By December 15, 2016

Business Owner Or 9 To 5 Job?

So, there comes a time in every software developer's life that you have to ask yourself the question: Do I want to become an entrepreneur or do I want to work for someone else?

In this video, I will discuss the pros and cons of being a business owner and of having a 9 to 5 job, so that you can decide between both.

Transcript From Video

John Sonmez: 

Hey, what’s up, John Sonmez from I got a video today about business owner or employee. This is a good question here. This question is from Tom and he says, “Hey John, I’m a software engineering student with one year left until I graduate university. I started a web development business early this year with a friend of mine. We’ve had great success, having 2 major contracts for us already, earning us around 26K a year. We have plans to move into app development while working on our final dissertation projects. I have 2 questions. First, should I be earning a similar salary from being my own boss as I could get as an entry level software engineer out of university, should I stick with the business or try to entry the industry as soon as possible? Secondly, I see a lot of job ads requiring 2-3+ years of experience. Would my business ventures be valuable experience and qualify me for these roles? Thanks. Tom.”

This is a good question Tom. I think that there’s kind of a higher question here of whether or not entrepreneurship is for you, whether you should be a business owner or an employee. In general, if you can do it you’re going to have more benefits, in general, in reward by being a business owner, by being an entrepreneur. But there are going to be some down sides to it. You’re going to have a higher risk. You’re going to have a lot less stability.

In making the bigger choice an employee has more stability, a more perceived stability but they have a very low amount of upward potential. There’s lower volatility. There’s less really good things that can happen. You could get a bonus and you could maybe make an extra 10K a year, but that’s it. You basically know your salary. You’re getting paid every week and it’s very steady so there’s less risk, less ups and downs there as an employee. It’s a safer route. You don’t have to manage yourself. You can kind of—when you’re not feeling like doing work you can get by and you clock in and you’re still going to get paid for the most part. It’s a lot less stressful.

As an entrepreneur you might make zero dollars but you might make a million. It’s like you have a high volatility. The sky is the limit. You could have—your upward mobility is uncapped. You have a high potential, but you also have a high potential—you could do a lot of work and make nothing or you could lose it all. There’s a higher risk involved in that and you have to be able to be self motivated and manage yourself. These are 2 different paths in life.

Now, I recommend that if you can—if you are the kind of person that can be an entrepreneur and a business owner that you should. I think that for most people that the correct path in life is to go through the apprenticeship model where you start off working for someone else and you learn how to do the job and how to run the business and you move up and then eventually you go out on your own and start your own business and become an entrepreneur.

Some people don’t like that and they just want to be an employee for the rest of their lives. That’s totally fine. You’ve got to figure out which kind of person you are and if you can be the kind of person that can go out and start your own business. It’s not for everyone. It’s difficult. I’ll tell you, it’s one of the most difficult things that you could do. If you can’t envision working 16-hour days, 5, 6, 7 days a week probably 7 days a week when you’re first starting out with a business then it’s not for you. It’s not something—not that you have to do that your whole entire life as an entrepreneur but to get a business started and to get it going and to really build it, you may have to do that and you’re going to have to make a lot of sacrifices in your life.

You’ve got to make that choice between those things. As far as your particular situation here where you’ve already got the business going versus getting a regular job, I’ll say 2 things. One, if you’ve already got this business going and you’re already running and you’re already being successful keep going because the sky is the limit like I said. If you’re already able to do this I would not recommend going back to regular employment. You’re not going to make as much money as an entrepreneur early on, right? Maybe you can make a lot more money if you got even just an entry level software development job. Maybe you can make 2 times or 3 times as much money. But in 10 years if you continue running your business and you do it successfully you could potentially make 10 times as much as you can make as a software developer 10 years down the road working for someone else if that makes sense.

Think about that. You’re going to make sacrifices early on, make less money, but over the long run you’re going to have a higher potential. As an employee it’s going to be more steady. The growth is not going to be quite as high.

The other thing I would say here is that your—you asked a question about your experience. The best experience that you could possibly have on your resume, in my opinion, is running your own business. That’s a totally valid experience, totally legitimate. Some companies are not going to employ you because you’ve been an entrepreneur working for your own company because they’re going to be afraid you’re a flight risk. Those are not the companies you want to work for anyway. The companies that value that experience and say, “Here’s a software developer that was actually running his own business, this is the guy that we need. We need entrepreneurship in our company.” That’s the kind of companies that you would want to work for. It’s going to be an extremely valuable experience for you.

I just really can’t see any reason to quit your business that’s being successful and to join the workforce because you’re afraid you won’t be able to later. If this business fails for someone or you change your mind, you’re going to have valuable experience that most people don’t have. If you can run a business, you can do anything honestly in the work force. Definitely I would recommend keeping that up.

Like I said, you can always fall back and become an employee if you want. I know some entrepreneurs that eventually became employees. I was just reading Patrick McKenzie on Hacker News, he just wrote this article where he went—he’s been an entrepreneur for a long time and he joined Stripe because he decided that he wanted to be an employee again and they offered him an opportunity to work on something really cool that he wanted to work on and he thought it was valuable at that time. You can definitely make that transition. You’ll probably make it at a much higher place if you’ve already been an entrepreneur because like I said, those skills transfer to everything that you do in life. If you can run a business and be an entrepreneur, you can do anything.

Anyway, if you find this helpful, I have a request for you which is to click the subscribe button below and you’ll get my videos. I do like 2 to 3 videos a day on all kinds of topics including entrepreneurship. If you’re a developer looking to basically get out of the rat race I’ve got plenty of videos for you. Just click the subscribe button and you’ll get access to them. if you’re already a subscriber and you like this video, show your love with a thumbs up. I’ll talk to you next time. Take care.

About the author

John Sonmez

John Sonmez is the founder of Simple Programmer and a life coach for software developers. He is the best selling author of the book "Soft Skills: The Software Developer's Life Manual."