Will you ever be the owner of a business? Before making a decision, consider the following advantages and disadvantages of owning a business (Small Business Development Center, 2006).
Advantages of owning a small business
Being an entrepreneur can be very rewarding. Having the courage to take risks and start a business is part of the American dream. Success brings many advantages:
Independence. As an entrepreneur, you are your own boss. You can not be fired. More importantly, you have the freedom to make decisions that are critical to the success of your business.
Lifestyle. Owning a small business gives you benefits for life. Because you are responsible, you decide when and where you want to work. If you want to spend more time without any action or with your family, you do not need to ask for free time. If it’s important for you to be with your family all day, you can run your business at home. Given today’s technology, it’s relatively easy to do. This also excludes travel time.
Financial rewards Despite the high financial risk, having your own business gives you the opportunity to earn more money than if you were hired by someone else. You benefit from your own hard work.
Learning options. As an entrepreneur, you participate in all aspects of your business. This situation offers many opportunities for understanding various business functions.
Creative freedom and personal satisfaction. As a business owner, you can work in a field that you really like. You will be able to use your skills and knowledge, and you will be satisfied personally when you apply your ideas, work directly with customers and successfully pursue your business.
Disadvantages of owning a small business
As the little boy said, when he made his first trip on a roller coaster: “I like high, but not low!” Here are some of the risks that you will face if you want to start a small business:
Financial risk Financial resources needed to start and grow a business can be significant. You may have to spend most of your savings or even start debts. If everything is not so good, you can incur significant financial losses. In addition, there is no guaranteed income. There may be times, especially in the early years, when business does not create enough money for life.
Stress. As an entrepreneur, you are a business. There are many things to worry about: competition, employees, accounts, breakdown of equipment, problems with customers. As an owner, you are also responsible for the welfare of your employees.
Time. People often start doing business in order to spend more time with their families. Unfortunately, business management takes a long time. Theoretically, you have the freedom to free yourself, but in fact you can not escape. In fact, you probably have less free time than someone else. For many entrepreneurs and small business owners, a 40-hour work week is a myth; see Figure 5.6 “Contractor’s working week”. Holidays will be difficult to accept and often interrupted. In recent years, mobile phones, iPhones, laptops and iPads connected to the Internet have made work difficult, and many small business owners regretted that they were always available.
Unwanted responsibilities. When you start, you will probably be responsible for doing or monitoring everything you need to do. You can get bogged down in the details that you do not like. As a business owner, you probably need to perform complex tasks such as:
Despite these and other shortcomings, most small businesses are happy with their decision to start a business. A survey conducted by the Wall Street Journal and Cicco and Associates shows that owners and small business executives agree that small business owners have a more satisfactory business experience. It is interesting that the researchers expected that small business owners will be satisfied with their decisions. However, they were surprised by the number of business leaders who felt that the lawn was greener in the small business world (Cicco and Associates Inc., 2006).