To be a small business owner or not to be a small business owner; that is the question these days, isn’t it? Many people looking to branch out on their own (because of the world economy) are stuck in a “should I, shouldn’t I?” mindset, and for a good reason. Current times have shown us in both our personal and work lives is that nothing is guaranteed. So, where does that leave you as an aspiring entrepreneur on the cusp of new things?
Before you can decide if owning a business is for you, you really need to dig deep down into all of the possible disadvantages and drawbacks of being a small business owner. Not to be a “negative Nancy”, but the reality is that being a small business owner comes with both advantages and disadvantages, so make sure that you do your investigations from both sides.
Owning a small business is not all sunshine and rainbows. There are definitely difficulties and challenges that you are going to have to face head-on. The worst part is that all of the responsibility falls on your shoulders. Before you leap into the process of becoming a small business owner, consider these possible disadvantages that go along with owning a business.
13 disadvantages and drawbacks of owning a small business:
1. Possible debt if you don’t already have capital or savings.
Unless you already have the capital saved, you are going to have to apply for a business loan to get your new small business started. You might think that because the business is “small” that the debt will be small too. That’s not necessarily the case. Some businesses, especially where stock and equipment are required, can be quite expensive to get started. You could get yourself in a hefty amount of debt.
2. Financial risk – you could lose it all.
Once you’ve got the funds you need and start to spend them, what happens if you don’t make it back? What if your business idea fails, but you have spent all of this money on it? That’s a huge financial risk to be faced with. Money needs to be dealt with carefully when starting a new business.
3. Increased stress levels.
If you thought you knew what stress was, wait until you own your own small business. Stress is paramount when running a business of your own. There are a million and one things to do and think about – at least that’s the way it feels. Prepare for your stress levels to rise. You may need to think about stress coping mechanisms before you get started.
4. No more “free time” to spend on yourself or loved ones.
Do you feel like you have a lot of free time? Probably not! Well, it’s about to get worse! The freedom to do what you want in your free time becomes null and void because you won’t have free time. Free time for a new small business owner is like the proverbial unicorn…no one is sure if it even exists!
Prepare to be busy all of the time, and even when you have a moment to spare, you will be thinking and obsessing about the business. Your time spent on yourself and with loved ones is bound to decrease somewhat drastically.
5. Unstable income/uncertainty, especially in the first few years.
A touchy subject to approach is that of income. Small business owners may want a guarantee that the income will be stable, but that can’t be guaranteed. Nothing is guaranteed when it comes to income for a small business owner.
Some months you might do really well, and then other months, you might feel like a sale will never happen. The trick is to ensure that you manage your money in such a way that in the tough months, you still have something to fall back on. This can be hard in the first years of business.
6. Competition may get rough.
If you have a brilliant business idea, even if it’s unique, it won’t be long until there’s competition heading your way. When competitors start vying for your business, you can expect to feel a flurry of emotions from anger to frustration and everything in between.
7. You take sole responsibility for all operations of the business.
Just how much responsibility you take as someone’s employee is vastly different from how much you take as an actual business owner. When you become a small business owner, you no longer have a boss or supervisor to take the flack for you when something goes wrong. Now, you are the person taking the flack, for anything and everything. You need to develop a tough skin in the role as a business owner.
8. Failure can have a negative impact on your mental and emotional health.
There is no guarantee that your business will be a thriving success. There’s a good chance that it could fail – we just have to be realistic about that. What happens when a business fails is that the business owner takes on that responsibility. If your business fails, you might experience emotional and mental issues such as depression and anxiety.
9. You have to wear many hats, from sales consultant to accountant.
As a small business owner, you probably won’t have the capital to hire a full complement of staff from day one. Instead, you will have to play the role of many different positions within the business. You will have to answer the phones, do the data capturing for the books, deal with customers, place orders, do deliveries, and more. It can become quite an overwhelming task.
10. You have to learn new skills and disciplines.
While running your own business, you need to have specific skills. You will need business management skills, bookkeeping skills, online marketing skills. Prepare to have to attend a few courses or dedicate yourself to self-study if you want to truly drive the success of your business.
11. Unpleasant tasks await you (there will come a time where you need to discipline or fire someone).
Unfortunately, there will come times when you have to do things you don’t really want to do. You will have to turn people down, fire people, hold disciplinary hearings, and take a firm stance. These can be unpleasant, especially for a more sensitive individual. As a business owner, you will need to harden up and be prepared to handle the difficult tasks head-on.
12. Your business idea needs to be timeless.
One of the disadvantages of coming up with a small business idea is that anything can become obsolete if something better comes along. The last thing you want is for your business idea to be a fad. Instead, there is a lot of pressure for your business model and idea to be “timeless”, which means that it won’t become obsolete or overrun with ease.
13. Your family relationships may take a backseat.
Let’s talk about how a small business can affect your relationship with your partner and family members for a bit…
We have already touched on the fact that you won’t have much free time when you start your own small business. Add to that inconvenience that your family relationships might start to take strain too. You will be putting in long hours and probably unable to think of much else, especially in the first few months. This can put relationships and family ties under immense strain. Time management and prioritizing will have to be on the forefront of your mind.
The conclusion that is come to is that being a small business owner comes with many possible disadvantages and drawbacks. However, with the right strategy in place and by weighing up the cons with the pros, you might still decide that the risks are worth the possible rewards. How you choose to proceed is entirely up to you! Good luck!