How much can you make realistically in entrepreneurship?
How much can you make realistically in entrepreneurship?
Like what sort of size business, what industries (revenues, no. of employees) to make a certain amount?
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I was thinking more businesses that arent famous and never will be. For instance having 5 small restaurants.
6 figures I would say - there are guys online saying you can make 6 figures a year from your laptop writing a few e-mails or managing a business's social media.
6-8 figures, 6-7 are most likely
You can also realistically make 0. :)
You could actually make in the negatives as well
According to indeed, the average entrepreneur pays themselves roughly $58,000. Some people weren't meant to work for themselves. Roughly 75% of millionaires own their own business and I don't know the statistics for self-made billionaires but I'd have to think that all are self-employed to a certain extent. You can only become so rich working for someone else. If you go off on your own, you are in control of making as much as you want.
it depends on the specific industry. A while back, I was in commercial banking and had some lower revenue Clients, this is what I can recall:
I've also seen professional recruiting firms where there's maybe $3-5MM rev and there's multiple people making $500M+. This is pretty common for any professional service such as engineering consulting, etc. High margins and very low costs.
Low margin businesses like trucking, Owners' are usually making $300-400k with $12-15MM rev. depending on how well the Company's run.
You'd also be surprised with how much restaurant Owners' can make, especially when they founded their own chain and have 3-10 locations. On the low end they're making $150-200k, on the high end I've seen two owners' of 8 ice cream locations make consistently $800K - $1MM a year, or $1.6MM-$2MM profit for the entire business on about $10MM in rev.
I've also seen a commercial snow plow company with I believe $10MM rev or so with the Owner bringing in $800k+
I've seen a promotional products company with ~$7MM rev where the Owner is making $500K+
I'm from the rust belt so I couldn't give you figures for tech related companies
In short, these modestly successful blue collar type business Owner's can make a lot more than most professionals..... you really need to make it to the Exec level in most cases to surpass these business owner's income. Important to note that they also tend to live in VERY low COL cities where $500-750K buys you a mini mansion with 4,000-5000 sq ft
It's a good life
I just got me a shitty little ecommerce business and making like 300K a year now on 600K revenue. Life’s good.
Can you elaborate? I'm in university and really considering starting an online sales company
That is indeed the life my man
How do you compete with Amazon?
I assume these are just the salaries they pay themselves or distributions they dividend to themselves. A good life indeed. These guys / gals also own the majority of the equity in their business. If the opportunity comes to sell, an EBITDA multiple of anywhere from 4x to 10x depending on the industry and business profile could leave them with a nice lump sum after many years of hard work.
The chief benefit of being a well paid owner vs a well paid employee is that you can sell your business (or hire someone to run it), but you can't sell your job.
Yeah those general numbers include salary plus distributions. Most don’t take over a 100-200k salary, a majority of their earnings are distributions.
from what I’ve seen, most of these types of businesses won’t go more than 4-5x EBITDA. Nevertheless, still great. You won’t see much PE in companies will less than $1MM EBITDA and I think normally 2-3mm+ is the sweet spot where they get more looks
Forgot to mention - commercial roofing contractor with revenue of $20MM a year, Owner makes ~$2.5MM a year all-in
loser mindset
Entrepreneurship = bad investment? (Originally Posted: 12/13/2010)
Why not put those "100 hours a week" into trying to start a business? I'm sure you've all thought of this, what turns you away? Too much risk? Less earning potential? Satisfied enough with your current situation?
Don't have a great idea, don't want to drop the start up capital, extremely high risk, there are a lot of reasons to start a company and many more reasons not to
.
Execution takes primacy over the idea, imo.
I don't care how you execute the Waterproof Towel, the shit isn't going to sell...
.
But the amount of money varies depending on the business. A manufacturing business may require much more start up $$ than an online site. I found this very interesting: http://www.wallstreetoasis.com/forums/article-about-former-vc-analystsa…
I'm 25 and will net out $1M+ personally this year. I've also been working 80 - 100 hours since I was 18 though. YMMV.
It's a slow burn but once you get the fire going things can get really good really really fast.
What's your business?
Diversified D2C brands and eCommerce retailers. Most of my cash comes from the former. My main business runs @ 35%+ EBITDA margins which is glorious.
There was a guy named Jeff who wanted to sell books online. He’s now worth $140B.
Definitely best answer here.
Trying to answer what realistic earnings are for an entrepreneur is the same as asking how much you can make from trading with your own money. You could be the guy under the bridge that guessed wrong and now you are broke or you could be the billionaire who can buy anything his heart desires. It all comes down to a good idea and great execution, if you can get those 2 together then you probably will have at least a somewhat successful business.
As for those giving out specifics, in my opinion the most valuable part of owning a business is the ability to run expenses through it - nothing like good pretax income.
I'd say the best part about owning a business is being able to do whatever you want, whenever you want, however you want.
I think this is a hard question to answer, but in my experience, most business owners are making somewhere in the 6 figure range, which I know is broad.
Something to throw in here is that the hardest part is getting any business going and on solid footing. It doesn’t matter if it’s a restaurant or a trucking company. Once you have experience and a few years of decent financials, you have access to capital and a network. From there I would say, your income potential is almost unlimited. The question becomes how hard do you want to work, are you able to take that “next step” (i.e. moving from the chef and GM of your restaurant, to learning to delegate so that you can open multiple locations), and are you willing to take the risk.
I think the majority of small businesses stop once their initial idea becomes successful in whatever terms that means to them. And there is absolutely nothing wrong with that.
Actually, now that I think about it, that’s where I am in my practice (independent PWM). I am completely happy financially and my schedule is spectacular. I share an assistant and office space with another FA who is in a similar spot and mindset. I have enough brand presence, leads, and a system in place that I could probably launch 3 new FAs and darn near guarantee them success (and make more money for myself). Ken Fisher would. Ric Edelman would. I’m just not that guy.
Food for thought.
+1 SB for the “guy named Jeff that wanted to sell books online.” I laughed!
Yes, but not exactly.
Most SUCCESSFUL business owners are making that.
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