Working for a salary in service of someone else’s business often only gets you so far. You could be stuck doing work that you’re not passionate about, and the amount you make and the hours you work are out of your hands.
That’s why when it comes to making good money and taking control of your time, there’s so much advice out there that recommends entrepreneurship.
Managing your own small business or even a startup can be incredibly fulfilling, and you’ll have the opportunity to do work that you genuinely love or feel committed to.
Of course, starting your own business has its own pros and cons that greatly differentiate it from working for a wage. It’s important to know what you’re getting into before you decide to take the plunge.
What are the ups and downs of running a business?
Running a business isn’t always smooth sailing. There can be many ups and on your journey, such as financial struggles, objections from friends and family, difficulties finding clients, and more. At the same time, you can look forward to a more flexible schedule, more fulfilling work, and more financial freedom.
Here are the ups and downs of running a business or startup, and what to do to overcome the challenges of entrepreneurship.
“When you’re running your own business, you decide what products and services to offer and how they’ll affect the community around you. You get to decide the mission and vision of your company. #entrepreneurship #startup”Tweet this
The Upsides of Running a Business
Many people are drawn to entrepreneurship due to the idea of “being your own boss”. In fact, running a business or startup gives you a lot of freedom to set your own hours, work from anywhere, and make as much money as you want.
Below are some of the “ups” of venturing into the world of business ownership.
+ You Decide When You Work
One of the most appealing advantages of running your own business involves time.No more 9-to-5 hours, no more unpaid vacation, no more scarcely available vacation days. When you run your own business, you decide when you work.
Of course, this freedom comes with the responsibility to devote the hours that your business needs from you in order to grow. For some businesses, this means that you might have to work more hours than before. Other times, especially when it comes to retail, you may have to work strange hours to get orders fulfilled.
The most important takeaway here is that the hours you put in are entirely up to you, and that kind of freedom and independence isn’t something you can put a price tag on.
+ You're in Control of your Business' Direction - And How Much you Make
Few things in life are as fulfilling as watching your business blossom thanks to all of your hard work.
You’ll achieve milestone after milestone, and you’ll always have the satisfaction of knowing that every goal you reach is something that you set for yourself.
There are no internal audits or performance reviews waiting for you at the end of every quarter. Your metrics are all your own – and you get to take complete ownership of any successes you achieve at the end of the day.
As a corollary to being in control of how your business grows, that also means that you’re in control of how much money you make. Now it’s not as simple as ‘willing’ yourself to have a million dollars tomorrow, but the point is that your earnings are directly related to how much effort you put into your business’s growth.
+ You Choose the People you Work with
Almost everyone has experienced being saddled with a coworker that they don’t get along with. It’s a terrible fact of life for people with regular jobs.
As your own boss, you will choose the people who join you in the ups and downs of running a business. Your partners and staff will share your vision and help you achieve your goals.
+ You Get to Work from Home
When running a business, you have the option of using your home as your office.
Technology allows you to manage your operations and hold meetings with your staff using video conferencing software, while eCommerce tools allow you to bypass a brick-and-mortar store entirely and have your store fully online.
+ You Get to Make a Difference
When working for someone else’s company, you often feel divorced from the outcome of your work. It feels like you’re just fulfilling orders that upper management is giving, and you never actually see the results.
But when you’re running your own business, you decide what products and services to offer and how they’ll affect the community around you. You get to decide the mission and vision of your company.
+ Selling your Company After it Gets Big Can Set you for Life
If you manage to make it past the downs of running a business and end up making it big with your company, then you’ll likely have the opportunity to sell it later on – and get a huge payout in the process. Oftentimes, this payout is enough to never have to work another day in your life.
If that isn’t what you want, then what you will have is the capital and experience you need to start the next step in your entrepreneurial journey—another idea, another company; but this time you’re wealthier and more experienced.
The Downsides of Running a Business
There’s a saying that goes, “If entrepreneurship were easy, everyone would be doing it”. This is such a common phrase because running a business can be hard work!
It’s rare that you’ll start a business that’s set-it-and-forget-it. You will need to put the hours in to help it grow. You’ll also experience pushback from peers, dips in your income, and unexpected hiccups.
Read about the downsides of running a business below so you’re prepared no matter what.
- You'll Get First Hand Experience Dealing with Competition
When you work for someone else, the competition can sometimes feel like an abstract concept.
Oftentimes, you’re just a cog in the machine, doing your job and not being able to see how the competition fares against your business. Other times, you see the competition as a small obstacle that affects the numbers you put out.
When you own a business, the competition becomes a constant cloud over your head. That product or service idea you had? Oh no, someone else has already cornered the market! That place you’re looking to expand to? Good luck dealing with that heavily entrenched local business that’s been around for decades.
Competition can be a great motivator to innovate and provide new ways of doing things. Unfortunately, it can also be a serious source of anxiety and uncertainty.
- You Have to Deal with Bad News
More than two decades ago, Bill Gates wrote in his book, Business @ the Speed of Thought:
“Bad news travels fast in a successful organization. An essential quality of a good manager is that he or she deals with bad news head-on, seeking it out rather than denying it.”
When it comes to entrepreneurship, it’s incredibly important to be aware of any problems going on in your business and to handle them as soon as possible. When you run your own company, the only person who can deal with issues is you.
That means dropping whatever you were doing, cancelling any plans you had, and getting started on damage control. If something in your supply chain went down, or if your logistics partner has suffered setbacks, it’ll be on you to contact them or even travel to their office to resolve issues.
It’s not just enough to be willing to deal with these problems. You need to constantly have your feelers out there, ready to catch the slightest whiff of a problem and respond to it before it starts significantly affecting your bottom line.
- You'll Need to Work on Getting Funding
Unless you’ve got enough capital saved up on your own, starting a business means shopping around for funding. That could mean looking for startup accelerators, taking out loans, or even working another job.
While running a business can be your ticket to big bucks, there’s a waiting period before your business starts actually producing a positive bottom line. With startups especially, that period can actually be years. Startups, after all, are defined by focusing on their ability to grow, without necessarily focusing on becoming profitable early on.
- You'll Have to Wear Many Hats
When it comes to the ups and downs of owning a business or startup, few things affect you as much as the need to do several jobs at once. You have to be the account manager, operations staff, finance department, sales, and business development all at once if you want to achieve growth in the initial stages.
This definitely means that, at least until you grow and hire more people, you’ll sometimes find yourself working even harder than at a regular salaried job.
- There is Less Security, Greater Risk
The ups and downs of owning a business often involve the ownership you have over both success and failure.
One day, you could be responsible for quadrupling your revenue in two years and expanding to five new locations. The next day, you could be teetering on the edge of insolvency, practically ready to throw in the towel.
With a secure wage job, you’ll mostly be fine if you just do the work you’re given. Running a business means losing that security and taking risks that could lead to major financial problems. You’ll make decisions that have a chance of amounting to nothing.
That’s why it’s so important to have the right risk management strategies in place, no matter how big or small your dreams are. As much as possible, you don’t want to make all-or-nothing decisions that lead to your company’s demise.
Knowing the Pros and Cons is Half the Battle
Theodore Roosevelt once said: “Nothing in the world is worth having or worth doing unless it means effort, pain, difficulty.”
Entrepreneurship isn’t easy, just like anything worth doing. However, the rewards that it offers after you’ve gone through the risks and challenges, are far greater than anything that anything normal 9-to-5 job could ever offer.
At Spoka, we make weathering the downs of running a business a bit easier. Get all the tools you need to improve communication and organization in your business.