What You Give Up by Becoming an Entrepreneur

Here are some of the benefits you can kiss goodbye when you start your own company. Forsaking the office to become an entrepreneur may soun...

Here are some of the benefits you can kiss goodbye when you start your own company. Forsaking the office to become an entrepreneur may sound like a dream come true, but the reality is that going into business for yourself can feel more like a nightmare.

While the number of people leaving their jobs to strike out on their own seems to be growing by the day, a recent story in New York magazine points out that being your own boss means sacrificing many things that Americans hold dear.

So what accounts for Americans' obsession with entrepreneurship and the rise of startup culture?

As Kathleen Christensen, director of the Alfred P. Sloan Foundation's Working Longer program, tells New York, many self-employed workers have been forced into entrepreneurship due to a lack of other options. These business owners are referred to as "necessity entrepreneurs," as opposed to "opportunity entrepreneurs."

What You Give Up by Becoming an Entrepreneur

Still, the substantial increase in college students pursuing majors or minors in entrepreneurship suggests that the American workforce is in the middle of a significant transformation. As New York reports:

In October 2010, Intuit, the Silicon Valley-based software company, estimated that more than 40 percent of the American workforce would be made up of "contingent workers" by 2020, a statistic that has since been repeated with almost religious regularity. It's only conjecture, of course, and skeptics point to the fact that the official self-employment rate in the United States is still hovering at just a shade over 10 percent. But there are plenty of serious people who believe Intuit's estimate is perfectly plausible.  

So what do aspiring entrepreneurs have to lose by leaving the corporate world for good? Here are some of the benefits New York reports you can kiss goodbye when you become an entrepreneur.

A sense of belonging
Whether workers realize it or not, the office is a comforting environment where people can even grow attached to their cubicles. Offices "are fundamentally social places," writes New York, "and in an age of dwindling social capital, in which Americans are less and less apt to visit with neighbors, join civic organizations, or have their friends over to dinner, having a community of professional peers is no small thing." A recent study from Brooklyn-based organization Lifeboat also showed that more than one in three adults have met a close friend at work, and that more than half of baby boomers have become close friends with colleagues.

The benefit of co-workers
Love them or hate them, co-workers make you better at your job. Research from Boris Groysberg, a professor of business administration at Harvard Business School, demonstrates that colleagues know each other's strengths and weaknesses and share information in a way that helps people work "more shrewdly and efficiently." A recent LinkedIn study also found that 27 percent of Millennials report that "workplace friendships" make them more competitive.

Creativity
Chance encounters with colleagues also lead to creative ideas that otherwise would never happen. (The creators of Post-it Notes are a prime example.) "The first thing that'd be lost if offices went away, I think, is creativity," says Wharton professor Adam Grant. "So much of organizational creativity is about the random walk down the hallway of an office."

An identity 

Entrepreneurs and freelancers who suffer through a dry spell of business can experience a crisis of identity, according to Sue Ashford, a management professor at the University of Michigan. "You're still a lawyer when you're not in the courtroom," she says. "But nonstandard workers only are who they are when they're doing it." In addition to the economic stress that comes with a lull in activity, entrepreneurs also experience what Ashford calls "identity stress."

While the American work force is clearly transitioning to include a higher percentage of self-employed individuals, it remains to be seen how well Americans will be able to adjust to the sacrifices that come with entrepreneurship.

Do the risks associated with starting your own company outweigh the advantages of being an entrepreneur? Tell us what you think in the comments below.

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