Advantages and disadvantages of business ownership
Are you interested in becoming a business owner? You might consider these advantages and disadvantages before you make your decision (Small Business Development Center 2006).Advantages and disadvantages of business ownership
The advantages of small business ownership
It can be very rewarding to own a business. The American dream is about being able to take risks and launch a business. Success has many benefits:
You are your boss as a business owner. You can’t get fired. You have the freedom and control to make the business decisions that will ensure your success.
A lifestyle. Owning your own small business can give you some advantages. You are in control of your work hours and can choose where and when you want to work. You don’t need to ask for time off if you want to spend more quality time with your family or other activities. You might consider running your business from home if you feel it is important to be with your family every day. It’s easy with today’s technology. It also eliminates commute time.
Financial benefits. Despite the high level of risk involved, owning your business can give you more opportunities to make money than if it were run by someone else. Your hard work is rewarded.
Opportunities for learning. You’ll be involved in every aspect of your business. This gives you many opportunities to learn about the business functions.
You will find creative freedom and personal fulfillment. You’ll have the opportunity to be an entrepreneur in a field you love. You will be able put your skills and knowledge into use. Personal satisfaction can come from helping customers and implementing your ideas.
Advantages of small business ownership
These are the risks that you need to take if you start a small business.
Financial risk. It is possible to have a large amount of financial resources required to start or grow a business. To get started, you may have to spend most of your savings and even take out debt. You could be in serious financial trouble if things do not go your way. There is no guarantee of income. In the initial years of the business, there might be times when it isn’t producing enough income to support your daily living expenses.
You are the owner of your business. There are many things to worry about: competition, employees, bills and equipment breakdowns, customers, and so on. You, as the owner, are responsible for your employees’ well-being.
Time commitment. Many people start businesses to make more time for their families. Running a business can be very time-consuming. Although you might think you can take your time, the reality is that you may not have enough. You’ll likely have less time to yourself than you would if you were working for someone else. Many entrepreneurs and small business owners believe that a 40-hour work week is a myth. See Figure 5.6, “The Entrepreneur’s Workweek”. It will be difficult to take vacations and they will be often interrupted. The difficulty of leaving the job has become more difficult in recent years with the advent of cell phones, iPhones, Internet connected laptops and iPads. Many small business owners are now disappointed that they can’t be reached.
Undesirable tasks. As a new employee, you will be expected to do or supervise just about anything that is required. It’s easy to get caught up in details that you don’t like. You will likely have to do some difficult tasks as a business owner like firing employees.