Oct 05, 2017

Is Starting a Business Safer Than Your Job?

Starting your own business is an adventure, and one with no promises. Many Americans have considered entrepreneurship as a means to pay the bills, while others have opted for the security of a bi-weekly paycheck that comes from working for someone else.

Have you ever thought of owning your own business? Or do you picture yourself staying on your current career path for life? What are the risks and rewards of each? Could starting a business be safer than your job?

As with most major life decisions, “it depends” is usually the answer.

Self-employment continues to be an important source of jobs in the United States. In 2015, 10.1 percent of total US employees were self-employed. However, it’s also important to note that those self-employed people had an additional 29.4 million people working for them. Together, they accounted for 44 million jobs, or 30 percent of the national workforce.

As of September 2017, The Bureau of Labor Statistics states the current unemployment rate in the United States is 4.4 percent. Considering 4.3 percent has often been referred to as “full employment,” or close to it, it’s looking better than the 10.2 percent it was in October of 2009.

Starting a business is going to be work. There is a good chance that in the early phase of your business, you will work harder than you did in your traditional job. If that interests you, and you’re willing to get out there, market yourself, and be a self-starter, one of these four paths toward business ownership may be for you.

1- Starting Your Own Business

If you have the natural ability and drive to follow your dream, starting your own business could be for you. You will definitely have the most freedom and potential for growth, satisfaction, and independence with this choice. You also have the unknown and the risks of working in uncharted territory, but there is always some type of lifeboat available. The Small Business Administration has assistance available in most areas to help you navigate the rocky waters of owning your own business.

2- Independently Selling for a Brand

One of the easiest ways to be your own boss is to independently sell for a brand. Many real estate and insurance agents do this. You have the freedom to be your own boss while associating yourself with a brand others are familiar with. The parent company and a network of agents are there to provide support, product development, marketing, encouragement, and so much more.

3- Starting a Freelance or Consulting Business

To start a freelance or consulting business, you don’t need much startup cash to begin. You can focus more on the knowledge and skills you have and may even have the potential to trade your knowledge, brand, and skills to make money.

4- Purchasing a Franchise

You can also be your own boss with the help of an established brand by purchasing a franchise. Being dialed into a specific audience and instant brand recognition are some of the perks, if you can afford to buy into a franchise. Plus, many franchises will help set you up with advertising and more, while also adhering to set requirements.

Check back next week for part two: How to Weigh the Risks of Employment vs. Self-Employment.

About the author

Elizabeth B. Jensen
Elizabeth B. Jensen

Elizabeth B. Jensen is a Utah-based freelance writer. She was a featured writer and editor for the Inside Small Business newsletter for Hewlett-Packard, as well as a marketing and social media writer for Logoworks by HP. Her articles have also been published in numerous travel and visitor guides, and online as the Social Media Specialist for FamilySearch.org.



    • Not sure how this comment applies to anything in this graphic, but OK, I’ll give you one thing: living in peace is good.

  2. we love it here @ salon sales equipment and furniture

  3. Are you going to say anything ???

  4. I found this article to be very informative, and the presentation of the information well balanced. As a person who has set his feet firmly on the road of entrepreneurship, my opinion is that it is more risky to stake your future on the wage/salary employment option. The indicators seem to point to the running down of the system we’ve all grown up in, and been trained to take part in from the start of our lives. Economics may not be the most stimulating and dazzling of studies, but the study of it would probably give a clearer picture of why we’re faced with mounting living costs and surging unemployment.
    So, be encouraged, friends. Learn about the new economy, keep cultivating your set of valuable skills, and let’s keep communicating positively. We’ve learned about the power of cooperation. Now, maybe a little more self-determination.

    • Hasseim, I think you make some great points. I think the bigger picture of this graphic is to take control of your future. Entrepreneurship might not be for everyone, but for many, it’s a better option.

