The stereotype that all entrepreneurs are rich strikes again!
Every entrepreneur that has ever existed in the entire history of humanity has been filthy rich, right? Every ad you see on YouTube claims that being an entrepreneur and starting a business of your own is the fastest as well as easiest way to become a millionaire. Is that really correct?
While it’s true that there are entrepreneurs out there that make a lot of money, there are plenty out there that are broke. But that doesn’t answer the main question of the article. That big question being…
Can you make millions of dollars as an entrepreneur?
Yes, you can potentially make millions of dollars as an entrepreneur. In fact, you can potentially make billions of dollars. The key word in that sentence is potentially.
The beauty of being an entrepreneur and starting your own business is that there’s no ceiling to your income. That being said, the opposite is true as well. You can make absolutely nothing as an entrepreneur and it’s good practice to assume you’ll make nothing as a new entrepreneur for a couple of months.
There are definitely many entrepreneurs out there who are millionaires. In fact, more than 80% of the millionaires in America alone are entrepreneurs. While that makes it seem incredibly appealing to become an entrepreneur, you should know that the vast majority of businesses never succeed. You need to be dedicated if you want to make a million dollars as an entrepreneur. This brings us to our next point
Is it difficult to make a million dollars as an entrepreneur?
To put it very bluntly, yes. It’s not easy to make a million dollars as an entrepreneur. It’s very difficult to make a million dollars as an entrepreneur. But you know what’s harder?
Trying to make a million dollars as an employee. Becoming a millionaire quickly as an entrepreneur is difficult but becoming a millionaire quickly as an employee with a 9 to 5 job is almost impossible.
But what about all those millionaires who you read about in self-help financial books like The Millionaire Next Door? Yes, you definitely can become a millionaire by working and saving at a 9 to 5 job. However, there’s two things to consider.
- You will likely only be a millionaire by the standard retirement age of about 62 to 64. You will be old by the time you’re a millionaire and might not be able to enjoy your money by then.
- You’ll have to be incredibly frugal and calculating if you choose to take this route. You’ll spend the majority of your life having to be a bit of a cheapskate for this plan to work. You won’t enjoy your life as much as you could if you want to become “The Millionaire Next Door”.
- A big part of being a “Millionaire Next Door” is assuming you’ll have a steady job for life, won’t ever be unemployed for long and consistently get incrementally higher pay as well as steadily growing investments over long periods of time. Anyone who’s worked at a big company or invested in the stock market knows that these two things are not guaranteed.
Meanwhile, while entrepreneurship is hard you can potentially make a million dollars in less than 5 years. Think about it, if you started a business at 25 and made a million dollars with it, you’d be sitting pretty at just 30. You saved more than 30 years of misery by going down the entrepreneurship route.
Here’s a simple mental exercise for you to go through that will show you that making a million dollars within 5 years as an entrepreneur is definitely possible.
The numbers you need to become a millionaire
Let’s imagine that you’re selling a product. We’ll use a watch that sells for $240 with a profit margin of $100 as an example. To make a million dollars in 5 years by selling your watches, you’d need to:
- Sell 10,000 of those watches in 5 years.
- That breaks down to 2000 watches in a year.
- That breaks down to about 166 watches in a month.
- That breaks down to about 5 watches in a day.
Does that sound impossible to you? It’s difficult but not impossible.
Here’s another example for you. Imagine you’re a B2B service provider that offers to take care of another company’s ads for $2000 a month. Let’s assume that this is pure profit since it’s what you charge to provide your service and labour. To make a million dollars in 5 years, you’d need to:
- You’d need 500 clients to pay for your service over the course of 5 years.
- This breaks down to 100 clients in a year.
- This breaks down to 8 clients in a month.
- This breaks down to 0.2 clients in a day.
The above example assumes that none of your customers are going to be repeat customers. Factoring in repeat customers makes the above seem even easier to pull off. It’s not easy but it is possible.
Think becoming a millionaire by 30 is impossible? Well, here’s a list of 20 year olds who grew million dollar businesses for you to read. Imagine being that young with assets worth a million dollars or more!
Making a million dollars as an entrepreneur is difficult but not impossible. Making a million dollars quickly while you’re young as an entrepreneur is definitely possible.
Becoming an entrepreneur because you want to make millions of dollars is a completely valid reason to dive into entrepreneurship. Entrepreneurs that make millions are much rarer than entrepreneurs who are broke but that doesn’t mean that it’s impossible to become a millionaire through entrepreneurship.
As we explained above, entrepreneurship is one of the best ways for you to build wealth as quickly as possible. It’s a monumental task to make a million dollars but it’s definitely something that’s worth your trouble. Even if it’s only something small on the side of your main job, you should give entrepreneurship a chance!