Written By: Ellis Orlan, CPA (IL), CGMA, Partner, Fuller Landau LLP, Toronto, ON, firstname.lastname@example.org, Futurpreneur Canada Mentor
Why would anyone want to start a business in the first place? The risks associated with starting a business are not the types of risks most people are used to. Starting from scratch can be stressful and discouraging. You might feel that you’re assuming much more responsibility than you’re used to. You may often be alone with your problems because help isn’t always easily accessible and it seems like a daunting prospect with many pitfalls. Many of us get used to a job routine with a steadily growing salary, we become accustomed to an increasingly expensive standard of living and the thought of starting a business and suddenly having little or no income can be frightening. Gradually, a new venture seems less and less like a viable option. Nevertheless, there are many reasons to start your own venture. Here are just a few.
Let’s face it, working a job in most companies means you have a salary that won’t increase beyond a few percentage points per year. If you play your cards right, a business of your own has the potential to generate a lot more wealth. According to the authors of The Millionaire Next Door, roughly “two-thirds of American millionaires are self-employed.” Of course, any business can fail, but the potential is there.
Many people think that being an entrepreneur is risky because you’re not guaranteed a steady salary. Today’s workplace doesn’t offer high levels of job security. Companies (large and small) have near absolute power to lay off their employees, cut their benefits, hours, or other employment terms, often with little or no notice. As we have seen, these are far from rare occurrences.
Owning your own business can be less risky than most people think. Start-ups often also cost less than most people think – most companies get started on a low budget. Once your business is established, you get to decide how to serve your customers, and reap the rewards!
You might start your own business out of necessity. Maybe the job market is slow or you simply can’t find a job that appeals to you. Starting a new venture is an alternative that can lead you down a new and exciting path.
Maybe you’re just fed up of working for someone else. How many of us had a boss or job we grew to hate? Maybe you want to try something new or want to follow a dream. Maybe you figure “life is short, so better try!” Wanting to make a life change is a perfectly valid reason to start a business.
A caveat is in order here. Entrepreneurs sometimes lose their shirts on their ventures. Be sure to set milestones and be ready to withdraw at a certain point. A business plan will help you set these objectives. Closing a business that you are emotionally vested in is difficult but far better than spending your life savings trying to salvage a doomed venture. Some use a rule of thumb that if there’s no significant progress after 2 years, consider closing shop.
Still want to go into business?