Owning a business is a dream that many people share, but some never seem to bring their ideas to life.
Starting a small business can seem like an intimidating venture, but all you really need is desire, drive, and dedication to be an entrepreneur. Before we dive into the ins and outs of creating your enterprise, it’s important to ask yourself why you would want to start a business in the first place.
Top Five Reasons to Start Your Own Business
1) The Flexibility of Being Your Own Boss
When asking people what they dislike most about their jobs, everyone has their own story to tell. Although every experience is unique, almost every response given boils down to one simple fact: the inflexibility and lack of independence that comes from working for someone else.
Whether you are frustrated with management, coworkers, customers, salary, or your schedule, your inability to control the decisions that directly affect your work satisfaction is at the heart of the issue. For some, the answer lies in slowly working their way up to more significant levels of seniority in their current full-time job. For others, entrepreneurship might be the answer.
For better or worse, starting a business puts all the power in your hands. As a business owner, you no longer need to seek approval before implementing changes within your company. Instead, you have complete creative control over how your business presents itself, who it serves, and who you wish to hire to represent you.
From strategic decisions that determine the direction your company will go in, to the smaller, day-to-day operations, as soon as you identify an issue, you have the power to implement change on your terms. That said, you may want to make sure that your desire for greater control and flexibility outweighs your need for stability and predictability.
Significant financial risks, hardships and sleepless nights are practically synonymous with entrepreneurship. In fact, A 2000 study by Burton Hamilton of the Olin School of Business showed that except for the very top earners, most entrepreneurs would be better off financially if they remained in salaried employment.
2) Master of Your Financial Destiny
Most people who decide to pursue a traditional 9-5 do so for employment security and financial stability as the main factors that influence their decision, however critical findings from a recent Pew Research Center survey paint a different picture.
We’ll spare you the extra reading and provide you with the highlight real:
- Employment growth is much higher among jobs that require average or above average social skills such as interpersonal, management and communication skills, and those that need higher levels of analytical skills such as critical thinking and computer skills.
- The majority of American workers say they will need continuous training to keep up with changes in the workplace and about 35% say they do not currently have the education and training they need to get ahead.
- Most Americans think the responsibility for making sure the workforce has the right skills and education to be successful in today’s economy lies with individuals themselves.
- Employment opportunities that require more training and more education are on the rise.
- Americans say job security is on the decline.
This research depicts how the economy is reshaping the workplace, and success, in a given role, is becoming increasingly dependent on the level of education and training that you invest in. Because of this, the argument can be made that you’re not necessarily more or less secure as an employee or as your own boss. Both require an investment of time and money, and it’s ultimately up to you how much control you want over your financial destiny.
3) Impact on the Local Economy
Once your new business is established, expansion is often the next consideration. You’re only one person, and a thriving business will eventually require more work than you’re capable of doing alone. This can benefit your local economy because it gives you the opportunity to hire people from your community to work for you. So, as a business owner, your success directly contributes to the livelihood of each of your employees.
Small businesses are also unique in that they accumulate less revenue than larger corporations, making them more nimble and likely to stay afloat during times of economic crisis.
4) Giving Back to the Community
You probably feel as though you have a firm grasp on the intricacies of your community, but owning a small business offers you the opportunity to develop a much deeper understanding. Entrepreneurs depend on their communities to keep their companies profitable. Successful businesses take the time to build strong bonds with locals and support their neighborhoods because they understand that a healthy community is at the heart of entrepreneurial success.
Giving back to the community isn’t just a smart business move; it also feels good. Supporting local sports teams, sponsoring fundraisers, and investing in community improvements are all ways to show your customers that you appreciate their support. When your business steps forward to improve the local area, any actions you take double as additional marketing for your company. This means the community gets the benefit of your time and effort, while you get the benefit of positive press and exposure to new people.
Small businesses also indirectly give back to schools and local government offices. A thriving local business will generate high levels of revenue, which results in the business paying higher taxes, including local taxes which are then used to invest in fire departments, police stations, and school systems.
5) Creating a Legacy to Pass On
Finally, starting a small business is the first step in creating a legacy that can be passed down to the next generation in your family. As your children get older, you will have the opportunity to hand them the reins of the company that you worked so hard to build. Even if taking over the family business isn’t an option, your children will have learned valuable life lessons by watching you start and run a business. The entrepreneurial spirit is easily passed on and will allow the younger members of the family to see, first hand, what it takes to be the boss instead of limiting themselves to an hourly position working for someone else.
