Americans are known for their independence and rugged individualism. And, that is evidenced with American entrepreneurs. They want to be their own boss and go their own way. In 2021, there was a record 5.4 million new business applicants. But are all these entrepreneurs happy? How are their mental health and quality of life compared to salaried employees?
Why Entrepreneurship?
When discussing if entrepreneurs are happy, it's first important to know why they built their own business. Freedom, flexibility and satisfaction are listed as top reasons people become entrepreneurs. The ability to create their own schedule and not answer anyone goes hand in hand with those reasons.
When the pandemic struck, many individuals lost their jobs and had to turn to themselves to find income. This led to self-determination. In other words, a self-determined career choice with life satisfaction that a person could not receive from wage employment.
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According to a Science Direct study, self-employed people found their work more meaningful. The respondents in the survey felt that having meaningful work surpassed autonomy. These individuals also reported more feelings of vitality than wage employees. This contributed to an overall feeling of well-being.
Hours Worked Not a Factor
Self-employed individuals work hard, but an entrepreneur's happiness is not dependent on the number of hours worked. Even those who work an occasional weekend reported satisfaction. The key for many is working productive hours. Organizing work to allow for family time is also a priority.
Both successful entrepreneurs and those struggling feel a sense of balance in their career choice.
Small Business Owner Ups and Downs
Running a startup can feel like a roller coaster at times. There are ups and downs and no predictor of whether the startup will succeed. It can be scary. But entrepreneurs tend to be optimistic. They celebrate the small wins and look for the silver lining in losses. They also remind themselves why they started the business in the first place.
Entrepreneurs Face Inflation Stress
There is currently a dark cloud on the horizon that is causing small business owners to feel stress. Inflation is starting to affect startups. Twenty-two percent of small business owners say that inflation is a problem.
And 61 percent have raised prices. This is the highest since the 1970s.
In January 2022, 47 percent of owners reported difficulty finding employees. Thirty-six percent of small business owners had job openings. The result was having to raise salaries during inflationary times.
Consider also: How to Calculate Future Value of Money Using Inflation Rates
Self-Employed vs. Salaried Employee
Nearly 50 percent of self-employed individuals were completely satisfied with their jobs, but only 28 percent of salaried employees felt satisfaction about their careers.
The average salary for both self-employed and salaried workers is about the same, at $35,000. But despite their job satisfaction and similar salary levels, self-employed felt more stressed about finances than salaried employees. The stress was due to paying their own benefits, such as health insurance.
But despite the financial stress, 32 percent of those who were their own boss wanted to run their business. That can't be said for wage employees, with only 19 percent wanting to be at their job.
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Feel More Balanced
Both successful entrepreneurs and those struggling feel a sense of balance in their career choice. A 2019 FreshBooks survey said that of 4,000 entrepreneurs, 70 percent felt a "work-life balance".
The study also found that generally, 54 percent of respondents also felt healthier.