Should I sacrifice a career in the City for my business idea?

How to choose between founding a start-up and climbing the corporate ladder

It's fair to assume that you, as a Gateway reader, are smart, ambitious and full of commercial nous. Given these qualities, if you really wanted to you could land yourself a corporate job (for example, in banking, law, consulting and so on) - and you may already have done so. But by the same token, if you wanted to you could establish your own business prior to or immediately after graduating. So how should you decide whether to go with that great start-up idea or to follow a more traditional corporate career track?

Money

Take two sets of ten graduates. The first set comprises those who will start their own companies. The second set comprises those who will take a corporate job. Zoom five years into the future and how will each be doing financially? Well, something like 70 per cent of start-ups fail within three years, so at best only three of our original ten entrepreneurs are still likely to be in business. Out of these three, the chances that even one will be running a business that makes them millions are slim, but not zero. The vast majority of businesses that do survive tend to be "lifestyle" businesses, that is, they generate a comfortable level of income for their founders but not enough to allow them to ditch their Ford Fiestas for Ferraris and to be popping champagne corks every night.

Now compare these to our second set of graduates, the corporate ladder-climbers. Five years into the future, the chances that their jobs will be earning them millions is practically zero. But all of them (not just three) will be earning a very comfortable level of income, that is, low to mid six-figure annual pay. In short, an entrepreneurial career offers considerably higher potential financial rewards than a corporate track, but the trade-off is that there's a higher chance of failure.

Timing

Some people say starting up a company as something you can "always do later". There is some truth and merit in this statement, but it depends how late you leave it. The benefits of taking a corporate job immediately post-graduation are significant: it will help you build a financial cushion which will be extremely handy if and when you do decide to start your own company, and it will help you build up work experience which can be valuable, either as inspiration for your own business or as something to fall back on if your business ambitions don't work out and you want to re-enter the corporate world.

But this all comes with a caveat: the later you leave exploring entrepreneurship the harder it will be to do so. Once you start climbing up the corporate ladder, a number of factors make it difficult to climb back down, namely: money - being used to regular, sizeable paychecks and the standard of living this brings; friendships groups - a big part of your social life will revolve around your job; responsibilities - rent, mortgage and possibly even dependants may require you to earn a steady income that starting a company cannot give you. One way to have the best of both worlds might be to pursue a corporate job initially, with a clear idea of the specific skills you want to learn and the ideal timeframe in which you want to acquire those skills (two to three years is common). Then once you have achieved your corporate goals, you can move on into entrepreneurship.

Type of work

In general, it's fair to say that an entrepreneurial career track favours creative people who relish unpredictability. After all, when you're starting a business your job is what you make it. By contrast, the corporate world is much more process-driven. There is scope for being creative, but usually within the relatively narrow confines of a specific role. As for unpredictability, investment banks, law firms, management consulting firms and the like are well-developed systems designed precisely to minimise unpredictability. To illustrate the difference in the type of work offered, consider the scenario of a sales pitch. All companies, whether they're start-ups or established corporates, will be involved in sales pitches. For these meetings, start-up founders will spend a long time creating documents from scratch. They have no choice. In a corporate environment, however, the idea of starting anything from scratch is usually frowned upon and seen as inefficient because with many thousands of employees (across the globe) and many years of operating it's highly likely that someone, somewhere within the company, has created a document which can be used as a template.

Personality

So the question of whether to start up a business or join a corporate after university is one without any objectively wrong answers. But that said, there are some personalities that tend to thrive more in one environment than the other. If you are one of those people who are not overly concerned with what other people think of you and have a bias towards rebelling, you fit the mould of the entrepreneur and will probably get frustrated rather quickly in a more corporate setting. On the other hand, if job title and prestige are important to you, you like the idea of having a particular role in a specific area, and enjoy working collaboratively rather having your own way all the time, then note that people like you do well in corporate settings.

Don't worry too much if you feel an equally strong tug pulling you towards entrepreneurship and the corporate world. The good news is that neither is a bad option and, even better, neither need be permanent.

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