The Lesser Known Pros (& Cons) Of Running Your Own Business

Being self-employed is likely to be a bit of a daydream for many of us. However, whilst it may feel idyllic to be your own boss, we’ve heard more than enough stories from generations of entrepreneurs that imply otherwise. 

The truth of the matter is that there are a myriad of unseen tasks and responsibilities that go into setting up your own business. Alongside fun stuff like being able to open a business bank account for streamlined company spending, business owners must also conduct hours upon hours of independent research before making any moves. Your growth and development plans are meaningless if your business hasn’t been built on the right foundation, and that means investing in not only industry talent, but also the necessary equipment, licensing and qualifications, as well as liability insurance and any other suitable insurance cover. 

Business owners are also required to don a wide range of different hats on any given day of the week, ranging from accountancy and risk management to administration and everything in between. One minute, you could be preparing a killer marketing strategy, and the next you could be performing a diagnostics test on your office computer network. 

You just never know what a day can bring when working as an entrepreneur. For some, this uncertainty can be quite alarming. For others, however, the promise of a new day’s worth of learning and growing is nothing short of exciting. 

So is entrepreneurship the right move for you? We’ll help you answer this question for yourself by outlining all the lesser known benefits (and disadvantages) that accompany owning your own business.

Freedom & Responsibility

The perceived ‘freedom’ of entrepreneurship actually shields another more sobering counterpoint: fiscal responsibility. While you gain the autonomy to shape your financial future as a business owner, you also shoulder the burden of managing your company’s finances. This dual role as an owner and financial steward naturally has its own pros and cons.

Let’s start with the obvious pros.

The pros of owning your own business

• Boosting your own earning potential – as a business owner, your income is not capped by a fixed salary. You have the potential to earn more if your business succeeds and grows.
• Enjoying business tax benefits – there are various tax deductions and advantages that are available only to business owners. In this regard, owning your own business may allow you to reduce your own tax liability.
• Working at your own schedule – while the initial stages of building your business might demand relentless effort, the ultimate reward lies in the freedom to take full control over your work schedule and work at your own hours.

The cons of owning your own business

But of course, wherever there are undeniable pros, there’s also a healthy amount of undeniable cons. Some of the foremost cons of owning your business include:

• Taking on a personal financial risk
• Taking on the additional work that accompanies business development and growth strategising
• The stresses of being responsible for your business and staff during times of economic uncertainty
• The responsibility of managing all the more intricate aspects of operating a business (i.e. accounting, legal compliance management, hiring and onboarding staff, etc.)

The Entrepreneur's Paradox: Time & Independence

Whilst working to your own schedule is one of the key advantages of running your own business, it’s also important to keep in mind that most business owners actually end up working far more than 38 hours a week. In fact, the notion that you can escape the constraints of your 9-to-5 job and do your own thing when managing your own business, may be one of the most prevalent myths today.

The truth is that no entrepreneur has an abundance of free time. When you manage your own business, your ‘downtime’ instead becomes periods where you should be learning new skills or strategising new ways to expand your enterprise.

Even so, it is possible for business owners to ‘switch off’, just as it’s possible for them to take greater control over their time management. If you’ve ever been envious of your boss rocking up to the office at 11am on a Wednesday, then you know exactly what we’re talking about.

Although your boss may still work 38 hours or more a week, they can do so on their own terms. This is a phenomenon called ‘adaptive scheduling’. Although most full-time employees don’t have this luxury, business owners typically do and they use it to take charge of their work-life balance.

Alongside this, business owners can select a company premises that is located near their own homes or even within their own home. This means that you’re less likely to have a draining morning or evening commute if you’re self-employed. 

The more obvious downsides to being in charge of your own schedule, is naturally having to learn new ways to set boundaries between your work life and your personal life. If business owners aren’t able to ‘switch off’, they’ll likely find that both their work performance and ability to stay present with family and loved ones are both impacted.

This is especially the case for business owners who are managing startups. As startup enterprises typically require highly detailed and adaptable growth strategies, startup entrepreneurs can usually expect themselves to work all through evenings and weekends alongside business hours. Are you ready to take on that level of commitment? That’s up for you to decide.

Is It Worth Wearing Multiple Hats?

As we mentioned, the earlier stages of building up a business are likely to see entrepreneurs wearing a wide array of different hats – especially if they're a solopreneur or part of a small team. While this versatility can be empowering, it also presents its own set of challenges.

The advantages of multitasking include:

• Greater cost efficiency for your budding business
• The opportunity to develop quick decision-making skills
• The opportunity to learn other new specialised skills (i.e. bookkeeping, marketing, computing, etc.)

And the more obvious downside to having to wear all these different hats include:

• Increased risks of experiencing burnout
• Increased risk of human error or making mistakes (due to taking on tasks with minimal background knowledge)
• Split focus (spending time on various tasks may detract from your core responsibilities as a business owner)
• Poorer time management

If you are looking to run your own business in the near future, it’s crucial that you learn to prioritise tasks, delegate effectively, and develop strong time management skills. All of these qualities can help you don many hats in the most effective way possible. Remember that understanding your strengths and weaknesses, and staying adaptable are both key to your success as an entrepreneur.

The Undeniable Con of Managing Unforeseen Expenses

We’ll leave you with one of the most frustrating cons you’ll experience when managing your own business: unforeseen or unexpected business expenses. It's essential to be aware of hidden costs that can quietly erode your bottom line. These gotchas can catch even the most diligent business owner off guard. In short, this is what makes financial planning a critical skill for all entrepreneurs.

It's essential to conduct thorough financial forecasting and scenario planning for your enterprise throughout all of its stages of development. This involves calculating your operational expenses at routine intervals as well as accounting for potential emergencies, market fluctuations, and other scenarios that may have been identified in your business’ risk evaluation processes.

Establishing an emergency fund and regularly reviewing your financial statements can also help you stay prepared and confident without taking up too many of your precious working hours.

Recap: Key Takeaways for Aspiring Entrepreneurs

Running your own business is undeniably a rewarding endeavour for all passionate professionals. But that doesn’t mean it’s for everyone. Being a business owner also demands resilience, financial savviness, and a willingness to confront the less-glamorous aspects of business management. 

Remember that success in entrepreneurship often hinges on your ability to embrace both the good and the bad. Lifestyle flexibility is balanced by fiscal responsibility. Additionally, assessing your business concept's financial feasibility is essential. Hidden cons can take the form of hidden costs lurking beneath the surface, but proactive financial management can mitigate their impact, setting you up for success moving forward.