Benefits of Being an Entrepreneur

1Why this matters

Keza has just finished S6. A supermarket offers her a job as a shop assistant at 120,000 Frw a month. Her cousin Mugisha runs a mobile-money (MoMo) agent kiosk that also sells phone accessories in Nyabugogo. He says he would never go back to working for someone else. Who is right? Before you can judge, you need to know exactly what an entrepreneur gains, and what those gains cost. This lesson covers the gains; the next covers the costs.

2Working for yourself

Self-employment is working for yourself instead of for an employer: you find your own customers and earn from a trade, profession or business you run. Every entrepreneur is self-employed at the start, but not every self-employed person is trying to grow. A tailor who only wants to support her family is self-employed; a tailor who plans to open three workshops and employ twenty people is also an entrepreneur building an enterprise.

3The benefits, one by one

• Independence. You make the decisions: what to sell, at what price, how to treat customers. There is no manager above you.
• You keep the profit. Profit is the money left after all costs are paid. An employee’s pay is fixed; an entrepreneur’s income can grow as the business grows.
• Personal satisfaction. You can build your work around something you are good at and care about, and see the results of your own effort.
• Control over time. You can arrange your hours around family or study. (The honest warning: most entrepreneurs work longer hours than employees, and the customers become the real boss.)
• Security from dismissal. Nobody can fire you, and you can keep working past the usual retirement age.
• Respect and networks. Successful business owners are often respected in their community and meet suppliers, officials and other owners.
• Learning. You learn to negotiate, keep records, manage people and handle money: skills that last a lifetime.
• An asset to pass on. A business can be handed to your children or sold.
• The chance to help others. You can employ relatives and neighbours, or solve a problem in your community.
• A low-cost start. Many businesses can start small and part-time, for example a market stall or selling snacks while still at college.

Worked example: salary or profit?

This case is written by Ganzaa. Mugisha recorded his kiosk’s profit for six months:

1. Total profit = 95,000 + 140,000 + 210,000 + 60,000 + 175,000 + 250,000 = 930,000 Frw.
2. Average monthly profit = 930,000 ÷ 6 = 155,000 Frw.
3. Keza’s salary over the same six months = 6 × 120,000 = 720,000 Frw.
4. Difference = 930,000 − 720,000 = 210,000 Frw more for Mugisha.

So the benefit is real: on average Mugisha earns more. But look at April: 60,000 Frw, half of Keza’s salary. Higher average income comes with irregular income. That trade-off is where the next lesson begins.

Practice