“Access to networks, funding, and education are some of the most significant advantages an entrepreneur can have. These are privileges that not everyone can claim.”
Guy Kawasaki
When you were a kid, did your parents and teachers hammer into you to 'Dream Big', promising that you could do anything, be anything?
For far too many of us, this now feels like an empty promise. Years later we are stuck in the rat race, forced to trade our time for money, and work tirelessly for someone else's dream. Perhaps what our caretakers and adults should have really said was, "You can do anything, as long as you're willing to suffer for it and risk failure, poverty and humiliation."
Entrepreneurship is often idealized as a meritocracy, where the best ideas and talent rise to the top. But that's simply an illusion. Research indicates that one's socioeconomic background is actually the most significant factor influencing entrepreneurial success.
Access to financial resources is a common trait among entrepreneurs, highlighting the role that PRIVILEGE plays in the initiation of new business. Understanding how social class and systemic barriers shape our workforce is essential to fostering a more equitable and inclusive environment for entrepreneurs everywhere.
The personal and financial risks of entrepreneurship are prohibitive to those without a safety net, deterring so many talented individuals from pursuing self-employment.
The Ultimate Currency
The ultimate indicator of power and measure of success is not money, or fame. It's TIME. it's owning your calendar.
Entrepreneurs everywhere dream of a business that gives you freedom and flexibility to:
choose your projects
set your own schedule
say no to what doesn't matter
say yes to what does
It's not about working less. It's about controlling when and how you work, and who you work with. It's about having complete economic and personal freedom and fulfillment. It's about the opportunities to close the pay gap, achieve work-life balance and escape frustrations of hierarchal workplaces.
THAT is the new American Dream that so many of us pine for.
However, it's not all sunshine and rainbows. It's important to shed light on the less glamorous aspects of entrepreneurship, offering a more grounded perspective on what it truly entails.
There can be a lot of chaos and confusion behind the scenes of small businesses, even if the face of the business is projecting an image that"all is well." While being your own boss offers empowerment and freedom, it also introduces immense mental and emotional challenges, nervous system dysregulation and burnout which can be deeply taxing internally.
Despite the toll, the passion for entrepreneurship often keeps people coming back: That’s how you know it's your true calling - when you still want it, even if the payout won’t make it worth it.
“There are many wonderful aspects and benefits to entrepreneurship, but there are equally pretty unsavory truths about becoming a successful entrepreneur that not many people talk about.The amount of difficulty and burnout you introduce into your life is absurd."
Sophia Sunwoo
Examining the Safety Net
Across social media, entrepreneurship is touted as the stepping stone to happiness, financial freedom and independence. But in reality, the journey to self-employment is paved with loop holes and "hacks" that give certain individuals with a head start.
Securing funding is a critical first step in entrepreneurship. Those with access to financial wealth, social connections or other assets can leverage these to not only start their journey but also to keep it going during times of hardship.
The presence of a financial safety net also allows the Lucky Ones to take entrepreneurial risks without the fear of financial ruin. This security enables these individuals to focus on business development or creativity rather than immediate profitability. It allows for expirementation and PLAY - major drivers of joy and happiness.
Family Money
Individuals from affluent families often have access to initial capital, through personal savings or personal loans that enable them to invest in business ventures without immediate financial strain.
Higher Education
Higher education provides knowledge, degree but also valuable, elite networks and credibility. Graduates from prestigious institutions often have connections to high-profile investors, mentors, and other human/social-capital resources that can facilitate entrepreneurial endeavors.
62% of entrepreneurs hold at least a bachelor’s degree, and those with doctoral degrees earn significantly more than their less-educated peers. That being said many marginalized individuals turn to entrepreneurship precisely because they lack access to higher education. For them, it becomes a pathway to economic stability and upward mobility.
“Wealth is the greatest enabler of entrepreneurial risk. It insulates against failure and allows for experimentation.”
Thomas Piketty
Spousal Income
A spouse or partner with a steady income or benefits can offset the financial uncertainty of entrepreneurship, enabling risk-taking with less fear of economic hardship. Additionally, having a partner who offers emotional encouragement and shares household responsibilities can reduce stress, allowing entrepreneurs to focus on growing their businesses.
