Starting a business is often touted as a smart financial decision. Harsh realities surface and working for someone else becomes a cloud with its own silver lining.
Should you start a business or become a company’s employee? Consider the following to make a decision that best fits you, your situation and your mindset.
Understand a Business vs. Skills Mindset
We’re trained for our skills, but we often know little about running a business.
Writers, health professionals like dentists and chiropractors, along with contractors and just about every profession out there are trained on how to construct articles, extract teeth, and lay the foundations for buildings.
Read a profit and loss statement? Enter receipts on a daily or weekly basis? That’s for kids who majored in business math. And those are basic skills needed for running a successful business.
How about knowing the metrics that show whether your business is or isn’t on track to succeed? And then you can go deeper into issues like labor laws, healthcare and retirement plans.
Yes, men and women who are intelligent enough to correct a spinal misalignment, lay electrical wires and create a perfectly styled head of hair can learn the intricacies of running a business.
If you want to spend your time using your skills and let someone else have the headaches of running a business, then you’re better off working as an employee.
Can You Ask for the Money?
You go to work and go into business for the same reason — to earn money so you can live and have a decent quality of life. But can you ask for the money?
If you have difficulty negotiating terms that you find favorable for either short-term or long-term client projects, then you’ll either need to sharpen those negotiating skills or use your specific skills as an employee.
When you run a corporation with employees, or you’re a solo-preneur, you need to have the value of what you offer engrained so deeply in your mind that no one can dissuade you from asking what you’re worth.
Following up on a client who’s overdue isn’t easy, either, but it’s a fact of life in many business operations. Yes, you can hire someone else to do the job for you such as a bookkeeper, but you need to ensure you’ve got the cash flow to fill a position.
Can You Build a Team?
Many small business owners make the mistake of doing everything. Larger businesses have advantages over smaller ones because they slot workers into positions.
The health professional, service provider or retail store owner can’t possibly run a business effectively and handle these various tasks:
- advertising and marketing
- bookkeeping and accounting
- hiring and firing
Those areas are in addition to managing the core competency of a business. Under advertising and marketing there are numerous sub-sets of activity like social media, direct mail and keeping websites up to date.
If you’re going to run a business, think strategically and use your skills where you are suited best and hire others to handle specialty work.
How Strong is Your Vision?
The more strongly you can envision a business that functions well, the greater your chance of succeeding. A vision sustains you during the many challenges that you’ll encounter.
If your vision is fuzzy and you’d like to go through the pain of starting a business just because you hear it’s the road to financial independence, then think again.
If you’re not clear on what your main offering is, your core competency, the reason that clients will do business with you, then assess your skills and find a job. There’s nothing wrong with that approach at all. Your business vision may become more clear in the ensuing months.
How Strong is Your Cash Position?
You may have a killer business vision and be ready to launch a product or service that will bring an entire city to your door. However, you do need money to start and sustain daily operations — whether that’s a franchise or being a writer from your own home office.
If you’re cash position isn’t strong and your credit is weak then become an employee with an eye toward launching a business. Get your finances in order. Make friends with a local banker and Certified Public Accountant.
Understand the city, county and state business permits you need. Know what positions you’ll need others to handle such as content marketing and bookkeeping.
Know Your Why
Once you evaluate carefully, you may be ready to launch a successful business or you may decide not to take certain risks and instead become an employee. One is not better than the other. The choices are different and you need to do what is best for you and your loved ones.
The more clearly you know why you are pursuing a certain path, then the more peace you’ll have personally and the greater your satisfaction professionally.
About the Author
Don Simkovich is a solo-preneur who writes books and blogs for growing businesses and professionals. He also co-authors the action-thriller Tom Stone Detective Stories series.
All photos by Don Simkovich.