Flexibility, generally lean staffing, and the ability to develop close relationships with customers are among the key benefits of small businesses. The digital communication revolution has significantly lowered the cost of reaching customers, and this has been a boon to small startups and big businesses alike. Time commitment. This leaves all of the duties and responsibilities to the owner.
Small-business owners report working more than eighty hours a week handling everything from purchasing to banking to advertising. This time commitment can place a strain on family and friends and add to the stress of launching a new business venture.
For instance, if an individual leaves a secure job to follow an entrepreneurial dream and the business fails, this financial setback can be hard to overcome. Beyond financial risk, entrepreneurs need to consider the risk from product liability, employee disagreements, and regulatory requirements. Even though the business may be successful at the start, external factors such as downturns in the economy, new competitors entering the marketplace, or shifts in consumer demand may stall the businesses growth.
Even entrepreneurs who go through a comprehensive planning process will never be able to anticipate all of the potential changes in the business environment. Financial commitment. Even the smallest of business ventures requires a certain amount of capital to start. For many people starting small businesses, their initial source of funding is personal savings, investments, or retirement funds. Committing these types of funds to a business venture makes them unavailable for personal or family needs.
In most cases where a small business receives start-up funding through a loan, the entrepreneur must secure the loan by pledging personal assets, such as a home. In spite of the potential disadvantages, most small-business owners are pleased with their decision to start a business. The odds are definitely stacked against small business owners and would-be entrepreneurs. Survival rates have changed little over time. There are six main causes of small business startup failure:.
To avoid this mistake, set a clear goal of where you want to be and how you plan to get there. Within every business someone needs to focus on the bigger picture and have an overview of everything happening internally and externally around the company. So delegate and outsource all the tasks that can be done by others, and free yourself to concentrate on the bigger picture. A small business needs to monitor its cash flow closely.
Top 8 Reasons to Start a Business in a Recession. Read Inspiration By: Lisa Furgison. Connect on Twitter: LegalAdvice Reason 4: Job security While some people would argue that working an office job in the world has more security than starting your own business, Nick Loper, owner of Side Hustle Nation, a company that helps people earn money outside of their day jobs, says diversifying your income with various clients is a smart play.
Connect on Twitter: nloper Reason 5: Flexible schedule Want to go to a baseball game in the afternoon? Connect on Twitter: BIOSuncare Reason 6: Cash in on tax benefits There are some monetary incentives to starting a business as well, says Fernando Campos, co-founder of Topwick, a members-only journal site that offers insider pricing on certain brands.
Reason 9: Surround yourself with good people Starting a business means you get to select the people you work with, which Jeremy Durant, co-founder of Bop Design, a marketing agency, says is one of the biggest reasons to start a business. Connect on Twitter: bopdesignsd Reason Acquire the quality of life you want One of the biggest reasons that Andrew Bliss, founder of The Adventurous Mailbox, wanted to start his own business was the geographical freedom that came with it.
Connect on Twitter: KarenRKoenig Reason Startup resources are plentiful Kyle Ems, founder of SeniorCareBox, a web-based company that helps customers send care packages to seniors, says there is no shortage of help available to new entrepreneurs. Reason Turn your vision into reality Have a great idea for a business?
Reason Spend more time with your children Working a normal job takes up a lot of time. Reason Share your talents with others Lisa Hennessy started Your Pet Chef because she wanted to share her love for dogs with others. Reason Personal fulfillment Nothing offers the kind of personal fulfillment that can be found in owning a business, says Christopher Rither, founder of One Mean Dream, a site that helps people achieve their goals in life. Reason Create the atmosphere you want Not everyone thrives in a bustling, cliquey office setting.
Connect on Twitter: OphisVape What other reasons are there to start a business? Lisa Furgison. Starting or Growing a Business? Check out these Offerings. Liked this article? Try these:. Back To Top. Plan, fund, and grow your business. Plan, fund, and grow your business Easily write a business plan, secure funding, and gain insights. Start your plan. If power is important to you, think about how to use it in a constructive way. The risks of forgoing a steady paycheck can pay off when you own your own business.
You can get rich in a small business, or at least do very well financially. Although most entrepreneurs don't get wealthy, some do. For more information on calculating the financial viability of your idea, see Will My Business Make Money? The most common include: Losing money. You're going to need money to get your small business started. Whether you raid your savings account, hit up friends and relatives, or borrow from a bank, there's a very real possibility that your business won't succeed and that you, your friends, or the bank will never see that money again.
If your business idea is risky, ask yourself whether you're willing to gamble your retirement, your friendships, and even your good credit on your business idea.
Personal sacrifice. Business success can come at a high personal cost. Getting your business up and running may consume most of your time and energy, including your precious evenings and weekends. You may not have much time for family or friends or the extra cash to take a second honeymoon with your spouse. Before you quit your job, decide whether you and your family are ready to make some of the personal sacrifices necessary for you to create a successful small business.
A break-even forecast includes the following: how much your business will earn over a specified period of time your projected sales revenue your fixed costs, such as rent and insurance your profit after deducting the direct cost of the product or service you provide your gross profit , and the sales revenue you will need just to keep your business running your "break-even point" or "break-even revenue". Determine if it's the right type of business. Use a break-even analysis to determine if your idea can make money.
Investigate business financing. Contemplate a basic marketing plan. For more information on writing a business plan, read Business Plan Basics. Business Formation. Choosing a Business Structure. Sole Proprietorships. Forming a Corporation.
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