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Is Owning a Business Right for You?

owning a business

When Rick was laid off from work in 2010, along with job hunting, he spent a good six months looking into the idea of owning a business with his best friend.  The four of us (Rick, his buddy and us wives) looked at tons of potential business prospects.  We looked at franchises in the automotive and food services industries.  We looked at existing retail businesses.  We looked at starting our own retail business.  We looked at existing businesses in the service industry.

Suffice it to say, we spent many hours researching every detail of a good many businesses, getting our financials in order (we had no debt at the time aside from our mortgage) and considering what type of business we could own that would feed our families and fit in best with our husbands’ gifts and talents.

It was a long, arduous task that cost a bit of money in travel and research expenses, but it was worth every dime, because in the end, Rick was able to figure out that, at that time, owning a business wasn’t right for him.  At that stage in his life, he was better off being an employee and he knew it, but only because of the extensive research he’d done on owning a business.  Here I’ve listed some of the questions you might want to ask yourself before you jump into business ownership.

When it Comes to Owning a Business, Choose Something You Enjoy

If you’re set on owning a business, it’s crucial to be certain you’re doing something you like.  When it comes to self-employment, John and his wife Nicole can attest to the fact that if you’re going own a successful business, you’ll likely spend a ton of hours each week building and maintaining it.  With that being the case, it’s imperative that you choose a business you’ll know you like doing, or that you can afford to hire someone to do for you who also enjoys what you’re doing.

In our case, one business we looked at seriously for a good long time was the concession business.  Food concessions at fairs can bring in some serious cash, and if you’ve read my blog, you’ll know I love to cook, so this seemed like a good potential business for a lot of reasons.  However, Rick and I both worked in food service when we were younger, and as we sat and thought about the prospect of being stuck in a trailer with deep fryers all day, we realized that this was NOT the ideal way for us to spend our days, and we chose to let the business prospect fall by the wayside.

Business ownership requires a lot of work, and you’ll be much happier if you’re doing that work in a business arena that is motivating and exciting to you. (Editor’s note: Laurie’s dead on here. If we were doing something we didn’t enjoy I know we would’ve thrown in the towel a long time ago.)

Make Sure You Have a Well-Rounded Team

Another crucial aspect to discovering whether or not business ownership is right for you is to analyze your own personality and the personality of any potential business partners.  When we were looking for businesses with our friends, we figured out that we all had certain personality traits that would do well in business: Rick is a detail-oriented person, his buddy is a big picture guy.  I’m stellar at customer service and the wife of Rick’s friend is great at accounting.  These are all qualities that are needed, either by the owner or by someone the owner hires, in order to own a business successfully.

When considering owning a business, it’s imperative to make sure that all of the bases needed to give that business the best chance for success are covered.  Missing even one crucial element, such as organization, can take even the most promising of businesses down real quick.

The Right Attitude

One particular business that looked promising to Rick and his friend was a business that would’ve been very complimentary to the auto insurance industry.  As part of his research, Rick called our insurance agent, who we’ve known for years, and asked his thoughts about the business.  Jeff gave him a thumbs up on the potential success of the service offered, and after that, he gave Rick a very crucial piece of advice.  He said “My insurance business is doing very well now, but when I first started out, it was hard.  I spent the first five years knocking on doors, 12 hours a day, 6 days a week, and most of the people turned me down.  Those were the toughest 5 years of my life.”

That was the one piece of information Rick needed to hear in order to decide that, at least at the time, business ownership wasn’t right for him.  Soon after, Rick got a job at another company in his field, and it’s been a great experience for him.  He likes his work, he’s challenged in his job and he’s making more money than he’s ever made before.

Our experience taught me that owning a business isn’t the ideal option for everyone, but it does work out well for many people.  Just make sure, like we did, that you’ve covered all of your bases and done all of your research before you take the plunge.

 

Have you ever thought about owning your own business or are you already self-employed? What process did you go through in evaluating whether or not taking the plunge was right for you and your family?

 

 

 

Photo courtesy of: Simone Lovati

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Laurie is a wife, mother to 4, and homesteader who blogs about personal finance, self-sufficiency and life in general over at The Frugal Farmer. Part witty, part introspective and part silly, her goal in blogging is to help others find their way to financial freedom, and to a simpler, more peaceful life.

27 Comments

  • I’ve always thought that eventually I will own a business full-time. At this stage in my life, though, the consistent income and benefits from my job are what my wife and I need, not to mention the fact that I’m gaining some extremely valuable skills and experience that should benefit a small business if I do decide to start one.

    My best friend and I for years have considered various small business ideas, and have even started a few. For one reason or another, none worked out. Keep in mind this was during my high school and first couple years of college. I don’t think starting a business with a partner is a good idea. If needed I would bring on partners for small chunks of equity later on, but not initially.

