Entrepreneuer Vs Employee

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An employee works for an entrepreneur. This is the basic difference between one and the other. But the entrepreneur cannot do without the employee. Both are partners and need to work together to achieve specific objectives in the corporate world.

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Entrepreneuer Vs Employee

  1. 2. E. K. Vinod Presents ner againt all ds Vin od
  2. 3. TechnoFIRST www.technofirstonline.com The Technology Career Magazine Network Partner in association with
  3. 4. Entrepreneurship Employment vs
  4. 5. Once upon a time there lived two friends Ramesh and Mahesh .
  5. 6. They had been friends since childhood. Now both of them have completed their studies.
  6. 7. Ramesh aspires to be an entrepreneur one day and started working towards that Mahesh wants to join a Multinational company and earn good salary.
  7. 8. They selected their way of life after carefully studying the advantages and disadvantages of entrepreneurship and employment.
  8. 9. The two friends spent long hours discussing and finally parted ways in different direction. They also made a promise that they will meet once in a year and will measure the progress they made in life.
  9. 10. Ramesh an aspiring entrepreneur faced difficulty and delays in meeting various government requirements such as registration of company, obtaining licences and registering the property.
  10. 11. According to World Bank report, it takes minimum 35 to 52 days to start a business in India .
  11. 12. The official costs of starting a business are high and the process quite complex involving no less than 13 procedures
  12. 13. About 50 % of the entrepreneurs said they faced problems while obtaining various clearances and licences .
  13. 14. He was facing a tough dilemma…..
  14. 15. Then, one day Ramesh saw TechnoFIRST magazine in a book shop.
  15. 16. It had a collection of visually compelling articles on the entrepreneurship from the experts. His eyes lit up on seeing an advertisement of the campaign ‘ I am an Entrepreneur’
  16. 17. He contacted TechnoFIRST immediately and after two days he got a call inviting him to attend the seminar.
  17. 18. It was the most engaging, moving and inspirational seminar I have ever attended. Thanks to TechnoFIRST and Technopark for inviting me to attend ‘ I am an Entrepreneur ’ campaign. Ramesh
  18. 19. Technopark Business Incubation Centre (T-BIC) mentoring services, space to work from and even seed capital Ramesh got encouragement from T-BIC and they offered
  19. 20. After one year both Ramesh and Mahesh met and narrated each others story. Ramesh , the entrepreneur invested Rs.1,50,000 to launch the new business. Meanwhile, Mahesh , the Employee invested nothing, incurring no debt or risk. If anything, he invested was a bit of time and photocopier expense in preparing a good resume.
  20. 21. Over the course of the first year Mahesh had a pretty big advantage in terms of income, with a salary that clearly exceeds the Rs. 20,000 owner benefit the Ramesh takes from the business. Mahesh
  21. 22. In Year 1 there is no arguing the fact a six-figure salary, even after taxes, exceeds the Rs. 20,000 owner benefit by quite a margin. Ramesh was willing to accept this. Rs.1,00,000/- Rs. 2,00,000/- Gross 10% Net Rs. 20,000 Owner Benefit Year 1 Rs. 0/- Rs. 1,50,000/- Startup Investment Employee Entrepreneur
  22. 23. In Second year, things improve for both. Th e Mahesh received a very nice raise of 5%, and now has a salary of Rs. 105,000 annually.
  23. 24. Because of the healthy boost of gross revenues and greater efficiency, owner benefit has now more than doubled from Year 1 from Rs.20,000 to Rs. 52,500 . Meanwhile, The Ramesh has done better in the business . His gross revenues have increased from Rs.200,000 to Rs.350,000 His net income percentage has increased from 10% to 15%
  24. 25. Rs. 1,05,000/- Rs. 3,50,000/- Gross 15% Net Rs. 52,500 Owner Benefit Year 2 Rs. 1,00,000/- Rs. 2,00,000/- Gross 10% Net Rs. 20,000 Owner Benefit Year 1 Rs. 0/- Rs. 1,50,000/- Startup Investment Employee Entrepreneur
  25. 26. Once again in Third year, The Mahesh was a good employee and was rewarded with another salary increase. His Rs. 108,000 pre-tax gross salary exceeds the Ramesh’s owner benefit.
  26. 27. But the gap is narrowing. In two years Ramesh has gone from Rs. 20,000 to Rs. 90,000 in Owner Benefit.
  27. 28. Rs. 1,08,000/- Rs. 4,50,000/- Gross 20% Net Rs.90,000 Owner Benefit Year 3 Rs. 1,05,000/- Rs. 3,50,000/- Gross 15% Net Rs. 52,500 Owner Benefit Year 2 Rs. 1,00,000/- Rs. 2,00,000/- Gross 10% Net Rs. 20,000 Owner Benefit Year 1 Rs. 0/- Rs. 1,50,000/- Startup Investment Employee Entrepreneur
  28. 29. Ramesh again . In terms of take-home salary, the Ramesh has at least evened the score , and possibly surpassed Mahesh Who achieved the greater hike in earnings?
  29. 30. Moral of the Story
  30. 31. After three years if we compare, the asset value the Employee’s job has an asset value of ZERO! Think about it. Does an employee own a job? No. Does an employee own their office or work station? Someone else owns these assets—the business owner!
  31. 32. Entrepreneur Employee Rs. 0/- Rs. 2,70,000/- Owners Business Rs. 1,08,000/- Rs.90,000 Owner Benefit Year 3 Rs. 1,05,000/- Rs. 52,500 Owner Benefit Year 2 Rs. 1,00,000/- Rs. 20,000 Owner Benefit Year 1 Rs. 0/- Rs. 1,50,000/- Startup Investment Employee Entrepreneur
  32. 33. Speaking of our entrepreneur, look at what happened to the market value of the asset that was created with a Rs. 150,000 investment. Because the Entrepreneur worked hard and created a successful business, he can now sell the business if he wishes. It is now worth around Rs. 2,70,000 (rule of thumb is 3 x owner benefit ) .
  33. 34. The start of the exercise, the Rs. 150,000 investment seemed like a significant setback for Ramesh , while Mahesh enjoyed the comfort and ease of settling into a new office to work for a steady paycheck.
  34. 35. entrepreneurial bug in college So, if you are bitten by the it's time to stop making excuses start making your campus dream true.
  35. 36. This is just the start of the story..…..

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