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Employee vs Entrepreneur

This lecture is the part of lecture series which will motivate employees to do own business after learning practical in job. My accounting education's aim is also to educate everybody about accounting and its ratios for developing own business.

Following are the main differences between employee and entrepreneur and it is on you to decide what you have to become.


1. Difference of Thinking


Thinking of Employee : 

Employee works for money. If he or she does not get the salary, he or she leaves the job. It means, for him or her, money is important than work. Whether it is job of teacher or job of computer operator or higher job of manager or any Govt. job. All employees' thinking level is same because from beginning school level to college level. All learning is one sentence. Do job and get salary. Then, go higher salary and then go more higher salary. This thinking makes all employees slave of money. Money control on them. There source of input is money.


Thinking of Entrepreneur : 

I am entrepreneur. I have to business with money. So, every entrepreneur like me does work with money. They try to best to earn $ 1 million from 1 $ investment. So, entrepreneur thinks, every dollar is hi or her slave. It will do what entrepreneur wants for promoting his or her business. This is the first difference of thinking between employee and entrepreneur.


2. Difference of Leverage 


Leverage of Employee 


Salary is employee's leverage. He wants to get all his desires with his limited salary. Actually, he is totally fool to define the definition of leverage. Leverage is small word but it has big meaning. Leverage means, to do big work with the help of any tool. With mistake, every employee thinks his salary is the tool to buy everything in the world. He thinks, he can buy AC car with his salary, he can buy house and other luxury goods which he can see any eCommerce websites. So, this foolish idea captures him in debt trap.


Leverage of Entrepreneur





From above my presentation, you can learn that leverage of entrepreneur is more efficient than employee's leverage. Entrepreneur uses both money and employee very intelligently. He uses employees as stick for getting solution of his big business problem. Whether you are govt. employee or private employee in big MNC, if you see, you are being used only as stick for big solutions. You should never delay to resign same job. Same 500 Kgs can pick up through 10 people. All have right to get business share. But, Someone can use only you by giving small salary support. So, try to understand leverage of your boss. Be smart and join business soon as possible.


3. Difference of Ratios 


Ratios of Employee : 


a) Debt Equity Ratio

If you see employee's balance sheet, debt equity ratio will high. It means, it may be 5:1 or 10:1. In business language, We can say it as employee is always insolvent person. For example Total capital  (salary ) of employee is $ 100 and  his debt is $ 500. It means, he is unable to repay his debt, if creditor needs money today.

b) Ratio of Help 

Employee is single. So, with his work, his help is also single. If he will do two jobs, then, his help may be more than one.

So, ratio is 1:1 or 1:2 But, he can not help more than his own capacity.


Ratios of Entrepreneur :  


Debt Equity Ratio

Good entrepreneur tries to best to keep debt equity ratio at lowest level. It may be 1:5. If entrepreneur has $ 500 capital, he will take the debt of $ 100. With this, he want to take the benefit of low interest rate of debt for more business control under his capital control.

b) Ratio of Help 

Ratio of entrepreneur is high than employee. He is one but he is equal to whole team.

His business ratio 1: 15

Entrepreneur may be more than 15 business.

His Employees ratio 1: 20

He may be more than 20 employees. He is giving salary to all 20 employees.

He has given his real estate on rent to more than 100 peoples.

1:100

Like this, his level of help is big than employee. So, employees should get motivation from entrepreneur.


4. Difference in Buying Method


Buying Method of Employees

Employee buys in retail, so, everything, he will get costly.


Buying Method of  Entrepreneur 


Entrepreneur buys in wholesale, so he gets discount earning.


5. Difference in Investment


Investment Method of Employee

Employee invests without more investigation because he has no time to investigate.


Investment Method of Entrepreneur


Entrepreneur invest his 1$ after 1000 investigation. With this, he saves from risk of loss of money. If his 1 $ lose, he will not get it from salary. So, it try to best to go to deep for learning every aspect of investment.


6.  Difference in Training


Training of Employee

Employee is always interested to get training which will increase his or her salary. He or she will not interested other type of training.


Training of Entrepreneur

Entrepreneur learns everything from production to marketing, from designing to development, from management to accounting. With great knowledge, he gets great ideas which increases his business potential. Everyday, I read lots of motivational and educational books. Except this, I try to learn online and offline for learning business. It has increased my knowledge as entrepreneur.


7. Difference in Planning


Planning of Employee

Employee's planning is of short period. He also wants to become rich but he makes planning of short period because he is interested to fill more water in small jug. He is not interested to increase the size of jug through adding other as partner.


Planning of Entrepreneur

Entrepreneur makes the plan of long period. He is interested to increase the size of jug if he wants more water in it. It means, if he wants more income, he will increase the number of employees. He will increase the infrastructure. He will buy more assets like building, land, machines.

In end, our final aim is to teach to all employees whether they are accountants or any other in accounting or any other industry that they should understand the differences between employee and entrepreneur and try to invest their salary just like a entrepreneur.


Related : Why should I leave My Job?

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Accounting Education: Employee vs Entrepreneur
Employee vs Entrepreneur
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Accounting Education
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