Corporate Job vs Forming Your Own Company

Entrepreneurship or employment: which is the better choice? Actually, seeking a job or forming your own company have both advantages and disadvantages.

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Thinking of quitting your job to start a business? Being an entrepreneur may be the big dream for some but it’s definitely not all roses and sunshine. Forming your own company has both advantages and disadvantages.

So, should you stay as a full-time employee or are you ready to pursue entrepreneurship? Before taking the huge leap, here are some important things to consider. We hope this blog can help you evaluate your options and make a decision as you choose between the two.

The workplace

First off, let’s consider your working environment.

In a corporate job, your daily workplace is generally the same from day to day: the office. You’ll likely be working in a cubicle, along with your colleagues. Depending on your position, you may be asked to attend the occasional out-of-town business trips.

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Entrepreneurs have a very different experience.

Since you are your own boss, you have complete control over your business’ location.

Case in point, you can decide to set up shop in a rented commercial space or even your garage. You may consider working from a coworking space or a coffee shop. It all depends on your current budget, business model, and preference.

If you compare the two, forming your own company allows you greater freedom and is more dynamic. However, it literally comes with a price. You will have to pay for everything – from basic utilities and office supplies, to furniture and equipment.

Daily schedule

Schedule-wise, employees typically report to work from 8 am to 5 pm. This usually means leaving home early to avoid traffic – only to get stuck in rush hour gridlock at the end of the day. You will also need to inform your superiors if you need to take a vacation or sick leave.

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Meanwhile, forming your own company means having flexible hours. You get to create a schedule that works best for you and your startup. If you’re working from home, you don’t even have to travel each day. You can even easily make adjustments if you need to attend special occasions. You won’t have to seek anyone’s permission because you’re the boss.   

The downside here, of course, is that you may have to work longer hours. In fact, studies confirm:

“Entrepreneurs work an average of 52 hours a week, which is 63 percent longer than the average worker.”

Not to mention that client meetings, business travel, and other important engagements may happen after hours and on weekends. You may have to sacrifice personal and family time in some instances.

The workload

As an employee, you are expected to fulfill a particular role based on your skills and qualifications. You may be part of a team but your specific position and responsibilities are also clearly defined. You need to finish projects on time and report progress or completion to your superiors. Plus you work under contract with the organization.

Again, it’s a somewhat different scenario for entrepreneurs.

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Sure, forming your own company likewise requires you to take on a heavy workload but here’s the thing:

You don’t have to do everything on your own.

You can delegate certain tasks to your full-time employees. In addition, you may also tap the services of contractors, freelancers, and other specialists. For example, you can work with a skilled registered agent to handle and process legal paperwork on your behalf. That way, you can focus more on growing your business while avoiding the consequences of non-compliance at the same time.

Most importantly, you are working on something you are passionate about – your company’s vision and mission. In short, you are building your dream which can be way more rewarding.

Income (and other perks of forming your own company)

Obviously, a corporate worker gets a fixed salary each payday. On top of their compensation, they also receive health insurance, paid vacation, performance bonuses, health insurance, retirement benefits, and more. They may also receive promotions and salary raises after several years of working in the company. They enjoy financial stability and peace of mind.

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Meanwhile, there are no steady paychecks if you’re an entrepreneur. Earnings can be unpredictable from month to month – or even zero income, especially if you’re just starting out in the industry. On the other hand, income possibilities are virtually unlimited as long as you play your cards right. As a result, you can potentially make more money than what you can earn as an employee. You are not limited to a monthly wage.

Skills and experience you can gain

Companies usually invest in their employees in terms of training. They want their workers to stay up-to-date with industry trends and best practices. Additionally, you can expect to receive coaching from your team leaders. The skills and experience you gain can be your advantage if you need to look for another job in the future.  

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Needless to say, you will also learn valuable lessons as a startup owner. Forming your own company puts you in a position where you will pick up a lot of things along the way. You will develop leadership, marketing, negotiation, and budgeting skills, among many others.

Risks of forming your own company

Employees face less risks. As long as they perform well, they remain secure in their jobs – unless the company decides to restructure or downsize.

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In comparison, entrepreneurs face risks every single day. You will introduce new products or services, hoping they will capture the attention of your target market. You will make big decisions on your own. Furthermore, you need to manage business finances wisely.  

As Entrepreneur.com warns:

“Some entrepreneurs use debt to start a business. This can be very dangerous especially if you are a first-time entrepreneur. A start-up is inherently very risky, especially if the business model is untested.”

Of course, it’s also only fair to point out that risks can lead to positive results.

Management expert and educator Peter Drucker once put it this way:

“Whenever you see a successful business, someone once made a courageous decision.”

Potential for growth

For the most part, good employees can only hope for career advancement and promotion as they stay with their company. Unfortunately, this does not always happen. Office politics, for example, can hinder you from achieving your career goals.

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Forming your own company may be risky but it also has a tremendous potential for growth. As your business succeeds, you can start to expand and rent bigger offices. You may even open up new shops across your location. Or maybe even across the country or the world. Who knows, right? The possibilities are certainly limitless.

Final thoughts: Entrepreneurship or employment – which is right for you?     

As you’ve probably realized, both employment and entrepreneurship have their own pros and cons. Ultimately, you really have to decide for yourself about which option is best for you. Take time to research and weigh things in your mind. Ask trusted people for their insights.

In any case, we hope you pick the path that would really lead to your happiness and fulfillment in the long run. Best of luck!

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