Entrepreneurship versus employment: which one suits you best?

Entrepreneurship. Historically seen as the Holy Grail attained by few, but the aspiration of many. Twenty or thirty years ago, you would be hard pressed to find an abundance of successful entrepreneurs or those willing to step outside the safety net of a steady job. That said, most people probably have dreamt of quitting their day jobs to hop aboard the self-employment train. These days, however, an entrepreneurial aspiration is no longer considered a pipe dream but is fully supported, encouraged, and even —dare we say—glorified a bit. In fact, in some societies, you can’t go anywhere without meeting someone with a startup or entrepreneurial side hustle (we’re looking at you, Estonia).


It’s important to remember, though, that starting your own business and working for others require different mentalities and skill sets and each has its own set of pros and cons. Just as employment may not be for everyone, entrepreneurship may not be the right fit for everyone. We’re going to delve into the realities of life as an employee and as an entrepreneur by weighing out the advantages and disadvantages of each. So read on!


The realities of employment can vary greatly depending on the company for which you work. A company can sell a very mundane product or service but have a great company culture, just as an exciting and innovative company could have a toxic culture—people and leadership are very important factors. As such, there always will be exceptions to every case and our examples (don’t @ us). Therefore, we will look at the overarching and general realities of employment through the lens of comparing it to the alternative (entrepreneurship).


Basically, we define employment (for ours and for most purposes) as working for someone else. Being an employee generally means you have a specific role within an organization. Employees generally have the priorities of stability, security, and specialization.

Advantages of employment:


Typically with employment, you will have colleagues and even other people within your team. This means you can bounce ideas off of others, share workloads and responsibilities, complement each other’s skill sets, and generally have people with whom you can socialize.

Work-life balance

When your work for an organization, the hours worked generally are built into your contract (with clauses for overtime, etc.) and agreed upon before being hired. This means if you want to work from nine to 5, you generally can. This can allow for a better balance between your work and your home life, which is an important factor for many people with families.

Less responsibility

As you’re only responsible for certain functions within the organization, you generally won’t need to work around the clock to make sure the entire business is running smoothly. You will only be responsible (and paid) for your assigned tasks and don’t need to worry about how other people across the organization are performing (unless it affects your work). This, of course, depends on the role within the organization (i.e., changes if you manage a giant team, but you still only have to worry about your team).

Steady pay and benefits

With employment, you will agree upon a salary before hired and can count on receiving a steady paycheck at the selected intervals. No job is completely secure, but you generally can count on stability depending on your contract. You also will have some sort of benefits package built into your contract. This could health benefits, benefits for taking leave (maternity, vacation, medical, etc.), and other perks such as an expense account, company car, and in-office perks (food, fitness stipend, etc.).

Development, learning opportunities, and resources

When you’re working in an organization, you generally will have more opportunities to learn from other people. Most often, you will have people working above you from whom you can learn from to further develop your skills, and also other colleagues form whom you can learn cross-functional skills. Not only that, but many organizations will have resources for learning and development and are active in helping their employees further advance their skills and careers. Some may even have programs for tuition reimbursement for pursuing additional schooling (such as an MBA).

Advantages of employment

Disadvantages of employment:


As an employee, you are dependent upon the rules and regulations set up by HR and have to follow the instructions of your boss. Even if you disagree with instructions, management methods, strategies, etc., you have to be careful with how you voice it and don’t have the freedom to make your own decisions. You also have to wait for approval on your ideas and are often stalled by red tape or have to go through multiple channels to have someone sign off on your work.

Limited scope

As stated previously, working for a company generally means you have a specific role or function within that organization. Typically, you are siloed into one category and may have limited options for development or career progression outside of your specific trajectory or industry.

Limited income

As an employee, your income is limited to the agreed-upon salary and is fixed. Even if the company does well that year or if you perform well, your salary will not increase (unless you have prior agreed-upon incentives or a bonus structure). To increase your salary, you have to request a raise, try for a promotion, or change jobs.

Competition and office politics

Although we listed colleagues as an advantage above, they also can be a nightmare depending on the organization (and the people). Working with a lot of other people means you may have to compete with others to get recognition or have your ideas implemented. You generally don’t get to choose your colleagues, and who is hired, so you more often than not have to put up with them regardless of their behavior. An organization will have shifting structures of power and authority, so you will have to learn to navigate the waters of workplace politics. There may be different formulas for getting ahead that aren’t always based on performance and merit, and you often have to carefully nurture relationships with people with power and influence over your career.

Job security

Although a semblance of security and stability was included with the advantages of employment, it can also be a disadvantage depending on certain circumstances. As an employee, you can negotiate a contract but—ultimately— your job is in the hands of your employer. Going from the previous disadvantage, if you’re not inline or willing to play the game of office politics, this could threaten your job security regardless of your performance. The company is also in the hands of someone else, and even if a company is doing well, it could fold at any time (it happens) and be out of your hands.

