Trade-Offs, Advantages & Disadvantages of Your Own Business
Starting your own business is an exercise in risk, and, as with anything else you do, the better prepared you are, the lower the risk -- most of the time. If you are considering starting your own business, start with an honest look at yourself. Entrepreneurial success is no accident. It takes certain personality traits that include a tolerance for uncertainty, consistent determination, realistic business ideas, attention to detail, and enough money.
The greatest advantage of running your own business is being able to set your own hours, within reason. If there is no work to do, you can take time off. Your ideas drive your business, so you can be as creative as you desire; there is no boss to please. One of the best advantages is that you can write off many of the expenses of your work life, such as travel, client entertainment, research into new products, networking, and even certain home expenses -- but check with your accountant first. You can hire the type of people you like to work with, and who share your vision for the business.
While you can set your own hours, prepare to work longer than eight hours a day, and even on weekends. Running your own business is a lifestyle, not a job. It is also a responsibility, particularly if you have employees. The money that flows through your business is not really your money until all expenses have been paid. If you have employees to pay, you come last. Sometimes there is no revenue. This is common for a startup, where months can pass before the first dollars are in the bank. There are always bills to pay, books to keep, letters to write, marketing to do, and problems to solve. Rules and regulations abound: zoning laws, environmental protection laws, labor laws, tax laws, and, if you seek investment, state and federal securities laws.
Running your own business is not a simple alternative to employment. To do it right, start with a well-researched idea and develop a detailed plan that includes realistic business revenue and marketing models. Then decide whether you will thrive under or resent the demands of entrepreneurship. If you still want to own and operate a business, spend some time beta-testing your idea, operating out of your home to keep overhead low while you determine whether your target market is actually there. If all seems to be in order, form your legal entity as a sole proprietorship, partnership, limited liability company or corporation, and launch your enterprise.
No matter how long the hours, how frustrating the problems, or how onerous the administration, the single most attractive tradeoff is the personal satisfaction, followed closely by the potential to make significant money. If your business succeeds, you can be proud of having created that success. If you have employees, they can also enjoy such pride in accomplishment, and a sense of participation and contribution.