9 Reasons You Should Start Your Own Business
Thinking about starting your own business? See all the benefits business ownership brings—personally, professionally, and for your community.
The U.S. Census Bureau reported that 5.4 million new business applications were filed in 2021, surpassing the record set in 2020 of 4.4 million. Obviously, entrepreneurs are looking at the landscape, weighing the pros and cons, and pulling the trigger to start their journey to small business ownership.
Approximately 50% of all new businesses fail within the first five years. For anyone who currently runs a small business, that statistic is probably not surprising. With the inevitable long hours, inherent financial risk, competition, and the need to become semi-fluent in scintillating topics like taxes, insurance, and workers’ compensation laws, it is not surprising that there are several options or pathways for negative outcomes.
And yet, more people are starting their own business than ever before. And, that statistic means 50% are succeeding!
Speaking of the “pros,” what are some benefits of starting your own business? Below are a few perspectives on the benefits of owning a small business—personally, professionally, and for your community.
The personal benefits of owning a small business are perhaps more intangible than upcoming categories and can be defined differently depending on the individual and their personal values. How each individual defines growth, flexibility, and rewards will vary accordingly.
“Being my own boss” is certainly at the top of the list for many business owners, but you can add that you are also, in some cases, the boss of others. Responsibility for the livelihood of others can require a new thought process that grows beyond a narrow personal focus to a broader view that encompasses you, your employees, and the community at large.
For some business owners, they have seen growth in a particular talent or hobby that has reached a tipping point where they convert a passion into a profit-generating business. Taking this step also requires growth in their own self-confidence and self-belief to pursue their own destiny.
One of the obvious benefits of being a small business owner is the independence and flexibility that come with running your own business. This includes making all the relevant decisions (and changing those decisions) while also managing your own schedule and a work/life balance that fits your values.
In addition, you get to work with the people you want, while also setting the culture for yourself, your business, and your team.
Achieving financial stability and a sense of pride and enjoyment in the work you do is a reward that cannot be measured by strict metrics such as the size of your bank account. But let’s not dismiss the idea that achieving greater financial success, along with available tax benefits, can be tremendous motivators.
But there is the added benefit of achieving personal fulfillment in building a successful business. It also builds on the self-confidence and self-belief mentioned earlier that can positively influence decision-making and lead to more success in the future.
From a professional perspective, the knowledge you accrue in owning a business begins from day one. Like exercising a muscle, the repetition of going through business cycles will exercise your mind to build foundational skills and then identify ways to continuously improve.
Small business owners wear multiple hats throughout the day including marketer, salesperson, IT pro, accountant, and customer service representative.
Some of these hats are stylish, others not so much.
Going through the repetitive tasks of running payroll every week, managing a monthly budget, or going through a year-end close will give you a wide range of expertise that comes with owning a business.
But beyond expanding your skillset as an employer, being a small business owner also allows you to focus on your specific skill sets that add value to your customers. Whether you are a jewelry maker, a craft drink bar owner, or a tax provider, devoting your time and energy to honing those skill sets and becoming an acknowledged “expert” in the field can allow you to maximize your value to your customer.
Being a part of a small business community can open new networking. Whether it is learning the ins and outs of starting your business, identifying the tax benefits, or working with the local chamber of commerce, there are several opportunities that a local network of fellow business owners can help navigate.
In addition, being part of a local network can identify partners to help you grow your business, whether partnering on projects or consulting with other small business owners on new trends, technologies, or innovations.
Small businesses are the foundation of the US economy. The benefits they bring to their local communities build on each other, creating synergies and multipliers that add value to a community. Whether it’s job creation, local economic stimulus, or diversification and innovation of the local economy, small business owners provide far-reaching positive impacts to their communities.
6. Job Creation
One of the most important ways small businesses benefit the community is by creating jobs and providing locals with job opportunities. According to the Small Business Association, small businesses created 10.5 million net new jobs between 2000 and 2019, accounting for 65.1% of net new jobs created since 2000. Full-time, part-time, experienced workers, and entry-level roles are all part of the equation.
The types of jobs and the opportunities they provide are important too.
As mentioned above, small business owners wear a lot of hats in managing their business. They may also require their workers, entry-level and experienced, to take on a variety of responsibilities that allow them to build a set of skills that can improve their future employment opportunities.
7. Stimulating Local Economy
When customers patronize a local business, most of the money they spend will end up circulating back into the local community. $48 of every $100 spent at a small business stays local according to the Small Business Administration. Spend the same $100 at a big-box store or national retailer, and only $14 stays.
Small businesses tend to leverage the skillsets and tools of other small businesses, whether it is graphic design needs or office renovations. Small companies are more likely to seek out their local network for another small business in the area instead of going with a large company.
Similarly, small business owners themselves tend to shop locally as well. They eat at local restaurants and shop at local retailers, and often encourage their friends and family to adopt the same attitude encouraging economic growth in the community.
Another way small businesses benefit the community comes from an improved local tax base. Taxes paid to small businesses—and the local taxes paid by small businesses—end up paying for community improvements such as schools, green space, public transit, and infrastructure. These community improvements add value and make it a more desirable place to live.
8. Local Market Diversification
To stand out among the crowd, successful small businesses tend to be run by innovative, creative entrepreneurs. As their success grows, it will encourage more innovation and growth within the community. This creates a more diverse marketplace, which adds to the appeal of your area, gives your community a more distinct personality, and leads to well-served and satisfied customers.
In addition, the benefits of small businesses are generally more green than larger, corporate-led businesses. This is not to say corporate HQs or big-box retailers don’t benefit their communities, but small businesses tend to have a smaller footprint utilizing existing infrastructure and building space and keeping the look and feel of the community.
The Biggest Benefit of All
Regardless of how the benefits of small business ownership are categorized or rationalized, they can all be boiled down to one word.
Small business ownership gives you the personal freedom to make choices that reflect your values and how you define success. Having that freedom is what makes the risks, long hours, uncertainty, and inevitable ups and downs of business, worthwhile.
Over the last two years, close to 10 million entrepreneurs are making that tradeoff to get that freedom. Congratulations and good luck to all of them.
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