It often looks like the only logical solution for people who are dissatisfied with their job: Start your own business and become your own boss. However, you should consider this step carefully, as not everyone is suited to working independently. There are risks and other disadvantages of running your own company to consider.

 

What risks and disadvantages lie in your own company

 

Costly investment: Many businesses require substantial start-up capital before they start to make a profit. The owner of the business must invest money and time to develop a business plan with the name of the business, product, profit opportunities, etc. The entrepreneur needs an office, materials, advertising and equipment. If the entrepreneur takes out a loan to set up the business and fails, the loan must still be repaid.

 

Expertise: At the beginning of a new business, the founder is usually the manager for every part, from finance and technology to advertising, sales and taxes. Since the new business owner is probably not yet an expert in all of these areas, he or she has a lot to learn in order to become competent enough.

 

Time commitment: As a self-employed person, you often have to invest many hours of work to get your business up and running and make it profitable as quickly as possible. This initial period is not only stressful, but also takes away time that could be spent with family and friends. What's more, as the boss of the company, you can't easily take time off if you're ill or want to go on holiday, because the business doesn't run alone.

 

High failure rate: 80 to 90% of small businesses fail within the first year. If your own business goes bust, a lot of working time and money is lost. Furthermore, you have wasted valuable time earning money in your profession and gaining experience.