I have owned a business on the side for the last few years. Every year I become more and more thankful that I do. In fact, it has gotten to the point where I think EVERYONE ought to own their own business. There are so many awesome benefits, and such little downside, that if you don't yet own a business, you should seriously consider starting one. Here are some of the benefits I have experienced.
10 Reasons You Should Own a Business
# 1 Extra Income
The main reason most people start a business on the side is simply to get some additional income. I certainly have enjoyed that extra money. It allows us to give more, save more, and spend more. What's not to like? Oh yes, it has also allowed me to pay more in taxes. Oh well, 3 out of 4 isn't bad.
# 2 Extra Retirement Accounts
Many employees are stuck with crappy retirement accounts and can only put a small percentage of the amount they need to save for retirement into tax-protected accounts. They have to wait until they leave their job to roll that money into an investment account with good options. When you're the boss, however, you get to choose the retirement plan. My side business allows me to have an Individual 401(k). If I can make enough income, that's another $53K a year I can protect from the tax-man and any future creditors.
# 3 Entrepreneurial Mindset
Perhaps the greatest benefit of owning my own business is that it has caused me to look at the world in a different way. Your mindset changes from a Scarcity Mentality (where you want to get a bigger percentage of the pie) to an Abundance Mentality (where you realize you can make the pie bigger.) You realize that YOU can create jobs for other people. You also realize, at least if you're in a business that scales, that there is no cap on your income or the value of that business. All of a sudden you see business ideas all around you all the time. It is a rare day that goes by that I don't think of or see a business that can be started. Obviously, I don't have the time to start them all, but you only need to get rich once!
# 4 Escape from Medicineside business may allow them to eventually transition out of medicine. Medicine can pay the bills while you grow it, and when it gets successful enough, you can punch out of medicine in your 30s, 40s, or 50s and follow your new passion. I don't know that I will ever leave medicine, but it's nice to know I could.
# 5 Appreciation for Your Main Job
One of the benefits I never expected from my side job was how much more I enjoy practicing medicine now. Perhaps it is simply because I don't have to practice it. But I think it is because I have learned that you have to work really hard to make “doctor money” doing anything else in life! Sometimes it feels like a break to just go into the ED, wrestle a few cocaine addicts, bust a few Percocet-seekers, empathize with the truly ill and injured, and maybe even save a few lives. My two jobs have a symbiotic, synergistic relationship. Each one makes the other one better.
# 6 Tax Deductions
It is really hard to deduct much as an employee. You're stuck dealing with the limitations of Schedule A. Schedule C is so much easier to use. Just doing a little moonlighting on the side for your “side business” may give you all kinds of deductions you wouldn't otherwise benefit much from. Scrubs, white coats, cell phones, computers, home office, business mileage, licensing fees, DEA fees, CME costs etc may all now be deductible when they weren't before. Everybody paid on a W-2 ought to figure out a way to have at least a little 1099 income each year.
# 7 Better Understanding of Business, Finance, and Taxes
I get better at business each year. Business is really an enterprise that consists of adding value to the lives of others. The better you can do that, the more you are rewarded for it. I have learned a ton about marketing, sales, accounting, and information systems that I never would have known without starting a business. My understanding of finance and taxes has also increased with the additional complexity the business adds to my life.
# 8 Less Need for Disability and Life Insurance
I own lots of disability and term life insurance. But you know what? My business would probably be worth as much or more to my wife in the event of my death. Sure, this website would change a bit. But it's income certainly wouldn't go away any time soon if I keeled over. I'm not planning on cancelling my policies or anything, but it's nice to know that neither I nor my family are completely reliant financially on my ability to practice medicine.
# 9 Building Something of Value
I mentioned above about the joy of business- adding value to the lives of others. That can be very fulfilling. But practically speaking, I am also building something of value to me. This website has an ongoing income. That's worth something. Websites are notoriously hard to value for sale, but there's no doubt this enterprise has at least a low six-figure value. That could be seven figures by the time I get around to selling it.
# 10 Having Fun
What Kind of Business?
So, what kind of business should you start? I have no idea. It might be a website. It might be writing a book. It might be a T-shirt business. It might be an investment property. Perhaps it is manufacturing a device you can use in your practice. Perhaps it is selling a craft you make. Perhaps it is teaching, or consulting, or reviewing charts for insurance companies or attorneys (defense only, of course.) Or perhaps it is just practicing medicine for yourself, rather than someone else. Whatever it is, go for it. The benefits seriously outweigh the risks. Too many of us are becoming employees without sufficient knowledge, skills, or desire to make it in the business world. And that's a shame.
What do you think? Do you own a business? What do you like the most about it? Comment below!