Mind Your Own Business

Begin Unrelated Story: I was talking with an employee who works for Mind Your Own Business–a company that makes small business accounting software.  She was relating a time she had been pulled over by a policeman who asked her the standard questions, "where are you going?", "where do you work?".  When asked where she worked, she replied "Mind Your Own Business". The cop was kind of surprised and started to explain that it would probably be better to cooperate.  She had to pull out her business card to prove that she indeed worked at Mind Your Own Business. End Unrelated Story

Ok back on track.  When you do work, you are providing value to someone.  Actually you are providing value to several people.  You are providing value to yourself (assuming you get paid for your work). You are providing value to the end customer and you are providing value to your employer.  If you work for the same employer for years, you will have built a great deal of value that goes beyond just the work you were paid for.  Your work is contributing to making the business itself more valuable.  Eventually the owners of the business can cash out.  They can take the value that has accumulated and sell the business to someone else.

The problem (from your standpoint) is that a good portion of the value
you help create is never going to benefit you.  Someone else is taking
the risk of running the business and so they are getting the reward.

Now assuming you are someone who puts a lot of effort into being highly
productive, this means the value that you are producing is much greater
than the value you receive.  The discrepancy is caused by the fact that
someone else (the business owner) is being paid to take the risk of
being in business.  Part of the value you produce is going paying for
your job security.  So basically you make a little less in order to
have a secure job.  Sounds reasonable right?

Well not really.

Just how secure is your job?  Company merge, fold, downsize, and do all
kinds of things that end up laying off employees.  The idea that your
job is secure is probably more of a fantasy than reality.  So what ends
up happening to the value of what you produce that is in excess of what
you are paid?

Several years ago much of it went to support work systems.  The cost of
running your own business was so great that you had to work for someone
who hired enough people to justify the cost of a computer system,
network, telephone system, advertising, payroll system, etc.

This is not as much the case today.  Many of the systems that were very
expensive 5 years ago are now handled by simple subscription based
services.  For example, I pay $50 per month to have a company run my
payroll and handle direct deposit for my company.  I pay another $30
per month for a dedicated webserver when a T1 line alone would have
cost $1,200 just a few years back. For a few hundred dollars each month
you can even get an ERP CRM system that rivals the systems many Fortune
500 companies put in for millions of dollars.

My point is that the benefits of working for a large company are
shrinking.  If you are someone who really concentrates on doing work
that is above average, you should probably be considering a plan to go
into business for yourself.  It isn’t easier to work for yourself, but
if you are willing to work hard you can build your own business in a
way that captures as much of the value of your work as possible instead
of basically paying someone else for a false sense of security.