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A small-scale business owner is the owner of a business that's considered small in terms of its work force, sales volume or
organizational structure. A small-scale business differs from one country to another, but the United States views this question in
different ways for different purposes. The Small Business Administration, or SBA, defines a small business as an enterprise
with fewer than 500 employees, but business size can also be measured in terms of sales volume and organizational structure.
1. THE IMPACT OF BUSINESS OWNERS ON SUCCESS AND FAILURE RATES
As the creator, organizer, and manager of a business, a business owner is critical to the success or failure of a given venture.
Why Business Owners Matter
An entrepreneur or a small business owner is generally defined as an individual who creates, organizes, and manages an
enterprise with considerable initiative (and usually shouldering considerable risk alongside it). Whatever the project, the
business owner tends to sit firmly at the heart of the strategy, tactics, and structure that defines the organization.
As a result of this, the business owner is a central source of advantage (or potentially disadvantage) when executing the
operations of the organization. Simply put, the success or failure of a small organization is inherently tied to the central figure
who starts, organizes, and manages it.

Video 1: Small Business Owners

What Determines Success or Failure
There are countless factors that determine success or failure when starting and running your own business. Each business is
different, operating in a different competitive environment with different demands. Without getting too specific or detailed, there
are a few central skills commonly required of owners across most small businesses:
Strategy
The first thing a business owner needs is a plan that lays out the strategy of their organization. This critical piece of guidance
lays the foundation for how and why decisions are made. As the business owner is most commonly the author of this
document, she will also be the person who determines the broader strategic strokes that guide the business in the short and
long term.
Team
Another key consideration of a business owner is who (if anyone) to bring on board alongside them. Talent is an expensive
business asset and the financial impact of good (or poor) hires can have an enormous effect on the quality of the organization.
Leadership of a team to create synergy and ensure alignment is also of central importance and by default the responsibility of
the owner.
Communication
Along similar lines, business owners need the capacity to communicate their vision to stakeholders. This includes customers,
investors, potential hires, and partners. The ability to sell the idea itself is therefore another critical success factor for any
business owner.
Relevant Skills
Different businesses require different skills. A small business owner involved in building websites will need the core relevant
skills to create them from scratch. A small consulting group in a given industry will need extensive experience, contacts, and
knowledge uniquely valuable to other incumbents in the industry. In short, most small business owners are the primary source
of relevant skills for that particular business model (at least at first).
How This Impacts Success Rates
Combining the core importance of the business owner in the creation of the business and the variety of skills business owners
can leverage to achieve success, business owners are often enough the primary influence on a small business’ potential
success (and potential failure).
Business owners with a strong strategic ability to plan, highly developed interpersonal skills, key industry skills/knowledge, and
the willingness to take risks and be accountable are poised for the highest rates of success in small business ventures.
Going into business for yourself can be highly rewarding financially and fulfilling personally. However, entrepreneurship is
notoriously linked with failure, and in such situations the entrepreneur is usually the one left wondering where they may have
gone wrong.

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Key Characteristics of Entrepreneurs

