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Pros and Cons of Starting a Small Business

Although starting a business offers many advantages, it is a good idea to be aware of the drawbacks and take steps to minimise their effects on your business. Easy money isn't easy. You must earn it. Facing unfathomable challenges and entering unchartered territory are part and parcel of entrepreneurship. Think hard before you take the plunge.

Disadvantages: the Downside

Running your own business means that you will:

• Face being lonely and isolated, especially as a sole trader working from home. Cabin fever can be hard to deal with, especially if you're used to swapping stories over the water cooler in your open plan office. Be warned and use the radio, Internet Relay Chat or MSN Messenger and other technologies to interact on a daily basis in real-time.
• Be unable to blame others, instead having to carry responsibility for your own mistakes. The buck stops with you.
• Be under pressure of the financial risk that comes with no regular income or security. A monthly or weekly wage is a safety net and that will be removed.
• Need to be heavily committed, which could put a strain on relationships with family and friends.
• Rely on yourself, your skills, your staff, your suppliers and many others who could let you down.
• Probably work very long hours (certainly longer hours than you would in your job). I've yet to meet a business person who doesn't take their work home with them even if it's only thinking about work, having left tasked work at the office. It's not a halfhearted thing, you live and breathe it; you have to.
• Have no colleagues or managers to ask for advice (although these can be replaced by mentors, advisors and 'network' colleagues).
• Have to forfeit holidays for a while as there may be little opportunity or available funds.
• Have no sick pay, so will either need to soldier on regardless or not get paid while you're recuperating.
• Have your family/social life disrupted.
• Probably suffer from higher stress levels which could affect your health.
• Have to constantly multi-task and meet customer deadlines, satisfy others and still rely on others (suppliers, partners) to deliver.

Advantages: Pros

Running your own business means that you will:

• Be your own boss! Make your own decisions and work at your own pace. Nobody will be telling you what to do or expecting you to be in at a certain time. There's no reporting to someone else (except for your clients, who will be relying on you, and for this reason, slackers still need not apply).
• Take credit for each success and be proud of your achievements.
• Develop a particular skill you've always been keen to improve.
• Be rid of petty office politics and related nonsense forever.
• Potentially remove your earnings 'ceiling'. In your job there may only be a certain limit to what you can earn, depending on promotions through the ranks. Despite the risk, your potential earning power can be greater with no fixed earnings 'ceiling'. If your business is successful, you will take the credit and the profit and could make a good deal of money (eg more than your current MD).
• No more commuting or traffic jams (if you set up from home).
• Improve your self-fulfilment through greater job satisfaction and improved confidence in your abilities.
• Be free to choose your own hours to achieve greater flexibility in your life. Yes, you will be able to swap Wednesday for Saturday if you want to go to the beach, and if you've a wireless laptop you could even take your work with you. Being your own boss allows an incredible amount of flexibility and freedom (depending of course on work load!) and you'll be able to plan your own working day and take time off without asking the boss. If you want to lie in and work later or have an extended lunch break and catch up with an early start, that's your call. Everything is your call.
• Have the opportunity to become an employer.
• Improve your confidence. If you can run your own business, you can set your mind to achieve anything.