The decision to start your own business or get a day job is one that will affect you for the rest of your life. It’s not an easy choice, but it doesn’t have to be that difficult either. You just need to ask yourself some key questions and then do some research before making such an important decision. In this blog post, we’ll compare the two career options side-by-side -side, and offer insightful questions to help you decide if owning a business or getting a job is right for you!
Best option for you? Employee Or Entrepreneur?
Entrepreneur: if your passion aligns with a need in society that is marketable, then this may be the right route. You’ll have to work harder as an entrepreneur and there is more risk involved than being employed by someone else.
Employee: if you want to be guaranteed a paycheck or are someone who values stability, then this may be the route for you. You’ll have more leisure time as an employee and there will be less risk involved than being an entrepreneur.
Keep reading to learn about vital differences between starting a business and getting a job…
- Best option for you? Employee Or Entrepreneur?
- Comparison Table: Start a Business vs Getting a Job
- Top 10 Pros and Cons of Starting a Business
- #1 PRO-Control your work-life – time & location
- #2 PRO- Better enjoy your workday
- #3 PRO-Learn valuable business skills
- #4 PRO- Make meaningful connections
- #5 PRO-Have unlimited growth potential
- #6 CON- Need Money to Fund Startups
- #7 CON- Increased Responsibilities
- #8 CON- Longer Work Hours
- #9 CON- No Guaranteed Income
- #10 CON- High-Risk Factor
- Top 10 Pros and Cons of Working a Day Job
- Ask Questions: Decide between Owning a Business or Getting a Job
- FAQ: Becoming a business owner or working for someone else
- What should you NOT do when starting a business?
Comparison Table: Start a Business vs Getting a Job
Side by side comparison table of becoming an entrepreneur or an employee to help you decide which is the best choice for you today.
|Consideration Factors||Start a Business||Get a Job|
|Money – Salary||Higher||Lower|
|Work Schedule||Above-average hours||Average hours|
|Read: Pros & Cons: Starting a business||Read: Pros & Cons: Getting a job|
Top 10 Pros and Cons of Starting a Business
We’ll starting by reviewing the advantages of starting a business:
#1 PRO-Control your work-life – time & location
Owning your own business, you are the boss and can create a schedule that works best for you. The work-life balance of running your own business is what you make it to be. The hours are much more flexible – even if you’re self-employed, it is possible to set your own hours so that they fit well with everything else going on in your life
You’ll be able to work from home, which means you can spend more time with family and friends. Or, you could choose to set up shop in your dream town or country. You’re the boss. It’s all up to you!
#2 PRO- Better enjoy your workday
Starting your own business is an exciting challenge that will allow you to learn new skills and explore different interests. There are many benefits of being self-employed or a business owner, such as not having a boss or answering to anyone else but yourself.
You can do work that you love and be passionate about your company’s mission. Working for yourself is rewarding because you’re in control of what happens next. Entrepreneurship offers an opportunity for self-expression and creativity
#3 PRO-Learn valuable business skills
Owning a business will teach you many valuable and marketable sales, finance, and employee supervision skills. Entrepreneurship will make you a better problem solver and also improve your communication skills. Launching your own firm is an excellent way to gain experience when you apply for jobs in the future and build your skillset.
#4 PRO- Make meaningful connections
It’s a chance to meet new people, learn new skills, and make connections with others who share similar interests or goals. It offers an opportunity for self-expression and creativity in your work life. You might find yourself making new friends in the process.
#5 PRO-Have unlimited growth potential
Businesses come with many opportunities for growth and profit. Setting up your own firm provides opportunities for career advancement and increased salary that may not be available at other day jobs. You have the opportunity for endless growth potential to expand your company. Who knows, your product or service may grow to be something massive, like Facebook or Google!
Now let’s review the disadvantages of starting a business:
#6 CON- Need Money to Fund Startups
As a business owner, you need to raise money for your startup, which can be difficult and take longer than you planned to delay your salary. When starting a company from scratch, there is usually an upfront investment required for equipment or other capital goods
#7 CON- Increased Responsibilities
Many responsibilities come with starting a product line, including administrative tasks like filing taxes and handling finances such as payroll or budgeting. You may also be responsible for creating marketing campaigns or learning how to make presentations to attract new clients beyond your skillset.
