Startup businesses are popping up all over the place, presenting the perfect opportunity for people to forgo the traditional job route for something more exciting or challenging. Either starting a business or joining a young company looking to take on the world, is something that is a genuine option in Southeast Asia’s startup industry.
Working a 9-to-5 job slaving away to make someone else rich often does not feel comfortable for highly motivated individuals who have big dreams of owning their own businesses. The lifeblood of any startup business is the employees who sometimes have unrealistic expectations of what they are getting themselves into.
We want this article to cover some things these people need to take into consideration before getting involved with a startup.
Working for a startup
It is very challenging working for a startup company because of the instability and survival factor, but there are some people with a hardcore work ethic, optimistic attitude, and personality traits and characteristics beneficial for a startup business. Employees who have an adventurous spirit and open-minded attitude are more likely to try something new, therefore they would benefit greatly from a radical work environment like that at a startup business.
For instance, after concluding their work at the startup company they have the necessary experience under their belts and developed skills that could be percolated into other business opportunities and startup companies. Moreover, the skills and experience gathered on the job look absolutely great on a résumé. Furthermore, if the startup company becomes highly successful, those employees who started at the bottom will quickly rise to the top and make big moves because they are already familiar with the logistics of the company, which would yield them a bigger salary.
Think for a second when Bitcoin got started and the majority of people in the financial industry were a bit leery about investing their money in digital currency. However, the people who purchased some Bitcoin in the early stages became millionaires years later when the use of cryptocurrency skyrocketed around the world. Now imagine how much money the CEO and his employees make.
Read more about Bitcoin and what it all means.
Does A Startup Business Offer Stability?
The short answer: Yes and no.
Startups are essentially ‘starting up’, so they are getting their feet wet in the business industry. They are completely new with CEOs virgin to formal business practices, so employees need to keep in mind they are always in the business of helping the business owner reach his or her dreams. The employees are in a sense playing the lottery waiting for a greater return on their investments that might not come.
Some of the cons of working with a startup business are the employees work harder for longer hours for a lower salary than as a stable business. Sometimes the employees need to clock 16-to-18 hours a day, waking up before 8 am and going home after 5 pm. Moreover, the weekly payments are flimsy because the business is most likely not generating a lot of money for long-term stability, which means the funds are usually coming from a business loan or the CEO’s own pockets, therefore no 401K plan is given to employees or medical benefits or the like are available.
According to this article, most startups are about 3 to 6 months from getting shut down. Although getting hired can be easy, surviving and growing with the company is not.
The number of startup businesses that fail
It might be surprising to know that 90% of all startups fail to make money because the CEO is not passionate enough, has superficial or ulterior reasons for starting the business, mishandled funds, might not have enough employees or they lose focus of the ultimate goal of the business.
We’ve got some statistics to back it all up:
- According to a research study published in the Wall Street Journal, concluded that 3 out of 4 startups fail. This study focused on the results gathered from approximately 2,000 companies with at least $1,000,000 funding in working capital between 2004 and 2010.
- The Berkeley & Stanford faculty members became involved with a project that determined businesses fail within 3 years and a majority of the time it is due to premature scaling.
- According to the Small Business Association (SBA) 30% of new business fail within the first 2 years.
- The Bureau of Labor Statistics’Bureau of Labor Statistics’ Business Employment Dynamics determined that 80% of businesses who hired employees are in a better position of surviving their first year.
So should you do it?
Working for a startup is not bad. The benefits all depends on what the employees want. There are some benefits and some downfalls just like with anything, so the employees have to decide whether the pros outweigh the cons.
Think about Steve Jobs, who was looking for an investor to become part of Apple and could not find one, continuing his dreams until he became a roaring success. The same goes for Groupon, Twitter, and Craigslist. All of these companies were startup businesses created from a hobby turned into multi-million and billion dollar empires. Employees need to choose wisely.