So… you want to be a business owner. Congratulations! Owning a business can be one of the most rewarding and satisfying experiences in life today. It can also be one of the most challenging and frustrating experiences imaginable.
The good news is that you get to work for yourself without anyone interfering with your quest toward success. The bad news is that being the “Chief of Everything” can lead to long hours and a lot of stress compared to working for someone else.
Here are some of the most important pros and cons of owning a small business to think about before jumping into the fray.
What Are the Pros of Owning a Small Business?
1. There is more job security.
When you own a small business, you’re in charge. No one is going to be able to fire you. The only way you lose your job is if your business doesn’t become a success. Work hard and there’s a chance you might find that success.
2. It can be a money-maker.
Owning a small business creates more income potential. In the first years, it might be difficult to turn a profit and make a lot of money, but in 5 years? That often changes. Compared to traditional employment, owning a small business creates more chances to achieve a windfall.
3. You have autonomy.
Being a business owner means you get to be your own boss. You get to make the decisions that are going to put your business into a place where it can grow. No one can hold you back unless you allow them to do so. You get to be in charge of whatever success you manage to achieve because you have complete oversight over the process.
4. You get to follow your passion.
How many people do you know hold down a job because it provides them with a paycheck? Going to work and being miserable every day is no way to live. When you own a small business, you get to pursue what you are passionate about. If you are in a position to hire others, then you can find like-minded people who share your passion. There are no boring days waiting for you here.
5. It provides roots.
Owning a small business means settling down into a neighborhood or community. It means getting to know people. This creates a sense of belonging. You are in a position to help others. That is a rewarding experience on its own.
What Are the Cons of Owning a Small Business?
1. It is a financial risk.
According to information from Bloomberg and published by Forbes, 80% of small business owners will see their venture fail within 18 months. Just 5% of new businesses started today, no matter what the size, will be operating 5 years from now. That is the financial risk you are taking as a business owner.
2. You’re going to be working longer hours.
You might get to set your own schedule as a small business owner, but that tends to be for solitary items in the day – like a doctor’s appointment or maybe a day off to accommodate a sick child. 30% of small business owners work 50-59 hours per week. Another 33% work 40-49 hours per week. Just 5% of small business owners work shorter hours compared to traditional employment.
3. You can get stuck dealing with the mundane.
When you own a small business, you’re stuck dealing with everything – especially if you’re the only employee. If the computer goes down, you get to deal with fixing it. If you need taxes done, you do them or hire an accountant to do it for you. The details of running a business are very different from the pursuit of what you are passionate about.
4. There are hard decisions to make.
When you own a business, many friends may come along, asking you for a job. You might need to turn them down. You might need to fire someone with the full understanding that you’re putting their family into a financially risky situation. Owning a business is tough. There are difficult decisions waiting for you and you’ve got to make them.
5. You can be vulnerable to distractions.
Even if you start your small business from a home office to save on startup costs, you’re not free from problems. A home office means home distractions. People come to your door. Your family always interrupts what you’re doing, even if they don’t mean to do so. Working from home can also make it difficult to hire someone if you need help should your business grow.
These owning a small business pros and cons show that it can be a pleasurable, rewarding experience. There are also some difficult steps waiting for you on the road ahead if you start a business. That is why it is always a good idea to make a fully informed decision when thinking about becoming a business owner.