The pros and cons of starting your own business, part 2July 11, 2016 10:06 am Leave your thoughts
Welcome back to the second in our two-part series on the pros and cons of starting your own business. While last time we detailed the ways that owning a business can be satisfying and fruitful as part of the pros of starting a new enterprise. In today's post, we will take a step back to go into the reasons that give many pause before going into business for themselves. Here are some of the cons when it comes to starting a business.
Risk of failure
Unfortunately, new businesses are disproportionately more likely to struggle – and often fail – than existing enterprises. The first two years are typically the hardest, when profits can be slim to nil and expenses high. It can be difficult to watch your dream falter and see all your hard work go to waste – both emotionally and monetarily.
Getting a business off the ground requires a significant investment of time, resources and money. While bank loans and gifts from family and friends can help, the bulk of the hard work and investment will come from you as the business owner. This means long hours and few opportunities to take any meaningful time off in the early stages of your enterprise.
New businesses are inconsistent and difficult to predict: revenue may be spotty, customers fickle and advertising confusingly ineffective. It may take time to get in a groove and discover what works best for your business – by which time, you may find yourself exhausted and in debt.
Lack of benefits
Unlike a traditional full-time job working for someone else, self-employment requires you to set up your own safety net. This means paying for your own health insurance, retirement and other benefit plans, as well as setting up these benefits for your staff.
Distraction from what you really want to be doing
Just because you got into business for yourself to make a particular product or provide a specific service doesn't mean that the majority of your time will be spent actually doing that. Often, business owners find themselves preoccupied with the organization and administrative tasks, overwhelmed by the minutia rather than being able to focus on what brings them the most satisfaction.
Regulation and litigation
The biggest drawback to opening your own business is that the burden of compliance falls squarely on the business owner. There may be permits to obtain, training to receive and regulations to observe that, in the event of non-compliance, can result in expensive litigation. Furthermore, if your personal assets aren't protected, any lawsuit or sanction against your business could result in losing the things you've worked so hard to get.
That's where an experienced business attorney can help. The Law Offices of Donald W. Hudspeth, P.C. has helped countless entrepreneurs protect their assets and structure their new businesses. Call us today to learn more.
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