Advantages and Disadvantages of Owning a Small BusinessThe issues small businesses in Australia face and how they can push through April 3, 2018
You can start your own business and all you need is just a small initial investment. There are over 2 million small businesses in Australia right now and the number continues to grow.
Every business owner faces difficulties at first and that might scare some people off. But while there are disadvantages of owning a small business, the advantages outnumber them. It’s best to know both the good and bad and then decide if the entrepreneur life is for you.
As a self-funded company that started from scratch, we decided to share with you our experience. What are the problems and difficulties, benefits and advantages of running a small business? Let’s take a look.
Table of Contents
- Advantages of Running a Small Business in Australia
- The Disadvantages of Owning a Small Business
- Our Solution for These Problems
Advantages of Running a Small Business in Australia
Running a small business venture has lots of perks. From being your own boss to building the business exactly how you envision it, there are many advantages that have to be acknowledged when deciding on starting a company.
Being the owner of the company means that you decide what the image of the company will be, the way you conduct business, who you work with, and everything else.
While being the one in charge isn’t for everyone, the independence that comes with it is a great advantage.
The autonomy that comes with running your own small venture allows you the freedom to position yourself on the market and society the way you like.
Leading your desired lifestyle isn’t always possible with a 9 to 5 job. When running a small company you can have the freedom of deciding your work hours and how much time you spend hustling and grinding.
That is perfect for people who never found to be productive during morning hours. Business owners can adjust their schedule to their own taste, thus increasing productivity.
Running a business comes with many uncertainties, however, playing your cards right means that you have a big chance of being financially independent.
Owning a business also allows you to decide your own salary, which is another amazing perk! Being the one in charge of your own finances and how much your earnings allows you to achieve financial independence.
If you are the sole owner of a small business, this means that you dictate the direction your company is heading. Are you going to work towards the best for you clients, or are you going the worse way – towards your companies own gains? This is up to you!
If you are a co-owner of a small business this sometimes means that both of you will have to agree upon important decisions, and it’s sometimes better to have someone to help you come up with decisions to all of the problems that face small companies.
We all know the saying ‘Choose a job you love and you will never work another day in your life.’.
Well, it’s not particularly true. Deciding to start a business in a niché that you love means that you will have an advantage when it comes to outworking your competitors. But that doesn’t mean you’ll have to put a lot of sweat and tears.
Enjoying your job and finding it interesting is a sure way to become good at what you do. And the satisfaction of making a living by your hobbies and passions is like none other.
We can say that working from 9 to 5 can’t give you the experience which running a business can. As a business owner, you will have to learn on the go and be fast.
Adaptation towards certain situations, meeting impossible deadlines and a ton of other adventures are what makes a good businessman. As every business owner knows – plans rarely go as planned, future projections are far more likely not to happen than to become a reality, and hard work is far more important than funding.
Being your own boss means that there isn’t someone to fire you. While financial security isn’t on the list, job security is. Unless you fire yourself, no one can. You don’t have a boss to pressure you can tackle tasks at your own pace, resulting in a job well done.
Many small businesses struggle with cash flow at the beginning of their journey. The country knows this, so they’ve made it possible for small companies to benefit from tax deductions. You can write off the equipment for your company as a business expense, and you will pay smaller tax when purchasing. The same thing goes for business meals, vehicles used for work, etc.
You Choose the People You Work With
Working with the right people can lead to increased productivity, know-how exchange, and overall improvement in your work life.
One of the biggest assets a small business can have are employees who care about the business. This would ensure that people will work towards the improvement of the company. While hard-to-find you can always look for friends or family that is looking for work. However, make sure they are qualified for the job you’ll be hiring them for.
Surrounding yourself with people who care about the company means that you will have employees who will always find a way to improve the workflow in your company, and this way your business will always move forward.
You Get to Help Others
The truth is that big, faceless enterprises have no chance when it comes to the personal experience of helping people. Small business owners have the upper hand in helping their employees, and their community simply because they care.
Your small business can contribute to the local society by opening creating jobs, helping employees live a better and more fulfilled life and improve the lifestyle of the people living in the community.
The truth is that big businesses can create charities, events and other types of social gatherings. However, small companies can touch the hearts of local people and customers because of the in-person interaction.
Personalized Customer Service
This is a big one. Just think how often when you call a big company you get through a rehearsed line, then your call gets transferred and so-so. Mostly it’s a complete waste of time!
