An entrepreneur is defined as an individual who operates and organizes a business, or multiple opportunities, while taking on a more significant financial risk than normal to do so.
The issue that many of these people face, along with the average leader in today’s society, is also this: they don’t really have a “job.” There is a lot of media hype that you’ll find today about all the good stuff that happens when you decide to pursue what you are passionate about. You can fine memes everywhere today about how evil corporations are, or how awesome it is to be working on your own.
That has driven many people into a world where they are coming up with new definitions of being unemployed instead of creating an earning opportunity for themselves.
“It’s okay that I’m not earning money,” someone might say, “because I’m building my brand and platform presence.”
Being an entrepreneur is not a job, but you can turn it into one when you take smart risks, make real investments, and put sweat equity into your future. That’s not easy to do.
That’s why reviewing these critical pros and cons of being an entrepreneur must happen before you go down this rabbit hole for good.
List of the Pros of Entrepreneurship
1. You have an opportunity to grow in your career.
When you decide to take the plunge to become an entrepreneur, then you are giving yourself the ability to fulfill your aspirations, goals, and passions as an individual. You get to be the boss of your environment. There is no one who interferes with your decisions, the place you wish to work, or how you want to approach situations. Your life gets to be your own, which means you take the risks that fall into your comfort zone. If there is a market demand for your services, then you have the chance to make some money.
2. There is a lot more independence as an entrepreneur.
Because you get to be your own boss when working as an entrepreneur, there is no one there to peer over your shoulder to tell you what to do. You are free to make decisions in your professional or personal life based on the needs you have in that moment. You can decide to work whatever hours you want, whenever you wish to work them, and even change your office location if you wish. This independence extends to any employees you have as you all work together to earn money.
3. You can have flexible working hours as an entrepreneur.
An entrepreneur will choose the working hours that suit their needs the best. Although Gary Vaynerchuk suggests that you must put in 18-hour days when you first get started, some entrepreneurs can get by with an 80-hour per week hustle. Some opportunities may only require a handful of hours at first because there isn’t much work coming in to complete. If you have access to resources and outsourcing, it is possible to find a place where you can sit back and start working as little as possible each day.
4. There is an immediate ability to earn as an entrepreneur.
Although you are taking more risks with your income as an entrepreneur, there are more opportunities to build wealth when you pursue this lifestyle as well. Employees are constrained by a specific salary or hourly rate. It doesn’t matter if they work harder or not – they will still be paid the same. If you are an entrepreneur, then you own the company outright (even if you’re working as a sole proprietor). That means you should be receiving the largest share of the profits which start coming into the company. You can earn as much as you want based on the demand that is available for your products or services.
5. You have opportunities to change or explore.
You are not stuck in a job that you hate when you are working as an entrepreneur. If you see a new opportunity that looks intriguing and there is the potential to earn more money, then you can start to pursue it. Even if that means re-training yourself or your employees or expanding your business, you hold the power to shift gears whenever you wish. That means you are always the creator of your destiny. If you want to start exploring a different horizon, then push forward and do it.
6. It is a chance to discover what makes you tick.
Instead of worrying about what is going on at the office, the world of the entrepreneur looks at the quality of the idea that you’re pursuing. It is an opportunity to embrace your creative center, following wherever your imagination might lead. Instead of trying to build a reputation that can earn you a promotion one day, the focus of your daily tasks is to improve your life by helping others to improve their own in some way. The only obstacles that get in your way are the ones that you allow to be there. If you’ve always wondered what kind of person you were, spending time as an entrepreneur will show you everything you’ve ever wanted to know.
7. It is an opportunity to earn based on your full potential.
There are no limitations to your income when you’re working as an entrepreneur. You will always earn based on the quality of your idea, your ability to market it, and how effective your selling techniques happen to be. The only caps on your wealth are the ones that you allow to be there in the first place. If you feel like you’re not earning enough to make ends meet, then even a side hustle as an entrepreneur can help you to find the supplemental cash that you need – and it could be enough to help you get free of the 9-5 grind every day to do your own thing.
8. You have new opportunities to get involved in your community.
Because you can set your own hours as an entrepreneur, there can be more free time to help you be active in beneficial ways in your community. Your new business can become part of the chamber of commerce if you wish. There are places for you to volunteer, like being a Little League coach or a leader in the Girl Scouts of Scouts BSA. You will find food banks, non-profits, and others in your community who could use a helping hand. One of the best reasons to become an entrepreneur is that you can make a real difference in the lives of others, which allows you to do the same for your own.
9. It is an opportunity to get your ideas out quickly.
If you are working for a traditional employer, then it can be a challenge to get your ideas out first to the market. There are multiple layers of hierarchy that you must navigate in the traditional employment environment. You may not even receive full credit for the results that your creativity generates when you earn a regular paycheck. When you operate as an entrepreneur, this issue goes away completely. You can start solving problems for people proactively, which gives you an opportunity to create products or services that can make you some extra cash.
