Disadvantages of Having Your Own Business
Owning a business offers a lot of benefits like being your own boss, selecting your own schedule as well as earning money that depends on the work you offer in your business.
Even though it offers a lot of advantages, keep in mind that there is also some disadvantages that you need to know in such business.
The Disadvantages of Owning a Business
Failure of Business
One of the main disadvantages of having your own business is the probability that it can fail. In the event that you are working as an employee and such business fails you may probably out of job but the fact is you didn’t invest your money to such business. Owners of business usually invest a large amount of their possessions and resources. As a matter of fact, Small Business Administration or SBA believed that there is approximately 50% of many small businesses fail.
Liability of Business
In case if the business fails, it might only means that business disappears, wherein the owner is already free of liability and can now start new project. Some individuals who completely own business without partner are considered as sole proprietorship, which leaves them the liability of the business. Meaning if the business has outstanding debt, the sole owner of the business is liable for that debt. This only means that it has a grave impact on such business like bankruptcy and other financial woes.
If you own your own business, the money that you make flows directly to your pocket. You have the option to put them into your business or keep these funds as your income. In case the business can be successful, it can be very profitable but in the long run you can have a small amount of money left over and keep as your personal income. The money that you can make could differ greatly when you own your own business. This makes it hard to create precise financial plans.
One possible drawback of owing a business is you may need to work for long hours than a usual job as an employee works. Owning a business, the triumph and failure of such business is a direct consequence of your hard work or determination. Meaning the more you spend time working the greater possibility that you can be succeed. Most entrepreneurs work for long hours but do not receive compensation like bonuses and overtime pay.
This is the type of businesses wherein the business is owned by one or more individuals. However, partnership faces numerous distinctive disadvantages like the liability for actions of other partners as well as the probable difference between partners. Aside from that, a death of partner could mean the termination of partnership.
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