If you’re an entrepreneur with a singular focus, the last thing you need is complexity. Complexity takes your time and attention away from your goals and can be a source of stress.
Nothing creates complexity like quitting your day job and jumping into complex investments just because everyone else is doing it.
Before you quit your job and start flipping houses to fund your business, consider the following:
Real estate investments can distract you from your business.
Most entrepreneurs have some kind of investment on the side. Often, those investments are in real estate. The general consensus is that real estate investments have the highest potential to supply the cash flow needed to run a business. Real estate investments have also become a symbol of success.
Thanks to stories shared across the internet, the urgency to demonstrate success through real estate investment runs deep. Hero status is given to those who risked it all, tempting new entrepreneurs to dive into complex investments they may not understand.
If you’re going to invest in real estate, keep it simple. Don’t complicate your life or your tax situation. For example, investing in out-of-state property creates a level of complexity that probably isn’t worth pursuing. The first time you need to evict an out-of-state tenant you’ll wish you had kept your investments within the borders of your home state.
Entrepreneurs who keep their day jobs are more successful.
Most entrepreneurs have one thing in common before going full-time: they can’t wait to quit their day job. In the entrepreneurial world, quitting your day job sends a message to the world that your business is a priority. It’s said that if you hang onto your job too long, your attention will be divided and your business won’t take off.
While some people advocate quitting your day job to go all-in, others (including Tony Robbins) advise against it. Since there are examples of success from both approaches, what’s the truth?
Thanks to a 15-year study called “Should I Quit My Day Job?: A Hybrid Path to Entrepreneurship,” we can finally lay to rest all speculation surrounding this topic. Researchers Joseph Raffiee and Jie Feng studied more than 5,000 entrepreneurs in the U.S. between 1994 and 2008. Regardless of industry or age, the data showed entrepreneurs who kept their day jobs were 33% less likely to fail. In other words, those who risked it all were more likely to fail.
While there are plenty of stories of entrepreneurs going “all in” and achieving success, those stories are rare and often have special circumstances surrounding their success that aren’t shared publicly. For example, those entrepreneurs are usually supported financially by a spouse or parent, or have access to other resources that don’t come from a traditional job (like a well-padded savings account).
If you’re wondering how famous entrepreneurs have found success, you might be surprised to learn that Steve Wozniak kept his job with Hewlett-Packard for a year after inventing the Apple computer. Bill Gates continued his studies at Harvard for a year after selling his first software program. Even the creators of Google spent two years at Stanford after launching their search engine.
Hesitation is a not-so-well-known key to success.
Contrary to popular belief, the results of the “Should I Quit My Day Job” study found entrepreneurs with less self-confidence and less commitment to their business were more successful in the long run. According to Wired.co.uk, their hesitations led them to “look carefully before leaping in,” to “question their ideas,” and to “seek honest feedback about which ideas were really worth pursuing.” All of these actions directly contributed to their success – actions that entrepreneurs with confidence and total commitment often fail to take.
Stick with your passions.
Another way to keep your life simple while launching a business is to stick with your passions. That doesn’t mean you shouldn’t do anything you’re not passionate about. All businesses need to perform tasks that aren’t fun, but generally speaking, don’t try to generate capital or go into business in an area you’re not interested in.
Don’t be like the high school graduates who flip through a catalog of salaries and choose their major based on how much money they’re likely to make. Pursuing a business you’re not passionate about will complicate your life and make it harder for you to achieve success.
Choose an entrepreneurial endeavor you’re passionate about so you won’t jump ship in challenging times.
Young Upstarts is a business and technology blog that champions new ideas, innovation and entrepreneurship. It focuses on highlighting young people and small businesses, celebrating their vision and role in changing the world with their ideas, products and services.