While entrepreneurship might sound like the immediate and tempting career choice, it is not for everyone. You might not be ready to make all the necessary sacrifices down the road.
Related: What is an entrepreneur?
On the other hand, if you just stay at your current job and never try something different, you might end up having regrets a decade from now, when it will be too late.
So to help you make a decision on which path is right for you here’s an in-depth breakdown of the advantages and disadvantages of both being an entrepreneur and an employee (click here to skip down to the entrepreneur section).
Pros and cons of being an employee
Being an employee might not be so bad, after all. However, at the same time, it can be a mistake to accept this as your destiny and take or keep a job. Let’s see why.
1. You will not worry about not getting paid next month
One of the good things about a regular job is that you will receive your money every month. That means you can just keep doing what you do, and not worry about a business project not working out, a client not paying, or else. That level of insecurity is left for entrepreneurs.
2. Employee benefits
The perks of being an employee include paid vacations and sick days, health and life insurance, a retirement plan, social security, workers compensation, and more. That makes life much easier for the employee.
Imagine having to deal with all these yourself and paying for them from your pocket. Because that is the life of an entrepreneur.
3. Separating life and work
Not everyone wants to be the busy business owner who leaves a family event to handle a crisis at work or the entrepreneur and parent who’s always on the phone or answering emails and travelling all the time to meet with clients.
What’s more, the lack of fixed working hours can drive some people crazy, ruin their sleep, and eventually affect their mental and physical health.
Employees, however, know precisely when and for how long they need to be at work, after which they can leave and forget about anything that happened there. That means they can strive and usually achieve a work and life balance. These are not connected in any way, which is comforting for people who do not want unnecessary stress in their life.
4. Not fulfilling your potential
If you stay at your job forever, you will never grow and see what you are capable of. Because that takes courage, you need to enter a new field, form connections, risk a lot, make sacrifices, and fail a few times before you succeed. These are some of the main reasons why people never start their own business.
You might avoid that thought for a while, but eventually, it hits you: there you are working the same thing you did five years ago and not having done anything new with your life. You realise that you are investing the best and most energetic years of your life to something you do not enjoy.
Not only are average workers not happy. It is proven that a job makes people miserable over time.
5. Making someone else rich
There’s not much that can motivate employees as no extra amount of work will make them any richer. In fact, it will only help their bosses. If you are looking to change your financial situation and want to be more independent, then being an employee is not the right path for you.
Job monotony will get to you eventually. Most people hate waking up in the morning, the commute, the office and atmosphere, the tedious projects. If you dedicate your whole life to that, you might end up depressed and lose the desire to achieve more or make a change.
Pros and cons of being an entrepreneur
Now, let’s see what’s on the other side. You might be admiring entrepreneurs who are transforming the business world or those small business owners who seem to be living the ideal lifestyle. However, it is not always easy. In fact, they admit it is the hardest thing they ever did. However, they still love every part of it. Let’s see if you can enjoy such a journey too.
1. Starting a company is not easy
Forming a limited company involves paperwork, taking responsibility, doing research, handling finance and legal. Moreover, that is something that will make most people quite stressed out. If you get past it, though, it will be okay.
2. You will not make it with your first business idea
The sad thing about entrepreneurship is that you need to make plenty of mistakes before you get it right. Your first business or business idea is unlikely to be successful, so don’t expect any money is coming in the first month or even year after starting your own company.
However, even some of the biggest names in business did not succeed from scratch. Elon Musk, for instance, saw much bad feedback with the first version of PayPal, and his first three rocket launches were a failure (which cost him hundreds of millions of dollars). However, he did not give up. In fact, he says “If things are not failing, you are not innovating enough.” Today, he is the CEO of Tesla and SpaceX and is changing the world in ways other people could not even imagine. If you decide to be an entrepreneur, you will have to accept the fact that failure is a big part of the journey.
3. The work never stops
As an employee, you are just waiting for the workday to be over so you can relax at home and not even think about anything work-related. Then, you wait for the weekend so you can do something fun.
Entrepreneurs do it differently, however. When they are building a business, they work all the time. Their mind is always trying to fix problems, think of ways to find new clients, or generate new business ideas. They also need to be available for others 24/7.
There’s no one else to blame if something goes wrong. So the entrepreneur might wake up at night to fix a payment issue, or dedicate their whole holiday at an exotic destination to building a sales funnel for a new product.
4. You are your boss
Entrepreneurship involves risk, uncertainty, stress and failure. However, at the end of the day, no one else is telling you what to do. You can take a day off whenever you feel like, or structure your work according to the other things you need to get done. It just means you will catch up later or do some more work in advance. That means you have all the flexibility in the world, which equals freedom.
Then, you own your time. That is our most precious possession, and employees do not have it under their control. However, as an entrepreneur, you do.
5. Growth in every possible way
If you dedicate your career to being an entrepreneur, you will also be a learner. You will seek personal and spiritual growth in the face of mentors, books, networking events, online courses, life lessons, experience, etc. You will be becoming the best possible version of yourself, and that will affect your business positively too.
Next comes business growth. The more effort you put into your project, the more opportunities will come your way. You never know when something written by you will go viral online when you’ll receive a great offer by email after someone found out about your work, or will meet your next partner.
Last but not least, you will have the chance to reach all your financial goals, no matter how big they are. You cannot become a millionaire by working for someone else. However, you can do it by building the next best product, creating a brand that gets much attention, becoming an expert in your field and charging a lot per hour of your time, or else.
The best thing is that there are no limitations here. You are creative, productive and determined, ready to work as much as it takes to make your dreams come true. Being an entrepreneur means you can enter more than one market, have different products and services, serve different types of audiences, and thus diversify your income. This will bring you financial stability. So even if one income stream is hurt because of outer factors (such as the economy, a change in people’s desires, a new competitor, or else), it will affect your monthly income just a bit.
Employee or entrepreneur?
So, what will it be for you? Now that you know the good and bad sides of both career trajectories, you can make a plan, define your priorities and passions in life, figure out what you truly want, and then take action in the right direction.