![]() On a positive note, start-ups with 2 partners are typically most successful (Stress and Health IssuesĪs a business owner, you are the face of the business and you "wear many hats". However, what’s your appetite or risk tolerance to invest a lifetime of savings or even go into debt to start or grow your business? And do you have a backup plan, (or another source of income), if things don’t go well and you face a substantial financial loss? Will you give up a regular paycheck in order to start your business, and if so, will you be able to pay your bills or sustain your lifestyle? The unfortunate reality is that 4 out of 5 businesses fail within the first 5 years. Financial RiskĮntrepreneurs by definition are risk-takers. So with all of these perceived benefits, why would we ever work for anyone but ourselves? Let’s take a look at some of the disadvantages of starting and owning a small business. Gains often are subject to lower long-term capital-gains rates (Best of all, owning your own business can have you waking up with a smile on Mondays, eager to start work rather than dragging yourself into someone else's business (Disadvantages of Small Business Ownership Tax laws in most countries are structured toward reducing the taxes of business owners and nearly all business expenses are typically deductible, which reduces a company’s taxable income. Ultimately, (and with a good dose of sweat equity and a bit of luck), you’ll gain personal satisfaction from implementing your ideas, working directly with customers, and watching your business succeed. You’re able to build something that may become part of your ongoing legacy and you could convert your skills, interests, and passions into income. Creative Freedom, Personal Satisfaction, and GrowthĪs a business owner, you’ll work in a field that you hopefully really enjoy. You may choose to raise and leverage money for your new business via investor’s capital instead of your own. Unlimited Financial BenefitsĪssuming you have an appetite for high financial risk, there’s no limit to the number of revenues and income your company can make and by operating your own business, you benefit from your own hard work. Even so, millennials are quite successful in this endeavor with 80% reporting profits, which is 3% higher than the national average for business. Millennials who grew up with technology have turned to entrepreneurship due to low employment opportunities and increased interest in lifestyle over money. There are more than 11.6 million businesses owned by women generating over $1.7 trillion in sales. For women, especially, owning your own business can give the lifestyle flexibility necessary to raise a family and still have a successful career. Your business can be a full expression of who you are. If family time is important, you may want to operate your business from home and eliminate a commute. You can set your own hours and decide when and where you want to work. You have no concerns about the whims of office politics. Advantages of Small Business Ownership Independence and ControlĪs a business owner, you have full control of everything, including your income, expenses, and debt. So, while money is a consideration, it may not be the primary reason for owning your own business. ![]() That’s a decent salary in certain low-cost areas, but it would be a struggle to live on those dollars in much of the U.S. According to, the average salary of an entrepreneur is $55,000, and that’s based on working an average of 66 hours per week. More than 400,000,000 entrepreneurs exist around the world, meaning that 1 of every 18 people owns a business (So, what is the attraction that would support these kinds of numbers? Those all sound like great reasons for taking the plunge and becoming an entrepreneur. We relish the thought of being our own boss, making much more money than if we worked for someone else, and the idea that we have job security (Ex. At one time or another, most of us have thought about starting and/or owning a business.
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