Do you want to know how an entrepreneurial spirit can help you turn problems into opportunities?
The rise of entrepreneurship corresponds to changes in the workforce and the way we live. To help you make sense of this trend, we brought you another episode of On the Margins: LIVE, with hosts Caleb Newquist, Gusto’s Editor-at-Large, and Will Lopez, head of Gusto’s accountant community. The duo welcomed Jody Padar, an entrepreneur and CPA, to discuss good innovation, entrepreneurship and risk, and what’s fueling the growth of entrepreneurship.
Jody is one of the accounting profession’s foremost visionaries and pioneers. She was named as one of the Top 100 Most Influential People in 2020 by Accounting Today. Jody has led the transition to tech for next-generation public accounting firms through open collaboration and change management. She is the author of From Success to Significance: The Radical CPA Guide and The Radical CPA: New Rules for the Future-Ready Firm and is CEO and principal of New Vision CPA Group in Chicago.
How a tolerance for risk factors into being an entrepreneur
“Entrepreneur” is a buzzword that people associate with ingenuity and independence. People often perceive entrepreneurs as go-getters who disrupt the status quo, upturn expectations, and fearlessly go after their dreams despite long hours and high risk. Is that all true?
“Entrepreneurship now has a sexiness to it, a lot more sexiness to it than [is] actually there if you actually are an entrepreneur and you’re actually doing it. It’s not always as fun as they make it out to be.”
– Jody Padar
While hard work and grit may be beneath the flash and image, there is still an edgy element to being an entrepreneur. Risk is inherent to it. While most people can learn a new skill or study how to run a business, not everyone is comfortable with risk. Caleb and Will questioned whether that’s something that can be cultivated. According to Jody, a tolerance for risk is possible to attain. Whether you’re developing it before you launch or as you’re scaling, you can use and flex your risk muscle.
“I think you actually build up muscle for risk. When I first started, I was only worried about myself and making money on the side. Then I joined my dad, and I had more bills to pay, and I had to actually feed myself full-time. But then, as my firm grew, I actually got a bigger tolerance for risk because I had employees I was paying, and they were under my care, and so I got that muscle, and it developed more. You just get used to having that … weight on your back, but [as] you get used to having people depend on you, it just becomes easier. I think you’re okay taking bigger risks.”
– Jody Padar
She also discussed how entrepreneurs do have the ability to modulate their level of risk, depending on the circumstances. They can pull back or scale depending on circumstance, such as having staff to pay or a family to take care of. For those of you who are considering becoming entrepreneurs in the financial advisory or people advisory spaces, take heart. You can create the conditions that work for you, and you’re not locked into them once you begin.
“You also develop the other side of it where you’re like, ‘Okay, I can’t be so crazy innovative because I have people depending on me,’ whereas when you really have no people depending on you, you can be as crazy as you want [and] be as innovative as you want because it doesn’t matter, because you’re not worried about feeding their families as well.”
– Jody Padar
Furthermore, some of the risk that’s traditionally been associated with being an entrepreneur has lessened because there are more options than before to create your own safety net. Just as you can help clients purchase healthcare plans that are right for them, you too can get the coverage you need.
“It started with healthcare. So once we had ‘Obamacare’ or whatever you want to call that, all of a sudden, entrepreneurship became a lot more reasonable because healthcare typically was the hardest thing to keep someone in a corporate job. They didn’t have healthcare. They couldn’t try something new.”
– Jody Padar
Jody also explained that the costs of getting started as an entrepreneur or small business owner have gone down dramatically. Ecommerce stores like Etsy through streaming sites such as YouTube, and social media have all made it possible to get started with minimal costs.
How entrepreneurs turn problems into innovations
For those who can see the silver lining in a crisis and a solution to every problem, there is a ripe opportunity to be the changemakers of the world. Creative destruction is a term used to describe how new businesses thrive despite economic downturns and losses, proving that there truly is a flip side to every coin. One reason businesses can launch during downturns is because there is space to do so. As some businesses level off or disappear, new ones can form to fill that void.
