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10 Biggest Disadvantages of Entrepreneurship (+Advantages)

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Being an entrepreneur has its perks, like freedom, flexibility, and fulfillment.

However, there are disadvantages of entrepreneurship, too.

And today you’ll learn about the biggest ones.

But I’ll also share how you can overcome them. (These are the same steps I’ve taught 1,000s of new entrepreneurs.)

Ready to get started? Let’s go.

The top 5 disadvantages of becoming an entrepreneur are…

  • No fixed income 
  • More stress  
  • Risk of failure 
  • More responsibility 
  • Longer working hours

Want to learn more? Read on for the full list. 

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for building a
6-Figure Coaching Business so you can achieve more freedom!

10 risks and disadvantages of becoming an entrepreneur 

As with anything, there are risks to becoming an entrepreneur.

But don’t let the disadvantages of entrepreneurship scare you off.

Because there are ways to deal with and overcome them.

Let’s begin with one of the scariest disadvantages of entrepreneurship – the financial risk involved.

Financial risks 

I know that financial risks are among the most intimidating disadvantages of entrepreneurship.
I mean, a whopping 82% of businesses either run into or fail because of money problems:

Graph that shows how many businesses fail due to money problems

But if you do it right, your business can provide financial security.

The solution: Build a solid foundation by staying risk-averse and focusing on sales.

Any way you slice it, entrepreneurship is risky – but you can minimize that risk.

Get comfortable with things like budgeting, financial planning, and creating a consistent income.

And, above all else, focus on sales.

The best way to make sales is to focus on the low-hanging fruit – the people ready to buy from you right now.

I’ll walk you through making sales in this video:

Uncertain income

One of the biggest disadvantages of entrepreneurship is that income is never guaranteed. 

But what if I told you there’s a way to guarantee a steady stream of income while you grow your business?

The solution: Instead of quitting your job, start a side hustle.

I’m a risk-averse person. And there’s nothing riskier than giving up your full-time salary to launch a business.

So I didn’t.

Instead, I started my business as a side hustle and worked on it during my free time. 

I only quit my job when I’d earned enough to replace my salary.

Image of cubicle
My cubicle at my 9-5. I didn’t risk it all by quitting on day one – instead, I first built up my business and then I quit

The best part? I did it using skills I already had.

That’s right. A successful side hustle doesn’t need to be revolutionary. It just needs the skills and tools you already have.

And that’s why businesses like coaching, consulting, and freelancing are great side hustles. (Here’s my guide on how to start a coaching business.)

And here are some other side hustle ideas:

  • Productized service
  • Online courses
  • Digital products

More responsibilities  

As a business owner, you don’t just wear a few hats – you wear them all

You’re responsible for marketing, sales, and management, to name a few.
And while you can outsource most tasks, you’ll still have to step outside your comfort zone and learn new skills.

Luisa Zhou YouTube video
Like many entrepreneurs, I had to learn how to become great on video…and I’m a born introvert! But today, I’m publishing consistent YouTube videos.

For some people, that’s one of the biggest disadvantages of entrepreneurship.

The solution: Getting into and growing your entrepreneurial mindset.

Successful entrepreneurs have a different approach to their beliefs, resilience, and motivation.

You have to have one, too.

It doesn’t always come naturally, and that’s okay! Start with the basics:

  • Stop comparing yourself to others
  • Set achievable goals
  • Focus on what you can control

Here’s a full guide to growing an entrepreneurial mindset.

Long working hours 

Unfortunately, a lot of entrepreneurs don’t have great work-life balance. 

In fact, 1 in 5 entrepreneurs work 60+ hours each week.

Graph that shows how much entrepreneurs work

That lack of work-life balance is one of the hardest disadvantages of entrepreneurship because you probably want to start a business to be able to enjoy your life more.  

But you can have a business and a life.

The solution: Build what I like to call a Freedom Business.

A Freedom Business leverages your existing skills and maximizes your profit per hour of work.

What does that look like?
You can either increase your pricing based on your skill or create profitable digital products to be sold repeatedly.

