The life of an entrepreneur is full of contradictions. The data says that they are happier than everyone else — yet they work long hours and make less money. Are people just telling researchers they are happier to cheer themselves on or is their happiness real?
Based on my experience starting my own consulting firm, I think the happiness is real. How so? Helping companies develop growth strategies is an intriguing challenge — but when someone else is telling me exactly how, where, and when to do what, I find it very frustrating. When I control how I do the work it becomes exhilarating.
I don’t know why entrepreneurs are happier than others. What does that even mean and in what ways do the negatives and positives of entrepreneurship lead to greater happiness?Here are four tests of whether you are enjoying true entrepreneurial happiness.
1. Does your passion overpower the stress?
Entrepreneurs are happier with their life and work. That’s the conclusion of a review of 100 academic studies on entrepreneurship and well-being by Ute Stephan, professor of entrepreneurship at King’s College London, reported the Wall Street Journal.
Entrepreneurs’ higher level of happiness is not absolute. That’s because their passion for their work causes them to work longer, to lose sleep, and feel more stress. Yet their sense of doing something important and being their own boss outweigh those negatives, according to Stephan.
If you identify with this mix of positives and negatives, you’ve passed this test of true entrepreneurial happiness.
2. Are you striving for the right amount of growth?
Entrepreneurial happiness does not rise as your company gets bigger. A Swedish study of 1,000 small business found that owners of small businesses were no less happy than those who run larger ones.
How so? While those who lead larger companies have higher financial satisfaction, they also suffer more stress due to more work and less free time. A small firm entrepreneur dreaming of running a bigger company may underestimate the way these negatives neutralize the fun of hiring people and earning more money, noted the Journal.
Every entrepreneur has a different level of stress they are willing to bear in order to make more money. If you are striving for the right amount of growth, you pass this second test.
3. Does your job satisfaction outweigh your leisure satisfaction?
When entrepreneurs get started, they tend to expect to be rewarded with greater happiness five years hence.
A survey of 1,000 German entrepreneurs between 1991 and 2013, found that they were less happy five years later than they had predicted they would be. That’s because they were working over five hours more each week in year five than they had predicted they would.
The remedy for this entrepreneurial ailment is to start off your venture with both a business plan and a life plan, explained study author, Alois Stutzer, professor of political economy at the University of Basel in Switzerland, according to the Journal. Do this the right way and you will pass this third test.
4. Does being your own boss boost autonomy and meaning?
My reasons for happiness in starting Peter S. Cohan & Associates are consistent with academic research. Stephan surveyed 22,000 people in 16 European countries and found that their happiness over the previous two weeks was higher than that of wage earners due to two factors — they found profound meaning in their work and they enjoyed decision-making freedom.
Meaning and autonomy contribute to my happiness. When I was in college, I started a bartending business. I enjoyed the challenge and autonomy of convincing party hosts to pay me to buy booze and serve it to their guests. Yet, as I described earlier, helping clients solve growth strategy problems feels much more meaningful to me than bartending.
If entrepreneurship’s meaning and autonomy make you happy, you pass this fourth test.
If you pass all four of these tests, your entrepreneurial journey is making you happier than wage earners are. If not, change your approach to entrepreneurship or go back to the corporate grind.