In the year gone, which has been one of the most challenging financially, we begun a discussion on how one can find the right small business given the financial and skill constraints.
We highlighted two important points to bear in mind when finding the right small business: first, the kind of business one could start, and secondly whether one has the skills or expertise to manage it.
Global research shows that for every 100 new business enterprises, only 20 survive to the fifth year. The better you prepare yourself and understand the challenges ahead of you, the more likely it is that you’ll be one of the survivors.
Two of the most common reasons that a business doesn’t succeed are firstly, that the business is poorly managed because the owner lacks (or doesn’t employ) the necessary skills. Secondly, the owner could have underestimated how much money it would take to start the business. This week, let us specifically consider the first cause so we can try to determine if we have what it takes to start a small business.
To begin the process of preparing yourself, let’s take a look at the pros and cons of owning a business—here’s where you can get a good sense of the challenges and rewards of owning your own business.
Owning a small business is not just another job. It’s a totally different lifestyle. You have to ask yourself whether you’re ready for a complete commitment to the success of your business. Just as importantly, you have to ask your partner, if you’re in a relationship, whether he or she is completely committed.
The type and size of small business will determine whether you may have to just retire and concentrate on your business initiative or wait until you reach your retirement age. Usually, those who are about to retire build better businesses because they know this will have to be their lifeline. But you do not have to completely reach ‘salvage-value’ before you retire from salaried job for you to start you own business; reserve some energy for running own business.
As a small business owner, you’re going to have less time for your personal life and you’ll probably be using much of what you own as collateral to raise more money for the business. If you are willing to make those sacrifices, then let’s move on to some of the advantages and disadvantages of owning your own business.
The possible advantages of owning a small business include: Having the chance to make a lot more money than you can make working for someone else; being your own boss and making the decisions that are crucial to your business’ success and having job security, among others.
Just as there are advantages, there are a considerable number of disadvantages which I prefer calling challenges since they can be dealt away with. These include: likelihood of having to work long hours and having fewer opportunities to take holidays and spending a lot of your time attending to the details of running a business and less time on those things you really enjoy. You may also find that your income is not steady and that there are times when you don’t have much income coming in at all; you may have to learn many new disciplines, such as filing and bookkeeping, inventory control and production planning.
When all is said and done, however, keeping your salaried job and running a small business at the same time, like a small hawker or kaunjika selling at your residential plot is possible and can bring big boost to your personal finances.
Have a blessed weekend as you made the decision to start a small business bearing in mind the pro and cons of such an undertaking.