FAQs About  Starting up A New Business

Lately, I have been observing the search queries [keywords] used by people to get to naijapreneur! One of the top phrases used by searchers to get to this site is this; “why become an entrepreneur?” or “why should one become an entrepreneur?”

This is an obvious indication that there are a lot of folks out there who are in search of valid reasons for becoming an entrepreneur. Luckily for them, I have written on this issue on naijapreneur precisely these two unusual articles;

Why did you become an entrepreneur?

9 ways how NOT to start a business

However, the answers in these posts were written for entrepreneurs who were already in business and was intended to correct their erroneous perception of entrepreneurship as a money making venture only rather than a what it really is – a problem solving or value adding venture.

I didn’t write for those who were currently employees and were in search of answers whether to quit their jobs and take the leap of faith or remain stuck on the rat race. This is the essence of this unusual article, to talk about entrepreneurship from the employees’ perspective and to further encourage you who have already taken the leap of faith that you didn’t make the wrong choice.

A little word of caution, this is a long one, so brace up yourself for a long read –over 3000 words! But I assure, the patient dog will eat the fattest bone on this one. You will never regret reading it to the end and you will mostly like want to share it with a lot of people.

Let’s begin!

The Anatomy of Employment [Job]

A job is the work you do for a business owner and receive a reward in the form of salaries or wages. It has fixed schedules and a very clear description of what is expected of you. A job is also the position you own in an organization for which you are expected to fulfill certain functions in order to get paid.

The availability of a position in an organization and your consistent ability to perform certain functions are the two key factors that determine the ownership of a job. Meaning that you can own a job so long as an organization has a vacant position you can occupy and certain problems they need you to solve.

In other words, a job basically means trading your time, skills, experience, knowledge, talent, ideas, and contacts in an organization based on the requirements of the position you occupy in exchange for a financial reward known as salary or wages.

As a result, every employee is a seller of time, skills, experience, knowledge, talent, ideas, and contacts while an employer is the buyer of all these things.

Time, skills, experience, knowledge, talent, ideas, and contacts are the value an employee brings to an organization for which the employer agrees to pay a certain amount of money in return for the right to own and use these things however he/she pleases. A job therefore, is a functional position employees are paid to occupy for a specified period of time.

A job is a risky thing to own

There’s an age long saying that goes like this; “there’s always two sides to every story”. The same is true for every concept ever conceived by man. There are several sides to every idea, concept, theory or thing in life; what really differs is not the concept, idea, theory or thing itself, but ‘how’ we humans perceive or see them.

What really changes, is how we think about these things; the individual subjective meanings we attribute to them. And as it’s been scientifically proven, we humans see and interpret things from our own angle, that is, from our own side of the story.

Rarely do we try to understand and view things from the other side of the story; that is, looking at things from the other person’s perspective. A much clearer understanding is often gained when we try to see the whole angles or sides to a thing. Only then can we accurately make the right decisions and take the right actions.

So what has this got to do with the issue of becoming an entrepreneur?

A lot…

In every organization, there are basically two parties involved;

• Workers [employees] and
• Owners [employers].

A job [functional position] is what every employee owns in an organization, assets are what every employer owns in an organization.

Everything in an organization, including the workers is an asset to the employer. And with every asset owned by an employer, comes a certain cost of maintenance. This cost of maintaining an asset is regarded as a liability.

An asset is anything that is capable of making you earn money [generate income] and a liability is anything that is capable of making you spend money [extract income].

To employees, a job is a source of income [asset] because it brings money into their pocket. To an employer, an employee is both a source of income [asset] and an expense [liability]. How?

A worker is only an asset so long as he/she is still capable of generating income for the business by consistently performing certain functions; remember our definition of a job? But always a liability in that money goes out of the business in the form of salaries and wages [cost of maintaining assets] paid out to workers regularly.

These are the two sides to the story of employment; the employees’ side and the employers’ side. What every employee regards as an asset [generates money] to them is what every employer regards as a liability [extracts money].

The very same money employees regard as income is what employers regard as expenses. If you were to ask every accountant this question; “on what side is salary and wages categorized in the financial report of every organization?” They would gladly tell you that it falls under the operating expenses column of the profit and loss account.

