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7 Pros and Cons of Entrepreneurship

By: SmallBizClub

 

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It’s a dream of so many individuals to one day have their own company. In America, entrepreneurship is often viewed as a primary barometer of success. Of course, people have wonderfully successful careers working for other existing companies, but the entrepreneurial spirit lives on among those who want the opportunity to make it on their own.

 
The Appeal of Starting a Business
 
While you might think that people start their own companies simply for the money, the truth is that most people do it for a variety of reasons. There is no denying that the prospects of making good money is a big motivator, but it really does go deeper than that for many individuals. Here are some other reasons why people start their own companies.
 
 
  • Independence – One characteristic that many entrepreneurs share is a great desire for independence. Some people might label them as malcontents who can’t works for others, but in many cases, that is simply not true or fair. In general, entrepreneurs enjoy the challenge of building something on their own. They look forward to making their own decisions without someone second guessing them and they tend to make the most of their flexibility. For some entrepreneurs, they believe working long hours is important to make the business successful while others take the approach that they want to build the business as long as they can enjoy themselves in the process.
  • Building a Legacy – The opportunity to build a business than could be handed down to future generations has a great deal of appeal for family oriented entrepreneurs. It’s surprising just how many adults look forward to the prospects of one day working with their kids and still others like the idea of providing the family future security.
  • Developing an Idea – Some people are dreamers and innovators. They don’t like the notion of sharing their ideas with others while running the risk of not receiving all due recognitions for their concept. For a lot of them, starting a business is just as much about protecting their vision as it about anything else.
 
Risks and Rewards of Entrepreneurship
 
No matter what endeavors people take on in their lives, there are inherent risks and rewards. In fact, these risks and rewards should be one of the prime considerations before making any major decisions, especially when it comes to business opportunities. Let’s take a look at the most prominent risks and rewards that face most entrepreneurs. While viewing this information, it’s important to keep in mind that prudent decisions require weighing all the factors together and not cherry picking one or two and letting them become the reason or reasons for making a certain decision. This should also be done with little regard for risk tolerance, just a nice practical approach.
 
Risks
 
  • Financial Failure – In order to place a business into operation, there is an inevitable financial investment that has to be made. It might come from savings, acquiring of a business loan, from private investors or through some combination of all three. If the business fails, the possible financial burden could be quite devastating, especially if the entrepreneur is on the hook to outside parties.
  • Emotional Failure – When a business is set in motion, the entrepreneur is pinning their hopes and dreams on its success. If the business fails, there might be an emotional toll as they watch those hopes and dreams go up in smoke.
  • Unemployment – After the business has been rendered non-operational, the entrepreneur might find themselves without employment and/or a reliable source of income. The prospects of having to go out and find a job on the heels of a business failure is often discouraging.
  • Time Investment – Whether they intend to or not, many entrepreneurs find themselves investing a great deal of time trying to get the business operational. It often leads to neglect of oneself and family members. If the business fails, that time is not something they will ever be able to recover.
 
Rewards
 
  • Unlimited Financial Prospects – If the business reaches its full potential, the financial rewards for an entrepreneur are often significantly higher than they could get through traditional employment paycheck. If an idea really takes off, it’s not a crazy notion that an entrepreneur might find themselves on the north side of a million dollars and in some cases, they might make more money than they could have ever imagined.
  • Emotionally Uplifting – The feeling of success is almost always worth the price of admission. The idea that someone can have an idea, make the investment of time and money, and watch the business takes off is one of the most fulfilling things a person could experience in life.
  • Making a Difference – There are occasions when an entrepreneur innovates a product or service that has a direct benefit to society. This goes far beyond a toy that gives a child joy. This is about innovations that save lives or create genuine benefits for the end users that they couldn’t find elsewhere.  It’s also about the ability to create jobs and provide for the financial stability of employees and their families.
 
 
As alluded to above, the decision to become an entrepreneur is a lot more involved than opening the doors to a storefront. In the beginning, the prospects of success or failure often run about even. Before making a substantial financial and emotional investment, it is extremely important for the would-be entrepreneur to take stock of the possible risks and rewards. By doing so, they increase the likelihood of making the right decision a majority of the time.
 
Author: Keith Andrews is President of Blue Wave Micro, one of the leading wholesale distributor of quality made transceivers, memory, semiconductors, electronic components, computer products and cabling in the United States. They carry all the major brands and are guaranteed to be 100 percent compatible. Every product is manufactured and tested under the strictest quality standards to ensure they meet customers’ needs and demands. https://twitter.com/bluewavemicro
Published: March 25, 2015
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