Low start-up capital
The positives of small businesses start with low start-up costs compared to medium and big business... Sometimes a few thousand are enough for a startup, but most often the amounts reach 2-3 million rubles. For example, you can estimate the size of the start-up capital in a small business by franchise:
- Real estate agency "Etazhi" offers a franchise with investments from 250 thousand to 3 million rubles.
- The cost of the Beer & Co franchise is 350 thousand of a lump-sum contribution, that is, payment for the franchise itself, and from 1.9 million rubles of investments.
- Jelly Shots Franchise Investment - lump-sum payment from 150 thousand, royalties - monthly deduction - from 3 thousand, starting capital from 100 thousand rubles.
Entrepreneur Anna Kukshtel spent about 1,000,000 rubles on starting a business and fully recouped the investment in 2 years. Here's what she says about her experience:
"Because initially, I did not set a goal to open point of sale with fruit bouquets, the online store was supposed to be the main source of sale and, so to speak, the face of our company.
A detailed TK was written, according to our target audience, goals and objectives that the site should solve. At the same time, I was looking for premises for production. A special room was needed where one could store fruits and collect bouquets from them.
The start of the project cost about 1 million rubles. This money went to the purchase of equipment, rental of premises, salaries of employees, website development and, of course, advertising "
Small businesses have access to low-cost promotion methods, for example:
You can also promote products or services with little or no budget using guerrilla marketing - for example, branded stickers, business cards, bags, bookmarks, T-shirts, and other items with a company logo.
Some people spend up to 10,000 rubles on promotion and at the same time get a lot of clients. Here's an example:
“In the first month I applied for a tax individual entrepreneur, got an outsourced accounting department, made an agreement with a friend to postpay the site, set up Yandex.Direct according to instructions on the Internet. Clients began to call, collected preliminary orders for wholesale and made shipments. Everything took about a month, I spent 7 tr for the start. and paid off in a month "
“Now about the process itself: submit the documents, ask to check the registration (just do not submit everything on the last day, otherwise you may not be in time). We handed in the final version 20 minutes before the deadline for applications (nervous). Then the documents are checked, and they call you back and say whether you have passed to the next round or not. We passed, the documents were in order. Then we are told when and where to come. We come and defend our business plan. It looks like defending some kind of diploma. You talk about your business, you are asked questions. The main thing is confidence and communication of a huge social significance for the city. Further, the commission deliberates and distributes the aid fund (in 2016 there were only 200 thousand, in 2017 it was already 1.5 million). We asked for 148,500, but we were only given 50,000. The rest of the money was divided between the animal shelter and social project for disabled children. After the money was received to the current account, calls from the administration immediately began with the requirement to report the expenses. Therefore, we do not think for a long time, but we transfer them to the bank account to buy a site and bring supporting documents to the administration. "
Mistrust of banks
In theory, there are many small business lending programs in Russia. In practice, it is difficult for entrepreneurs to get a loan on favorable terms and with a low interest rate, because they need to prove to the bank their high solvency. The lower the income, the more difficult it will be to pay on the loan, the higher the interest rate on it. On average, the interest rate is slightly lower than the rate on consumer loans, but still high - for example, Sberbank offers small businesses loans with a rate of 11% per annum and for a period of up to 180 months. Tochka Bank issues a business advance with a commission of 10% or an overdraft with a rate of 21-25%. Tinkoff offers loans with a rate of 12% per annum or 1% per month.
Most banks only issue loans to companies that have been operating for some time - from 3 to 12 months. Those who just want to open their own business can also get a loan, but it is much more difficult to get it. For example, if the business already exists, it is enough to provide constituent documents and securities confirming the yield. If you are just starting your journey, you need to draw up a competent business plan, confirm your solvency or leave a deposit, and prove the success of the business plan.
Takeover threat
The giants seek to monopolize the market, so they can “absorb” small businesses. Smaller companies find it harder to resist outside influence. The entire volume of M&A - mergers and acquisitions - is clearly visible in: according to his data, in 2014 alone, there were 513 mergers and acquisitions worth more than $ 48,000 million.
Lack of professionals in the team
Due to the small investment and low income compared to large companies, small businesses cannot afford professionals in a narrow field. Most often, enterprises employ specialists with little work experience, or those who have to be trained from scratch. Leadership positions are also often occupied by those who do not have serious experience. Therefore, the performance of employees in a small business is usually lower than it would be with experienced professionals and a manager.
What other advantages and disadvantages of small business do you know? Share your opinion personal experience in the comments - we will be glad to have a fruitful discussion.
