Many people start their business adventure dreaming of riches and freedom. And while both are certainly possible, the first thing to understand is that there are trade-offs when you decide to start a business. Difficult bosses, annoying co-workers, peculiar policies, demands upon your time, and limits on how much money you can make are traded for independence, creativity, opportunity, and power. But by the same token, you also swap a regular paycheck and benefits for no paycheck and no benefits. A life of security, comfort, and regularity is traded for one of uncertainty.
There are definitely pros and cons to starting your own business. To be more precise, the benefits of starting a business include:
• Control. Even if you like your boss and your job, the possibility remains that you can be laid off at any time. That boss you like so much can be transferred. Your company can go bankrupt. So one advantage of starting your own business is that you are more in control of your work and career. And while that may be comforting, you should also realize that with that control will come increased responsibility and a new set of demands. As the boss, the buck must stop with you. You are the one who has to meet payroll. You are the one who has to make sure that clients and customers are happy. You are the one who must hire and fire the employees. It is not always easy, and you can bet that there will certainly be times when you will look fondly back on your days as an employee, when you had far less responsibility and control.
• Money. Many people choose to start their own business for the simple reason that they think that they are worth more money than they are making or they want the chance to provide a better life for their family. There is usually a limit to how much money you can make when you are an employee. The good news is that when you are the employer, the entrepreneur, the boss, there are far fewer limits. That can be a good or bad thing; you may make a fortune, or you may go bust. If this kind of uncertainty appeals to you, good, because it is what you will be getting if you start your own business.
• Creativity and independence. If you feel stagnant in your current job, you won’t feel stagnant for long if you start a business. Running your own business may require you to be the marketing wizard, salesman, bookkeeper, secretary, and president all rolled into one. It is a hectic life. But you may not mind that. It’s kind of like the Calvin and Hobbes cartoon in which Calvin’s mother tells him to make his bed. Calvin decides to build a robot to make the bed for him. When Hobbes asks, “ Isn't making the robot more work than making the bed?” Calvin answers, “It’s only work if someone makes you do it!” The same holds true when the business is yours—it often doesn't feel like work because no one is making you do it.
• Freedom. Working at your own business gives you the flexibility to decide when and where you will work. You decide your hours and place of business. The freedom that comes with being your own boss, where no one can tell you what to do or how to do it, may be the best thing about being an entrepreneur.
But there are also downsides to starting your own business:
• Uncertainty. As indicated, the life of an entrepreneur is not necessarily an easy one. Is it fun? Yes. Is it challenging, exciting, and spontaneous? You bet. But it is not easy. The hardest part of being in business for yourself is that there is no steady source of income; a paycheck does not come every two weeks.
• Risk. What is an entrepreneur? An entrepreneur is someone who is willing to take a risk with money to make money. Not all entrepreneurial ventures are successful. The willingness to take a smart, calculated risk is the hallmark of a smart entrepreneur. But even calculated risks are still risks. You could make a million or you could go bankrupt.
• Lack of structure. Many people like the structure of working for someone else. They know what is expected of them and what they need to accomplish each day. This is not true when you work for yourself. The work is very unpredictable. You need to consider carefully both the risks and rewards of entrepreneurship before deciding to jump in. It is easy to become infatuated with the idea of owning your own business. But if you are going to do it right, if you are going to be successful, you need to take emotion out of the equation. You have to begin to think like a businessman, consider the risks, and make an informed, intelligent, calculated decision.