5 answers
Terrence
Student
Miami, Florida
4
Questions
Asked
1778 views
What are the pros and cons to owning a business?
#startups #entrepreneurship #marketing
Login to comment
5 answers
Doc Frick
Career Coach and Mentor
1616
Answers
California, CA
Updated
Doc’s Answer
Terrence owning your own business brings some great benefits, and many entrepreneurs are satisfied with their decision after they make the plunge. The most common reason people launch their own business is to be their own boss. Other benefits include flexibility, financial rewards, the opportunity to innovate, and a chance to impact your community. Still, there are serious risks to launching your own business, and you should carefully consider and plan before you take the leap, including:
FINANCIAL – Even though the business may be successful at the start, external factors such as downturns in the economy, new competitors entering the marketplace, or shifts in consumer demand may stall the businesses growth. Even entrepreneurs who go through a comprehensive planning process will never be able to anticipate all of the potential changes in the business environment. That's why it's critical to write a thorough, clear business plan and make sure you have a reasonable chance at success.
PERSONAL LIABILITY – Beyond merely losing the money you put into the business, you could put more of your personal assets at risk—from your car to your house—if you don't structure your business to protect them. Even the smallest of business ventures requires a certain amount of capital to start. For many people starting small businesses, their initial source of funding is personal savings, investments, or retirement funds. Committing these types of funds to a business venture makes them unavailable for personal or family needs. In most cases where a small business receives start-up funding through a loan, the entrepreneur must secure the loan by pledging personal assets, such as a home. Risking the equity in one’s home is a financial commitment not all entrepreneurs are willing to make.
TIME COMMITMENT – When someone opens a small business, it’s likely, at least in the beginning, that they will have few employees. This leaves all of the duties and responsibilities to the owner. Small-business owners report working more than eighty hours a week handling everything from purchasing to banking to advertising. This time commitment can place a strain on family and friends and add to the stress of launching a new business venture.
It all starts with a good idea Terrence.
Develop an in-depth plan that fully details how you'll attack the challenge ahead. Your plan should define any opportunities you've identified, clearly state your mission, describe your target, establish measurable goals, and set deadlines for each milestone along the way. Remember that while it's important to have a plan, it's equally vital to be flexible enough to pivot when needed.
Tell everyone you know about your business. Network with potential customers, market to possible clients, and spread the word about your company. Ask for referrals and request that people tell their friends and family about your new business. Creating demand for your product or service is critical to your success.
FINANCIAL – Even though the business may be successful at the start, external factors such as downturns in the economy, new competitors entering the marketplace, or shifts in consumer demand may stall the businesses growth. Even entrepreneurs who go through a comprehensive planning process will never be able to anticipate all of the potential changes in the business environment. That's why it's critical to write a thorough, clear business plan and make sure you have a reasonable chance at success.
PERSONAL LIABILITY – Beyond merely losing the money you put into the business, you could put more of your personal assets at risk—from your car to your house—if you don't structure your business to protect them. Even the smallest of business ventures requires a certain amount of capital to start. For many people starting small businesses, their initial source of funding is personal savings, investments, or retirement funds. Committing these types of funds to a business venture makes them unavailable for personal or family needs. In most cases where a small business receives start-up funding through a loan, the entrepreneur must secure the loan by pledging personal assets, such as a home. Risking the equity in one’s home is a financial commitment not all entrepreneurs are willing to make.
TIME COMMITMENT – When someone opens a small business, it’s likely, at least in the beginning, that they will have few employees. This leaves all of the duties and responsibilities to the owner. Small-business owners report working more than eighty hours a week handling everything from purchasing to banking to advertising. This time commitment can place a strain on family and friends and add to the stress of launching a new business venture.
It all starts with a good idea Terrence.
Doc recommends the following next steps:
Moises Cariaso, MBA
Professor
9
Answers
Manila, Metro Manila, Philippines
Updated
Moises’s Answer
The Pros of having a business are:
- you are the boss of your own company
- you handles your own time
- no one to blame on the success or failure of the business but you
- you have all your profit and loss.
The cons are:
- time consuming
- you do not have partners to help you.
- you are the boss of your own company
- you handles your own time
- no one to blame on the success or failure of the business but you
- you have all your profit and loss.
The cons are:
- time consuming
- you do not have partners to help you.
Candace Pflum
Manager, Customer Success
3
Answers
Tampa, Florida
Updated
Candace’s Answer
There are many both Pros and Cons to owning a business. I owned a printing and graphic design company for 3.5 years.
Pros- this is your company. You get to make the decisions, and choose how you want to run it. You get flexibility. You decide how you want to enter the market, and position your product or service. You get to have a say in all of the details. You can choose your customers and or your vendors. You can choose your price and dictate your margin and or profit.
Cons- hours. As a business owner, you will be pouring your life into your company. You will work more hours than you've ever worked before. You will live and breathe your company. Your passion will drive you. This will consume you, and any free time you've ever had. Some people think that as a business owner you will have more flexibility-but it's actually the opposite. You will have less free time. You will also shoulder the burden of carrying and worrying about the financials. So you'll want to hire experts or make sure you get good advice from people that can help you with this.
If you do open your own company, good luck!
Pros- this is your company. You get to make the decisions, and choose how you want to run it. You get flexibility. You decide how you want to enter the market, and position your product or service. You get to have a say in all of the details. You can choose your customers and or your vendors. You can choose your price and dictate your margin and or profit.
