{"id":2996,"date":"2023-02-19T16:11:16","date_gmt":"2023-02-19T16:11:16","guid":{"rendered":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/chapter\/advantages-and-disadvantages-of-small-business-ownership\/"},"modified":"2025-05-22T15:01:04","modified_gmt":"2025-05-22T15:01:04","slug":"advantages-and-disadvantages-of-small-business-ownership","status":"publish","type":"chapter","link":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/chapter\/advantages-and-disadvantages-of-small-business-ownership\/","title":{"raw":"Learn It 8.3.1: Should You Start a Business?","rendered":"Learn It 8.3.1: Should You Start a Business?"},"content":{"raw":"<section class=\"textbox learningGoals\">\r\n<ul>\r\n\t<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Recognize the advantages and disadvantages of starting a business&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:14720,&quot;10&quot;:0,&quot;11&quot;:4,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Recognize the advantages and disadvantages of starting a business<\/span><\/li>\r\n\t<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Understand why some businesses fail&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:14720,&quot;10&quot;:0,&quot;11&quot;:4,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Understand why some businesses fail<\/span><\/li>\r\n\t<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;List important things to consider when deciding whether to start a business&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:15233,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:0,&quot;11&quot;:4,&quot;12&quot;:0,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">List important things to consider when deciding whether to start a business<\/span><\/li>\r\n<\/ul>\r\n<\/section>\r\n<h2>Evaluating Entrepreneurship<\/h2>\r\n<p>As author and retired entrepreneur Carol Denbow writes in Are You Ready to Be Your Own Boss?, \u201cIf you want your new business to succeed, you must know why most businesses fail.\u201d New business survival statistics are grim. Approximately 20% of new businesses failed in the first year and half of new business fail within five years.[footnote]Carter, Timothy. \u201cThe True Failure Rate of Small Businesses.\u201d The True Failure Rate of Small Businesses, January 3, 2021. https:\/\/www.entrepreneur.com\/starting-a-business\/the-true-failure-rate-of-small-businesses\/361350[\/footnote] Before you jump into starting your own business, take a look at the pros and cons of starting a small business and how to improve the odds of success.<\/p>\r\n<h2>Advantages and Disadvantages<\/h2>\r\n<p>There are very few things in life that can compare to the experience of creating your own business. As investor and former entrepreneur James Caan expresses it: \u201cNothing will ever replace the thrill of creating a profitable company from scratch.\u201d<\/p>\r\n<p>Starting a small business is a matter of self-selection and self-determination. While the founders of small businesses still are a part of the society they live in, their business ventures can allow them to step into an alternate reality, part of a social order in which each person\u2014regardless of gender, race, ethnicity, religion, birth, or circumstances\u2014can achieve their fullest potential and receive recognition for their achievements.<\/p>\r\n<p>A small business owner has great freedom in both business and lifestyle choices, from developing the business concept and operating environment to defining success. The benefits\u2014measured in impact, revenue, or infrastructure terms\u2014are essentially unlimited. Perhaps the most nebulous, but important, benefit of being a small business owner is the freedom to choose your business\u2019s purpose and goals.<\/p>\r\n<p>However, as an entrepreneur, you own the decisions and the results of those decisions. Evasion is not an option. You can\u2019t say, \u201cIt\u2019s not my job,\u201d point fingers, shrug, or check out. Additionally, as a small business owner, you will probably be risking your own (and, perhaps, friends' and family's) financial capital. Essentially, you\u2019re flying without a net. There\u2019s no guarantee of a regular paycheck and no paid or subsidized benefits (for example, a retirement plan, holidays, or perks). You\u2019re responsible for business development, business planning, HR, IT, and every other function as well.<\/p>\r\n<p>Freedom from an employer\u2019s expectations comes at a cost: you\u2019re responsible for setting and managing expectations\u2014for yourself and others\u2014and for making the magic happen. Starting a business, you have the potential for freedom and success but the price is responsibility for your business and all the stakeholders who rely upon it. You have to decide if the risk is worth the reward.<\/p>\r\n<section class=\"textbox tryIt\">[ohm2_question height=\"350\"]4472[\/ohm2_question]<\/section>","rendered":"<section class=\"textbox learningGoals\">\n<ul>\n<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Recognize the advantages and disadvantages of starting a business&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:14720,&quot;10&quot;:0,&quot;11&quot;:4,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Recognize the advantages and disadvantages of starting a business<\/span><\/li>\n<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Understand why some businesses fail&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:14720,&quot;10&quot;:0,&quot;11&quot;:4,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Understand why some businesses fail<\/span><\/li>\n<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;List important things to consider when deciding whether to start a business&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:15233,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:0,&quot;11&quot;:4,&quot;12&quot;:0,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">List important things to consider when deciding whether to start a business<\/span><\/li>\n<\/ul>\n<\/section>\n<h2>Evaluating Entrepreneurship<\/h2>\n<p>As author and retired entrepreneur Carol Denbow writes in Are You Ready to Be Your Own Boss?, \u201cIf you want your new business to succeed, you must know why most businesses fail.