For most people, being hired is the only way to make money. Money... But there are those who chose an alternative - they opened their own business. With proper planning and running your own business, you can qualitatively improve your life.
The advantages of being your own boss are obvious to those who are not afraid to take responsibility for their own well-being. Here are 10 reasons that fully reveal the benefits of your own business.
1. Earnings
By working for hire, we can carry out our duties without much motivation. When we work for ourselves, the effectiveness of results, and therefore profit, depends only on us. We know that no one will do our work for us.
This teaches us composure, punctuality, responsibility. The more effort and time we put into work, the more profit we get. All that earned is ours. No one will deprive the premium and deduct the shortfall from the salary. Income depends on our personal and professional qualities.
Natalya Storozheva, head of the Perspektiva business and career center, says: “I believe that my salaries, as a business leader and my employees, are paid by clients. They are much fairer than any bosses and evaluate our recruiting work in terms of benefits for their companies. And repeat customer orders are a reward that we receive as a reward for high-quality and hard work. "
2. Ability to do what you love
The benefits of owning a business will not be complete without it. Because we choose the business niche that we like. The case should be interesting, first of all, for ourselves. This will allow you to do the job well and enjoy your workflow. The absence of bosses and harmful colleagues gives a good mood and has a positive effect on performance.
Natalia Storozheva says: “Working for yourself gives you the opportunity to express yourself in different types of activities: management recruiting agency, HR consulting, conducting seminars and trainings, speaking at various business events, writing articles. The ability to embody a variety of interests and, from time to time, change the field of activity, protects me from professional burnout and opens up new opportunities for development. "
3. The ability to improve yourself
If we work for ourselves, we are looking for ways and opportunities to improve knowledge, since this is very important for the development of the business. There are many ways to improve your skills in a specific area. You can read, search for information on the Internet, attend trainings, participate in webinars. New knowledge will help you better understand important points business.
Natalya Chukhrova, coach, comments: “When working for ourselves, all attitudes and values that we carry through life are tested for strength. Here you will experience the function of self-control, and creativity, and faith in yourself, and trust in others. You will be able to look at yourself from the outside and see for yourself all the strengths and growth zones. Test your speed of decision and depth of approach, feel the complex of emotions and taste the taste of personal victory. In hiring, all this is often hidden behind a veil of responsibilities, regulations and incomprehensible processes. Here you are building your own world, but only you are responsible. "
4. Time for yourself and your family
You no longer need to ask your superiors for leave if a child suddenly falls ill or pipes burst in the apartment. You can arrange yourself a day off whenever you want and go on vacation at any time of the year. You yourself plan your work process, so you have more time for your family and for your interests.
5. You are the boss
Moreover, both for themselves and for their subordinates. There is no need to hire those who dislike you. You yourself define your environment and assign responsibilities for each employee.
Natalya Storozheva comments on it this way: “Being the sole boss is a great advantage, any decision can be made independently and autonomously. If you are a hired employee, then there are situations when it is more profitable and more convenient to refer to the "evil leadership", but working for yourself will not provide you with such an opportunity. "
6. Become free from restrictions
For many, the advantages of their own business are, first of all, the presence of freedom and the absence of borders. All companies have established rules for staff: dress code, break time, schedule, job duties... Working for yourself eliminates the presence of rigid frameworks and restrictions. Naturally, you have responsibilities - no one canceled them. But you can solve business issues when it is convenient for you.
Ekaterina Fedyanova, business mentor: “By choosing independent business once, you can’t refuse. Working for yourself is a cool, exciting world of opportunities to realize yourself and your destiny, new meetings and a new, different life. Yes - precisely the purpose, and not just the way of making money. "
7. The right to choose an idea for a business
You decide what you want to do. Not interesting ideas to start your own business? Refer to the franchise. By purchasing a franchise, you will save time and money. At the same time, you will receive a sustainable business model, a unique product, and favorable conditions. You will reduce your risks and get a lot of advantages over your competitors.
8. Become self-sufficient
Now there is no need to please everyone and everyone. You know your worth, confidence becomes yours business card... Work brings pleasure, nervous tension and irritability go away. Working for yourself is an opportunity to assert yourself and see new horizons. Now there is something to strive for, you see the goal and go towards it with confident steps.
“The ability to choose clients and work with companies that you consider interesting and promising allows you to build your own“ ecosystem ”in business. In my opinion, this significantly reduces stress levels and greatly affects productivity, ”says Natalya Storozheva.