List of the Cons of Entrepreneurship
1. The leave benefits of an entrepreneur are not the same.
When you work as an employee under a traditional employment contract, then there are leave benefits and holidays for which you may qualify. These are specific times of the year where you can enjoy being paid while not actually being at work. You might receive discretionary sick time to use if you feel under the weather or need a mental health day. Vacation times are paid as well, often taken when you want to get away. Holidays are paid-time off. When you’re working as an entrepreneur, these options are not always available.
2. You do not have a guaranteed income as an entrepreneur.
One of the biggest advantages that employees have when compared to those in the pursuit of entrepreneurism is a guaranteed paycheck. Although there is the threat of being fired or laid off, the income you receive for your work comes in on a regular schedule. That means entrepreneurs are working with lower levels of financial security for themselves and their families. The payment an employee receives often includes a range of financial benefits for their family as well, including health and life insurance.
3. There are no fixed working hours when you’re an entrepreneur.
When you work in a traditional employment setting, then you are given fixed working hours with a guarantee of payment. It is a contract outlined between you and the company that offers compensation at a specific level. If you exceed those hours, then you can earn additional wages, benefits, or opportunities in the future. Some workers receive “hours in lieu” that work like vacation time.
If you are an entrepreneur, then you are working whenever a task must be completed. There are no holidays, vacations, or sick days unless you set your work aside for them – and then it waits for your return. You’re not getting paid (unless you have passive income) unless you work. Justin Zhu, CEO of Iterable, says he works from 11am to 5pm, and then 9pm to 3am, as a way to stay productive.
4. You are the one required to do all of your updates.
If you’re working as an entrepreneur, then there is an excellent chance that you are using technology to make things happen. That’s a lovely tool to use when things are up-to-date. When your firmware needs to update to a different version or the software stops function, then you stop working until the process completes itself. You could find yourself losing 2+ hours out of a day trying to fix your tech problems. Unless you budget time for this on a regular basis, there will be times when you’ll struggle to meet deadlines because something isn’t working right.
5. There are more responsibilities as an entrepreneur.
When you are active in the employment world, then you are given a specific role or assignment to complete. You are only responsible to perform the tasks given to you, which are usually related to the role in which you’ve been hired. There isn’t a need to worry about the work that others are doing. You get paid for that limited scope or tunnel vision. You even receive appraisals based on how well you perform in your role which can often lead to promotions. If you’re an entrepreneur, then you’re responsible for everything all of the time without exception.
6. You must have high levels of self-discipline as an entrepreneur.
Entrepreneurs succeed only when they can create standards for themselves that they adhere to when fulfilling their roles and responsibilities. This trait must extend to their direct reports as well. There must be some level of natural leadership present within the atmosphere of the opportunity under pursuit for there to be any chance of success. If you decide to slack off when there is work to be done, you have that choice – but it could also limit the amount of progress you make on an idea.
7. There are higher levels of stress as an entrepreneur.
You don’t have a guaranteed income as an entrepreneur. There isn’t a boss around that can offer you advice if you’re stuck on a problem. You might not have any colleagues to rely on for support. There are plenty of people in this position who are working solo every day, mired in their home office, struggling to make ends meet. Being your own CEO, managing your marketing, legal work, and accounting leads to high levels of stress. That’s why there are some people who like the idea of following this trend, but then discover that it isn’t right for them.
8. You might need some cash to get started on a new idea.
There are some business opportunities that can be started for next to nothing. If you’re a sole proprietor who offers a standard service that can be sold online, then all you need to do is create a website or join a platform, put up your listing, and then start to market yourself. If you want to start an LLC or corporation, however, then you may need to have a few thousand dollars at-the-ready to begin the investment process. Most entrepreneurs start in debt because they need to cover their start-up costs. If you can’t turn a profit, then you could lose everything when pursuing a dream.
9. There are tax implications to consider.
If you earn money as an entrepreneur, then you become your own employer in the eyes of the tax laws in the United States. That means you are responsible for the employer’s share of the Social Security and Medicare withholding in addition to your own. The 2018 tax year pegged this rate at 15.3%.
These pros and cons of being an entrepreneur will either encourage you to chase after an idea or stick with the life you know. There is no in-between status with this opportunity. You are either willing to take risks or you are not. It gives you a chance to build an independent lifestyle, but it can also cause you to work more hours than you can ever remember. How you define wealth will likely determine if this is a world that is right for you.
Natalie Regoli is our editor-in-chief. The goal of ConnectUs is to publish compelling content that addresses some of the biggest issues the world faces. If you would like to reach out to contact Natalie, then go here to send her a message.