The Pros and Cons of Owning a Business
This could be the shortest blog post in the history of humankind.
The pros are that you work for yourself and absolutely nobody is telling you what to do. The cons are you work for yourself and absolutely nobody is telling you what to do.
Okay, so it’s a lot more complex than all that and there are a few things you should know about the good, and the bad, of owning a business before you jump right in.
We’ll start off on a positive note by mentioning the pros first.
The most appealing factor of being your own boss is the independence that comes with it. When you own your own business you can set your own hours and work at your own pace. If you are a contractor you’re not forced to accept work from customers, or for jobs that you know are going to be difficult. You can accept or turn down jobs at will.
Another great aspect is that you get back what you put in. If you’re willing to work hard to develop your business, the sky’s the limit when it comes to your profit margin. Most small business owners do work long hours, especially in the beginning, but the work pays off when you personally see the payoffs from your efforts.
You also have absolute control over the business. If you own a store and don’t like a display, you can change it without having to submit a request to some higher entity. You define the strategy and have the power to alter or change directions (large or small) based on your own expertise and best judgment.
Something else to consider is that you will probably have more control over your time outside the office (at least when it comes to how much of it you get). If you can get the work done in a time that is acceptable to your clients or customers, then you get to decide when you want or need to take some time off. You also get to decide when to hire help, and whether it will be for the short or the long term.
It comes as no surprise that being your own boss has more than a few drawbacks.
First, while you may not have a direct boss or supervisor, you might actually have a different ‘boss’ with each transaction. If you accept the work, the customer is essentially your boss for the duration of the project or the contract. And you may be required to alter the work or your vision for the project if it differs from theirs.
Also, every customer is unique, and you will have to learn to deal with multiple personalities and character traits. Some of them you probably won’t like, but they’re the boss so you may have to make adjustments to your own communication style to keep the customer happy.
Probably the scariest part of owning a business is that you can no longer rely on a steady income, especially when starting out. As a salaried or even hourly employee, you know exactly how much you’re earning and can plan accordingly. You just can’t do that when you’re self-employed. There may be some lean times ahead, so you have to make adjustments, and budget carefully for both personal and business expenses.
There’s also the aspect of steady hours and steady work. Even with the best forecasting and budgeting, you may not be able to predict the amount of work required for each job. And while it’s probably a good thing, a rush or otherwise unexpected job may come in that you are not able to refuse.
All the major decisions, and the consequences that come from them, are yours. There are no executives to set the direction, define inventory levels, or manage customer relationships. You will have to define the business strategy, manage vendors, and keep customers happy while doing the bulk of the day-to-day work. Sometimes you may pine for the days when you just went to work and performed the tasks that are asked of you.
The business owner also has to work day and night to promote your business. You’ve got to figure out what advertising is right for you or what promotion is going to work. There’s a lot of trial and error when it comes to this, and investing in a failed marketing tactic can be a costly mistake.
But if being your own boss is your dream – go for it. Sure, there are pitfalls to owning your own business, and unfortunately everyone who starts a business isn’t going to make it in the long run. But if you have the right idea at the right time, the payoffs (monetary and personal) can be tremendous. When you own your business you have the control to make or break your income. You also have the pride that comes along with knowing that you did all of this on your own.
That’s a great feeling.