- There are significant challenges that all small business owners face.
- The positives of owning a small business far outweigh the challenges.
- Business ownership requires sacrifice, determination and resilience.
Although there are plenty of things to love about owning a small business, entrepreneurs say there are many aspects that aren't as glamorous.
Indeed, running a business requires considerable sacrifices, according to a 2015 study from email marketing provider Constant Contact. Specifically, 56% of the entrepreneurs surveyed said they felt like they could never be away from their business, while 51% said they didn't have time to focus on themselves. Additionally, more than 40% of those surveyed said they didn't take vacations or see their family and friends as much as they would like to.
Owning a small business can also be a drain on your finances. The research discovered that 41% of entrepreneurs had all of their money tied up in their business.
In addition to the sacrifices they make, small business owners face a variety of challenges. Because most small business owners are in charge of just about all areas of their company – including sales, marketing, operations, customer relations, payroll and accounts payable – the entrepreneurs surveyed said the struggle of wearing so many hats is the most difficult part of their job.
Having to weather economic storms, find new customers, retain existing customers and keep up with new technology are among the other tough aspects of being a small business owner, the study found. [Read related article: What It Means to Be an Entrepreneur]
Potential challenges of owning a small business
Entrepreneurs also face some challenges not mentioned in the study. For example, to make money, business owners depend on their clients. If you are selling a product or a service, someone has to purchase those from you for you to make money. You should make your customer base as diverse as possible to balance where your revenue is generated.
Managing your cash flow is another large challenge for small business owners. Of course, you need money to make money. You typically need a way to make capital and a way to get access to cash reserves quickly. Small business often do not have this, so entrepreneurs typically have many sources of income. This way, when one source of income slows, there is still money coming in.
Burnout is another challenge. Entrepreneurs work long hours and get little rest. In many cases, until they begin to make money, they do all the work themselves. There is a large potential for fatigue, which can lead to poor decisions and, potentially, the desire to give up.
Nonetheless, many small business owners said the sacrifices and challenges are worth it. More than 60% of those surveyed said they love running their own business because it allows them to pursue their own passions, while 59% said it gives them the freedom to control their professional life.
The flexibility, the freedom to try new things and make their own mistakes, the power to control their own destiny and the ability to put their stamp on things are some of the other benefits of being a small business owner, according to the study.
Being a small business owner may be one of the toughest jobs, but it's also one of the most rewarding, said Gail Goodman, CEO of Constant Contact.
"Small business owners face incredible professional challenges that often impact every aspect of their lives," Goodman said in a statement . "Yet their job represents their passion, and that seems to make the sacrifices worth it."
The study was based on surveys of 785 small business owners who participate in the Constant Contact Small Biz Council, a research panel of U.S. small businesses and nonprofits recruited from the Constant Contact customer base.
Benefits of owning a small business
Fortunately, there are also many benefits of being a small business owner, and they can far outweigh the negatives.
First, small business owners have total independence. When you own the business, you are the boss, which means you make all of the decisions. You do not have to rely on others or discuss decisions with them. You also have the benefit of reaping the financial rewards. If you do not have a business partner or employees, you do not have to worry about paying them. If you have only a few employees, that means fewer people are take a cut of your earnings.
You also decide your own hours. At first, it may seem like you are working all the time while you are building your business, but eventually, you will be able to decide when and where to work; that means no 9 to 5 or reporting back to a boss.
Another important benefit of owning a business is the satisfaction of knowing you are the creator of whatever product you put out. You are the vision behind it, and you put it i motion. You get to do what you love in a field you enjoy. You no longer have to drag yourself to a job you hate every morning. Many business owners also love that they can build their business on their beliefs and values.