4 Startup Truths You Won’t Learn in Business School

Becoming an entrepreneur is one of the most rewarding—and terrifying—things you’ll ever do. I started my own business, a business-planning software company initially based in Palo Alto, California, three years after graduating from business school. I’ve succeeded through several decades, but it wasn’t always easy given that I struggled with student loan and mortgage payments, and took care of my family at the same time. But today, I’m financially secure, my business is healthy, and I employ more than 60 people at our new location in Eugene, Oregon. Because I’ve dealt with startups and entrepreneurs for a long time, I’m well equipped to outline what you can expect if you’re planning to start your own business.

B-school has given other entrepreneurs exactly what it gave me: business fundamentals, including basic finance, marketing, and administration. An MBA program also teaches you how to plan and, most importantly, how to understand cash flow. But what school doesn’t teach you is how to wade through the entrepreneur clichés to get to the unvarnished truth.

So that you know what you’re getting into before starting your own business, I’ve broken down four expectations of being a business owner, and explained the reality behind each.

1. The expectation: You’ll be your own boss

Why it’s true

When you build your own business, you do get to set your own schedule (for the most part). After I left a market research firm to consult on my own, I was able to coach my kids’ soccer team. I left work early three afternoons a week, and made up for it by working after dinner and on some weekends. Years later, I hired a consultant—a single mom with a business degree and significant student debt—who does something similar. She takes meetings only in the mornings so she can be at home when her child returns from school.

Why it isn’t

To achieve success in business, you must answer to your customers, clients, investors, partners, and employees. In effect, they will become your bosses. You’ll need to be available to them when they need you. You’ll also likely become a business owner who’s harder on yourself than your past bosses ever were.

Finding the balance

When I was building my business, I was obsessed with it (as most entrepreneurs are), and my wife and kids understood. But the good news is, striking a quality work/life balance is possible as an entrepreneur.

My family learned how to slot time in my calendar for family time. And while you can’t disrespect your customers’ or clients’ time, you can take time for yourself. For several years, even though I worked long hours, my wife insisted I get home for family dinner. “You can work on your laptop later,” she would add. Years later, I’m grateful—the value of your time is something every entrepreneur should keep in mind as they figure out how to divvy up their schedule.

2. The expectation: You’ll get to do what you love

Why it’s true

Starting your own business often means spending your days working on things you enjoy. When I first started my business, I had to pay off student loans and support my family, so I needed a reliable cash flow. But I didn’t want to spend my time selling or focusing on management to get it. Instead, I wanted to code software and work with spreadsheets.

So I did, but not 100% of the time. In fact, I always did the consulting that paid the bills and my student loan debt first, before doing the product work I loved that would build the future of my company.

In this aspect, I wasn’t alone. In 2016, The Financial Times surveyed MBAs from the class of 2012 and found that the percentage of entrepreneurs who depend on their companies as their main source of income varies. Among UCLA and Harvard MBAs, more than 50% of entrepreneurs support themselves fully from their business compared to 18% of University of Southern California grads.

So I learned from experience that it’s possible to build a company while paying off student loans. Even though I knew my debt would be an additional challenge, I didn’t want to let my student loans postpone my startup ambitions.

Why it isn’t

When you start your own business, you have no choice but to wear all the hats. In addition to doing what you love, you have to take care of what can be the less enjoyable aspects—like administrative tasks, finding new business, and functioning as your own HR department.

Finding the balance

Let your core values guide your hiring such that you bring on people who embody and share your company’s values. Beyond that, hire employees who believe in your company as much as you do, and make sure your passion for your work is infectious. That positivity helps build excitement and drive in the office, especially in the early days.

3. The expectation: You’re in control of your success

Why it’s true

When you run your own business, success is up to you. You don’t have to make someone else’s goals happen; you get to do it your way and take credit for your wins. However, if you fall short, that’s on you, too.

Why it isn’t

As a business owner, you’ll live with uncertainty; building a stable cash flow could take months or even years. Doing your best to predict the future becomes a skill, but it’s one you’ll never perfect. I have a friend who launched a social media business with good clients, and she was a rousing success. However, she admitted to me that although the money was great, never knowing what might come next drove her crazy. One aspect of being a business owner is constantly guessing about the future.

Finding the balance

You will make mistakes, as all business owners do. Own up to them quickly and move on. Learn how to make decisions—especially on the fly—and how to suffer bad results like a pro without blaming others.

4. The expectation (or fear, in this case): You’ll risk too much

Why it’s true

Entrepreneurship is a gamble, and it’s true that success is never guaranteed. Plenty of businesses fail, of course. In fact, the U.S. Small Business Administration’s Office of Advocacy reports that more than 20% fail within a year, about 50% fail within five years, and only a third last 10 years. But other businesses win big—we’ve all heard the success stories.

Why it isn’t

You create your own odds with how you manage your startup. As a member of an angel investment group, I’ve invested in 12 startups, and study several dozen each year. I’ve learned that businesses that carefully identify markets, provide value to customers, manage resources successfully, and understand change are far less likely to fail than those that don’t. Businesses that plan, track results, and review and revise regularly are much more likely to succeed.

Data suggests that business training helps. The Financial Times’ report noted above indicates that many MBA holders are more open to the risk of becoming entrepreneurs. Forty-six percent of Babson MBAs, 34% of Stanford MBAs, and 28% of Harvard MBAs started their own businesses within three years of graduating. More importantly, most of those businesses—78%, 81%, and 64%, respectively—were still operating three years later.

Finding the balance

Entrepreneurship is risky, so never bet what you can’t afford to lose (such as your home and family). But also realize that failure isn’t random. Those that take risks with open eyes and solid business plans are better able to survive a crisis. As you build your business, you should plan with foresight and continually review and respect your resources. If you come up short on those, revise your plan to do less, adjust your timeline, or look for outside investment. 

SoFi’s Entrepreneur Program can help you turn a great idea into your startup dream, even while you’re paying down your student loans. Every quarter, we admit eight to 12 qualified entrepreneurs, who can receive student loan deferment and get access to mentors, resources, and investors. Apply today to join.

As you navigate the ups and downs of entrepreneurship in your career, consider looking into a coaching to help develop your strategy, too.