Is being an Entrepreneur or an employee better?
You are often told by your parents to study hard and get good grades in school so that it is easier for you to find a better job when you graduate. In your final year, you begin to consider if you are better off working as an employee in the corporate world or you have big dreams to be an entrepreneur and start your own company. Let us look into both pros and cons of being an employee and an entrepreneur.
Pros of being an entrepreneur
Bid goodbye to a traditional nine-to-five job.
You have flexible working hours, you get to choose to spend on your life priorities be it work or personal. you have the freedom to work wherever and whenever you want. An entrepreneur can choose to spend more time with your family or spend long hours to kick start their business.
No need to report to a boss
You’re your own boss now, and the responsibility ends with you. You do not have to spend your entire career climbing the corporate ladder and report to a boss. You also don’t have to worry about getting fired by a boss. If you want to stay at home and work, you can do it.
Wealth is not capped and can be limitless. Your wealth is usually pegged to the profit generated from the business. There is no limit or ceiling to your income potential, and your reward is solely as a result of making your business a success.
Sense of satisfaction
Although running a company will take more commitment than being an employee, building a company is rewarding. You are directly responsible to help other people in your company by providing them jobs and building their families. There is also a great satisfaction that comes with working on various business partnerships that grow your own business. An entrepreneur builds solutions for other companies and consumers hence helping more people in the community.
Cons of being an employee
Fixed working schedule
You have to report working on a traditional nine-to-five job.
Limited personal growth
In some companies, employees fulfilled one single function and do not have the opportunity to cross-train in other areas. You are not able to acquire new skills necessary for career growth.
Limited financial growth
An employee draws from an hourly or monthly salary agreed during the start of employment. Your salary might be stagnated for years if the company offers little to no opportunity to climb the corporate ladder.
Having a micromanager as your supervisor, who delegates you all your job down to its microscopic tasks. All these tasks require approval and constant updates resulting in a drop in self-confidence.
No passion for the job
You have no passion for your work. As time goes by, you stop enjoying going to work and constantly looking at the clock waiting for the day to end. You drag your feet daily to work simply to earn a living.
Lack of job security
Everyone is dispensable in the current competitive job market. As you have bills to pay monthly, you looking forward to the following paycheck. However, your position might not be 100% secure. Some employers might often find ways to terminate employees without good reason. There are also times during an economic downturn resulting in a restructuring exercise and you might be caught unprepared.
Pros of Being an Employee
An employee works for a salary and even if the company network system is not working or there are fewer customers this month, you will still be getting a regular paycheck. This will allow you to plan your day to day lifestyle as you do not have to worry about any financial uncertainty.
Some companies offer huge discounts for their own company products as they want you as the employee to be a walking brand ambassador. Besides that other companies who want to get more sales will offer companies corporate rates for their products. Being an employee you will get a more favorable discount.
As an employee, you get paid annual leave. You can plan for a yearly vacation with your loved ones and still get paid during your absence.
In addition to annual leave, you also get sick leave if you are not feeling well. Some companies still have other healthcare benefits to ensure its employees stay happy and healthy.
Sense of satisfaction
Employee motivation comes from either achieving power within the company or a rise in income. Employees measure success by how much they get ahead in their organization. Some employees are also satisfied with annual income increments.
Better comfort level
The work you are tasked to do can be repetitive and is quite easy to do. As long the work is manageable, it can be comfortable and you also bear little responsibility. You will be more relaxed and enjoy your personal life after work. As an employee, when you are finished with work after a long day– then that is your free time.
You are able to engage in your hobbies or spend time with your family as no one expects you to work after office hours. This will result in a better work life balance and stress free life.
Cons of being an entrepreneur
Stress due to uncertainty
With no guaranteed income, you are solely responsible for the company’s growth. Being a founder you know that there are many employees dependent on you steering the company to its success. Your company sales could be affected due to seasonality and you need to find new business to offset the drop in sales. Employees turn to you for business decisions and your decisions might affect the income.
Long Working Hours
As an entrepreneur, you want to make your start successful. You will usually put in more hours as you are passionate in your business. There are also not enough staff initially hence you will be playing multiple roles in your company – finance, sales, operations and human resource.
Spending long hours working can be detrimental to your relationship with family and close friends.
When you just started a business, there may not be much income available. This can affect your individual finance rating and lead to trouble securing mortgages, cars, mobile telephones and other lifetime essentials. You will not be receiving any corporate benefits or 401k, medical, or any pension fund.
If you already have liabilities like housing or insurance, you will need to ensure that your business will be able to generate enough to pay off your house or family expenses
You will likely need to tap into your personal savings and go without any income at first.
Conclusion – Is being an entrepreneur or employee better?
Starting a business is not for everyone. Before selecting your entrepreneur journey, you need to consider and weigh the pros and cons of becoming an entrepreneur or becoming an employee.
If you have a project that you are truly passionate about, feel that you can take risks and feel that the pros outweigh the cons of being an entrepreneur. You should follow your heart and work towards starting your business. You will be passionate in your work and it is something rarely felt through working as an employee.You will find the ultimate work satisfaction through following your dreams and passions through being an entrepreneur.
Being risk-averse and you seek financial stability as you are just starting a family, you will more likely be better off starting as an employee.
Everyone’s situation and personality are unique, the one that fits best is dependent on your situation then.