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What factors determine whether YOU are a better fit to be an entrepreneur or employee?
For more than four decades, my Grandpa awoke at the crack of dawn each morning and headed to work. He was an employee of Continental Motors, one of the largest producers of engines in the first half of the 20th century. After his hours of service as an employee, Grandpa underwent a daily transformation into an entrepreneur in a matter of minutes. While many of his co-workers went fishing or retired to their homes for the day, Grandpa could be found painting, flipping vehicles or utility trailers which needed repair, or even helping operate the family market. Grandpa likely never paid any thought to whether he should be an employee or entrepreneur; why choose just one role when he could pursue both?
I think of Grandpa’s example often when contemplating life as an entrepreneur or employee. He was a rare individual who could successfully manage both pursuits while remaining the ultimate father and husband.
The world was different in the 20th century. Yet today, as it did in the past, life as an entrepreneur or employee offers distinct advantages and disadvantages. This is especially true in today’s competitive, rapidly changing marketplace.
What qualifies me to write about the advantages and disadvantages of being an entrepreneur or employee? I’ve lived both lives in the past, and I’m currently living them now. I am a public school teacher by day, a real estate agent in the afternoon, and I run FinanceSuperhero at night. I have experienced the joys and sorrows of being “the boss,” being an employee, and being my own boss.
What does all this mean?
You’re going to get straight, no frills insight.
The Entrepreneur Advantage
As an entrepreneur, you are in the driver’s seat 24 hours per day, 7 days per week, 365 days per year. Your business depends solely upon you, your vision, and your leadership. You are in full control.
An entrepreneur rarely faces the same slate of challenges day in and day out. In the role of entrepreneur, you will be the lead agent of change and growth of your business. Each day is unique.
Furthermore, you possess the ultimate freedom to do as you please with your business. You are the lead creative genius. You may set your own agenda, work hours, and timelines. The world is your office, in many cases, so you can work anywhere!
Lastly, your profitability and earnings are largely determined by the success of your business. If you’re business thrives, there is often a direct correlation in growth of your income. Hard work typically pays off.
As an employee, you find yourself in a world which is much more defined. Your job description, responsibilities, work hours, salary, insurance benefits, and retirement plans are all established when you are hired. These benefits are typically stable.
As a result of such definition, each day often follows a routine structure. Meetings, projects, and other tasks are assigned to you. Work is more predictable.
Additionally, the life of an employee often offers increased opportunities for collaboration and the development of relationships. Over time, you and your colleagues may develop strong working relationships. You may even be able to depend upon them in times of need.
While life as an entrepreneur has its benefits, the disadvantages are also plentiful. When you are in control of your business, the only throat to choke when something goes awry is your own. For some, this responsibility is a heavy burden to bear.
The entrepreneur also faces a bevy of additional challenges:
*Remaining competitive in a changing marketplace
*Building and maintaining a client base
*Marketing and branding the business with sensitivity to return on investment
*Maintaining focus and direction while being pulled and stretched at all times
*Maintaining personal relationships and boundaries
Of course, life as an employee is not always full of rainbows and butterflies. You may be forced to deal with the insufferable demands of a clueless boss. Inefficiency in your department may create more work for you at every turn. Perhaps there is little motivation or financial incentive for you to work harder or increase your production.
Entrepreneur or Employee – Which is right for you?
I am a firm believer that your initial reactions to the above advantages and disadvantages of being an entrepreneur or employee, respectively, may be a great indicator of which role is right for you. For example, if the thought of being in full control scares you more than it excites you, perhaps the role of entrepreneur is not right for you. Similarly, if the idea of predictable, structured work sounds like a scene from Dante’s Inferno, perhaps the role of employee is not right for you.
With a few exceptions, the following personality characteristics, mindsets, habits, goals, and preferences may help you find the role which is best for you.
*Highly-motivated to start new endeavors (A “Go-Getter”)
*Self-driven and motivated
*Mindset which asks “What’s next” and “What is it time for now?”
*Willing to make mistakes and learn from them (An entrepreneur always embraces failure!)
*Recognized by yourself or others as a “Jack of All Trades,” or a generalist
*More likely to have friends in all walks of life and professions
*Enjoys following directions and orders to complete tasks
*Patient and accepting in the face of occasional mistreatment (your job depends on staying in line and doing what you’re told in most cases, yet this does not bother you)
*Values the safety of a guaranteed hourly rate or salary
*Fears mistakes and strives to maintain the status quo
*Tendency to be a specialist vs. a generalist (highly-trained in a specific niche)
*More likely to associate with people similar to them in lifestyle and professions
Entrepreneur or Employee – The Final Decision
Lee Eclov, pastor, author, and one of the wisest teachers I have ever known, is fond of reminding people to paint with the colors they are given. This metaphor is not only applicable in the context of ministry or other public service – it is equally valid in the business world. We should all strive to recognize our natural talents and abilities and seek to maximize them, whether we are an an entrepreneur or employee.
Ultimately, the choice to be an entrepreneur or employee – or both – comes down to knowing and honoring yourself and your abilities. Seize the opportunity that fits you best and aligns best with you, your values, and your goals. As Dave Matthews wrote,
Make the most of what you’ve got
Don’t waste time trying to be something you’re not
Fill up your head & fill up your heart, take your shot
Don’t waste time trying to be something you’re not
Are you an entrepreneur, employee, or both? Do you feel you are in the role which best suits you? If money were not a consideration, what would be your ideal role?
If you are interested in quitting your job as an employee to become an entrepreneur, don’t quit – engineer your layoff by following the tried-and-true advice of FinancialSamurai.