Arguably this will be one of the most complex decisions of your entire working life, so it should not be taken lightly. Whilst going it alone can be fraught with risk, it can also bring tremendous benefits to both your professional and personal life. But how will you know if you’re ready to take this step?
Both routes bring their own pros and cons, and you will receive arguments for either side, therefore weighing up your options thoroughly is vital to ensuring that you make the right choice. Below we will take you through some of the advantages and disadvantages to take into consideration when making this life-changing decision.
It goes without saying that there is significantly more financial stability associated with employment. Even if you are working on a temporary contract, you will still have a good idea of your income for the foreseeable future and can manage your finances accordingly.
Holiday pay, sick pay, maternity pay, workplace pension and set working hours; these are just some of a vast list of benefits that you are required by law to receive when in employment. To attract professionals at the top of their game, many businesses will offer further incentives such as performance bonuses, additional training opportunities, healthcare, company cars, laptops, mobile phones and much more.
It’s no secret that running your own business can be rather isolating in the early stages. Working within a company, on the other hand, will allow you to socialise and build those all-important friendships that support you during your working days. In addition to this, working with other team members (as well as third parties) on projects will build your professional network, which will serve you well in your career.
When it comes to working for a company, what the director says, goes. This could subsequently leave you feeling somewhat restricted in your job role. Factors such as your responsibilities, working hours and where you are required to work are in the hands of someone else.
If an employer fails to make job progression a priority, you may feel that your role becomes stagnant. This could be with regards to your responsibilities, your salary, or even lack of opportunity to further your skills.
Job satisfaction is the key to keeping employees motivated. When stuck in a role that you are unhappy with, your satisfaction levels will drop. Without this, you will find productivity levels significantly impacted, not to mention your overall well-being.
Of course, one of the main benefits of becoming a business owner is that you have control over decision making. This means that you have the freedom to pursue the work you want, and carry it out however you wish.
Despite the risk associated with running your own business, the earning potential can be significantly higher than that of a salaried position. Should the business grow, you will be able to take a share of the profits. As a business owner, the harder you work, the more income you will bring in, which is not always the case when it comes to employment.
You will take on a vast array of tasks as a business owner. From HR to marketing, accounting to recruitment, alongside your core business responsibilities. Whilst you may not necessarily look forward to some of these tasks, there will always be new challenges to explore and knowledge to be gained, meaning there will never be a dull day.
Starting any new business will involve a substantial cash injection, one that you risk losing should the business fail. It is important to be realistic in those beginning stages as, more often than not, it will take months (if not years) to make enough money to break even. According to research, 60% of new businesses will go under within 3 years, and 20% will close their doors within just 12 months. These alarming figures are certainly worth considering when weighing up your decision.
Juggling the responsibilities associated with running a business can be highly stressful. From managing employees to bringing in new business, ensuring compliance through to the time pressures of completing projects. It’s no wonder that a study found 83% of small business owners had felt stressed in the past 6 months.
With a day job it is relatively easy to separate your work and home life, but this is not quite so simple for a business owner. Long working hours are commonplace and often necessary to sustain the profitability of the business, eating into your evenings and weekends. Particularly in those first stages, business owners frequently find themselves sacrificing a lot of their time to get the company up and running.
As we have shown, there are positive and negative aspects for both approaches. When it comes to choosing between a day job and starting your own business, making your decision should be based on where you see your career moving, and whether or not you are fully prepared to handle to the responsibilities of becoming a business owner at this stage.
12 Feb 2024
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