It seems that in the job vs business debate, there’s one group that’s a lot louder than everyone else.
I’m talking about the group that tells you to just go for it, just walk into your boss’s office, quit on the spot, and walk out into the sun with your head held high. Fist pump, fire emoji.
They tell you that a life of fulfillment is waiting for you on the other side…
This is not one of those posts.
Today, let’s talk about what makes starting an online business so hard by looking at some of the downsides and risks that come with becoming a business owner.
As someone who has successfully transitioned into being self employed, it can be all too skip over how scary it is to say goodbye to steady income and job security. But, at the end of the day, I’d still trade in my traditional job for having my own company any day. Maybe you should, too.
The Risks Of (Self) Employment
People often associate starting a business with taking a financial risk. You go from receiving a fixed monthly salary to … well, nothing definite. You go from financial stability to not knowing how much money you’ll make in a month or where your health insurance will come from. How can anyone say that’s not scary?
Let’s face it: businesses fail, and they fail often. In fact, about 20% of businesses fail in their first year and 70% fail in their first decade. Starting a new business is risky, there’s no doubt about that. Of course, this is an average and that success rate varies wildly from industry to industry.
As a result, steady jobs are seen as the safer option. That was until the start of the pandemic…
I mean, you have a steady workload, regular hours, and earn a fixed salary every month. It certainly sounds safe, doesn’t it? If you look at the data, you’ll be second-guessing.
Statistics suggest that job loss isn’t uncommon, weighs on workers constantly and is something most people feel ill-prepared for.
We’d all like to believe that cases of layoffs are the unicorns, but they’re much more pedestrian than we realize.
About 2 in 5 (40%) of all Americans have been laid off, at least once. Of course, different demographics report different percentages so it’s good to keep in mind that this number is also an average. The point I’m making here is that the odds of it happening to one of us are not as low as we’d like to think.
There is clearly more risk involved with starting a small business but maybe not by as big of a margin as you’d think. Sure, there’s a significant gap between a 1 in 5 that your business fails within a year and a 2 in 5 chance that you’ll get laid off at any point in their career.
But maybe the gap isn’t as wide as you think. The important thing to remember is that a full-time job might not be as steady as you would like to believe.
The Joy And Curse Of Working Hours
Back when I was still in my regular job as a teacher, my commute was about 90 minutes. I had to bike or walk to the station, take the train and finally walk to work.
There were some days when I loved it! Out of the window, I could see the Dutch landscape go by while I was in a comfortable seat, slowly sipping hot coffee.
Commuting wasn’t bad on a summer’s day, but sadly, there were many more days where I absolutely hated it. Especially in winter, where the days are *painfully* short (in Holland we lose 8 hours of daylight in winter).
Leaving the house in the dark and coming back hours after sunset made me feel like the days, weeks and months were passing me by. I spent many a train ride dreaming about being able to set my own hours so I could at least enjoy some sunshine.
Ironically, the absence of fixed working hours is simultaneously seen as one of the biggest perks and as one of the greatest drawbacks of being self-employed. While being in control of when you work may seem like the answer to all your problems, think again.
Without a set work schedule, it’s normal to struggle with:
- When to start work
- When to put work away
- Taking breaks
- Life balance in general
It’s exactly this freedom that poses such an enormous challenge for those who choose to become freelancers or self-employed. After all, deciding when to start is easy but deciding when you’re done for the day is hard.
Self-employment comes with a lot of freedom but it also means that the buck stops with you. There is no marketing or publicity team you can rely on so you have to do all that stuff yourself in addition to a “normal” workload. It’s therefore not surprising that the average self-employed worker works more hours in a given week than any other demographic, especiall in the early stage of running your business.
These long hours make working on achieving a healthy work-life balance one of the biggest challenges that comes with being your own boss.
Once you’ve spent your office hours performing your services, you still have to increase your visibility online and likewise market your business.
Being free to set your own hours seems amazing at first, however, it’s also something that also makes freelancing a huge challenge. Maybe that alarm clock is not so bad after all?
The Absence Of A Job Description
When you choose your job, you (generally) know exactly what you’re getting into. Sure, maybe no one filled you in on your loose-canon boss or all of the extra work that would get dumped on you, but the big bullet points of the role were described before day one.
Working in a job with a very clear job description is one of the big advantages of working in a corporate company. This all changes when you’re self-employed.
As soon as you become self-employed, your job description changes. One of the hardest parts that comes with becoming a freelancer is that, all of the sudden, YOU are the one who’s responsible for *everything.* This also means you’re the one that has to handle stuff you know nothing about.
Learning Curve Or Opportunity For Growth?
Being self-employed comes with a huge learning curve. All of a sudden you can no longer create jobs for other people to fix.
Instead, you’re going to have to learn new skills such as marketing and packaging your services, doing business and maintaining client relations, building your sales page, running a website, becoming your own human resources department, and so much more.
As someone who’s had to learn all of this, I can also tell you that it also presents an amazing opportunity for professional development and growth. And more importantly, it can all be done once you figure out where you can learn.
How To Learn
Luckily, free educational resources have never been more accessible. You can find a lot of what you need to know online, often for free, but that doesn’t mean it won’t still be a surprisingly heavy lift.
Job vs business: work investment
There are countless blogs, guides, and courses online that teach you what you need to know to get you started. It shouldn’t be hard to find an online community where you can meet new people that are working on the same skills as you.
Keep in mind that although a lot of what you need won’t cost you any money, but it will definitely cost time.
An Unavoidable Learning Curve
There’s no skipping the entire learning curve, even if you’re freelancing the exact skills that you did in your 9-5. In fact, skipping the learning curve is the number one reason why so many online businesses fail.
Budding business owners don’t fail because they don’t put in the hours, they fail because they aren’t ready.
