Why running your own business is not for everyone
- Jeanine Hoekstra
- 12 Jun 2023
- Edited 22 Nov 2022
- 3 min
Many people dream of starting their own business. Managing your own time and deciding what jobs to take on. It sounds tempting, but is running your own business really all it is cracked up to be?
More than 4,500 business owners register with KVK on a weekly basis. While there are many benefits to running your own business, there are also things that can dampen the fun. We have listed 9 of them below.
1. Working 24/7
Working 40 hours a week? Working part-time? These terms are not part of the vocabulary of the average business owner. You can be certain that setting up your own business takes up more time than a full-time job. Your work never ends: customers or clients will call you outside office hours and expect you to respond right away.
Research shows that many independent business owners regularly experience stress (in Dutch). If this stress becomes overwhelming, you run the risk of burn out. The implications of this – particularly the financial ones – are substantial. You can no longer meet your commitments to your clients or customers, and may even lose income.
2. Iron discipline
We have all been there: after a busy and fun weekend, your alarm clock lets you know it is morning. However, as an independent business owner, you are not required to attend early morning meetings. So, who or what is keeping you from hitting the snooze button? As an independent business owner, you must be disciplined enough to start work on time.
In some fields, you obviously have to deal with tight schedules, for example, because a customer is expecting you. But in that case, you will need that iron discipline for something else – for example, your administrative records, which will be waiting for you after a long day. In those cases, it is very tempting to procrastinate.
3. Waiting for your money
Payment reminder here, warning letter there. Non-paying customers and clients greatly cause irritation and stress to business owners. As an employee, you receive your monthly salary in your account. It is very straightforward, and you are certain sufficient funds will be in your account to cover the monthly payments.
If you run your own business, you will often need to chase your own money. Even knowing that you work round the clock, some clients and customers have no problem making you wait for your money for many weeks.
And even once that one bill is finally paid, you may find that your income is not sufficient to cover your fixed expenses. In any case, doing business mainly involves making investments at the start, in both time and money. If you are doing things right, you will eventually start earning money, but not all business owners succeed.
5. Responsible for everything
One thing that many new business owners overlook is that you will be faced with mountains of work. And some may not be in your wheelhouse. This includes creating invoices, filing tax returns, designing a website, creating content for social media, handling customer service, and so on.
As a sole proprietor, you bear the full responsibility for your business, including tasks you do not like. You can jobs you may be less good at, but you probably cannot afford this. Especially at the start, you will end up taking on most of the work.
6. Time costs money
Manage your own time is seen as one of the biggest advantages of owning your own business. While nobody tells you what to do, you should take into account that all your time costs money. Are you sick and are running a fever? For entrepreneurs it can mean they have to continue working, rather than spending the day in bed. Otherwise you will not make any money.
The same goes for holidays: you will not be the first business owner who is afraid to take time off. Especially when you first start out, it is hard to turn down work. After all, who will guarantee that you will still have enough work six months from now?
Managing your own time and directing your own business gives you a lot of freedom. You do not have to deal with unpleasant co-workers who always criticise your exciting new plans. Still, that critical viewpoint can be useful, as feedback keeps you on your feet and enables you to keep developing.
As a new business owner, you may also miss having co-workers. Especially when you are just starting out, you will run into issues you may not have any experience with yet. You also need to deal with tough and demanding customers, without having anyone nearby to give you pointers or against whom you can vent your frustration.
8. Substantial risk
An entrepreneur’s existence is risky, and not only in terms of income. Unless you make arrangements, you will not accrue any pension benefits, and will not have any social safety net if you get sick. Obviously, you can save for your own retirement and there are even favourable terms available, but you will need to make all the arrangements yourself.
Insurance for business owners costs money. The amount you pay in premiums depends on the risk to which you are exposed. A nail stylist, for example, is less at risk of becoming disabled than, say, a builder. In addition, you will run risks that people in paid employment are simply not exposed to, such as damage to your building or inventories. Then there are legal disputes relating to unpaid bills and other issues.