In 1989, a 39-year-old executive found herself at a crossroads. After 17 difficult years spent climbing the corporate ladder in Rowing, lost the editor-in-chief position to a rival, Anna Wintour. One day, as she struggled to find the right dress for her upcoming wedding, she spotted a business opportunity: designing dresses for others. Hesitant, she wasn’t sure she could make it: “Maybe it’s just too late for me,” the manager wondered. However, she took the plunge and a year later she opened a boutique at the Carlyle Hotel in New York City.
Fast forward to 2024, and that executive is Vera Wang, one of the most successful fashion designers in the world, with a net worth of more than $650 million. It’s easy to marvel at Wang’s financial success. But as new research reveals, the real reward of starting a business goes far beyond money: It also means less stress, better health and a more meaningful career.
The burnout that drives successful people to leave American companies has only intensified in recent years. During the height of the pandemic, Gallup reported record levels of stress. It would be easy to dismiss this as an inevitable byproduct of COVID-19, except for one heartbreaking detail: We’re just as stressed today.
Why entrepreneurs report less stress than the average worker
Having helped thousands of entrepreneurs, I know firsthand the benefits of – and misconceptions about – taking matters into your own hands and starting a business. After a year filled with record layoffs, back-to-work mandates, and the looming threat of artificial intelligence, it’s time to take the research on worker well-being seriously and dispel the myths that keep employees from being healthier, more satisfying and less stressful lives.
In recent years, a new wave of peer-reviewed research indicates that starting a business can dramatically reduce stress and improve physical and mental health. That revelation first gained traction with a groundbreaking article published in Journal of Work and Organizational Psychology. In it, researchers compared a nationally representative sample of employees and business owners on various health factors, including blood pressure, doctor visits, physical and mental illnesses, and general well-being. The results overwhelmingly favored entrepreneurs, who reported significantly lower rates of blood pressure and hypertension, fewer hospital visits, and a reduced incidence of physical and mental illness.
How can starting a business, which many rightly consider a huge and nerve-wracking undertaking, reduce stress?
A 2020 study offers important clues as to why entrepreneurs report less stress than the average American. Economists at Colorado State University and Florida Atlantic University concluded that founding a business fosters a greater sense of purpose as entrepreneurs experience greater autonomy and competence at work.
And while we’ve been taught that being an employee is the safest financial path, a 2022 JP Morgan report indicates that the average self-employed household has more than four times the net worth of the average worker. Counterintuitively, starting a business provides greater financial stability than working for an employer.
What’s stopping more employees from starting their own business
I recently commissioned a proprietary study of 1,100 current and potential entrepreneurs, asking about their perceptions of entrepreneurship, motivation for starting a business, and work experiences. We then compared those who recently started a business with employees who have considered doing so but haven’t yet taken the plunge. We discovered three main obstacles, all founded on faulty assumptions about entrepreneurship.
First, aspiring founders believe they need much more experience, industry knowledge, and financial savings to start their own business than true entrepreneurs possessed before starting theirs. In other words, higher, often unrealistic, standards are imposed.
Another major obstacle that dissuades people from starting a business is the fear that entrepreneurship requires excessively long working hours, which has a serious impact on their personal life and relationships with family. Our research tells a different story. As it turns out, most new entrepreneurs work the same number of hours as they did before starting their business, with one notable difference: They do so while experiencing less work-related stress. At the same time, more than twice as many entrepreneurs report that starting a business has had a positive impact on their family relationships compared to those who say it has harmed them.
A final myth that stops people from starting a business is the belief that successful founders tend to be young. Mark Zuckerberg and Bill Gates may have both launched their companies while still in college, but research conducted at Wharton indicates they are the exception, not the rule.
In our study, aspiring entrepreneurs estimated the average age of a successful founder to be 35 years old. Wharton’s analyzes indicate that the actual average is 42 years, but even that figure may paint an unrealistic picture. That’s because, excluding the software industry, the average age of founders is closer to 47, older even than Vera Wang was when she opened lei flagship store.
Not only is youth not a requirement to start a business, but if you aim for success, age is an advantage. According to Wharton’s analysis, founders between the ages of 40 and 49 tend to far outperform younger founders. In fact, their companies are more than three times more likely to rank among the best-performing startups.
For those at a crossroads, the path to overall well-being may lie in the very idea you feel poses the greatest risk. For those aiming to secure greater wealth, better health and deeper personal satisfaction, taking the entrepreneurial leap might be just the right move. It’s never too late to transition to a more positive work life: the data is on your side.
Ross Buhrdorf is the CEO of ZenBusiness, which has empowered over half a million people to start and scale their businesses.
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