If you've always worked as an employee for a company, you might be thinking about making the leap to start your own business and gain the perks that come with being your own boss. Reasons people take this route range from wanting the power and freedom that business ownership offers to having a unique business idea or passion they want to bring to life. There are also financial benefits to consider along with the ability to gain new skills and put existing ones to use.
Having a Unique Business Idea
Whether you have a new product idea or want to start an organization that makes a difference in your community, having a unique product or service idea is a common reason people start their own businesses. Perhaps you're passionate about technology and have invented a new app that can make people's lives easier. You might also have seen a problem with homelessness in your community and want to start an organization to offer affordable housing and necessities.
While you could perhaps suggest your idea to your current employer or another company, this might not allow you to fully use your creativity or bring your idea to fruition like you could on your own. You also will ensure you get full credit for the idea if it's your own business.
Desiring to Work for Yourself
You might consider starting your own business if you want the independence and flexibility that comes with being your own boss and having full control over your work. If you've worked a full-time job with long hours, being able to choose your own schedule to allow you to spend more time with your family can be a good perk. In some cases, you might even work entirely from home and avoid the daily commute and small cubicle you may have disliked when you worked for an employer.
In addition, you'll be able to make all your own decisions when it comes to running the business. This means you can choose the products or services you offer, the people you hire, how you advertise and how you manage the business's finances. You won't have to answer to another boss, so you can do what you feel is in your company's and customer's best interests.
Being Passionate About Business
Having an interest in business in general can also lead people to become business owners. Maybe you had a lemonade shop as a child and enjoyed marketing your stand, helping customers and making the drinks. You might have also gained an interest through college classes or working for someone else and want to see what it's like to wear many hats as a business owner.
Having your own business gives you the chance to explore and gain experience in areas ranging from marketing and sales to distribution and finance. You'll get to wear many hats and learn more about what areas of business interest you most as well as areas where you could improve.
Trying Out a New Field
If you've grown tired of the field in which you work now, you might consider starting your own business as an alternative to seeking a new job in another field. While a typical career change can require education and formal experience you might not have, you don't have to worry much about these qualifications if you start your own business. This allows you to make use of what you've learned through hobbies and personal interests.
For example, you might have designed webpages as a hobby for friends and family but find it difficult to get a web designer job without a degree. You can choose to start a web design service from your own home to gain experience and earn money doing what you enjoy. You could even potentially use this experience for a full-time job in the field later if you wanted.
Reaping Profits and Tax Benefits
Financial benefits can also drive people to become business owners. If your business idea has an ideal target market, and you have great business skills, you could earn a lot of money. By keeping your costs low, offering a marketable product or service and marketing effectively to gain more customers, there's no real limit to how much you can potentially earn, although there is no guarantee. This differs from a regular job where you likely have a preset salary or hourly wage with occasional raises.
Small businesses also gain tax benefits and the ability to deduct certain expenses. As part of the Tax Cuts and Jobs Act that took effect for the 2018 tax year, you can deduct 20 percent of your company's net income – subject to certain limits – if you have a pass-through business like an S corporation, sole proprietorship or partnership. You might also benefit from deductions for your home office and supplies, mileage, insurance premiums and retirement contributions.
- The Business Journals: The 4 Reasons Why People Start Their Own Businesses
- Entrepreneur: 20 Reasons to Start Your Own Business
- Nolo: Evaluating Your Business Idea FAQ
- Bankrate: A Dozen Deductions for Your Small Business
- IRS: Tax Cuts and Jobs Act, Provision 11011 Section 199A - Qualified Business Income Deduction FAQs