Maybe you’re wondering what it would be like to set out on your own and start a business. Do you have what it takes? Is your business idea marketable? Is stepping out like this worth the risk? These are tough questions. As an employee, you are earning a living without the weight of responsibility a business owner carries. As a business owner, you have the freedom and the potential to build wealth that your employees can only dream of. The decision is yours: should you get a job or start a business?

Of course, as an employee, you are the hired help just making a living, while the company is making exponentially more money from your hard work. But as a business owner, there is a lot on your plate. You are managing ups and downs in the economy. Your good employees never turn off those Indeed notifications as they keep one eye open for a better opportunity. Your bad-fit employees suck your time and energy before you part ways with them. And that’s just the tip of the iceberg. 

Risks and Rewards

There are risks and rewards on both paths. Understanding your own strengths and your capacity for risk-taking is part of the calculation when it comes to choosing the right path for you.

The decision does not have to be a once and done proposition. At different points in your life, you might find your prospects as an employee to be less advantageous. That can play out in several ways: you may take your employment as far as the company, your training and education can take you. You may find your skills and interests starting to diverge away from the job you currently hold.

But for this moment in time, what is the best path for you, employee or business owner? The first set of questions to ask yourself revolve around mindset. Where is your comfort zone? You can obviously work on making changes in your mindset to better meet challenges, but overall, where are you the most comfortable? Where are your gifts and experiences put to the best use?

Employee Mindset

With an employee mindset, the big picture is somebody else’s problem. 

As an employee, you are focused on a mission that may resonate with you but belongs to someone else. If you are happy to work under a corporate set of guiding principles and purpose, that’s great. If your preference is to have a set set of tasks and KPIs to measure your work against, that is an employee mindset. You’re there to do a job, do it well, reap the rewards, and not have the weight of the company on your shoulders when you are not working.

Owner Mindset

An owner mindset is one of taking on challenges, facing risk, and finding a way through. If you are impatient with inefficiencies in your current job or have an idea or concept for something new that you just can’t get out of your head, that’s an owner mindset. 

Starting your business is hard work that takes a lot of self-motivation. In the beginning, you will more than likely be putting more money into the business than you are getting out, but you know you want to persevere and grow this idea into a thriving business. If all of that excites you, that’s the owner mindset. If all of that makes you want to run in the other direction, stay on that employee path.

Pros and Cons of Employee Life


  • Steady Income

No job has an ironclad guarantee, but you get a steady paycheck in exchange for your steady work when you are employed. There’s nothing wrong with seeking that kind of peace of mind. 

  • Benefits

Being a salaried employee, especially of companies with more than a handful of employees, means having access to benefits like assistance with health insurance, a 401(k), vacation, and sick leave. 

  • Less Responsibility

When you are an employee, you may work long hours, but you are not responsible for the livelihood of others in the way a business owner is. 

You are more likely to have standard hours of work, though, with the pandemic and the general increase of remote work, your work hours might be more flexible than they were even five years ago. 


  • Limitations on Income

As an employee, you agree to a wage in exchange for your work. Whatever the going rate is for your work, that’s your salary. If you feel like you deserve more, asking for a raise is a scary proposition. You don’t stand to gain financially from a thriving business in the same way the owner does.

  • No Guarantees

There is no such thing as total job security. Things can be rolling along smoothly, and a global pandemic stops hospitality and other industries in their tracks. Or another kind of economic downturn comes along. Automation is changing the present and future of work, so the jobs that exist today might not exist a few years from now. 

  • Career Development Challenges

Some workplaces are great at offering personal and career development opportunities. Others can’t be bothered. Prioritizing and putting money into talent development may not be part of the company culture. Either way, developing a career path can be challenging as an employee if you don’t put a lot of your own thought and energy into it. Many employers limit continuing education and development opportunities.

Pros and Cons of Starting and Owning a Business


  • Growth Potential 

This business is yours and you can grow it as big as your ideas, energy, and the market will take you. As your business grows, you should be able to make your own schedule, and trust that the business will run smoothly and you’ll be earning income whether you are there or not. 

