Pros and Cons of Owning a Small Business

Whether you have a store front or run an online small business there are pros and cons to quitting a traditional job that provides you with a net monthly income and benefits versus becoming a sole proprietor.


Cash Flow

Probably the hardest adjustment for a new small business owner is dealing with the constant need to acquire additional funds to keep the business operational during the first couple of years. There are many monthly expenses involved in owning a small business and until you get your name out there, and establish a client base, months when business is slow can cause you to use up any money held in reserve pretty fast.

This is a difficult time where many business owners choose to close up shop instead of trying to borrow money again. And, since traditional banks are not very accommodating to a young business due to the risk factor, finding other lenders to fund a small business loan is essential. Luckily, these types of lenders are available to keep you afloat.


Marketing is just as important as having cash flow. Regardless of the type of business you run, competition is heavy and it’s up to you to convince consumers that you are the best choice. Without a comprehensive plan in place to get the word out to the public, you can end up closing quickly. The good news is that there are many ways to promote your business including through your website, social media platforms and traditional market strategies like mailings and cold calling.

Benefits Package

Deciding to own your own business means that you will have to acquire your own health insurance and open a retirement account too. Health insurance is very expensive; however, it is not something you or your family can live without. Make sure that before you pick a plan you do the research and make sure that you add the costs of each one into your monthly budget.


You Are the Boss

Probably the best resource you have to help you become a successful small business owner is you. Since you’re the boss, you create the plan for your business. This means that if an area is not as effective as you like, you can change it. You also create your own hours. So if you work from home, and are not a morning person, you can start working later. Being a small business owner also affords you time with your family. If a special event comes along, you don’t have to ask for time off, you take it.


When you operate your own business there is no set salary and no need to ask for a raise. As the business starts to grow and you find that you have extra money, you can increase your salary. You can also give yourself a bonus at the end of each year based on your margin of profit.

Owning your own business has pros and cons. However, if you can keep the cash flow positive and remain committed to the business, once you get past the first few years and establish a loyal customer base, you will reap the benefits.

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