Disadvantages of employment


Entrepreneurship can mean being self-employed and running solo (perhaps as a freelancer or contractor) or can mean starting/running your own business (with others eventually working for you). It seems ideal and can be extraordinary, but it’s important to understand the realities of entrepreneurship—especially since they’re often glossed over, as entrepreneurship has become quite glorified.

Entrepreneurship can mean being self-employed

Entrepreneurs generally are a “jack of all trades” and have the mindset or ability to wear multiple hats, with a wider expertise that allows them to cover different components of an organization. If they have more specific skills, they generally have a solid network of relationships that will help them to build and grow their business.

Advantages of entrepreneurship:


Entrepreneurs have the freedom and independence to build their company from the ground up and make their own decisions. They don’t have to report to anyone and can choose how to work, where to work, and when to work. They also can choose how they want to develop their company culture and who to hire. Ultimately, it is up to them to pick who they want to add to their team.


With independence comes more flexibility. Entrepreneurs can structure their work schedule and set their own hours. Generally, this often is working 80-hour weeks in the beginning (and if they want to work that much, they are free to do so) but if they have the right resources, network, and ability to delegate set up, they can be flexible with their hours and schedule. If their company is successful and grows, this allows for even more flexibility in the future.

Potential for financial growth

An entrepreneur is not constrained to a salary, and their income isn’t capped, which means their potential for financial growth is much higher than that of an employee. They own their own company and generally have a large share of the profits. Depending on the success of the business and demand for the product or service, they have the potential to earn as much as they wish and could see a huge payoff in the future,

Unlimited scope

As an entrepreneur, your scope isn’t constrained or limited. You can explore all facets of an organization, and can take part in any component (marketing, HR, business development, etc.). You are in charge of your own destiny and can network and develop endless relationships to help your company succeed. If you have new ideas, you are free to explore those and add new components to your business.

Career and personal growth

An entrepreneur must learn things quickly and in a way that is very hands-on. Every decision, every success, and every mistake will fuel growth and experience. Everything is in your hands, and you can choose to develop in a way that works for you without the constraints of a boss. You have the opportunity to be seen as a leader and changemaker in your field or industry, and with that comes the opportunity for learning, connection, and growth.

Advantages of entrepreneurship

Disadvantages of entrepreneurship:

Difficult work-life balance

A.K.A. Stress galore. As an entrepreneur, you have to invest a huge amount of time into starting your own company—for many years; you will find yourself working very long hours. You also don’t have a vacation or paid leave built into a contract from an employer, thus (as the owner of the business) it can be very hard to take time away. This can create an enormous amount of stress—you have to work extremely hard, but need tread lightly so you don’t burn out.

Risk and investment

Starting your own company is very risky, and many entrepreneurs and companies fail. Not only do you face your company failing and the financial risks that go with it, but you also have to deal with the legal risks and liabilities of starting a company. Entrepreneurship generally requires a large investment on your part, without any guarantee that you’ll get any return (i.e., if the business fails). Not only do you (usually) have to invest a lot of your own money, but you have to network and find others who are willing to invest in your company. Coming up with starting capital can be very difficult, as you need to see the big picture and have a strong business plan in place.


Being an entrepreneur can be extremely lonely, especially at first. All decisions are up to you, and you have the burden of all of the stress on your own shoulders. You don’t have colleagues to bounce ideas off of, and the success and future of your company are entirely up to you. On top of that, the long hours can deplete any time you have to socialize or spend time with other people, so it can be a very isolating endeavor.


While being a “jack of all trades” can be enticing to many; it’s important to note that this doesn’t just mean you get to dabble in cool marketing ideas. You have to take care of all components of your business (at least until you have the finances and resources to hire and delegate). This starts with the legal paperwork required for setting up and registering your business and includes administration duties, accounting, dealing with taxes, and so forth. There is a lot of responsibility and behind the scenes, day-to-day work that goes into being an entrepreneur—it’s not just traveling around giving TED talks.

Financial instability

Being an entrepreneur means you don’t have the stability or security of a regular paycheck. In fact, for the first few years, most money goes right back into growing the business, and you won’t see a healthy paycheck. Your finances are entirely dependent on the success and growth of the company—even if the company grows, it could have a slow period which can negatively affect your income.

So which one is right for me?

Ultimately, it depends on your personality, mindset, and priorities. It’s also important to note that you don’t necessarily need to have an inherent skill set or personality to direct you to one route over the other. Even if you think you don’t have the right mindset for entrepreneurship, this can always be learned by studying successful entrepreneurs and adapting some of their key traits. The options for personal and career development are endless, especially in today’s digital age. Do your research and make sure to talk to people in both situations to see both sides of the coin (and remember that often, the grass is always greener on the other side).

Disadvantages of entrepreneurship

Are you an entrepreneur or employee? What are some of the advantages or disadvantages from your experience? Let us know in the comments below.

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