The pros and cons of running a small business

Running a small business is notorious for being one of the most demanding yet rewarding professions a person can choose.

But are you cut out for it?

Here are just some of the pros and cons of running a small business to give you a balanced view.


1. You make the decisions

One of the best things about running your own small business is that you have full control over its operations. So, whether you want to try new ideas, expand, invest, take risks, or take the business in a new direction, it’s all up to you.

2. It’s tax efficient

If you run a limited company, you can enjoy some tax breaks which aren’t available to salaried employees. These tax allowances are designed to help small businesses grow.

For example, corporation tax on profit is 19%, less than half what you’d be paying in income tax as an employee.

3. Good earning potential

The key word here is potential. You only get out what you put in, but you can make uncapped profits if your business is thriving. This is in contrast to working for someone else, where you’re at the mercy of their salary structure.

4. You can benefit from limited liability

If you choose to run a limited company, your assets and personal wealth won’t be personally tied to any debts the company incurs. It’s worth remembering that a sole trader structure doesn’t have limited liability, so to benefit from this you’d have to be ‘Ltd’.

5. Connect with your community

Increasingly, people are looking to their own communities to source products and services from smaller businesses. This creates a more cohesive community feel in your local area, with repeat customers and word-of-mouth marketing, which as a business owner can feel very rewarding.

SME Accounting Services

Accounting for small businesses can seem like an administrative nightmare, but with QAccounting, we make small business accounting easy. If you're looking for industry-leading accounting services for your SME, then get in touch with us today!


1. Start-up costs

Even the smallest business incurs start-up costs like marketing, stock, equipment and technology. Not to mention the time you’re taking out of paid employment to set your business up before it ever makes a penny.

Remember, the UK government has various tax relief schemes in place to help start-ups get off the ground – an accountant will be able to walk you through your options.

2. Ultimate responsibility

Yes, this is also considered a pro, but having the buck stop with you is a huge responsibility which isn’t for everyone.

3. Accounting

Accounting for small businesses is an administrative nightmare, right? Well – yes and no. While it’s true that the bookkeeping, accounts and tax affairs of small business ownership aren’t something to be taken lightly, working with a good accountant will make your small business accounting more than manageable.

4. Longer hours

Running a small business isn’t a 9 – 5 job. You should expect to regularly work evenings, weekends and holidays, especially when you’re just starting out.

5. Self-discipline required

It can be challenging for many people to hold themselves to account when it comes to working for themselves. The temptation to work too much – or too little- is strong when you’re the only one you’ve got to answer to.

6. Unreliable income

Just as your income is uncapped, there’s also no lower limit on the amount you can earn running a small business.

Unlike with salaried employment, there are no guarantees on earning a set amount each month, so you’ll have those leaner months where you need to manage your finances accordingly. An accountant will help you plan for the financial ups and downs.

accountant doing paperwork to showcase The Key Role of an Accountant for Limited Companies: Driving Growth and Achieving Success

Is running a small business right for me?

If you’re prepared to plan for the future, discipline yourself and take the rough with the smooth, then the answer is probably yes!

Speak to an accountant today about how to get started.

More Blogs

How to Register for VAT

VAT is an acronym for Value Added Tax and it is a consumption tax levied on the value added to goods and services at each stage of production or distribution. Whenever a business sells goods or services, VAT is added to the sale price. For business owners, understanding the ins and outs of VAT and knowing when and how to pay it, is a huge factor in running a compliant operation. VAT impacts various aspects of a business’s financial health so it’s important to meet this obligation by managing VAT compliance at all times. This involves a meticulous approach to invoicing, record keeping and reporting. Apart from simply charging VAT and submitting regular VAT returns to HM Revenue and Customs (HMRC), businesses can also reclaim VAT paid on their purchases which can reduce their overall tax burden. In this article, we take an in-depth look at how to register for VAT in the UK.

Accounting Team

Capital Gains Tax Basics, a Complete Guide

Capital gains tax in the UK, also sometimes referred to as CGT for short, is a tax on the profit you make when you sell certain assets for more than you paid for them originally. This tax applies to a wide range of assets including real estate, stocks, bonds, precious metals and property. It generally excludes personal assets such as cars or household goods. Capital gains tax targets the gain or profit made from the asset sale, rather than the total amount received, impacting individuals, trusts, and estates that sell assets for a profit. The revenue generated from capital gains tax serves as a source of income for governments, contributing to public funding.

Accounting Team

Guide To Dividend Tax for the 2024/25 Season

Dividend tax refers to the tax levied on income received from dividends paid out by companies to shareholders. This tax applies to individuals who own shares in companies and receive dividends as a source of income. It’s important to differentiate dividend tax from corporate tax, which is paid by companies on their profits – dividend tax in the UK is the responsibility of the shareholders receiving the dividends. The rate of dividend tax varies depending on the taxpayer’s income tax band – basic, higher or additional rate.

Accounting Team