Advantages and Disadvantages of Starting a Business Assignment Help
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A. Entrepreneurship Topics: Advantages and Disadvantages of Starting a Business
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Starting a business can be both an exciting as well a risky affair too. Starting a business can give the entrepreneur freedom from dependency, however still it can give the person lot of anxiety too. Since it is a venture, whose outcomes are normally unpredictable, only thing that an entrepreneur can do is to do all that he can for risk mitigation in the venture (Allen, 1999). Typical activities include comprehensive strategic planning and employing best in class resources for sustaining the business and business advantages. Competition analysis, evaluation of the self and the competitor advantages, Using right managerial strategies are some of the tactics that an entrepreneur need to employ to play the game safely and to evolve successfully. The following part of the write-up discusses in detail the advantages and disadvantages of starting a Business. Further there is discussion presented on the miscellaneous concerns that distinguishes the unique nature of starting a business and its consequences from routine corporate jobs and benefits. Further there is discussion on the attitude and skills of the person and the suitability of the same with entrepreneurship.
Advantages and Disadvantages of Starting a Business:
Advantages (Chapter: 1)
Freedom and Job Security:
Starting an own business will provide a person with freedom to work as they like. One need not compromise on personal works for the sake of meeting the established office timings. There won't be anyone to question the timings compliance. The business owner need not be answerable to any other person apart from his own conscious and his own discipline. This is particularly suitable for the people who are more freedom lovers and for those who do find motivation in doing things as they wish to do. As a whole, starting a business will provide freedom as well it will also make the person free of the fears of lay-offs and other job insecurities. Since he will be the boss of the business, no-one will question his performance as well there is no need to fear of lay-off or job suspension at any instant. Starting a business is highly advantageous for the people, who finds delightment in working for their own and who expects returns in accordance with the efforts which they wish to put in the business (Allen, 2015).
When a person is involved in a routine job, he will be confined only to the salaries that are offered in the job. He cannot get any salary beyond the payment which is offered in the job. Also his promotions and job incentives will depend on the discretion of the supervisor as well as the company. However starting a business will provide ample scope for the person to show his own talent and to completely get advantage of the fruits of the labor without any complications. There won't be anyone to suppress one's opportunities as well there won't be anyone to prevent the possible job growth of the person in general. Hence staring a business is right advantageous move for anyone who expects legitimate and justified benefits for their efforts and who are willing to shoulder responsibility for their own future. Once if someone become successful in business, there will be obviously financial security and he can lead a more comfortable life in future.
Disadvantages (Chapter: 2)
Financial Risk and associated complications:
Starting a business will incur significant investment at the start-up times. One needs to invest heavily in business depending on the business operational requirements. The expenses during the starting phase of the business; just will not include the business capital investments, rather other investments like registration expenses, due diligence expenses etc all will count. Further expenses will vary from location to the location and also the business capital investments will obviously depend on the type of business being floated. If the person establishing the business has the necessary financial resources, he can invest in the business, if is not very much capable, the financial risk will be heavy. If the person could not mobilize the necessary financial resources, all his efforts will go waste. At the same time, if the business outcomes are not successful, the impact of the loss will be heavy and can lead the person into serious problems. These risks and complications cannot be seen in routine jobs and employment; these are unique to self started business ventures. Also the type of the businesses like private limited companies will demand more and more due diligence in terms of the fillings, general body meetings, submissions to the Registrar of companies etc. All this requires considerable efforts and time by the business owners (Burns, 2016).
Risk of intellectual property, trade-marks and patent rights, Copy rights and legal complications:
Every business owner need to take care of the registration of the trade marks, emblems, intellectual property rights etc. One should not infringe with the rights of the others in running the business, as well should protect their own intellectual property rights as well. If found convicted, there will be heavy fines on the organization and even may be needed to forfeit the business license also. Hence the legal compliance requirements need to be focused on considerably. Based on the nature and the type of business, these complications can be too serious. For example, in pharmaceutical business, the necessity to compliant with the property rights and patent rights is too heavy. The associated fines and penalties will be too high and one needs to take utmost care in their business functionality (Hatten, 2015).
Running an own business needs several other attributes as well. It is required to posses excellent commitment on behalf of the business owners. They need to possess more and more commitment towards the business needs and requirements. The demands of the commitment need not be just for the sake of making up profits. Sometimes it may be required even for sustaining the business; it is particularly true in the cases where there is high competition for sustenance of the business. When there is severe competition it will become serious requirement for the business owners to keep more and more commitment just to protect the business from collapse. Unlike traditional income generating tasks, running a business is always risky, it is risky of entire financial resources of the person, if the person is not having the right attitude as well if he is not having the required talent to run the business, the consequences can be disastrous. He will risk not only the financial resources, the future of himself and his family will be at stake. In certain businesses, the profitability cannot be achieved immediately, it will take time for achieving the profits and the delayed profitability may mean increased overheads, increased interests on the loans and also increased complications for leading their own life comfortably. Business owners are expected to keep more responsibility for business causes, one should take care of all the legal compliance requirements and if they are not done properly, always there is risk of facing consequences. Even if the employees of the organization not done the due-diligence properly, the ultimate responsibility will be on the owner and he need to pay for these errors.
Miscellaneous concerns: (Chapter: 3)
Though it cannot be ruled out that the starting a business can provide the financial freedom, exposure, satisfaction and limitless growth to a person, the inherent risk cannot be avoided. Further the suitability purely depends on the skills and capabilities of the person as well. If a person has an attitude to take up the business risk and if his skills are suitable to lead the business, establish customer relationships, enable him to evaluate the financial risk, well he can proceed for the business. If not it is can be a big mistake to enter into the business. A corporate job can ensure less risk, it can enable the person to get all the privileges like group insurance, group privileges etc. Also a corporate employ will not be exposed to the company losses and profits, he will be entitled to his fixed salary and he may gain bonus and dividends based on the growth of the company. Further the person can always have an option to quit the company if it is not doing well. But he himself if is the owner of the company, he has no choice to leave the business, he need to stick to that and getting out of the business can be very costlier deal.
It is required to evaluate numerous factors before taking a decision to start a business or not. Though there are numerous benefits in starting a business and becoming an owner of the same, it need not always be a right decision to take up that initiative. There can be lacking of one or many of the requirements, a person may be having financial resources, but may be lacking the necessary aptitude and skills, one may be having the talents but may lack the requires resources like financials and manpower. Further successful operations of the business may depend on factors like political issues, legal aspects, economic and social factors as well. So it is purely a risky affair and one need to take up the calculated initiative to start-up the business. There are both advantages and disadvantages in starting a business, the outcomes of a business purely depend on the case to case basis, and hence justification of action is purely a concern of the individual capabilities, attitude, aptitude and personal and family factors. A carefully evaluated decision is to be taken and once decided should be ready to face the consequences of any type. The consequences will impact not the person but his family and dependants too, so it is fit for those who have the necessary attitude and family conditions as well.
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