Your Own Business – Risks Vs Rewards
Introduction
Your own business: an expensive German car or even a red Italian one, a vacation in the Swiss Alps, your own condo on a remote island—all the potential benefits of owning your own business. On the other hand, you have the doomsayers that highlight long hours, difficult employees, economic downturns, stress, and high rates of business failures. What is the reality?
In fact, most entrepreneurial startups fail in the first few years. Only a small percentage actually make good money. There are several risks in starting your own business that cannot be ignored. However, these risks can be drastically reduced with detailed market research, proper business planning and effective management. The potential rewards, for the successful entrepreneur, make the effort worthwhile.
Some of the most important risks are:
Financial risk
The personal financial investment of having your own business is usually quite high. Business failure can mean substantial financial loss for the entrepreneur (and other stakeholders) and can even cause bankruptcy.
Social risk
A business requires a lot of input from the entrepreneur. This means less time for family life, friendship, sports, leisure and vacations. The potential to lose a friend and even a spouse is very real.
career risk
When an entrepreneur starts his own business, he usually quits his current job. If things go wrong, it can be difficult or even impossible to resume a race.
psychological risk
People handle different types of stress. Good stress, called eustress, gives a person enough adrenaline to handle difficult situations in a positive way. Distress, on the other hand, can be destructive to the entrepreneur and the business. It can lead to severe burnout and depression. Distress can be caused by working too hard for long periods of time, worrying too much about various aspects of the business (especially if everything doesn’t go according to plan), not having an adequate support system (for example, from a spouse), and even the feeling that the business was a mistake and that the entrepreneur is climbing the wrong ladder.
Fortunately, substantial rewards await the successful entrepreneur, including some of the following:
financial rewards
A successful business has the potential to generate good profits and provide substantial wealth for the entrepreneur. If this wealth is managed carefully, it can make a big difference in the financial well-being of an entrepreneur (and his or her spouse and descendants).
social rewards
There is rarely a greater reward than making a positive difference in someone else’s life. Entrepreneurship is already creating most of the new jobs and wealth in the world. The successful business provides jobs, pride, and financial security for its employees. Personal wealth can also be used to make a difference to a family member, a friend, the community, or any worthwhile cause.
independence rewards
Your own business gives you the privilege of working on your own, at your own pace, without a boss and with a sense of freedom. Financial success increases the potential for independence. growth rewards
The entire business process is a process of personal growth and an entrepreneur learns about failure and success, difficult people and situations, and especially about himself. Knowledge of various disciplines will also be enhanced. Successful entrepreneurs generally experience a sense of self-fulfillment.
Summary
Having your own business definitely carries substantial risks. However, if you have the right personality profile, the necessary experience, and the willingness to diligently prepare and work hard, your chances of business success improve dramatically. The potential rewards far outweigh the risks.
Copyright © 2008 – Wim Venter
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