Businessspundit.com has a good article on Entrepreneurship, Age, and Money that discusses the average income of an entrepreneur and whether older entrepreneurs are more successful than their younger counterparts.
If you’re thinking about leaving the 9-5 just because they aren’t paying you enough, here’s a little food for thought.
> The truth is that you are likely to make less money over your career as an entrepreneur than you would in the corporate world. Research shows that only the top quartiles of entrepreneurs make more wages than their corporate employed counterparts. That means 75% of entrepreneurs would be better off financially with a regular job. You could counter by saying that wages may suffer but you can build wealth through your business, but you would be wrong again. The majority of entrepreneurs have $20,000 or less in business equity, and 30% of them have zero business equity.
It’s true that the money doesn’t come easy, but there are a couple more factors worth considering when weighing the potential economic benefits of entrepreneurship.
1) Do entrepreneurs who leave the workplace to start a business, but later re-enter the corporate environment make more or less than their counterparts who stayed put? If you are a designer and start a car wash business, you’re earning potential probably won’t change too much. But if you’re a designer and start a design company, you may end up learning more compared to your old job where table layouts are the norm and marketers pick the color schemes. The increased knowledge and quality of your portfolio could have a nice effect on earning potential should you choose to re-enter the corporate world.
2) It may be true that the average entrepreneur earns less, but the average business also fails after a short amount of time. How much do entrepreneurs who create lasting businesses earn compared to their corporate counterparts? In our case, we’ll probably make less than our market value for this year, but that will change as the business continues to grow.
Well I am trying to start something but not leaving my day job till I can make at least as much on my side project.
I left my 9 to 5 job over three years ago and within 6-9 months more than quadrupled my gross revenue. Since my expenses are mainly hosting and a little advertising costs, my net was still well, well into the six figures for the year. I’ve hovered around that point since, but comparing it to my full time job, I never would’ve reached that point unless I had ownership in the company (which would’ve never happened).
The only downside to owning your own business IMO is health insurance costs, saving for your own retirement, knowing how much to reinvest back into your own company, and those little things - like working 80 hours a week to get things done.
Tradeoff yes! - and well worth it to be able to create and make your own path in life.
Read my story, I keep getting offer for 30K+, INRs, and my earning is less than 5-6K. The scene was pathetic and my partner left me in between just coz the earning was very bad. Over the time I have learned how to earn money apart from learning how to create Rich AJAX apps. Now I can support a team, an office and am looking to hire some good ppl. I have risen but I will accept your point, my earnings are still less than my counterparts in jobs and worse of all my liabilities are more. I work 24 hours and they work 9-5. But still I am my own boss and I know I will grow. There is always plus and minus of every thing.