    • It’s interesting what you say about not thinking starting a business with a partner is a good idea. One of the reasons we keep scrapping our biz ideas with our friends is that, to a certain extent, we don’t want to take a chance on losing the friendship because a biz deal went wrong. And so the discussion goes…..

  • Dave Lalonde says:

    My family and I are currently running our family business, Auto Credit Express that we have had the pleasure of watching it flourish in the past 10+ years. We have an amazing team here and because of that, you can say that our environment here is very family-friendly. As Senior Vice President, it really is rewarding to hear the stories of the people we have helped, whether the consumers, our employees, or the organization we do charity for. That, for me, is the best part. It was the best decision for our family and there has been nothing but good news since.

    • Dave, that’s awesome!!! We would love to own a family-run business some day. Great to hear that success in this area is possible. :-)

      • Dave Lalonde says:

        Thank you! I really appreciate it. I encourage you and your husband to give it a try when you both are ready. It’s a lot of sacrifice and hard work, but it’s well worth it if you do it right!

  • Kudos to you guys for doing extensive research before just jumping in! Boy, you’d really hate to find yourself in a spot where you’d sunk thousands of dollars into a business and then just two years down the road you hate it! It sounds like it was well worth your time to thoroughly research and evaluate that.

  • Yup self-employed, but I was laid off so I was thrown into the fire and not prepared at all. And it’s been tough as well. Unlike John and Nicole, what’s even tougher is I don’t love what I do. I do it well and can tolerate it more than other times, but I agree having a passion for something will make it WAY easier! I think you both were very smart in weighing every single pro and con!

  • Owning your own business is definitely not right for everyone. I think that people initially make the decision on a whim and then they get burdened by all the hard work and struggle to keep it going. I love having my own business because I am absolutely passionate about what I do. I am borderline obsessive about helping others with money so despite the fact that I have never worked harder in my life, I have never had so much fun and gotten so much enjoyment out of the hard work.

    • Shannon, I totally agree about people going into biz on a whim and then getting overburden by the work. Business owning is awesome for those who are prepared and passionate about their business, as you are. :-)

  • Lauren says:

    My husband hopes to own his own business eventually. I freelance, so technically I’m self-employed, and it definitely isn’t for everyone! It takes a lot of hustle and energy, and I can imagine running a bigger business takes 10x more effort and energy.

    • I agree, Lauren! Even with freelancing, you need to have the motivation to find and do work, even on the days you don’t want to, and it’s that kind of get up and go that business owners in all sectors need.

  • I never thought I would end up self-employed, but here I am! I ended up here because my side hustle started earning more than my full-time job. I wouldn’t change a thing. I have always liked doing things my way.

  • I think doing research before taking the plunge is essential. Last year a friend of mine decided to partner up with another person in a joint venture. They both do the same thing and are self employed but they wanted to join forces and make more money. Unfortunately, they took the plunge without really thinking about all the issues that could arise. In the end it was a mess and the big problem was lack of communication and organization. They dissolved the JV a month later.

  • Michelle says:

    I never even thought about having my own business until around one to two years ago. Crazy how quickly things can change. I now have my own business and I wouldn’t change a thing, but I know others who prefer to work for others.

    • Michelle, yours is another great example of a successful business-owning venture. I’m with you, I love being in charge of my biz and my day, but Rick really likes leaving his work and the responsibility that goes with it at work, although I could see him owning a biz someday if it was the right opportunity.. :-)

  • The amount of hours I put into my blog before seeing a penny was considerable. If I didn’t love it and feel passionate about it, there’s no way I would’ve turned it into a profitable business.

    • I agree, Stefanie! It’s amazing how much time and energy blogging can take, like you said, even before you see a dime. To put in that many hours before seeing any money definitely takes a subject you are passionate about.

  • E.M. says:

    Valuable tips here, Laurie! Eventually, I would like to run something on the side with my boyfriend. I think it could potentially be more enjoyable that way, and we tend to complement each other’s traits. I would rather take that route simply because there are times where I’m involved with blogging and he’s off doing his own thing. I like working as a team!

  • Hey Laurie, I took the plunge about a year and a half ago. However, it took a lot to get there. I planned, planned, planned, and even when I started my business, I still maintained full time employment. It actually wasn’t until the first of this year that I actually quit my job. Sure, I could have done it a bit sooner, but I’m glad I waited. It gave me the savings I needed to get through the bumps in the beginning of the road.

  • debt debs says:

    My husband has his own business and is self employed. He works on contract for another company. No benefits, long (but flexible) hours. Plus he has to pay for his own mandatory training to keep his designation current, costly liability insurance and fees for services used from various agencies. His income is variable too. If work demand is down, then he doesn’t have much work and consequently much pay. I would prefer for him to work for a company, and he’s tried but nothing yet. I’m wondering if they think he is too old. Other than the flexible hours, the only good thing about it is he can write off a lot of expenses including prorated house expenses on his income tax.

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