#8 CON- Longer Work Hours
Starting your own company means that you’ll be working all the time. The typical startup entrepreneur works 60+ hours a week. And those hours are not confined to business hours. Often client meetings, emergency production, and overnight travel are on nights and weekends – stealing precious family and personal time.
#9 CON- No Guaranteed Income
It can take years before you see any profits from your new company. There are no guarantees that you will succeed or even make any money at all.
#10 CON- High-Risk Factor
There are risks involved with founding your own company, such as not paying employees (and yourself!) or suppliers on time if there is a cash-flow problem.
The risk of failure is high and could have devastating consequences for your finances, mental health, and relationships with family members or friends
Top 10 Pros and Cons of Working a Day Job
#1 PRO-Steady paycheck
Greater financial security because you can plan your budget with your guaranteed annual salary.
Working for someone else means having the security of knowing what your paycheck will look like every month, which can be comforting if you don’t want any surprises!
A job provides financial stability, which is an essential factor in many aspects of life. First, your earned money can be towards other things like paying off debt or saving up for retirement.
#2 PRO-Additional Benefits
Your employer will provide you with benefits such as health insurance and retirement savings plans. Additionally, often you will get paid vacation, sick days, and personal time included in your salary package.
#3 PRO-Opportunities for promotion
You’ll be able to take advantage of opportunities f and or promotion within the company, which will lead to greater responsibility and a higher salary. It will look good on your resume when applying for jobs in the future because it’s experience
#4 PRO- Learn new skills
If you are working for someone, they may be able to teach you new skills. Also, many companies fund continuing education for their workers, teaching them specific skills to advance the company.
#5 PRO- Meet new people
A job is a great way to meet new people and establish connections with others who share similar interests or backgrounds as you do. Getting a job is an easy way to make friends because coworkers often spend time outside of work together socializing and having fun.
Now consider these disadvantages of working for someone else:
#6 CON- Little Schedule Flexibility
You will have little to no control over when you have to start or stop working.
Often the company expects you to work long hours, even if it means sacrificing your time with family or friends. You may also have to travel out of town that typically doesn’t coincide with regular business hours.
#7 CON- Limited upward career mobility
There are no opportunities for advancement or growth within the company because they only hire from inside
#8 CON- No Job Security
Many jobs are in workplaces that don’t offer stability or security. If your company re-structures and downsizes, there’s a chance that you could lose your job too
#9 CON– Less Income Potential
You may not be able to make as much money as you would working for yourself. Plus there is often not much chance for salary growth – once again it’s all about how much experience and time you have accrued at the firm. Also, your personal paycheck is dependent on the company’s success of which you have little control.
#10 CON– Lack of Control
You don’t get to choose what type of work you do or where in the company to work. Usually, you will not have any say in what projects get assigned to you or when they’ll be completed. This often leads to low job satisfaction.
The culture of the workplace can be difficult to adjust to and may not suit your personality or work style well. It’s difficult to find a job that has good benefits and is in line with your interests.
Ask Questions: Decide between Owning a Business or Getting a Job
To make your best decision between employment and entrepreneurship, ask yourself these questions regarding whether or not you should start a business or get a job.
- How much cash will I have at risk if I start a business? Can I afford to invest and possibly lose some or all of my startup capital? If no, they get a job and build your skills. Then perhaps you could start your venture part-time with lower startup cash needs.
- How much time will a new business startup require? Do I have the ability to devote the needed hours to its successful completion – or do I have prior commitments to school or family that will prevent me from giving the business 100 percent? If so, perhaps there is a better time in the future for your to launch your company.
- How much physical and mental strength and will it take? Do I have the needed robust health and upbeat personality to take on the challenge? Am I headed into this venture from a position of strength or weakness? If you are behind in your bills, just laid off, and a bit down, this may not be the best time to try your luck as a business owner.