Screenshot of Good gentleman website
One of my students, Ruby, started a relationship coaching business based on her experience as a matchmaker at eHarmony. Coaching is one of the best Freedom Business models

Whichever route you take, there are a few things you need to do to make your business a true Freedom Business.

Get the Ultimate Guide

for building a
6-Figure Coaching Business so you can achieve more freedom!

First, choose a business model that turns the skills you already have into profit.

Then, streamline your time by building systems.

You’ll need two: A lead generation system and an automated sales process.

And finally, don’t be afraid to outsource! I know it’s your Freedom Business, but you can’t grow it without a team behind you.

I talk more about avoiding common disadvantages of entrepreneurship by building a Freedom Business in this guide.

Business failures  

The hard truth is that 90% of startups fail.

startup failure graph

Why? Typically because they run out of money or there’s no market for the product.

But entrepreneurs don’t let failure hold them back.

They embrace it.

The solution: Overcome your fear of failure by looking at it as part of the process.

Yes, failure is one of the most painful disadvantages of entrepreneurship.

In fact, I failed a lot when I was first starting out. Dozens of people turned me down.

But if I’d seen that as an endpoint, I wouldn’t have gotten my first paying client.

The truth is, you have to fail to be successful. How else will you learn and grow?

For three tips to conquer your fear of failure, watch this video:

Stress and burnout

More than 2 in 5 entrepreneurs experience burnout – it’s one of the most common disadvantages of entrepreneurship.

Graph that shows entrepreneur burnout rate

But it is possible to build a business that doesn’t feel like a grind.

The solution: Overcome stress and burnout by doing what works best for you. In other words, throw out the rule book!

Your business decisions should all be fueled by excitement, which starts with building a business around something you love.

That means finding a niche.

And when you do, ignore what everyone else is doing and figure out what you enjoy. That’s the key to success.

For example, I used to hate social media.

But when I stepped back, I realized I didn’t have to use it even if everyone else was. I was already making great sales from things I actually enjoyed doing!

I talk more about avoiding business burnout in this video:

Confrontation with uncomfortable situations

Most of us go out of our way to avoid uncomfortable situations. It’s only natural.

But uncomfortable situations are just unavoidable disadvantages of entrepreneurship.

The solution: Get comfortable with being uncomfortable. 

Often, we’re so afraid of messing up or failing – of being uncomfortable – that we never even try.

The truth is there’s no tip or story I can share to ease that fear.

You just have to take that leap.


Almost everyone is uncomfortable with some aspect of entrepreneurship.

Hitting publish on my first few Facebook business posts was excruciating. I was uncomfortable with the idea that I could look stupid or that nobody would respond.

But I knew I had to do it if I wanted to be successful.

I talk more about being uncomfortable in this video:


Over half of entrepreneurs feel lonely.

I spent about six years of my career feeling lonely, so I know first-hand how hard and disheartening it can be.

Get the Ultimate Guide

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6-Figure Coaching Business so you can achieve more freedom!

But reframing loneliness helped me to stop seeing it as one of the disadvantages of entrepreneurship.

The solution: Start thinking of your loneliness as a rite of passage to becoming an entrepreneur.

Loneliness isn’t a bad thing.

It gives you space to build your skills, resilience, and confidence. 

And once you do, people will start flocking to you. After all, successful people want to hang out with other successful people.

When I threw myself into my work, I realized the loneliness didn’t actually bother me. In fact, I found my work more enjoyable because of it.

The more I worked, the better my skills became. And I started seeing better results!

I talk more about loneliness in this video:

Difficult to start

I see it all the time.

People don’t start businesses because they don’t believe they have the time, talent, or right idea.

That belief is among the most damaging disadvantages of entrepreneurship because it derails your entire journey.

You do have what it takes – you just have to look at it differently. 
The solution: Overcome your fear of starting a business by thinking of it as an extension of your skills rather than a new or revolutionary idea.

Luisa Zhou quote

You just have to choose a business that uses your skills and takes little time to start.

For me, it was paid ads consulting. I already used those skills in my day job, and it only required a few hours every week.

You’ll notice I don’t offer that service anymore.

That’s because I always knew I wanted to help people build their businesses – but I didn’t have those skills yet. 

