Owning a Business

Owning a business is a wonderful opportunity for the individual or persons who are willing to take the risk of seeking success through an idea, break-through invention, or well thought out business plan. However, the disadvantages that come along with establishing and maintaining a company comes with a commitment and/or responsibility that many are not prepared for and would indeed refrain me from wanting to acquire my own business. For example, starting a business may require an extensive financial investment that may put an individual into a major debt, especially if the business is considered a major loss. One must also keep in mind that income is not always guaranteed and revenue may not be generated for the first few years. Stress is also a major factor that comes along with the financial burdens, as many entrepreneurs are responsible for all bills that are accrued for the company, customer issues, repairs, and employee wages. Additionally, a business owner should always keep tabs on their competitors as the market is constantly changing. Indeed owning a company does not come without time commitment and many business owners are responsible for managing tasks that needs to be completed in order maintain the operation of the business. In many aspects, a business owner can expect to work more than the usual 40-hour workweek.

Pet.com is short-lived company that reflected poor business planning that eventually suffered a major financial loss. During its first fiscal year, from February to September 1999, the company earned revenue of $619,000, however spent $11.8 million on advertising. For example, they would sale merchandise for one-third of the price it paid to obtain the product and tried to build a customer base by offering deep discounts and free shipping through which they had to absorb those costs. The company's goal was to eventually shift customers to higher margin purchases, however the plan unsuccessful as customer's purchasing patterns failed to change during its second fiscal year. The company would had to close it doors as it stocks had fallen from over $11 per share in February 2000 to $0.19.