If you are like many people, you dream of one day having your own business and answering only to you. If that sounds amazing, it is. But, not so fast, while owning a business can be profitable, not everyone enjoys success. In fact, nearly half won’t make it beyond five years. Listed below are the advantages and pitfalls of owning a business.
It’s Your Business
Pros: Owning a business definitely puts you in the driver seat. As the owner, you do the marketing; create the policies and best of all you don’t have a boss to answer to. You also don’t have to miss family functions allowing you to stay connected.
Cons: It’s your business, and while you don’t have anyone above you, you are responsible for everything. And, during the first few development years, the business will require a lot of your time. This can mean long hours and many sleepless nights.
Pros: If you have a plan mapped out and a spreadsheet that contains estimated costs to run the business, projected over the year, you pretty much know where you stand with your current finances and what you need to make in order to stay afloat with a possible small profit. Thankfully, if you should find that you need more money to get your business in motion, for small businesses there are loan companies offering loans.
Cons: Many people often turn away from owning a business quickly, once they realize that they need money to get started. And, while there are lenders out there who will provide a loan to a small business, working another bill into an already tight budget may not prove in your best interest.
The Risk Factor
Pros: There’s nothing more rewarding than taking a risk in life and having it pay off in dividends. It makes you feel almost euphoric when you take a dream and then realize it, only to achieve success.
Cons: If you quit your day job and the only source of income is your new business, you put everything on the line. That means that if the business fails you stand to lose everything. And, if you have a family, losing everything can cause your world to come tumbling down.
Pros: When it’s your business you do the marketing. This means that the ideas you had that your boss dismissed, you can now implement. You get to choose what marketing strategies you want to use and find out which ones work best.
Cons: Since it’s your business, cost is a key player in your marketing strategy. And, while you may know how to gain customers, your path to success may end quickly if the money you need to launch a successful marketing campaign isn’t there.
Pooling All Resources
Pros: While you may need to consume less monetarily during the first year, the rewards for a small sacrifice are worth it. If you use more of your money to get your business off the ground versus borrowing from a bank or family member, when the money starts to come in it’s yours.
Cons: When you first start out in business, you will need to pool money from everywhere. This can translate to giving up dining out or even a vacation, at least for the first year. This also means that you’ll need to curb personal spending and do without some of the luxury items you take for granted. And, in the end, the business may fail.
Making the decision to go in business for yourself has both pros and cons. It’s important to weigh each one carefully, before making a final decision based on impulse.