Being your own boss, making more money, and having job security are all attractive reasons for starting your own business – which may explain why 400 million entrepreneurs exist worldwide! But with so many people owning businesses, what makes entrepreneurship so appealing? Many of us have thought at one point or another about starting and owning our businesses. Being our own boss, making more money, and having job security are all appealing reasons to become an entrepreneur.

There are more than 400,000,000 entrepreneurs in the world, which means that 1 out of every 18 people owns a business. So, what is the draw that supports these kinds of numbers?

While money is a consideration, it may not be the primary reason for owning your own business. According to entrepreneur.com, the average salary of an entrepreneur is $55,000, which would be a struggle to live on in much of the U.S. So if you’re considering starting your own business, financial stability may not be the primary motivation.

Advantages of Small Business Ownership

Independence and Control

As a business owner, you’re in full control of your company’s destiny – from its income and expenses to its debt. You make all the critical decisions and don’t have to worry about office politics. As a business owner, you have complete control over your income, expenses, and debt. You make all the important decisions and don’t have to worry about office politics.

Lifestyle and Freedom

Being your own boss has a lot of advantages, one of them being that you can set your own hours and work around your schedule instead of the other way around. This is especially beneficial for those who want to spend more time with their families or eliminate a lengthy commute. Additionally, owning your own business allows you to express yourself fully through your work and Women-owned businesses are on the rise, making up 11.6 million businesses in the US and generating over $1.7 trillion in sales annually. So, not only are you able to create a lifestyle that works best for you, but you’re also joining a large and growing community of female entrepreneurs!

Unlimited Financial Benefits

There’s no cap on how much money your company can make if you’re willing to take on high financial risks. And as the owner of your own business, you get to reap the rewards of your own labor. Instead of using your own money, you may choose to finance your new business by raising money from investors.

Creative Freedom, Personal Satisfaction, and Growth

As a business owner, you have the opportunity to work in a field that you’re passionate about. You can build something that becomes part of your legacy and convert your skills, interests, and passions into income. With hard work and a bit of luck, you’ll gain satisfaction from implementing your ideas, working with customers, and watching your business succeed.

Tax Benefits

One of the best things about owning your own business is that you can deduct nearly all of your business expenses from your taxes. This means that you can significantly reduce your taxable income, and in some cases, you may even be eligible for lower long-term capital-gains rates.

Another great thing about being a business owner is that you get to wake up on Mondays excited to start work, rather than dreading it like so many people do. At the end of the day, owning your own business gives you a lot more control over your life and your career.

Disadvantages of Small Business Ownership

Even with all of these advantages, there are also some disadvantages of starting and owning a small business that are important to consider. Weighing the pros and cons will help you decide if entrepreneurship is right for you.

Financial Risk

As an entrepreneur, you’re naturally a risk-taker. But when it comes to your business, how much risk are you willing to take? Are you comfortable investing your lifetime savings or going into debt to start or grow your business? And if things don’t go well, do you have a backup plan? Will you give up a regular paycheck 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. So it’s important to consider all of these factors before taking the plunge into entrepreneurship.

Stress and Health Issues

As a business owner, you are the face of the business and you “wear many hats”. There’s a non-stop list of concerns to deal with – competition, employees, bills, equipment breakdowns, customer problems, supplier shortages, and late deliveries – too numerous to mention. As the owner, you’re also responsible for the well-being of your employees. You will likely have to perform some unpleasant tasks – like firing people – which can be difficult in a strong economy with low unemployment. You will also have to recruit and hire qualified people to staff your organization.

Time Commitment

People often start businesses with the intention of spending more time with their families. However, in reality, they may not be able to get away as much as they’d like. In fact, they may have even less free time than if they were working for someone else. For many entrepreneurs and small business owners, a forty-hour workweek is a myth – on average, they work 55 hours or more per week. They may find themselves working nights, weekends and holidays. And while we understand how important it is to spend time with loved ones, we also know how important it is to put the time in to make your business successful.

Unknown Variables and Threats

There are always going to be unknown factors that can impact your business, no matter how much you plan or how well you think you’ve got things figured out. That’s just the way business goes – there’s always uncertainty. An unexpected geo-political event could thrust the economy into a rapid recession, causing consumers to cut back on discretionary spending. A strong competitor could enter your space and poach market share from you. A key contributor or business partner could take ill and, suddenly, you’re faced with additional responsibilities. The key to weathering these storms is to have a good team around you that can help you adapt and pivot as needed. If you’re prepared for the unknowns, then you’ll be able to weather anything that comes your way.

Takeaways

Although the odds may be stacked against them, starting a small business is still a popular endeavor – with approximately 250,000 new businesses being started in the US monthly, according to the SBA. And for those who are successful, there are plenty of rewards to be reaped both financially and emotionally. After all, small businesses help people by creating jobs in their communities and being good corporate citizens.

Some of the world’s most iconic companies and business leaders started with a simple home-grown idea. Facebook and Microsoft are just two examples of businesses that started small but went on to change the world; while visionaries like Disney, Zuckerberg, Bezos, and Gates continue to inspire us with their innovation and success.

You can still be an agent of powerful change, even if your business doesn’t reach world-renowned levels. The impact that your product or service could have on individuals might be significant, and you might even get to turn your passion into a job that you love. The Duquesne University SBDC provides free business consulting for entrepreneurs in the Greater Pittsburgh area. Request free consulting here, or contact the SBDC for additional help and information. Paul Bucciarelli is a part-time business consultant with the Duquesne University SBDC and serves in the New Castle/Lawrence County Area. He recently retired from the PNC Financial Services Group after 19 years as a VP – Supply Chain Manager. Paul holds a Master’s in Business Administration from Youngstown State University and a Bachelor’s degree in Advertising and Journalism from Penn State. He is a part-time faculty member for the Penn State Shenango Campus, and he also serves on the Advisory Board for PSU – Shenango.