What’s better – being an entrepreneur or employee? 

That’s what you’ll learn today.

You’ll learn the biggest differences between the two, pros, cons, and which option works for YOU. 

Want to learn more? Read on.

What is entrepreneurship vs employment?

Let’s start by defining entrepreneurship and employment. 

Employment is when you work for someone else. 

This could be a corporation, government body, or private employer that dictates your schedule, tasks, and salary. 

You could be an hourly or salaried employee, and your company will likely give you benefits.

Entrepreneurship is when you work for yourself. 

That means creating a business that you control, and you pay yourself from the business’ profits. 

Studies show that nearly half of Americans have considered leaving the 9-5 and becoming entrepreneurs. 

Why? Let’s look at the differences next.

How is entrepreneurship different from employment? 

The key ways entrepreneurship is different from employment include:

• Income potential: As an employee, you have a cap on how much you can earn for the skills you have. But as an entrepreneur, you can set your own rates. That means no income ceiling.
• Risks and securities: Entrepreneurship can be risky because if you don’t make sales, you don’t have a salary. Employment offers more job security.
• Ownership and responsibility: Your employer will take a lot of the responsibility for your work, but as an entrepreneur, it’s all on you. You also are liable for any actions of your employees if you hire a team.
• Work-life balance: Employees tend to have a better work-life balance than entrepreneurs. Why? Well, entrepreneurs wear many hats. On the other hand, many employees can clock out on the weekend and not feel the pressure to keep working. 
• Freedom and control: Most employees don’t have much control over their tasks or career progression. However, entrepreneurs can work anywhere, at any time they want with no restrictions.
• Personal development: Entrepreneurship is one of the best ways to develop yourself – you learn so much about yourself. After all, you constantly have to move outside your comfort zone and learn new skills. Employees don’t necessarily get those same opportunities to grow themselves.
• Passion: Many people are passionate about their day jobs, but that number is decreasing. Starting a business gives you the freedom to prioritize your passions.

But how do you ultimately choose which route to take? Here are the pros and cons of both options. 

What are the pros and cons of entrepreneurship? 

Want to know if entrepreneurship is for you? Let’s talk through the pros and cons.

Pros of entrepreneurship 

Here are a few reasons why entrepreneurship is worth it:

You can have full control of your life 

Imagine having complete control of your work life. 

Whether you have a family emergency that needs your attention, or you want to have a picnic with your kids on a Tuesday afternoon, you have the freedom to do that. 

Your earning potential is unlimited

Instead of being trapped by the typical income range in your field, you have unlimited earning potential as an entrepreneur. 

The average entrepreneur earns over $80,000 per year. But with passive income streams and high-ticket offers, you can earn six or even seven-figures per year. 

Watch this video if you want to hear more:

You can have greater freedom and more choices

One of the things my students love the most about being an entrepreneur is the freedom to choose. 

They get to choose where they work, when they work, how they work, and so on. 

That flexibility is unmatched in corporate life.

You can enjoy work-life balance

If you have a stressful corporate job with long hours, listen up. 

Becoming an entrepreneur can give you control of your time so you can create a schedule that works for you. 

That means more time spent with the people you love and doing the things you love outside of work. 

You can define and create an impact in your work

As an employee, your impact is limited. And even if you do make a huge difference in your field, your company will likely take the credit. 

If you want to be known as a thought leader in your field, becoming an entrepreneur is one of the best ways.

Cons of entrepreneurship 

Running your own business comes with plenty of challenges, too. Here are some cons you need to consider:

Job security is not guaranteed 

Employment is considered more “secure” than entrepreneurship because you get a monthly, predictable salary. 

But as an entrepreneur, if you’re unable to work, you don’t get paid, right?

Here’s a surprising truth: A business can offer you even more security than a corporate job if you build systems to bring you consistent profits. 

You will have more responsibilities 

A key part of growing an entrepreneurial mindset is realizing that you are in control. 

And with that, comes more responsibility than you’re probably used to in your corporate job. 

Can that be stressful? Sure. 

But successful entrepreneurs see it as part of their personal development.

Your business may fail 

Look: More than half of new businesses fail in the first year.

And that’s a scary risk to take if your family depends on your income. 

But, there are ways to minimize the risk. 

My method was to build a six-figure business on the side of my 9-5 so that I knew I had consistent scales coming in before I quit my job.

You may have to deal with a lot of admin work

Entrepreneurs need to be super diligent about their admin. 

Think taxes, insurance, contracts, and so on. 

You also have to cover your own salary and “benefits” package from your business profits. 

That means paying for your health insurance out of pocket.

Many entrepreneurs don’t have the same work-life balance as employees

On average, small business owners work twice as much as employees.

And you can understand why. If you’re running everything, the to-do list can be huge.

But it doesn’t need to be this way. I work less than four hours a day. 

How? By building a Freedom Business. This is a business model that uses systems to scale your income and give you your time back. 

Want to hear more? This video will help:

What are the pros and cons of employment? 

So those are the reasons why entrepreneurship could be a good fit. Now let’s look at employment. 

Pros of employment 

The pros of employment are:

Your job is pretty secure

Being in a 9-5 gives you a monthly fixed income and a work contract which you don’t have as an entrepreneur. 

If you start your own business, you have to create your own security. 

You can just clock in and clock out

There’s some truth to the stereotype of entrepreneurs working on their businesses through their nights and weekends. I definitely went through that phase early on.

Employees don’t have to worry about that. Fixed work hours mean you can clock out and switch off. 

You may have a more straightforward career path

If you want a clear path to the top of your field, employment is great. 

You can climb the corporate ladder. Creating your own path as an entrepreneur can feel less straightforward.

You don’t have to worry about health insurance or benefits 

One of the main reasons people stay in their corporate jobs is the benefits. 

Health insurance, wardrobe allowance, bonuses, and education funds all sweeten the deal.

Entrepreneurs have to create their own benefits which is tough in the beginning. 

Cons of employment 

Now, here are the cons:

You may lose your job one day or get fired 

Listen, 55% of Americans worry about their job security, and with good reason. With the recent season of layoffs across major companies, it can feel shaky. 

You can’t get fired from your own business.

You have to follow someone else’s rules all the time 

I asked one of my students why they decided to become an entrepreneur. 

They said: 

“I want to wake up every morning without having to fit myself, personality, and gifts into a tiny box that a corporation monitors and approves.”

Following company guidelines can be restricting. 

Entrepreneurship gives you the freedom to show up however you want.

You have less work flexibility

Your company controls where you work and when.

They also control when you can take vacation and for how long. 

Imagine having no restrictions on your time. That’s what being an entrepreneur can offer you. 

Your income is tied to your job

Having a 9-5 can feel more secure because of the steady paycheck. 

But if your employer has any financial struggles, you could be laid off and lose that income. 

You have to navigate office politics

“Office politics” are those unwritten rules for navigating the corporate world. And if you’re an introvert or a minority, it can be more challenging to climb the corporate ladder.

Next steps

And there you have it! The truth about entrepreneurship vs employment.

But here’s the thing: You can do both. 

By launching an online side business, you can earn extra income doing something you’re passionate about. Or you can scale your business to help you leave your 9-5 for good.

I’ve helped thousands of people start their businesses on the side of their day jobs. 

But there are a few key steps you need to follow to become a successful entrepreneur.

I’ll show you exactly what they are in this free blueprint:

Read more:

The Top Characteristics of Successful Entrepreneurs

How to Think Like an Entrepreneur

Top Habits of Successful Entrepreneurs