Why You Must Be An Entrepreneur And Not Just An Employee

As an Economist and employee, I have discovered the old economic maxim to be true; that human wants are unlimited, but the resources to satisfy them are limited. In reality, as our incomes increase, our desires and needs multiply.

This is why you need to understand that your monthly pay-check will not settle your monthly bills, irrespective of how high they become. This article will discuss why your paycheck can’t pay your bills and why you should be an entrepreneur and not just an employee.

Below are a number of reasons why your paycheck can’t pay your bills and why you should be an entrepreneur. i.e. own a small business.

1. Your needs will continue to rise

You may (like me, in the past) have lived with the oblivious notion that what you need is a good job, and then your present needs will be settled. As fine as this seems, unfortunately, within a short while of securing that desired job, you are likely to fall into depression after finding out that your supposed solace is far from sufficient in solving your financial problems.

It will seem as though your needs came out of hiding the moment you earned that first mega-salary you dreamed of. Distant relatives, long-forgotten family members and even close friends, let alone your close relatives suddenly present their burdens to their perceived burden bearer – you. Your personal tastes will swiftly ascend to greater heights that all what you previously owned and valued suddenly become inferior.

You may have been content with living in a single-room before, but getting a job can suddenly make that idea old-fashioned. Just as you begin to plan on how to share your new income on meeting different demands that arise, the bombshell is released – your needs are suddenly too many than you can handle. What has actually happened is the reality of the Parkinson law that states that no matter how much money people earn, they tend to spend the entire amount and a little bit more besides.

2. Prices may never fall

Have you tried to analyse the trend in the prices of consumables in the last two decades, for instance? There was a time when with a little above a million naira, you could purchase a brand new Mercedes Benz. But that amount today can only fetch you a fairly used car.

What about the prices of housing? Renting a three-bedroom flat in a lowly-expensive city like Ibadan where I lived for over two decades will require as low as #50,000 fifteen years ago. Right now, that amount can only get you a decent room in a less-expensive area in Ibadan.

The situation in more expensive cities like Lagos, Port-Harcourt, Abuja and Asaba is worse with rents for three-bedroom apartments as high as #250,000 or more. With the persistent rise in exchange rates, crude-oil prices and rise in costs of raw materials, prices may never fall in the nearest future.

The reality in the face of an average Nigerian working for an employer whether in the private or public sector is that while the prices of goods and services are rising daily, their pay-check is unchanged for years. Or like the economist, Malthus predicted, while prices rise geometrically, our salaries as employees rise arithmetically only after a number of years.

3. No employer will pay you exactly the value of your productivity

Employers generally have the mindset of minimizing their costs in order to earn as high profits as possible. No matter how productive an employee is to his or her boss, the employee can never be paid for his or her entire productivity to a company.

If this was done, employers will make little or no profit. Pay rises, perks and other benefits are never sufficient to pay for the ideas and skills supplied and overtime work done by devoted employees. So, you as an employee will eventually find out that what you earn cannot completely measure up to what you give into the job.

The Way Out

Many persons have struggled with the effects of the above reasons to no avail. Honestly, I have found out that while working as an employee is very necessary in providing the right exposure to understanding organizational structures, the experiences may not yield sufficient income needed to pay the bills of an average Nigerian. If you are one of such persons, the option of getting an extra job (working full-time alongside running a small scale business) may just be the way out.

Not that shuffling between two jobs can solve the problem but the bold step of having an additional source of income to your monthly earnings can help to reduce the financial burden. While this is a good idea as a backup incase salaries are owed or there is redundancy, it further provides some social security for you after retirement.

A drawback to this idea though is that your present company’s policies and working conditions may not accommodate the flexibility you may require. However, if you are able to work things out by performing your employee’ duties adequately and building a good relationship with fellow workers and your employer, you will find it much easier to combine both.

You can also choose to work full time during the week and focus on your business at weekends. In extreme cases, you can choose to work part-time with the firm to have more time on your business. Whichever way you choose to apply this option, exploring it is capable of providing you financial security and help reduce financial stress while living in Nigeria.

Related Article: 8 life lessons of a successful Entrepreneur

Author: Promise Ayeni

About the Author: Promise is a young economist engaged in web development, teaching and writing. He is an IELTS coach, vocalist and web developer. You can contact him on (+234) 8076765539; (+234) 8102888897.