Entrepreneurial Role Models
Having family members or close relatives who are entrepreneurs can make the dream of starting a business seem more attainable. This network provides inspiration and guidance, allowing the journey to entrepreneurship to feel less daunting or overwhleming.
"Representation matters. Watching entrepreneurs who look like you and come from similar backgrounds experience the ups and downs of business helps us know our dreams are possible.”
Nika White
Strong Credit
Financial wealth often provides a foundation for maintaining a good credit score by enabling consistent repayment of debts, lower credit utilization, and timely bill payments. A high credit score signals reliability to lenders, which can result in loans with more favorable terms, such as lower interest rates and higher borrowing limits. This cycle reinforces financial privilege and further builds those with existing financial standing.
Confidence & Empowerment
A financial safety net, strong social network and reputable educational background can provide a sense of inner peace and security that mitigates the fear of failure. Knowing and believing that you are marketable, connected and resourced reduces pressure and stress that something could go wrong. Deep down you know everything will be ok because you can always pivot to traditional employment if necessary. This psychological safety allow individuals to take risks and pursue entrepreneurship with less worry and hesitation. What a dream!
“Taking a risk is not a problem for those who have the resources to recover. For those without privilege, risk is often not a choice.”
Dr. Linda Hill
The Bottom Line
While grit and resilience are often celebrated as the key to entrepreneurial success, the truth is they're still not enough. You need money to make money. The money exists for those who live in the social and family networks that already have it, or for the few Lucky Ones who find their way in strategically.
There are critical unseen forces and structural advantages that wealthy, privileged people have which keep them succeeding, and failing, succeeding, and failing, over and over and over again.
Aspiring entrepreneurs from backgrounds of lower-income, lesser education or social standing may struggle to secure funding or take the risks associated with launching a business. Sustaining a business demands resources that not everyone has access to, and that is sad for those of us who consider ourselves social justice warriors.
My Story: I can't afford to fail, so I can't afford to be a full-time entrepreneur. I have significant financial and caregiving responsibilities as a solo parent and solo homeowner. I carry burdens and feel pressures that others with more resources do not.
The Long Haul
Starting a business is one challenge; sustaining it is another. The Lucky Ones can afford to fail, and try again.
Even with a strong idea and initial funding, unforeseen circumstances or financial pressures often force businesses to shutter and close. While privileged entrepreneurs can weather these challenges, others are left dreaming.
For those without such resources, the consequences of failure can be devastating and detrimental that it prevents them from even attempting to start a business in the first place.
When/If you have to slow down or hit pause on your dream because it’s financially not making sense, give yourself some compassion and grace.
Thinking 'Realistically'
In a perfect world, merit and innovation would be valued over socioeconomic status. Of course, Entrepreneurship is not reserved only for privileged individuals, but privilege sure does make it easier.
This harsh truth shouldn’t discourage us "regular people" from pursuing entrepreneurship, but rather prompt us to examine and reevaluate our strategies and resources. With maturity, awareness and honesty, we may see that certain avenues are a waste of time and decide to redirect our energy. Perhaps there is another way. Perhaps there is not.
Regardless, believing in yourself is the most important secret of success. Don't let go of your goals and aspirations just because they're challenging, unrealistic or risky.
Stay steadfast to your dreams. Hold on to that hope and vision. Miracles happen. Manifestation is real. You can defy all odds. The ones who are called 'crazy' and 'delusional', are often the ones to succeed.
Don't downgrade your dreams to match your reality. Instead, upgrade your beliefs to match your vision.
Statistics indicate that a significant percentage of freelancers and small business do not succeed long-term due to inconsistent income, lack of benefits, or difficulties in finding clients.
The Balanced, Leveled Approach
Being cautious of entrepreneurship is completely normal and natural. After all, failure carries a heavy stigma in our society. We don't want to disappoint or embarrass our family or lose our social status or respect. But entrepreneurship doesn't have to be "all or nothing". We can take baby steps to achieve our goals.
Here are some ways that "normal" (less-privileged and/or more risk-averse) people can venture into entrepreneurship safely and strategically. By taking these steps, you can increase your chances of success and create a more stable foundation for your self-employment journey.