That didn’t stop me from launching a business, though.

Instead, I looked at my skills, chose one that was good enough, and boom! I’d launched my first business.

I used this as a stepping stone to the business I wanted to create.

At the end of the day, a “good enough” business idea is the single best way to start your entrepreneurial journey.

Regulatory limitations   

Regulatory limitations are disadvantages of entrepreneurship, and they are stressful. But they don’t have to be impossible to navigate.

The solution: You just need the right resources and professionals to help you understand them.

Those include:

  • Accountants for big financial tasks like taxes and financial planning
  • Bookkeepers for everyday financial tasks like payroll and invoicing
  • Marketing and sales consultants for developing new strategies
  • Business mentors for guidance and support

Fortunately, there are tons of free resources available, too.

Take the US Small Business Administration (SBA). It has dozens of programs and services and is good for business plans and loans.

And SCORE offers mentors, workshops, webinars, and online courses to help you start and grow your business.


Nobody likes rejection, but it’s an inevitable part of entrepreneurship.

You get rejected all the time. 

By potential clients, people in your audience, people you pitch…

Solution: Figure out how to overcome the fear of rejection by getting used to it.

In other words, pitch yourself to as many people as possible and risk rejection.

I know this seems counterintuitive. But as someone who hated rejection, I can’t recommend doing this enough.

When you pitch yourself over and over again, you’ll get used to hearing the word “no.”

Eventually, it won’t matter.

Don’t believe me?

I got told “no” 30 times! But I continued to try, got used to hearing the word “no,” and kept going because it didn’t faze me anymore.

You now know about the disadvantages of entrepreneurship, but there are some important advantages, too.

I’ll tell you about them in the next section, so keep reading!

What are the advantages of entrepreneurship?

Even though there are some disadvantages of entrepreneurship, the advantages make it all worth it.

When you’re running a business, you don’t have to answer to anyone else. You’re your own boss.

Who hasn’t dreamed of that?

And I’d be lying if I said the money wasn’t an advantage.

Advantages of entrepreneurship

Higher income

When you transition from employee to entrepreneur, you break free of a capped salary and experience unlimited earning potential. 

Not only did entrepreneurship allow me to replace my salary entirely, but I could also scale to multiple six figures in just a year.

Get the Ultimate Guide

for building a
6-Figure Coaching Business so you can achieve more freedom!


But it’s not just about the money or working for yourself.

Entrepreneurship allows you to create the kind of lifestyle that suits you

Want to take the afternoon off, work for a week in a new state, or sign off and go on vacation?

Then go!

You can do it because a business allows you to have real freedom. Your life is on your terms.


Entrepreneurs also have a greater sense of fulfillment in their careers – which is something that a majority of employees say they’re missing in their jobs

That’s because, as an entrepreneur, you get to focus on finding solutions to problems that matter to you and positively impact society. 

Personal growth 

But above all else, becoming an entrepreneur is like a crash course in personal growth.

You’ll constantly face new challenges, learn new skills, and work to make yourself better.

Most importantly, you’ll learn to shift your thinking and better overcome stress, barriers, and mental blocks.

So, yes, you’ll find risks and disadvantages of entrepreneurship if you look hard enough. 

But the rewards outweigh them all.

Next steps 

There you have it! 

A breakdown of the most common disadvantages of entrepreneurship and ways to overcome them.

And today, I’ll show you how to go from employee to entrepreneur with your own successful business.

You’ll find the exact steps I took in this FREE PDF:

Want to Build a 6-Figure Coaching Business So You Can Achieve More Freedom?

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When you sign up, you’ll also receive regular updates on building a successful online business.

Read more:

What is an Entrepreneur?

How to Finally Go From Employee to Entrepreneur

How to Become an Entrepreneur Without an Idea

How to Start a 6-Figure Business While Working Full-Time

About Luisa Zhou

Luisa Zhou has helped thousands of students build and scale their own profitable online Freedom Business. Fun Fact: She used to work as an engineer for the Space Station and holds a B.S.E. from Princeton. Click here to learn more about Luisa.

Hope you enjoy this blog post.

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