Knowledge Base

Opportunity costs - Why founding a company and taking the step into self-employment is really (financially) worthwhile in the rarest of cases

12/06/2023 | By: FDS

Starting your own business can be a very rewarding move, but rarely is it the most profitable move you can make as an entrepreneur. There are a few factors to consider when deciding whether an entrepreneur should start his or her own career or business.

One important factor is that one must weigh the costs and risks of starting one's own business against the costs and risks one would face in an employed position. These include the costs of starting a business, the costs of running the business and operating the business in general, as well as the risks one takes as an entrepreneur, such as the risks of market failure.

In addition, the opportunities one has as an entrepreneur are not necessarily better than those one has as an employee. If you want to succeed as an entrepreneur, you have to invest a lot of energy and time into starting and running your business, which means you have less time to do other things and you may get paid less than you would in a salaried position.

Ultimately, starting your own business is a decision that each entrepreneur must make for themselves. It is important to make the decision in light of the opportunity costs and potential rewards and risks. When deciding to start a business, it is important to have the opportunity to run your business successfully and to realize that you may have to invest more money and time than you expect.

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