Owning a small business is part of the American Dream for a reason. The flexibility and control that come with having a company are often thought to overshadow any negatives that arise. However, there are always cons that must be considered. Read below to learn the major pros and cons of of starting a business, and decide if the venture is right for you!
Being a business owner, you can determine your personal hours, pace, and work environment. As your business grows, you can let employees take the reins, allowing you to oversee the entire project as a whole. This means more vacation time, less stressful work days, and a personalized work environment.
Instead of being stuck with tedious tasks, you can hire someone to take on those jobs for you. Once your business is up and running, you decide how involved you become in the day to day tasks of the business.
As a business owner, you have the opportunity to wear all the hats of the company as you determine how it will be run. It will likely be a one-man show at the beginning, and you will experience how each position should be run for yourself.
Depending on how well your business does, you could be reaping the financial benefits for years or even decades. This is not guaranteed, but if you are fortunate, you could earn significantly more than you would at an already established company. Research shows that “self-employed business people were four times more likely to be millionaires than those in traditional employer-employee roles.”
You call the shots. You conduct your business exactly as you like it, and have the authority to conduct others to follow suit. This can bring a sense of moral fulfillment, as well, as you can decide how to run your business based on how you believe it should be run.
The sky is the limit
As the founder, your paycheck will never be limited. The better the business does, the bigger your wallet becomes. This provides even more of an incentive to work hard for the sake of your company.
Especially at the beginning of your business, the hours will likely get exhausting. It takes a lot of effort and time to make a business successful, and much of that falls onto the business owners’ shoulders.
Starting a business can be a big investment, that could potentially fail. You may have to invest a portion of your savings into keeping your business afloat, which can affect your long-term financial future.
Businesses take time
You won’t find overnight success. Businesses can take years to get off the ground, and it can be hard to stay patient and focused on the overall goal. Before embarking on your business venture, you need to make sure you are committed to your business’s success.
No hourly pay or set salary
You will receive the same pay regardless of if you work 20 hours a week or 80. Your paycheck is not set in stone and certainly not guaranteed, so your financial standing can become rocky. Your yearly salary will likely drop within the first year or two of focusing on your business, so it is good to prepare for the pay deduction. You also say goodbye to guaranteed benefits like healthcare and insurance, and you must be able to afford that on your own.
You may run into legal trouble along the way. As a business owner, you have to anticipate potential legal cases from harm caused by your company.
The blame falls on you
Even great CEOs take responsibility for incidents in their companies that they didn’t cause. As the owner and face of the company, you are responsible for bad work ethic and poor performance. It’s up to you to hire the right employees that you feel confident will get the job done right.
No one said starting a business was easy. While starting a business comes with risks, the rewards can significantly outshine them. And when you start your business, make sure to call a lawyer for assistance with complying to federal regulations, completing business contracts, and avoiding any business mishaps that could land you in legal trouble. Robert Von Esch is an experienced business law attorney and can help you every step of the way of opening your own business. Give him a call today!