Advantages and Disadvantages of Small Business Startup

Establishing a small business startup is at its best time as the Internet capability for business transaction and promotion is also being maximized through global connectivity. However, before jumping into the bandwagon of micro venture, know the pros and cons of this type of business first, so you’ll know if it is the best decision for you or not.

Small Business Startup Advantages

1.      Low-capital venture

The capital for this type of business is very minimal even if you are offering your own product. It is even lower if you are basing your business on a service which mainly relies on human-capital or if you are consigning. However, since this is a small venture, do not expect growth rate as fast as its bigger counterparts.

Your lack of resources might take a toll on your inventories/manpower should there be more clients willing to buy your products or avail your services, more than what you can actually offer. For such cases, they are already considered lost transactions for your business.

2.      Low-risk venture

The smaller the capital is, the smaller the chance of losing money. This is not always true, but it stays as it is most of the time for small businesses. As you are micromanaging your business, there is also smaller room for error and oversight. It is also easier to handle a problem in this set-up because you have longer arm-reach due to a tighter setting or organization.

3.      High flexibility

A small business tends to have more flexibility in offering its product and service because it has a more lenient structure, both in finance and operational management. While a big company has multilevel organization, which makes flexible offering almost possible, a small business venture has more room for adjustment as the owner has the sole discretion to do so.

There is not much documentation to problem, so if you feel like giving extra service (no pun intended) or freebie to a client, just go and take charge.

Small Business Startup Disadvantages

1.      Short-term venture

The model of a small business startup is not meant to stand the test of time. This is more seasonal (which is in a way, also an advantage) and may not have uptime all year round.

Partnership among businesses is important to stay relevant and extend their reaches to more market segments, and because you do not have this, there is a high risk of going out of business during non-peak seasons.

Nonetheless, this is evitable should you stay updated and consistently expanding with consistent innovation – a tough job for a single person.

2.      Time consuming

You probably thought of this already, but just to confirm – yes, you likely have to say goodbye to nine-to-five working hours until your small venture picks up the pace. Having your own business is a very time-consuming activity because you have very minimal support and hands to fulfill the job. The good thing is that you have all the fruits of your endeavor for yourself once this venture succeeds.

3.      Multitasking job

The business itself is a multitasking job. You are burdened with all tasks – planning, delivery, inventory, marketing, selling – name it! This is not as big a problem for single individuals, but this may take a big toll on people with families to take care of aside from their small business startup.