Successful entrepreneurs have a unique set of personal characteristics, including the drive to take risks and embrace failure.
Drive and Entrepreneurship
The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself.
Therefore all progress depends on the unreasonable man. —George Bernard Shaw
Develop success from failures. Discouragement and failure are two of the surest stepping stones to success. No other element
can do so much for a man if he is willing to study them and make capital out of them. —Dale Carnegie
Entrepreneurs must be willing to accept risk and failure. The key is that when you fail, you must fail quickly and inexpensively.
Test, analyze, figure out why you failed, evolve, and iterate. That is the meaning of drive.
Entrepreneurs often possess immense focus and energy. Entrepreneurship requires extensive mental strength and
determination because, as opposed to traditional occupations, there is no right or wrong path to achievement. Competition is
intense and innovation is required to face the challenges that result from starting your own business.
Entrepreneurial Attributes That Enable Drive
Entrepreneurial drive is something of an umbrella term for the wide variety of
characteristics that compel an individual to pursue a unique and untested path
relentlessly, regardless of the failures and obstacles. The characteristics below all
overlap with drive in some way, shape, or form, to ultimately create a template for the
entrepreneurial mentality:
Vision: The entrepreneur must be able to create and communicate an easily
understandable vision of what the new venture does in order to successfully launch a
new business. This is accomplished while inspiring others to join you in your new
enterprise.
Creativity: The entrepreneur must be able to inject imagination and uniqueness into
a new business venture. It takes skill and ingenuity to create a new venture equipped
with strategies to outsmart the competition.
Focus: The entrepreneur must be able to maintain the vision of the company with
unwavering diligence. It’s very easy to get sidetracked, especially if you find it Figure 1: Characteristics of Entrepreneurs
necessary to adapt the original vision. Ironically, there are many successful
entrepreneurs who get bored easily.
Passion: Entrepreneurs must have a desire to succeed in a business venture under their own initiative.
Perseverance: The entrepreneur must be able to keep going even when faced with seemingly insurmountable obstacles.
Opportunistic nature: The entrepreneur must take advantage of an upcoming trend or unite unrelated processes to create a
unique business venture. It helps, of course, to see the possibilities before they even exist.
Problem-solving ability:The entrepreneur must thrive on coming up with solutions to complex challenges.
Self-discipline: The entrepreneur must be organized and regimented in pursuit of a successful business venture. This
includes frugality, which is knowing how to stretch every cent so that expenditures are as low as possible.
The Demographics of Modern Entrepreneurs
Due to technological aptitude, unemployment, and lack of dependents, a sizable percentage of U.S. entrepreneurs are young.
Entrepreneurs are catalysts for economic change. Research suggests that entrepreneurs are highly creative individuals with a
tendency to imagine new solutions by finding opportunities for profit or reward. The ability of entrepreneurs to innovate is
thought to relate to innate traits such as extroversion and a proclivity for risk taking.
Enabling Factors
There are entrepreneurs in all demographics and walks of life. There have never been lower barriers to entry when starting a
new company. Thanks to developments in technology, less capital than ever before is required to start a business (depending
on the industry). Moreover, advancements in engineering have allowed people to build software and Internet businesses from
scratch with minimal obstacles.
The venture-capital sector has risen from nothing 40 years ago to investing billions in new businesses today. Technology has
allowed for business to be scalable over a variety of countries and continents. Previously, scaling a new business would have
taken extensive time, focus, and capital. Now there is infrastructure in place (e.g., the Internet, FedEx and UPS, and
smartphones) that allows entrepreneurs to build a business that can be replicated in different cities globally.
Couple this with slow economic growth due to the banking collapse in the U.S. and a high number of over-educated and
underemployed people and you get a great deal of people who are drawn to entrepreneurship as a way of creating their future.
Youth
All of these factors contribute to the trend of younger and younger business owners. The tendency of young people to take
risks, coupled with the relative ease of starting a business in today’s environment, has driven down the average age of
entrepreneurs. Also, the younger generations (i.e., recent graduates) are facing high levels of underemployment as a result of
economic factors. The younger entrepreneurs also have an interest in and familiarity with technology that provides some
advantage.
Organizations have even risen to service the ever-younger, emerging entrepreneurs. The Young Entrepreneur Council (YEC) is
an American nonprofit organization that provides entrepreneurs with access to tools, mentorship, and resources that support
each stage of their business’s development and growth. The organization has several hundred members—all successful young
entrepreneurs and business owners, ages 17 to 40—including the founders and leaders of LivingSocial, Airbnb, Reddit,
College Hunks Hauling Junk, Mint.com, myYearbook, Thrillist, Yodle, Threadless, ModCloth, Grasshopper, Likeable, HootSuite,
and Blip.tv.

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Trends and Statistics of Women in Business

here are exciting things happening inside the world of female entrepreneurship. Women are now a dominant force in small-
business ownership and they are succeeding in industries that were once taboo for women. Women are not
only starting businesses, they are staying in business. Between 1997 and 2006, female-owned businesses grew at nearly
twice the rate of all U.S. firms (42.3 percent vs. 23.3 percent). During the same time period, employment among female-owned
firms grew 0.4 percent and annual sales grew 4.4 percent. In 2006, reports on women-owned (or majority owned by women)
businesses in the United States returned the following impressive statistics.
There were an estimated 10.4 million privately-held firms.
These firms accounted for two in five (40.2 percent) of all businesses in the country.
These firms generated $1.9 trillion in annual sales and employed 12.8 million people nationwide.

Recent years have seen a dramatic rise in the number of businesses owned by female entrepreneurs. As the image shows,
women are now founding businesses at a rate 1.5 times the national average; the most prevalent such businesses include
healthcare / social assistance (15.8%) and professional / technical services (14.1%).

