A lot of people want to be in business to get rich. They feel that to be an employee, you’d be stuck working for someone else for peanuts for the rest of their lives.

I actually disagree.

For one, many corporate dudes work for extremely high salaries — high enough to support a demanding unemployed stay-at-home wife, and send four kids to the best international schools in the country, all the while staying at a nice pad somewhere in the city, with one or two maids in tow.

And two, the math somehow supports that being an employee is a good shtick to have.

There are two business graduates, Henry and Ben. Henry had big dreams and wanted to start his own business, while Ben found a job working for one of the largest multinational companies in the world.

The easiest business to get into is food. So Henry, upon seeing Potato Corner, decided to start his own french fries shop right in the corner of his place.

The capital required is not that great.

To start of his business, Henry had a contractor to make his stall and he bought some fries and powder from Quiapo. Overall, he spent around Php 50,000.00 to start his business — Php 25,000 he borrowed from the local loanshark at 20% per month, and the Php 25,000, he borrowed from his mom, who has worked for the same company for 18 years as a secretary.

The Php 45,000 was spent as follows:

• His stall and equipment was Php 25,000.00 for material and labor.
• His monthly rent was Php 8,000. Adding one-month security deposit, that’s Php 16,000 total.
• Php 3,000 for the materials, and transportation to and fro Quiapo.
• Php 2,000 for the local police and the local barangay to not give him any trouble since his is an underground economy.
• He has Php 4,000 left for operating expenses.

To save on costs, he was the one who manned the store, waking up early till late, working from 9am till 11pm at night, saving himself at least Php 5,500 a month (Around Php 200 per day).

His location was okay. It was by his street so he sold fries to his neighbors. He operated five days a week, going to Quiapo and buying new supplies when he is almost out.

The money that he makes is poured into supplies, rent, and interest expenses since his Php 25,000 loan costs him Php 5,000 interest expense per month.

Technically, for all his efforts, he nets Php 5,000 profit per month for himself.

Unfortunately, being one of the first kids to graduate from college, he has carried the burden of being a breadwinner. The Php 5,000 he earned goes to paying for the hospital bills when his little sister got sick. Php 500 went to pay for the project of another brother. Life goes on and with every medical emergency and family need, what he earns is shared with the rest of his family.

So the money that he makes from his fries business is easily spent.

Two years later, he has the same stall, working 5 days a week. There is a Potato Corner that opened up a few streets away so his business went down further. He feels tired, dirty and exhausted. He wonders why his business has yet to earn him the wealth he so deserves since he has been working non-stop for 2 years straight.

Ben on the other hand started in the multinational company as a Management Trainee.

Conservatively, his salary as a fresh graduate is Php 15,000. If he had graduated from the top schools of Manila, his salary is at least Php 20,000.

His work is from Mondays to Saturdays from 9am to 6pm.

Transportation from his house to work costs him around Php 150 per day or Php 3,900 per month and commutes 1.5 hours per day without traffic.

After being in the company for 6 months, he was regularized and started renting bedspace at Php 3,000 nearby. This cut his commute time and money significantly. That still leaves him with Php 12,000 money left.

Food is budgeted a day so that leaves him with Php 8,000 at a Php 15,000 monthly salary. Ben spends Php 3,000 on miscellaneous things like merienda, and saves the Php 5,000. In December, he gets his 13th month pay so that’s an additional Php 15,000, which he saves, so by the end of his first year, he has saved around Php 75,000, debt free.

His family expenses were around Php 25,000 for emergencies, but he still has Php 50,000 in savings debt free.

After a year’s time, Ben’s salary was increased to Php 18,000 (if he started at Php 15,000) and Php 22,500 (if he started at Php 20,000). Given his good performance and work attitude, Ben enjoyed increased responsibilities and salary.

And this is just two years off university. A man who spends years in his corporate life should gain a higher salary and benefits given increased responsibilities. The Philippine law mandates SSS, Philhealth and Pagibig benefits.

Hence, at the minimum for example, if you are part of the underground economy, if you get pregnant, you get nothing since you do not contribute to Social Security. If you work for someone else, you should get around Php 32,000 maternity benefit after contributing for at least a year.

So let me ask you — Who had it better? Henry or Ben?

“Bonita, this is unfair! Of course, it is Ben (The Employee). But that’s only because you framed your example that way. What if Henry got lucky and got wealthy like Joe Magsaysay, the owner of Potato Corner? Is Magno not racking the riches now?”

That is correct, my friends.

It is unfair for me to summarize the entrepreneur life in such a manner.

If Henry was smarter, and somehow hired help and expanded his business to 10 stores around the area, he is on his way to being a Joe Magsayasay.

But that requires several things.

For one, it requires more than enough start-up capital.

If you don’t have enough money to invest and expand your business, life will catch up with you and your business will end up efficiently run.

When we built our business, we took out millions of loans to build our store. It was a very bad time for us. I was always stressed whenever I paid the bills. But without risking ourselves financially, we would be stuck in a business limbo.

Two, it requires life to not throw too many curve balls at you.

My mom and my brother already has enough money so they don’t need me to support them. My business is also not my only bread and butter. If I lose the business, my family does not starve.

It’s hard to be a businessman if your business is the only thing that sustains you. The pressure can be unbearable: Especially when someone in your family gets sick, or if you make a mistake and have to pay a huge penalty for it, the pressure is enough to screw your mind up.

For our business, a staff I trusted stole Php 200,000 from me. If you’re Henry, that’s Php 200,000 is enough to bankrupt you and put you in debt for years.

Lastly, it’s about being smart about it and to not invest a business if it is not viable.

My husband loves Gundam toys, and went into business with a friend/partner in making dioramas and repainting toys.

They were making around Php 1,200 profit in each repainted toy they sold.

It takes around 4 days to repaint each toys because they are busy with many other thing. So while getting customers is not a problem, finishing projects on time is. At the height of their business, they had a 2-week backlog.

His friend used to earn Php 40,000 as a mining engineer. Given the profit of Php 1,200 per toy, that meant that they had to finish 33 toys per month just to make Php 40,000. And that’s just his friend. That doesn’t count my husband’s income yet.

They could only finish less than 10 toys per month given their schedules. As a result, the money they made was not enough to sustain their lifestyle.

Since his friend quit his job as a mining engineer to fulfill his dream, friend was constantly getting money from their business for his personal expense. The business was not big enough to give a salary, so he was forced to drain some money so that he can survive.

So no, being talented does not mean you are a good businessman.

Our friend is talented and can do a mean artistic Gunpla. However, he cannot do business. As expected, the business folded up in two year’s time.

Yes, I am bad. I should be more encouraging. I should be more positive, not more negative about entrepreneurship.

Don’t get me wrong — I AM supportive of entrepreneurs.

There are a lot of businessmen who I very much respect, who knows how to do business, and whose business, I would invest in if given a chance. They have built successful businesses through the years and employed hundreds even thousands of people.

These are the people I support — the ones who know how big a sacrifice it entails to do a business. Who operates their business hands-on and sets up the system so other people can operate their business for them.

The ones who will invest their own money into their business because they fully believe in it, and not just spend other people’s money with abandon.

The ones who are successful because they actually know how to make AND not lose money.

They are the true entrepreneurs.

Not just dreamers who want a quick get-rich scheme on their way to financial ruin.

What do you think? Do you agree or not? Comments below.