Start Small: Begin with a side hustle or low-cost venture to minimize financial risk. If possible, start freelancing or working on your business part-time while still employed. This allows you to build a portfolio and client base before fully committing/transitioning.
Create a Business Plan: Outline your goals, target market, and financial projections. A solid plan can guide your decisions and help you stay focused and prepare for the worst, with contingencies for potential setbacks, ensuring a structured approach to risk.
Start Saving: A common recommendation is to have at least three to six months' worth of living expenses saved before transitioning to self-employment. This cushion can help cover expenses during lean periods and provide peace of mind as you establish your business.
Diversify Income Streams: Consider offering multiple services or products to reduce reliance on a single source of income.
Build Connections Online: Leverage free or affordable online resources, crowdfunding platforms to gain knowledge and connections. Promote your services organically through social media and online channels/directories to attract clients.
Build Connections In Person. Build relationships with other professionals in your field. Networking or local entrepreneur meetups can lead to referrals and vital collaborations. Partner with others who complement your skill set and share the burden of financial and operational risks.
Secure Grants: Explore small business grants or microloans tailored for underrepresented entrepreneurs. You'll first need to get your LLC, but then you could use grant money to secure a bank account and line of credit, then scale it from there to secure larger SBA loans.
Leverage Community Resources: Utilize support from organizations that provide mentorship programs or resources to aspiring entrepreneurs from marginalized communities, such as accelerators, co-working spaces, or small business associations.
Stay Organized: Keep track of your finances, deadlines, and client communications to maintain professionalism and efficiency.
Continuously Improve Skills: Stay updated with industry trends and continuously improve your skills to remain competitive.
Consider Insurance: Look into health insurance, liability insurance, and other coverage to protect yourself and your business.
Our parents weren't ALL wrong - Entrepreneurship does require the belief that you can do anything, be anything. You need an unbelievable amount of grit and resilience - the ability to withstand stress, discomfort and solve problems quickly. You also need AUDACITY
The audacity to
take yourself seriously as a professional or creative
treat your ideas and insights with respect
carve out time to actually work on what we are interested in
find mentors and inspiration to lean on when we feel stuck
Privilege and 'Luck' certainly help in the pursuit of success , but it's not a requirement. Undying Self-belief, Curiosity, and Commitment is ultimately what you need to take the leap and pull you through. Your faith has to be bigger than your fear.
“Entrepreneurship is about taking risks. But those risks are often mitigated by a safety net that many don’t have.”
Andrew Yang
Doing Your Part: How to Level the Startup Field
The entrepreneurial ecosystem won’t self-correct itself. It's time to acknowledge the role that privilege plays in creating inequities, and then be proactive in making changes that contribute to the greater good.
If you're one of The Lucky Ones, use your power (and capital) to invest and uplift others, especially those in marginalized communities and underrepresented groups. Take a chance on someone, just like someone took a chance on you!
Network on their behalf
Share and amplify their voices
Offer a loan
Donate for a grant
And of course- Mentorship!
By sharing wisdom and resources, entrepreneurs from all walks of life can help eachother thrive.
If you are in a position of power and privilege, it is now your responsibility to use that to empower others with opportunities and connections. Pay it forward! Everyone deserves a career that aligns with their values and goals.
The lack of diversity in entrepreneurship is not about talent or ideas—it’s about access to opportunity.”
Arlan Hamilton
Wrapping it Up
Entrepreneurship can be a pathway to both financial independence and personal empowerment, but it's a path not available to many.
Recognizing the role that privilege plays in entrepreneurship is crucial for developing policies and support systems that level the playing field. With time, effort and open dialogue we can undo the limiting systems and barriers that keep entrepreneurship an illusive, far-off pipe-dream for minority groups.
Acknowledging and addressing factors of wealth disparity is essential to fostering a more inclusive and equitable environment for aspiring entrepreneurs everywhere.
“Most entrepreneurs are not self-made. They are the product of opportunity, mentorship, and financial support that they may not even realize is a privilege.”
Scott Shane
Erin Ratliff is a holistic, organic growth + visibility business coach and consultant serving energy-sensitive soul-preneurs and heart-led self-starters with the mission of personal and planetary healing.
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