It’s been clearly shown and it’s widely known that business owners are usually happier than employees. More detailed research looks more closely at the factors that make business owners happier.
A Wall Street Journal review of 21st century research wasn’t focusing on franchisees, but experience shows that the factors the researchers found apply just as much to a franchise as to an independent start up.
What motivated the decision to go into business?
The researchers found that many people go into business in order to be independent, and that’s no surprise. You might be surprised to discover, though, that this doesn’t always work out as a motivation for independent start ups, any more than it does for franchisees.
Entrepreneurs in general value freedom and like to be their own bosses.Many find that they have overestimated their freedom, though. Franchisees have rules and systems to follow which are set by their franchisors. Start-ups have to answer to their financial backers, their partners, industry regulations… and their customers. The idea that being your own boss means complete freedom often turns out to be a myth. Business owners often value freedom more highly than the average guy, and the requirement to go and open up at the time you painted on the door can feel like a burden to some entrepreneurs.
But they can also feel dissatisfied because they don’t get the positive feedback they used to get when they were employees. Being a star employee is great when you’re getting your picture on the wall or being given a promotion. Bosses don’t get that.
And entrepreneurs often don’t realize that they care about that feedback. Positive feedback from customers can take the place of those “Employee of the Month” plaques, of course, but business owners may hear more complaints than they did when they were staff members. Those who went into business mostly for the sense of freedom my not be as happy as those who had a different reason.
How’s the money?
A study from 2008 found that most entrepreneurs were happy with their choice to go into business for themselves: happy answers dominated on a long list of questions. But income showed the highest level of satisfaction: 4.73 out of 5.0. Next up was security, at 4.67. Flexible schedules and creativity were both over 4.0 on average, but just barely: 4.03 and 4.05 respectively.
So entrepreneurs who invested in their own business were happiest with their incomes. But there were some people who weren’t as satisfied. People who had plenty of capital to begin with tended to be less satisfied with the income from their businesses, for example. That may be why the millionaires who have enough personal wealth to invest in a franchise like McDonald’s may express less satisfaction with the return on their investment than people in more modest franchises.
Are the results up to date?
Most of the studies mentioned in the WSJ article were from five years ago or more. Gallup has done a more recent study that might confirm the research review’s results. They found that satisfaction with owning a business dipped during the Recession, when some of the studies WSJ referenced were made. Small business owners have rebounded, though, with more than half counting themselves very satisfied — and being their own boss topped the list of satisfying factors.