A business venture comes with both advantages and disadvantages. Exploring those pros and cons before you start your business prepares you for the possibilities. For some people, the disadvantages may outweigh the potential gains. For other new business owners, the exercise helps identify and avoid potential pitfalls. The type of business you choose makes some advantages and disadvantages more relevant, but most issues apply universally to business ownership.
An advantage for many business owners is the control in the decision making for the company. As the owner, you mold the company based on your own visions and goals. Because you are the boss, you decide how to run the business and which direction to go with it. You set your work schedule, which means more flexibility for many business owners. You decide if you want to have a full or part-time business. You also control how much effort you put into the business. In most cases, the more effort put into the business, the greater the results.
When you own a business, you reap the rewards of the work you put into the company. If you create a highly profitable and successful business, you benefit in your income and reputation in the business world. Seeing your vision become a reality offers a sense of pride and accomplishment. That recognition isn't always as immediate and sometimes doesn't come at all when you work for someone else.
It's All Up to You
One potential disadvantage of owning a business is that you are responsible for the business's success or failure. The start-up phase is often the most challenging because your business is not yet established. Owners starting a business often spend long hours working hard to get the company going. A missed day due to illness or other personal situations often means lost income and momentum. Balancing work and a personal life becomes a problem for many business owners. Work tends to consume more of your life with blurred lines between work and family time. You may find yourself with less social time because you are working more.
As an employee of an established business, you collect your paycheck on a regular basis, usually in a consistent amount. When you own a business, income is likely to fluctuate, sometimes extremely. You might have a record-breaking month of income to be followed by a month with hardly any income. Planning ahead for these fluctuations makes it easier to pay all of your bills on lower income months. You also need to figure in the cost of benefits for yourself and any employees. When you leave the corporate world, you leave behind health insurance, paid vacation, 401(k)s and all of the other benefits.