Last week I flagged the shocking and even depressing statistics that most entrepreneurs – holding constant for socioeconomic factors – make less money, work more hours and suffer more work-related stress – than their employed counterparts.
And when we combine these statistics with those that show a very incredibly low percentage of startups and small businesses ever attaining meaningful profitability, it is remarkable that people ever dream to be entrepreneurs and start businesses at all.
But start them they do!
Quite possibly the most amazing and inspiring number in all of American business is 550,000.
That is the approximate number of new businesses that are started in American each and every month, or more than 6 million per year, or close to 3% of the U.S. adult population.
Now these opposing statistics beg the question, “Why?”
Why would 550,000 people – who statistically are far better educated and wealthier than the population as a whole – engage in behavior that on the surface clearly seems contrary to their self-interest, irrational, and dare I say, delusional?
Well, on the cynical side, many of these brave folks probably think the odds of economic success are greater than they really are. And even if they know the odds, they think that they don’t apply to them.
On the slightly less cynical but still not totally inspiring side, one could argue that businesses are started out of boredom – out of the need for that “action rush” that in the realm of business only an entrepreneurial endeavor can truly provide.
Inspirationally, many believe like I do that entrepreneurship is the greatest force for positive change in the world today, and they start and grow businesses to be positive change agents, on levels big and small.
They start restaurants to create and share beautiful food, service, and atmosphere.
They open day care facilities to provide quality, spirited child care for working families.
They start creative agencies – graphic design, public relation, web development firms, and the like to leverage their business and creative talent to its most effective end.
And they start drug development and medical device companies to help people live longer, healthier lives.
And thousands of types and forms and sizes of business in between, led by entrepreneurs with aspirations big and small, driven by motivations both pedestrian and soaring.
But at the heart of all of their reasons for starting businesses, at least of the ones that survive, is that often begrudged but really most inspiring motivation of them all.
They start businesses to make a lot of money.
Now the key word in that sentence is make – as in bringing into existence through creativity, effort, and as often as not more than a little serendipity and luck, something that did not exist beforehand.
Making money is the difference between Mo Ibrahim becoming a billionaire through bringing inexpensive mobile telecommunications to millions in Africa and Mo Gaddafi stealing billions of his people’s money at the point of a gun.
It is the difference between Steve Jobs and Apple creating $325 billion in market capitalization (and untold additional hundreds of billions in economic and multiplier effect), and governmental “who you know” redistribution and inefficient waste of this created wealth.
Now often, for the entrepreneur and those that back them, the touching of this money often takes many years, even decades, of under-paid, hard, and often thankless work, before a cash windfall in the form of a business sale or a public offering.
But that is a story for another day.
For now, find those that can truly make money, encourage and back them, and you and the world will get to a better place.