So, you have decided that you want to open your own small business. Congratulations! Owning your own business can be one of the most satisfying and rewarding things you can do in your life. However, it can also be one of the most frustrating and challenging experiences that you will go through. You will have to deal with the simplest of tasks along with more complex aspects of a business like AML compliance and Know Your Customer (KYC).
One of the best things about owning your own small business is that you are the boss. The downside of that independence is that it can take a huge amount of work, not to mention the stress of having to make every crucial decision yourself and the financial risks.
Let’s go through some of the pros and cons of owning a small business, so you can consider everything before making the leap, and ensure you have the proper knowledge of the various forms of compliance like AML compliance and Know Your Customer (KYC).
Pros of Owning a Small Business
More Job Security
When you are the boss, it is pretty hard to get fired! You don’t have to answer to anyone. You are in charge of how the whole business is run. The only way you will be out of a job is if the business as a whole fails. By working hard and implementing AML compliance and Know Your Customer (KYC) systems, you will significantly reduce the chance that you are ever out of a job.
Potentially Make More Money
Owning your own small business means that there is a greater opportunity for increased income. As with all businesses, the first few years might not be the most profitable, but when a business reaches the five-year mark, it is typically doing quite well. This will bring its own risks as well, which is why procedures like AML compliance and Know Your Customer (KYC) are necessary.
As mentioned earlier, you have full control of how the business is run when you are the owner. You make the decisions that mold how the business operates. No other person has a say in the business unless you want them to. Any success that is achieved by the business will be because of your management.
Follow Your Passion
Many people work their 9 to 5 jobs as a way of paying bills, and not doing what they love every day. Owning a small business can give you the chance to follow your passions and get away from spending most of your life working at a job you hate. Don’t let fraud come in the way of your passion, and ensure Know Your Customer (KYC) compliance at all times.
Provides Roots in the Community
Owning a small business automatically makes you a part of the community that surrounds the business. You will more than likely live near to the business and will settle down in the surrounding neighborhoods. A lot of people like to support their local businesses, so it’s not only financially rewarding; feeling like a part of the community can help you to create a sense of belonging.
Even though you will be a valuable part of the community, you still need to ensure that your AML compliance and Know Your Customer (KYC) procedures are up to date, as you can’t be too careful.
Cons of Owning a Small Business
Big Financial Risk
The biggest thing that holds most people back from starting their own small business is the amount of financial risk that you have to take. An article from Forbes states that 80% of all small businesses will fail within 18 months. Just 5% of all small businesses will be operating after five years. There is also the growing risk of fraud in this modern world, which is why AML compliance and Know Your Customer (KYC) are so important.
Working Longer Hours
The glamorous idea of making your own schedule when you are your own boss is the stuff of dreams. When anyone starts their own business, they go from working 40-50 hours a week to working 24/7. You have the flexibility to take your child to the doctor or to take a call during the day, but the business will never be off of your mind. It can be hard to separate yourself from it, especially in the early years.
Dealing with Mundane Daily Tasks
As the owner of a small business, you are typically involved in every aspect of the operations. If the taxes for the company need to be done, you either do them or bring them to an accountant to do. You might also think that you will be in charge of the high-level tasks, like employing AML compliance and Know Your Customer (KYC), but if a computer breaks or your POS system goes down, that is also your problem. Making sure that your business is equipped with the best retail POS system typically solves the issue, taking all other tedious tasks handled by experienced professionals, but of course, at a fair cost.
There are many difficult decisions to make when owning a small business. Many of your family and friends can come along and expect you to hire them, and even pay them significantly more than the market rate. Tell them to brush up on their AML compliance and come back!
You may also have to let someone go from the business, knowing that they have a family at home, and they could be harshly affected by the job loss. These decisions are some of the toughest things that a small business owner has to go through.
Vulnerable to Distractions
As you are the boss of your small business, you have to stay focused to ensure the business has the best chance of survival. However, you also have a life. Sometimes normal life events can clash with work, and it is up to you whether you let the distractions hinder your work life. This can mean that your home life can sometimes suffer, and it is your decision as to how to deal with these situations.
Distractions can cause mistakes to happen as well, which could lead to increased risk when running the business. Deploying AML compliance and Know Your Customer (KYC) procedures can help to mitigate this risk.
While being a small business owner can be very rewarding and offer great opportunities to make money, it is wise to know the risks and drawbacks of going out on your own. Put the necessary procedures in place, including AML compliance and Know Your Customer (KYC).