The Pros And Cons Of Being An Entrepreneur Vs An Employee

An entrepreneur is someone who has dreams and aspirations. From the moment they complete the company formation procedures, they are free to put their ideas and strategies into action, without needing anyone’s permission. But they also have to take financial risks. Conversely, an employee receives a regular guaranteed salary, and the risks they face are far less than those of an entrepreneur.  So let us put the spotlight on the pros and cons of being an employee vs an entrepreneur.

Employee Pros

Number 1. Income Security

Unlike entrepreneurs, employees have guaranteed financial security for themselves, their partners, and their children. Moreover, employees have the benefit of national insurance payments, and may have the advantage of other benefits such as a private pension plan and comprehensive private health insurance. And in some cases, the employee and their family, receive extensive medical insurance. On top of these perks, employees may be given a housing allowance for their rent or mortgage costs, particularly if they have had to relocate. Further, employees may be able to have their travel expenses covered. This can be extremely useful if it involves an expensive season ticket for rail travel, which can work out at thousands of pounds per year.


Number 2. Leave Benefits

These benefits are very important for female employees, as they have the security of being paid for pre and post maternity leave. The benefits are also essential for anyone who is recuperating from an accident or illness, as well as for employees who have lost someone close to them, and need to attend to arranging the funeral etc. 

Number 3. Fixed Working Times

When an individual is employed, they are given a work schedule which is, for example, 9am to 5pm, Monday to Friday. Moreover, generally speaking, employees are paid for any overtime hours they put in. Having a fixed timetable enables employees to attend to family matters, such as going home to prepare the evening meal, and spending time with their family or partner, or as a singleton, enjoying doing different activities in the evenings and on weekends.


Number 4.  Less Responsibilities

As a company employee, an individual is given specific responsibilities for a limited number of duties. These are normally listed in their work contract. “The growth of an individual depends upon the excellence proved in performing that task. They need not worry how others are performing for the organization…” Conversely, an entrepreneur’s duties are unlimited, and they do have to be concerned about the way that others are carrying out their duties.

Number 5. Life-Work Balance

When compared to an entrepreneur, an employee can often concentrate more on their private life. As an employee, having a set eight hour workday and no entrepreneurial responsibilities, means that when he or she leaves their place of work, they can immediately switch over to their personal life. This type of life scheduling is very beneficial to health and well-being, and unless there are serious problems at work, allows the employee to de-stress and shut off all thoughts about the company’s business. They do not have to take work home with them, or spend hours on end on the home computer doing work related business such as answering emails or looking at the accounts. They can devote all their time to their family or their own pursuits.

Entrepreneur Pros

Number 1. Career Growth

By opting to become an entrepreneur, you are paving the way to potential success, and the kind of life that comes with it. All the planning and strategies that you have worked on, maybe for years, could now come into fruition. “Every person aspires to become richer and choose a career of their own choice. An entrepreneur can rule the business world, [and their] growth depends on the business one chooses and the market demand.” If the market that the entrepreneur has chosen needs the products or services that are going to be offered, then, with skill, good management and planning, the business has a good chance of being successful. Moreover, if the market demand stays up, then business growth can be achieved. 

Number 2. Being Independent

Enjoying the freedom to make your own choices and decisions about how to operate a business, is all part of the perks of being an entrepreneur. There is no manager or boss to go against your wishes, and any employees under you just follow the directions that you set. Unlike when you are an employee, and cannot do anything about other members of staff who behave badly, or are abusing the company in some way, as an entrepreneur, you can take legal action which can ultimately lead to their dismissal, and then replace them with staff who are going to make your business successful.

Number 3. Choosing Your Own Working Hours

Although it has to be said that entrepreneurs have more responsibilities than employees, at least they have the freedom to be able to work whenever they like. For example, many entrepreneurs who work from home, enjoy starting a little later in the morning, and if their business is with the US, then they can work in the afternoon and evening. They are also free to randomly take days off during the week, and make up for the missed workload over the weekend. In the case of entrepreneurs who have a manned office, as long as there is a manager or supervisor, and everyone can be trusted to carry out their duties, then the company director can spend limited time at the office, and perhaps go in later than the others, and stay later. 


Number 4. The Freedom to Grow Economically

Just as with any professional career, financial growth through entrepreneurship is very much on the agenda: “One can earn as much they can; [and] by making some process changes or business strategy, they can affect the demand for their products and thus increase their sales which will directly affect the revenue of the organization.”  As an entrepreneur receives a major share percentage from the company profits, their potential for financial growth is far higher than it would be for someone working for a company.

Number 5. The Opportunity to Network and Get New Ideas

Entrepreneurs have a wonderful opportunity to network with other entrepreneurs. This is often at international trade shows and conferences which are held both in the UK and abroad. Such exposure can give them the chance to learn about new products and strategies for their business, such as going high tech and adopting blockchain. After networking, they may also have a potentially successful idea, and decide to make a second company registration. For example, they could meet up with an entrepreneur who has a successful business in another country, and want to initiate the same thing in the UK. 

Employee Cons 

Number 1. No Freedom of Expression

An employee does not enjoy the freedom to make their own choices, or in many cases, suggestions. This can be very frustrating, and can lead to stressful situations. 


Number 2. Limited Income

An employee usually has a fixed income. In some cases, there may be a chance for annual or monthly bonuses, but these are not guaranteed. 

Number 3. Limited Capacity to Learn New Skills

Even though employees may want to further their career by learning about certain skills, few have the opportunities that entrepreneurs do. For example, they may not be able to do an online course or attend workshops and lectures, as they cannot take time from work, and because they are often prohibitively expensive.

Number 4. Job Security

These days, few employees enjoy job security, and being made redundant has become commonplace. Moreover, they may have to leave their job at a certain age. Conversely, an entrepreneur has excellent work security, as long as the business is running well; and they can carry on working after retirement age.

Entrepreneurship Cons

Number 1. Stressful Responsibilities

Being an entrepreneur comes with a great deal of responsibility, especially if the company employs other people. He or she needs to be aware of every aspect of the business, and the functions that each employee is responsible for. In the case of start ups, the pressure can be intense, and extremely difficult if the entrepreneur does not have the funds to get professional help.

Number 2. Mandatory Investment

Before forming a company, an entrepreneur has to ensure that they have sufficient funds to get the business off the ground. Further, they: “should be capable enough to clear debts and make profits, otherwise, they could get deep into debt,” if they do not have sufficient financial back-up. 

Number 3. Long Days

Building a business from the ground upwards takes a lot of determination and effort. An entrepreneur has: “to work hard to… capture market demand and be able to deliver quality services.” Making contact with potentially interested companies, and establishing a large client base, is also essential. To that end, in the beginning, an entrepreneur must expect to work long hours, and on some occasions, seven days a week.

Number 4. Financial Instability

Unlike being an employee, there is no guaranteed income as an entrepreneur, and unless the latter has regular funds from another source, financial instability can always be a risk. Moreover, if a company fails to meet its targets, or makes bad investments, then they can put their company in jeopardy.

Leave a Reply

Your email address will not be published. Required fields are marked *