The Pros and Cons of Entrepreneurship vs Employment

  • By: mvadmin
  • Date: May 1, 2021
  • Time to read: 13 min.

In this blog post, I will be discussing the pros and cons of entrepreneurship vs employment.

What are the advantages and disadvantages of entrepreneurship? Most of it can be summed up by the proverb about with great power comes responsibility. In this case, it is the freedom as an entrepreneur to be the check and balance, but ultimately, you are responsible for the outcome.

“He who dares wins.” (Special Air Service moto)

The word itself is a loanword from French (first appearing in 1723); its meaning “undertakes” a task. Its closest English equivalent from the same era would be “adventurer.”

In the modern age, an entrepreneur as an adventurer has almost merged in the popular imagination, and everybody wants to be an “entrepreneur” exploring new business opportunities and blazing new trails much as explorers of old went out into the world to seek fame and fortune, for better or worse.

On the other hand, being an employee has a less glamorous image, as evidenced in shows like The Office (the British version, of course), comics like Dilbert and countless others over the years.

But is it all that black and white?

Running a small business can be an appealing career option for independent individuals hungry for success – but entrepreneurship is not for everyone. Before you commit to the path of entrepreneurship, you should consider weighing the options between being a business owner and being an employee, as the two paths could not be more different. Before even thinking about forming a new company, you need to understand that entrepreneurship offers a lifestyle characterized by risk and reward on the one hand. On the other hand, being an employee promises a level of security, little risk, and a little reward.

Which path you decide on depends on your personality traits and your lifestyle expectations. The rest of this article will focus on highlighting the pros and cons of being an entrepreneur compared to the pros and cons of being an employee.

Advantages of Being an Employee:

Leave Benefits

Leave benefits or holidays are the times available each year to have some time out and enjoy the paid time when they are not working for their employer.

They may take a holiday or choose to work on their personal relationships, hobbies, exercise, or rest.

These holiday periods can give employees the chance to really take stock of their lives and refresh themselves. This means that when they return to work, they will have more focus and energy to complete their daily tasks with new vigour and satisfaction.

Guaranteed Income

Obviously, a huge advantage of employment vs entrepreneurship is guaranteed income. This fixed amount of money deposited weekly or monthly into bank accounts means financial security for the employee and their family.

Employers pay the employee for their services towards their organization. This pay often includes a range of allowances and benefits, including taxes, insurance, health insurance, provident funds, and company shares.

Sometimes the family of the employee will also be covered by a health plan. Even after the age of retirement, the employee may continue to get private or state income, leaving them and their families secure for the rest of their lives.

Fixed Working Hours

Employees will often agree on fixed working hours that will be guaranteed and outlined in a contract between themselves and the organization that employs them.

Overtime or extra hours available will be worked at the employee’s discretion and will not be compulsory. Hours exceeding that in the contract are called ‘overtime’ and are often remunerated at a rate higher than the standard hours agreed when employment begins.

Sometimes an agreement is set out between an employer and employee to receive lieu time in exchange for working hours that exceed that of their contract. Hours worked in lieu can be saved and exchanged for longer periods of holiday or extra days off work.

Separating life and work

Not everyone wants to be the busy business owner who leaves a family event to handle a crisis at work or the entrepreneur and parent who’s always on the phone or answering emails and travelling all the time to meet with clients.

What’s more, the lack of fixed working hours can drive some people crazy, ruin their sleep, and eventually affect their mental and physical health.

Employees, however, know precisely when and for how long they need to be at work, after which they can leave and forget about anything that happened there. That means they can strive and usually achieve a work and life balance. These are not connected in any way, which is comforting for people who do not want unnecessary stress in their life.

Less Responsibility

In employment, you are often assigned a particular role and are only responsible for performing the tasks that are directly related to that role whilst you are working.

You don’t need to interfere or worry about how other people are performing across the company. You will still receive your payment as long as you complete all the expected and outlined tasks for your individual role.

You will probably be periodically appraised for your role, which will affect your chances of promotion and your success rate within your profession. Appraisals can be a good opportunity to discover your individual strengths and weaknesses.


