008/02
A lot of people after graduation hold baggage of debt or want to understand and gain experience of working. A perception of starting a business holds higher risk as compared to getting a job which starts out early in life. After getting into the work environment, people get into a comfort zone of getting paid every month and unknowingly get dependent on monthly income rendering them more hesitant to taking risk starting the business. Another factor that can be weighed in is the social stigma in my community that promotes aspiration of getting a job rather than business unless your family has a business.
By the time you want to get into business you have already spent a decade in a 9 to 5 job. Still yet another aspect of this is the risk taking factor. As you start getting older and having a family of your own reduces the amount of risk you can take. Bound by family priorities, people are psychologically demotivated or withdrawn from getting into business taking risk.
Although related business experience before startup has a significantly positive effect, the magnitude is limited and cannot overcome the negative effect of age. The results indicate the importance of starting up while young, at the latest, before 60 years of age. (Harada, 2004)
Age has both positive and negative effect towards business startups. Another aspect to this discussion is shown by relationship in 55-74 aged individuals’ transition to self-employment. It showed that most of the people starting their own business later in life had some prior self-employment experience that also suggested that people getting into entrepreneurship later in life were habitual. (Tervo, 2015)
Looking at the pros of old age shows experience, maturity, more availability of capital (in some cases), understanding of market, and overall more patience. Therefore experience can be a positive indicator as people have clear vision of what they want, why they want it and how they will go about getting it. Knowledge is not the only thing that is acquired with age. Communication skill, diplomacy, reading and analyzing customer demand, network etc. also advantages of people with age.
Another aspect of it is with age people are more trusted in business. Customer’s perception is also more to do with the experience or the background of the entrepreneur to which they can rely on. Young entrepreneurs may not be trusted by investors as much.
On the other hand age also brings reduction in risk taking, fatigue, family responsibilities etc. On the other hand, generally speaking, research also shows old people are less technology savvy. These days business arena is being induced with technology for gaining competitive advantages and having less knowledge about technology may be a huge and critical weakness.
These are some of the reasons why people usually start business later in life and what they learn during this time. Age factor has both positive and negative effect on business startup.
Harada, N. (2004). Productivity and Entrepreneurial Characteristics in New Japanese Firms. Small Business Economics; Dordrecht , 299-310.
Tervo, H. (2015). Starting a new business later in life. Journal of Small Business and Entrepreneurship; Regina , 171-190.
There is no single profile or psychological template for being an entrepreneur. Entrepreneur can be of any age, gender, religion and ethnicity who is passionate about the business idea and shows immense commitment, dedication and hard work to make the ideas work (Spinelli & Adams). The research by Kaufmann Index of Entrepreneurship shows that 25% of the entrepreneurs are of the age group between 55 and 64. It reveals that most people decide to go into business for themselves in their later career (Pierre, 2017).
It is so because after the professional experience of many years, they have clearer idea about what excites and motives them to work and what their passion is. So, post retirement they may choose to work on their passion and start entrepreneurship journey. Similarly, at the starting of the career, people want a stable, secure and less-risky jobs. Once they started living a stable life from the earnings and feel that they are ready to take the challenge, they start working on their ideas. In addition, when the technological development changes the working procedure, they might choose to embrace entrepreneurship and give continuity to whatever they were doing rather than train themselves for being tech-savvy. Another reason for this might be because people are habituated to work and when they are about to retire or leave of a job because of their age factor, they find it difficult to stay idle and very few organizations are willing to hire to hire aged people. So they choose to become entrepreneur so that they remain engaged.
In context of Nepal, the people have to bear the financial responsibility of their family. The responsibilities like educating the children or looking after the parents need a stable income that is not guaranteed if we are an entrepreneur. So till the time they are bounded by responsibility they chose to work for others for fixed income. When they feel they no more have to contribute fixed income for their family and can take the risk, the start entrepreneurship.
When people work for others, they gain idea about the market, adequate exposure to different working situations, widespread networks and financial stability with no or very less amount of risk involved. The different skills needed to be an entrepreneur like critical thinking, decision-making and problem solving, dealing with unfavorable situations etc. can be acquired from the work. Later, they can capitalize on their experience, skills, exposure and networks built during the job by being an entrepreneur and it also allows them to share their knowledge and learning to newer generations who work with them.
Pierre, R. S. (2017, May 26). How Older Entrepreneurs Can Turn Age to Their Advantage. Retrieved from Entrepreneur: https://www.entrepreneur.com/article/294799
Spinelli, S., & Adams, R. J. (n.d.). New Venture Creation: Entrepreneurship for the 21st Century (Nineth ed.). Irwin: McGraw Hill Education.