Sometimes you see ads online for various business opportunities promising you you’ll make hundreds of dollars in a week, or the thrill of starting your own business immediately. Becoming self-employed does have some perks with it, but nobody becomes rich overnight going that route. If you really are a motivated person who values hard work and reaching goals on your own, self-employment may be for you if you consider the following pros and cons.
Pro: You Get To Decide How And Where Your Business Is Run
One great thing for new entrepreneurs, freelancers and other independent contractors is that brick and mortar businesses aren’t the only kinds of businesses that get started in today’s world. You could start an online business like a drop shipping business or other e-commerce business. Or you could provide services for your local area that are high in demand but short in supply. Basically, depending on how many skills you have and your overall knowledge of different industries, the possibilities for starting your own business can be quite numerous. And if you prefer to start a business right from your own home, you can do that and not have to worry about fighting traffic to get to a job working for someone else.
Pro: You Get To Hire Who You Want And Establish Your Own Workplace Culture
Starting a business from scratch and growing it into a company with a lot of employees can take years to do, but if you are seeing revenue come in and feel it’s time to hire, you get to make that decision. You can decide what your brand will be like, whether you want your workplace to be laid back or fast-paced, and other rules for employee conduct. There are many things that have to happen and many considerations surrounding these decisions before you get to that point, but as a business owner these do rest with you.
Con: You Are Responsible Now For Taxes And Legal Issues
One benefit most regular employees have is that their employer usually withholds taxes, social security and Medicare for them, and covers things like worker’s comp and employee benefits. When you start your own business, you’ll need to know how to do your business taxes and make sure you have your business and personal finances separated. You’ll want to know what your business should be registered as, what kind of insurance you’ll need, and other legal implications you should do your homework on.
Con: You Have No Financial Safety Net
Often the hardest part about starting a business is getting the working capital to do it. You usually can’t get an SBA loan or traditional financing until you’ve been in business for a while and have enough valuable assets to secure a loan with. That means you might have to dip into your personal savings, sell some of your personal items, or even use credit card balances to start your business. This could put you in a bind if an unexpected emergency comes up, and your personal savings are tied up in your business. In this situation, you can consider alternative financing options such as online installment loan lenders to get you through your personal financial crisis. Just remember to pay off any personal loans as quickly as possible to avoid incurring excess fees, and start building your savings back up.
In conclusion, while starting your own business can put you in control of your own tasks, your own hours, and your own marketing decisions, don’t expect to be going off on your dream vacations whenever you want during startup. You will need to have backup plans and be prepared for risk taking and failure, but if you are strong of heart, don’t be afraid to go all in on your business idea.
If you’re a business owner and in need of resources, here are our top recommendations to set you up for success: