You may want to develop your own unique ideas for a product or service, and if so setting up your own New business from the drawing board may be your only option. You may want to start a home-based business that you can run in your time. You may want to start a business because you want to do things the right way, after working for an employer who goes about things in the wrong way.
It is much easier to do things your own way if you’re working alone, rather than, say, buying someone else’s business that already has its routines and working practices established.
- Working for and by yourself has several things going for it:
- It may be possible to start the business in your spare time. This will allow you to gain more confidence in the future success of your proposed venture before either giving up your job or pumping your life savings into the venture.
- If you have limited money to invest in your new venture, you may not need to spend it all at the start of the project. This also means that if things do start to go wrong, it will be easier to restrict the losses.
- Starting a New business is not just about money. Setting up and running a successful business has the potential to give you a feeling of personal achievement which may not be there to quite the same extent if you buy someone else’s business, for example.
- Going it alone isn’t all fun and games. Some of the disadvantages are:
- Your New business will take time to grow. It may not be able to support your current personal financial obligations for many months or years.
- There is a lot of one-off administration involved in setting up a new business such as registering for VAT and PAYE, getting business stationery, setting up the phone, fax, and Internet connections at your trading premises, and registering your business name, in addition, to actually trading.
- These tasks can be very time-consuming and frustrating in the short term, and very costly in the long run if you get them wrong. Unfortunately, these tasks are often not easily delegated and can be expensive if you get other people to do them. If you buy a business or take up a franchise, these basic administrative tasks should have already been dealt with.
- There is no one to bounce ideas off or to share responsibility with when things go wrong.
- As a result of this perceived riskiness, it is generally more difficult to borrow money to fund a start-up than to borrow to invest in an established profitable business.