But small companies can, and should, invest time and money in personalised customer service. Because of the lesser amount of clients, employees can interact more thoroughly and personally with their clients. This is a great way to increase the chance for the customer to use the services of your company again.
The Disadvantages of Owning a Small Business
With every business there are disadvantages. In fact, there are far more minuses in owning a business than working a nice cushion job.
Why do we build businesses then?
Because deciding your future, and reaping the seeds of your success are disproportionately more rewarding than the million problems that come and go.
Let’s take a look at some of the disadvantages and issues of small business ventures here in Australia.
Only business owners know the true meaning of investment. As a small business owner, you’ll have to invest your money, time, hard work and a big chunk of your life.
Sometimes money won’t be enough, other times you’ll have to sacrifice quality of work in order to deliver on time. This is a problem you will have to constantly balance and work trough.
Unless you are a startup that has a revolutionary product it will be very hard to find money to grow your business.
Banks are quite conservative towards new ideas, so they won’t just give you money. Most times big loans are what ruin small businesses.
Angel investors won’t back up a new company that isn’t putting something new on the table. This means you’ll have to find the money yourself and sometimes sell your personal belongings to keep the business afloat.
Downturns in Revenue
While having one amazing month in revenue this doesn’t mean the next three months you won’t be working at a loss. The revenue of small companies is hardly a consistent one. You can’t make any accurate predictions and the near future is always fuzzy.
This is a problem that ruins many small business owners just because of the stress that it creates. The unknown has been something that has always accompanied the world of entrepreneurship.
Or, time investment as we called it above. While there is an advantage of deciding your own work time, there is no such thing as nine to five in business. In fact, as you become a business owner your work schedule shifts from 9 to 5, to 24/7/365.
Working 10, 12, 15 hours a day is a pretty common occurrence in the startup stages of your business. Even after establishing your business as a household name on the market you will have to be always available and ready to tackle any problems.
Doing Things That Aren’t Your Job
You are never too good to sweep the floor or clean the toilets. Small companies with three or four employees can save up on hiring a janitor. As you’re the boss it’s your responsibility to keep the image of the brand presentable, and that includes the office space.
This is also a great way to show your team that the boss isn’t afraid to roll up the sleeves and do the dirty work. It builds morale in the team, and you can encourage other employees to clean the office space as well.
Side note: Above is the perfect example of a disadvantage turned to an advantage. This is something that is in the core values of Fantastic Services. From the moment we begin in the company we are trained to think like that. This translates into our daily lives too. It’s a trait that stays with you for the rest of your life.
It All Depends on You
When the team is small you will have to work ten different jobs. Managing cash flow, working on the image of your business, being an HR and caring for your employees. It’s though work.
As the owner and manager of a small company, you will be a one-man army. Prepare for it!
We can’t explain the amount of stress a small business brings to its owners. Everything is on you, even the future of your employees. You’re responsible for everything
There is no way you can know if you can resist the amounts of stress, as every human is different. That’s just something that you will have to experience yourself.
Attracting Talented Employees
Small businesses can’t offer the good work environment that big companies can. The lack of some benefits makes hiring talented people harder. This slows the growth of the company and makes it less possible for a small business to position itself as an expert in any niché.
We mention decision taking above, and it is an advantage as well as disadvantage. All of the decisions you make impact the company and its success.
You will have to be careful when you take decisions because you never know which decision will be the last one.
Being a small business and an established name means one thing – you’ve been in business for at least two generations. If you are just starting out, you won’t have the name recognition, even if you deserve it.
Brands are built on time and consistency. It has nothing to do with money, and it’s more related to the decisions you make and the quality of work.
It’s hard to build a good reputation for your company, and it’s very easy to make your business infamous. You’ll have to swiftly manage your company and take the right decisions in order to be sure your company has a good reputation among your peers and customers.
You can’t know if you are a good businessman before you try. The only way to try is to start your own business venture. There are a lot of disadvantages, but in our experience, it’s worth the shot.
Our Solution for These Problems
As a self-funded company, we’ve experienced the problems first hand, that’s why we know what we are talking about.
If you aren’t sure full-time entrepreneurship is for you, then you can start a side hustle. Before and after work can be utilised in building a business which may sustain you in the future, and even grow into a big business venture.
But if you want to work for yourself, and you want to skip the hassle then try a franchise! Franchisees in Fantastic Services are only focused on growing their team and improving professionally. Everything else like reputation management, clients, branding and accounting is covered by the back end Fantastic Team!