A lot of the stories I read these days about young entrepreneurs make it seem like they have some pretty awesome lives. Especially now that we’re in the age of the start-up, every month or so there’s some new kid with an app that’s valued at a billion dollars(re: Snapchat). That seems like a lot of money for only a little bit of work but that experience is pretty atypical compared to most other entrepreneurs. The media tends to glorify a lot of successful individuals and dangle that lifestyle within our reach because people want to believe that could be them. The millionaire entrepreneur profiles we constantly see on TV and radio are popular because they give us hope.
We all like to think that with enough hard work that could be us some day on the other side of the camera. But once you realize that a billion dollar valuation for your dick-pic app probably isn’t in the cards, the true burden of entrepreneurship will start to sink in. It’s not that you don’t stand a chance at success when you’re on your own but it is much more difficult than working a day job for someone else.
I don’t consider myself an expert in either field(day job or entrepreneurship) but I have done both and I’m doing both currently. So I think it’s fair to say I have some experience and knowledge when it comes to comparing entrepreneurship to working a day job.
Downfalls of Entrepreneurship
Let’s be honest, it’s a lot of fun to bitch and complain about going to work and how much you hate your boss. But if it was really that bad, why are so many people doing it? My answer is simple: because the alternative is a lot harder. It’s nice to think about working for yourself, setting your own hours and having the freedom to take vacation whenever you want but those are some tough goals to achieve if you’re doing everything on your own.
Not only will you have to excel at your niche, but you also have to be able to advertise, deal effectively with others, budget, sell and be good at pretty much every other aspect of running a business. At a normal day job, there are people who specialize in things like finance and legal, allowing you to be an expert on your small slice of the pie. And as the company you work for gets bigger, your role becomes more and more specialized. Entrepreneurship and mega corporations are on opposite ends of the spectrum when it comes to tasks and responsibilities.
If you’re an engineer at a large aerospace company, all you need to worry about is your tiny little part. There are hundreds of other people who will interface with customers, worry about sales and so forth. But when you’re on your own, all of that responsibility falls on you. Once your business starts to grow, you’ll have to be able to hire and develop new talent to help you out. There’s always a limit on the amount of success a one person business can have, eventually you’ll have to start managing others.
You Always Get Paid
The largest barrier to entrepreneurship is usually the money. Most businesses require capital(except for online ones like mine) and when you first start out, there’s a very good chance that you won’t make much. I don’t think many people would go work a day job if they knew they weren’t going to get paid for the first year or two but that’s usually what happens in entrepreneurship. I started my first personal finance blog as a hobby and I was very fortunate that it turned into a viable business. But it didn’t happen overnight, it took about a year before I realized, ‘hey, I could actually make some decent money doing this.’
It’s nice to be able to work your own hours like I do for my online activities but it can also lead to laziness. If I’m not motivated to work, then I’m not going to make much money. I do see a nice correlation though between the amount of effort I put in to my business and how much money I make. In my corporate experience, slackers are usually rewarded about the same as the hardest workers. They might not get as big of a raise or as high of a bonus, but the difference in pay is usually negligible while the difference in work/output is monumental.
Where Does Growth Come From?
When you’re working as an entrepreneur, it’s easy to get complacent. You’ve developed your business and it’s making money so why put in any extra work? But in order to be a successful entrepreneur, you always have to be thinking ahead and contemplating your next move. That’s what good businesses do all the time. I work in the aerospace industry so I’ve seen first hand the shift in power among the top companies. Some of the biggest firms from 30 years ago don’t even exist anymore because they did a poor job adapting to a changing marketplace. Now a days, the most successful businesses are the ones that can continually develop and get more efficient, produce better products and develop better employees.
There aren’t many niches that don’t have competition, so as an entrepreneur you’ll always have to be worrying about the latest industry trends and optimizations. You can’t rest on your laurels since if you do, your business might be overtaken by the next guy.
As a day-jobber, there’s just a lot less to worry about. Find a good company, get a good position and slowly work your way up. 99% of you won’t ever make it to the top but you can live a very comfortable life spending below your means, investing wisely, all while putting in just above the bare minimum. The American dream is still alive and well for the middle class but if you strive to go above and beyond it’s very difficult to do that in the corporate world.
I’ve read the statistics and seen the articles; most millionaires are small business owners that started off as one man or one woman entrepreneurs. They employed a lot of the tactics I’ve discussed in order to get to where they are today. If you ever want to reach that stratosphere, I can guarantee it will be a lot harder than working a day job. But the results will also be a lot more rewarding too.
Readers, what do you think about working a day job vs. going out on your own? Have you ever considered leaving your day job to start your own business or is there too much risk? Have you left your day job already and you’re loving it? We’d love to hear from you!
-Harry @ 4HWD