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Entrepreneurship vs. Underemployment: The Pros and Cons

Mar 7, 2012 Jennifer Williamson, Distance Columnist | 0 Comments

It’s not easy out there for job seekers. Unemployment in 2011 rose higher than 9%, and many of those with jobs were underemployed—working in low-paying jobs for which they were overqualified and which usually do not require a college degree.

As a recent graduate, you may be struggling to find a job that’s in your field and that uses the skills you learned in school.

While they’re waiting for the perfect job to come along, many recent graduates consider two different options to keep them afloat—entrepreneurship, or underemployment. Both of these have their pros and cons—each one could either help or hinder you in working toward your larger goals. Here’s a more in-depth look at each.


It’s a risk

Monopoly Board

Which one you should choose depends on what you need - often it comes down to a steady paycheck vs. pursuing a passion.



Starting a business isn’t for the faint of heart. Some businesses require a loan or other start-up capital; for others, it’s difficult to get started if you don’t already have long-standing contacts in the industry. It’s not easy, and some recent grads may not be in a position to launch a business without at least some experience and resources.

But this isn’t true for all businesses. Freelancing, for example, can have extremely low start-up costs, depending on the type of freelancing you’re doing. If you’re crafty and creative, there are plenty of sites, like, that allow you to sell things you’ve made online. Some businesses may require a big investment, while others may not be as much of a risk as they seem at first.

Rates of success aren’t high

That said, a large percentage—50-80%, depending on which study you’re reading—fail within their first few years. There are a wide variety of reasons why businesses fail, and these often include lack of experience, lack of start-up capital, intense competition, bad locations, poor financing agreements, and use of business funds for personal use. It’s not easy to start a business, and it’s even harder to keep one running.

You have to pay your own benefits

Finding benefits on your own isn’t easy—even if you’re young and healthy. When you work for a company, this is taken care of for you—and the company often pays a significant percentage of the premium for you, although a contribution will likely be taken out of your paycheck as well. As a small business owner, you’ll have to navigate these waters yourself—and possibly get benefits for your employees as well.

It also just might work

All this negativity aside, your entrepreneurial idea might just work—and it might be glorious. Running your own business gives you control over your own life, and opportunity to earn money, that you may never see working for someone else. And it gives you the opportunity to work at something you’re passionate about. For some people, finding the ideal job isn’t about getting someone to hire them—it’s about making that job themselves.


It doesn’t look as good on your resume

If your ambition is to work on Capitol Hill, you won’t be helping your resume much if you’ve done nothing but work at Starbucks for the past two years after graduation. These stopgap jobs definitely can be a hit to your resume, and the secret is to find a way they’re relevant to the job you want—and aggressively present them that way in your resume. If you’re a good enough writer, you may be able to present your underemployed position as an asset that people with a more traditional career path don’t have. But this isn’t possible in all fields.

It can be demoralizing

It can be extremely depressing to work at a job you’re not enthusiastic about for months or even years, without seeing a way out. It’s especially depressing when the position you have isn’t relevant to your degree—and doesn’t even require one. When you’re trying to get a business off the ground, on the other hand, you’re at least dedicating your time to something you want and you’re passionate about.

It’s a steady option

It does have its drawbacks. But that stopgap job can also be a lifeline to recent graduates who are struggling for cash. Some of these jobs provide benefits—Starbucks, for example, gives benefits even to part-time workers—and most provide a steady paycheck. For some recent grads, that stability is just what they need as a foundation for their job search.

Sometimes you have a conscious choice between these two and the other option, ideal for many of us—a steady job with a company you want to work for. And sometimes one or more of these opportunities present themselves.

Which one you should choose depends on what you need—often it comes down to a steady paycheck vs. pursuing a passion. Some people feel more comfortable with the steadiness a regular job provides, even if they’re way overqualified for that job; while others can handle the irregular paycheck as long as they’re working toward something they truly want. Which one is right for you is a very personal choice—take some time to consider which would make your life more bearable while searching for your dream job, and you’ll be much more likely to arrive at the right answer for you.



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