Being an entrepreneur isn’t for everyone; by the same token, being an employee is not either. There are serious pros and cons to each side that affect one’s stress level, work/life balance, and personal fulfillment.
People don’t so much choose to be an entrepreneur as they are called to be one. Entrepreneurs generally know from early in their career that they are destined to start a business of their own. They may feel that it is in their genes. Being an entrepreneur can be risky, but if executed correctly, can have big payoffs. One of the biggest perks that entrepreneurs enjoy is that there is no cap to their potential, but being an entrepreneur is risky as about 50% of all startups fail in the first 5 years. Your own business may require much more than 40 hours per week, and entrepreneurs run the risk of becoming “workaholics.” This addiction to work leads to a poor work/life balance, where friends and family are often neglected. Being 100% autonomous (e.g., no boss), they are free to make all decisions and reap the benefits or suffer the failures. Entrepreneurs also set their own schedules; if you are most productive at night, great, stay up all night and get your work done. Setting your schedule does not mean you work less, as 30% of entrepreneurs work 50-59 hours per week while making less money than if they had a regular job.
Top three benefits of running your own company
- Earning potential is not capped
- Flexible schedule
- You steer the ship
Top three disadvantages of running your own company
- More work and less pay (at least in the beginning)
- More risk and stress
- Work can be addictive
All this talk about being an entrepreneur may have you thinking that everyone should be one. This is very far from the truth. People have different talents. Some talents apply to starting a company, while some are best for regular jobs. Employees enjoy a steady income (while employed at least) and less stress. The employer is responsible for keeping the business profitable and dealing with business problems. Employees generally have a benefits package with perks like PTO (paid time off) and insurance and retirement options. On the downside, most employee pay is capped based on the position they hold at the company. Employees have managers (with agendas) which may limit an employee’s ability to follow their passion and do what they really want to do and love. In general, employers have the power to tell employees when they need to be at work and when they can take time off. While this is essential for a business to function, it can cause havoc for an employee’s personal responsibilities such as sick children and medical appointments.
Top three benefits of employment
- Steady income
- Benefits like PTO and insurance
- Less stress
Top three disadvantages of employment
- Typically, earnings are capped
- Harder to fulfill your passion
- Fixed schedule
Which path is better? There is no better; there is only the path which is best suited for you. If you are a risk taker, competitive and find a passion in business, you may want to look into starting your own company. If you like to play it safe, reduce stress in your life, and find passion in personal endeavors, employment may be your best option.