Figure 2: Recent years have seen a dramatic rise in the number of businesses owned by female entrepreneurs. As the image shows, women are now founding businesses
at a rate 1.5 times the national average; the most prevalent such businesses include healthcare / social assistance (15.8%) and professional / technical services (14.1%).

2. CHARACTERISTICS OF A SUCCESSFUL BUSINESS OWNER

When evaluating if business ownership is right for you, it’s important to be honest with yourself about your motivations,
strengths, and weaknesses. While dreaming of being your own boss can feel great, it will likely be more difficult than anything
you have done in your career to date — and worth it!

Video 2: Characteristics Of A Successful Business Owner

Self-Motivated
Successful business owners don’t sit back and assume things will simply fall into place. Instead, they display a high degree of
self-motivation, seeking to make things happen themselves. Successful business owners are the ones that go out into the
world and look to make change happen, instead of letting change happen to them.
Self-motivation manifests itself when business owners are faced with a challenge and then work relentlessly to solve the
problems. You won’t have a boss to tell you how to prioritize your time and attention. Having an internal desire to achieve
things on your own is key to any business owner’s success.
Self-Belief
Becoming a business owner means you must be completely sure your business has a market and can succeed with your
guidance. While you may have friends and family that believe in you, you (and any partners you have) need to have a deeply
held confidence your business will be successful.

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Growth Mindset
Carol Dweck’s book, Mindset: The New Psychology of Success, lays out two different ways of thinking: Fixed Mindset vs.
Growth Mindset. According to Dweck, people with a fixed mindset believe their qualities, such as intelligence or talent, are fixed
traits. Saying or thinking things like, “I am just not good at accounting” or “I have never been much of a leader,” are examples
of a fixed mindset.
Dweck says that people with a growth mindset believe their most basic abilities can be developed through dedication and hard
work. Seeking to improve accounting skills or taking writing courses to develop a skillset is aligned with having a growth
mindset.
In the first few years of business you will be wearing many hats, some of which you have never put on before. If you don’t
naturally see an area you are currently weak in as an opportunity to improve, then you might find it difficult to grow your
business to a place where you can hire people to overcome your weaknesses.
Acceptance of Risk and Failure
Anyone who leaps into business ownership, depending on how they fund their business, is likely making one of the biggest
financial risks of their life. Even beyond overcoming the financial hurdles, entrepreneurs should accept that their ego, pride,
and morale may take a hit if things don’t go according to plan and their business fails.
While successful business owners do accept these risks, it’s important to note they don’t just rush in blindly to business
ownership. Part of what makes them successful is the research they have put into their concept, market, and industry. This
helps them accept the up-front risks and allows for better decision making while running their business. They can focus on
success and avoid analysis paralysis.
Competitive Drive and Tenacity
From the moment you open your doors, you’ll be competing — for the attention of potential customers, for market share, and
with others who want to grow their businesses. For as long as you own your business you’ll to be competing, and this is where
tenacity is key.
If you don’t have an internal competitive drive to battle the competition and the tenacity to stay with it, your company’s success
could falter. While the competitive drive is important, when it comes to the competition you will also need to be competitive with
yourself. You will be making a lot of decisions; some will be brilliant while others will fail miserably. The key will be your drive to
stay with it and overcome the missteps you’ll inevitably make from time to time.
Be Decisive and Persuasive
Making important decisions can be difficult. No decision is made in a vacuum, and they can be increasingly difficult to make
with the more partners or employees you have. When more people are involved it’s not only about making the decision; it’s
about persuading others to be excited by the decision.
Strong, Ethical Leader
As a business owner, all eyes are on you — there’s no one to pass the buck on to. It’s your job to earn respect, trust, and
confidence from your employees and then to reciprocate.
At center stage of your company, it’s not only important to be a strong leader but also to make sure you lead with ethics and
integrity. While people may be able to take shortcuts and receive temporary gains, you want your business to be sustainable.
Acting with integrity makes you a role model and sets the tone for the type of behavior that is important for business success.
Maintain Humbleness
While successful business owners do need to have confidence and believe in themselves, don’t let those traits be confused
with ego. The most successful business owners understand that they always have an opportunity to learn. They aren’t afraid to
ask for help when they encounter something they don’t know. They are the first one to ask questions and put pride aside
because they know any insights gained will outweigh “having all the answers.”
Be Flexible and Open-Minded
While successful business owners have a strong vision for their desired outcomes and the passion for getting there, there are
many unknowns along the way. Holding fast and refusing to adjust your plans to achieve your vision is a sure-fire way for your
business to go extinct. Like in the animal kingdom, the survival of your business will depend on your willingness to adapt.
Though a larger scale than most business owners will see, Blockbuster’s success and failure is a lesson to learn from. Their
failure to adapt to industry disruptors Redbox and Netflix is a demonstration of how had Blockbuster been more open-minded
and flexible; they might have been able to shift their business before it was too late.
Vision and Passion
No matter the size or scope of the business you’re interested in, it’s important to have a vision of how you want your business
to operate and how you want to serve your customers. Your vision for the business will trickle down to your employees.
Successful business owners have a passion for entrepreneurship and the life it allows them. While the classic advice of “do
what you love” is great, as long as you have an immense passion for your vision of success, you’re on the road to finding that
success.
Understanding of Basic Business Skills
As a business owner, you should expect to play a role in accounting, marketing, sales, operations, and human resources, all
while executing on your vision. Successful business owners know their areas of strength and are grounded with a general
understanding of business functions vital to running a successful company.
You don’t need to be an expert in payroll, bookkeeping, or tax preparation because there are companies you can hire to help
manage these foundational elements for you. What you do need to ensure is that those things are being taken care of
accurately.
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Video 3. Basic business skills

