I’m a freshman in college right now, doing a math and statistics double major and I have actuarial Exam P passed. That’s been my plan so far, to become an actuary.
I’ve lately been thinking about the prospect of going into business or entrepreneurship. What would be the best way to go about that, if I was to take that route?
Would it be to keep doing what I’m doing, pass more actuarial exams, work as an actuary for a while and then start a business, or is there a better more efficient way to go about it?
Well you usually need significant cash to become an entrepreneur, both for the business start-up costs and for your living expenses while setting it up.
Generally it also helps to be passionate about something. So if you like horses opening up a beach bar in Hawaii isn’t going to hold your interests during the 16 hour days of not making much money. Likewise if you want to start an actuarial firm be sure you at least like hustling for clients, managing staff and dealing with layers and accountants because even as a one person firm. You’ll spend much more of your time doing those things then being an actuary.
Best advice I got during my MBA program with regards to entrepreneurship was once you have an idea go sell it to someone. If you’ve come up with a way to improve the microwave don’t spent years tinkering to make it perfect take the concept out and see if you can find someone who wants to buy it. If not find out why and then fix that then go sell it again. The idea idea is to fail quickly so you don’t have a huge investment in an idea before you’ve gotten it in front of customers. Before I started my distillery I organized a craft spirits and craft cocktail party at $20 / person to see if people in my town would spend that kind of money on local made spirits for instance.
Get the degree and job. You will need capital and cash flow once you start up. Most businesses fail because of cash flow issues during the first year or two.
My wife and I started a craft beer/gourmet grilled cheese restaurant in April after 8 months of construction in a basically shell of a building (mostly sweat equity) all the while she is running her business and I am working my day job. Even though we are doing very well especially for first time restaurant owners, it never would have worked without the cash flow from my day job. I hope to quit in about a year after paying off my in-laws. It’s long days, 7 days a week but its worth it and I do enjoy it.
I just read an article where it said one of the keys to being successful is managing risk. Having some sort of other income gives you some breathing room. The more startup money of your own that you can put in keeps the loan payments lower. Having insurance allowed us to survive me injurying myself doing construction. Having equity in our house and savings allowed us to get the loan to buy the building. Buying the building means that even if we fail we have a building in an up and coming arts district that is setup as a restaurant which will be easily rentable for more than the payment.
Part of managing risk is being flexible. We put everything we had in it but had to borrow from the in-laws after the construction went higher than planned. Business plans are good for about 5 minutes after being written. We had planned for maybe 5 employees tops. We are at 20. It quickly became apparent we had more than demand than we expected and that our customers wanted a full service experience. If we had stuck to the plan we would have failed.
So go for it but do so in a smart way. Good luck and enjoy the ride.
This is the thing. “Business” and “entrepreneurship” are broad descriptions, not specific things to do. You open a business to do something. You don’t open a business just to “do business”.
There are plenty of ways to make successful small-ishbusinesses as outlined above. And one can live quite well off a successful small-ish business.
An entrepreneur is IMO somebody who wants to make a successful *medium to large *business. For that, the thing one needs passion for is operating a business. Not baking or restaurantuering or actuarying.
One thing’s for sure. Either way it takes tremendous passion, energy, and effort. Been there, done that, got the [del]t-shirt[/del] scars to prove it.
Yep. All of the truly entrepreneurial types I’ve ever met (and especially the successful ones) are typically of the mindset ‘X is more important than most other things’ (I was going to say ‘X is more important than people’, but let’s try to be fair).
It’s this drive that makes entrepreneurs work through the night, get out of bed when they’re dying of 'flu, and crush all who oppose them underfoot.
So: solve for X. Is there anything that you care about enough?
Get your degree, and work for a while in your chosen field (actuarial science, or whatever else you might choose). Take a few years to get to understand how the business world works, and to build an understanding of how the business you’d like to start might provide something that your prospective clients would actually want and need.
