How to Start a Business

Why is it that you have more potential to make money as an entrepreneur or small business owner than you do working for the man?  Here are my top 5 reasons.

1. You Obtain All Money from a Project

Chris Hanks, faculty member of The Entrepreneur School, often cites the stat that says you must generate 3 times as much money as you make at a company.  If your salary is $100k a year, you must be bringing in $300k of business. This pays for your health insurance, supplies, and profit for the company.  But in working for yourself, if you generate $300k of business, you keep $300k.  Granted you will have marketing costs, supplies, and other overhead, but you keep more of the money earned as an entrepreneur.

2. You Control Your Workload

When I worked for a company, I had a set list of tasks to perform in any given week.  If I did those tasks in 2 days, I would make the same amount of money I did if I stretched those tasks out over 5 days.  But if I am working for myself, if I complete my tasks in 2 days, I get paid for those tasks and can focus on new business for the other 3 days.  Additionally, I can work extra hours and make more money bringing in new business.

3. You Have Ownership

If you work for yourself, you likely own your company.  If you run a company that gets purchased by a bigger company along the way, you get the money.  It’s unlikely you would own a part of a company that employed you unless you were in the upper executive levels of the firm.  In that case, if that company got purchased, not only would you not see any proceeds, but you’d likely be fired as well.

4. You Have Motivation

In working for a company, you are spending your time promoting that brand.  In working for yourself, you are building your own brand or your own name.  I regularly see people work harder and smarter when their reputation is in question as opposed to working for the reputation of their boss or a brand.

5. You don’t have Meetings

How much time is wasted in Corporate America in pointless meetings?  Excessive meetings don’t generate income.  As an entrepreneur, you will still have meetings in order to garner new business, network, or pitch your idea to potential investors.  But those meetings are related to your bottom line.  Many corporate meetings have the bottom line as a goal, but waste precious work time in bickering.

Submit a comment to this blog if you agree and have other reasons or if you disagree with the top 5 list above.

Related posts:

1. The Salary of an Entrepreneur
2. Top 10 Reasons to Start a Business in a Recession
3. The “Salary” of an Entrepreneur
4. Raise Your Own Money!
5. Time Management