Building and Maintaining a Strong Peer Network
You might look at successful business owners and think “They are just naturally good at business,” but if you go ask them how
they got to where they are many will tell you stories of mistakes, fumbles, and feeling lost along their journey.
The one thing you’ll hear regularly is they had help along the way. When they needed to learn more about a skill, ran into a
challenge, or had to make a difficult decision, they had a strong peer network to turn to. It’s great if you already have one, but
for those that don’t, there are groups like Entrepreneurs’ Organization, which helps connect business owners to learn and grow
from one another.
Overcoming Fear
Last, but potentially the most important, is the ability to overcome fear. You will consistently have a voice in your head
encouraging you to quit. Beyond just accepting risk and failure, successful business owners overcome the voice in their head
and manage to control their fears. Courage in the face of fear and self-doubt allows them to keep their eye on the prize and not
give up when others might.

3. DUTIES AND RESPONSIBILITIES OF A SMALL BUSINESS OWNER

Small business owners and entrepreneurs do whatever is required to make their businesses a success. This could mean doing
everything from emptying the trash cans, to picking up the mail at the post office, to making sales calls, to changing the go-to-
market strategy.
It depends on the business and how you as the owner choose to spend your time.
Every small business owner has six key areas of
responsibility:
1. staffing and management,

2. financial,

3. planning and strategy,

4. daily operations,

5. sales and marketing,

6. customer service.

