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Is Starting Your Own Business Now a Safer Bet Than Getting a Job?

Is it really that big a gamble to start your own business? Compared with other options, maybe not.

You know the stereotypical image: An entrepreneur risks it all in a gamble to get a business started. It’s tremendously hard work–but is it really all that risky? Sometimes what seems safe is, in reality, far riskier.

The “Safer” Options

José María Cobián, an experienced entrepreneur in Spain, recently wondered about the number of university graduates in his country thinking of trying for a public sector job. About 60% are considering whether to take the qualifying exam. Only 1.6% entertain an entrepreneur’s path.

And yet, according to research that Cobián quotes, five years out, only a fifth of the people who actually pass the exams get jobs in the public sector, and the annual success rate in the examinations is only 2%. Those numbers came before the current austerity measures that will mean fewer positions and less certainty. Public service is hardly more reliable and welcoming in the U.S., where government keeps trying to downsize and there is tremendous contention between management and labor. Just look at the turmoil in the Chicago public schools.

Are big corporations safer than starting your own company? For years, when asked about the dangers of working on my own and not as a corporate employee, I’ve always answered that given the economic climate and potential for layoffs, it seemed to me that full-time employees were the ones at risk. All their eggs are in one basket.

Where the Jobs Really Are

Look at the hiring trends. New jobs aren’t increasing at a breakneck pace, and the number of people who are disappearing from the unemployment rolls because they’ve given up on finding something has been on the increase. Furthermore, how many companies scale back on benefits and pay over time? What good is it if a large company can retroactively limit your retirement benefits, health care coverage, or other important aspect of living?

As Cobián also points out, if you want a new opportunity, small companies are largely the way to go. According to the Kauffman Foundation, young firms less than five years old are the real job creators in the U.S. In fact…

Read more: Erik Sherman, Inc.

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