Being in business for yourself has great risks, rewardsThe great American Dream: Being in business for yourself. Is it a dream, or is it a nightmare?
Over the last 30 years I have consulted with hundreds of business owners about either buying or starting their own business and selling or unloading the business they are already in. There are numerous considerations that need to be addressed when considering either purchasing an existing business or venturing out on your own and starting a new business from scratch.
Let’s begin with the perceptions that go along with the desire to start or purchase a business:
By having my own business, I will have the ability to create wealth for myself and do it on my terms.
As a business owner, I will have more flexibility in my schedule and have the ability to work as much or little as I desire.
By owning a business I can make decisions instantly rather than dealing with all the administrative hang-ups that exist when you are involved with a company as an employee or partner.
Now let’s address the perceptions of the American Dream, what is real and what is fiction:
It is absolutely true that by having your own business you will have the ability to create wealth and at a much quicker pace than that of being an employee or a partner in a company where you are not in control. However, along with ownership comes an understanding that there is risk, often extreme, when either purchasing an existing business or starting a business from scratch. What is your risk tolerance? Do you have the stomach to be able to accept the bad with the good? Do you realize that a significant number of small businesses fail, often due to situations that are out of your control, like the current recession? Do you have enough capital to get you through extended periods of tough times and downturns in the economy?
Believing that you will have more flexibility in your life is a double-edged sword. Depending on the type of business endeavor that you choose to embark upon, there will definitely be choices as to how many hours you work and when you choose to work them. That being said, owning a business is often a 24/7 type of proposition. It is my view that it takes a driven person to be a business owner –you need to eat, sleep and drink it for many years if success is going to happen. Flexibility means you get to work as much as you want, not as little as you want. What differentiates the business owner from the employee is that there is no “cap” on how much you can work. There is no such thing as a “40-hour work week” for a business owner. As an owner of a business, you may think you are working Mondays through Fridays, 8-5, but the reality is that you are taking home projects at night, working on community service commitments on an ongoing basis as part of your marketing program and having a huge responsibility toward keeping your employees happy and productive. Is this what you consider “having more flexibility”?
The trade off of having to deal with administrative hang-ups versus being able to pull the trigger without having to consult with anyone has always been an intriguing issue to me. I am a decision maker, hate procrastination and just want to get things done. However, I am also subject to “knee-jerk reactions” that can backfire on me. As an employee, there are typically more checks and balances that can cause frustrating delays. But these delays will often lead to a better overall result for the process being analyzed.