If you were working before you became an entrepreneur your last salary is your benchmark.

If you were working before you became an entrepreneur your last salary is your benchmark.

If you are a fresher or were unemployed then the benchmark is 0 :) Which simply means you have nothing to lose as opportunity cost.

But if you were working earlier then your opportunity cost is your last salary.

You need to invest money in business in the first year.

Unless you are funded which is rare most often than not you will be losing money in the 1st year.

Infact by the 2nd year if you are earning even 25% of your last salary you are doing well.

By the 3rd year if you can earn 50% of your last salary it means you are doing well.

By the 4th year if you can earn 75% of your last salary it means you are doing well.

By the 5th year if you can earn 100% of your salary it means you are doing well.

It roughly takes 3-5 years to build a business for most people.

Which is why most startups close down in the first 3 years because the entrepreneur cannot run his house.

Now this is not a thumb rule. You can break even in the first year as well. Also by the 3rd year you could be making your last salary.

In case of funded startups this could be faster.

But it is very tough to do so.

The good part about this is, entrepreneurs can earn much more in the long run than employees but also they can work till they die, there is no retirement age:)

Thoughts?