Which is Better: An Employee or Entrepreneur?

August 6, 2011 | By | 2 Replies More

Which is Better: An Employee or Entrepreneur?

Which is better: an entrepreneur or an employee? Which of the two is more rewarding, easier and less stressful?

It’s really hard to say whether being an entrepreneur or an employee is better for a person. Some people are meant to become entrepreneurs, and they find personal fulfillment, happiness and success with their own businesses. Some, however, are destined to work as employees, with a few rising to the top of their corporations.

There are advantages and disadvantages to being an employee as well as an entrepreneur, and here are some of them:

Advantages and Disadvantages of Being an Employee

As an employee, you are a specialist. You are given a set of tasks based on your position and nature of your job. You focus on doing the responsibilities assigned to you by the organization. You stick to what you know. If you’re an accountant, then you simply need to work on the accounting functions; and if you are a customer service representative, then you work only in dealing with customers.




The income of an employee is also relatively predictable: you know how much you will get paid, and when you will get paid (e.g. weekly, biweekly or once a month). Whether you did your best work or just so-so work that month, you still get to receive your regular salary.

Your work hours are also fixed. If it’s a 9-to-5 job, you are expected to work within that time period; if you so chooses, you can forget about work as soon as you leave the office. Unless you’re workaholic or involved in the job that works on weekends, you can enjoy your weekend and not even think about your job.

woman thinkingEmployees also enjoy the availability of health insurance coverage, where you pay a contribution that is relatively smaller as compared to buying the insurance yourself.

The downside, of course, is that you are just an employee. Whether you agree with the company’s visions, strategies or directions, there’s nothing you can do about it unless you are in a position of power. Your choice is to follow (albeit grudgingly) or leave the organization. You are also likely to have a boss (and your boss may have one or more bosses), and you follow what your higher-ups tell you to do.
 
>> RELATED: How to Make the Jump from Employee to Entrepreneur
 
If you want to have more voice in the company’s decision-making, you need to rise up and get promoted to a position with more responsibilities. However, going up the company ladder is not easy as you will have to compete with other employees and any new hires that the company will bring in.

Your income is also pretty much set. If you are to be paid $50,000 per year, then that is the amount you are going to receive. Unless your company offers bonuses and other perks for excellent performance, there’s very little chance to increase your annual salary.

Advantages and Disadvantages of an Entrepreneur

On the other hand, the entrepreneur is the boss. If you feel you can do and gain so much more on your own outside the confines of employment, entrepreneurship is for you.

You set the vision for the company, determine its strategies and what you need to do to achieve your goals. If you like to be in a leadership position and loves the challenge of solving problems, being an entrepreneur allows you to chart your own destiny and succeed on your own terms.
 
>> RELATED: Why Be Self-Employed? 10 Benefits of Entrepreneurship
 
Starting your own business also allows you to become rich and financially secure. There’s really no cap as to how much you can potentially earn. How much you earn depends on your creativity, willingness to work hard, and yes, lots of luck. You also get an incredible sense of pride in seeing your own products or service used and appreciated by your customers.

As an entrepreneur, you set your own time and work whenever and wherever you are. You can choose to work only at night, or during the day. You can choose to work in your pajamas, or whatever outfit makes you comfortable. You can decide to attend a yoga class in the middle of the day without worrying about your boss – because you are your own boss.

The downside is that there are no guarantees that your business will succeed. Starting a business is a huge risk, and there are always new challenges at every stage of the business. It could be a massive failure and you could end up losing everything – your money and savings, your home, your family. Even how much you earn per month is not guaranteed: some months may be stellar and you’re taking home huge sums of money only to find that you’re in the red the next month.
 
>> RELATED: Are You an Entrepreneur or Freelancer?
 
You also live and breathe your business. It is not uncommon to find entrepreneurs logging the insane amount of time for their business, particularly during startup. There are just so many things to do, and so many challenges to face.

Being an entrepreneur is also stressful. As a business owner, you are the one who worries about all the problems of the business. The thought that the bank is going to close your credit line or that you can’t meet payroll on the 15th are enough to cause you to lose sleep.

You’ll also have to wear many hats. You can’t just focus on doing what you do best, especially when you are just starting up with no resources to hire employees. You can be the CEO, administrative assistant, customer service representative, accountant, even janitor all rolled into one.

Whether you decide to become an entrepreneur or an employee, your decision should be based on what is right for you, what you want to do with your life, and what you can do. And of course, you can choose to do both and start a business while still employed.

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Category: Starting a Business

About the Author ()

Isabel Isidro is the co-founder of PowerHomeBiz.com. A mom of three boys, avid vintage postcard collector, frustrated scrapbooker, she also manages Women Home Business, Starting Up Tips and Learning from Big Boys.

Comments (2)

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  1. Tomas Merrill says:

    Although the income from being employed may seem less risky then the profits a business might make, I think the salary is actually riskier in the long term.

    You have no guarantee you will continue to be employed. While that same lack of certain is still true with a business, at least you get a large share of the money made for taking on the same risk.

    I think that is a great reason to start a business.

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  2. Virtual Offices says:

    The most common reason causing people to become entrepreneurs is the independence that it gives them. As an entrepreneur, you’ll be your own boss.

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