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

Development, learning opportunities, and resources

When you’re working in an organization, you generally will have more opportunities to learn from other people. You will most often have people working above you from whom you can learn to develop further your skills and other colleagues from 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).

Disadvantages of Being an Employee:


Employees have to follow their employer’s instructions and become dependent on their monthly income to buy things on finance and slip into debt.

Employees with big families have added pressure and can feel a growing dependency on their job as their family grows and expands.

Limited Income

An employee’s income is often limited to their agreed salary or hourly rate, meaning that is capped and can’t be expanded without overtime or a pay rise.

Limited income puts constraints on almost every part of life. Some employees may be incentivized with bonuses etc. However, they are often capped or limited until they change jobs or get a pay rise.

Making someone else rich

There’s not much that can motivate employees as no extra amount of work will make them any richer. In fact, it will only help their bosses. If you are looking to change your financial situation and want to be more independent, then being an employee is not the right path for you.


Job monotony will get to you eventually. Most people hate waking up in the morning, the commute, the office and atmosphere, the tedious projects. If you dedicate your whole life to that, you might end up depressed and lose the desire to achieve more or make a change.

Limited Development Scope

Again, the constraints of employment within a specific industry or role can really minimize an individual’s scope for development.

Employees often have fewer choices for career progression and can only advance within a particular industry.

Job Security

In a competitive world, people are disposable. Jobs are not always guaranteed for life, and employers can often sack employees without a solid reason. Of course, this all depends on how professional the contract of employment is. But job security is never 100% guaranteed. Some companies can appear to be doing well and then fold without apparent reason.

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 many 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.

Depending on Others

As an employee, you must follow instruction from your superiors – annoyingly! And unless you’re very brave or foolish, you don’t go against them. They’ll no doubt ask you to occasionally to complete mundane and seemingly pointless tasks which you’ll have absolutely no choice but to do if you want to continue your career progression.

There’s much less freedom to decide how you work and unless a boss figure approves, you’ll struggle to implement anything new. You’ll also have to be punctual and follow the terms of your contract to the letter.

Advantages of the Entrepreneur:

Growth in Career

As an entrepreneur, you have the ability to fulfil your goals and aspirations as an individual. You will not have a boss in place to interfere or make decisions for you. Your life is your own, and the amount and size of the risks that you take is your choice.

Entrepreneurs all have the opportunity to rule their chosen business sector. Obviously, the market demand for their product or service and the amount of drive and determination harboured by the individual is decided by the market demand.


With no boss in place, the entrepreneur is free to make their own decisions in their personal and professional lives. However, they can work whenever they want, however many hours they want, and sometimes from wherever they want.

They will direct employees and have other people helping them make money and achieve their goals.

However, they will need to be natural leaders and set up standards and roles and responsibilities for their employees. The more they can outsource, the easier their life will become.

Flexible Working Hours

Ultimately, the entrepreneur will choose working hours that suit them. While some entrepreneurs will work 80-hour weeks when they first start, others will have the people and resources in place to sit back and work as little as possible.

The Ability to Earn

The financial growth is much greater than that of an employee constrained to a salary or an hourly rate decided and agreed on at the start of their employment.

They will own their company outright and often have a large share of the business profits.

They have the potential to earn as much as they want to, depending on the demand for their product or services.

Change and Exploration

If an entrepreneur sees a new opportunity to make more money by expanding or re-training, they have the choice to do so.

Entrepreneurs are often out networking and making new business contacts and opportunities. This means they are the creators of their own destiny and can always change and explore new horizons.

Growth in every possible way

If you dedicate your career to being an entrepreneur, you will also be a learner. You will seek personal and spiritual growth in the face of mentors, books, networking events, online courses, life lessons, experience, etc. You will be becoming the best possible version of yourself, which will positively affect your business.

Next comes business growth. The more effort you put into your project, the more opportunities will come your way. You never know when something written by you will go viral online when you’ll receive a great offer by email after someone found out about your work, or will meet your next partner.

