Opening own business is a cherished dream for millions of people around the world. Thousands achieve it but most do not as much explore possibilities of launching an own venture. Among those who open businesses, several fail because of minor mistakes.
The strangest part of running a business is that people who would otherwise be perfect employees, tend to take their own venture for granted.
Rather than affording the attention and extra effort an enterprise merits, these entrepreneurs falsely believe they are free to work at will for their own business.
In this context, we view some of the big differences between running a small business and having a job.
Differences between Business and Job
Before we explore major differences between a business and a job, it is worth noting that every business is also a job. This means you have to work for your own business the same way you would for an employer.
1. Work Schedules
Generally, every job will come with a fixed daily work schedule. A person has to report for work at a fixed time, gets a few intervals as coffee and meal breaks and departs office at the designated hour. A typical work schedule spans eight hours.
Running a business offers flexibility to choose work hours. This is true for brick-and-mortar and online businesses. Entrepreneurs can select the time they wish to keep the business open on any particular day or fix hours to suit their convenience.
However, this does not mean that entrepreneurs can work at will because it will be detrimental to their business. They also need to enforce a work schedule and adhere to it strictly.
2. Income Levels
Another major difference between running a business and having a job is income levels. Employed people enter into a contract to receive a fixed amount of money for their work.
The money or salary is paid every week or month, depending on the employer. Some jobs also attract daily wages while few pay every fortnight.
In stark contrast, earnings from the business can vary drastically every day, week, month or year. Income from business is dependent upon various factors including economic situation of a country, natural calamities, demand for particular product or service, the purchasing power of the targeted clientele, festivals, seasons and myriad others.
Hence, entrepreneurs need to shield themselves from these vagaries to ensure steady income.
3. Possibilities of Increased Income
Business and job both hold the promise of increased income
However, there is a vast difference. An employed person can leave a job to take another that pays more.
In business, increased income is solely dependent upon extra efforts exerted by the entrepreneur and external conditions listed above. Further, there are no assurances or guarantees that extra efforts will automatically translate into higher profits or more money.
An entrepreneur cannot abandon a running business and venture into another without incurring significant financial losses.
4. Upgrading Skills
Nowadays, a majority of jobs provide adequate opportunities for a person to upgrade existing skills. Every employer strives to ensure that workers remain updated with latest trends and technologies vital for the company’s survival and success.
In stark contrast, upgrading skills required for a business is the sole responsibility of the entrepreneur. Failure to upgrade skills and acquire newer ones can sound the death knell of a venture since other businesses in the field will be able to innovate and score a head-start.
Additionally, businesses have to invest and provide sufficient vistas for employees to keep their skills fine-tuned and in line with current trends and technologies.
Employed people usually get several perquisites, depending upon the size and nature of business of their employer. These perks range from allowance for commuting, housing, and meals to insurance coverage for healthcare, accidents at work and outside, disability and death.
Further, large employers also give paid holidays, sometimes with allowances for travel for the worker and family. Duties of an employee on vacation are performed by other staff.
In business, the entrepreneur has no such benefits. A business person has to pay for commuting, housing, meals, and insurance of all sorts for self and family. If the business has employees, the owner is responsible for the welfare of staff and has to spend on their basic perks.
Traveling on holidays is also at own cost. Further, staying away from business to take a vacation can lead to its neglect and deterioration.
Delegating an employee to take charge in absence of the business person is fine. However, only limited powers can be delegated and key responsibilities like payroll and decision making remain with the entrepreneur.
6. Legal Protection
An employed person enjoys various types of legal protection under labor and employment laws of the country. Hence, an aggrieved employee can file lawsuits against the employer to seek legal redress.
Common lawsuits between employee and employer include non-payment or delayed payment of wages, exposure to potential hazards, non-payment of compensation for injuries sustained at the workplace and unlawful termination of services, among others.
Entrepreneurs are not covered by labor laws. Instead, they can fall victim to labor laws if some unscrupulous employees drag them to court on false or trumped-up charges.
Business persons enjoy legal protection only in specific cases such as loss of investment and liabilities, among others. A dishonest employee can file lawsuits against a business merely to tarnish its image.
There are several more differences between running a business and doing a job. Usually, good workers enjoy some degree of job security. In business, there are no securities: a competitor can upstage a well-established brand anytime by undercutting prices or introducing innovative offerings.
Salaried persons find it easier to get loans for buying a vehicle or house since the amount lent by a bank or financial institution will depend upon the income.
Those in business have to provide multiple documents to prove their venture is profitable, meets legal requirements, is sustainable and has sufficient assets to continue the enterprise before it can be granted a loan.
Doing a business or having a job is fine provided one knows what the two entails. Owning a business often sounds more glamorous and prestigious than saying one is employed.
To open a business, one needs to have sufficient knowledge of the field and adequate information about the market and competitors. In a job, a person only needs to possess skills for the role they are hired to play.