The Decision to be an Entrepreneur: Pros & Cons

With today's volatile job market, many employees are seeking greener pastures and attempting to begin a business venture of their own. The road to entrepreneurship can be hard, but it can also be very rewarding. However, the journey is not one to be taken lightly. There are many factors to consider, research to be undertaken, and many pitfalls along the way that may impede your progress and success.

The two most important questions you must ask yourself before making the final decision to be an entrepreneur and start a small business is "What are your real reasons for wanting to become an entrepreneur?" and "What level of happiness do you expect to reach as an entrepreneur?"

The answers to these questions will possibly be broad, and will of course vary from individual to individual, as well as be affected by the type of business you plan to open. But if you can take the time to get as clear and concise as possible with your answers, you will be in a better position to face any challenges and strive to reach your goals.

Reasons for Becoming and Entrepreneur

There are many reasons individuals decide to become an entrepreneur and start their own small business. Job dissatisfaction is a major component. So is the desire to be more independent, and of course money is a consideration as well. Some people are motivated by the challenge, and others simply feel that they have a great idea for a profitable business. Whatever your reasons may be, you need to be aware that starting a new business is time-consuming, expensive, and full of potential hardship even when managed to the best of your ability. It will likely take a lot of effort and expense until your business is successful enough to allow you to step back and breathe.

The underlying key to success is to always remain positive, never lose sight of your goals, and always remember your reasons for starting a new business in the first place. Stay focused on managing and maintaining your business in a calm, professional manner, and you will increase your chances of success. Of course, a large amount of market research is also required, as well as a clear understanding of what you should expect when you start a small business.

What to Expect When You Start a Small Business

The notion of being independent and having more time with your family or for yourself is definitely of great appeal. But it isn't exactly a reality. As an entrepreneur and small business owner, you will always have to answer to someone: your customers. You will also need to work with suppliers for inventory and banks for capital, and your reliance upon them certainly factors into your ability to run your business wholly independently.

You also need to be prepared for emergency expenditures. Don't just rely on your start-up capital (which, incidentally, should already be secured) to keep your business going - you need to have ample extra cash on hand to carry you through at least six months of business. Be prepared for customers who pay late, equipment that breaks, or increased competition putting a dent in your profits. Anything and everything may happen, but with enough capital standing by, you'll hopefully have enough to weather whatever the storm may bring.

Another consideration is time. Think you'll have more spare time on your hands? Think again. Maybe eventually, when and if your business is more self-sustainable or managers are in place to handle much of the responsibilities, you'll have more time to relax. But in the initial start-up stages, you must be prepared to devote nearly all of your time to your business, and you should make certain that your family also understands the sacrifices in time that must be made. It's a trade-off not entered into lightly, but if your business is profitable, then the rewards are increased financial independence, security, more time with your family, etc. But you'll work hard to reach that point.

Before You Begin: Research

Regardless of how great you think your product line, proposed offered services, or business idea may be, if you don't first conduct the appropriate market research, you could be setting yourself up for a costly failure. This is a big investment not just in financial terms, but also in your life. It's worth it to be patient and gather as much information as you can that will serve to your advantage. Use every resource available: public records, paid market research, television, news, the Internet, seminars, related books, etc.

Create Your Business Plan

Based upon your research, you should be able to craft a solid business plan. You'll need to show the banks a business plan anyway before they agree to loan you any capital, so this is another step you'll want to donate plenty of time to.

You need to focus attention on several key aspects: The ultimate goals of your business, the products or services you'll be offering, how you'll market them to consumers, your plans for future growth, your business location, and how your organization will be structured. These are just some of several things that will make up your comprehensive business plan. For more information on how to construct a solid business plan, you can search the Internet or research several books on the subject.

After the Start-Up

How you manage your business will also determine its success. Customer service, marketing, and employee management are all critical. Handling conflict, which is bound to arise on more than one occasion, also plays a role. As the owner of your business, you'll likely handle much more responsibility than you did as an employee of another company. You'll need to be wary of increased stress, and learn how to resolve conflicts professionally and calmly.

What is your management style? Will you micro-manage your organization, or will you employ managers or supervisors to handle specific tasks and departments? You'll certainly need to have employees in place to handle things you have no experience with, such as payroll, or you'll have to learn it yourself.

Don't expect your business to grow quickly or evenly. There will be ups and downs along the way. Some months may be more profitable than others; some months you may see a loss. Your products or services may be affected seasonally, but if you've done your research, you'll be prepared for this. You'll make mistakes, and hopefully learn from them.

You'll deal with all sorts of clients, and in the beginning you'll probably try to appease them all. But unless you want to find yourself devoting all of your time to a few problem customers or clients, you must learn to quickly establish rules, boundaries and guidelines, and then stick to them. Otherwise your clients will take advantage, and this ultimately cuts into your bottom line.

Constructing Your Organization

This is your business: you have the power to not only choose your employees, but also your customers and suppliers as well. Choose the best employees you can, work with reputable, professional suppliers, and strategically market to a strong customer base, and you'll further increase your chances of success.

Customers & Clients

If your small business sells a wide variety of products, than choosing your customers isn't primarily a necessary issue. You'll be relying upon your marketing efforts to lure in as many potential customers as possible that will purchase your products. You may have to work a bit with pricing and promotion until you find the best combination that converts to the highest amount of sales.

Finding the right price point for your products is especially important if you have any competitors, and you probably will. Customers are especially cost-conscious these days, and will not hesitate to seek out the lowest prices on a product. If you cannot offer the lowest prices, than you must show your customers other reasons they should purchase products from you. You can do this in several ways: explain the benefits of your products better, offer incentives or promotional items to increase brand recognition and customer loyalty, and always, always, always strive for excellent customer service.

If your business intends to attract clients rather than customers, you'll need to focus a bit more on the choices you make. A strong client base made up of accounts that utilize your services on a continual basis, pay on time, and remain loyal to you is preferable to a large client base made up of many clients that sporadically acquire your services, often pay late, and threaten to take their business elsewhere. It may be tempting at times to take on a large client with a recognizable name, but if they take their time to pay or act as if they are your only client and demand all your attention, they may not be worth it.

The Decision

Every entrepreneur shares some of the same experiences, and also a set of pros and cons unique to themselves and their business. Know this before you enter into entrepreneurship, but don't let it dissuade you. Becoming an entrepreneur can be daunting and may not be for everyone, but if you have evaluated all your options and feel that you can handle the challenge, then be sure to commit yourself fully to the task. Remain realistic in your goals and limit your mistakes by conducting thorough research. If you are lucky enough to become successful, you'll enjoy ample reward in the long run.

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