Another way entrepreneurs can capitalize on almost any situation is to come up with creative solutions to problems. This is something that’s been happening throughout history, as Caleb shared:
“Manufacturing is a really good example, especially [big car manufacturers.] A lot of the suppliers to the big car manufacturers are small businesses. They’d be making bolts, or they’d be making gaskets or whatever it is that they did, [and] they would-be suppliers to this mega-manufacturer. And so when the car industry went through all its turmoil … 10, 15, 20 years ago, that really had a downstream effect on a lot of small businesses. We’re in the process of building a new era of the car business in the United States, and that’s exciting and just one of the many areas where there’s some innovation and a lot of excitement going on.”
– Caleb Newquist
Caleb, Will, and Jody discussed one of the biggest opportunities for problem-solving of our time—that of the COVID-19 Pandemic. The worldwide shutdown destroyed many businesses and forced others to adapt just to survive. Whether it was a bar that couldn’t pay its employee, but sold to-go cocktails whenever possible, or clothing retailers that sold cloth masks to protect people from the virus, the world of commerce changed rapidly.
But in that chaos and destruction, there was room for new growth and new beginnings. People had time to sit at home, evaluate life, and question what mattered to them. Long-standing issues such as poor work-life balance, insufficient healthcare, and a lack of a safety net caused people to reconsider having traditional jobs that paid the bills but lowered their quality of life. Some went back to work with renewed purpose while others shifted their life trajectory, either by choice or out of necessity.
The result of all of this is the opportunity for reinvention, recreation, and freedom to do something new and unknown:
“I think, too, we’re going to be in a renaissance. So the pandemic kind of … leveled everything off. What’s the renaissance going to be like?”
– Jody Padar
Will discussed how the loss of full-time positions and more traditional work models may be replaced by the gig economy, which can provide more flexibility and freedom than ever before.
“A Forbes news article [says] that, post-pandemic, … the gig economy will exit probably more strongly than it ever has because of the thought of job flexibility being more appealing … [and] more necessary remote work [potentially] happening, and that being [normalized] as a result of the pandemic. And there’s a renaissance of what employees should look like or can look like now that companies can support remote work as a result of the pandemic.”
– Will Lopez
While all types of work have their benefits and drawbacks, his example points to how rapidly people can adapt and not only survive, but thrive in the face of change. This ability to adapt and remain flexible is an inspiring example of how possible it is to create totally new ways of doing things. Jody pointed out how many new industries have sprouted during the health crisis and how many more will fill in the gaps in the future:
“I think there’s going to be all these needs that people are going to have to figure out new ways [of meeting]. They’re going to have to invent something or figure something out to solve these problems that now have been created by the pandemic, and that’s where the innovation’s going to come from because good innovation comes from real problems.”
– Jody Padar
For example, tech has disrupted and continues to disrupt the accounting industry. It’s hard to compete against automation, which can far exceed human capabilities in terms of scope, speed, and accuracy. Accounting tech saves businesses money and time, which is a compelling reason for people to adopt it. It’s not going anywhere soon.
This disruption is unsettling, but it’s also an opportunity. Where there are problems, there are solutions. Those who can identify and capitalize on those solutions have a lot to gain. Businesses who don’t know how to run or operate automation, struggle to connect the dots between their people’s culture and their revenue, or haven’t yet been informed that they can provide affordable healthcare, need an advisor to show them a better way. Advisors can step up to the plate, level up their skills with certifications, and provide the guidance businesses desperately need.
“I think people are smart, and I think people will figure it out. The people who are innovative will figure those things out, and they’ll start companies, and then the worker bees will just work for those new companies because they are worker bees.”
– Jody Padar
Whatever path you’re on, know that a creative mindset can help you find the flip side to every coin and the solution to every problem.
Learn more about the rise of entrepreneurship
The rise of entrepreneurship corresponds to the level of challenges people face. Innovative, creative thinkers have an edge because they can identify opportunities that lay within problems. Being an entrepreneur isn’t as risky as it once was, and it’s possible to modulate the level of risk you incur. Risk tolerance is also a muscle that you can build through intention and experience. During times of loss and challenge, there are opportunities to create solutions and provide them to the public. It’s important to stay adaptable in the face of change and the unknown.
Gusto is here to help you make the most of every opportunity. Don’t forget to check out our other article based on the same episode: “Creative Destruction: Why Entrepreneurship Booms During Economic Crisis.”
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