12 Feb Pros and Cons to Start a Business
Are you clear on all possible Pros and Cons when you start your own business?
How will being a business owner impact your career, your family, your time and your money? What short and long term Pros and Cons can you see on the horizon?
– Do you have an entrepreneurial personality and mindset? Do you have what it takes to start your own business? Find out for yourself with our Entrepreneur’s Self-Test
– What strengths and weaknesses do you bring to your business?
– What goals drive you?
And, one of the most important questions is…
What are YOUR Pros and Cons of Starting a Business?
Before you take the plunge, explore and anticipate any potential impact on any area of your life. Look at your golden opportunities as much as at the possible darker side of things.
Why do you need a Pros and Cons list?
Even though you might be the naturally born entrepreneur and you have strong goals, you want to know if your business opportunities outweigh your risks and challenges. The Pros and Cons list will be your very first startup plan ‘light’; it helps you decide if you want to move forward or if you rather drop the idea of starting your own business.
When times get tough in the startup phase, you will depend on the unlimited understanding, love and support from your family and friends to keep you going. Involve them in crafting your Pros and Cons list and you are more likely to get their backing as they feel they are part of your business.
Being clear on all startup Cons allows you to implement precautions. Save the money you need to keep you alive until your clients pay you big bucks. Find additional sources of income or investment. Get the right partner on board to complement your skills and talents. Agree upfront with your family how much time you will spend with them in the startup years.
The Pros and Cons list also helps you find your own business idea and helps you decide what type of biz you want to launch. If you go for minimizing the risk of failure you rather want to buy a market-proven franchise.
Addressing your startup Cons before you exchange your corporate career with owning a risky business maximizes your chance to succeed.
How to create your personal Pros and Cons list?
ACTION: Make an extensive list of all Pros and Cons. Draw a vertical line in the middle of a blank paper. On the top left side you write ‘Pros’ and on top right you write ‘Cons’. In the Pros column write down all opportunities linked with starting your own business. On the Cons column you write down all potential risks and negative aspects.
Complete this list for yourself first. Start doing it spontaneously. Then allow yourself time to add other points for a couple of days. Use the list below as a starting point. Which of these Pros and Cons should also be on your list?
Once you feel your list is complete, ask people around you for their input. Include the perspectives of your closest family members and friends. Do not forget to talk to some business owners you know and get their experiences included.
Most common Pros and Cons to start your own business
|– You control your own destiny||– High risk of failure (more than 50% of businesses fail within the first 5 years)|
|– Your job security does not depend on a single employer|
|– Your success is independent of economic trends when you offer valuable solutions according to market trends|
|– ‘The sky is the limit’ when it comes to earning potential (research has shown that self-employed people were 4 times more likely to become millionaires than employees)||– You only earn as per the value you create for others; there is no regular salary check, often no income for months or even years|
|– Depending on your local regulations, you are free to decide how and how much you invest in your own social security||– You pay 100% of your social security contributions. If you cannot pay you are not secured.|
|– You can build a self-sustaining and self-expanding system in place and earn money while being on holiday||– As an independent you only get paid when you work (no vacation and sickness days are paid).|
|Independency / Flexibility|
|– You set your own goals and decide how to reach them||– There is a risk of a negative impact on your health, family and other areas of your life. It is up to you to keep the balance between your business and your private life.|
|– You decide at what time and how many hours you work||– As a business owner you are likely to work many hours (esp. during startup)|
|– You can work wherever it pleases you (if you work virtually)||– There is no formalized structure as in a formal workplace. You need your own personal drive and motivation to get and remain active in your business.|
|– You are more flexible to balance your business with your family life|
|– You have the opportunity to fully exploit your own skills and talents|
|– You can work on topics, industries and fields that you are passionate about|
|– You try and learn on your own merits which often makes you learn faster||– You are forced to learn fast|
|– You can fully leverage your creativity and ingenuity||– You must cope with constant change and uncertainties, you have to develop your capacity for dealing with the unexpected|
|– You decide how to invest in your own education and training||– You pay for any formal education yourself|
|Access to Support|
|– You can delegate tasks and responsibilities||– You do not have a free support infrastructure available (like in a corporation around IT, Accounting, Assistance etc.)|
|– You decide whom you want to work with||– You need to build your own support network|
|– You decide how your work environment looks like||– You need to create your own social structure, it is not a given as in a traditional workplace|
|– You often need to deal with difficult situations on your own|
|– You need to wear many hats and often need to take care of less glamorous tasks|
|– You need to be as sales oriented as interested in creating and producing. Alternatively you need to bring partners on board to complement your skills and interests.|
Remark: This list is just a collection of some common Pros and Cons a lot of entrepreneurs would put on their list. It is not a complete list and you decide which points are relevant for your decision.
Got your Pros and Cons list ready? Make a startup decision with your eyes wide open!
Which Pros make you want to start your business right away? Which Cons do you need to address before you feel ready to rocket your own ideas into entreprise?
A final note: Once you start your own business, be ready to get surprised in many different ways. You cannot anticipate all opportunities or risks on a journey before you take the first step. That just makes starting and running your own business even more exciting and fun!