  5. Yes I agree Living in peace is The Key to LIFE.

  6. Thank you, Dan, for posting this insightful infographic. I work with the Campaign for Free Enterprise, a project of the U.S. Chamber of Commerce, and we believe that entrepreneurship fosters vital job creation and product innovation. With unsustainable unemployment rates, more and more Americans are turning to entrepreneurship as a means of paying the bills and Lendio’s infographic is of great value to those looking at their employment prospects. I will be sure to share your article with our fan base.


  7. While the article is focused on the US market, the same applies to the UK with slightly varying figures.

    I have actually managed to be both self-employed and employed, it works great for the fact that I don’t have enough capital to go it alone.

    I also think 3 months worth of capital isn’t enough, most people who go self employed have a lot more than just 3 months worth of capital. I’ve asked various people how they achieved this and most have told me they re-mortgaged their property in order to raise the capital to operate a company.

    One man however, how is my inspiration, did similar to what I am doing, working for a company whilst building up a stable company. I find coming from a poor background and being so young (23 and started the company when I was 21), this option works well as I don’t have to take as many risks and capital will slowly increase.

    Some find living with their parents is a good way to help them start a company as their living expenses are a lot lower, I didn’t have that option for personal reasons so my living expenses are a lot higher – another reason why I choose to be self-employed and employed full time.

    If you wonder how I manage to do both, I work from home the majority of the time and sometimes I pay visits to the office. I deal with most of my clients by e-mail and respond to all e-mails within 2 hours in office times.

    It would be nice to see a diagram showing the 3rd option, as I guess these figures will be margin compared to the other figures.

    • Great insight, Matthew. Thanks for sharing your own story. What exactly is the 3rd option that you’re talking about? Do you mean on buying a non-franchise business?

  8. Nice ideas, but I think some things are still missing when comparing the income of self employed and working for someone else. Self employed person uses the car of his company, fuel is not his, but company’s, phone, internet and many other daily needs are paid by his company, not by himself. That’s not such a small sum in a month.

    • Good points. We actually thought of including more of those points, but that would have made an entirely new graphic in and of itself. This one was more about the risks, and we are planning on doing one that compares the true costs of each. Thanks for stopping by!

  9. Started reading, bookmarked for tommorow when I wake up. Well written piece.

  10. Enjoyed that , It’s great to find a helpful website Such as this. Thank you.

  11. starting a buss. is the way to go
    been in buss from 1999 until now
    you will fail if you listen to foolish people
    follow your dream.its like driving a car
    you go where you need to go,you don;t
    catch the bus and let someone drop you off
    they may not pick you up.smile

  12. Loved the article. I actually finally went out on my own a year ago and I LOVE IT! Although I have to say, having 3 months of safety net would be what I would recommend as a minimum, especially if you have a family. Within the first years time I had no idea what to expect as far as sales (My company does custom web development) When I first started business was booming. However 7 months later it slowed to a disturbing crawl and I have been fighting to keep my head above water for the past month as I have finally eaten through my safety net. But things are starting to look up again. You just have to persevere.

    But even with that, I have to say that starting my own company and no longer having to sit in a box, in a room full of other people in boxes has been a dream come true.

  13. quite touching and informative infographic

  14. Don’t know whether its safer, but its definitely more fun.

    Since founding exploreB2B I’m a much happier person than before.

    • Jonathan, heh, great comment. Maybe that should be the next graphic. “Is starting a business more fun than having a job?”

  15. Even if you fail a few times starting a business, it’s such a worthwhile venture that you’ll be happy if you keep trying new things. With enough persistence, you’ll find success.

  16. I Started out myself after losing my job and been unemployed for 4 months. There was no work around and I was not one of these people who could sit around doing noting claiming off the state. I dont earn as much as I did employed but I am working contributing and it leaves me time to spend with my family and put food on the table