  • Wealth-Building Potential

A Fundera study showed that small business owners often do not pull in a huge salary from the business itself. That may surprise you, but it’s true.

But with a business, you can build wealth in many ways. If you own the building, you can become your own landlord and pass the rent through a second company. You can lease space and charge rent. 

  • Love What You Do 

That same Fundera study found that, while the actual paycheck they give themselves might not always be huge, fully 92% of respondents did not regret starting a business. Business owners enjoy the rewards of flexibility and contributing to the wider economy (Small businesses created 64% of net new jobs in the U.S. between 1993 and 2011). Those factors build pride and keep the entrepreneurial spirit alive. 


  • No Guarantees

When you are just starting a business, income may be sporadic. You will probably work crazy hours and might not be drawing as much from the business in those early days (years) that you did as an employee. 

Businesses fail all the time. I have some experience in that department. I am happily running a small business now, but I have learned the hard way how things can go south. My wife and I ran an outdoor recreation brick-and-mortar shop at the very beginning of the Great Recession. We ran into bad timing and a business plan that was not strong enough. The point is, there are no guarantees. 

Would You Rather Be Part of a Great Workplace or Run a Great Workplace?

Even if you work in a company that rewards you for innovation, allows you to set goals that are connected to larger corporate goals, allows you a lot of independence, and offers you a share in profits during solid times,  you are still working for someone else’s dream. If you are happy with that tradeoff, being an employee in a great company is a solid path for you.

But if you’d rather take your dreams and make them a reality, build a team, contribute to the wellbeing of your community, you might be cut out to start that business. 

It Might Not Have to be Either/Or

You may need to hold a job and start a business to build wealth. The truth is, for most of us, a paycheck and a 401(k) off in the distance somewhere are not going to get us where we want to go. And it’s not how the wealthy behave. People build and retain wealth by having multiple sources of income. 

If you are like me, the thought of running a business is pretty scary. If you feel that way, maybe don’t think of it as a business. “I own a few rental properties” isn’t hard to say. For tax purposes, you’ll probably do that through an LLC or S Corp. It’s technically a business, but that doesn’t mean you are leaving your day job, the benefits, and those 401(k) contributions. But you don’t really have to choose one or the other. There are ways to build wealth and grow a small business. Some popular options include owning real estate, affiliate marketing, or selling bespoke products online. None of those mean throwing away the security of being an employee.

Finding Your Own Path

The Robert Kiyosakis of the world will tell you to always get yourself into business ownership and investment, rather than being an employee or merely self-employed. But maybe you are not wired to just jump in and take the risks of starting a business. Walking away from your day job is great if you have the skills and determination to build a business and an investment portfolio. It isn’t the right choice for everyone.

But an approach that builds a plan over time to take advantage of the relative stability of your status as an employee, along with dipping a toe into, say, the short or long-term rental market, might be a great approach to building wealth beyond the 401(k). Plus you are making money you can use now. That 401(k) can’t be used for much (without a big penalty) until you reach age 59.5.

If you have that entrepreneurial bug, but don’t want to ditch that day job just yet, Nick Gallo offers some step-by-step instructions in this excellent article. He has some great advice if you are thinking about launching a business that you intend to replace your current job. 

But there are plenty of great reasons to remain an employee, enjoy that stability, reap the rewards, and let someone else manage the headaches of ownership.

Which Should It Be?

If you crave stability and want the buck to stop somewhere else, remaining an employee is the best bet. There are some ways you could, and probably should, start thinking about building wealth beyond the paycheck and the 401(k). But there is a lot to be said for having that day job be the bedrock of your financial plan.

On the other hand, if you are feeling hemmed in by your job description, have a passion, or a business idea you’ve been longing to test out, it may be time to start your own business. If you feel like you have the mindset and the passion to go for it, develop a solid plan, seek the guidance of wise mentors, and get started!

Inline Feedbacks
View all comments