If you are an employee, it is (mostly) easy to understand what you should be doing at work. You have a job description, work on tasks in your job description and do what has been asked of you. But when you are an entrepreneur, you are in charge of your business. You don’t have a boss and must do what works for you. You can see this as a great amount of freedom but it also means you have to do everything from scratch. In this article, we look at the differences between the two and ask if it is worth it to be an entrepreneur.
What is an employee?
An employee applies their knowledge & experience to perform tasks that are defined in a job description. This job description is provided to the employee by an employer, who owns the business, or a manager to whom the employee reports.
As an ongoing or regular worker, the employee receives weekly or monthly compensation for their work completed. This remuneration is defined in an employment contract (either written or verbal).
What is an Independent Contractor?
An independent contractor is someone who engages in an occupation on his or her own account and is not a type of employee. They are often hired for a specific task or project and are paid for the services performed. Independent contractors can also be referred to as freelancers or self-employed. An independent contractor can be paid in a variety of ways including hourly, daily, weekly, or monthly. They are also responsibly for their own tax returns.
What is an entrepreneur?
Entrepreneurs are forward-thinking individuals. They come up with new ideas or try and identify trends and then attempt to capitalised on these potential markets & opportunities. This can be difficult as there are certain risks involved, and it can take a lot of time and money to build something that will have a lasting impression. However, entrepreneurs are willing to take these risks and overcome these challenges in order to create something that people will remember.
Entrepreneurs can be independent contractors or employers. In fact, entrepreneurs can be employees too, but the risk of burning the candle at both ends often ends up in failure.
Over 50% of startups will fail in their first year. The primary reasons for this are lack of market research and a business plan, lack of funding, and lack of adequate business skills and experience. Many businesses overestimate the demand for their products and services, while at the same time underestimating the startup costs and effort needed to establish their business. This can lead to a lack of interest and failure of the business to get off the ground.
How do you get started as an entrepreneur?
If you have the ambition to start something new, it doesn’t have to be an expensive exercise. You can start a business with no more than R1000. In the entrepreneurial world, bigger risks usually provide bigger rewards, but you need to be able to handle the pressure that comes along with such big risks.
Luckily, you don’t have to take it on alone, so make sure you’re subscribed and we’ll give you some tips on how what to keep in mind on your entrepreneurial journey.