11 Sep Is It Worth Starting a Business?
Sep 11, 2024
When entering the bookstore and standing in front of the business section, I notice that most of the books seem to sell a recipe for business success. At that particular moment, multiple thoughts cross my mind. Should everyone start their own business? What are the advantages and the disadvantages? If one starts a business, what is the final goal of all of this?
Should I Start a Business?
Well, not necessarily. You can find a good job, earn good money, and that could be more than enough for you.
But to continue, we need to answer another question first. What is the difference between being hired and running your own company?
When you are hired, you offer your knowledge or physical labour to another person who is willing to pay for it. This relationship is governed by an employment contract. Here are the pros and cons.
Pros:
- Limited responsibility. You don’t have to worry about the future of the company. Your job is to be smart enough to choose a company that can be stable enough for a long period. Your responsibility is limited to the scope of the tasks you do.
- More personal time. You don’t have to think about your job after the end of the working day.
- Regular payments. You know that every month on a particular day you will get paid.
Cons:
- Vulnerability to economic shocks. Getting your salary every month may seem to you as a stable income but the reality is that if the economic situation changes, you may be fired.
- Fixed salary. Usually, your salary is not negotiable for a long period. Imagine you are Apple and you ask the customer to pay you 500+ USD for the new iPhone model. The customer says, “No, let’s talk about that in 12 months”. They pay you the old price, take the phone, and leave. The situation here is similar.
Overall the pros and the cons of being hired can be boiled down to the following. Being hired gives you the impression that you are safe, which usually keeps your health in good condition.
Now, let’s look at the case when you start a business. The situation there is almost the same. You offer a service or a product to another person who is willing to pay for it. However, the pros and cons are different.
Pros:
- No fixed salary. Depending on the type of your business and how well you play “your cards,” there is a chance of high rewards – high income.
Cons:
- Vulnerability to economic shocks. As a business owner, you are also vulnerable to economic shocks. However, you have a slightly better advantage compared to if you are an employee because you will be the last one who will leave the ship. Employees may be fired for the sake of reducing the costs of the company and ensuring its survival.
- High responsibility. You may feel worried about the future of the company because you have full responsibility for every process, and employee, as well as the future you are headed to.
- No guaranteed payments. You don’t have certainty that you will be paid next month. In my experience, contracts throughout history have proven that they are to be followed but also to be broken. In other words, contracts have almost no value. What matters is the word of the other person.
- Little personal time.
The last three cons are usually paid with your health, your savings, and your absence from home with your family.
Let me summarise. Being hired or running a business has no difference when talking about you giving something to someone who pays for it. However, the pros of the first one are cons of the second one and vice versa. From that perspective, they are quite the opposite.
Therefore, the answer to the question “Should I start a business?” depends on the following. For the likelihood of achieving high income, which otherwise you cannot earn by being hired, are you ready to answer yes to all four questions below?
- Do you have enough savings to run a business?
- Is your family ready to pay the price by not seeing you that often?
- Is your health in good condition?
- Are you able to take responsibility for other people?
If you pass the test above, then you should start a business and try to earn more than you usually would as an employee.