Top 7 Disadvantages Of Running Your Own Business

Top 7 Disadvantages of Running your own business - Moniedism

Do you run your business? Or maybe you are just considering starting a business? In the previous post, we told you about the top 8 advantages of running your own business. Now we will tell you what are the cons of running your own business. So here are the top 7 disadvantages of running a business.

1. Barriers to accessing financing sources

This is very often the main barrier that prevents people from entering any business. Due to irregular financial flows in companies and difficulties in finding investors, raising capital for a company can be quite a feat.

2. Non-wage labor costs

In many countries, social insurance contributions constitute approximately 30% of labor costs. In the list of 34 OECD countries, we are in the eleventh place among the countries with the highest costs. This creates some confusion in the employee-employer field. Employers often complain that hiring employees full-time involves considerable risk and very high costs.

3. Taxes and law

Lack of cooperation and trust between tax authorities and entrepreneurs is often a barrier to the development of entrepreneurship. The complexity of regulations and a large number of procedures can certainly be included among the challenges faced by every entrepreneur. This, of course, also comes with some risks that not everyone wants to afford. Therefore, I include it among the disadvantages of running your own business.

4. Bureaucracy

This is perhaps the most hated part of running a business by most entrepreneurs. Nobody likes paperwork related to running a business - registration obligations towards the Tax Office, advance payments, settlements with ZUS, now also GDPR - this is the daily bread of every entrepreneur. In the case of a sole proprietorship, the owner bears full legal and financial responsibility. That is why these are important things, but they do not directly affect the business development. However, they occupy a large part of the calendar.

5. Payment delays

Another disadvantage of running your own business is the late payment of invoices. Although macroeconomic indicators indicate the very good condition of the domestic economy and the good condition of foreign economies, the quality of mutual payments by enterprises does not change for the better. According to the BIG InfoMonitor survey, more than half of enterprises still inform delays in payments of contractors of at least 60 days in the last 6 months - 52 percent. Compared to the first quarter of this year, only a symbolic change was recorded. The percentage of companies that had problems with obtaining money for goods and services sold in the past 6 months fell from 52.6%. up to 52.1 percent Currently, trade companies are complaining about late payments more often than others.

6. No leave

Lack of free time is also a statement we hear very often from entrepreneurs. It especially concerns owners of one-person companies, including the self-employed. With such people, business very often revolves only thanks to the work performed by the owner. Any kind of time off - whether it's a vacation or sick leave - means no earnings. This is not a condition that should last all the time, but at least in the early stages of business development, it is the norm.

7. Lower pension

Do you have your own business? The average entrepreneur's retirement pension is even lower than the standard average retirement pension and amounts to approx. PLN 1,780 gross. Therefore, it is worth considering very seriously how to start securing your future when running a business.

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