Should you start a small business? Pros and cons04/03/2022
For many people, starting their own small business is a logical step forward in their career. However, if it is a step you are thinking of taking, it’s important to be aware of the advantages and disadvantages that come with being your own boss. To help you decide whether it’s the right move for you, we’ve broken down what we believe are the most important pros and cons:
The benefits of owning your own small business
One major upside is that you’ll have more independence. Being your own boss gives you ultimate control over your career, letting you make every decision on your own, from holidays taken to hours worked to training embarked upon. It also provides you with the freedom to make important decisions like where to invest capital, and which clients to pursue.
The other major positive of owning a small business is that you will almost certainly make more money working for yourself than you would working for an employer. This is because you’re taking more risks owning the business yourself – and as a result, will reap more of the rewards. Rather than taking a wage, you will own all the profit your business makes (unless you have shareholders or partners). Additionally, owning a small business will give you access to tax breaks that self-employed people do not have, like claiming expenses against the company. These could include travel costs, office equipment and (if your office is part of your home) utility bills.
Career satisfaction is another valuable upside to being a business owner. Running your own small business will let you build a career you love, focusing on the type of work you enjoy and learning the things you want to learn.
Finally, a business is something of value that can be sold or passed on to an heir. As such, owning your own elevates you above the level of an employee and gives you a valuable asset you can dispose of in the future.
The downsides of being a business owner
Of course, if owning a business was all fun and games, everyone would do it. In reality, there are a number of downsides that accompany owning a small business, but they all broadly fall under two general headings: first, risk; and second, stress.
When you own your own business, the buck stops with you. If the business folds, it is your capital that disappears. If the work dries up, no one is paying you an hourly wage. There are also a number of ways you can get it wrong – like not saving enough money into your pension account.
Of course, this risk can be stressful. But owning a small business can also be stressful even when it’s going well. If you choose to employ other people, you will become responsible for a number of things (pensions, benefits packages, people management and administration). You many also end up working long hours, whether you employ other people or not – since it’s your baby, you’ll be the one pulling twelve hour shifts to keep it growing well.
At JW Hinks, we offer small business owners a high-quality end-to-end accountancy and business consultancy service that gives them everything they need to succeed. If you are thinking about starting up on your own, call us on 0121 456 0190 and find out how our experienced team can help.