The Pros & Cons of Starting Your Own Business/Practice
Some of the reasons people start or buy their own businesses are to;
- be their own boss or create their own job
- seek an alternative to their current career
- make better use of their skills and knowledge
- introduce a new product or service, or
- take advantage of a business opportunity.
These are all valid reasons to want your own business, but the success or failure of a person's business venture is as unique as their fingerprint. There is no simple or standard method for launching a successful business.
Before hazarding into the world of entrepreneurship and self-employment, you'll need to do a lot of homework. You need to research your idea and potential market, create a business plan and operating strategy and work out the financing details.
After you have had a chance to consider the big picture, you should have a good sense of whether owning your own business is for you and whether your idea is feasible. If you're confident that you can make a success of your business, you will want to start looking into financing and working on your business plan.
After going through the research and planning, you may decide that being an entrepreneur is not for you or that your business idea is not workable. You can always explore another idea. It's easier to stop early than after you've spent money.
Whatever you ultimately decide, your research will not be wasted.
First assess your own capabilities, resources and characteristics. This helps you concentrate on your strengths as well as identify the additional tools, resources and skills you'll need - from financing to market planning to bookkeeping.
- What do you want?
- Do you have the right skills, temperament and work style?
- Have you thought about what's involved?
Are you comfortable with having all the decisions rest with you - from employees, to suppliers, to production, sales, and management?
Here are some more important questions to ask yourself:
Enjoy what you do:
Do you have a passion for your business idea? You'll be spending time and money to make your idea work - having a true affinity for the business makes it a lot easier.
Commitment, resourcefulness and motivation:
Are you committed to making your business work, or do you get frustrated and discouraged easily? Do you like taking initiative and making decisions? Do you have the creativity to solve problems or know when to ask for help? To make it through the start-up phase, you need plenty of initiative and drive. And to run the business requires constant care and management.
Do you understand the risks involved in starting a new business? Are you aware of the consequences of failure? While there may be potential for high earnings there's also the potential for financial loss if your business doesn't succeed. If you are not willing to take the risk, perhaps you should reconsider. Some individuals start their businesses part-time or after hours while still working at salaried jobs. If you have a business partner, perhaps one of you can run the new business, while the other retains his or her job and works part-time in the new business. This way, you have more security while waiting for your business to get off the ground.
Time and patience:
Do you have the time and patience to nurture a business from the ground up? Starting a business requires careful planning and preparation. Are you prepared to work long hours and make sacrifices?
Are you prepared to weather the business cycles of highs and lows? Circumstances can change almost daily. You have to remain flexible and adapt to new conditions, and perhaps get used to an unpredictable income.
Personal and family considerations:
Making a profit may take several months at the very least. Making that profit doesn't necessarily mean you'll take home a great salary. You may have to support yourself (and perhaps your family) while you get your business up and running. Your energy and time will be engrossed in the business for months. Don't take this lightly. This is an undertaking that will require a considerable amount of sacrifice (it has been known to be the basis of divorce on many occasions). Both you and your family should agree that this is exactly what you want to do and understand how much time, money, effort and personal sacrifice is required.
Skills and proficiency:
Do you have the necessary knowledge and skills? Can you take leadership role as well as pay invoices? It helps to have a solid understanding of your market and product or service. You'll also need to have excellent organizational and management skills. You'll end up wearing many hats - sales, marketing, money management, production, administration, and managing people. If you are missing skills in certain areas, you may want to consider teaming up with a partner who has different skill sets. You may also want to take some courses or delay your idea until you're better prepared.
You may have to endure a lot of stress and a heavy workload. Are you physically up to the challenge? Although health is an issue when it comes to the stamina required to run a business, starting a business has been known to bring individuals out of a health crisis and give them something to live for.
Voice of the Editor
Which isn’t completely true. I mean, occasionally I drop by when I manage to sneak out of the nonstop frat party over at Going Concern, but I’m mostly a wallflower over there. I’m happy to say that I’ve been given express permission (or explicit orders, if you like) to wander over here to AccountingWEB more often.
Why is that, you might ask? My job is to replace the irreplaceable Gail Perry as Editor-in-Chief. What does that mean? I don’t really know! I think it’ll be fun getting a feel for things, throwing in my own thoughts here and there, and listening to the discussions you’re having about the accounting profession.