Industry Trends

Not Everyone Should Start a Business

Caleb Newquist Editor-at-Large, Gusto 

February 18, 2021

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Starting businesses

I’ve started a couple businesses. The first time, I didn’t have the original idea, but I was the essential employee that my co-founders needed in order to start the business. Fortunately, I wasn’t responsible for revenue or payroll or any of that stuff. Unfortunately, I was entirely responsible for the product. It was a lot of work and a lot of fun. I screwed up a lot but also learned a lot. I stuck with that for quite a while, and it’s still going, so, arguably, it was a success.

The second business was one of those side gigs that are popular these days. Again, I wasn’t responsible for employees, but I did have to find all the work and then do all the work with rare exceptions. That business more or less got me my current job at Gusto, so even if it’s not a business that’s still going, it resulted in something.

Now, neither of those situations may meet your personal definition of “starting a business,” but in both cases, I took personal, professional, and financial risks that could’ve gone sideways. In both instances, I had to work hard, but I also had to be lucky (i.e., right idea, right skills, right place, right time) for them to work. I’m not trying to convince anyone of anything; I’m just saying that’s more or less what’s involved when you start a business.

These are also many of the reasons why most people don’t start businesses! It’s a hard thing to do, it’s an even harder thing to make a living at, and it’s harder still if you want it to scale, have employees, the whole schmear. Which is why many businesses end up failing. And failing is a hard thing, too. If you don’t handle it well, then starting businesses may not be for you.

Just because some people are not cut out to start businesses does not mean they are inferior. It just means that they aren’t meant to start businesses. The pandemic, however, has nudged a lot of people into trying it out. Many people suddenly found themselves out of work with plenty of time on their hands, and they’re giving this entrepreneur thing a shot:

Most of Shopify’s more than one million customers are first-time entrepreneurs, said Harley Finkelstein, president of the Ottawa-based company, which will report fourth-quarter results on Wednesday. “Imagine a future where everyone is an entrepreneur. We’re moving in that direction,” he said.

Sigh. Ok, sure, I’ll try to imagine a future where everyone’s an entrepreneur, but then can I take a nap? For like a week? Do entrepreneurs take vacations in this imaginary future? And if so, do they work on these vacations? Do they have friends? Like, real friends? Will they talk to them about non-entrepreneurial things, at least occasionally?

But there’s a practical point here as well: In this future where everyone is an entrepreneur, do any of these businesses have employees? Or does the entrepreneur do everything until they burn themselves out? Or do they simply earn money by submitting themselves to round-the-clock advertising while delivering take-out?

If a person in difficult—but inspired!—circumstances wants to start a business, they should! They should use Shopify! They should use Gusto! (Full disclosure: I work at Gusto. This is a Gusto newsletter. I didn’t start Gusto, but I did start this Gusto newsletter.) It can work! But if it’s not for you, you should go work for someone who did start a business! They’re going to need help.

Mistakes, I’ve made a few

Well, not me. But someone:

It was one of the worst Wall Street mishaps in years: Citigroup accidentally wired $900 million last year to a group of lenders locked in a bitter dispute with the beauty company Revlon.

On Tuesday, a federal judge ruled that the recipients don’t have to return the cash.

For those of you who may have spent some time auditing huge companies, especially huge financial companies, this kind of mistake is probably not surprising. The judge in the case, however, has no such experience:

Recipients of cash wired in error are typically required to return it. But in this case, the creditors had reasonable grounds to believe the payment was intentional, Judge Jesse M. Furman of the U.S. District Court in Manhattan wrote in his ruling.

“To believe that Citibank, one of the most sophisticated financial institutions in the world, had made a mistake that had never happened before, to the tune of nearly $1 billion, would have been borderline irrational,” he wrote.

But it’s not! The whole thing is incomprehensible, so I’m not going to even bother trying to explain it. That any auditor of internal controls would take one look at it and think, “Oh, yeah. That’s an effective control,” was just someone trying to get out of doing more work.

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Caleb Newquist
Caleb Newquist Caleb is Editor-at-Large at Gusto. In 2009, he became the founding editor of Going Concern, the one-of-a-kind voice on the accounting profession, serving in the role for 9 years. Prior to Going Concern, Caleb worked as a CPA for nearly 6 years in New York and Denver. He lives in Denver with his wife, daughter, and two cats.

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