learning from the wisdom: pros and cons of starting your own business
TRANSCRIPT
Learning from the wisdom: pros and cons of starting your own business
By Adan Green CPA
Courtesy of Dennis Skley at Flickr.com
Adam Greene and his associates have worked extensively with startups in the past. Their experience has helped entrepreneurs to cope with the initial dichotomies of starting a new business. Every time someone is about to start their own business, it is important to consider and establish the reason — why is this business to be started — behind the initial motive. Establishing the reason might include assorted ingredients like the chance of being their own boss, the chance of having flexible working hours, the possibility of having more leisure time and, the most common: people are already stuck in a lousy job. There are plenty of reasons why someone would like to start a business, and neither of them is either good or bad.
If one were to stick to the reality, one would get a devastating picture: between 50% and 75% percent of startups businesses will actually close within the first three years! The common reasons for this are, mostly, the lack of experience: this means that people are often good at a job, but not so much at running a business. Remember that running a business includes also being able to know how to manage employees, time, stock, debt, cash, etc. Also the lack of planning leads most startups to bankruptcy: if no planning whatsoever is done in advance, chances are the startup is going to fail soon.
What are the cons?
Greater dedication: Starting a business demands a lot of time and a lot of effort, mostly during the initial phases. Being an entrepreneur means developing a mandatory set of skills required for the business operation. It also means not only focusing on being profitable but being able to control, supervise and properly manage the project.
Economic Risk: There are plenty of factors — both internal and external — which determine the likelihood of being successful or going bankrupt. As an entrepreneur, one must be aware of all the possible factors that might lead the business to achieve the proposed goals. Having a healthy management tendency is definitely a plus. It is important to mention that during the initial phases the stream of income might not be as stable as one desires, therefore is important to plan in advance to overcome future lack of cash flows.
Uncertainty: When starting a business it is uncertain whether it will be successful or no. It depends solely on the entrepreneur since they are responsible for every decision, every goal achieved and every failure. There is not a magic formula to ensure and attain success within corporate world: an unexpected turn of events might be around the corner every time, therefore, it is vital to always have a plan B.
Are there any pros?
Of course there are!
Stability: In terms of labor context. Although there are uncertainty and distressful issues, working on an own project is much more invigorating.
Autonomy: As entrepreneurs, they are responsible for every decision and every step towards the achievement of project goals. Being an entrepreneur allows people to autonomously decide what is best for the project. Starting a business also brings to table the chance of applying personal methodologies and ideas.