For all entrepreneurs, starting a business is the route to “life, liberty, and the pursuit of happiness,” no matter how risky. It’s the American dream that has been the goal of people in this country for over 230 years. If you are here in the U.S., I hope you are all able to take some time off this holiday weekend, to contemplate what you do, and why you do it.
According to an article and poll by Startups.co.uk, having the independence to make your own decisions is considered the key benefit of being an entrepreneur. Nearly 90% of respondents said decision-making independence was very important, closely followed by more flexibility for a better work/life balance. Job creation and innovation are the results, not the drivers.
Personal satisfaction also ranked close behind, with 70% of respondents claiming it was a key advantage to running their own business. Contrary to popular belief, most business owners did not start a business just to earn more money. Only 32% of entrepreneurs cited money a key benefit of running their own firm. This indicates that lifestyle and satisfaction factors are often more important than financial ones.
As with everything in life, there are advantages and disadvantages to every choice we make. Choosing entrepreneurship is no exception. Beyond the obvious advantages mentioned above, there are some additional advantages that get mentioned often.
- Challenge of originality. A good entrepreneur feels the incentive to offer a new service/product that no one else has offered before. That’s the same challenge an artist feels on every new canvas, or every musician feels when composing a new work.
- High level of excitement. Entrepreneurs love the continuous challenges of a startup, and the satisfaction of solving them. Some are so high on this life, that they hate the fact that they have to "waste" part of their life in sleep!
- Minimal rules and regulations. Work in a conventional job is often difficult to get done because of all the "red tape" and consistent administration approval needed. With a startup there are no rules, until you make them.
- Challenge of originality. A good entrepreneur feels the incentive to offer a new service/product that no one else has offered before. That’s the same challenge an artist feels on every new canvas, or every musician feels when composing a new work.
- Beat the competition and discover yourself. Competition drives innovation, and innovation drives competition. The cycle never stops. But the best part is that ultimately entrepreneurship isn’t a race against others but an opportunity to discover your potential.
Of course there are some disadvantages that every entrepreneur knows all too well:
- No regular paycheck. Starting your own business means that you must be willing to give up the security of a regular paycheck. In fact, most startup founders work for no salary during the first year or two of company operation.
- Few paid benefits. There will likely be no medical and dental benefits, and no vacations or other perks during the formative years. Don’t expect a staff to do the accounting, handle correspondence, or even clean the bathrooms.
- Decision responsibility. All the decisions of the business must be made on your own, better known as “the buck stops here.” This may sound like an advantage, but is actually a major source of stress and loneliness for startup CEOs.
- Staffing challenges. Hiring and firing decisions are hard, and that’s just the beginning. Often times, you will find yourself working with people who "don't know the ropes" and require extensive coaching and assistance. Then you have to deal with the mistakes.
By definition, if you see the rewards here as outweighing the risks, you are an entrepreneur. So you should fully appreciate the independence factor fought for so hard by our forefathers. I hope you have had time this long weekend to savor the dream. You earned it, and you need the rest.
Marty Zwilling
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The US dollar is holding on to yesterday's gains as the market awaits the key events of the week: the ECB meeting and press conference and the US jobs data--for which the imprecise ADP data will serve as the proxy today ahead of tomorrow's national report.
While yesterday's free-fall in peripheral European bonds has moderated today, helped perhaps by a solid reception to the Spanish bond auction, pressure is still evident in the credit-default swaps market. Portual 5-year CDS is moving above 1000 bp today, which in the past has been an important threshold.
Even stronger than expected German industriaal production data and the prospects of the ECB hike has proved insufficient to do more than stabilize the euro near 7-day lows and near the retracement objective near $1.4280. While there is additional support near $1.4235-40, a convincing break of the $1.4280 area could signal a move back toward $1.4100. A move now above $1.4350 would go a long way in helping boost sentiment.
Trichet's press conference could determine whether this happens. A rate hike is a done of a deal as these things get. The key is that he will have to keep the door open to further normalization of monetary policy. Despite the slowing picked up by the recent PMI reports, monetary policy is still perceived to be accommodative. The refi rate is still below the rate of inflation. The ECB's latest monthly bulletin highlighted the fact that excess capacity is being absorbed and the output gap is falling. Trichet needs to say that the ECB is "closely monitoring" inflation.
The ECB is hiking rates at the start of Q3. The next hike should be penciled in for November, the middle of Q4 as Draghi takes over. Of course, much could happen between then and now.
Neither the foreign exchange market nor the equity markets are making much hay from the positive growth impulses reported today. Japan reported stronger than expected machinery orders (3.0%), best in four months. This is more evidence that an economic recovery is taking hold. Australia report stronger than expected jobs data. Hiring continues to appear strongest in the resource states. The implication is that the jobs data is consistent with the bifurcation of the Australian economy with the external sector still being bolstered by the favorable terms of trade shock.
The UK reported a slightly smaller than expected rise in May industrial production (0.9% vs 1.1%), but this disappointment reflects the mining/quarrying, not the manufacturing sector, which did exceptionally well. The 1.8% rise in UK manufacturing completely offsets the 1.6% decline in April. It is the strongest report since March 2010, but most likely cannot be sustained.
Germany also reported stronger than expected industrial production. The 1.2% rise in May offsets in full the revised 0.8% decline in April. Yet more recent data, like the PMI, warns that the Germany economy has stopped accelerating.
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