Whether you have already started a business or just thinking about it, there are advantages and disadvantages of owning a small business.
A few of the biggest advantages that come with the courage to follow this American Dream are…
- Freedom – You get to be your own boss! In addition to that perk, you also get to make the decisions you feel are in the best interest of your business.
- Way of life – You get to decide when and where you work. You can work in an office or out of your home and depending on the type of business you can even work on the road. Need some extra personal time or family time? No problem.
- Financial rewards – The goal of business ownership includes financial benefits. There are definitely risks involved in starting your own business, but there is potential for great personal financial reward. You get to reap what you sew.
- Continued growth – There are never ending learning opportunities when you are a small business owner. You are generally involved in every aspect of the business in one way or another. Running your own business allows you to continually evolve both personally and professionally.
- Creative license and personal fulfillment – When people start a business it is generally in a field that they enjoy and want to succeed in. As the owner, you will be able to implement your ideas and vision for your company and participate in the evolution and success of your efforts.
On the other side of the coin – along with the risk associated with starting your own business, here are a few disadvantages to consider…
- Economic risk – When starting out or expanding, an owner may have to use their own savings or go into debt. There is rarely the security of guaranteed income.
- Stress – Business ownership comes with a lot of responsibilities. Whether you are a sole proprietor or have employees, the bulk of the accountability falls to you – the owner. You have to consider all aspects of the company: customer service, competitive environment, overhead, etc.
- Time Obligation – Many people are attracted to the flexibility that they believe business ownership can provide them. Many times the reality can be much different. Owning your own business can mean that you have a hard time getting away from your e-mail, cell phone and computer to enjoy the much needed time away.
- Unwelcome duties – We all have duties that we are required to do, but do not necessarily enjoy. This is true for the entrepreneur as well. Being the boss means that you may have to do jobs that do not excite you or interest you. This could range from taking out the trash to firing a difficult employee.
Given all of the advantages and disadvantages of owning your own business, it has been found that individuals that are involved in building their own businesses tend to have higher rates of well-being than those are employed by others.1
If you are interested in becoming, or are already a small business owner, having professionals to consult with along the way can be invaluable.
Matt Cassedy, with Analytic Business Appraisers, LLC can provide invaluable guidance in finding where the value drivers are in your current or prospective business venture. Feel free to give him a call for a free initial consultation at 480-857-7449.
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