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Self-employment: It’s a Trap

Self-employment and creating a startup are very different. A self-employed person simply trades his or her time for money. Meanwhile, entrepreneurship involves delivering an innovative solution to a problem, creating a value proposition around that solution, and creating a venture that can sustain the delivery of the solution over time.

Two real (but disguised) examples illustrate why creating a startup is often the better option. Like many veterans, Edwin Golf struggled to find a job after leaving the military. Edwin then started doing odd jobs. He hauled away junk in his truck, repaired a roof, trimmed trees, and mowed lawns. Edwin soon found that mowing lawns could at least provide recurring work, so he focused on getting more lawn service clients. Customers loved Edwin because he was hard working and conscientious.

After a few months, Edwin had enough customers that he was working 6 days a week from dawn to dusk. Edwin was pleased that he was earning enough to cover his bills and he even had a little money left over to start saving. But winter was coming and Edwin knew that he would have to think of something else to do. Snow was rare in his area, so the obvious choice of operating a snow plow was not an option.

By pursuing self-employment, Edwin had created a trap. With winter coming, he had no way to support himself once people stopped needing lawn care. Occasionally, Edwin’s war injuries would flare up. This would cost him a day or two of work and would sometimes lead to losing a customer. If his health took a turn for the worse, he would have no way to support himself during warmer weather too.

After Travis Hotel’s military service, he landed a job stocking shelves at the grocery store where he had worked during high school. Travis often found himself dreaming of owning his own business, but he had no idea what kind of business to pursue.

One day, the store manager complained about the poor quality of the nightly janitorial service and noted that she would be happy to pay more for better cleaning. Travis realized that his skills in running his military unit’s motor pool were really just people management skills. He offered to solve the manager’s problem by starting a commercial cleaning business. Within a few months, Travis had five accounts and a full-time crew of four people.

Travis Hotel had created a startup. Although Travis had started his business with a mop in his hand, now most of his time is spent working on his business rather than in his business by bidding on new jobs, managing his employees, and finding the best people to join his startup. His cleaning service is a sustainable enterprise that could thrive in the future even if Travis were no longer involved.

 

This article is adapted from Blass, F.R. & Ketchen, D.J. 2014. So, you want to be an entrepreneur? Lessons from the Entrepreneurship Bootcamp for Veterans with Disabilities. Business Horizons, 57, 5-9.