You’ll find that prospective investors and clients will take you far more seriously if you’re someone who has relevant experience in the field, and a business model that shows an understanding of the industry, than they will if you’re fresh out of college, with lots of ideas but no experience to back them up.
I’ve always heard this as the main distinction between startups and small businesses, but I’ve never heard the word “entrepreneur” restricted in this way. I’ve always equated “entrepreneur” with “founder of a business”, regardless of the business size or type. Am I the weird one here or is this distinction well-known?
My impression, which may not be backed up by actual historical fact, is that “entreprenuer” historically was reserved for folks with grander plans or at least were already past the small-biz stage.
Somewhere along about the Reagan era when the Republicans wanted to broaden their target market from the Wall Street set to the two-guys-with-a-truck set they started worshipping the idea that each and every one-man band was the backbone of the economy and needed a grandiose term to match. Suddenly every construction guy and plumber with his name on his truck was an entrepreneur.
This is also about the time the statistics about how many jobs are created by small biz each year began to be touted loudly. Somehow they never bothered to compute the net of small-biz jobs created less those destroyed by the continuous churn of one-man bands.
My view is a bit cynical, but it isn’t just outta my ass. These changes really happened.
To me an entrepreneur is someone with lots of ideas for businesses and the drive to start them, get them going, and then move on to the next one. You don’t just become an entrepreneur, it’s in you. Entrepreneurs are creative and driven to bring those ideas to life in conjunction with companies that they develop.
Small business owners are people thst focus more on one industry and fill a need in the market. They employ people to help perform the service, manufacture the product, etc.
Then you have solopreneurs who have ideas and drive but that don’t desire to work in conjunction with others as much. They often diversify their income.
Lastly, you have the self-employed who basically own their own jobs, providing a product or service in their chosen industry.
The way the OP’s question was asked makes me think there’s no entrepreneurial vision. What do you want to do, specifically? What makes you think you’re an entrepreneur? What attracts you to being an entrepreneur, what do you envision one being?
I followed a path close to the one you’re talking about, doing Math and Physics in undergrad while interested in entrepreneurship, and starting my first company while still in college. That grew and I did it for several years after college, and even after it failed (largely due to undercapitalization, as other posters have warned about) later went on to be a founding part of a few more startups.
My words of advice based on that background is that you’re on a good path in general - develop your skills and try to get an impressive academic background behind you, and while doing that, keep your eye open for business opportunities.
A business opportunity that an entrepreneur can fill is generally a pain point with no immediately apparent good solution - for instance, sitting in traffic is a major pain point for literally tens of millions of people every day, and if you could somehow solve that, it would drive billions in value. That’s too big for you to tackle, and besides is being tackled by some of the biggest/smartest companies in the world right now, but it gives you a general idea of what to look for: you look for situations that are notably painful to a good number of people, and think about how to solve that problem.
The best problems are those that you can individually contribute to solving, but those are surpassingly rare. Far more likely, you’ll have a problem whose solution would require a number of different people and skills to craft a solution for. You’ve either got to pay those people with money or get them to buy into the vision of your solution and bring them in for equity, and unless you or your family is wealthy, you’re not likely to have the resources to pay people for their services right off the bat.
So the second bit of concrete advice I’d give besides thinking about pain points is to make friends with lots of different people with varied skills and backgrounds, and be a great communicator. The people you know in your immediate network and the people they know are where your other founders and investors are overwhelmingly going to come from.
So get out there and know more people! The more you know, the more likely you can successfully tackle the specific worthwhile problem that you ultimately decide to tackle…and doing that is the essence of entrepreneurship.
Finally, I’ll just third the advice you’ve already got here that life is VASTLY easier if you have a “real” job actually bringing in a good amount of excess income that can keep you afloat for the first few years of your startup - it is exceedingly rare for a new business of any sort to make enough money to support all operations and growth AND you in the first 3 years. So having that extra cushion can be the crucial, life-or-death difference for your nascent company.