The beginning stages of starting your own business is tough. It is both time consuming and financially difficult.
It is easy for business owners in the very beginning stages of starting a business to get discouraged and consider re-entering the workforce, since chances are that you are bringing in little revenue.
While this may seem tempting, it is also important to re-evaluate all of the reasons you initially left your previous job to start your own business.
Steve Pavlina, a blogger on personal development, wrote an incredible article on why getting a job is a bad idea. This posting really motivated me to quit my job and start my own business, and I would imagine it is equally useful in keeping you from looking for a job.
Among the reasons Steve points out, I would like to add some additional reasons as well as add to his points a bit.
1. Our time, as workers, is getting cheaper
With globalization and outsourcing as a common business practice, the workforces that are in danger of being outsourced (and that pretty much is everyone who hasn’t been outsourced or automated yet) needs to become more and more competitive and productive in order to keep their jobs.
Keep in mind, saving money by outsourcing is not just a function of spending less capital per hour, it is also finding the most productive and efficient workforce to do the work.
Therefore, the workforces that are in danger of being outsourced have to be more productive, work long hours to get the work done and be constantly available to be contacted via a smart phone, etc.
The result? We lose time with our families, friends, doing the things we love and the workplace follows us wherever we go. At the same time, our time, valued by the hour, is reduced due to longer working hours (and since we are often paid a salary) all to just stay competitive and keep our jobs. This doesn’t sound like a secure situation now does it?
If you work for yourself, however, you make the decisions. You decide how valuable your time is. Also, you can decide to outsource the work you do and still maintain the same revenue you were producing before, if not more.
2. There are fundamental flaws with the concept of retirement
Oh? What’s that you say? Your employer offers you a 401k with a company match? What funds do they make available for you to invest in? Just one fund with a 80% weight in company stock, huh?
This isn’t really always the case, and company matching is a great deal, however, this just shows you that even your retirement savings is left to the mercy of your employer’s decision makers.
If there is a heavy weight, or even any weight in that company’s stock, that is signs of trouble. Not only does your boss tell you what to do, and how much you are going to be paid while doing it, but you are also hamster fed a retirement fund that just might not suit you.
But this isn’t the biggest flaw with working hard your entire able-bodied life and then retiring. Tim Ferriss, author of The 4-Hour Workweek (a must read), calls this a “Deferred Life Plan” (or DLP).
Basically, Tim defines DLP as working hard and saving as much as you can during the time period in your life when you are at your physical and mental peak so you have enough money to retire, enjoy life and travel when your physical and mental peak is far passed. Why wait until you are 65, 70 or 80 to finally slow down and enjoy life? Why not do it now?
Well wage slaves can’t, because the amount of money they are paid is only a function of how long they work (see item # 1 in Steve Pavlina’s post).
Entrepreneurs, however, can, since they can choose the work they do and don’t do, hire staff to do the work for them and can outsource, a concept Tim discusses in his book.
It’s important to save for retirement, but don’t plan on actually living once you retire at 85. The simple answer is to not tie your money to your time. Don’t go work for someone else, keep working for you.
3. You can choose what time you get to work
Who defined working full time as working 9-5, Monday to Friday? Why is it that this specific block of time has to be dedicated to work?
What if you are most productive at night? In the morning? What if you have family obligations on Wednesday but Saturday you are doing absolutely nothing? Or what if you are a productivity machine and can actually get all of your work done on from 10am-4pm on Friday?
Too bad. As a member of the work force, your time is scheduled for you. Doesn’t seem fair does it?
Sigh…when you were working for yourself, you were able to pick your own hours…
4. You only answer to one person
Didn’t get some meaningless report finished on time? Well now you have to quickly make up an excuse and explain to your boss why.
Maybe your boss is nice and understanding, maybe not. But still, as a member of the workforce, do you decide the importance of certain tasks? Do you have the option to ignore these tasks and not excuse yourself? Didn’t think so.
Is this stress worth going through for a fixed salary with little growth potential? Do yourself a favor, stick to working for the best boss you could have, you. You only have to worry about the meaningless tasks you assign to yourself. And if you don’t do them, you only have one person to answer to.
5. You get paid for the value that you are adding
This goes along with items 4 and 7 in Steve’s post. Step back and think for a minute about how much income you would be generating for the company you are considering working for.
There is an extremely good chance (unless you would be working in a support department such as HR) that you will be paid nothing close to the amount of monetary value that you generate.
Think about it, would businesses hire you if you were making more than the value that you generate? Knowing this, why would you devalue your time and sell your valuable abilities for less money than it is actually worth?
It may take a little bit of time to generate the clientele to earn a decent income, but your income can continue to grow as you get more clients or customers. Your pay isn’t capped, and better yet, it is no longer tied to your time. Think about it, is it better to plan only for short-term gains or long-term wealth?
The beginning stages of business are particularly expensive, so seeking temporary employment is certainly reasonable. It’s definitely better than selling some of your ownership to a VC. But if you are in need of the money, please, for your own sake, don’t lose sight of your business and be tempted to permanently re-enter the workforce.