Entrepreneurship vs. Employment: Examining the Risk
By Kathy-Ann Fletcher
On examining the reasons why there is some hesitancy to become entrepreneurs or why it sometimes does not even cross our minds to consider being self-employed, I realise that the majority of the blame should be placed firmly on the shoulders of socialisation.
Traditionally, we associate entrepreneurship with risk and salaried employment with security and a nice little nest egg for our retirement. We settle for an average lifestyle because we are afraid to take the risks linked to entrepreneurship and self-employment.
A student of entrepreneur Warren Tracy is credited as saying, "Entrepreneurship is living a few years of your life like most people won't, so that you can spend the rest of your life like most people can't”. Many won't take the risk associated with entrepreneurship, that's why many won't live the life that being a successful entrepreneur can afford.
For many may see the business opportunity in the market but not many will calculate the risk and take advantage of all opportunities before them. They will settle for life in their comfort zone, the known above the unknown or at least how we perceive it.
I believe that we may have somewhat misguided perception. We may be overestimating the risk of being self-employed while underestimating the danger of being employed for someone else whether in public or private sector.
I am not advocating taking uncalculated risks. I am advising that we should not be afraid once we have examined the possibilities from all angles considering the risks and the benefits to take that first determined step into the world of self-employment.
Money - Recently, I had a conversation with a friend of mine who owns her own business. While she was quite enthusiastic about her business and the big plans she had in store, she did have one concern. She stated that sometimes she wished that she was still employed elsewhere because that way she would get a certain salary at the end of the pay cycle. However, she persists ahead in her quest at this early stage because she knows that before her lies awesome potential to make money, more so than would lie with her previous employment.
Failure – new businesses especially small businesses are susceptible to failure. Even one wrong decision can cause the business to fail. However, there are businesses that succeed and grow to become great revenue generators for the entrepreneurs, employees and even the country's economy.
Market conditions – The new company may not have the capacity to survive sudden changes in the economic atmosphere. It works both ways; any negative conditions can weaken the company. Additionally, any new opportunities can cause problems if the company is not equipped to handle them. However, with the correct amount of planning ahead of time and with a certain level of flexibility, new companies can overcome this obstacle.
Family issues – An entrepreneur at least in the early stages, spends long hours working to establish the business. This may present personal and family issues. When I was younger my mother missed graduations and other family events due to being at her company. This caused some tension within the family. Entrepreneurs have to prepare for such tensions and handle them appropriately with their families.
Salaried employment has its own risks
Considering the risks of entrepreneurship without considering the rewards can cause one to run straight to the seemingly secure world of employment. However, employment for others carries its own risks as well.
Lack of control – You do not have final control over the company. The creative path of the company may be out of your control. Even if you have the right to make suggestions, you don’t have the final say. Therefore, you may have to sit and watch the company take routes that you are not comfortable with.
Financial insecurity – You have a fixed salary. This means there is not much potential for your salary to increase beyond your agreed salary. Also, if your bosses are squandering the finances of the company, it may affect their ability to pay you and you just may get laid off. Therefore, the financial security that we saw in being employed for others is not that secure.
Permission – You have to ask permission from your boss to work for other players while still in his or her employ.
Life is full of risks regardless of the route you take to achieve your ambitions. Therefore, don’t discount entrepreneurship due only to the risks associated because you will be robbing yourself of its rewards.
There is the greater potential for profit, the ability to control the creative path of your company and the reward of following your dreams on your terms to be gained by stepping into the life of an entrepreneur. By becoming an entrepreneur you can create the environment whereby you can fully utilize your talents, skills, knowledge, and creativity.
Once you take the time to realise that while there are risks associated with entrepreneurship, the rewards justify the investment you will make financially and emotionally in establishing your own company. Therefore, don’t be afraid to take that calculated risk towards financial and creative control of your livelihood.
I have found my mantra:
"Entrepreneurship is living a few years of your life like most people won't, so that you can spend the rest of your life like most people can't”.
Good Luck to all my fellow entrepreneurs out there.
Natalie Hunte
General Manager
CANOPY Solutions
Marketing Research
Much success to you.
Kathy-Ann Fletcher
Note on the website, can the font for the comments be made bigger, it was a struggle for me to read them. Thanks!