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Advantages of Small Business OwnershipBeing a business owner can be extremely rewarding. Having the courage to take arisk and start a venture is part of the American dream. Success brings with it manyadvantages:•Independence. As a business owner, you’re your own boss. You can’t getfired. More importantly, you have the freedom to make the decisionsthat are crucial to your own business success.•Lifestyle. Owning a small business gives you certain lifestyleadvantages. Because you’re in charge, you decide when and where youwant to work. If you want to spend more time on nonwork activities orwith your family, you don’t have to ask for the time off. If it’simportant that you be with your family all day, you might decide torun your business from your home. Given today’s technology, it’srelatively easy to do. Moreover, it eliminates commuting time.•Financial rewards. In spite of high financial risk, running your ownbusiness gives you a chance to make more money than if you wereemployed by someone else. You benefit from your own hard work.•Learning opportunities. As a business owner, you’ll be involved in allaspects of your business. This situation creates numerousopportunities to gain a thorough understanding of the various businessfunctions.•Creative freedom and personal satisfaction. As a business owner, you’ll beable to work in a field that you really enjoy. You’ll be able to put yourskills and knowledge to use, and you’ll gain personal satisfaction fromChapter 5 The Challenges of Starting a Business233
implementing your ideas, working directly with customers, andwatching your business succeed.Disadvantages of Small Business OwnershipAs the little boy said when he got off his first roller-coaster ride, “I like the ups butnot the downs!” Here are some of the risks you run if you want to start a smallbusiness:•Financial risk. The financial resources needed to start and grow abusiness can be extensive. You may need to commit most of yoursavings or even go into debt to get started. If things don’t go well, youmay face substantial financial loss. In addition, there’s no guaranteedincome. There might be times, especially in the first few years, whenthe business isn’t generating enough cash for you to live on.•Stress. As a business owner, youarethe business. There’s a bewilderingarray of things to worry about—competition, employees, bills,equipment breakdowns, customer problems. As the owner, you’re alsoresponsible for the well-being of your employees.•Time commitment. People often start businesses so that they’ll havemore time to spend with their families. Unfortunately, running abusiness is extremely time-consuming. In theory, you have thefreedom to take time off, but in reality, you may not be able to getaway. In fact, you’ll probably have less free time than you’d haveworking for someone else. For many entrepreneurs and small businessowners, a forty-hour workweek is a myth; seeFigure 5.6 "The