The idea of starting a business can be very tempting. Maybe it’s a wish to follow a lifelong interest. Perhaps it’s creating a better work/life balance with a flexible schedule. It could be a way to earn more money. As rewarding as being a business owner can be, however, it’s not for everyone. Here are some of the risks and rewards of being a business owner, in comparison to being an employee.
When someone is hired as an employee, there is a fair amount of predictability involved. For example, the number of hours worked each week is likely to be relatively established, and an employee will regularly receive a paycheck for a certain amount for completed work. Depending on the employer, an employee might receive benefits such as health insurance, vacation time, and retirement savings plans. And employees may have career training and growth opportunities, when working for a supportive organization. Being an employee means participating in a group effort to accomplish a company’s overall mission.
Running a business is rarely predictable. The owner is ultimately responsible for making sure every aspect of the business is operating at full capacity. This includes everything from ensuring that enough work is coming in to sustain the business, to invoicing and collecting payments from customers or clients, checking that equipment is working properly, making sure rent is being paid, paying taxes, filing business paperwork, and hiring and firing employees. The work never really ends for the business owner, and there are often long hours required to keep the business afloat.
However, along with risk comes the potential for success and rewards. Many successful companies in America are owned or co-owned by first-generation immigrants. Immigrant-owned startups have grown significantly in the past 25 years, consistently outpacing businesses started by U.S.-born owners. Not only are some of these businesses lucrative for the owners, they also create jobs. Business owners can feel good about their role in contributing to the local community and providing opportunities for others.
Someone who is contemplating starting a business should consider their comfort level in taking on the associated responsibilities and risks that go along with ownership. Another aspect to consider is personal happiness, current responsibilities, and overall life goals.