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Are you considering being an entrepreneur? Are you considering starting a career? If so, it is good to know the pros and cons of each. The table below will help you learn the difference in roles and mindset between an entrepreneur and an employee.

Take a Job or Make a Job: Entrepreneur vs. Employee



Value wealth over job security

Value job security over wealth

Can go months or years without payment

Receive consistent paycheck

Long hours, especially during start-up

Regular, consistent hours

Potential for very large payoff

Constant but relatively low payment

Build their own assets

Work to build someone else’s asset

Have a higer tolerance for riskDo not like risk

Own the company. Can only be fired by Board of Directors.

Could be fired at any time

Sit behind the desk when interviewing

Sit in front of the desk when interviewing

Are willing to take calculated and educated risks

Adverse to risk

Build systems for benefit of themselves

Build systems for benefit of employers

Pay taxes only on NET income

Pay taxes on total income

Build assets and then use them to purchase other assets

Do not build assets.

Build passive and portfolio income, taxed lowest

Build active income, taxed the highest

Invests from the inside

Invests from the outside

Can start other similar companies

Restricted by non-disclosure and non-compete agreements

Adapt quickly to change

Often resist change

Often have to dedicate yourself fully during start-up stages. Hard to raise a family and start a high-potential venture.

Have time to do other things besides work—such as raise a family or take up hobbies.

Have access through their businesses to much larger credit limits

Much harder to obtain significant credit

Financial security once venture succeeds

Will have to follow strict saving and investment plan to reach financial security by retirement

Can become wealthy at young age

Will not become financially secure while still young

Have a bias toward action

Often have a bias toward passing the bill

Create the systems

Have to deal with the bureaucracies created by intricate systems of the companies they work for

Decides who to hire and who they work with

Have little say over who they work with

Have freedom to control direction of their company

Have little say over the direction of their company

Are able to use all of their skill sets

Use only a small portion of their abilities

Rarely do the same thing two days in a row

Often have repetitive jobs

Work on building assets so they’ll never need a 401(k) or pension

Work on building 401(k) or pension

Make money when they sleep

Make money only when they are working

Hopefully the table above has given you some insight into the different characteristics of entrepreneurs and employees. It is a difficult choice to make for many. Many aspiring entrepreneurs choose to work for someone else for a few years to gain knowledge, contacts, and capital. Others feel that the best way is to start out as an entrepreneur and have the advantage of quite a few years of learning over their peers. Whichever you decide, just make sure that the choice is the one that is right for you, not just the one that everyone wants you to make.

This Entrepreneurship article was written by Ryan P Allis on 2/9/2005

Ryan P. Allis, 20, is the author of Zero to One Million, a guide to building a company to $1 million in sales, and the founder of Ryan is also the CEO of Broadwick Corp., a provider of the permission-based email marketing software and CEO of Virante, Inc., a web marketing and search engine optimization firm. Ryan is an economics major at the University of North Carolina at Chapel Hill, where he is a Blanchard Scholar. [learn more.