Showdown 1: Security/Stability

March 17, 2007

Posted in Small Business.

This is part one of a series exploring factors in self-employment and traditional employment. For more about this series, read the opening article.


How reliable your paycheck and position is

Self Boss
Pros Cons Pros Cons
  • You decide how and when to get paid
  • You control where the money comes from and how it is used
  • Nobody can fire you
  • If money isn’t there, you may have to skip paychecks
  • Startups usually run lean, which means you’re susceptible to fluctuations in business
  • Startups are more likely to shift business models
  • Long-standing businesses are likely to withstand fluctuations in the market
  • Often, there’s less pressure to bring your A game all the time
  • Layoffs are a common way to cut costs
  • Big businesses can still implode (see Enron)


I think the major point from the pros and cons is this: Startups are more susceptible to fluctuations. When my business had unexpected expenses, business was slow, or a key client paid late, we had to skip payroll. When things were going great, it was easy – success keeps you going. But the hardest times were the months where we knew we didn’t have enough cash to pay ourselves. When your mortgage payment relies on the month-to-month income from your business, a small variation can have disastrous effects.

Once you’re on your feet and have a reservoir to cover payroll (or have outside funding) little factors like a client paying a week late won’t matter quite so much. But until that time, you’re in startup mode – and stability is a major weakness.

Winner: Traditional Employment