The upside of entrepreneurship

After last week’s column on entrepreneurship as opposed to a corporate career, I have received an unprecedented number of messages via LinkedIn and by e-mail. It was one of the best conversation starters since I began writing for Oman Daily Observer seven years ago.

If I think back at 2013 and 2014, when I was actively mentoring the SME in the Sultanate of Oman through the platform offered by Riyada, being an entrepreneur in the Sultanate of Oman was still a controversial topic. I cannot forget a friend of mine — who worked for the government — asking me once: “Why would I risk my money on a new business, when I can earn a salary every month?”.

But on the other end of the spectrum, I also had Omani friends who would not accept any job offer, so determined they were to pursue their own enterprise.

I am sure it is a matter of personal needs. Some need security, while others need the feeling of materialising ideas.

Last week, I mentioned that an entrepreneur needs to be ready to fail. Risk is a constant in entrepreneurship.

Simply put, we can visualise ideas in our mind, but it takes time, money and hard work to actualise them. In some cases, failure is the result of lack of one, or more, of the three above. Not enough time invested. Not enough capital. Not enough hard work.

But in other cases, failure is simply a natural outcome for a business that did not make much sense to start with.

What I want to focus on are likelihood and magnitude of failure, in both entrepreneurship and in corporate career.

First of all, failure as an employee manifests only in one way: losing the job. This has very limited consequences, so the magnitude is manageable.

In short: when you get fired, you won’t get your salary next month. And getting back on track is relatively simple for qualified candidates. The next job could be just a few weeks away.

Also, in terms of likelihood, getting fired in a moment is very unlikely. Depending on the law applicable, the process might be quite long.

In some countries it is mandatory to offer a few months of salary as a compensation, so the statement about not receiving the salary next month does not even apply.

In Singapore, for example, after a warning letter, employer and employee must agree on a Performance Improvement Plan, and try it out for at least a month before sending out a termination letter.

That slows down the process to around three months.

In entrepreneurship, on the other hand, things can be far more brutal. To start with, generally there is some capital invested.

Therefore, failing in entrepreneurship would forfeit whatever amount was invested.

Secondly, despite the “pay yourself first” advice, preached by practically all of the entrepreneurship gurus, at the early stages there might not be enough income in the business to pay expenses — such as rent for example — as well as a salary for the entrepreneur.

A few months without salary is relatively normal for entrepreneurs.

Next week we will talk about the tangible and intangible of both entrepreneurship and corporate career. (The writer is a member of the International Press Association)