If you’re planning on specializing in small business ownership in your studies, you’ve probably pondered what the ups and downs are for owning a small business. While owning a small business seems glamorous on the outside, many people rarely stop to consider the fact that it comes with just as many cons as it does pros. These are the attractive and not-so-attractive qualities of owning a small business.
Pro: The Potential is Yours
Obviously, rather than working under a company’s business plan that you don’t have your hands in, you are free to choose how your own small business will operate. Using knowledge that you gain when studying small business ownership will equip you with the skills to decide exactly how to delegate finances, what promotions to run with, how to fine-tune your business plan, and much more.
Additionally, rather than receiving a strict and fixed rate of payment month after month, owning your business opens the door for growth and improvement. The harder you work can actually affect how much you make. On the other side of the coin, hard work often goes unnoticed for regular employees.
Pro: You Get to Do What You Truly Enjoy
Owning a small business is a great opportunity to do what really makes you happy. Sure, a job that pays $40,000 per year can be the key to a comfortable life, but what’s the point in any of it if you don’t enjoy that particular job? Even if you make only half of that type of salary doing what you love by owning your own small business, you will surely lead a much more happy and fulfilling life.
Pro: You Can Build Retirement Value
Owning your own business provides a great opportunity for building up a promising retirement fund. Even if you don’t save while running your business, there is always the option to sell your business once you reach retirement age.
Con: You May Not Turn a Profit for Years
What many people don’t understand about owning/starting a small business is that it can be a very long time before their hard work even slightly begins to show. Many businesses will break even or even stay in the red for years before they begin to see a bit of a return on their efforts. This can be quite a turn-off for many who are solely in the business to make money as soon as possible.
Con: You May Have to Sacrifice in the Beginning
To provide for your business and take more financial risks, you may be required to make personal sacrifices. However, if you do decide to do this, it’s important that you never lose sight of why you’re doing it; to eventually reach a fruitful future.
Con: Income Might Not Always be Steady
Lastly, owning a business may come with a very sporadic and unpredictable rate of income. You might do really well one month and have an extra $3,000 on hand to spend, while other months may be exceptionally difficult. It’s important to save gains and put them back for future periods when profits just aren’t there.
Overall, owning a small business is a responsibility that comes with many advantages and disadvantages. Additionally, it is not something that everyone can do or enjoy. The best piece of advice is to build a strong business plan and perform enough research to ensure that your business has very strong odds for success before putting any serious money into it.
Check out “The Most Tried and Failed Businesses” for more information.