Starting a business can be a very rewarding experience, both financially and emotionally. There are very few ways to become rich that don’t involve owning a business. But, owning a business is not a walk in the park, and shouldn’t be seen as an easy path to financial freedom.
Here are 10 reasons why starting your own business isn’t always a good idea:
1. It’s a LOT of Work
Owning a business requires a tonne of work, especially in the beginning. In most cases, it will require much more time and effort than your typical full-time, forty-hour work week. Let’s face it: You’re going to work harder for yourself than you are for someone else. If you don’t have the time to put into it, you’d be better off not starting your own business at all.
2. Most Businesses Fail
There are lots of different statistics out there about how many businesses fail, but no matter which survey you look at, the percentage of businesses that make it past the 5-year mark is quite low. If you’re scared of failing, then starting a business is probably not a good choice. Leave it to those that are willing to risk being unsuccessful.
3. It will Make You Uncomfortable
Owning a business requires wearing many hats, at least until you’ve built some momentum. Most people go into business because they’re good at providing a service, or are passionate about a specific product. They don’t go into business because they like to handle billings and collections, manage shipping, create marketing materials or do bookkeeping. While you may be able to (and should) delegate these tasks to others in the future, you will likely need to do a lot of things that you haven’t done before, and don’t enjoy. If that makes you uncomfortable, or you just don’t want to do it, starting a business may not be for you.
4. It’s Expensive
Starting a business is expensive. You’ll need to pay for a website, bank accounts, health insurance, legal fees, accounting, marketing and what will seem like hundreds of other expenses. It’s not cheap, especially if you hope to be successful. If you’re just getting by and hoping to start a business with no money, you’re not being realistic.
5. You’ll Wish You Worked for Someone Else
There will be times when running a business when you will long for the simple life. For times when you could come home from work and stop thinking. Once you become a business owner, your mind will constantly be thinking about ideas, opportunities, and projects for your business. If you’re starting a new business solely because you’re tired of your current job, it may not be for you.
6. It’s a Major Commitment
Starting a business is not something you do for fun or because you’re bored. It’s not something you do because you want to be an entrepreneur and be your own boss. Starting a business is hard work, it consumes all of your time, and if you don’t love doing it enough to make it worth all of that—if you’re just doing it because it’s what everyone else is doing—then don’t start one.
7. The Buck Stops with You
As a business owner, you will be ultimately responsible for the success or failure of your business. If things go wrong, you will be the one to blame. If you’re the type of person who struggles to deal with pressure, then starting a business may not be for you.
8. You Can’t Control What You Can’t Control
It’s easy to believe that as a business owner, you’re in control of your company and its success. The truth is, there are many factors outside of your control that can have a huge impact on your business. These include things like your staff, suppliers, bankers, the government, and public health emergencies.
9. No Job Security
As an employee, you are entitled to certain rights. If you do your job correctly, it’s very difficult for an employer to let you go without paying some sort of severance or settlement. Business owners do not have this same luxury. If your business fails, there will be no severance package or unemployment benefits coming your way. Instead, you’ll need to look for another job and figure out how to pay any outstanding business debts. The only cure to this problem is to be successful, which is easier said than done.
10. There’s Always Room for Competition
The business world is full of great ideas, but only the best ones make it. If you are at all successful with your business, there’s a very good possibility that another person will try to copy what you’ve done. In most cases, being the first to market will give you a significant advantage over your future competitors, but if that competitor has significantly more money, better connections, or is willing to outhustle you, they may just put you out of business.
So What Now?
Now that we’ve given you all of the bad news, you might be wondering if it’s still worth it to start a business. Here’s how we look at it. Owning your own business is a lot like owning a puppy. Although it can be very rewarding, it also requires a lot of hard work to keep it happy and healthy. If you’re not willing to put in the time, effort, and resources, you’d be much better off not getting one at all.
But here’s the thing: just like owning a dog, owning your own business doesn’t have to be painful if you do it right. Just like with dogs (or any pet), there are steps you can take so that your business doesn’t become sickly or cause you to be stressed out from too much work or responsibility. From a legal perspective, that starts with structuring your business correctly and working with experienced legal professionals to protect your precious investment. That’s where we can help!
If you want to prevent future problems by setting up your business correctly, book an incorporation consultation below. You’ll have a chance to speak with a lawyer directly to discuss ways to limit your risk, maintain flexibility, and increase your chances of success.
Don’t waste any more time, get clarity and peace of mind by booking your consultation today.