Future Entrepreneurs, Where Should You Start Your Career—Large Company Or Small Company

You aspire to be an entrepreneur, but you want some work experience first. When you start your first professional job in your career, where do you look? To the safety of a large company or the accelerated pace and chaos of a small firm? While there might not be a right answer for everyone, there is a right answer for you. The problem is that you might not know which decision to make unless you have done several working internships and your homework.

Knowing the type of environment where you will thrive is extremely important. And while people talk a lot about culture, it’s hard to “see” the culture of a company before you start working there. If you truly want to be an entrepreneur in the future, let’s compare the key elements of what you want and need in the first few years of your career from the aspect of a large or small company.

Culture is critical. It might be more important to choose the right company based on culture than any other attribute. Finding a culture that fits you will be crucial to your overall job satisfaction. At a large company the culture is more formal than not governed by rules and policies. People might be more conservative and the way that employees are treated is more general in nature. There will be more divisions, departments and you might not get a sense of the mission of the company in general, but more by your department. There will also be more layers of management in the company. As a result, employees might feel like one of a million; like an employee number, not an individual.

At a smaller company, the culture is formed organically, usually by the founders. Often, the culture is still evolving as more people join the company. But if the mission, purpose and values are aligned, then it will feel like there is a sense of mission at the firm. The culture is likely going to be casual with less rules or process which could be chaotic.  At small companies, employees may be treated like the individuals they are and as a result, you might feel more comfortable in the workplace. But, most likely, you will have to deal with less structure and be self-motivated to do well.

Learning versus training. At a large organization, training will be built into the infrastructure of the company. Large companies usually offer formalized new hire training as well as a multitude of ongoing education and professional development courses. From mental health training to negotiation skills, you could have access to free libraries of courses or be sent to a top conference to learn new skills. Bottom line: big companies’ budget for training and development. In fact, most large companies have extensive training departments.

Small companies may not do as much formal training, but they have learning initiatives that are key to the business. There may be some sort of a training program such as on-boarding or product training, but it might possibly lack the structure that a large company offers. But what a small company offers is possibly more learning by what is known as on the job training. At a small company you might have fewer employees and fewer specialists, but you will have more urgency. As a result, employees need to help out in areas of the business outside of their own domains and learn more cross functional skills which they would not learn at a large company.

Compensation. There are two types of compensation. One is real money. The other is opportunity. Larger companies may be able to offer you a good initial compensation and certainly an amazing array of benefits. At larger firms you might get an attractive total compensation package, with a combination of salary, bonus, benefits, retirement plans, etc. However, in large companies, compensation is managed in a structured, methodical way. All jobs will have salary ranges and so your ability to negotiate your earnings outside of the predetermined range may be next to impossible.

Smaller companies, especially technology firms must fight to be more competitive, so you’ll be at market, if not higher in your earnings. You’ll have a good compensation package, but retirement options and benefits may be weaker. The great thing about smaller companies is your ability to negotiate your value through proven success. This is where “opportunity” compensation comes in. At a smaller company, if you prove your value, you might see accelerated opportunities and compensation, including stock options, that you might not see at a larger firm in the same timeframe.

Creativity rewarded. Creative freedom. Due to standard rules and policies, freedom might be limited at a large company. At a large company, you may have variations of experiences that may be perceived as freedoms, but it’s relative freedom. You will have various choices and depending on your contribution level you’ll be able to make an impact, but it might not feel like creative freedom. As an employee you may be managed quite closely.

At a small company you might have a much wider spectrum of freedoms. Freedoms related to time. Freedoms with creative decisions towards solving problems. At a small company you might figure a way to solve a problem or increase revenue, step into the founder’s office, pitch the concept and get a new initiative approved by end of day. Because you’re encouraged to be wildly productive at a small company, you might naturally become more creative and thus enjoy more freedom. Smaller companies are more focused on their purpose and vision and tend to be more results oriented in the short term. So, you have to be comfortable with being held accountable for your work.

So, where should you work when you start your career? There is no right answer. You should choose the environment where you believe you can grow and thrive early in your career to acquire important skills. If you feel you need more structure and training, then work at a larger company. If you believe you can thrive in a place where chaos meets opportunity and you want to accelerate your overall skill and capabilities, then start your career in a smaller firm. Both career move options, if done well, could support your entrepreneurial ambitions.