If you’re thinking about turning your side hustle into an online business, you really need a plan on how to develop your business and a clear set of goals for growth. In addition, you need to set time aside to learn skills like basic SEO, the fundamentals of content marketing, etc.
So, before you escape your 9-5 job for a business, ask yourself when you want to spend that time.
Do you want to learn as you go and put in the hours as you’re starting your business? Or would you prefer to stay at your current job a little longer?
Job Vs Business: Let’s Talk Money
As we saw earlier, being your own boss is statistically a little riskier than working for one. Yet, lots of people are choosing to strike out on their own so there must be something to it.
Well, one of those somethings is money.
Working as a part of a company means that your employer pays you as little as they can get away with. Let that sink in.
At every step of the way, it’s about minimizing costs in order to maximize profit for the owner. The higher you get on the corporate ladder, the closer you get to sharing some of the profit. It may sound cynical, but it’s just the reality of capitalism.
The Reality Of Capitalism
Think about it: every time a client pays your company a lot of money, where does that money go? Someone is making that money and it’s probably not you. Instead, you have little control over your fixed salary, no matter how much money you bring in.
Remember that thing about setting your work hours? You get to decide when you work and how much you work. While this can cause many problems with life outside of work if you’re not careful, it also gives you some control over your income as all of the sudden you get to keep all the profits.
Don’t get me wrong here, I’m not saying that you can just *choose* to make a million dollars next month! All I’m saying is that your income is no longer capped. If you want more money, you can just put more time in. Being self-employed means you get to decide how much to put in your bank account from the money your successful business makes.
When it comes to making money, being self-employed is clearly the way to go. Virtually across the entire spectrum, freelancers make more money than regular employees. A survey by Upwork also supports the idea that freelancers make as much money if not more than those in a steady job.
The Costs Of Financial Growth
Don’t be blinded by the extra money, though. Sure, you’ll probably make more if you choose to go solo but it comes at a cost. There will likely be a significant increase in stress and workload, and as a result, your work-life balance will suffer.
Job Satisfaction, Is It Worth It?
The moment you decide to leave paid employment is normally filled with ecstasy. Finally, no more pointless meetings that could have been an email, office gossip, or incompetent managers.
For many people, the idea of being rid of their boss alone is enough to bring a smile to their face.
Taking over the business and becoming the person in charge comes with a feeling of purpose. This is the moment when you find yourself at the helm and in full control of the direction you want to go in.
It comes with a feeling of unlimited potential. No longer will you be held back by glass ceilings or income limits. When you’re self-employed, nobody tells you how far you can go.
You get to set insane goals for the year if you want to. You might not achieve all of them but at least nobody is telling you not to try!
Job Satisfaction Among New Entrepreneurs
These feelings aren’t as temporary as you might think. Many surveys have shown that, even years after they left their paid positions, freelancers report high job satisfaction. A recent study even found that this feeling seems to spread beyond employment as freelancers also report higher life satisfaction.
It’s not hard to understand why. The feeling that you have opportunities for advancement and the variety in tasks that a freelancer experiences are both major factors that contribute to job satisfaction.
It is clear that there must be something to being a freelancer. Otherwise, why on earth would people choose the uncertainty and insane work hours over regular employment?
Make Work Revolve Around Life
If being self-employed, and especially transitioning into it, is so hard, why do people still do it? Why do people choose a life of uncertainty, stress and long work hours?
There’s one life-changing thing that you get once you leave your current position. Being self-employed allows you to plan your work around your life and not the other way around.
Stepping out and trying to find your own path means that you choose where you put your feet. It gives you full control over how you want to work, where and, to a certain extent, when.
If you have a specific dream lifestyle in mind, chances are being self-employed makes it easier to pursue it. Maybe you want to travel, live in a van or on a sailboat or just work as much as possible, no matter what your ideal life is, flexibility is probably essential to living it.
My Reasons For Switching Jobs
For me personally, this was the reason why I decided to leave my day job as an ESL teacher. Both Kayla and I wanted to be able to visit our respective families at any moment but being a teacher meant that my ability to travel was limited to school holidays. Becoming location independent was the answer for me.
This is actually really common, and is known as building a “lifestyle business.”
When you get to decide the parameters of your work, it is amazing what you can do. All the things you dream about, all those places you would like to work from, things you want to see, it is all possible. It is all possible, as long as you’re prepared to pay the price of stress and uncertainty.
That doesn’t mean it’s automatically worth the sacrifice, though.
Job Vs Business, Which Is Better?
When it comes to the old job vs business debate, I don’t think there is an option that is just *better.* It really depends on who you are and what you want out of life.
Being part of regular employment isn’t a bad thing by any standard. As long as you like what you do and are able to make ends meet, the (inital) loss of financial security and the long stressful days that come with freelancing are probably not worth it. Yes, you might make more money but is it worth working 60+ hours a week?
Being self-employed comes with freedom but that in itself isn’t worth it. Freedom is a beautiful ideal, but in itself doesn’t mean anything. That is… until you have a plan for what to do with it.
Are you one of those people that dreams of life on a sailboat or in a van? Then the life of a freelancer is for you! Being able to dictate the parameters within which you do your work can be the key to living that dream.
Final Thoughts On Job Vs Business
Job vs business: it remains a difficult question to answer. Just saying one is better than the other seems to be a bit blind to reality.
Transitioning into self-employment is hard and comes with a huge learning curve. You are the one that has to do everything and that includes stuff that you know nothing about.
You work hard and make long hours and you’ll probably experience some really intense and stressful times until your own business takes off.
The upside is that you make more money and get a unique opportunity to take control of your life. If you have a dream life in mind, freelancing can get you there.
Job or business… Are you thinking of escaping the rat race? Let me know in the comments!