Last but not least, you will have the chance to reach all your financial goals, no matter how big they are. You cannot become a millionaire by working for someone else. However, you can do it by building the next best product, creating a brand that gets much attention, becoming an expert in your field and charging a lot per hour of your time, or else.

The best thing is that there are no limitations here. You are creative, productive and determined, ready to work as much as it takes to make your dreams come true. Being an entrepreneur means you can enter more than one market, have different products and services, serve different types of audiences, and thus diversify your income. This will bring you financial stability. So even if one income stream is hurt because of outer factors (such as the economy, a change in people’s desires, a new competitor, or else), it will affect your monthly income just a bit.

The Opportunity to Network and Get New Ideas

Entrepreneurs have a wonderful opportunity to network with other entrepreneurs. This is often at international trade shows and conferences which are held both in the UK and abroad. Such exposure can give them the chance to learn about new products and strategies for their business, such as going high tech and adopting blockchain. After networking, they may also have a potentially successful idea and decide to make a second company registration. For example, they could meet up with an entrepreneur who has a successful business in another country, and want to initiate the same thing in the UK. 

Disadvantages of Entrepreneurship:


With no guaranteed income, no boss for guidance, no colleagues for support… Entrepreneurship can prove a stressful and lonely place. For all the advantages that it offers, it has its pitfalls. The stress of being your own boss, marketing department, legal department, networker, and accountant can prove too much for some people.


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, and your company’s success and future 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 to be a very isolating endeavour.


Starting a business can need a lot of money depending on the type of business you are starting. Some entrepreneurs start in debt because they have had to borrow money to cover their start-up costs.

This investment can have a huge impact on performance and can lead to debt.

The entrepreneur is at the scrutiny of his or her clients at all times. A bad reputation can lead to a loss in earnings and can incur debt on prior investments.

Long Working Hours

Some businesses need to work a lot of hours to get off the ground and be successful.

If you are starting a business with many competitors, sometimes man-hours are the only way of building a solid reputation and customer base.

Working long hours can have a negative impact on your family and social life and also your health.

The work never stops.

As an employee, you are just waiting for the workday to be over so you can relax at home and not even think about anything work-related. Then, you wait for the weekend so you can do something fun.

Entrepreneurs do it differently, however. When they are building a business, they work all the time. Their mind is always trying to fix problems, think of ways to find new clients, or generate new business ideas. They also need to be available for others 24/7.

There’s no one else to blame if something goes wrong. So the entrepreneur might wake up at night to fix a payment issue or dedicate their whole holiday at an exotic destination to building a sales funnel for a new product.

Financial Instability

When starting a business and for the first few years of trading, there may not be much disposable income available. This can affect your individual finance rating and lead to trouble securing mortgages, cars, mobile telephones and other life essentials.

Are you ready to face this level of financial instability?


Going it alone and deciding to become an entrepreneur carries a lot of risks. The risk of failing, the risk of others witnessing your failure. The risk of debt, the risk of hungry competitors, the risk of bankruptcy… It’s not for the light-hearted!

Starting a company is not easy.

Forming a limited company involves paperwork, taking responsibility, doing research, handling finance and legal. Moreover, that is something that will make most people quite stressed out. If you get past it, though, it will be okay.

You will not make it with your first business idea

The sad thing about entrepreneurship is that you need to make plenty of mistakes before getting it right. Your first business or business idea is unlikely to be successful, so don’t expect any money is coming in the first month or even year after starting your own company.

However, even some of the biggest names in business did not succeed from scratch. Elon Musk, for instance, saw much bad feedback with the first version of PayPal, and his first three rocket launches were a failure (which cost him hundreds of millions of dollars).

However, he did not give up. In fact, he says “If things are not failing, you are not innovating enough.” Today, he is the CEO of Tesla and SpaceX and is changing the world in ways other people could not even imagine. If you decide to be an entrepreneur, you will have to accept that failure is a big part of the journey.

Employee or Entrepreneur?

So, what will it be for you? Now that you know the good and bad sides of both career trajectories, you can make a plan, define your priorities and passions in life, figure out what you truly want, and then take action in the right direction.



Photo by Adeolu Eletu on Unsplash

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