Overrated Career: Small-Business Owner

By Marty Nemko

Posted: December 11, 2008

The Appeal: Work for yourself, and you're automatically the CEO. You get to make all the decisions, set your own hours, and keep all the profits. And you're inspired by the stories of other entrepreneurs who became wealthy.

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The Reality: Most new businesses fold within a few years. There are good reasons. For one thing, running a small business usually requires you to be good at many jobs: salesperson, buyer, accountant, marketer, operations manager, even janitor. Few people can do it all. Yet hiring others often cuts too deeply into profits. In addition, you must be a self-starter—no one is going to make you do anything or structure it for you. It's all on you. Even though you set your own hours, they tend to be long. And you have to provide your own healthcare and other benefits. For an individual, that can be very expensive, especially if you or a family member has a pre-existing condition.

An Alternative: Be the No. 2 person in someone else's small business. You'll have a seat at the table and a say in company decisions. But you'll go home with fewer headaches than the owner does. And probably go home earlier.

Learn more: The World's Shortest Management Course (abridged), by Marty Nemko

I did it.

I was laid off from my mind numbing corporate job...thank god...i finally got my act together and started up a little skate shop. Its was difficult because I started with a very small budget and a small loan from a family member. I was warned about how hard it is to establish and succeed but I went for it anyway. It was a very risky move...but I couldnt stand the thought being 1 of 100 applicants for every job that becomes available. With a little smarts and a little luck you never know. Anyway, at least I have my sanity...for now :)

If you are thinking of starting a business...I say GO FOR IT. Our country is going back to grass-roots and Ma & Pop shops.

I say forget your masters degree and go ahead and start that lawn care business. Open the store that specializes in bird houses. Rent out a small studio and open an art gallery. The money sucks...but you'll feel better about yourself.

Life is short...do what makes you happy.

My 2cents

Christian of KS @ Oct 30, 2009 19:29:20 PM

I miss it

If someone offered you a job where there was no guaranteed income, no benefits, required you to work 60+ hours per week with no time off, and you had to invest your life savings to get started, you would tell them "are you crazy"? Welcome to the world of self employment.

I started a small business 6 years ago. The first 3 years, we almost starved to death. My wife would ask me almost daily, "why did you give up your great paying job and benefits to start this stupid business?" I really couldn't give her a good answer other than the fact that I couldn't take another day in the corporate world.

After 3 years however, things started changing. Revenues and profits increased rapidly. By the end of the 4th year, I was making almost 2.5 times what I could make in the corporate world. Then when my wife looked at me, she said, "I am really glad you started this businsss!" I just smiled.

Then after 6 years, I really did a dumb thing. I got kind of tired of doing the same thing over and over again and someone asked me if I would sell my business. The offer was great so I sold my business for a nice profit. Uncle Sam ended up taking a huge percentage of it though.

Now I am back to square one. I am working for a corporation and totally hate it. I talked to my wife about starting another business and she says there is no way we are going through 3 years of hardship again starting another business. So I really screwed up. Now I am stuck back in the corporate world dreaming of owning my own business again.

Todd Ebach of FL @ Jun 01, 2009 22:44:05 PM

SBO not overrated..just not for Everyone

There is some truth to the article, but what the article fails to acknowledge is the millions of jobs small businesses provide for communities. This is a very difficult time for small business owners, but since most small businesses operate differently than larger corporations, there is more potential for smart business owners to weather the economic storm.

I agree that owning a small business is not for everyone, but how will you know until you try. Just be sure to write your plan out first, understand your cash flow, and always save for those rainy days.

Belinda Waters of GA @ Feb 09, 2009 10:17:00 AM

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