Stress Level versus Cash Flow for an Entrepreneur

I had a friend while I was in business school – let’s call him Charlie – who was specializing in entrepreneurship. However, Charlie, being a bit older and wiser than most of us in the business school program, decided he did not want to be like one of his classmates and start a business.  Instead, he wanted to go work at a young business that was cash flow positive. At the time, I was a bit confused. All I wanted to do was start my own business and I thought what could be more fun than being there at the beginning. You’d have the opportunity to mold a business and see it grow every step of the way. Plus, when you make it big, you will have the biggest payoff.

So, when we all graduated, Charlie found a job with a small start up who had been in business for a few years.  It had just reached the point of being cash flow positive while several of my other classmates and I decided to take our ideas and turn them into businesses. What I discovered, was that my friend Charlie was right. The enthusiasm and excitement of starting a business slowly fades away as the initial cash from the investment gets spent and revenue trickles in. As pictured below, from my own experiences with my business and without any real scientific study, is a graph of the entrepreneur’s stress level as it relates to cash flow with their business.

Starting a business from scratch is one wild ride. I think for most entrepreneurs, it involves a lot of long hours and some sleepless nights in the early days of the business. I was able to talk to my friend Charlie from time to time about his job, and his stress level was always way below the classmates that had started businesses.   I’d still encourage anyone who has the desire to start a business to do so. Just be ready for the stress curve!

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