How Do I Know if Starting a Business is Right for Me?
If any of these five reasons hit home, running a business might be right for you. But before you rush out to put in an order for business cards, here are a few things you need to consider that will help determine whether going into business for yourself is a realistic move right now.
Do you have the financial resources you need?
Regardless of the type of company you choose to build, there are going to be start-up business costs you will need to budget for. Take note of your assets and figure out whether those costs are within your reach without emptying your bank account. You could also seek a loan or other form of financing to start your business, if you feel comfortable with going into debt to get off the ground. Just be sure to understand your repayment obligations before taking this step.
It’s also important to note that most businesses don’t generate a profit for several years, so it’s ideal to have a financial backup like savings, or the salary of a significant other to help cover living expenses until you get off the ground. The time it takes to become profitable depends on your industry, your business acumen, and other operational factors like cost of goods sold (COGS), so you’ll need to weigh those factors to determine the size of the safety net you’ll need. One final approach is starting a part-time business while holding down full-time employment elsewhere, and then transition that into your full-time role as that business grows.
Are you good at managing your time?
When working for someone else, your job security depends on your ability to get there on time and stay on task during your scheduled hours. For many people, the fear of losing their job is a strong motivator for punctuality and productivity. When you make the switch from employee to business owner, your accountability becomes personal. With no boss to answer to, it can be easy for some people to put things off or lose sight of their business priorities. It becomes too easy to spend time on the work you like and ignore the tasks you don’t. The success of your company relies on your self-discipline, so you need to ask yourself if you have what it takes to stay dedicated.
Do you have a support network?
Starting a business takes significant time and energy, and it’s important to have access to like-minded people who are supportive of your efforts. This usually includes friends and family, but professional contacts are an essential asset that is often overlooked. Not only is your support network necessary for cheering you on, but it should also include a mix of entrepreneurs with first-hand experience from their own businesses to help guide you through the process. Take stock of your network and determine if you need to join a professional network or participate in networking events to grow your contact list.
How to Get Started
If you’ve decided that entrepreneurship is the life for you, and you think you have what it takes to be successful, getting started doesn’t have to be complicated. There are specific steps that you’ll need to take in almost every industry to get the ball rolling.
- Choose your industry. When choosing a product or service to offer, ask yourself five questions: What am I knowledgeable about? What am I passionate about? What are my skills? What need can I fulfill? Who will be my customers? Your answers will give you an idea of what your startup should offer.
- Create your business plan. This can be as elaborate or as simple as you like, but it needs to identify your business name, product, target market, competition, marketing plan, and operational considerations. This is your blueprint for success, so spend sufficient time on it. There are many free business plan templates and generators available online to get you started.
- Set goals. This is also an excellent time to write down your future goals. The timeline is up to you, but you should include both short and long-term goals. Remember, your goals are meant to evolve, so don’t get hung up on making them perfect. Instead, make sure they reflect realistic expectations.
- File your paperwork. Some industries require licenses or permits that you will need to apply for. Check your state’s applicable laws and decide which legal business structure (LLC, corporation, sole proprietorship, etc.) is appropriate for your situation, then fill out and send in your application along with any required fees. If you aren’t comfortable handling this yourself, you can contact a law firm for assistance, or you can use one of the many resources available online.
- Gather your resources. Make a list of everything your business will need and get what you don’t already have. This can include office space and furniture, a desktop computer or laptop, software, phone, tools, materials, or anything else your new company requires.
- Start marketing before you launch. Build the anticipation of your grand opening by communicating with your target market early. Let people know the problem your company will solve and how you stand out from the competition. If you’re comfortable on social media, this is where many entrepreneurs get started.
- Set up your bookkeeping. Whether you plan on handling your records yourself or hiring an accountant, establish your bookkeeping system before you launch. This will make filing your taxes easier and help protect you in the event of an audit.
There are many good reasons to start your own small business and take control of your professional goals. As a business owner, you will have the freedom to exercise your creative choices and govern your salary, while also improving the lives around you through job creation and community involvement. Your children will learn and grow from your experiences and perhaps, someday, be ready to take over the business you create. If you think you have what it takes to be an entrepreneur, now is the time to start working through the necessary steps to improve your life and make your dreams a reality.