This is a guest post by Usman Haq, the founder of ChargerHarbor.com. It’s a website that provides reviews, tips, and news about all things charging electronics related.
Times are changing and these days there are lots of kids going to college. At the same time, there are others that are choosing not to and starting their own businesses or just taking a gap year or just some time to think if college is right for them.
If anything is certain though, there is a constant feud that is going on between being your own boss versus being someone that goes to college, gets a 9-5 job and works their way up the corporate ladder.
There’s one side that thinks it’s best to go the safe route and get the stable job so you’re able to have more of a secure financial standing. That makes the most sense and that’s why most people would rather work for someone else as it provides job security.
Then the other part is that there is a crowd that thinks working for someone else holds no value as you’re just working to make the people higher than you wealthier. That is quite true as well and when you own your own business you’re working to make yourself money only.
With all that said, let’s go over the main points where both of these logics have their main differences so that it’s easier to understand why one isn’t exactly better than the other. Rather, equal than anything else.
Does a Business Really Make you Rich?
When people think of starting a business, they immediately start jumping to conclusions such as tech startups or a clothing line with their name. And that they’ll be able to make millions of dollar by just starting a business.
Well, that’s far from the truth.
Even though starting a business is a great first step, running a business and growing one is very difficult.
You have to answer questions like, “Who’s your target customer?” or “How will people know about your product?”.
Marketing is a large part of a business and it’s something that costs quite a lot of money to do as well. You could have a perfect product that is ready to be bought by the customer but if no one knows that your product exists, then how are they going to purchase it?
So the result of starting a business is that you have to spend some money or even lots of money before you actually start making money.
This does not mean that by making a single or few sales you’re actually making money.
One of the most important parts of a business is knowing what revenue and expenses are and to be able to calculate profits.
The equation for this is Revenue – Expenses = Profits.
If your Profits are in the negatives, then you have not gained anything from your business as your expenses exceed the amount that you’re making. However, if you profit is positive, then you are making money.
So the thing with starting and running a business is that you really don’t know if you’re going to be rich or not because there are so many variables to account for and the possibility of failure is very high.
Is it possible to get rich as an employee?
Yes, but it depends on what job you’re working.
For example, if you’re working retail as a cashier or a sales floor associate, then you’re not going to build wealth. It doesn’t matter if you work retail for 10 or 20 years because those types of companies simply don’t have that high of a raise.
Now if we’re talking about someone that has a skill that they have developed on their own through freelancing on websites like Upwork, maybe they started a couple of micro business and they’re looking for a job. Or, of course, someone went to college and now has a degree.
Then, both of those types of people can very well qualify for jobs at large corporations where there are plenty of opportunities for advancements.
That’s the key.
An employee that has the opportunity for advancement is in a very good position. A much better one than most business owners because as long as they keep doing their job and doing it well, then they will get a raise or a promotion.
So you’re able to get into the six figure range with a job and yet those that own a business can still be having trouble to get into the 4 figures.
Owning and Running a Business is a Full-Time Job
Having a business and making it grow requires a lot more time and energy than being an employee.
When you’re an employee, once you leave your workplace, whatever happened at work or needs to be done is left at work. You work only when you have to and your times are usually scheduled and you are told what to do.
However, with a business, it’s a constant battle. You can’t leave your business. Otherwise you would go out of business.
If a customer complains about your service or product, or if you find that your marketing strategy isn’t effective, then you’ve got to find a solution. As a result, you also have to wear a few hats at the beginning of your business because you most likely don’t have enough money to hire employees.
Employees are great to hire when you’ve got your business on the right track. But it can also be difficult to manage them because you may want something done a certain way and yet an employee might do it another way.
You’ve got to figure out if what they’re doing is wrong or if your way isn’t the best. Often you should just let the person that has the specialized skill take the wheel on certain parts of the business.
What makes the most sense to do?
It makes sense to start and to start small.
The truth is that this isn’t the movies or TV shows and that you’re not Bill Gates or Mark Zuckerberg. You have to realize your strengths and your weakness. Focus on what you can excel in the most and just go as far as you can with it.
Maybe that all starts with being an employee first because there are skills that you learn on the job that you could transfer over to a business. Actually, one of the most common things that people do is just work on their business on the side and eventually make it a full-time gig.
Yes, I said a business is a full-time thing. But those that make it a part-time thing simply make it more difficult to scale. But at least they have a job and have money coming in.
Or, if you’re young enough and don’t have quite a lot of responsibilities, just start with small businesses and go from there. It could be something as simple as having a neighborhood lawn mowing company, as you learn how to get customers.
One of the best parts of owning a business though is that you go through self-actualization. So you’re able to get an idea of what your limits are.
Some people never find what they’re actually capable of. Some people become self-actualized by being an employee. But you can also test your limits by having your own business.