Have you ever thought about quitting your job to start your own business? I know I’ve definitely dreamed about the day I can give my letter of resignation and hang my own shingle. I know several people who have started their own businesses and I’ve watched the risky, yet rewarding experience. That said, it’s probably not a good venture for everyone.
Some people do very well running their own business, while others thrive while working for someone else (and there’s nothing wrong with that!). Before taking the big leap to start your own business, you need to completely understand what you are getting yourself into. Many people don’t consider the pros and cons of starting their own business, jump right into it, and ultimately fall flat on their face. But after careful consideration and in-depth due diligence you’re prepared to run your own business, you shouldn’t be scared to give it a shot.
Starting Your Own Business: Advantages
According to Hostway, owning your own business is a completely different lifestyle. But it will take total commitment and determination to make the lifestyle work for you. Though there are drawbacks, here are some of the advantages to owning your own business:
- Work-life balance. Owning your own business enables you to find a balance between work and family that works for you. Many people find it frustrating to be at the beck and call of their employers. I hate being on-call, but it’s part of my job and it’s something I’ve had to learn to live with. You can also wind up working odd hours and not seeing much of your family, which means missing important family events and functions. Once you get into the groove of your own business, Inc notes that you can carve out time for family without sacrificing work time or vice versa.
- More work = More pay. You have the opportunity to make more money when you own your own business. When I see the direct impact of more work = more pay, it’s easy to get motivated and I want to work hard. Additionally, since you have no co-workers (unless you hire staff to help you), you can keep the money you earn for yourself. In most traditional jobs (unless you work for commission) the majority of your direct earnings never come back to you. When you own your own business you keep all of the revenue.
- You’re the boss. One of the best perks of owning your own business is that you are your own boss. I know I’m my own biggest critic, so I don’t need a boss telling me what to do. If you don’t like or benefit from taking orders from someone else, then going in to business for yourself might be the best option for you.
- Room for creative growth. It’s nearly impossible to get fired (unless you really don’t like yourself-wink). This takes the pressure off of minor mistakes you may and gives you the ability to use your creativity in ways you might not be able to in a traditional job.
- The Internet makes it “easy”. Years ago it would have been more difficult for someone to open their own business. You’d have to have extensive start-up money and a physical location. Thankfully, the Internet has really leveled the paying field, and you can now start a business, website or blog in your pjs from your basement. Programs such as Shopify help you run your business online.
- You’re in control. Whether you are going the traditional, physical business route, or beginning your business online, running your own business enables you to put roots where you want. You don’t have to live in a community you don’t like because that’s where your employer is located. If you run an online business you can live anywhere with Internet access. It also gives you the ability to travel frequently and/or vacation with your family without worrying about having vacation time, “approved” by your employer.
Starting Your Own Business: Disadvantages
Starting your own business can be awfully exciting, there are many drawbacks that some people don’t take in to consideration. If you,”under-think” everything and jump into business ownership without a well-thought out plan, you may end investing your money and time into a venture that fails. It is true that there are many advantages, but you need to be prepared for the disadvantages as well.
- Financial risk. This may sound obvious, but opening your own business may mean taking a big financial risk. This is especially true when you go the traditional route and end up renting or purchasing a building. You could invest thousands of dollars, only to find out down the road that the business just was not for you. Interestingly there are now a bunch of TV shows that document experts and celebrities stepping in to help failed businesses. Restaurant impossible anyone?
- Long hours. While it is true that you set your own hours, your hours may not truly be your own for years. Just ask a small business owner how many hours he/she spends working on her business. If you think a 50 hour work week is a lot, you’ve never met a small business owner. I can almost guarantee that starting a business will mean longer hours and fewer vacations (at least at first). Even if you do take a vacation, your mind never completely leaves your work.
- Income isn’t guaranteed. When you first start your business you it may take a while for business to pick up. If you can’t afford to go a few months without income and don’t have a good sized emergency fund, then you might want to think twice about starting your own business. Most folks I know who have started their own businesses have worked on building the business part-time on the side while they were still working their regular salaried jobs. That way when they took the leap into being a business owner, they already knew they could make the money necessary to survive.
- Benefits and taxes. When you’re self-employed you’re the one paying your taxes. What seems like a ton of money (gross) is much less once Uncle Sam takes his cut. Benefits like health insurance, life insurance and retirement matches are non-existent unless you fund them yourself. With the state of our current health insurance industry here in the US, health insurance is a real obstacle for people who are self-employed (and one you should carefully consider before starting out on your own). By the time you pay those premiums you might have very little money left over to live on.
- You’re not alone. Not to be a negative Nancy, but everyone thinks they have what it takes to start their own business. But do you have what it takes to really, “make it work?”. You may have a great idea for a business, but there are hundreds of people out there with the same great idea. What makes you better and how dedicated are you to making it work? What makes you stand out and what’s going to make you succeed?
Ready to quit that day job and hang your own shingle? Are you self-employed? Do you want to be? At some point in the future I’d definitely like to start my own business and work for myself, but for right now, I’m happy working for someone else and building my skills, while not having to worry about how I’m going to get paid.