Your Own Business Offers A Point Of Stability
Being your own boss is an attractive thought that most of us have had at some point or another, especially in America where individuality is highly prized.
But starting your own business isn’t really a great idea for everyone, & falls solidly within the group of thoughts that we’d call “life altering decisions.”
If there’s one thing that we all learn through life, it’s that change is inevitable. Technology continues to advance, society ebbs & flows, and our own priorities change based on life events. It makes starting a new business an attractive option for a lot of people as a way of having a constant in our lives that we’re in absolute control of, sort of like a refuge that we’re constantly working on.
Think of something that you enjoy doing & that you’re really good at. Now think of doing that all day, every day, for the foreseeable future. If you’re still thinking that sounds pretty good, you might have the same grit that many entrepreneurs will tell you is needed for a successful business.
Let’s look at the pros & cons of being your own boss.
Advantages Of Self-Employment
Higher Earnings Potential
If you’re good at what you do & your audience takes note, you can potentially earn as much your time will allow.
As an example:
Got a landscaping company that you charge $45 per cut for patio homes? Grouping customers together & limiting your windshield time makes it so that you can earn more per day – if you have ten homes that you’ve scheduled in the same neighborhood, that’s a $450 day each week just for cutting their grass. Set your customers’ billing up on an automatic subscription basis to make your earnings easy & predictable, as well as making it easier for your customers.
If you’re offering content creation at 15 cents per word, you could produce an average-length piece of 1500 words in fairly short order, if it’s a topic you’re familiar with, bagging you $225 just like that – how many of those can you do in a day?
Job SecurityYou can’t get fired when you’re your own boss! It’s true that we all actually work for our customers & that there will inevitably be differences of personality, etc., but having several customers makes it that much more secure when things change in their lives & they need to make a change which impacts your business.
You Decide What To Work On
Corporate culture can be stifling & one of my absolute biggest irritations in my previous professional life was not being able to work on things that I wanted to do which were legitimately worthwhile & important. Thing is, when you’re working for the man, you have to do what you’re told, period. Business owners have the flexibility to decide how to build on their company’s foundation. Customers are asking for something that you’re not currently doing? You get to explore whether or not that’s a good idea & here’s a little clue – that is one of the most exciting things when you’re in business for yourself. Don’t like something that you’re doing? Consider eliminating it as an option.
You Can Set Your Own Boundaries
In office culture, you don’t get to decide who you work with, or who you work for, but as an entrepreneur, you definitely do. We’re all familiar with the signs in small businesses everywhere that read, “We reserve the right to refuse service to anyone.” This is something that is lost on some folks – a business owner is well able to decide who they want to be around & asking for a manager won’t do much more than speed an entitled customer towards the door even faster.
If you’re particularly close with your family, you might even be able to make it a family business! Similarly, if you’ve got an employee who decides that they’re going to start sandbagging, you can “upgrade” them to another employee.
Depending on the type of business you run, one of the biggest benefits of being your own boss is that you have incredible flexibility, especially in today’s increasingly remote work culture. Don’t feel like shaving & brushing your hair? Maybe want to work from the coffee shop in your PJs? No problem! Business owners set their own schedule & tend to not have a clock to punch – I won’t lie, this is a huge benefit for me.
Businesses like boutiques, cafes, and offices might have a little bit less flexibility present in their structure, it really just depends on that specific business.
Freedom Of Movement, If You’re Remote
If you set up your business in a decentralized manner, meaning you’re not tied to a physical location, you can do your job from virtually anywhere in the world. These days, services are in demand more & more, with things like content writing, virtual assistance, & software services providing excellent opportunities for a nomadic entrepreneur. This is how many people find themselves becoming a web developer or working in graphic design & these kinds of business can provide you with the ability to explore other revenue streams in addition to your primary income.
A business owner will tell you that their company is practically like a child to them. They’ve put in so much time & effort on growing it, refining processes, and improving products & services that they could write a novel on it all. Knowing where you’ve come from & where you are is incredibly gratifying.
Disadvantages Of Self-Employment
It Takes Time To Grow
New businesses come & go all the time, for different reasons – failure to plan for taxes is a common reason. It’s important for a business to build up a cash reserve so that they can be prepared to deal with unexpected expenses & keep the doors open & when a business starts, it’s almost always in the red. It takes time for a company to produce enough revenue to support everyone involved & generate a profit, to boot. Sometimes you’ll feel like you’ve left the rat race only to start racing with wolverines but the hard work & dedication will pay off, if you stick to it.
You Can’t Call In Sick
Well, you can, but nothing will get done if you’re solo. Unless a business is set up to operate only part of the time, it’s difficult to find a way to take time off & keep the lights on, at least initially. You’re the one working, doing everything with your own hands, on call every day. The weird thing about this is that entrepreneurs tend to see this as more of a positive than a negative – being in the driver’s seat & developing the know-how needed for a successful business is very satisfying. It’s also the only way that most small businesses can grow & make more money.
You Have To Hold Yourself Accountable
As an entrepreneur, the cliche “if it is to be, it’s up to me” rings true. Business owners need to be focused self-starters.
Personally, I’ve learned over time that I can do pretty much any job for 3-5 years but after that, I’m ready for a change. That was a major advantage of working in a much larger organization previously, there was never a shortage of needs in different areas, enabling me to apply & make an acceptable change. I’ve learned how to tell I’m getting burned out over the years because of this & it’s a real danger in self-employment, so you really need to figure out ways to maintain that keen interest in what you’re doing with some goals that take a little more time & effort than just making money.
