Make Some Money

is it better to be the employee or the business owner?

this is a question a lot of people often ask themselves as the toy with the idea of leaving work to setup their own business. usually in the same field that they were in but working for themselves as consultants or maybe being their own boss and employing other people too.

note. these are not my employees just a random image

Being the Employee

they generally work 9-5 only and get paid reasonably well to do a job they neither love or hate.
they live comfortably in either rented accommodation or they have just made their way up the property ladder.
they usually get about 30 days paid holiday per year.
unless they are quite prudent with their savings the money they get every month as salary usually gets spent as bills, rent and other outgoings. they usually live for the next pay cheque.
in most UK cities you will notice when most people go out for a few drinks is at the end of the month when they have been paid.

note. these may not be business owners. but that guy can sure jump high.

Being the Business Owner

they usually work many more hours sometimes as many as 12 or more as they establish their business.
they usually own their own home with a mortgage.
they usually find it hard to take any holidays in the early stages of their business for fear of losing customers and also usually payment only comes in when they work.
good business owners will put profits made back into the business after allowing for living expenses and some luxuries.

it seems to be easier to be the employee as you have far less responsibilities, only have to work your set hours and can take your 30 days paid holidays without having to worry about work. would you be silly to want to start your own business?

well lets fast forward 5 years and take another look at the employee and the business owner.

the Employee

they may have got promoted or moved to a different company to get a decent pay rise, but they now earn significantly more then before.
with higher earning they will have taken on more liabilities such as a bigger mortgage for the bigger house and a bigger faster car.
they still get about 30 paid holidays per year and still work 9-5
they still live for the next pay cheque

the Business Owner

the business is now quite established and they may have a couple of employees to help run the business. perseverance has paid off. they now work a lot less hours, maybe only a few days per week and spend a lot more time playing golf.
they can take holidays when they want now and probably have about 3 per year.
they can now take a healthy amount of the profit from the business and enjoy it and spend on the things they like.
they do not have to be as involved in their business and much of their income is passive as they do not have to work to get it.

ok so this is a overly simplified look at things as businesses vary greatly and not all business’s succeed, but then not all employment lasts either.
but given the potential rewards of becoming a business owner it is easy to see why so many people prefer to work for themselves, then seek regular employment.