The Unexpected Pros and Cons of Moving from Executive to EntrepreneurPublished on February 03, 2021
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From the outside looking in, the roles of an executive and an entrepreneur look to be similar. After all, both positions rely on strong leadership and management skills, with the weight of their decisions affecting the success of the business they work for or own. Typically, that’s where the similarities end, and although there are a lot of people who successfully move from one to the other, many struggle with the transition and find it more difficult than they imagined. One of the reasons for their struggle is they haven’t properly looked at the pros and cons between the roles of each position.
It‘s a Very Different Atmosphere
As a corporate executive, you’re hardly ever on your own. You spend much of your days collaborating with colleagues until you reach a consensus on the decisions you’re trying to make. As an entrepreneur, however, the buck stops with you. Decisions are made by you and you alone, even though you may have others providing recommendations and guidance. While it may seem easy enough to do, an executive transitioning to the role of entrepreneur may find themselves feeling lost without the opinions of their peers. Executives need to accept that the structure and guidance they were used to is gone, and unless they can look beyond the process-driven world of meetings and guidelines they came from, they will have a hard time of it.
In the corporate world, an executive typically manages a team of players who play specific roles in the company. While small, day-to-day decisions may be made by the individual employees, long-term tasks are typically assigned by the executive. Entrepreneurs, on the other hand, expect their employees to be self-directed and handle multiple tasks at once. They rely on their employees to know their roles and make their own decisions.
On Your Own Dime, On Your Own Time
In many cases, executives are privy to a different budget than most other careers. From business lunches and trips, even to entertainment, executives are typically able to spend company money to satisfy miscellaneous costs of doing business. Entrepreneurs on the other hand are a little tighter with their money. Unlike executives, they know that every dollar spent is their own and can affect their bottom line.
In a corporate world you climb a ladder, and if you need to take time off, you lose your spot. It’s extremely hard to pause your career and if you do, you may find it difficult to start up again. After all technology is always changing, connections need constant massaging and the person behind you on the ladder is hungry to advance and more than willing to pass you. An entrepreneur on the other hand can take breaks or hit the pause button with the ability to hire people they trust to run things for them while they’re gone or sell their business when its value is high. When you’re ready to start up again, you can continue right where you left off without having to worry about being left behind or how you’re going to re-enter the job market.
Of course, being a corporate executive has its perks. Executives have their corporate safety net, with a pension, corporate vehicles, health and drug plans, stock options, severance packages and more, all of which vary from company to company. These benefits are highly attractive and desirable, and to attain any of them an entrepreneur needs to pay for them out of their own pocket. In order to transition from an executive position to that of an entrepreneur the perks are something they must be willing to give up.
Nothing Ventured, Nothing Gained
What it all comes down to though, is how well do you handle risk? An executive has less financial and legal risk if a business doesn’t perform well. An entrepreneur on the other hand has everything on their shoulders. All the risk is theirs to take and it effects more than their lives, but the lives of their employees as well. As an entrepreneur, you reap the benefits of running a successful company, but if the business fails, there’s very little reaping to do.
Executives are naturally well suited to entrepreneurial endeavors. But, if you’re exploring the idea of moving out of an executive role and buying a franchise as your next career move, you’ll need to consider all of the above and much more. The two roles may seem similar, but in the end the operational skills needed to run a business are very different. The work may even be the same, but the amount of autonomy is not. Understanding this may just help you make the right decision for your career.