The pro and cons of starting a small business

Do you wish to start a small business? Great! 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 the rewards — of owning your own business.

So what are the pros or advantages of running a small business? Some of the possible advantages are:

• You have the chance to make a lot more money than you can make working for someone else.

• You’ll be your own boss and make the decisions that are crucial to your business’ success or failure.

• You may be the boss of other people.

• You’ll have job security — no one can fire you.

• You’ll have the chance to put your ideas into practice.

• You’ll learn more about every aspect of a business and gain experience in a variety of disciplines.

• You’ll be able to benefit the Malawi economy, by hiring other people to work for you and contributing towards public revenue (taxes).

• You’ll have the personal satisfaction of creating and running a successful business.

• You’ll have the chance to put down roots in a community and to provide a sense of belonging and stability for your family.

If you think this is compelling enough to get you started, then go ahead. But perhaps consider the disadvantages too to balance the equation. The possible disadvantages are:

• You may have to take a large financial risk.

• You will probably have to work long hours and may have fewer opportunities to take holidays.

• You may end up 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 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, production planning, advertising and promotion, market research, and general management.

If you wish to still keep your salaried job and run a small business at the same time, like a small hawker or kaunjika selling at your residential plot, it is a big boost for your personal finances. However, this also has its own pros and cons. Some of the obvious advantages include:

• Your start-up costs will be lower.

• Your operating costs will be lower than they would if you were renting space and paying utilities.

• You may be more flexible in your schedule if your business can be conducted at your convenience or outside “normal” weekday business hours.

On the other hand, you may have to live with the following cons:

• You are much more vulnerable to interruptions from family members, neighbours, and door-to-door salespeople.

• You may have an image problem, although with the prevalence of home-run businesses, particularly in low-density locations in Malawi, that’s less common.

• You may run out of space at home if your business grows.

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.

Having considered all this, do you still plan to go ahead and start a small business? If yes, all the best with it – the world favours those who take calculated risks. Have a blessed weekend.