One thing that is lost on many business owners is that they can & should plan for this by developing an owner’s mentality. Business owners should begin to transition out of production work & gradually find themselves talking with people more & more. Train key personnel to take the reins, give them the tools that they need to do their job, & get out of their way.
If your work is 100% remote & you’re a social person, this is going to be one of the bigger problems that you’ll face. Business owners need to take the initiative to network with complementary personalities in a way that mitigates this isolation.
Loss Of Benefits
Larger organizations tend to have healthcare, retirement plans, & other fringe benefits for their staff. Guess what? Being your own boss fulltime means that you’ll need to create these entirely on your own if these are important to you.
Feast Or Famine
Unpredictability in cash flow is a major headache for small businesses. Entrepreneurs are taking a gamble just taking the chance on their own business but when we consider how other factors impact the business, it’s easy to see how sales could suffer for a lot of businesses. Civil or political unrest, supply chain issues, global pandemics are all good examples of how we’ve all been impacted, positively or negatively, in business.
Business Owners Thrive On All Of This
As a business owner, the positives will always outweigh the negatives that we’ve listed & that remain unspoken here. We understand intuitively that if it were easy, everyone would do it & that we stand to gain far more satisfaction taking the road less traveled than we do sitting in a big company’s cubicle, so let’s look a little deeper in some things that might help to identify what a good business idea may be for you.
What Makes A Good/Profitable Business?
We could debate what constitutes success to each of us individually but let’s keep this simple – for the vast majority of companies, the measure of their success is profitability – make more money. A sound idea, a viable market, & quality execution. It would probably make more sense to create a new service business in America than trying to create a new manufacturing business these days, given the trend towards our time being at a premium & everyone still wanting to have an improved quality of life. Businesses begin life as a practical unknown & need to earn their reputation, so it’s crucial for business owners to not take shortcuts & to communicate with transparency. Don’t make promises you can’t keep because it will come back to bite you.
Be authentic in your professionalism, don’t try to pretend that you’re something you’re not. Ours is a race of hunter-gatherers & we prize an individual’s abilities to compete & camouflage & because of that, there’s a little warning buzzer that goes off in our heads when someone is trying to deceive us. Don’t be the one setting that buzzer off.
Make A Business Plan Out Of Your Business Idea
Any successful entrepreneur will tell you that there’s a lot of stuff to keep up with in any small business & it’s critical for the owner(s) to understand their business model. Having a business plan can help to keep important milestones in focus as the business grows. The US Small Business Administration has tons of free resources available, including how to create a business plan. Once your business idea has been fleshed out into an initial business plan, you’ll be able to see if the business makes financial sense in addition to being something that you’ll enjoy doing.
Don’t Comingle Funds
This is a major trap for fresh-faced entrepreneurs & can be difficult to bounce back from, especially if the business had a good year & the owner was, erm … more free with their funds. It’s very important to set up a business bank account & have all of your company’s expenses ultimately coming out of that. Pay yourself a salary & use that for your own personal expenses or risk a nasty tax surprise at filing time.
Understand How Much Money Will Be Needed
Some businesses are resource-intensive to get off the ground & require thousands of dollars of startup capital. For some of us, we might cash in our life savings to begin our own business while more of us will focus on creating more success & building on what the business is doing gradually to avoid debt. This would be particularly true if a new company were started up as a side business, which is probably the most financially stable way to approach starting a business.
Listen To Your Customers
Most customers won’t tell you what they want right away, they’ll wait to see what you give them before you hear honest feedback. This can make it difficult to hear, sometimes, since you’ve put in the effort & if the provided feedback is negative, it can feel like you’ve had your effort thrown right back in your face. It’s crucial to remain objective at this point & maintain a merchant’s mentality – this is where you get the most valuable information your business can get … over time. There will be one or two customers here & there that try to game the system but most of your customers will provide good, constructive feedback over time that can help a business owner refine their product or service.
Opinions expressed by your clientele are invaluable – they will teach companies who listen, over time, how to embrace their failures, trim off unnecessary parts of the company, & focus on what’s working, thus creating more success.
Lessons learned this way will also help with new ideas, better define the target audience (revealing new potential customers), better understand your position in the market, & refine processes so they’re less time consuming – time is money.
Improve Your Skills
Continuing education is important & learning new skills doesn’t need to be expensive or formal, there are a ton of free or inexpensive resources available for most industries such as on LinkedIn Learning or Udemy, as two examples just off the top of my head. Trade shows, conferences, social media groups, message boards, service providers – all of these represent examples of potential continuing education for a small business owner. Trust me, your customers will notice when you invest in yourself & your people & they’ll appreciate that it’s important to your company to provide the best in the business.
Be True To Yourself & Trust Your Gut
The cliche that committee kills creativity is true when you’re running your own business. Friends & family who hear that someone they know has started their own company, especially if it’s a one-person show, tend to behave as though the business owner needs to hear their input on what the business should be doing. Even if they’ve not had a single minute’s experience doing what you do. You’ve done what you’re doing long enough to have the valuable skills needed for your business, know what works & what your customers want, stick to that & don’t let unsolicited advice distract you from what you know you need to be doing.