Top 10 Distinctions Between Building a Business and Creating Your Own Job
By Dr Philip E. Humbert
Many professionals and Small Office/Home Office
owners dont understand the distinction between building a business verses creating a
job for themselves. While either route can be satisfying and fulfilling, it is important
to choose the path you prefer. The "rules" and priorities are very different for
each, as are the long-term results down the road. Many professionals believe they are
creating one type of enterprise, but are actually creating the other. This can result in
frustration and unexpected (and unpleasant) surprises when planning for retirement or other
While the following distinctions are only tendencies
and most business people use a mix of all these traits, this list may help:
- A business can be sold; your job ends when you
retire. In creating a business you are creating an enterprise that has
assets and a "life" of its own. Other people can buy it, run it,
build it up or merge it into their own enterprise. When you create a job for
yourself, the enterprise is largely dependent on your being there ever day. You are
the primary asset, and when you leave, the business has little inherent value.
- A Business markets its inventory; a Job
markets your skills. A business has an inventory of something
tapes, a staff of consultants, something that can be counted and managed. A job
markets your skills and your personality. You are the primary inventory or product
that is sold.
- A Business has a relationship with its
banker; a Job has a relationship with its clients. In building a
business, you will typically need a line of credit, a merchant credit card account and
other services from your bank. Youll get to know you business banker on a
first name basis. Creating a Job requires superb personal relationships with
individual customers and clients. You probably know your clients better than your
- Businesses develop formal accounting
standards; Jobs are run out of a checkbook. In developing a business, other
people (your banker?) will want to see accounting records and expect them to use standard
accounting principles. In building a job, you want your paperwork to be minimal,
simple, and invisible so it never interferes with your ability to serve your clients.
- Businesses develop policies and procedures;
Jobs have standards and boundaries. As a business evolves it becomes more
complex, requiring policies about personnel, vacations, retirement plans and so forth.
A Job is largely about YOU. You have personal standards and boundaries that
help you run your life, and your work is a reflection of that.
- A Business is likely to have a 5 year Plan; A
job is more likely to have Goals. A Business Plan is likely to include a
formal market analysis, demographics, product develop statements and marketing programs.
A Job is more likely to have a goal of increasing income, a full practice, or
writing a book in the coming year.
- A Business is more likely to be incorporated;
a Job is more likely to be sole proprietorship. As a legal entity, a
business is likely to have filed legal papers, set up a legal headquarters, and have a
Board of Directors. Jobs are much more likely to be owned and operated by a single
individual or a couple of partners, sometimes very informally.
- A Business is more likely about strategy; a
Job is more likely about passion. People who enjoy creating a business tend
to be analytical, calculating and precise in their decision process. People who
prefer creating their own job tend to enjoy the freedom, the individuality, and have a
love or vision about the work they can do as an individual. The different approaches
are often obvious after even a brief conversation with the owners.
- A Business tends to require more financial
investment; A Job may require little cash, but may have required we invest our
whole heart. Creating an enterprise that will continue as a profitable business
typically requires some initial cash investment. Creating a home-based job may only
require a phone number, a checking account and perhaps a fax machine.
- Business have vacation pay, Jobs
dont. This is the "acid test" in many cases.
Businesses establish policies and have financial reserves for health insurance, vacations
and retirement. Most small business operations that are actually more like Jobs,
have no formal provision for these things. If the owner goes on vacation, the income
stops. Health insurance and retirement are the personal responsibility of the
Knowing where you come out on these distinctions, and
where you would like to be, can clarify many other business decisions. Do you want
to hire employees? Should you incorporate? Can the business legally buy your
car for you? These decisions can often be made more easily once you understand the
distinctions between building a business verse creating a job you love.
Are You Stunting the Growth of Your Home Business?
This article looks at the growth stages of a typical
one-person home-based business and how to gradually grow your business
without being run over in the process.
How to succeed as a
Most people who go solo tend to fall into one of two groups. The largest group of those who try it tend to fail within about 12 months.
The second group however seems to thrive on their own and would not trade their new business for the world.
For New Home Businesses
You're eager to start your home business and bring in some extra income. Although you're probably bursting with ideas and enthusiasm and want to jump right in, take some time to plan and prepare for your new venture.
Here's a simple checklist you can use in the startup phase of your home-based business.
Are You Working Your Business Part Time? Or Spare Time?
Most people who start a home based business do so with the
objective of creating a second income. It is a replacement
for working a part time job. With a part time job you would have a certain number of
hours to work on a specific schedule of days or evenings. Do
you treat your part time business in the same way?
© Copyright 2000 by Philip E. Humbert. All Rights Reserved.
Dr Philip E. Humbert, author, speaker and
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