What are the pros & Cons of being an Entrepreneur?

What are the pros & Cons of being an Entrepreneur?

Ans:   Pros and Cons of being an Entrepreneur

            The advantages and disadvantages of being an entrepreneur are equally weighted. Being an entrepreneur one can create wealth for society and be satisfied. But running a business show on ones own capabilities if not that easy. Entrepreneur has to undergo several hardships. In this backdrop. Pros and Cons of being an entrepreneur are discussed in the following paragraphs.

            Advantages (Pros)

            Many a time people may ask for themselves as to the advantages they enjoy by owning ones own business. Although it is very difficult to give an insight to into this question, it may however, be said that it all depends up on the extent of involvement of an individual in a business activity. For some people simply being their own boss is enough to keep them happy. Others would like to have their own business for an immense financial success. But rarely seen are the entrepreneurs who are happy. Still people take risk and enjoy being entrepreneurs. The advantages of being an entrepreneur are listed below.

(i)      Bridge the gap between knowledge and application: People acquire knowledge through education. But all are not interested in applying their knowledge for the benefit of society. Entrepreneur can bridge the gap between knowledge and its applications. If the knowledge is new, that is not a market. The step towards commercialisation is complicated. Entrepreneur can convert the knowledge into an economic activity and gain out of it. But he has to take risk. Knowledge conversion is a complicated issue. Still entrepreneur does it.

(ii)     Converting an idea into money: Being an entrepreneur, one may push up ones innovative ideas into reality. A entrepreneur is dynamic, creative, skilful, and is ready to take calculative risk, he/she puts societal resources into societal use. At the same time, entrepreneur, besides enjoying economic gain, makes the society more enjoyable.

(iii)    Be your own boss: Many people would like to enjoy their lives independently. They feel excited by doing so. They possess high capacity to take risk and to have adventurous life. These personal traits of entrepreneur, provides an opportunity to the society to improve the standard of living.

(iv)    Originality, respected: The creative and original business ideas of an individual can be used for societal benefit and with this the originator respected in the society. Originators feel that they can offer a new service/ product that no one has offered before.

(v)     Competition: By adapting innovative ideas of entrepreneur the product/ service can be produced at a low cost. This facilitates the organisation to face competition in the market. Besides this, society can get quality product.

(vi)    Better utilisation of skill and knowledge: Several people in a society will have entrepreneural skills. But most of them hesitate to use their skill and knowledge for the benefit of the society. The advantage of becoming an entrepreneur is that creative skill and knowledge of an individual can be used for the benefit of the society otherwise which would go wasted.

(vii)   Alternative to current career: Many people with entrepreneural skills will be working for others for reasons known or unknown to them. They are called “Intrepreneurs”. At times they get frustrated working with others and would like to change their position an employers. The advantage being that they not only get satisfaction of becoming entrepreneurs, but also their creative skill will be used for the benefit of the society. Persons having entrepreneural skills will be having alternative to their present career, if opportunity come in their way.

(viii)  Business opportunity: In any’ society business development process is a continuous activity. In such an atmosphere, very many business opportunities will be cropping up in different sizes and magnitudes. People with entrepreneural ability can seize such opportunities and have personal gain. This also facilities the society to tap the resources for improving the standard of living of the people.

Besides these, entrepreneurs will have the advantages (a) of managing their time for better living having flexible operations in their own business, (b) optimized earning for their full efforts, (c) enjoy independence, (d) work wherever they want/ whenever they want, and however they want and (e) become role models for success. They are not being paid what they are worth and would rather work on their own and earn the money they should be earning for their efforts.

Disadvantages (Cons)

Entrepreneur has several risks. Being an entrepreneur, one has to undergo several ordeals. Particularly in small business activities, there are very many hurdles come in the way of business development. Some of the key disturbing factors are analysed in the following paragraphs.

(i)      Remuneration: Entrepreneur works on his own for economic gain. But he/ she is not assured of positive economic gain. It will work both ways. On the one hand, becoming an entrepreneur, one forgoes regular income. This means without taking to self – employment, had he/she worked as a paid employee he/she would have got regular monthly income. To become an entrepreneur, he/she may work on the principle of opportunity cost and decides to get into own business. But in this, his expected growth in terms of profits and assets may not happen. The reward for risk-bearing in entrepreneurship may be positive or negative. If he/she continuously suffers loss, there will be no alternative except to close the business. Therefore, in entrepreneurship development, reward may be positive or negative.

(ii)     Benefits: Being an entrepreneur, a person may not gain much in initial stages. The start-up problems being more, it takes considerable time to reap the benefit of being an entrepreneur. Even in long-run, benefits will not be extra-ordinary. Most of the entrepreneurs will be enjoying normal profits and build up reasonable assets. They cannot enjoy monopoly power and make super-normal profits. There will always be threat of competition and any extra profit expected to be earned will be eaten away be competitors. Except that they will be enjoying independence in operating entrepreneurs are always exposed to Various types of business risks. Considering the cost-benefit (cost includes both implicit and explicit) analysis, entrepreneur will be benefited with only normal profit or he may be in break-even or might be Incurring loss. Therefore, entrepreneur will not enjoy benefits as expected.

(iii)    Time management: As entrepreneur will be taking more risk, time is very precious for him. Time is money for him. One cannot enjoy time in self-employment as one enjoys in paid employment. He/she has to dedicate himself/herself to the business. Managing time becomes a critical factor. The work schedule of an entrepreneur is never predictable. An emergency can come up in a matter of a second and late hours will have to be put in. He will be on his toes all the time to manage time effectively. He cannot have casual approach.

(iv)    Management: Entrepreneur will be the boss of one’s own business and decision-making will be again a critical factor. One should have sound decision support system to take good decisions on all the issues concerned with the business. Decision should not be post-poned. Good decision or bad decision is better than indecision. Post-poning the decision means, post-poning the evil. Being the monarch of the situation, entrepreneur should have better management of his affairs, has to take sound decision. But the greatest limitation is that entrepreneur being the top person in the chain of command, may take decisions which may prove abortive for the business. Unknown risks are the one’s which put the entrepreneur in trouble in managing the business.

(v)     Experience: Entrepreneurship feature is an inherent quality of an individual. In most of the cases it will be in genes. Very few acquire the entrepreneural skills when they enter into their own business. An unskilled person with an unskilled staff will have a difficult time in running the business. Working with employees who “do not know the ropes” becomes a tough time for an entrepreneur. “Core Competence” in the accepted and practiced business is the success factor of an entrepreneur. Therefore, an inexperienced person without entrepreneural ability cannot manage ones own business.

These are the major limitations of an entrepreneur the hassles one experiences from external agencies such as government policies, financial policies of lending institutions and personal traits not conducive for running a self-owned business unit.