Staffing and Management

Small business owners are responsible for putting a top notch Figure 3: Small business owners
team in place to operate the business. This includes recruiting
and hiring new staff. It also means training and developing
existing staff.
Small business owners write job descriptions, provide feedback and performance reviews, and reward employees with pay,
benefits and recognition.
According to CEO, as a business grows the pressure is on. The owner’s role has to change. “Most business owners start out
doing everything. But you won’t be able to keep that up. If you want your business to grow, you’ll soon become a bottleneck if
you insist on doing it all. That’s why smart entrepreneurs hire and develop managers as soon as they can afford it. Delegation
is smart,”
Financial
Small business owners are responsible for the fiscal health of their companies. It’s up to the owner to establish a viable
business model for how the company will earn money. The owner is responsible for establishing budgets and sales forecasts
— and making sure the company meets them. The owner may actually invoice customers, collect overdue accounts, keep the
accounting system up to date and reconcile bank statements.
Above all, the owner makes sure all expenses kept in line and can be met.
“One of a small business owner’s key roles is to ‘make payroll’ each month. In fact, I should put “Chief Payment Officer” on my
business cards. It’s how I think of my main role. You have to make sure the money is there to pay everyone timely — workers,
vendors, service providers, tax authorities, creditors and yourself.”
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If the coffers get low, the owner may have to arrange for a line of credit or loan to bridge temporary cash flow issues.
Planning and Strategy
Small business owners are responsible for setting strategy and having a business plan. They establish the vision and mission
for their businesses. “Every entrepreneur should ask and answer the question ‘what do we want to be known for?’ If you can’t
do that, your business will be rudderless and could lack distinction”.
The owner also communicates the vision and mission so that employees, customers and the world understand.
As part of planning and strategy, entrepreneurs keep tabs on marketplace trends, competitors and changing customer tastes
and needs. After all, any good entrepreneur knows that you must deliver what the market wants and is willing to pay for. This is
always changing — it doesn’t stay static. From time to time, you have to update your products and services, adjust pricing or
adapt your marketing strategy to meet expectations.
Daily Operations
Small business owners are responsible for carrying out daily operations. For example, the owner of an organic food business
may have a big role in growing and harvesting the food.
But it’s important to look up from doing to see the bigger picture. That’s why smart entrepreneurs work on the efficiency and
effectiveness of daily operations.
Every company has inefficiencies and waste. Every company has processes that could be tighter. Part of the owner’s role is to
identify where that occurs and find solutions. This includes automating tedious manual procedures, or adopting new technology
to drive cost out of your bottom line. It may mean outsourcing non-core functions.
“Small business owners should network with peers. And don’t forget to attend industry events a few times a year. This is how
you discover best-in-class technologies and new operational methods. Continuous learning is key to running a business.”
Sales and Marketing
Small business owners are responsible for sales revenue and the marketing to drive sales.
Many owners, especially in the early years, also go on sales calls and help close sales. Owners may get involved in marketing,
including establishing campaigns, placing ads, doing email marketing and social media marketing.
Customer Service
Small business owners are responsible for the overall customer service experience. It starts with making sure your company
delivers a quality product. But the whole experience should delight customers.
“In the early years, it’s common for the owner to be the person answering the phone or manning live chat to solve customer
issues. Later as the business grows, smart entrepreneurs put in place a customer service organization and empower them to
solve problems.”
A big part of customer support these days is great technology that’s integrated to avoid data silos and customers feeling like
you don’t know them. A CRM system, help desk software, live chat, sophisticated phone system and auto responder emails are
just some of the solutions that can help make customers feel valued.
Ultimately, the owner must build a positive company reputation as reflected in renewal rates, repeat purchases, net promoter
scores, and online reviews and testimonials.

4. CRUCIAL SKILLS EVERY SMALL BUSINESS OWNER NEEDS

When you own a small business, you have to take on many of the day-to-day responsibilities yourself—at least in the
beginning. Having some basic knowledge across all aspects of business operations can go a long way to making your
business flourish, and ultimately turn you into a more well-rounded manager when you do eventually hire staff.

Video 4: Crucial Skills

Delegation
Many first-time business owners experience anxiety when it comes to turning over duties as the business grows. No leader
wants to be perceived as the lazy "idea guy," but there comes a time when growth is important. Leadership means focusing on
the big picture instead of hopping around the office proving you're not afraid to roll up your sleeves. Train yourself to delegate
every duty that doesn't need your authority by spending one hour each month auditing how you spend your time throughout
the day. You are not doing your team a favor by backing them up with menial tasks if it means you're not out there creating new
opportunities for them.