- What are the chances of business success? Have I thoroughly researched and tested my business idea viability? What were the results of customer feedback? If you are unsure, go ahead and create a test-run mini product launch while you get a part-time job or before quitting your day job.
- What if my business fails? How easily will I be able to forward in my career and life? How will my financial situation be impacted, my confidence, and my reputation? Nobody wants to consider failure at the start of their launch, but it is a real possibility for all business owners. Better to acknowledge reality and be prepared with strategies for moving on to your next stage in life if needs be.
FAQ: Becoming a business owner or working for someone else
Do you make more money owning your own business?
It can be more profitable owning your own business, but it also has a higher risk. The average business owner’s salaries of $65,302 is 18% higher than comparable managerial positions average annual salary of $55,342. The business owner’s higher salary also has increased risk, income uncertainty, additional work hours, and stressful responsibilities that entrepreneurs must deal with successfully to stay in business and continue to make money.
Should I get a job while I start a business?
You might find it easier to get a job while starting your own business. Working as an employee provides stability and the security of steady income, but with less risk than owning your own business.
Having a job to support your basic needs as you launch into entrepreneurship can be a smart move. You will greatly reduce the financial strain on your fledgling company if you can forgo taking a salary. Then instead reinvest profits to build a stronger business for long-term survival and growth.
Is it worth it to start your own business?
Business owners are much happier with their work-life than employees. Based on recent reports, Entrepreneurs and self-employed individuals report a substantially higher level of job satisfaction (78%) versus employees who are less satisfied with their work-life (53.7%). See the chart below comparing salary, revenue, and career satisfaction from the experts at Freshbooks.
Starting a new business is hard but could it be worth it? Check out my article about the hardest parts of launching and how to make it a bit easier and more successful for your new venture.
What is the best way to pay yourself as a business owner?
The most advantageous way to pay yourself from your small business will be determined by your business entity – either DBA sole proprietorship, LLC, or Corporation – because there are different laws governing each legal business structure.
If your company is set up as an LLC, Sole Proprietor, or partnership legally you are considered self-employed and would be best served by paying yourself with an Owners Draw. These monies will not be taxed when taken but tax will be due when the owners file their personal tax return.
For S corporations they can elect to pay the owner with both an owner’s draw and a regular salary. In fact, if you are running the business every day the IRS recommends that you get paid with a salary and not an owner’s draw. You are fulfilling the role of business manager and that position is typically a salaried job.
Get more detailed information about the best way to pay yourself as a business owner from the financial experts at Freshbooks here
What should you NOT do when starting a business?
- Don’t start a business without a plan not doing your research
- Don’t invest in an industry that you don’t understand
- Don’t try to do everything yourself – delegate tasks and responsibilities so that you can focus on the most important things for your company
- Don’t spend too much money on equipment, inventory, or marketing before you have any customers
- Don’t try to do everything yourself – hire an accountant, lawyer, and marketing team. Delegate tasks and responsibilities to others. Do what you’re good at and outsource the rest!
- Don’t be afraid to ask for help when you need it. Use government entrepreneur assistance programs – see my list here
- Don’t assume that you know all the answers. Be open to input from employees, vendors, and industry professionals.
- Don’t take on too many projects at once. Focus on one at a time, then move onto the next project when it’s finished.
- Don’t over-promise or under-deliver to customers, bankers or suppliers.
- Don’t make decisions based solely on your own opinion and preferences – get feedback from others before moving forward with any decision.
- Don’t let fear hold you back from taking risks or making changes – these are often what lead to success!
- Don’t give up when it gets hard. Keep in mind that there’s no such thing as overnight success – it takes time!
- Don’t get discouraged if things don’t go as planned right away, just learn from them and move forward! Be patient and persistent with your business.
It might not be easy to decide whether you should start your own business or get a job, but we hope that this blog post has provided some insight into the advantages and disadvantages of each. Hopefully, these pros and cons will help you make an informed decision for yourself about how to reach your goals in life.
Check out my guide on how to start your business right with tons of useful tips I learned by successfully starting, building, and selling multiple companies.