The Advantages and Pitfalls of Self Employment

Thousands make the plunge only a few can swim.

Every day, thousands of people across the United States decide to make the plunge into self-employment. There are as many reasons why people become convinced that going into business is right for them as there are occupations. Even though the failure rate is extremely high, self-employment continues to be sought after as an American dream.

The following is some reasons why you might be prompted to start your own business as well as some pitfalls to consider.

You Have Come Up With A Super Business Idea

Sometimes what seems like a good business idea to you may not be so sound when put into practice. Unless you have a revolutionary new invention or a new product or service, or an original idea or solution that deals with an everyday problem you probably will be repeating what thousands have done before you. Something to consider doing:

  • Filling a gap in the market that big business can’t or won’t concentrate on
  • Stay within a field of business you are already familiar with
  • Follow a passion by turning an interest or hobby into a business

No matter what your great idea is, you need to be sure that it is not only a viable business venture but it is something you will also be comfortable with.

Before doing anything be honest and ask yourself these Questions

  • Why would anyone want to do business with me?
  • Do I have enough relevant experience and expertise?
  • Is there a need for my product or service?
  • How will I reach out or market to my customer base?
  • Are there others in the same business and who will be my main competitors?
  • What sets my product or service apart from similar offerings?
  • Do I have or can I get enough funding?

Remember, what can go wrong probably will?

The tried and tested business

Some self-employed people choose to stay within tried and proven businesses such as buying a turn-key package an established business or licensing rights to a franchise – which may be higher cost at first but carry fewer risks than developing your own idea.

Advantages

  • More attractive for investors.
  • A market for the product or service has a track record.
  • A proven business plan and marketing plan is in place.
  • Training and consulting are provided.
  • Problems have already been discovered and ironed out.
  • Financial support is included in some franchises.

Disadvantages

  • Some businesses for sale may be because they are experiencing difficulties. Look into the background of the business and make sure you fully understand the reasons for selling. You don’t want to purchase a white elephant that will need more investment than it’s worth. You also don’t want to have to overcome a negative management reputation.
  • Buying the rights to a franchise or a license to sell a particular product or service not only ties you to the product or service but may be expensive also. With a franchise, there is a franchise conduct that depicts a particular way to run the business that you have to stick with.

A business opportunity

Sometimes the opportunity of owning your own business comes with or without warning. You may be offered the opportunity to buy out your employer, or take over a family business.

Opportunities like these may require lots of personal commitment and you may need to put your own money on the line. Just because you are familiar with the business, you still need to carefully examine the business to make sure it is worth becoming involved in.

Advantages

  • All aspects of the business including a marketing plan should already be active.
  • An established customers base , reliable revenue, an established name to capitalize and build on, and a list of useful contacts.
  • You probably already know a lot about the product or service and have a good understanding of the business.

Disadvantages

  • You may be taking on a failing business. Ask if there are any problems with the business, and if so, how can you best solve them?
  • Stepping into your employer’s shoes does not mean you automatically retain his/her support services. Remember, you are the responsible party. It’s up to you to provide everything such as accounting, staff management, suppliers, business location and payroll.

This has only been a sampling of business ideas and their possibilities. Stay focused, be diligent and most of all proceed with caution.

Happy Trails