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Do you love your job? Do you enjoy every minute of it? Does your job guarantee you a secure and prosperous future? Do you trust 100% the people making decisions for the company you work for? Do you like the people you’re working for? Do you like the people you’re working with? Odds are your regular nine to five job is going to ht a snag somewhere.
This is not true of small businesses. Small businesses are those that are independently owned and considered not dominant in their respective fields of operation. These include single person operations such as nannies and real estate agents.
Small businesses are of great importance to the US Economy. According to the U.S. Small Business Administration, small firms account for 99.7% of all employer firms. Small Businesses are responsible for creating more than 50% of the non farm private gross domestic product (GDP). The small business sector is also a significant employer, employing half of all private sector employees and paying out more than 45% of total US private payroll. More importantly, small businesses have generated 60-80% of net new jobs annually over the past decade. President Bush has said that “small businesses create two out of every three new jobs” in a speech he made to the Small Business Week Conference in Washington DC last April 13, 2006.
While it is easily seen the benefits that small businesses have on the country, there are also advantages for an individual to start his own small business. Whether it is only a part-time consulting job or a full-time business, there are many benefits to making money through a business than going to work in a “regular” 9-to-5 job.
First and foremost is the freedom of not having to work for anyone. No more pointy-haired bosses, no more clueless middle management, no more having to live with the axe of being fired hanging over your neck. In a small business, you are responsible only to yourself. You make the decision on who to hire, you make the decisions on what to do. For some people, it is very exciting to be able to control your own destiny – opening up your own small business lets you do just that.
One large side effect of working only for yourself is the relaxed atmosphere it brings to your daily life. If you feel tired, just don’t go to work after all you’re the boss! You want to go to work wearing flip flops and a t-shirt, you’re the boss! You feel that whatever you’re working on is understaffed, hire more people. This is an immediate side effect of not having to work for anyone; you are now free to go to “work” however you please to.
In addition, having a small business lets your inner abilities shine through better than in a 9-to-5 job. Have that great idea that nobody at work listens to? In your own small business, you can do whatever you want to do that makes you think will be better for the business. A small business is truly a place where you can reach your own maximum potential as you don’t have to deal with bosses, management, and the many other forms of bureaucracy found in “big business”.
Famed entrepreneur Paul Graham put it this way. If you say are earning $80,000 in your job, which means that at the very least you are generating $80,000 worth of value for the company. However, this is not your maximum possible output. If you remove the clueless management, if you remove the sterile environment of the office and go to work where and when you are most comfortable, if you make it such that working twice as hard will be compensated twice as much, then a person making $80,000 worth of value could easily make 10-20 times as much value when all these constraints of big business is released. A small business does just that. Being responsible for yourself, you remove the clueless management, you go to work whenever and wherever you like and because you own the business, being twice as productive is directly connected to how your business will perform.
Another aspect to small business that may influence you to leave your job and go start being an entrepreneur is that small businesses are easy to create and don’t need high capital. At the cheapest end of the spectrum are the nannies and the real estate agents whose only capital is themselves and their skill and industry.
Numerous agencies also exist with the purpose of helping you start your own business. From the US Small Business Administration, to local entrepreneurship centers and business incubators, there are a lot of available knowledge and information out there for the budding entrepreneur.
A major help in starting your own business is if you have a unique product or invention that could be marketable. In that case, you may also pursue the option of looking for investors that will help you fund your business. These investors will give you capital in exchange for being a part-owner of the firm. Aside from giving you startup money, these investors are usually useful as their connections and business experience helps you make sales and meet necessary people that could help your budding company.
One more factor in starting your business is the risk involved. Starting your own business is always a more risky move than just staying with XYZ Corporation. However, as food for thought here is what Paul Graham (2007) has to say.
Even the founders who fail don't seem to have such a bad time. Of those first eight startups, three are now probably dead. In two cases the founders just went on to do other things at the end of the summer. I don't think they were traumatized by the experience… …So here is an even more striking statistic: 0% of that first batch had a terrible experience. They had ups and downs, like every startup, but I don't think any would have traded it for a job in a cubicle. And that statistic is probably not an anomaly. Whatever our long-term success rate ends up being, I think the rate of people who wish they'd gotten a regular job will stay close to 0%.
Paul Graham tells us that failure is going to be inevitable for some people who decide to start their own businesses. However, with all the trials and tribulations that the business brings, the risk of having a miserable time starting a business is zero. The experience and knowledge and time you had in trying to make a business are still incomparably good as compared to working in an office.
Optimistic as Paul Graham’s views may be, he does discourage those with families to start their own full fledged businesses. He says that the best time for creating a business is while you’re still young and only have your youth and energy to lose. The risk of failing is too large if the potential founder has children to feed. What Paul Graham does suggest is for people with families to start a consulting business first. This way, the risk is minimized as a consulting business can be done while still holding a regular job. It is then only up to the entrepreneur to grow his consulting business until he can rely on it fully and quit his job.
Lastly, probably the greatest allure for creating your own business is the possibility of making it big. We all know about the story of Bill Gates (Microsoft), of Larry Page and Sergey Brin (Google), and of Sam Walton (Wal-Mart). Going into business gives you an opportunity to achieve a level of financial success that is impossible if one is only to climb up the ranks.
Also unlike a regular job wherein credentials are needed to get you in through the door and to go past your many glass ceilings, in a business you’re success is only limited by your skill and hard work. Let us go back to the example of a worker making $80,000 worth of value for his company. Released from the chains of corporate bureaucracy, he is now making ten to twenty times more value and wealth. Moreover, unlike in the corporate world where his extra work and productivity will likely go unnoticed, in his own business, the additional value created by the employee goes directly to line that same employee-turned-entrepreneur’s pockets.
If there are so many good reasons to start your own small business, one has to wonder why more people aren’t starting their own. Most people probably couldn’t handle the thought of leaving their cushy offices and cubicles for the thrill of being your own boss, CEO and company president. They probably cannot live outside of the protective stability that a large corporation brings.
In the western world, everybody has belonged to one institution or another until their 20s. From early childhood, Americans wake in the morning, dress up nicely and go to a set of buildings to spend the whole day then go home in the evening. Upon reaching high school age, they wake up in the morning, dress up nicely and go to a new set of buildings. College is another step wherein you wake up, get dressed and pay to enter another set of buildings. Work then seems just like a natural extension of that. Work even seems like the triumphant end as now instead of paying to enter a new set of buildings, you get paid to enter a new set of buildings.
Starting your own business is not just about waking up and going to a new set of buildings. Entrepreneurs are people who wake up, dress as they want to dress then go on to make the best of themselves, after which they go home (when they want) so that they can reap the benefits. The question now is, do you just want to enter a new set of buildings or do you want to be the best that you can be? If you’re among the latter, stop waiting and start your own business and start making your own fortune.
Advocacy Small Business Statistics and Research. (n.d.). Frequently Asked Questions. In US Small Business Administration. Retrieved April 26, 2007
Graham, Paul. (May 2004). How to Make Wealth. In PaulGraham.com. Retrieved April 26, 2007
Graham, Paul. (March 2007). Why to Not Not Start a Startup. In PaulGraham.com. Retrieved April 26, 2007
US Small Business Administration. (n.d.). Small Business Planner. In US Small Business Administration. Retrieved April 26, 2007
WhiteHouse.Gov (n.d.). Taking Action to Strengthen Small Business. In The White House. Retrieved April 26, 2007,