Pros and Cons of starting a business

1.You choose who you work with
2.You choose when you work
3.You choose where you work
4.You (can)pay less tax
5.You(can)make more money
6. You can make the world better
7. You can have/make an impact
8 You can create jobs
9. You can have fun
10. You have ultimate freedom

1.You choose who you work with

I'm sure we've all had the experience, at some times in our life, with working with someone we didn't quite click with. When you are employed you have to be a team player. So, you are asked to work with someone, lets call him Jon, at Sector C, that you don't get on with.

He talks shit. is arrogant and always boasts about stuff he's done. You earn less than him. You have to take his crap. Your blood boils everytime you hear him speaking. Tough luck, as there isn't much you can do to change the matter, barring getting a bigger promotion, to a role with real power and firing the punk!

Business Owner Comparison

You hire and fire who you like! You get to work with who you like, period. Though, I advise you to work with people that will do the job well, if you don't get on with them you can warn them etc Although, that said, you are always in control. You are the man/woman, the buck stops with you, even if you only have 5 employees!

What I say, though, is to be as nice to your employees as you would have liked to have been treated as an employee. That way, they will stay at your company, work hard and produce the results you want. Think it boils down to being friendly and fair*


*same applies with your suppliers/potential suppliers

2.You choose when you work

Some get this perk as an employee. Most don't, or are at least they are tied down by some contract. You must work X amount of hours etc. How well do you work at night? Fancy a later morning, not if your an employee!

Business Owner Comparison

You work when you want. Flexibility is the key. You can work less. You can work more, its up to you. If you pick a business that you know about and enjoy then the 'work' you do won't actually feel like work at all, it'll just be something you do. If this is the case, why not work hard at it, make it a success, and who knows, you might be able to retire early and sit on a beach all day (if that floats your boat)...

3.You choose where you work

As an employee you are, in my own personal experience, told where to work. 'Here's your desk', 'This is where you'll be at' etc etc The real problem I found with that was that I sometimes enjoy working outside or whilst listening to music, or on the train. Some get flexibility, and if I were to be a long term permie (permanent worker) then I'd demand to have very flexible working conditions!

Business Owner Comparison

Where you work is where you want to work. I sometimes take my work outside, talk in the street, work on the train, send emails in the cinemas, whatever works best for you, screw the protocol- you make the protocols!

4.You (can)pay less tax

Employees are taxed at source and when you get paid. You get double taxation, business owners only get taxed once (actually with CGT Tax you can consider that doubly taxed- but that's another entry). Furthermore, business owners get taxed slightly less, if you are clever about it.

Business Owner Comparison

Business owners, if they own their company 100% outright, or close to, can opt to be paid no salary, and just dividends- which are taxed differently. You can also offset regular costs, such as petrol in your car, as a partial or full business expense. The best person to speak to regarding claiming expenses and such is an accountant- which is a luxury you can have if you are a Business owner.

5.You(can)make more money

Employee wages do go up, just very, very, slowly. The exulted pay rise is ridiculous if you think about it. Most companies and employers only allow slow progression. What if you learn quickly? Sometime companies and Employers won't promote you due to age too, whether they admin it or not.. Shame, lets look at the alternative.

Business Owner Comparison

Facebook, the networking site, offers a good example of how anyone can make money. Although the implementation of the idea isn't easy, Mark Zuckerberg founded the site in 2004 and recently sold 1.6% share of Facebook for $246 million to the Computing giant Microsoft, valuing the company in the billions.

The potential to make money in business is great. It is also, in relation to the other pillars of wealth (check older blog entries), one of the least cash intensive(if low start up costs etc) ways of creating wealth. Bottom line is business is not rocket science, good tradesmen can make good money providing a reliable quality service and advertising themselves.

6. You can make the world better

Arguably this is also possible if you are an employee. Teachers, Doctors etc make the world a better place, but usually on a very small scale.


Business Owner Comparison

Your business might completely revolutionize the world. EasyJet spawned a practical new wave of International travel, created jobs* and helped the everyman travel further (good for economics, not great for global warming, once again, another entry).
Not only can you change the world through the operations of your business, but with the money you make from it. Bill Gates and Warren Buffett pooled their collected cash together (bear in mind they are the two richest people in the world, or were the last time I checked) and are using it for the Gates Foundation. The Foundation will use the money to tackle worldwide disease, particularly Malaria and Aids- a perfect example that commerce can help socially, and make real differences in the world outside of business.

* not just within easyjet but the whole international leisure sector has benefited from cheaper flights

7. You can have/make an impact

Employees, as already mentioned, can make an impact. Though that fact's not in question, its how great an impact. Prime ministers yes. Shop workers- maybe not.

Business Owner Comparison

Can alter whole sectors. The competition normally follows trends if one competitor does something well and makes cash. This produces a cycle that can have a huge impact. It happens everyday. Business drives change. Technology, can be said to, but its not really true. True technological advances are sold to the public by big business, not by the government or charities. But what about medicine? Pharmaceuticals is a multi trillion dollar industry. Space Travel? Check Virgin Galactic. Even in the past. How was electricity and light spread? Through Edison's company. Without the companies, the technology rarely gets to market and makes no impact!

For those of you with new products/inventions always check out patents/trademarks as you need to protect your ideas. Check out relevant blog entries.

8 You can create jobs

As your business grows you will need to employ staff. This helps the economy as they can spend money and help other businesses employ staff. Then they spend and the positive business cycle continues... Everyone wins..

9. You can have fun

Freedom to do whatever, whenever, with who you like! Like swimming? Buy a hotel next to a lake and sell the benefits to your customers! Like golf? Create a course and sell golfing holidays? Want to help businesses? Set up as a business consultancy... Almost everything can be turned into a business..

10. You have ultimate freedom

When you are employed you are tied into contracts. Only 20 days off a year, full stop. No complaining, full stop. 40 hour week, full stop.


Business Owner Comparison

Fancy taking a holiday? As a business owner you can take a holiday whenever you want. You can do what you want, when you want. You are the master of your own destiny.


So, in summary. If you can, go for it. Set a company up- if you plan well you should have a higher standard of living, with more benefits. 100 million pound house here we come!