\u201d New business survival statistics are grim. Approximately 20% of new businesses failed in the first year and half of new business fail within five years.<a class=\"footnote\" title=\"Carter, Timothy. \u201cThe True Failure Rate of Small Businesses.\u201d The True Failure Rate of Small Businesses, January 3, 2021. https:\/\/www.entrepreneur.com\/starting-a-business\/the-true-failure-rate-of-small-businesses\/361350\" id=\"return-footnote-2996-1\" href=\"#footnote-2996-1\" aria-label=\"Footnote 1\"><sup class=\"footnote\">[1]<\/sup><\/a> Before you jump into starting your own business, take a look at the pros and cons of starting a small business and how to improve the odds of success.<\/p>\n<h2>Advantages and Disadvantages<\/h2>\n<p>There are very few things in life that can compare to the experience of creating your own business. As investor and former entrepreneur James Caan expresses it: \u201cNothing will ever replace the thrill of creating a profitable company from scratch.\u201d<\/p>\n<p>Starting a small business is a matter of self-selection and self-determination. While the founders of small businesses still are a part of the society they live in, their business ventures can allow them to step into an alternate reality, part of a social order in which each person\u2014regardless of gender, race, ethnicity, religion, birth, or circumstances\u2014can achieve their fullest potential and receive recognition for their achievements.<\/p>\n<p>A small business owner has great freedom in both business and lifestyle choices, from developing the business concept and operating environment to defining success. The benefits\u2014measured in impact, revenue, or infrastructure terms\u2014are essentially unlimited. Perhaps the most nebulous, but important, benefit of being a small business owner is the freedom to choose your business\u2019s purpose and goals.<\/p>\n<p>However, as an entrepreneur, you own the decisions and the results of those decisions. Evasion is not an option. You can\u2019t say, \u201cIt\u2019s not my job,\u201d point fingers, shrug, or check out. Additionally, as a small business owner, you will probably be risking your own (and, perhaps, friends&#8217; and family&#8217;s) financial capital. Essentially, you\u2019re flying without a net. There\u2019s no guarantee of a regular paycheck and no paid or subsidized benefits (for example, a retirement plan, holidays, or perks). You\u2019re responsible for business development, business planning, HR, IT, and every other function as well.<\/p>\n<p>Freedom from an employer\u2019s expectations comes at a cost: you\u2019re responsible for setting and managing expectations\u2014for yourself and others\u2014and for making the magic happen. Starting a business, you have the potential for freedom and success but the price is responsibility for your business and all the stakeholders who rely upon it. You have to decide if the risk is worth the reward.<\/p>\n<section class=\"textbox tryIt\"><iframe loading=\"lazy\" id=\"ohm4472\" class=\"resizable\" src=\"https:\/\/ohm.one.lumenlearning.com\/multiembedq.php?id=4472&theme=lumen&iframe_resize_id=ohm4472&source=tnh&show_question_numbers\" width=\"100%\" height=\"350\"><\/iframe><\/section>\n<hr class=\"before-footnotes clear\" \/><div class=\"footnotes\"><ol><li id=\"footnote-2996-1\">Carter, Timothy. \u201cThe True Failure Rate of Small Businesses.\u201d The True Failure Rate of Small Businesses, January 3, 2021. https:\/\/www.entrepreneur.com\/starting-a-business\/the-true-failure-rate-of-small-businesses\/361350 <a href=\"#return-footnote-2996-1\" class=\"return-footnote\" aria-label=\"Return to footnote 1\">&crarr;<\/a><\/li><\/ol><\/div>","protected":false},"author":21,"menu_order":14,"template":"","meta":{"_candela_citation":"[{\"type\":\"original\",\"description\":\"Advantages and Disadvantages of Small-Business Ownership\",\"author\":\"Nina Burokas\",\"organization\":\"Lumen Learning\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"},{\"type\":\"cc\",\"description\":\"Day 22\",\"author\":\"David Childers\",\"organization\":\"\",\"url\":\"https:\/\/www.flickr.com\/photos\/davidchilders\/6799551981\/\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"}]","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"part":2981,"module-header":"learn_it","content_attributions":[{"type":"original","description":"Advantages and Disadvantages of Small-Business Ownership","author":"Nina Burokas","organization":"Lumen Learning","url":"","project":"","license":"cc-by","license_terms":""},{"type":"cc","description":"Day 22","author":"David Childers","organization":"","url":"https:\/\/www.flickr.com\/photos\/davidchilders\/6799551981\/","project":"","license":"cc-by","license_terms":""}],"internal_book_links":[],"video_content":null,"cc_video_embed_content":{"cc_scripts":"","media_targets":[]},"try_it_collection":null,"_links":{"self":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapters\/2996"}],"collection":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/wp\/v2\/users\/21"}],"version-history":[{"count":7,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapters\/2996\/revisions"}],"predecessor-version":[{"id":9501,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapters\/2996\/revisions\/9501"}],"part":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/parts\/2981"}],"metadata":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapters\/2996\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/wp\/v2\/media?parent=2996"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapter-type?post=2996"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/wp\/v2\/contributor?post=2996"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/wp\/v2\/license?post=2996"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}