06 Apr The Pros and Cons of Starting Your Own Business
I consider myself a serial entrepreneur. I’ve owned many businesses over the years, including a real estate management company, national hair cutting franchises, and several non-profits. And I’ll be the first to say that starting your own business can be scary!
But, like I say in my book Money Mastery, anyone who has built wealth has had to take some risks.
Yes, there are many moving parts to starting a business and all of the responsibility hangs on you in the beginning. However, I truly believe that starting your own business can be one of the most worthwhile endeavors you’ll ever take on.
If you’re wavering back and forth, wondering whether starting your own business is a good idea or a bad one, consider the following list of pros and cons. Consider whether each pro is truly a pro for you personally, and whether the cons apply to your business idea.
Additionally, consider reading my recent post about the 18 Questions to Get Started Developing Your Business Plan.
The 6 Pros and 5 Cons of Starting Your Own Business
1. A business is an asset.
Basically, this means that at the end of the day you can sell your business, sell equity, take it public, or borrow against it.
2. The tax advantages you have are amazing.
Think about it – you can purchase almost anything with before-tax dollars. This includes other assets!
3. You are in total control.
Sure, you will still report to customers, suppliers, the government, and a few other people. But you cannot be fired and you almost always have the final say. This is a great thing for your freedom!
4. Your schedule is yours.
Do you like working at home or find that you need to get out of the house? What about structure – do you need a 9-5 workday or want to only work mornings? With your own business, you get to make your own schedule. Again, this is great for your freedom – and your family.
5. You have cash flow.
Once your business gets rolling, you will have the resources you need to make bigger and better decisions for your business.
6. The financial potential is unlimited.
This may be the best part of owning your own business. The sky is truly the limit! Through owning a business, you can reach a state of wealth in which you are able to give away almost everything and still live well.
Think like Andrew Carnegie: “I want to spend the first half of my life making money and the second half of my life giving it all away.” What a way to live!
1. All risk is yours.
Like I said at the beginning, starting a business is not for the faint of heart. It’s scary. But remember that failure doesn’t always mean an ending. Most times, it’s the start of the next big thing!
2. You will likely work long hours with less vacation time.
Remember the pros – you do get to manage your own schedule. So, if you’d like to go on vacation, you only have to run it by yourself! However, in the beginning at least, there will likely be little time for vacation. In fact, you’ll be working long, hard hours.
3. You have to pay attention to all details.
We all have gifts and talents, however in the beginning, you will need to attend to everything – not just the tasks you like to do. Eventually you’ll be able to hire help for the aspects you don’t enjoy. But from the beginning, you must be fully in the game!
4. You will likely get paid last.
And – consider this – at the beginning you will likely end up paying the business to keep it afloat.
5. All of the “people stuff” is your responsibility.
You must be prepared for firing someone, hiring (and deciding whether you’ll hire friends and family), having to implement policies, communication disagreements, and more. Your employees will look to you for help and support.
You may look at this list of cons and think that they sound too scary or overwhelming. And, believe me, I understand that there are some looming cons.
However, also remember the pros. Starting your own business is one of the most satisfying things you can do. After the blood, sweat, and tears that you put into your business, it will feel like an essential member to your family – and you will be unable to imagine life without your business.
It can be rewarding. Just be open-minded and considerate of the obstacles you will have to overcome to make it to the finish line.
Have you started your own business? Tell me about it in the comments!