Of all decisions a person makes in their lifetime, going into business ranks up there among the most important. It requires careful thought and calculated risk. There are many things to do: from choosing a name and identifying an office space, to getting relevant licenses and permits.
There are different forms the business can take. It could be a sole proprietorship, a partnership or a corporation. Each of these has pros and cons. However, if you are just starting out, going solo is the way to go. Here are the reasons why.
Whenever you listen to a motivational talk or read a book by a successful entrepreneur, it’s easy to be under the impression they knew exactly what they wanted to do from the get go. While a number of business founders are that lucky, the majority of entrepreneurs had an evolving vision.
A business idea that seems perfect in your head can prove unfeasible once you subject it to the market. Ergo, one of the benefits of going solo at the start is the freedom to change your mind without the need to refer to a third party. If something isn’t working as you thought it would, you won’t be saddled with the guilt of letting down or misleading your partners.
There are also more quirky freedoms such as the liberty to smoke a cigarette or vape eliquid without the need to consult a work colleague.
The world over, governments are considered grossly inefficient beasts. There’s even a word for it: bureaucracy. In virtually every country, the government is the single largest employer. Due to the large employee base as well as numerous layers of approval, decision-making can be excruciatingly slow and frustrating.
While partnerships and corporations don’t have quite the same scale of hierarchy as governments, critical decisions must go through multiple individuals. For a one-person business, decisions are near instantaneous. When you choose to move in a certain direction, your only constraint will be the resources needed to actualize that decision.
3. More learning
The average small to medium-sized business will have multiple departments. For large organizations, departments are in dozens. These include sales and marketing, product development, customer service, human resources, legal, finance, technology, operations, procurement etc. Each department has deep expertise in its area of specialization.
But if you are bootstrapping a startup, it’s best to begin alone and only temporarily contract third parties for highly technical functions. This will give you a good feel of every facet of the business and allow you to make decisions with a full appreciation of the repercussions. You are also better able to hire people as well as develop accurate presentations when pitching to venture capitalists.
4. The profit is all yours
You’ve probably heard the depressing statistic about the majority of new businesses closing shop within the first 5 years. There’s no denying that going into business is a gamble of sorts. However, if it pays off, there can be tremendous reward in terms of profit and a soaring valuation.
In a partnership or corporation, such gains must be split among multiple parties. If you wholly own the business, the high returns are all yours. You can choose to keep the entire profit or preferably reinvest most or all of it back into the business. Those choices will not be yours to make if you are running the show with someone else.
Some people will go into business to run away from the rigidity of a 9-to-5 job. What they quickly find out though is that managing a business comes with responsibilities that may call for long hours and even working weekends.
Nevertheless, the good thing about running a business solo is you can be flexible when the situation demands it. This allows for work-life balance and ensures you do not miss the most important moments of your family’s life. By not having to answer to a partner or a fellow shareholder, you can prioritize what matters the most to you.
Going solo has some disadvantages but overall, it’s the way to go for a startup.