A reputable commercial, financial, and economical dictionary — Investopedia — defines an entrepreneur as “an individual who founds and runs a small business rather than working as an employee, assuming all the risks and rewards of the venture.”
As common sense suggests, the greater the risk associated with such an endeavor, the higher the potential reward. So it stands to reason that people who assume such risks are in a better position to reap greater rewards than those who allow others to mitigate risk for them. But the journey is not without hardship. There are both positives and negatives associated with this particular career path.
Pro: Higher education not required
Many people attend college in hopes of earning a higher salary over the course of their careers. While the average four-year or graduate degree-holder will earn more as an employee than their non-degree-holding counterparts, college degrees have little bearing on an entrepreneur’s potential for success. Many successful entrepreneurs do not possess a 4-year degree.
Con: Sole responsibility
In the United States alone, a whopping 24.3 million businesses were considered “nonemployer businesses” in 2014, meaning each businesses’ respective founder didn’t have any additional staff on their payroll. While this may mean that profits can be appropriately funneled between founder and business, it also means that 100% of all work must be completed by the entrepreneur themselves.
Pro: Ultimate decision-making capabilities
Entrepreneurs have complete control over their operations. Rather than spending their days completing tasks assigned by superiors, they are free to analyze needs and assemble their own to-do lists based on the best interests of the company. As an added bonus, entrepreneurs have the potential to earn as much as their business endeavors can afford to release, meaning they are not usually subject to bureaucratic pay scales and review sessions.
Con: Lack of company-provided benefits
Employees are frequently the recipients of benefit packages like health insurance, paid time off, and retirement plan contributions. Conversely, entrepreneurs are unable to take advantage of these benefits without purchasing them directly using out-of-pocket funds. There is no one above them to assist in covering these expenses.
Pro: Create your own schedule
Entrepreneurs possess the freedom to choose how much work they are going to complete, and when they are going to complete it. They do not have to punch in or punch out, time their lunch breaks, or remain seated at their desk until the clock strikes 5:00 PM. Their independent position provides them with a certain level of flexibility.
Con: Stress levels are tremendous
When you’re an entrepreneur your success, and that of the company, ultimately depends on you and you alone. Yes, you have the freedom to leave when you’d like to, but you may not be able to do so with falling behind on work that must be done if your company is going to survive. Bank accounts, bottom lines, and employees all depend on you to work hard and work often in order to ensure their security. The pressure can create extremely stressful working conditions.