The Advantages And Disadvantages Of Owning A Small Business

Small business ventures are easily undertaken by many young entrepreneurs because they are relatively easier to operate

. With lesser need for additional employees, business capital and stock turnover, these businesses have a lot to offer to the business owner. However, there are also some disadvantages in starting small. You just have to carefully weigh all options, take risk and lean more on the positive end for your business startup to succeed.

Advantages of a Small Business

From the business owner's point of view, smaller businesses are easy to start because there's no need to raise a huge amount of capital for you to run them. This is advantageous to those who are just new to the field of business. To add, banks do not lend huge sums of money to new businesses because of the risk involved in sponsoring someone with an unproven business operation history.

Secondly, you don't have to be rich to start your own little business. With just a small portion of land and a few members of the workforce, you can already start operating. Even if you, as the owner, do not possess significant risk taking ability you can still proceed with smaller ventures because they have a high chance of succeeding despite fewer resources.

Operating small shops give the owner more flexibility when choosing the right time to work, take a break and take a day off from work. The owner can be his own boss because there is little risk involved in the absence of business operations.

Furthermore, the owner has the sole right to the profits earned. He is not required to divide it with co-owners (shareholders) as in the case of many bigger businesses. This greatly increases motivation because he reaps all the fruits of labor.

Disadvantages of a Small Business

If you come to think of it, smaller stores may end up with higher costs because they don't have the capacity to increase production unlike bigger businesses. Also, even if small means less capital it is also to be expected that businesses running with the help of bank loans are plagued with premiums at high interests. Unfortunately, this is the route taken by most business operators as raising capital is difficult these days.

Next, smaller stores are prone to non-diversity of products and services. They tend to focus on fewer items that often come cheap. For example, the demand for bread, standard coffee packs and regular milk may wane if most consumers in your area develop higher income brackets. These people often switch to premium products and go for bigger stores that offer a wider range of things to buy.

With today's pressing competition for space, a small business easily becomes hardly hit because of the expensive rents offered to potential tenants. As such, it sometimes appears that you will be paying more for less space as compared to paying a little more but you are guaranteed to get a much bigger space to operate your business.

by: Kurt Ross

POST COMMENT

Utilizing A Notebook For Business 000-186 Ibm Business Process Manager Express Or Standard Edition V 7 51 Bpm Application Development Maximize Your Online Business Presence With Google Data Feeds How Surveys Can Help A Business Is Commercial Storage Right For Your Business? Details About Buying And Promoting A Child Care Business Seo Is An Organic Process To Gain Succces In Your Business. Business Loans Business Loans Lenders Found Here From Henry Ford To Facebook: Business Data Analytics A Negative Business Strategy: Inappropriately Big Discounts Mixing Your Strengths With The Needs Of A Small Business Can Factoring Invoices Help Your Business Grow? Why Custom Graphics Will Be Perfect For Your Business