The 3 Best and Worst Things about Being an Entrepreneur

Starting and successfully managing a business can be simultaneously incredibly challenging and rewarding. According to the Small Business Administration (SBA), there are more than 32 million small businesses in the United States. The Bureau of Labor Statistics, however, reports that more than one-fifth of those businesses fail within their first year of operation, while almost half of all startups are out of business within five years.

Owning a business isn't for everybody. If you're an aspiring entrepreneur, you should have a clear vision of what you want to achieve and how you plan to do it. You should also be passionate, hard-working, and competitive. Those who have these qualities are more likely to succeed and reap the benefits of entrepreneurship—benefits like being your own boss, seeing your ideas come to life, creating an organization that can impact people's lives, and potentially earning a good living. However, there are also downsides to owning a business you should be aware of, too.

Below are four of the best and worst things about being an entrepreneur.

Best: Freedom and Flexibility

While most employees work predetermined hours at a specific location, entrepreneurs have much more autonomy over their professional life. They can choose when and where they work and call it quits on the day whenever they choose. They may have to work harder and longer to achieve success, but it's entirely their decision as to how much energy and effort they want to put into the business.

The freedom to work whenever and wherever is a major benefit for entrepreneurs with families; after all, spending time with loved ones is what's really important in life. Business owners can take time off when they choose or bring their work with them on family vacations.

Worst: Constantly Busy

Entrepreneurs have a lot more flexibility in their work-life balance than employees, but also have significantly more responsibilities. Whereas a worker only has to worry about their specific duties, the business owner is responsible for oversight of all employees as well as all day-to-day operational and financial activities. In other words, the buck stops with you—and the weight of this responsibility can be incredibly taxing. Entrepreneurs can set their own schedules and work from wherever they chose, but there's unlikely to be many days in which they can completely relax and ignore all responsibilities.

Best: Complete Control

For better or worse, entrepreneurs have total control over their business, meaning they can hire who they want, facilitate product or service changes as they please, and make all other key decisions. Rather than just being another worker in a corporate structure, being a business owner is a great way to make a real difference and see your vision come to fruition. You can define what success looks like for your company by setting quarterly and annual goals and making changes as necessary to accomplish those goals.

As a business owner, you may have to work hard, but your work benefits you, not your boss or some corporate executives in a far-off office you'll never visit. This fact can be incredibly motivating; it can make all that hard work feel less burdensome.

For many people, not having to answer to others is a major contributing factor for starting a business. For example, in a 2021 survey conducted by Guidant Financial, 29 percent of business owners said they launched their company to be their own boss.

Worst: Poor Quality of Labor

As their business grows, entrepreneurs need to hire additional employees to manage the increased responsibilities. Relying on others, however, can have its challenges. While some workers may be an excellent fit, others may be unmotivated and not as competent in their role. In a 2019 poll of more than 2,000 small business owners conducted by CNBC and SurveyMonkey, more than half of all respondents cited poor labor quality as their biggest problem. Sixty-three percent of respondents who managed businesses with more than 50 employees said it was harder to find qualified employees than it was the year prior.

The pandemic has only made this problem worse. Businesses that were able to survive the shutdowns and maintain operations are now faced with labor shortages. A March 2021 survey conducted by the National Federation of Independent Business (NIFB) found that 42 percent of business owners had vacant roles they couldn't fill.

"They have made it to this point and they've adjusted their business operations to get through the worst of the pandemic and now they are saddled with not being able to increase business operations when they find the opportunities," explained NFIB Research Center executive director Holly Wade, speaking to CNBC.

Best: Pursuing a Passion

One of the best parts about being an entrepreneur is you get to pursue your passion rather than working for someone and helping them achieve their business goals. If you're passionate about protecting the environment, you could start a clean energy company and know that the work you're doing is making a positive difference in the world. Few people start companies in fields they aren't passionate about, while many people are employed in industries in which they have little interest.

Worst: Financial Risk

Having complete control of a company also means inheriting all of the financial risk. Even creating a small, home-based business can cost as much as $3,000 or more in startup costs. Of course, there's potential to earn much greater income than you would if you were an employee, but that depends on the success of the business. Entrepreneurs may also need to inject some of their own money into the business as it grows.