Pros & Cons of Starting a Small Business

pros-and-cons

Ignorance may be bliss some days, but not when starting a small business. It’s better to go with the adage, “Forewarned is forearmed.” Knowing both the positive and negative aspects of becoming a business owner will help you make the right decision for you and your family.

The list below is a categorized compilation (that’s fun to say) of a dozen articles on the advantages and disadvantages of starting your own small business.

CATEGORY PROS CONS
Money You can make more than an employer will pay you You will risk your own funds with no guarantee of a paycheck
Control You are your own boss You must keep your promises to customers, employees, partners, and vendors
Direction You get to pick your mission and the type of customers you want You are responsible for all the tough choices about the product or service, the right market, the right strategy and tactics for making your business model work
Risk You get to roll the dice yourself You have to deal with snake eyes
Location You decide where and when to work You bear the burden of whatever overhead you choose (office, equipment, etc.)
Success Limited only by our own talent and effort There are no guarantees; Resilience is a commonly touted requirement for founders
Values You set the initial values for your company Hiring people just like you will create a stunted, one-dimensional team
Responsibility You will have autonomy to make every decision You are responsible for all the tough calls
Initiative You get to test your own ideas You own each failure
Stability No one can fire you; You directly influence your own prosperity Your income may go up and down
Staff You control who works for you and how much you grow You have to hire enough people to prevent burning people out, manage them well, deal with performance issues
Health Flexibility to schedule exercise and pick restaurants Pressure to work too long and not take care of yourself
Stress No one is telling you what to do There is always more work to do; You can feel overwhelmed
Interests You can work on what excites you The boring details of legal and accounting have to get done
Family, Friends, Hobbies, Vacation Freedom to set your own hours Pressure to get critical things done and maintain cash flow; Family and friendships can suffer
Learning Develop broad knowledge of business; Try new things You have to do things you don’t like until you can afford help
Influence You have direct contact with customers and partners You must be able to sell your product or service
Confidence Running a business can bolster your self-belief Working alone on tough decisions is difficult; You must be able to handle failure

Now that you know, how do you make the decision to start your own small business or not? What is about you that will weight the scales in your favor to succeed? Check out this list of decision factors.

Image credit: All Reverse Mortgage

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