When people think of entrepreneurs in America, names like Mark Cuban, Jeff Bezos, and Mark Zuckerberg come to mind. However, for every Elon Musk, there are hundreds of thousands of business owners trying to carve out a slice of the marketplace, and that number is on the rise. Nearly 5.4 million new business applications were filed in 2021, a record high, according to the U.S. Census Bureau.
Small businesses made up more than 99% of all businesses in 2021 and employed nearly 59 million Americans, according to the U.S. Small Business Administration. Rather than signing on with an existing company, these small business owners bet on themselves and their own ideas.
The benefits of owning your own business are many, including the ability to follow your passion and be your own boss. If you’re drawn to the idea of one day becoming a business owner, you may want to consider investing in your education. An Executive Master of Business Administration (EMBA) degree can help prepare you for the rewards — and challenges — of entrepreneurship.
What Is a Business Owner?
As the title implies, a business owner oversees all monetary and operational aspects of a business.
Regardless of the type of business, the most common aspects of running a business involve the following:
- Strategic planning
- Finance and accounting
- Compliance and legal
- Sales and marketing
- Customer service
- Human resources
Typically, a business provides either goods or services. Things like sports equipment, consumer electronics, and clothing are considered goods. By comparison, car repair, dentistry, and massage therapy are considered services. However, some businesses provide both goods and services. For example, a tanning salon provides tanning bed services along with goods such as bronzer lotion and tanning goggles.
The Four Types of Business Ownership
The precise role of an owner is different from business to business. Business ownership generally falls under one of the following four types:
- Sole proprietorship: In a sole proprietorship, a person owns an unincorporated business by themselves.
- Partnership: In a partnership, two or more people own the business and share the profits; partnerships don’t have to be equal.
- Corporation: Sometimes referred to as a “legal person,” a corporation is a legal entity that’s both distinct and separate from its owners; a group of vested individuals known as shareholders run corporations.
- Limited liability company (LLC): An LLC is a business structure that protects owners from personal responsibility involving liabilities and debts; owners of an LLC are referred to as members.
What Are the Benefits of Owning Your Own Business?
If you’re considering becoming an entrepreneur, you may wonder what some of the benefits of owning your own business are. Some of the most notable advantages include:
1. Following Your Passion
Business owners have the luxury of being able to select the industry they wish to work in and the types of goods or services they wish to provide. People who are passionate about what they do often have a greater drive to succeed.
2. Providing for Your Community
Being a business owner means being able to fill a need in the community. Whether it’s doing hair at the local salon or making sure that suits look their best via dry cleaning services, local business owners are staples in thriving communities.
3. Being Your Own Boss
Few things are more empowering than being your own boss. For business owners, this means setting their own schedule, deciding which tasks to undertake and which to delegate, and having control over the company’s big decisions.
4. Ownership Equity
Being a business owner typically means reaping the highest reward when it comes to the business’ profits. The reason is that business owners have something the traditional employee doesn’t—equity. Equity is the value of a business, taking into account items such as stock price, company assets, and product inventory. When a business owner decides to sell a business, the percentage of equity determines the payout.
5. Taking Advantage of Tax Breaks
Another perk of being a small business owner is the assortment of tax breaks that may be available to you. The most common include the following:
- Qualified business income
- Advertising and marketing materials and services
- Rent on an office or storefront
- Office supplies
- Business-related travel
- Business-related meals
6. Establishing Core Values and Mission Statement
Salary and benefits may attract employees, but the values and mission are what define company culture and win over their hearts and minds. A business owner has the unique ability to determine a company’s moral direction and what it stands for.
7. Choosing a Target Market
Business owners can craft their marketing and advertising to a specific market or gear their services toward a specific community, region, or age group.
8. Selecting a Team of Associates
Being the boss means being able to build and develop a successful team of coworkers. Business owners often have a clear vision of the skills and experience they’re looking for and can apply ideals of diversity and inclusion to produce an equitable company culture that creates loyal employees.
9. Opportunities to Innovate and Be Creative
One of the biggest benefits of owning your own business is that operations don’t have to be “business as usual.” Business owners are free to pursue innovative ideas. They can take risks and experiment with their products, marketing, or store layout.
What Are the Challenges of Owning Your Own Business?
Although owning a business has numerous benefits, the work is far from easy. Being a business owner is often rife with challenges. Only 55% of businesses survive 5 or more years, while only 35% make it past 10 years, according to data from the U.S. Bureau of Labor Statistics.
Additionally, business owners face many of the following challenges:
- Potential income instability and financial risk
- Uncertainty and work-related stress
- Long working hours, including weekends
- Lack of guidance or mentorship
- The pressure of being responsible for employees’ livelihood
Fortunately, a time-tested way to overcome these challenges exists: preparation. Understanding the challenges ahead and the best ways to overcome them is crucial for business owners to keep their companies going, particularly in the first few years of running a business.
One of the best ways to prepare to be a business owner is with a formal education in business.
Become Your Own Boss with an EMBA Degree
Small businesses play a vital role in the American economy, with advantages for both entrepreneurs and their customers. Owning a business is an opportunity to innovate and be creative and to provide a valuable product or service to the community—and these are just a few of the many benefits of owning your own business.
Investing in an education, such as Online Executive MBA program, can help aspiring entrepreneurs develop the skill set and knowledge base they need to run a thriving business. With courses such as marketing management, business analytics, financial management, and administrative control all laying the groundwork for a career as an entrepreneur, WSU’s Online EMBA offers students a foundation that can help them succeed in their business ventures.
Pursue your dreams of becoming a business owner with WSU.
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Indeed, “10 Pros and Cons of Being a Small Business Owner”
Investopedia, “Top 6 Reasons New Businesses Fail”
Investopedia, “What Is an LLC? Limited Liability Company Structure and Benefits Defined”
Joint Economic Committee Democrats, “New Businesses Boomed Across the Country and Reached Record Highs in 2021 Under President Biden”
Shopify, “Starting Your First Venture? Here’s What You Need to Become a Business Owner”
The Balance Small Business, “The Benefits of Owning Your Own Business”
U.S. Bureau of Labor Statistics, Survival of Private Sector Establishments by Opening Year
U.S. Small Business Administration, 2021 Small Business Profile