9. Dream fulfillment
Always dreamed of going on a trip to another country, or even changing your place of residence? This is possible, it is only important to build your business correctly. You will go on a trip for several months, but your income will continue to grow. Management is real.
10. Improving living standards
Self-employed people are often on a tight budget. They have to plan a family budget and limit themselves in many ways. By creating your own business, you will raise the standard of living, you will be able to give your children a good education. Of course, this will not happen immediately. It will take time and effort for the project to start making a profit. But it's worth it!
Having started your own business, it is important not to stop. A good attitude and focus on results will pay off. It can be difficult in the beginning, difficulties will arise. But they are all surmountable, if you believe in your success and act.
Galina Khvostova, an expert on increasing sales, says: “When you work for yourself, your salary depends only on you. So is the speed of making money. You no longer have to go with outstretched hand to the authorities and beg for the bonus that you honestly earned. At the same time, listening to the answer "there is no money, but you are holding on." If you want more - turned on the head, strained - got it. "
The advantages of your own business are various ways out to a new level of life. To achieve results, you have to work hard and hard, come up with new ideas. Working for oneself is always a competition, both with oneself and with competitors. The result depends on you, so you need to act and never stop there.
Having your own business can be one of the most rewarding pursuits of your life. Like all good things, there are pros and cons. For some people, having their own business is the only way to earn money, according to others, working well in a hired job.
People are all different and although they may have similarities, no two people are alike. You can take two people.
One wants to work eight hours and return home so that there are no worries and there is no desire to create something, at the same time the other person does not want to work in a hired job and wants to open his own business, keep everything under control and additional worries do not scare him ...
Both of these scenarios are equal views of life. You should not be in an uncomfortable work environment, or you will be unhappy and stressed. Make sure you choose the right environment for yourself.
Pros and cons of owning a business
Let's take a look at pros and cons of owning a business .
Pros:
- You control the process, directing your business on the right track
- You can create your own work environment
- You are the leader
- Less stress (once you've built a well-performing business and have full control over it)
- You Can Manage Your Time Better To Take Care Of Your Personal Life
- You have no limit on how successful you can be.
- You have no restrictions on the amount of income, how much you earn, it all depends on you
- You can run the business however you want
- You can hire people to solve issues that are tedious for you or something that needs to be done, but you do not like to do it.
- It is prestigious - own successful business
- You gain business knowledge and experience that you can use in your life
- You have more freedom
- Financial benefit
- Flexible hours (in some cases)
Minuses
- If there is a big problem, your business may collapse and there is no one to blame but yourself, this is your business, and you are at the helm.
- At the initial stage, you will need a lot of time and effort.
- There will be financing problems if the business is not stable
- You may have to recycle a lot
- Considerable investment may be required: time and money
- You are not paid for overtime
- You must be able to adapt to a rapidly changing situation.
- From time to time, be in limbo
- You cannot just work eight hours and go home, if there are problems or important unfinished business, this is your job.
- Increased responsibility
- There is no guarantee that your business will be successful.
- Increase in liabilities
- You may feel lonely when you start a business.
- If you created a business wrong, you will work 16 hours a day, not a business that should work itself
If the thought of starting your own business does not leave you and if you are not afraid of the disadvantages listed above, then starting your own business can be the right decision... If thoughts of great responsibility, problems, overtime work, lack of constant income, scare you, in this case, your own business is not for you and it might be better for you to think about improving the current situation at your work.
Whether or not to be the owner of your business is up to you, this is your decision and only you can make it. Take time to research and reflect on what's best for you. I really liked one saying by John Maxwell: "You can live your life the way you want, but you only live once!"
Actions and steps:
- Consider the pros and cons in the above list and decide which set is more relevant to your own personality. Feel free to add more pros or cons, do as you see fit.
- If you decide to start your own business, carefully study all the shortcomings and prepare for them in advance, what you will need to do if they arise, while you create your own business.
Assessment of the pros and cons for starting your own business:
- Are the pros good enough for me?
- There are downsides, but this is nothing compared to future prospects, or are you not ready to take risks?
Any own business or business develops in three main areas: income generation, freedom of decision-making, and risk (often unjustified).
In the dashing 90s, when the legal field and the concept of law as such, and work on state enterprises there was practically no country in individual entrepreneurship a large number of people poured in. Among them were people with higher education, and sometimes with several higher educations. Many have managed to develop their business quite well, largely thanks to just higher education... According to statistics, the share of such businessmen in Russian business exceeds 80%. That is Russian businessman the most educated in the world. But this is if we talk about history and statistics.