The really funny thing is that neither the employees nor the money paid out as salaries or wages to them are regarded or treated as assets in the financial records of a business or organization.

The balance sheet is the only financial statement that describes the overall assets and liabilities of a business or organization. But guess what? There’s no record of employees and the money paid out to them. Why? Because the income employees earn is the cost employers bear as a result of using the employees as assets for generating money for the business.

Both the employees and the money paid out to them are regarded as cost of operation and are written off as such in the profit and loss account of every business or organization. I honestly wish there’s an easier or less harsh way to put this, but I am sorry for what I am about to say next.

As an employee, you are an expense [liability] to the organization you work for!

Truth is bitter!

Believe me, there’s absolutely no easier way to put this than I just did. It didn’t feel good too when I realized this bitter truth. For crying out loud, as an employee, you’re being used as an income generating tool. Meaning you are very, very expendable – they can do without you.

Why?

Because you are only as good as the money you make the company or your employer. They can willingly get rid of you whenever they wish or think you are no longer valuable and only they can determine how valuable you are or not on the job.

There you are!

Why do you think it’s always easy for employers to lay off employees at the slightest economic down turn? Because they want to cut down on operating expenses and unfortunately for the employees, they are top on the list of operating expenses.

So when push comes to shove, and every employer is faced with the harsh realities of survival, the workers are the very first point of call when it comes to the reduction of operating expenses in every organization.

Whether it is a profit making organization [business] or not for profit organization [social], salaries and wages paid to employees is always an expense. It’s because of this singular reason that has made a job a risky thing to own.

Why?

Because in the end, what you think you own and call an asset because it brings you money is what the very person [employer] who controls how much money your so called asset [job] generates for you, considers otherwise.

To them, they own you [asset] and because you are a source through which money is extracted from them [liability], they can decide to let go of you whenever they feel they can no longer put up with your cost of maintenance – expenses!

What are you working for, a job or a business?

I can almost hear you screaming out these words right now in your thought; “but employees also make employers money [asset], in fact, without the employees, employers can’t do business.”

Very true, quite true indeed. But here’s the real truth; the estimation of the value you bring as an employee to an organization is best evaluated by the owner. And if the owner says, “Hey Tom, your services are no longer needed in this organization; therefore, you are hereby fired!”

There’s little or nothing anyone can do about that, the highest you would get is a fair compensation for the dismissal. And if the organization pays out any form of gratuity or pension, the better for you. Besides that, nothing else counts. You are fired, is you are fired. Nothing more, nothing less.

So if I were you, rather than argue about your perceived right as an asset in the eyes of an employer, I would begin to take my financial future more seriously than banking on one job which obviously will never be my own. The earlier you come to terms with this reality, the better for you and everyone you love.

The outcome of your financial future is not in the hands of your employer, neither is it in the hands of the government. Your financial future is in your hands, decide today what you want it to be. I have written this unusual article to help you confront the bitter truth of your financial future and challenge you to take up the responsibility of putting an end to financial struggle in your life.

As it is increasingly becoming obvious, most especially since after the global economic meltdown, everyone is getting to face the often avoided truth that there’s no such thing as job security. The only security is the one you build, own and control yourself – a business. Counting on a job to make you financially secure is an illusion that you need to wake up from fast!

Why it pays to work on a business rather than a job

A job is short term solution to a lifelong problem. Staking all your life on it will be a fatal mistake. The problem [financial struggle] will continually outpace the solution [paycheck] you are proffering. This is because a job was never created to solve your financial problems for life. It was designed to make you needy [dependent] for life. It was designed to pacify [make less painful] the problem of lack of money but never to nullify [abolish] it.

As long as the job remains, the trick is to make your financial problems less obvious. But once the job stops, that same old problem of lack of money which was never actually solved suddenly resurfaces again. Why? Because all a job does is to shift your focus from the problem [financial struggle] to the paycheck [temporary cure for lack of money].

For as long as the paycheck keeps coming, your problem of lack of money appears to be over.

But is it really over?

What you never stop to ask yourself is this; “who is actually making the problem of lack of money less painful, me or my boss?” If you ever come to this realization, then maybe you’ll stop feeling secure about an uncertain job. The feeling of being secure can only come from what you have a direct control over.

