21 May The Pros and Cons of Starting a Business
As a serial entrepreneur, I’ve owned many business over the years: a real estate management company, Great Clips franchises, and several non-profits, to name a few. Starting a business can be scary. There are so many plates to balance, and it all hangs on you at the beginning! But starting a business–whether it be in real estate or the food industry or nonprofit or whatever–can also be one of the most worthwhile endeavors you’ll ever take on! So, when in doubt, write a pro and con list.
Here are the pros and cons that I think of when I look back on my experience starting businesses!
- You are building an asset. This means at the end of the day you can sell the business, sell equity, take it public or borrow against it. A business is passive income.
- The tax advantages you have are amazing. You can purchase almost anything with before-tax dollars—including other assets!
- You have cash flow. Once things get rolling, you will really be able to make bigger and bigger decisions about your business–and about your personal life.
- You are in control! You still report to customers, suppliers, government, etc. But you can’t be fired and are generally the last say!
- Control your own schedule. Want to work from home? Do you find you are exhausted by 8-5? Maybe your energy really peaks in the evening. So go ahead and do that 8-12 and 5-9 shift.
- The financial potential is unlimited. Andrew Carnegie said, ” I want to spend the first half of my life making money and the second half of my life giving it all away.” The richest of the rich are business owners. Through owning a business you can reach a state of wealth where you are able to give away almost everything and still live well!
- You assume all the risk. Yes, this is the big con. It’s scary. But remember that failure isn’t the end of everything. Most times, it’s the start of the next big thing.
- Long hours and less vacation time. Again, the pros of this situation is that at least you control your schedule! So if you want to go on vacation, you have to run it by, well, you. But it’s not going to be all ease in the beginning. The hours are long, and when you do go on vacation, you will find your mind drifting back to the business–just like a parent away from their child for the first time.
- You must attend to all the details! Unfortunately, especially at the beginning of a business, you don’t get to only focus on what you love to do. You’ve got to be in the game fully.
- You usually get paid last. And at the beginning you can even end up paying the business instead to stay afloat!
- People stuff. If you’re going to start a business, you need to be prepared for the people stuff: firing somebody, the debate of hiring a relative or friend, having to implement policies, etc.
This last one can be a pro or a con, depending on how you look at things. Because as a business starter, you will have to learn new disciplines. You’re going to need to dip into bookkeeping, leadership, management, legal matters and contracts, finance, marketing, inventory control, etc. This goes along the lines of you don’t only get to do things you love. Small shops and new business require everyone to wear many hats.
I hope these pros and cons help you in your decision process! I can say personally that starting a business is worth the stress.
What do you think is the strongest pro to starting a business? What is the scariest thing about starting a business? Let me know in the comments!
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