The pros and the cons of both
For some, going it alone and setting up their own business is the dream but for others, the thought of lacking the stability of a job within a company seems like the stuff of nightmares. Undoubtedly, there are pros and cons for both and in this article, we will be examining these for both the employee and the entrepreneur.
Employee vs. Entrepreneur
The pros
1. Stability
Okay, we know there is always a risk of unexpected redundancies, or messing up one too many times and ending up getting the axe, but day to day the life of a employee brings stability. Regular paychecks, a set role and job that assures you get approved for credit means the majority of those worries disappear from day to day.
2. Paid holidays (and holidays in general…)
One of the best parts of being employed, for some, is the times they don’t actually have to work. Paid annual leave means getting a break from emails and being paid to do so, meaning you can return back to work with a little less stress on your shoulders. Granted, not all roles mean switching off the phone completely, but there is a team back at the office to help ease the load whilst you’re away.
3. Benefits
Not only do employees benefit from paid holidays, they usually get a host of other benefits. From free coffee to health insurance schemes, there are many other benefits beyond the monthly paycheck that they get to enjoy. It also means that should you fall ill, you know you have a company and some form of income to support you through those hard times, making recovery that little bit less stressful. For women, this also means getting to spend those precious first moments with their little one when they become a mother, by ensuring via maternity leave they have not only a source of income but a job to go back to.
4. A set schedule
Being an employee means having contracted working hours, and for some, over time pay should these be increased. With set working hours and pay, employees can not only know what money is coming in and when, but where they are and when, meaning they won’t end up working more than they should be.
5. Balance
With set working hours and a set working week (or shifts), an employee knows what time is spent working and is therefore free to use their spare time to do the things they enjoy. From spending time with their children, to fitting in hobbies, having a set ‘work time’ and ‘personal time’ allows them to live a balanced lifestyle.
The cons
1. Lack of opportunities
One of the major cons employees face is lack of opportunities. Whether this is due to the size of their company or management refusing to give them the opportunities they crave, employees may find themselves stuck in a role than no longer inspires them or allows them to grow. Plus, with a set role, this may mean an employee is unable to explore avenues outside their role where they feel they could add value.
2. Clashes with co-workers and rules
Working for other people can also mean working for people you don’t necessarily like. Having to answer to a boss who is not your cup of tea can not only be irritating but harmful to your career when it leads to communication issues, whilst defying your superior can lead to termination of your role. This can also mean following company rules that the employee does not necessarily agree with, whether it be following certain protocols or maintaining a certain hair color.
3. Set income
Whilst the employee has the benefit of a certain level of security when it comes to income, this may also mean they have a limit to the amount they can take home. This may be particularly frustrating for employees performing well and bringing in large profits for the company. Watching some of their hard earned cash line others pockets can be a frustrating position to be in.
4. A lack of stability and set working hours
Whilst being an employee should mean set working hours and a stable job with a good work life balance, this simply isn’t the case for many. For fear of losing their job, many employees end up working well beyond their contracted hours without over time pay, leading to stress. For others, their company may not be in the most stable position and they may feel powerless to help, therefore constantly living in fear of losing their job.
Entrepreneur vs. Employee
The pros
1. Be your own boss
With your own company formation, you get to work for yourself and that means not having to deal with difficult personalities in leadership roles or company rules that you just don’t agree with. It also means you get to pick and choose your own team, who support your values as a company and help your business grow.
2. Take your business and career where you want to take it
Instead of being in a set role, as an entrepreneur you take on multiple roles and get to explore each of these meaning there is no end to your learning and certainly no boredom. As your company grows, you can build your team in the areas you are weaker in and focus on your strengths and passions. You decide the strategies and long-term goals you put in place for the business.
3. Flexibility
Being an entrepreneur can bring a large amount of flexibility to your life. Whether it is working from home when your child is sick or deciding which country your HQ will be in, you get to build a business that works around you. Granted, some of these elements may be swayed by external factors (setting up an ice cream shop in a ski resort may not be the best idea), but you ultimately get to make the decision about where, when and how you run your business. Plus, as your own boss you get to decide what your working hours will be as ultimately the responsibility is your own. Don’t like Mondays and prefer to work Sundays? You go for it.
4. Unlimited income
Whilst being an employee may provide stable income, this income may also be capped at a certain point. By being an entrepreneur and building your own business the possibilities are endless. Not only can you grow your take home income via revenue streams, you can choose to sell part of the business you have grown for a lump sum.
5. It’s rewarding
There is nothing more rewarding than seeing the business you have built grow and thrive. All your work directly benefits your business and you get to witness the successes first hand.
The cons
1. Instability
Whilst the entrepreneurial adventure is an exciting one, it is not the most stable. Particularly in the early days, there is no guarantee your business will work and this can lead to great instability both personally and financially. This burden can also create a huge strain and stress on the entrepreneur as they navigate these difficult times with their business.
2. No rest
Whilst being an entrepreneur may allow a certain level of flexibility, there is also no such thing as ‘time off’. Your business is a concern 24 hours a day, which means even if you try and switch off it can be difficult to do so. Plus, depending on the type of business you run, taking time off as holiday may mean doing so unpaid. Being an entrepreneur may also mean you have to skip out on certain events due to work commitments, as you are solely responsible for them.
3. Financially difficult
Being an entrepreneur is financially difficult for a number of reasons. Firstly, there is the instability when it comes to pay- a bad month may mean no money to take home. Secondly, there is the cost of setting up your business. Establishing a business is expensive and can be financially draining, especially in those businesses where it takes some time for the business to become profitable. Lastly, running your own business may mean that you struggle to access certain types of financial support, such as a mortgage, as you become a higher credit risk.
4. Isolating
The journey of an entrepreneur can be an isolating one. Long days combined with a hectic work schedule can lead to feelings of being overwhelmed. Even once your business is big enough to build a team, this can mean pressure and isolation as being the leader of your company, the decisions come down to you.
Ultimately, being an employee or an entrepreneur has its pros and its cons. What it comes down to is what matters to you as an individual. If you prefer a greater level of stability and a set role, being an employee is for you. If you prefer more of a high-risk adventure of a career, with potentially higher benefits, then it’s time to get setting up that business.
