Comp: 9-5 vs Business Ownership

We found another great post on X from Blueprintsmb about comparing a 9-5 job to business ownership. The account owner, who is an ex-Wall Street professional and current owner of a small manufacturing business acquired through ETA, likely has valuable perspectives on the subject.

With this foundation, we decided to blog about the topic.

Transitioning from a stable W2 (or T4 for my Canadian friends) job to owning a small business is a journey filled with both challenges and rewards. Blueprintsmb has experienced both worlds and has shared a detailed comparison of these two distinct career paths. If you're currently in a 9-5 job and considering buying a business, this guide is for you.

W2/Finance (Public Markets)

Daily Routine:

• 4 am: Check futures to stay updated on global markets.
• 4:30 am: Hit the snooze button for a brief moment of rest.
• 5 am: Walk to the office, preparing mentally for the day ahead.
• 6 am: Start the day with a strong cup of coffee.
• 7 am: Check emails and the latest news to stay informed.
• 8 am: Execute trades based on market conditions.
• 9 am - 4 pm: Engage in various tasks including:
  • Updating financial models.
  • Reviewing earnings previews.
  • Handling investor relations and management calls/meetings.
  • Assessing risk about factor exposure.
  • Meeting with sell-side analysts and attending conferences.
• 5 pm: Adjust portfolios if necessary and plan for the next day.
• 6 pm: If there are no earnings, head home but stay connected to the markets via phone and email. If there are earnings, listen to calls, update models, and make necessary trades.

Weekly Schedule:

• Hours: 60-70 hours a week, increasing during earnings season.
• Days: Monday to Friday (6 am - 6 pm office hours, extending later during earnings). Sundays are dedicated to preparing for the upcoming week.

Lifestyle Metrics:

• Steps Walked per Day: 4-5k, reflecting a largely sedentary lifestyle.
• Stress Level: Very high, due to the volatile nature of the markets.
• Job Security: Feels low, as market conditions can change rapidly.
• Feeling of Control: Low; public markets can be unpredictable and humbling.
• Maximizing Near Term $: High potential for earnings; always one good year away from seven figures.
• Best Part: When the market performs well, the financial rewards are significant.
• Worst Part: Constant pressure and the looming fear of employment loss due to market instability.

SMB Ownership (Small Manufacturing Business)

Daily Routine:

• 4 am: Wake up and drive to the factory, ready to start the day early.
• 4:30 am: Open the factory and turn on equipment.
• 5 am: Discuss job priorities with the bag foreman.
• 6 am: Set up freight for the day, handle accounts payable, and check in with extrusion scheduling.
• 7 am: Send emails to overdue accounts.
• 8 am: Update the 13-week cash flow if necessary.
• 9 am - 4 pm: Engage in various tasks including:
  • Quoting jobs for customers.
  • Processing orders and scheduling jobs for extrusion.
  • Addressing maintenance issues and setting up pallets for shipping.
  • Walking around the plant, checking in on orders, and assisting with loading/unloading.
• 5 pm: Invoice customers.
• 6 pm: Home for dinner with the family.

Weekly Schedule:

• Hours: 50-60 hours a week.
• Days: Monday to Thursday (4:30 am - 4 pm); Friday (4:30 am - 12 pm). Weekends are rarely required.

Lifestyle Metrics:

• Steps Walked per Day: 10-15k, reflecting a more active lifestyle.
• Stress Level: High, but different from the constant pressure of financial markets.
• Job Security: High, though cash flow volatility requires a strong understanding of working capital.
• Feeling of Control: Higher than in a W2 role; more direct influence on business outcomes.
• Maximizing Near Term $: Slower growth; interest and debt amortization can impact cash flow.
• Best Part: Greater flexibility and the ability to be present for family without being tied to Bloomberg.
• Worst Part: Dealing with issues like theft, equipment breakdowns, and late payments can be isolating.

The Comparison

1. Working Hours and Routine: In my W2 finance role, my days were filled with high-stress tasks from early morning to late evening, especially during earnings season. In contrast, SMB ownership, while still demanding, offers a slightly more predictable schedule and allows me to be home by 6 pm most days. The transition from a structured office environment to the hands-on demands of running a manufacturing business can be jarring. However, the early start and physical nature of the work have added a new dimension to my routine, keeping me more active and engaged.
2. Stress and Control: The stress level in public markets is incredibly high, with job security always feeling low due to market volatility. The pressure of constant performance evaluation and the fear of sudden market shifts can be overwhelming. On the other hand, SMB ownership brings its own set of stresses, such as managing cash flow and handling operational issues. However, there's a greater sense of control over business operations and earnings visibility. The ability to directly influence the success of the business provides a more tangible sense of achievement.
3. Financial Rewards: The potential for high earnings is greater in a W2 finance role with a good year potentially leading to seven-figure earnings. SMB ownership, while slower to build wealth due to factors like interest and debt, offers the satisfaction of building something tangible. The financial rewards in business ownership are more long-term and tied to the growth and success of the enterprise.
4. Physical Activity: Interestingly, my SMB role has significantly increased my daily steps, contributing positively to my overall health. In the finance role, I was much more sedentary, spending long hours at a desk with little physical movement.
5. Work-Life Balance: One of the most significant benefits of SMB ownership is the improved work-life balance. I can be more present with my family and less tied to my phone and computer outside of work hours. The flexibility to manage my own schedule and the ability to step away from work without constant market monitoring has been a major advantage.

In the end, both paths come with their unique sets of challenges and rewards. The decision to transition from a stable W2 job to owning a business should be made after careful consideration of personal goals, financial situation, and lifestyle preferences. Here are some key takeaways for those considering this transition:

• Evaluate Your Risk Tolerance: The financial markets offer high potential rewards but come with significant stress and instability. SMB ownership provides more control but requires patience and a strong understanding of business fundamentals.
• Consider Your Health and Well-Being: The sedentary nature of office jobs can impact physical health. SMB ownership, particularly in a manufacturing setting, can lead to a more active lifestyle.
• Assess Your Long-Term Goals: If your goal is immediate financial gain, a high-paying W2 job may be more suitable. However, if you seek long-term growth, personal satisfaction, and greater control over your work-life balance, SMB ownership could be the better path.
• Prepare for the Challenges: Both paths have their own difficulties. Whether it's the high-pressure environment of finance or the operational challenges of running a business, being prepared and resilient is crucial.

At BuyAndSellABusiness.com, we’ve had a front-row seat to watch our users' journey from W2/T4 to SMB ownership. It has been incredibly rewarding to see firsthand the blend of professional satisfaction and personal fulfillment. If you're contemplating whether to leave your 9-5 job and enter the SMB arena, weigh these factors carefully and choose the path that aligns best with your personal and professional aspirations.

Opinions expressed here by contributors are their own.

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