Now about the benefits of your own business. Despite the fact that business in Russia is conducted in rather unfavorable conditions (corruption in all branches of government, difficulties with access to international markets), it must be admitted that Russian businessmen are gradually gaining their place in the international arena.
Let's not forget that business, first of all, is a combination of excitement with an almost complete absence of rules. And the Russian person doesn’t have enough excitement!
Also, the advantage of your own business can be considered the ability to freely and independently of anyone make decisions and implement them. Control over the implementation of these decisions also lies with you, there are no bosses and leaders dictating their will.
And finally, if you are a creative person, then better way realize your potential than in own business, simply not to be found, you can outsource Accounting services and develop your business.
And now about the disadvantages. Risk, and given the realities of our Motherland, a big risk, an integral part of any business, especially your personal.
Starting your own business, you need to be prepared for the fact that a stable income may not be very stable. There are many factors influencing this: the crisis has woken up again and is knocking on our doors, some official suddenly needs your financial assistance, suppliers have left to rest in the Maldives with your money, and so on.
And the main drawback is that your own business mercilessly steals your time for communicating with loved ones. You just live in your company, and not at home, in your family.
And one more important detail - all your financial mistakes will be compensated out of your own pocket.
But, in any case, independence is good, especially if it is financial.
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Small business has a number of advantages:
- More quick adaptation to local economic conditions;
- · Great freedom of action for small businesses;
- · Flexibility and efficiency in making and implementing decisions;
- · Relatively low costs in the implementation of activities, especially management costs;
- · A great opportunity for an individual to realize his ideas, to show his abilities;
- · Lower need for initial capital and the ability to quickly introduce changes in products and production processes in response to the demands of local markets;
- · Relatively higher turnover of equity capital, etc.
For example, a report by the International Labor Office notes that small and medium-sized enterprises have significant competitive advantages often require less capital investment per worker than large enterprises, widely use local material and labor resources.
Small business owners are more prone to saving and investing, they always have a high level of personal motivation to achieve success, which has a positive effect on the overall activity of the enterprise. Small businesses are better aware of the level of demand in local (local) markets, often goods are produced by the order of specific consumers, provide a means of subsistence for an employee. Small businesses contribute to the employment of more workers than large enterprises, thereby contributing to the training of professional personnel and the dissemination of practical knowledge. Small and medium-sized enterprises, in comparison with large ones in individual countries, occupy a dominant position, both in terms of number and specific gravity in the production of goods, performance of work, provision of services.
At the same time, small businesses are characterized by certain limitations, among which the most significant should be highlighted:
- · A higher level of risk, therefore, a high degree of volatility in the market position;
- · addiction large companies;
- · Shortcomings in business management;
- · Weak competence of managers; increased sensitivity to changes in business conditions;
- Difficulties in borrowing additional financial resources and obtaining loans;
- Uncertainty and caution of business entities when concluding agreements (contracts), etc.
Of course, shortcomings and failures in the activities of small businesses are determined by both internal and external reasons, the conditions for the functioning of small businesses. Experience shows that most of the failures of small firms are associated with a lack of management experience or professional incompetence of the owners of small and medium-sized enterprises.
In regularly conducted surveys among entrepreneurs - participants in small businesses in the United States, the main reasons for failure: their activities are most often cited as:
incompetence;
unbalanced experience (for example, an experienced engineer but an inexperienced merchant);
lack of experience in commerce, finance, supply, production, management in sole ownership in partnerships, inability to start and maintain business connections and contacts.
Other reasons for bankruptcy of small firms are: business confusion; poor health or bad habits; disasters, fires, theft, fraud, etc. A small firm's chances of success increase as it gets older. Firms that have existed for a long time under one owner bring in higher and more stable income than firms that change owners. American statistics show that women who own small firms are more successful in business than men. Research notes that entrepreneurs who work a lot, but at the same time do not go beyond common sense, succeed.
Small business failures are affected by the low qualifications of entrepreneurs. Entrepreneurs who have already gained experience in doing business in small firms tend to be more successful. If not one person is involved in the management of the company, but an entrepreneurial team, which consists of two, three or four persons, the chances of survival are higher, since collective decision-making is more professional. The size of financing at the first stage also affects the survivability of small firms. The more initial capital invested in a small firm, the more opportunities it has for maintaining business in times of crisis.
The constant search for now emerging and disappearing social needs and continuous adaptation to them form the basis of the strategy of small business. Some Western experts view small business as a school of new personal relationships, a testing ground for the principles of entrepreneurship of the future.