Cons- hours. As a business owner, you will be pouring your life into your company. You will work more hours than you've ever worked before. You will live and breathe your company. Your passion will drive you. This will consume you, and any free time you've ever had. Some people think that as a business owner you will have more flexibility-but it's actually the opposite. You will have less free time. You will also shoulder the burden of carrying and worrying about the financials. So you'll want to hire experts or make sure you get good advice from people that can help you with this.
If you do open your own company, good luck!
Barry Silverstein
Author, Blogger, Writer
6
Answers
Asheville, North Carolina
Updated
Barry’s Answer
Hi Terrence,
John Frick already gave you some excellent advice. Since I started and owned a 1-person business that eventually grew into a 50-person, multimillion dollar business, I will identify some of the leading pros and cons to business ownership from my perspective:
PROS
1. Being your own boss: That means a lot to people who are independent, confident and can effectively lead people (if they have a staff). It also means you have the ultimate responsibility for every decision and every action.
2. Unlimited potential: As an owner, your business is limited only by your imagination. If you have a solid product or service that people want to buy and you stand behind it, you could achieve a high degree of success. Along with that comes business referrals, a good reputation and a great path for growth.
3. Financial rewards: Typically, someone who owns a successful business can reap financial rewards far greater than if he or she was an employee. A business owner can draw a much higher salary, use techniques to increase wealth such as deferred compensation, and take advantage of many benefits, such as paid health and disability insurance, retirement plan contributions, paid business expenses and more. These benefits are often just as essential as drawing a salary.
CONS
1. Personnel management: While some businesses can exist as solo operations, more often than not you eventually have to bring on staff. That means getting involved in human resources: Promoting the company to potential employees, screening job-seekers, hiring and training people, establishing personnel policies, defining job responsibilities, motivating employees and, unfortunately, firing people when necessary.
2. Funding: Depending on the nature of the business, you are likely to need startup funding. Some business owners "bootstrap" their business with their own money, but often, a business owner needs outside sources. It could be SBA loans from banks, funding from one or more investors, venture capital or some combination. Funding is critically important, but it can be very challenging to get the money you need at the most attractive terms and without giving up the control you want to retain.
3. Personal toll: There is no question that starting and running a business takes a huge personal toll on the business owner's life. If you have a spouse and children, they are likely to suffer some personal consequences since you will pour much of your time into starting and running your own business. Some business owners figure out how to balance the responsibilities of business ownership with their personal lives but it is never easy.
I suggest you read lots of business books about entrepreneurship for additional details. Be sure to read some that are written by people who have started their own businesses, or have interviewed business owners.
John Frick already gave you some excellent advice. Since I started and owned a 1-person business that eventually grew into a 50-person, multimillion dollar business, I will identify some of the leading pros and cons to business ownership from my perspective:
PROS
1. Being your own boss: That means a lot to people who are independent, confident and can effectively lead people (if they have a staff). It also means you have the ultimate responsibility for every decision and every action.
2. Unlimited potential: As an owner, your business is limited only by your imagination. If you have a solid product or service that people want to buy and you stand behind it, you could achieve a high degree of success. Along with that comes business referrals, a good reputation and a great path for growth.
3. Financial rewards: Typically, someone who owns a successful business can reap financial rewards far greater than if he or she was an employee. A business owner can draw a much higher salary, use techniques to increase wealth such as deferred compensation, and take advantage of many benefits, such as paid health and disability insurance, retirement plan contributions, paid business expenses and more. These benefits are often just as essential as drawing a salary.
CONS
1. Personnel management: While some businesses can exist as solo operations, more often than not you eventually have to bring on staff. That means getting involved in human resources: Promoting the company to potential employees, screening job-seekers, hiring and training people, establishing personnel policies, defining job responsibilities, motivating employees and, unfortunately, firing people when necessary.
2. Funding: Depending on the nature of the business, you are likely to need startup funding. Some business owners "bootstrap" their business with their own money, but often, a business owner needs outside sources. It could be SBA loans from banks, funding from one or more investors, venture capital or some combination. Funding is critically important, but it can be very challenging to get the money you need at the most attractive terms and without giving up the control you want to retain.
3. Personal toll: There is no question that starting and running a business takes a huge personal toll on the business owner's life. If you have a spouse and children, they are likely to suffer some personal consequences since you will pour much of your time into starting and running your own business. Some business owners figure out how to balance the responsibilities of business ownership with their personal lives but it is never easy.
Barry recommends the following next steps:
Yumi Trapani
Corporate Banking (Securitization)
42
Answers
Fairfield, Connecticut
Updated
Yumi’s Answer
Hi Terrence,
I do not own my own business, so this is not from a business owner's point of view, but looking from corporate employee perspective, one of pros in corporate working environment is that we have a group of experts for different aspects of running business. For example, we have HR, accounting unit, planning department, marketing & sales, etc. and they divide responsibilities within a corporation. If you own our own business, you would wear multiple hats and get involved in many different aspects of running business. In corporate world it tends to take longer time for things to move, however. Decision making is often based on institutional consensus which takes many meetings and phone calls. On the other hand, if you own your own business, important decision can be made much quicker.
I do not own my own business, so this is not from a business owner's point of view, but looking from corporate employee perspective, one of pros in corporate working environment is that we have a group of experts for different aspects of running business. For example, we have HR, accounting unit, planning department, marketing & sales, etc. and they divide responsibilities within a corporation. If you own our own business, you would wear multiple hats and get involved in many different aspects of running business. In corporate world it tends to take longer time for things to move, however. Decision making is often based on institutional consensus which takes many meetings and phone calls. On the other hand, if you own your own business, important decision can be made much quicker.