With Millennials starting more businesses than almost any other age group, starting a business may seem like a pretty good idea. After all, look at all those Instagram posts of people relaxing on the beach, or those Pinterest posts about people making $5,000 a month – and more. Maybe starting your own business could be better than working full time for someone else!
Unfortunately, starting your own business isn’t quite that easy. In fact, if not done right, you could regret quitting your full time job to start a business. After all, your full time job offers plenty of benefits you might not see your first year – or ever – of your own business.
Before making the leap to a full-time entrepreneur, here are some pros and cons to take into consideration.
The Cons of Starting Your Own Business
While we could start with the pros of working for yourself, sometimes it’s best and easiest to look at the cons – especially if you’re currently working full time. If you currently work full time, there are likely many benefits you receive from your job that you won’t get if you start a business full time, including:
- Health care – if you live in the United States, you may find going out on your own means a big increase in your health care costs. Depending on the state you live in and several other factors, your health care could be worse and more expensive than what you currently pay at your full time job.
- Free training – many employers pay for their employees to receive training. Whether that’s training in your city (or even at work), or training across the country, you won’t receive free training as a full time businessperson. You’re paying for your own training – and it could costs hundreds of dollars.
- Subsidies – some employers subsidize employees gym fees, transportation needs, and even offer discounts on cellphone plans. As a full time business owner, you’ll have to pay for all of these on your own.
- Camaraderie/gossip/current events – although harder to measure, getting out and talking with other people is a pretty big perk of working a full time job. Although some coworkers may drive you nuts, overall there are probably a few people you enjoy talking to everyday. In addition, you’re able to talk current (and local) events at work – you might not have this luxury if you work from home with national or international clients.
- Varied income – some months will be very good, but some months could be very bad. If you’re used to a regular and steady paycheck, you may find it a shock to have a varied income as a full time business person.
The Pros of Starting Your Own Business
Now that we’ve addressed some of the cons, what about those pros to starting your own business? After all, there has to be some perks, especially if more people (especially Millennials!) are doing it, right?
- Unlimited earning potential – this is probably the best part of starting your own business. If you have the right idea, service, or product and good marketing and business skills, your income earning potential is virtually unlimited. This means the harder you work (or smarter you work), the more you earn – something you won’t find in a full time job working for someone else!
- Flexibility – another reason people love working for themselves is flexibility. How many times have you needed to take care of something at home, only to not have the flexibility in your schedule to do it? Not that you should be running errands while growing your business, but it is nice to have the ability to handle issues at home and not have to worry about them from afar at your full time job.
- Manage yourself – this could be a pro or con depending on how you work. However, as a full time entrepreneur, you manage yourself, and only yourself (until you hire people to work for you). No more having to deal with micromanagers, or coworkers who push their work on to you, no more meetings, no more requesting time off and hoping it’s approved.
While it may seem like there are a few more negatives to starting a business than positives, it’s all in perspective and a clear understanding of your business. There are a lot of risks to being a full time entrepreneur, but if you’re aware of these risks and develop a solid business plan (and maybe even a fall-back plan, in case Plan A doesn’t work), these cons shouldn’t rock your world.
Have you ever thought of being an entrepreneur and starting a business? What would you say are pros and cons to becoming a full time entrepreneur instead of a full time employee?
Track All Your Accounts With Personal CapitalPersonal Capital lets you see all of your accounts in one convenient place. Sign up now for free.
This post gives a really good insight. It’s important to fully assess all the positives and negatives of any big decision, especially one as big as starting your own business because so much is at risk in pursuing that. It’s definitely a great idea for some people, but these things must be considered first! Thanks for sharing!