Comparing being an employee to a business owner
Whether you are an employee or business owner, you have probably wondered if the grass is greener on the other side. Here are some key points highlighting the good and the bad of being both.
Advantages of being an employee
- paid sick leave and holidays
- fixed hours
- less likely to take home worries
- minimal financial risks
- no accounting bookkeeping and simpler tax affairs
- great rewards for highly specialised knowledge. You can pursue your career.
- stick to a limited range of tasks within your role that you excel in.
Disadvantages of being an employee
- fixed wages
- job insecurity
- job dissatisfaction
- management and staff friction or you could call it office politics
- being “bossed around”, resistance to changes
- paying tax out of your pay packet, disincentives to work more
- being ineffective at creating and implementing change such as red tape
Advantages of being a business owner
- In addition to annual profit, you can build value in your business goodwill. That is, sell your business too one day for profit
- Do it completely your way. Find your career purpose.
- When you get it right, it goes in your pocket. Not someone else’s.
- Employees and systems are making you money
- Improving personal qualities like resilience and being an ‘all rounder’ as business owners have to be multi skilled in their journey to success
- some tasks are more fun than others being in business, such as, learning to sell yourself and marketing
Disadvantages of being a business owner
- More accounting, bookkeeping and complicated tax affairs
- inconsistent profits, risk of business failure and it can take years to earn more in your business than your old salary
- harder to get away for longer holidays
- more long term stress in keeping the business ship on track
- take on more of the risks for staff and suppliers
- some tasks are less fun than others such as debtor chasing and managing staff.
As you can see there are benefits to both positions. Some individuals will find they are better suited to owning their own business and others will enjoy working for someone else. If you are thinking about starting your own business but are afraid to take the first step, try reaching out to others who have done this and seek their counsel. Most people will be delighted to share what worked for them and what to avoid, and of course, don’t forget to speak to your accountant who will have tips and advice to prepare you for this change.