Should you be an employee or entrepreneur? Ask your friends and family and you will get a variety of different answers.
Some people may tell you to play it safe, don’t take risks, secure a good job, save your money, buy a house with a white picket fence and invest in a retirement plan so you can eventually sit on your deck and feed the squirrels when you are 65.
Others will tell you that owning your business is the best way to go. Become an entrepreneur and live the dream.
Guess what? I’m not going to tell you to do either one. Only you can decide what is best for you. I simply want to give you some things to think about before you pick which option will work best for you.
There are many of us that probably give the impression that being an entrepreneur is easy and stress free. Please do not get that impression. It is not always easy; there is stress, but I will say that for me, being an entrepreneur is much more satisfying than working for someone else.
Employee or Entrepreneur: 17 Questions to Ask Yourself Before You Decide Which Option is Best for You
I believe that before you make the decision to become an entrepreneur, or remain an employee, you need to ask yourself these 17 questions. Your answers should determine the route you will take.
Question #1: What would be my primary reason for starting a business?
If you answer that question with:
- I want to get rich
- Because I can work less than I do as an employee
- I can take the weekends off
you may want to rethink starting a business. Those reasons are terrible. Better reasons for starting a business would be:
- To do something I love
- To create something new
- To impact my community and the world
Question #2: Do I have the fortitude to run a business for the long-term?
You have to understand that a business does not become profitable overnight, normally. You have to ask yourself if you can undertake this risk without giving up over adversity. There will be moments of trial and error and you must keep moving forward.
If you have a history of quitting when small issues arise, you may have problems becoming an entrepreneur. It takes mental toughness to start and grow a business.
Question #3: Can I handle criticism?
Be it the product or your business format, there will always be people who offer criticism. If you don’t have a thick batch of skin, you will find yourself living on an emotional roller coaster.
Question #4: Can I handle the risk financially?
I have met people who are considering becoming entrepreneurs and I ask them if they have money saved to meet their needs until they become profitable.
When they tell me that they have $30 to their name and they are sure they can make money with their idea immediately, my first response is: “Keep your job until you do make money.”
Yes, there have been entrepreneurs that have started with nothing and have become highly successful. But we really don’t hear about the plethora of entrepreneurs who started with nothing and lost every asset they had because the business did not work.
Be wise and save some money before quitting your day job. Even better, start a part-time business while you keep your day job.
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Question #5: Do I have a strong support system?
Does your family support the decision? Do you have one or more mentors that you can approach with questions?
If the answer is no to either of these questions, you may really want to consider if you will be a happy entrepreneur.
Question #6: Can I motivate myself or do I need outer motivation?
If you depend on your boss or coworkers to give you motivation, you will be in for a “wake-up” call as an entrepreneur. No one is going to motivate you; you have the motivation responsibility on your own shoulders.
Question #7: Do I believe I can succeed?
If you are considering the entrepreneurial journey, you have probably already answered this question. After all, who in their right mind would take on something they don’t believe they can succeed at?
But if you have not asked yourself this question yet, you need to. Your belief level, and conviction in what you are doing, will have a huge impact on whether or not you ultimately succeed.
Question #8: Am I willing to work long hours as well as weekends?
Starting a business will require your presence well after regular employees are drinking a cold beer and watching Monday Night Football.
To build a successful business, it will require extra hours. The 40 hour work week will be history. For your first couple of years in business, it will look more like an 80 to 100 hour work week.
Question #9: Am I good at managing finances?
I don’t believe you have to answer this with yes, but it is important that you learn wise financing. I am a huge fan of Dave Ramsey. You may want to read some of his books.
I also recommend having an accountant and be sure and save all receipts.
It is very important that you properly manage your finances as an entrepreneur or you will not be very happy.
Question #10: Who would be my competitors?
It is quite important that you know who, and how much competition you have. If you have too much competition, you may find yourself in a never-ending battle. So you will then have to ask yourself, “Is it worth it?”
Question #11: Do I have a backup plan? Can I get my job back if need be?
“You should be an entrepreneur, if and only if, you are completely prepared to fail, and you are at a point in your life where you can afford to fail.” Phil Libin
I look at this question as what could be considered a crutch. Because if you have the advantage of being able to go back to the employer, will you give 110% to your business?
But I do believe it is important to have a plan B and even plan C. If something does not work out with the original plan, you need to be able to move seamlessly to the next plan.
Question #12: Can I make hard decisions?
The life of an entrepreneur is full of decisions; many of those decisions can be quite difficult.
As an employee, the tough decisions might consist of what lipstick to wear, or what tie today?
You could find yourself having to decide whether you will stop using your best friend as a consultant, or firing someone who will be in a bad position if they lose their job.
You must be willing and able to make the hard decisions.
Question #13: Am I physically capable of becoming an entrepreneur?
Most employers offer paid sick leave. I doubt you will get that as an entrepreneur. As a matter of fact, most of the time you have to work while sick.
This is an important aspect to consider… And believe me, it can be difficult to smile, work and vomit all at the same time.
Question #14: Can I handle networking and meeting new people?
If you are introverted and have a hard time meeting new people, the life of an entrepreneur could be difficult.
Now don’t get me wrong… There are many highly successful introverted entrepreneurs. But they have also learned to not allow their introverted personality to get in the way of their business operations.
The key is to ask yourself if you truly will be happy.
Question #15: Can I negotiate?
Negotiating is a never-ending part of the entrepreneur life. You may have to negotiate sales contracts, leases and many other things.
Question #16: Am I creative?
Do you think outside the box? Are you the type of person who would rather make something with the scraps in your garage rather than going to Home Depot and buying it already complete?
If you love creating, I would wager you will be an extremely happy entrepreneur.
Question #17: Can I sell? (Or possibly) Will I sell?
This may just be the most important question you will need to ask yourself. If you immediately say, “I hate selling,” then the odds are very high you will dislike being an entrepreneur. You will have to sell; that is, unless you have a monstrous bankroll and can hire a sales force.
Just to be clear, we’ve all been salespeople our entire lives, probably without realizing it:
- Mom, can I go to (friend’s) house?
- Dad, I have 4 A’s so can I use the car Friday night?
- Will you marry me?
You surely get my point… But believe me, entrepreneurs must be willing and able to sell.
I believe that while it isn’t a bad idea to listen to the advice of people around you… But just listen. You don’t have to follow what they say. I also suggest you look at their background. Is their advice worth heeding?
Be sure to ask yourself all of the above questions and then you will have a much easier decision on whether you will be happier as an employee or as an entrepreneur.
Do you have any questions for me? Would you add any questions to this list? I really hope this helps you make a wise decision. Let us know your thoughts in the comment area below. Thank you and please share this with others who may be considering this same subject.