What are the things to be considered when starting your own business?

This is the common question that we hear or see from most people who wants to build their own business. Here is a not so short blog discussing the factors; what are the risks and rewards of it.

Most people have considered starting their own business, or at least being their own boss via freelance work or consulting. Fewer people, though, have an idea they think they could turn into a successful business, or the experience or time necessary to dedicate themselves to launching a successful business model.

If you have a great idea and the time to devote to that passion, then you may still face a lengthy list of positive and negative issues or questions when starting your own company.

Risks:

Inconsistent or no income

When starting your own business, not only do you not know how long it will take for you to turn a profit – you don’t know if you will ever really make enough money to sustain yourself, your employees and your business as a whole. Fluctuations in the economy, demographic transitions, and consumer trends may impact the amount of revenue your business earns from month-to-month.  When starting out on your own, years of experience in your industry and a substantial book of clients may lead to consistent work, but even that is very rare for a brand new company. You’ll have to be prepared  to lose money the first year, possibly break even the second year, and finally turn a profit in the third year if everything goes well.

Long hours

With inconsistent income, you are likely to need to take any job offered at first, which may lead to late nights and long hours. It can mean taking on projects you don’t enjoy  to earn a paycheck — which is a reason people leave their jobs to start their own businesses in the first place. Launching your own company doesn’t just mean doing something you enjoy or are good at: it means hours spent managing the business aspects as well. A 40 hour work week can easily turn into a 60 or 80 hour week when you have multiple client deadlines to balance, employees to hire, meeting payroll week after week and tackling weekly, monthly and  quarterly financials. And – if you’re lucky, you’ll get to do your annual financials.

Rewards:

Income potential

Unlike a job where you draw a salary, the potential income when starting your own business can be very rewarding.. This is the other side of the “dry spell” coin. If you do have a great idea or can take customers with you to your next venture, you can control costs to a reasonable extent. The only limit on growth is your own limitations – or how many other people you want to hire.

Autonomy and security

No matter how high you climb in the corporate world, unless you own your own business, you can never really experience the autonomy and security that comes from being your own boss. Not only do you not have to check with any higher-up about the decisions you make, you don’t have to worry about job security. With the economic downturn last decade, many corporate executives realized no job is safe. Whether you lost your own position or had to cut staff, you’re likely interested in developing a recession-proof concept that you won’t have to worry about leaving.

Experience

The opposite of being forced to be a jack-of-all-trades, developing the experience in various aspects of business management can translate well to any field or industry. Once you master the concept of human resource management, for example, you can delegate that task with ease, or manage it if needed in any business venture.

Starting your own business will require more time, talent, and dedication than any other job you can have. While it requires an investment of both your money and yourself, the risk can definitely pay off, emotionally and financially.