There’s no need for a long preamble on this one. You are here to find out how much entrepreneurs make, so let’s have at it.
#1: Can Entrepreneurship Make You Rich?
Don’t pretend you weren’t thinking about it. Who amongst us isn’t an aspiring billionaire? When we ask how much entrepreneurs make, most of us are secretly hoping that the answer has at least 7 figures in it.
Entrepreneurship offers a veil of mystery that naturally leads to get-rich-quick thoughts. When you have a salaried job, you know how much you’ll be making each year, give or take a bonus. With hourly jobs, the most you can hope for is easily determined by a 40-hour workweek and maybe some overtime.
In either of these cases, any thoughts of getting rich are focused on promotions and raises, neither of which feels like an overnight success story in the making.
Entrepreneurship is not the only variant of work that gets people seeing dollar signs in their dreams. Commission-based sales jobs fall into this same category, as do executive positions where performance bonuses and stock options are a significant portion of your pay.
These are all cases where the difference in payment from year to year can vary by far more than the 1-20% bump you might get from cost-of-living increases, raises, and promotions.
But I haven’t actually answered the question yet.
If you want to be making 6 to 7 figures, well above the threshold most people need to be content, entrepreneurship is not for you.
If you want a steady income in a job that you can be reasonably certain will still exist next year, entrepreneurship is not for you.
Yes, entrepreneurship can make you rich, but only if you are hard-working and incredibly lucky. Entrepreneurship is the best way to become a billionaire and the best way to go broke. You don’t have full control over which path it takes, and one is far more likely than the other.
So yes, you can get rich by being an entrepreneur, but it’s far from the most likely outcome.
#2: How Much Do Entrepreneurs Make?
Okay, so maybe you won’t get rich, but that wasn’t the initial question. How much do entrepreneurs make? Let’s find out.
According to Career Explorer, the median entrepreneur income in the United States is $43,240. Using a somewhat different methodology, Seek Capital puts the median income for entrepreneurs at $51,419. These estimates are much higher than the median salary for all American workers: $40,000.
It’s worth noting that the definition of an entrepreneur can greatly impact those estimates. Seek Capital, for example, looks specifically at people employed at their own incorporated business. We could try to find the ideal definition, but I don’t think it has a significant impact on the overall point of this article.
In short, making money is one of the worst reasons to start your own business or other entrepreneurial venture.
#3: Why Should I Become an Entrepreneur?
Hopefully, I didn’t disappoint too many of you already. If I’ve driven one or two of you back to the corporate world and its guaranteed income, I’m okay with that.
For those that remain, let’s talk about a few of the non-monetary advantages of entrepreneurship.
- Experience – In most jobs, you have a narrowly defined set of responsibilities. As an entrepreneur, you are responsible for marketing, sales, design, HR, product, accounting, and everything else. This experience gives you a chance to dip your toes in and figure out skills you didn’t even know you had. Sure, you can and should delegate tasks, but even that is up to you.
- Freedom – As I mentioned in the previous bullet, you get to choose what tasks you do and what tasks you delegate. You also have more control over your working hours as an entrepreneur. There is, of course, a caveat to this: your real bosses are your customers and your bottom line, so you may find yourself trading some of that freedom for money or reputation at times.
- Connections – How many contacts were you really making at your office job? I can almost guarantee you that you’ll meet more people as an entrepreneur. It’s up to you to find clients, build relationships with partners, hire workers, and deal with regulators. If you prove to be hardworking, innovative, and trustworthy, they’ll see that and you’ll have a Rolodex stuffed full of high-quality contacts for your future endeavors.
If money is your goal, entrepreneurship is probably not for you. There are better ways to get rich. But if money is not your goal and if you have what it takes to be an entrepreneur, then there are few career paths for exciting and fulfilling.
If you aren’t sure whether entrepreneurship is for you, maybe you should try out a side hustle. It’s one of the safest ways to figure out whether you can be successful and make money following your passion.
If you’ve read this article and still think entrepreneurship will make you a billionaire, you’re free to try to prove me wrong. I’m always happy when I lose that particular bet.