Your comfort with instability. Entrepreneurship can be a highly rewarding path, but it's not as safe a bet as traditional employment. On average, just under 50% of businesses fail in the first five years. If you are a person who values stability in your career and dislikes risk, you may prefer to be an employee. If you feel comfortable with the risk-reward ratio and want to create your own business, entrepreneurship might be for you. It all comes down to your personal needs and interests.
Consider whether you want to have control over your own salary or whether you would rather your employer handle that. There are pros and cons to both. Having control over what you get paid means that you do not risk getting taken advantage of, yet if you run your own business, you do not always necessarily know how much you will be able to pay yourself. So, between all those factors, consider what is the most important to you in terms of how you get paid.
What fundamentally separates the two roles apart is that as an entrepreneur you have the freedom to spend your time doing what is important to you. It comes with shouldering greater responsibilities but for many, the pros outweigh the cons. Life is short, and the one thing we can never get back is time. As a result, time is one of your most valuable resources, and you should treat it as such. While, as an employee, you do not have the same luxury of choice, when you’re working as an employee you do so on the company's time, you are limited in terms of flexibility but also have a greater sense of security and support.
A job is only as safe as your position within the company. If the company falls on hard times, or the company makes a bad decision that has a negative effect on its overall performance, it’s likely that the employees will be the first to feel the consequences. When you’re an employee, you’re basically at the mercy of the company. If the company makes a bad decision, or if the company’s performance suffers, you could be the first to feel the negative effects. When this happens, you may be forced to look for another job, or worse, you might be forced to file for unemployment. The risk of being an employee is that you have less control over your future and you’re entirely dependent on the company’s decision-making. Moreover, as an employee, you risk being fired if you don't perform well. However, if you're an entrepreneur, you risk losing all your money if your business venture fails.
Commitment is a heavy word both in the game of life and business. In a competitive industry, not everyone can succeed or excel in the field. Devotion to your craft plays a huge role in choosing between becoming the boss or the worker. Becoming an employee is not as easy as it seems. You are a mere follower abiding by orders mandated by a leader. Given that you are working for someone else, the pressure and burden of the company do not weigh on you. Hence, more time for yourself. Meanwhile, starting a business requires a lot of attention and time. Dedication and responsibility are vital if you want a successful enterprise. You must be 100% committed and decisive that this is the path you want to take. In general, it all relies upon your visions and goals if you are hesitant about what career to pursue. If you could see a future in any of the two, do not be afraid to follow it. The only thing stopping you from achieving anything in this life is your doubts and worries.
Entreprenuership requires proper planning and prioritizing with the resources available. As an aspiring entrepreneur, determine if you have the necessary capital needed to start and maintain the business since at the early stage of the business you will input more than you will get from the business. Kow if you have viable investors that you can approach or a plan B that you can resort to if the unexpected happens and you need to use more resources to boost the business.
Entrepreneurship often involves experimenting. It’s hard to predict if your business idea will work out and if you will have enough resources to pursue your dreams. You should think carefully before deciding whether you want to change from stable employment to entrepreneurship. Think of your life situation at the moment. If you just started a family, it might be not the best idea to also start a new business. Even if you have enough financial resources, you might lack energy to meet the challenges of your private and professional life at the same time. So how do you open yourself to new opportunities while minimizing the risk of failure? Don't put all your eggs in one basket! Evaluate your situation and consider how much risk you can take. Many people decide to follow their passions and start developing a new career, but do it next to their actual job. It might be challenging to do these two things simultaneously, but it will give you extra security if your plan doesn't work out.
The skillset required to be a successful entrepreneur and a successful employee is usually different. For the latter, you need a wide range of skills and less specialization in one area. for the latter, the more specialized you are, the better. But that's not the main thing to consider. The main area that you need to be absolutely sure of is the level of responsibility you want to take on. As an entrepreneur, you are the final decision maker and, in the end, you're responsible for everything that goes on at the company. Even if you don't know the specific activities carried out by an individual in a specific department, it's still your responsibility. - The direction of the company is your responsibility - Payroll is your responsibility - Product quality is your responsibility - Client and customer experience is your responsibility - Team building is your responsibility - Etc. Even if you're a level or two removed from the work it's all still your responsibility.
The responsibilities between the two roles are a huge difference. An entrepreneur is responsible for each business move while an employee is responsible to execute a small detail. For example, an entrepreneur overlooks the entire process of a new product launch, but an employee may only handle the online merchandising. Consider how much responsibility you want to have when comparing the two.
If I was logical, I would only eat healthy food, and always make the right decisions to the extent that my mind knows to do the right thing. But I am not. I am a psychological being with feelings and thoughts, and I don't always make the right decisions. The logical answer would be to understand his/her environment. Do I have a family to support? Am I emotionally stable, and I can function well without the security of a job, do I have savings? What are my financial responsibilities in terms of a place to live in etc... The one thing we should consider when deciding whether to be an employee or an entrepreneur is ourselves. Take some time, dig deep, be honest with yourself (not based on how others made it), and decide what's right for your psychological makeup to stay healthy. Only you can know yourself to make this decision and your number one consideration should be to be true to yourself.