How can you feel secure about a job your boss directly controls? How can you feel secure when you are not in charge? How can you call a job yours when someone else designed the position you currently occupy? How can you feel secure or safe about a company you work for?

The very notion of “a job” negates the essence of security. Remember, a job is only a functional position you are being paid to occupy for a specified period of time.

It always has an expiration date. Security can only come from being in control and you can only control what you own. Unfortunately, in all my short stay on earth, I’ve never come across a job that is owned. What I’ve seen so far are job positions that were created for people to occupy.

Just because you fill the position doesn’t make you the owner and since you’re not the owner, you can be replaced. Why? Because a job you call your own is only yours to own temporarily as long as the boss says so.

Owning a Job VS owning a Business

A job was created to be “worked in” [physical engagement] and not to be “worked on” [mental engagement]. A job is like a car; you’ve got to be in it before you can drive it. Your physical engagement will always be a requirement.

There’s no other way to having a job than to “work in” one. You can never be free from what you “work in” [job], you can only be free from what you “work on” [business]. The former [job] requires all your time, while the later requires some of your time.

You do a job, but you build a business. You engage in a job, but you create a business. You are inside one doing all the work [job], but on top of the other calling all the shots [business].

A job requires your presence to make money; a business depends on asset to generate money. A job gives you money [active income]; a business makes you wealth [passive income]. The difference is TIME.

A job takes your time and gives you money, but a business frees your time and still gives you money. In a job, your time, skills, experience, knowledge, talent, ideas, and contacts is being exchanged for money; the more money you make, the less time you have. And time is an irreplaceable resource, once used it can never be replaced.

Eventually, you would run out of time because there’s a universal constraint placed on every human–AGE.

Remember the two key factors that determine the ownership of a job –availability of a position in an organization and your consistent ability to perform certain functions. Well I have got news for you; age is the barrier to them both.

The older we grow, the less we can physically do. The less we can physically do, the less functional positions we will be needed by employers to occupy.

Ultimately, as we age we lose our capacity to physically perform. Life has been designed in such a way that there’s an opposite relationship between age and our capacity to perform. As age goes up, our capacity to perform comes down.

This implies that there’s a deadline on our working years; much like an expiration date when despite our increasing needs, the ability to work would have diminished. The reality of this fact of life poses a rather disturbing question to you; “how long will your earned income serve you when your working years are over?”

I am sure you’ve never thought of asking yourself that question. Don’t wait till that time to find out, it would be too late then; now is the best time to start. START NOW!

Are you saying being an Employee is bad?

Absolutely Not!
There is nothing bad with being an employee per se. At some point or the other in our adult lives we would be engaged in some form of employment or the other. But here is the truth, a job or being employed is a transition. Meaning, it’s not the end, but only a means to an end.

What is bad is holding on to employment as the solution to the long term problem of financial struggle. What is bad is thinking that a job is all you need to be financially free or secured. The inherent danger of employment is being caught in the rat race for life.

It is when you begin to view your job as the way out of your financial struggle that makes employment bad. Having a job isn’t bad, betting all your financial future on it is what is bad. Having a job isn’t bad, thinking it’s all you need to be wealthy is what is bad.  Why? Because as you’ve seen so far, a job is a short term solution [paycheck] to a long term problem [financial struggle].

You cannot solve a permanent problem with a temporary solution. That you are employed in a job right now is good, forgetting to do anything on your own that will guarantee your financial future apart from your job is what is bad. As you work, always bear it in mind that a job is only temporary and therefore you must begin to plan on how to start your own business.

Never let the illusion of a paycheck distract your vision of a financially free future. You can start a part time business that will help you build assets [wealth] while you are still working for a paycheck [money].

Don’t get carried away by the temporary thrill of working for money that you forget to start building a business that will guarantee perpetual wealth. Money is too short a solution to solve a long term problem of financial struggle. Wealth and not money, is the lasting solution to financial struggle!

Your Turn

If you got this far, thumbs up to you!

So what do you think of my anatomy of employment? Did you find it useful, enlightening or disturbing?

To the entrepreneurs reading this, do you honestly feel becoming an entrepreneur was the best decision of your entire life? Do you have any regrets?

To you employee reading this, do you honestly feel this way about employment?

Kindly share your thoughts and comments below.

One Last Thing!

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