Pros and Cons of Starting your own Business
Pros and Cons of Starting your own Business
Pros and Cons of Starting your own Business - To learn more about this author, visit Mike Richter's Website.
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As an experienced HR Consultant with significant insight in talent development strategies on corporate level to the (executive) search and recruitment process I have learnt about dozens of different ambitions, goals and reasons to consider a career change - or even leaving the "corporate world" and starting an own business. Again, the latter also includes myself.
In a nutshell, let me share my gathered knowledge about the top 10 reasons to leave "Employment" and turn "Entrepreneur":
- Freedom, "be your own boss"
- Being stuck in the corporate ladder, limited development potential
- Salary / Earning potential
- Status
- Flexible work hours
- Creativity
- Ambition
- Fun factor
- Power
- Employee relationships
Note: According to some latest opinion polls (U.S.) far more than half of the employed have seriously thought about opening an own business, or becoming a partner in a firm or self-employed in an established marketing business!
Employment
Until the economic downturn set-in Q4 2008, most (multinational) companies had one key HR issue: employee retention!
In some international markets the average employee turnover reaches levels of more than 25% p.a. A modern approach of getting to the root-cause are retention audits, i.e. singling out the main factors of attrition. Here one can find a great dispairity when comparing markets (Japan, U.S., UK, India), industries (steel making, advertising) and seniority levels (factory worker, Director). Reasons for unhappiness in a current employment are sometimes obvious, but in many cases under the surface and not openly communicated.
Over years of experience in recruitment and HR consulting and having discussed this specific subject with international HR managers it has become obvious that there might be a great number of such reasons in combination, but some are generally predominant and therefore lead to employees considering other options. Top 5:
- Compensation & Benefits
- Position, Status & Power
- Work Hours
- Product/Company Reputation & Culture
- Location
If you take a close look at these, aren`t these the same reasons for many now-employees closely looking at opportunities to start their own business (refer to above)?
But in order to make a decision to
a) move and make a career shift or
b) become en entrepreneur or partner
the following facts need to be considered and weighed carefully, in every possible detail:
- Employees receive a guaranteed/ fixed salary.
- Employees receive benefits, from health insurance, retirement schemes to car allowance, housing support and school education support
- Employees receive holiday
- Employees are paid their salary even when falling sick (depending on market and legislation)
- Employees have work hours regulated by contract and/or legislation
- Employess receive retrenchment packages in times of downsizing
- et cetera.
Therefore the easier choice - in many cases - is to shift employment for an anticipated benefit, e.g. advancement in Compensation & Benefits, Position, Status & Power, and/or others.
Why do many "secure" employees take risks then, starting-up their own business?
Entrepreneurship
Psycholgists have researched many fields of human behavior - what are the underlying reasons for taking certain action? Why some prefer staying in their comfort zone, and why some others take risks, calculated or unlimited.
Becoming your own boss by leaving secure employment (= job with all the benefits described above) is generally anticipated a risk. Only if someone has reached a level of great financial security and freedom this risk can be completely eliminated (although even Millionaires can turn broke).
The risk needs to be calculated and foreseeable. This is key to possible success.
I have seen a large number of business plans with interesting ideas and income plans - based on "could" and "should" scenarios. These are in most cases set to fail in the short to mid term. An Entrepreneur must do his/her due dilligence and gather as much information as possible and include best-case and worst-case scenarios in the process. Of course a start-up lives from its flexibility as well, but the bottom line must be secured, at least with one reinforced net!
Entrepreneurs follow their own ideas, goals and dreams, something most employees are naturally limited in doing or accomplishing. This is a driving factor behid many start-ups! A vision one is ready to give everything (and I do not mean financial input / investment) to accomplish.
Satisfaction comes from various achievements: freedom, fun factor, status and last but not least - incredible earnings potential.
It must however be clear that most start-up businesses fail. Many due to unfinished "homework", some others because of a lack of dilligence, input and perseverance. An Entrepreneur must have a vision, and break the path down in smaller steps in order to work towards the vision. Close to no-one has reached success over night.
- If you are not ready to leave the comfort zone of a ssecure employment and monthly fixed salary, you should not consider starting your own business.
- If you are not willing to invest long hours in research, business planning and preparation before start-up, and constant learning therafter, you should not consider starting your own business.
- You need to crunch the numbers, especially "worst-case" before deciding to invest in your own business.
Find the right people, partners, and mentors who can be your biggest supporter to launch your start-up.
Do not invest more than you can easily afford, based on worst-case scenario. Avoid the "sleepless nights" right from the start.
I have gone through this years ago, and having done the "homework" and having sticked to the plan my ventures have turned out very successful.
The latest trend that many embark on is marketing online. For newbie-entrepreneurs there are greta opportunities out there, with very limited risk and complete "ready-to-use" systems that work.
As I am not a particular friend of "re-inventing the wheel" I see two basic choices for entrepreneurs to becoming a successful start-up marketer.
Either you have a brilliant idea for a product, service or system that is not available on the market yet and - according to your "research" - has the potential to take off as the first in its niche.
Or you join a successful and established business model that provides you with all the necessary tools and training to start-up small scale and grow into an entrepreneur, making serious turnover and profit. Here very limited investment is required, and the start-up is made easy through professional support.
Pros and Cons of Starting your own Business - To learn more about this author, visit Mike Richter's Website.
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David BarrDavid Barr is the President of Venture Opportunities, Inc. David has been a professional business broker/intermediary since 1980 focusing on General Business Brokerage and Mergers and Acquisitions representing client transaction value from $400,000 to $20,000,000. Mr. Barr has handled the sale of over four hundred and fifty companies. David earned a university degree from the State University of New York majoring in economics and business. David holds the Mergers and Acquisition Master Intermediary and the Certified Business Intermediary designations from the International Business Brokers Association. He is also a Senior Business Analyst and a Texas licensed Real Estate Agent. For more information about David and Venture Opportunities, visit www.bizdealmaker.com. - Visit David Barr's Website |
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