Of course, our personal bottom line is the reason we all go to work. We try to bring value to our boss‘ bottom line in order to get rewarded, compensated and promoted. Rather than putting forth all our energy providing for the boss’ bottom line, we have an option in America of creating our own wealth independent of a boss.
Since America is built on the Free Enterprise system, we are free to choose whether to work for ourselves or be an employee of someone else. There are advantages and disadvantages of each. You may be better suited for one over the other.
Employee or Employer
Some people value the certainty that accompanies being an employee. They have no desire to be the business owner, assuming the risk of the business’ bottom line making money and staying afloat. The employee is only responsible for his own performance.
Only a few value the challenge of making their own business succeed. The perceived rewards of success include the opportunity to make a higher income, the freedom of self-direction, the feeling of significance of having his name on the business and owning the successful enterprise.
Who ever feels like they are being paid enough? Could you make more money by working for yourself or as someone else’s employee? Given a profitable idea and the resources and means to market it, you might be able to develop an income greater by having your own enterprise. However without proper execution, the cost of doing business could wind up exceeding what you make. When your outgo exceeds your income, this is known as a deficit.
Being A Business Owner is Not for Everyone
Not everyone is capable of running a business. One benefit of being an employee of another is a much more predictable income and a much lower risk of not making money or worse, losing money. Owning your own business requires that you have an internal drive. It is analogous to moving off to college. At college, no one wakes you up and ensures you go to class. In high school, a truant officer will be dispatched to round you up in some cases. When your own your own business, you are completely responsible for getting it done. Self-motivation and self-direction are two required attributes to successfully run a business. In a recent blog post, 5 Better Solutions Than A More Competitive Minimum Wage, I listed six ways to increase your bottom line. Some of those are as an employee and some are in a business of your own.
Improve Your Bottom Line and Fulfillment Through Self-Employment
Which is better for you: working for someone else or working for yourself? Which is better for you: working for someone else or working for yourself? Click To Tweet
Without a role model, it can be very intimidating to consider stepping out on your own. Some people seem to have no fear when it comes to taking the risk of going into business for themselves and successfully launch one enterprise after another. Some do better than others and sometimes entrepreneurs sell a business they’ve built to another to run, freeing up the entrepreneur to start another venture.
Challenges of Self-Employment
There is no guarantee that your business idea will be a success. In fact, most business start-ups do not survive more than five years and end up bankrupt for one reason or another. This reality can strike fear in many would be business owners. Following a proven formula and engaging with a successful mentor is a great way to increase your odds of success.
Striking out on your own sets you apart from your peers. When you begin to have success in any area, some of your peers will be supportive. However, people have a tendency to act like crabs in a bucket. See, if you put one crab in a bucket, he will climb right back out of the bucket. But if you put a bunch of crabs in the bucket together, none of them can get out because the rest keep grabbing any that try to get out and pull them back in. That is what a lot of people try to do when they see someone having success. They use intimidation to pull them back down so they are not left behind.
When you start talking to people about your entrepreneurial dreams, they say things like “You’ll never make it” and tell you all kinds of stories about how people have failed trying to do what you are thinking about. Be careful where you get advice. Well meaning friends may be crabs in a bucket.
Late Night Infomercials
I recently came across an interesting comment in Quora in answer to the Question
“Why do many middle and lower middle class people in the US mortgage a house then put it up for rent (as an investment) but most wealthy people do not?
I’ve observed this a countless number of times. Many middle class and lower tend to mortgage multiple houses, put them all up for rent, then use the rent to cover their payments. As in, the people who can least afford to survive the slightest financial shock take on huge liabilities. Why?:
Everyone likes the pitch which is something like this: ‘Hate your job? No money at the end of the month? You can make a killing flipping property or be sitting on the beach while idiots pay you rent. The wealthy don’t have a job and have money at the end of the month. So the pitch only works on the middle class.’” -Pedro Miranda
The Entrepreneurial Spirit
So, let me ask you, are you in a position where you are looking to do something different to improve your bottom line? Does a pitch like that resonate with something inside you? What is it in a person that resonates with the opportunity to strike out on your own to create an income from flipping houses or being a landlord of multiple properties?
Someone who runs their own business is called an entrepreneur. Once you get the entrepreneurial bug, it is hard to shake. I have started a couple of businesses, have multiple streams of income and have studied quite a few other opportunities.
Never Start a Business to Make Money. Start a Business to Make a Difference. -Marie Forleo
If you have that entrepreneurial drive, you will feel an irritation or an itch, always feeling like you could be doing better for your bottom line if you were self-employed. You are self-motivated and have an inherent drive to be self-directed. You find yourself seeking opportunities that provide independence and lead to a sense of fulfillment. One way to scratch that itch is to open your own business. There are a few business structures that each have a different strong points and liabilities.
You can invest in business of your own and have employees work for you or start up a sole proprietorship where you are your only employee. The Small Business Administration provides detailed information about starting and running the following Business structures:
- Sole Proprietorship
- Limited Liability Company (LLC)
- S Corporation
Local chapter of Small Business Administration usually run courses on what you will need to do to get appropriate licenses and they provide training on things like loans for small business.
Other Ways to Make Money
Even as an employee, you can still go about your work with an entrepreneurial drive. Growing your understanding of how the business that employs you works will help you move up in the organization.
In addition to being a business owner or employee, an other source of income is to be a contractor where you do work on a contract basis.
Pinterest is a great source of ideas on how to make money either on-line or at home. There is no limit to the ways you can make legitimate, goods money using your own God given talents. Some require a larger initial capital investment than others. But you will find that little creativity goes a long way for someone with an entrepreneurial drive. The world is your oyster. When you look around you will find all kinds of success stories of people who began with nothing but an idea and made it BIG!
One area where you can make some money on the side is by teaching and coaching. You might be good at getting people to push harder in the gym and charge people money to coach them in fitness. Some things you can teach include sports and fitness, music – either an instrument or singing, tutoring academics, teaching a language such as English as a second language. You can create a school and host other teachers or just be a teacher yourself. Selling your services as a virtual assistant is another great way to earn some cash on the side.
Side Hustles and Moon Lighting
‘Side hustle’ is a current term for earning money while working a job. An old term for the practice of earning money on the side is ‘moon lighting’. Either term can refer to working for yourself or being a part time employee while holding down a full time job. Basically, doing what it takes to improve your bottom line. When I was in college, I was working a night job delivering pizza and full time for the navy.
After making a decision on what business structure to start up, many entrepreneurs choose to continue working a day job until their enterprise is off the ground. If you do this, you’ll want to identify the point at which your enterprise is big enough to cover your desired lifestyle. The minimum income level you require before you are willing to walk away from the security of the day job is sometimes known as Ramen level. That means you are earning enough to survive on top ramen noodles while you pour all you’ve got into growing your business to a significant income level. During the ramen level phase, you are free from the demands of the job and can go full speed ahead into your own undertaking. Making that leap is a turning point in your life.
If you were going to pursue your own business in the free enterprise system, what would it be? Real estate, sales, provide a service for others? Does your business idea provide residual or passive income? What are your first steps in starting up that type of business?
Whatever route you take to increase your bottom line, my post The Startling Truth About Goals Objectives and Campaigns has some good tips for you to set and reach goals that will get you to where you want to be.
Stay In Touch
If you are currently working on a plan to improve your bottom line, write me a comment below telling me what your pursuit is and what is the next step for you in pursuing it so I can cheer you on! And if you haven’t done so already, sign up for the Paladin Newsletter! Its free!