Question

What are the advantages and disadvantages of starting a business from scratch? Please explain in 350 words or more

Answer 1

Starting a business from scratch has its own advantages and disadvantages. Entrepreneurship gives a rewarding and satisfying feeling to the people in the business. A lot of factors run into making small business to well-run companies like work experience, educations, network in the industry etc.

Few of the advantages of running a business are:

• Increase in Income: It is one of the potential advantages of starting a business; Individuals can create multiple streams of incomes. Business allows individuals to earn more as compared to a traditional job. It gives them the freedom to diversify their income which is limited in jobs
• Better Quality of Life: Most of the individuals start business in the areas where they would love to work or it could be their hobby. When one starts doing what they love, the positivity in the environment and job increases which leads to a better quality of life as it does not stress out the individual
• Increased Learning: starting a new business requires more skills as compared to a regular job. This gives the individuals an opportunity to learn more skills. As you learn more about the business, you get to implement them without any restrictions
• Clean Image: when you start a new business from scratch, you do not have any background of poor image or poor operations. You get to build everything from a new perspective and image that you would want

Disadvantages of starting a business from scratch:

• Achieving breakeven can take some time as it takes time to create a brand and image
• Starting a business usually take up a lot of time of entrepreneurs. In the initial few months, it requires complete dedication and hard work which leaves individuals with very less time for their family and self
• Risk of competition, market ups and downs, consumer demands etc. impacts business a lot
• Suppliers may not trust new entrepreneurs and may not extend credit due to lack of trust and credibility, this impacts cash flow a lot as the entrepreneur has to make payments upfront
• A lot of paper work is involved like registration, promotion, insurance, financial administration, taxes etc. which takes up a lot of time