  17. For me, common wisdom isn’t all it’s cracked up to be. I’ve been an artist all my life, but of course I always heard I couldn’t make a living at that, that I would have to have something “to fall back on.” So for years I was a frustrated artist making art when I could, wasting my energy working for other people for less than I was worth. Back around 2004, I knew the economy was headed for trouble; it began to feel to me as if trusting someone else for my sole source of income was putting myself too much at their mercy, which is the way the big corporations like it – you’ll jump through more flaming hoops that way. I started my own part time business doing window splash painting. Then I started going to school to learn sign graphics. I’ve had my business, The Window Goddess Sign Painting and Window Splash for 7 years now. In July of 2010, I was laid off from my full-time job of 14 years. I never missed a day’s work, never filed for unemployment. I just went to work doing the artistic work that I had been doing part-time. When the “real” job got jerked out from under me, I “fell back on” my artistic ability. I think our notions of security are backwards, too – you can create much more security working for yourself than you can working for a job where someone else holds the reins. I have intentionally low overhead. I think the current economy is a breeding ground for entrepreneurs. The corporate mentality says get people to do as much work as possible for as little pay as possible, with no job security. Well, all you have to do is figure out that if you already know how to work long hours for little pay and no security, you might as well be doing it for yourself – that is after all exactly what is required for a new business. I say get out from under the big corporate rock and spend your energy working for yourself – it’s far more rewarding.

    • Love the comments, Kimberly, especially: “If you already know how to work long hours for little pay and no security, you might as well be doing it for yourself.”

  18. I think that starting a business is definitely the way to go. I’ve left my job 2 years ago and pursued my dream to help others find online employment and have been successful at it.

  19. In assessing the financial risk, it would be interesting to see the average amount of money lost by those entrepreneurs that fail. Quite a big gap in the figures. Interesting read nonetheless.

  20. I started my own business as I really struggled to find a job after having my first baby. I kept financial rsik to a minimum and tend to think that even if my business doesn’t quite work out, the skills I’ll have aquired and the contacts I have made could help me be more employable in the future.

  21. While persistence is very important and key to achieving many things in life, you also have to know what you’re doing. There are self-employed folks out there that can be very closed minded, and will run their business into the ground because of pride. You really should stay open minded, seek others opinions, and get help from some successful people who have worked in your field.

  22. A great post and some interesting info. I am in the UK but feel sure the stats would be similar. I have tried franchises and opening highstreet businesses but believe the only way to go is online and start small, build the business before leaving employment.

  23. Great infographic – would be interesting to see the difference in average hours worked/lifestyle/happiness too

  24. Awesome infographic! Looking forward to reading more of your posts!

  25. Starting your own business is an adventure, and one with no promises. The best you can do is be at the right place at the right time with the right product,. That is why I am attending the Funding, Discovery and Monetization Conference, September 12-13 at the San Diego Convention Center (www.coastalshows.com).This event is a MUST ATTEND for leaders from the digital media community, angel and venture funds as well as investment firms looking for opportunities in the social media,applications, platforms and mobile digital market. The AppShow is providing a special discounted rate for incubators/ hatcheries and start-up companies as a way to support their entrepreneurial efforts.

  26. You drive a solid point home with this post that I have believed for quite awhile. I am working toward being self employed now. It finally sunk in with me that I can’t blame anybody else but me for my financial situation, which is gradually improving.

    Robert Kiyosaki’s “Rich Dad, Poor Dad”, and “Cash Flow Quadrant” along with Dave Ramsey’s teachings and radio show have made a huge difference in my mindset.

    Your post proves out the numbers. We have to be smart about becoming self employed, but we all need to strive for it by finding a way to truly become valuable to the marketplace with our own skills.

    We can use skills we have or develop new ones, but we need to build multiple streams of income with our own skills.

    Good post

    Scott Moore

  27. Great analysis Dan. Having your own business does come with many risks, however the rewards are well worth it for those willing to stick it out. I have owned several businesses and I have also been an employee. I can tell you that owning a business for me is much more rewarding in job satisfaction and financially. There have been times when I wanted to throw in the towel especially in 2009-2011 when things got pretty tough, however I plowed ahead and things worked out fine. There are many opportunities for people to start their own business but finding a passion for what you do is critical to success. If you don’t love what you do then you will fail. On the other hand there are very rewarding jobs out there that pay well and often come with less risk. However if you want to make $250K+ good luck, those jobs are few and far between. I guess you can tell that I truly believe in the entrepreneurial spirit. Many thanks for your perspective on this topic.

    All the best!

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