What Is the Difference Between Owning Your Company Vs Being an Employee?

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What Is the Difference Between Owning Your
Company Vs Being an Employee?
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• When people are deciding whether they want to
  take the leap and become a small business owner,
  often they are more concerned with the personal
  pros and cons, and less the strategic financial
  and business concerns. Questions like, how will
  it affect my personal time? and do I have what it
  takes? are valid, but these questions are just a
  small part of the equation when it comes to
  making the decision about becoming a small
  business owner.

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• Before you make that decision, a consultation
  with a small business accountant like Kent
  Accounting can go a long way (and we offer these
  at no charge!). Consider it more of an
  educational session that will help you see and
  understand the full picture of owning your own
  business, both in the short-term and in the
  long-term. Here are some of the top benefits and
  challenges to consider when you are thinking
  about starting out on your own.

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• Benefits
• There are plenty of enticing reasons to become a
  small business owner here are just a few.
• Freedom to Work from Wherever You Want
• Regardless of whether you obtain space for your
  business or decide to start from your home, as an
  entrepreneur you get to work where you want to.
  Coffee shops, your comfy chair even the local
  pub can become your office. If you have a
  dedicated office space within your home, you can
  consider that square footage tax deductible, as
  well as some of your utilities and monthly bills.
  To best understand what qualifies as a deduction
  and what doesnt, contact Kent Accounting.

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• Results and Gratification
• The saying goes Work Smarter, Not Harder.
  Moreover, when you are a small business owner,
  the more you work, the higher your financial and
  personal return on investment will be. The
  success of your business is a direct result of
  the amount of energy and intellect you put into
  it. As an employee, success is more likely to be
  attributed to a team, and you might not directly
  benefit from your efforts. We have all
  experienced the fatigue of working in an
  underperforming team where we have equal share in
  the reward but end up completing the majority of
  the work ourselves.

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• Building A Company Is an Investment
• When you build a successful small business, you
  also have the flexibility to sell your business
  after it has become profitable and
  well-established. The sale of your business can
  be a useful lump sum to help fund your retirement
  or a new venture you are passionate about.
  Building a successful small business starts from
  the beginning. Start with a strong financial plan
  developed with Kent Accounting.

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• Job Satisfaction
• When youre employed by a large company,
  sometimes you feel like just a number. You spend
  hours working, and yet the majority of the
  rewards go to executives and/or shareholders.
  Working for yourself is infinitely more
  satisfying the hours of hard work and
  relationship building pay off exponentially when,
  as a small business owner, you secure a new
  client or project. With each new partnership
  secured, you will feel a pride of ownership and
  increased confidence in your abilities and your
  decision. Whether it is bookkeeping or long-term
  financial strategies, Kent Accounting can help
  keep your job satisfaction high with stress-free
  financial planning.

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• Challenges
• While it may seem like owning your company is
  exciting and liberating (both financially and
  personally), there are some drawbacks that must
  be considered before taking the next step.

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• Upfront Costs
• There are costs to starting a business that you
  will have to pay for before you even begin
  operating. Paying for the physical aspects of
  starting your business, like leasing space and
  buying inventory, supplies and computers, can be
  large investments. If you do not currently have
  enough capital saved to pay for these upfront
  expenses, there are avenues to borrow money to
  fund these startup costs. However, it is
  important to remember that these funds are
  borrowed you do have to pay them back. Contact
  Kent Accounting to learn more about start-up
  funding opportunities and the realities of
  borrowing money to start your business.

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• Unsteady Pay Cheques
• As a small business owner, you are the last
  person to get paid. Your suppliers, employees,
  and creditors all have to be paid before you are,
  so it is not always realistic to expect that your
  pay cheque will be reliable until you are well
  established. Even if you have a substantial
  project or client list, with a steady monthly net
  income, remember that in Alberta, your customers
  will often take 90 days to pay an invoice, so
  your cash flow can become an issue.

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• It can take up to a year for small business
  owners to start seeing regular pay cheques, and
  sometimes longer for those pay cheques to be
  equal to those you might have been receiving as
  an employee. We recommend that you have at least
  6 months living costs saved up in order to keep
  financial stressors manageable. Kent Accounting
  can help you build a monthly cash flow
  spreadsheet to ensure you are netting enough
  income to pay your bills.

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• Uncertainty
• If uncertainty is an emotion that you are not
  comfortable with, then starting your company
  might not be the best decision for you. How would
  you feel if your company lost 10,000 in a single
  month and you had to use your savings to cover
  it? It is normal for a company to have a bad
  month and lose that much, or more, periodically
  throughout its operations. As a small business
  owner, sometimes it can be challenging to see the
  forest through the trees and balance new client
  acquisition (i.e. activities that keep new money
  coming in) with running your business (i.e.
  activities that get you paid today). You arent
  alone in growing your business Kent Accounting
  can help you build a financial strategy to keep
  the stress of uncertainty at bay.

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• Kent Accounting is a full service accounting firm
  located in Calgary, Alberta. The firm is lead by
  Kent Greaves, a Chartered Professional accountant
  in Calgary with over 18 years of experience
  working with privately owned companies. As one of
  the top accounting firms in Calgary, we believe
  in prompt, accurate service at affordable rates.
  Running a small business can be the most exciting
  endeavor and the greatest challenge a person can
  undertake were here to help you succeed.