Being an entrepreneur is a great way to get your start in business, but it's also a lot of work. If you're looking for the path of least resistance, becoming an employee might be a better idea. It's still hard work—but it's easier than going out on your own because you can use your skills and experience as a foundation for your new company. If you want to be an entrepreneur and aren't sure what direction to take, consider these questions: What do you love? What do you feel like you're good at? What do other people tell you that they like about what you do? These are all things that can help guide your decision whether or not to become an entrepreneur.
Your personal characteristic is one factor—possibly the most crucial—that you should consider when selecting whether to work for someone else or start your own business. Most entrepreneurial professions and some employment positions are particularly challenging from a technical or stress perspective. Many people discovered that labor and stress were equally tricky, except for the freedom of thought and action that comes with being an entrepreneur. I thrive with the independence to succeed (or fail) on my own. Many people, including myself, cannot bear answering to anybody other than a customer in a professional context. However, other people praise the employee lifestyle, in which they receive a monthly paycheck and have the legal right to sue if they don't. You merely put in the contracted hours of labor and follow directions from others. Everything ultimately depends on your personality.
So long as your job exists, being an employee can provide you with the stability and security you need to live your life without worrying about money. As an employee, you’re being paid by someone else, so you don’t have to worry about the details of running a business. You can simply focus on doing your job, getting paid and enjoying a comfortable life. However, as an employee, you have very little control over your future. Your job security is dependent on the decisions made by your company’s management. If you’re laid off or downsized, you may have to look for another job, start your own business, or retire early. As an entrepreneur, the risks are more transparent, and your success depends largely on the quality of the decisions you make. As such, if you learn how to build businesses, you are in the long-run much more resilient to unexpected shocks than an employee who never had to think about those things.
Are you a person who can take someone's great idea and make it happen, or are you the person with the great idea? Both are good positions to be in and are imperative for a successful business, but the answer can tell you whether you're meant to be an employee or an entrepreneur. While some people want to step out on their own and take the big risk, others like the security and stability of employee life.
Determine whether you like to work with others or whether you prefer to work alone. While entrepreneurs do not always work alone, they have the ability to do so. If you are an employee, you must answer to a manager. If you could see yourself working alone, you may want to consider entrepreneurship. Some people enjoy collaboration, while others would rather have complete control over what they do. Decide which one of these feels best for you.
One of the most relevant yardsticks to determine whether you’re cut out to be an entrepreneur is to evaluate where your motivation comes from. Most entrepreneurs need to have the ability to motivate themselves and their team because often, this is what will drive their business forward. Conversely, if you’re someone who thrives as part of a team that is motivated and led by someone else, and value comfort more, then that’s totally natural, and a sign that you should opt to be an employer instead.
One of the biggest mistakes of my professional career was not recognizing my need to take a step back and learn through being an employer. Working with SmashBrand has helped me identify gaps in my thinking and actions. Of course, this depends on the company you choose to work with. While you can and will learn from any professional endeavor, specific organizations are more geared toward growth than others. If you decide on employment, look for a workplace that considers your long-term growth rather than your immediate needs. Also, who is to say that you cannot be an entrepreneur while working as an employee? I've found this to be an intelligent way to lay the foundation for your business. You learn to lead, delegate, and optimize since you have less time available. SmashBrand is a strategy, branding, and packaging design agency that services the CPG and FMCG industries. By leveraging consumer data and real-world testing, we help brands win on-shelf.
Entrepreneurship is about big ideas. It’s about disruption in the marketplace. It’s about invention and changing the landscape. There is a flair and a boldness to entrepreneurship. By comparison, to become an employee, you need to know the basics first. Some entrepreneurs enter the space while still being naive about what’s acceptable and unacceptable in business. You won’t have that problem for long if you enter the professional world looking to be a valuable and reliable employee. You will learn the ropes faster. You’ll be more ethically sound and you’ll find out what tactics and strategies are the most tried and true. In fact, the best entrepreneurs are those who became employees first. While working for someone else, they discovered what was missing in whatever industry they worked in or company they worked for and decided to go out and create something better on their own.
An employee, by definition, shows up for a day's work in exchange for compensation, to be rewarded for their time spent. An entrepreneur does not have such expectations. Instead, they believe that if they create something of value, they will receive value in return. It's a subtle but significant distinction. The key difference is that employees seek direction, while entrepreneurs create a path.
I think one thing people should consider when deciding whether to be an employee or an entrepreneur is stress. Employees are typically safe in their positions with a set schedule, set pay schedule, and benefits. Entrepreneurs typically work long hours, pay is not on a set schedule, and do not always have benefits.