For many business owners, running their own company makes them feel liberated, excited and gives them a profound sense of achievement. However, working for someone else’s company also has its perks, like job security, less financial concerns and stability.
If you’re considering going solo but are unsure if it will create the right lifestyle for you, then we’ve chalked up some pros and cons of owning your own business vs working for someone else’s, to offer a helping hand in making that big decision.
Pros Of Owning Your Own Business
1. Freedom At Work
In a recent survey we carried out involving 500 small business owners, we discovered that 75% of SME owners are happier owning their own business than they were in previous job roles.
We think a huge reason for this is the freedom and independence which comes with running your own company. You call the shots, you decide when you work, how long you work for, what work you take on and what work you decline. This sense of control over everything you do is a huge reason why so many people are choosing to lead a more entrepreneurial lifestyle over working for someone else.
2. Control Over Your Finances
Although finances may be a struggle at first for most small businesses, if you are successful then you need to remember that you will be in control of that money. If you worked for someone else’s company, although you may gain bonuses and commission, you won’t be the one deciding where the money goes.
3. You Can Follow Your Passion And Do Something Which You Love Every Day
Even if you land the job role of your dreams, if it’s for someone else’s company then there will be a set job description in place which may not be filled with everything that you’re passionate about. For example, if you love writing and take on a new writing role, it may also involve administrative or sales jobs. If you own your own business, then you have the option to hire people to do the jobs which you don’t want to do.
From the business survey which we carried out with 500 SMEs, 70% said they would never go back to working for someone else and prefer owning their own company. Which more than likely has a lot to do with them being able to work on what they’re passionate about and what they love.
Pros For Working For Someone Else
1. Job Security
Many people fantasise about running their own company, but when it comes down to it they’re often scared by the idea of not having a secure job in place. It’s true, that when you run your own business you will have much less job security than when you work for someone else’s company, or at least until your business becomes a success and starts to generate a good income. For a lot of people who have families and mortgages, job security is incredibly important and is a huge reason why many people don’t make the jump to setting up their own business.
2. A Clear Work/Life Balance
In a job role within somebody else’s company you will more than likely have much more fixed working times, such as you start at 9 and finish at 5. This will make it a lot easier for you to keep a good work/life balance and to not let your work take over your personal life. It will also give you your weekends and holidays, which many people enjoy and look forward to. When running your own business, especially in the first year or so, you may also find that you don’t have as much free time as you did when working for someone else.
3. Social Interaction
If you were to decide to go freelance or run your own business, then you may find that at first before you start to employ people, you work predominantly alone which can feel isolating for some. Whereas, when you work for an established company generally you will have a team, organised social events and be part of a community, which for many people is a huge bonus about going into work. Working within a team and bouncing ideas off like-minded people can give you a great feeling of job satisfaction, which you may not have if you run your own business.
Cons For Owning Your Own Business
1. Financial Worries
For a lot of people, one of the main concerns of launching and running your own business is the costs behind it. For many people, launching their own company will be their main source of income. So, you need to make sure you plan your finances carefully and set a realistic budget plan. There is a lot of financial help available to you which you may not be aware of, such as loans and grants, so make sure you carry out sufficient research to understand if and what your business is eligible for.
Alycia Yerves, owner of Alycia Yerves Creative, discussed with us how she felt before she launched her company and then how she feels now it’s a success.
‘‘I was very nervous upfront. I believe that a lot of the fear regarding the what ifs and the fear of not knowing certain business setup procedures, kept me from starting my business even sooner than I did. When I finally decided to buckle down and jump in, what surprised me was that a lot of it was actually so much easier than I expected and I realised that much of my fear, stress and worry was completely unnecessary. For example, I had no idea that acquiring a Tax ID would take just a few moments. I was surprised at how quickly I could set up a business checking account.’’
Many of your financial concerns can be quashed by doing some simple research on what help is out there, what you need to do as a business financially and how to pull together a realistic budget plan.
2. Pressure And Stress
It goes without saying, running your company will at times be highly pressurising and stressful, but this also means it will be incredibly satisfying when you gain those wins. If you’re the type of person who thrives from overcoming challenges then you will more than likely flourish as a business owner and, on some level, enjoy the stresses that comes with it.
Plus, it’s worth remembering that you will probably feel stress and pressure when working for somebody else’s company too – all jobs will naturally come with different forms of stresses, especially if they’re high paying roles.
3. Difficulty With Work/Life Balance
When starting your own business, you may find that the boundaries between your home and work life become a little more blurred, but that’s not necessarily a negative thing, and it’s something which can easily be managed.
It’s good to be so passionate about what you do for a living so much that you want to focus on it and ensure that it’s a success, however, it is vital that you still make time for other parts of your life which you love, or you may start to resent your business.
Cons For Working For Someone Else
1. Little Control Over Your Job Role
A con for many business owners when it comes to working for someone else’s business is that you have little control over the finances. For example, if you land a huge deal for someone else’s company you may not reap as many benefits as you would if you ran your own business. Additionally, if you work for someone else’s company then you would rely on the overhead to give you promotions and pay rises, whereas, when you work for yourself you are the boss and decide what you should be taking home money wise.
Although generally, if you work hard and bring in the results, you will gain pay rises when you work for someone’s company, if you run your own business you may find that you take a cut in your income especially for the first couple of years no matter how hard you work.
2. Bad Commute
For many people, some of the best work opportunities are in the city centre which can often mean enduring a long and exhausting commute to and from work. If you work for yourself, you can choose where you work and when, but this could also make it difficult to stay focused or for you to feel like you’re ‘at work’.
3. Working With Clients Or People You Don’t Want To Work With
If you run your own company, then it’s your choice who you work for and who you employ. If you work for someone else’s company, then you more than likely won’t be calling the shots on everyone who’s employed or all the clients which you take on. However, if you gain a higher position in a company then it’s more likely that you will have more of a say over what clients you work with and what staff you hire, plus, there may be opportunities to work from home even when working for someone else’s company.
If you’re keen to learn more about starting a business to see if it’s right for you, then read our recent blog post on ‘The truth about what to expect when starting your own business’.