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Thought Leadership
A thought leader is somebody with a different way of viewing things than what is mainstream. Some leaders lead their
followers, but don’t innovate while a thought leader has something controversial to offer. It could be someone whose story,
product or ideas are not popular, but thought leaders have a very distinct thesis and message to share to motivate others.
Leadership is very important, but you must be a thought leader to operate well every day. Operations, tech, PR, writing and
marketing skills will all follow once you have the heart to innovate, motivate and share. You may be the smartest or most
talented person out there, but once your people fail under your leadership, your whole business will fail, too.
Basic Communication Skills
This might sound obvious, but the biggest and most consistent gap I see within founders and leaders is not having adequate
communication skills. A lack of communication can be a huge vulnerability for teams and organizations. As a leader, you should
lead by example and help implement a culture that thrives on proactive, open and honest communication. This should flow in
every direction and include gaining feedback from clients, partners and staff often. By not having this skill, negative sentiments
can start to grow and spread within the organization. This will eventually impact employee morale and then spread to other
aspects of a small business. A common misconception is that good communication is a natural skill. While it can be, it can also
be taught and learned.
Proactivity
The whole "get things done" mentality to ensure seamless day-to-day operations for your team almost always runs into a
roadblock that was never considered. That's because a lot of times we're somewhat reactive to this formula where a client,
vendor or customer gets angry and we put measures in to make sure that the problem never happens again. Then, we rinse
and repeat, but some changes might only work for a small fraction of situations and could make things worse for the whole.
Focusing on what could go wrong with the fixes and exercising context on what your team needs to succeed can get you much
further ahead of that issue. It makes you proactive, not reactive and gives the weapons your teams need to run better without
you needing to interfere all the time.
Financial Literacy
Nothing is more important in a business than understanding the finances. A good business owner knows how much things
cost, including things like labor, sales, etc. This is important so that you maximize cash flow and have good planning for the
future. I had a client do a special for seven years and lose money every week not realizing that the truth is in the numbers.
Numbers don't lie; they give you a real, strong understanding of the health of your business. It also tells you what direction your
business is growing in and where it needs more help. Understand your numbers! Your business depends on it.
Leadership
Companies are full of personalities and relationships. We have found that the primary thing that keeps all types of people
focused and connected is purpose. What are they all striving for? What are the goals everyone in the company is moving
towards? Everyone in the company needs to be reminded of their purpose almost every day and it is not enough to write it on
the wall. The strength of a leader could be measured by how many personalities get behind and believe in the purpose the
leader puts forth. The leaders of the company need to bring inspiration to their purpose. In light of all the things individuals in
the company do, there must be a solid, greater purpose that all employees can support.
Emotional Intelligence
High emotional intelligence is a vital skill for any business owner. Whether it is with clients, suppliers or partners, you are going
to be interacting with people all day long. Being able to perceive their emotions will help you build stronger relationships. You
also need to recognize and manage your own emotions, as owning a business is no easy feat. Being comfortable with yourself
and aware of where you stand will make decision making easier, especially under stress. With the advancement of technology
and life online, more and more jobs are pushing more technical tasks to automation and robots. This means that being
personable and having a powerful EQ are more important than ever.
Sales
Whether it's onboarding new clients, generating customers, hiring employees, bringing on investors or retaining existing talent,
all small business owners need to know how to sell. You have to know how to sell yourself, sell your products or services, listen
to your customers while ensuring you get buy-in from your employees, partners or investors. Essentially, knowing how to
persuade all stakeholders is the key to running a successful business.
Customer Service
The key to any successful business is good customer service. You can get tons and tons of customers at your business, but if
you don't provide outstanding customer service, those customers will never stick around. It's much more expensive to acquire
new customers than it is to keep existing ones. All small business owners need to know how to provide good customer service.
This includes learning how to deal with angry customers and negative reviews properly and how to listen and respond in a
timely manner. Knowing how to accept and implement feedback will allow you to go above and beyond for your loyal
customers.
Digital Marketing
Digital marketing is essential for any business today. More people than ever before have access to low-cost internet and
people rely on search engines to help them find information and buy products. A business owner needs to have a firm
knowledge of SEO, social media marketing, online advertising and more to guide the business's growth. You can hire people to
manage these aspects of your business, but you still need to be informed enough to lead your team into creating the best
digital marketing strategy for your business. You also should have the ability to track and measure the results of different
campaigns—you can only do these things by understanding digital marketing.
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Self-Awareness of Blind Spots

With all of the technology available today and the world's knowledge at our fingertips, we'd be easily conned into believing that
there is a set of apps, a suite of software or a regiment of practices that any entrepreneur could enact and see results. The true
killer app is knowledge of self, and the ability to realize when you need help. We want to pile up the tech, putting our problems
on a dashboard and whisking our worries away with a widget. With each Frankenstein fix to our workflow with tech or a new
strategy plan, the unforeseen issues compound. The best basic skill to sharpen and refine is the ability to realize your blind
spots. Then, seek help from experts you actually trust and listen to that. It can help you see clearly.

