Entrepreneurship: a Game of Risk

Part I of a series on using entrepreneurship to alleviate poverty. You can read Part II here.

 

Some people are interested in becoming entrepreneurs to get out of poverty. Going this route can be rewarding, as well as risky.

Throughout this series, I will explore the ins and outs of becoming an entrepreneur while living on a low — or no — income. I will share success stories, explain the organizations that have helped these entrepreneurs get off the ground, and offer my personal experiences in opening a business.

First, it’s important to understand the benefits and risks of starting a business while living in poverty.

The Hard Knocks
When opening a business you never ever know whether or not it is going to be a success until you try your product, or service, out in the marketplace. There are numerous challenges that come along with this task, and those can seem almost insurmountable when living in poverty. There is the old catch phrase “you need money to make money,” and this is often what makes it difficult for people living in poverty to create successful businesses.

People living in poverty also have great difficulty accessing credit. They struggle to find a means for purchasing food and the necessities of life, and thus may have missed payments on some bills that have led them to a poor credit rating. Lenders and bankers can then be wary of people living in poverty.

So, people in poverty — just like many others who want to start a business — have to take money of out their own pocket to pay for initial expenses. Examples of these include purchasing business related supplies and registering your business.

Most people who live in poverty end up running their businesses out of their own home because rental of locations such as office space and storefronts are expensive. For a person who lives in poverty to be able to rent those types of spaces upfront takes funds away from their limited living allowances.

The biggest concern that people who live in poverty face is the uncertainty of knowing if they are going to make enough money off of running their business to solve the problems they have had while living in poverty, and to make a decent living on top of that. You never know until you try, but trying is risky.

The Rewards
While getting your business up and running, the activities you do to achieve your goals along the way, such as writing a business plan, researching business related supplies, market research, securing loans and building cliental, are learning experiences.

If your business does not succeed then the reward comes from the work experience you gained trying to open it. This experience is invaluable in future employment opportunities.

On the other hand, your business could succeed and you could no longer lives in poverty. In addition you could be able to pay off your debts and improve your credit rating. Finally, a successful business could contribute to more independence.

A Hidden Reward
Not to be forgotten are the benefits of entrepreneurship in alleviating social isolation, a symptom of poverty.

According to several people who have gone this route, they found that working on their businesses opened up a door for a way out of social isolation: something I myself experienced as well. How? Consider these factors:

While working on a business plan, market research is involved. A part of market research means going to businesspeople and networking with them.

There are also several training courses you can take to help get your business up and running. Those available in Halifax include the workshops offered through Entrepreneur With Disabilities Network, the Centre for Entrepreneur, Education and Development, and the Sobey School of Business. I will explore these supports more in part II of this series. They are worth noting, again, for their opportunity for social interaction and networking.

There are other organizations and business groups who put on networking events which entrepreneurs take part in. Fusion Halifax, the Entrepreneur’s Forum, and the Halifax Chamber of Commerce, and the Downtown Dartmouth Business Commission host get-togethers for the business community. The Entrepreneur With Disabilities Network also puts on an annual Entrepreneur-of-the-Year Award event in April, which attracts a lot of businesspeople from outside the network.  

As well, entrepreneurs are sometimes invited to sit on boards of directors for not-for-profit organizations. I was invited to sit on the Entrepreneur With Disabilities Network board. It is now one of my many activities that keep me out of social isolation thanks to my attempts at trying to start a business, which will be discussed at length in part III of this series.

So, if starting a business wasn’t a reward enough already, there are plenty of benefits associated with becoming an entrepreneur that can really help someone looking to escape poverty.

Editor's Note: Maureen Collier of the Halifax Public Libraries alerted us to another learning opportunity for entrepreneurs. Small Business Startup: one-on-one consultations for entrepreneurs offers in-person at the Spring Garden Road Library sessions to help get your business going.