5. ADVANTAGES AND DISADVANTAGES OF SMALL-BUSINESS OWNERSHIP

Owning a small business has its advantages and disadvantages. Each entrepreneur must weigh the pros and the cons
carefully and decide whether or not the risk is worth the reward.
Advantages of Small-Business Ownership
Independence. Entrepreneurs are their own bosses. They make the decisions. They choose whom to do business with
and what work they will do. They decide what hours to work, as well as what to pay and whether to take vacations. For
many entrepreneurs the freedom to control their destiny is enough to outweigh the potential risks.
Financial gain. Entrepreneurship offers a greater possibility of achieving significant financial rewards than working for
someone else. Owning your own business removes the income restraint that exists in being someone else’s employee.
Many entrepreneurs are inspired by the mega-millionaire entrepreneurs we see today, such as Steve Jobs, Elon Musk,
Jeff Bezos, and Mark Zuckerberg.
Control. It enables one to be involved in the total operation of the business, from concept to design to creation, from sales
to business operations to customer response. This ability to be totally immersed in the business is very satisfying to
entrepreneurs who are driven by passion and creativity and possess a “vision” of what they aim to achieve. This level of
involvement allows the business owner to truly create something of their own.
Prestige. It offers the status of being the person in charge. Some entrepreneurs are attracted to the idea of being the
boss. In addition, though, there is the prestige and pride of ownership. When someone asks, “Who did this?” the
entrepreneur can answer, “I did.”
Equity. It gives an individual the opportunity to build equity, which can be kept, sold, or passed on to the next generation.
It’s not uncommon for entrepreneurs to own multiple businesses throughout their life. They establish a company, run it for
a while, and later sell it to someone else. The income from this sale can then be used to finance the next venture. If
they’re not interested in selling the business, the goal may be to build something that can be passed down to their children
to help ensure their financial future. One thing is sure: In order to fully reap the financial benefits of a business venture,
you need to be the owner.
Opportunity. Entrepreneurship creates an opportunity for a person to make a contribution. Most new entrepreneurs help
the local economy. A few—through their innovations—contribute to society as a whole.

In addition, small businesses have certain advantages over large businesses. Flexibility, generally lean staffing, and the ability
to develop close relationships with customers are among the key benefits of small businesses. The digital communication
revolution has significantly lowered the cost of reaching customers, and this has been a boon to small startups and big
businesses alike.
Disadvantages of Small-Business Ownership
As the little boy said when he got off his first roller-coaster ride, “I like the ups but not the downs!” Here are some of the
downsides to owning a small business:
Time commitment. When someone opens a small business, it’s likely, at least in the beginning, that they will have few
employees. This leaves all of the duties and responsibilities to the owner. Small-business owners report working more than
eighty hours a week handling everything from purchasing to banking to advertising. This time commitment can place a strain
on family and friends and add to the stress of launching a new business venture.
Risk. Even if the business has been structured to minimize the risk and liability to the owner, risk can’t be
completely eliminated. For instance, if an individual leaves a secure job to follow an entrepreneurial dream and the business
fails, this financial setback can be hard to overcome. Beyond financial risk, entrepreneurs need to consider the risk from
product liability, employee disagreements, and regulatory requirements
Uncertainty. Even though the business may be successful at the start, external factors such as downturns in the economy,
new competitors entering the marketplace, or shifts in consumer demand may stall the businesses growth. Even entrepreneurs
who go through a comprehensive planning process will never be able to anticipate all of the potential changes in the business
environment.
Financial commitment. Even the smallest of business ventures requires a certain amount of capital to start. For many people
starting small businesses, their initial source of funding is personal savings, investments, or retirement funds. Committing these
types of funds to a business venture makes them unavailable for personal or family needs. In most cases where a small
business receives start-up funding through a loan, the entrepreneur must secure the loan by pledging personal assets, such as
a home. Risking the equity in one’s home is a financial commitment not all entrepreneurs are willing to make.
6. REFERENCES
1. "Profitable Tactics Using Internet Marketing For Small Business". 25 June 2015.

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2. "The Surprising Demographics of Small Business Owners". Small Business Labs. Retrieved 3 April 2018.

3. *Healers, S. Purdy, D. Stanworth, C. Watson, A.2004. Franchising as small business growth strategy: A resource-based

view organizational development: International small business journal,22(6), pp 539-599

4. Beaver, G. 2001. Small business, entrepreneurship and enterprise development. Financial Times, Prentice Hall: Harlow.

5. Berry, A. 2008. The role of the small and medium enterprise sector in Latin America and similar developing economies.

6. Hope, John B.; Mackin, Patrick C. (2007). "The Relationship Between Employee Turnover and Employee Compensation

in Small Business". Small Business Research Summary. 308: 1–44.

7. Richbell, S. M.; Wardle, P.; Watts, H. D. (2006). "Owner-managers and Business Planning in the Small Firm".

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