While I’ve said that I think working for a small business can be surprisingly beneficial, it can also have many undeniable drawbacks.
1. Lower pay: Many small businesses simply do not have the resources that large companies do. While you may get more experience, you’ll often get paid less than you would doing the exact same work for a larger company. When there’s less money to work with and no human resources department around to figure out how to set up a small business 401k or dental insurance, you’re also unlikely to get as many benefits as a large company could offer.
2. Fewer vacation days: Small businesses have fewer employees, which means that there are fewer people around to pick up the slack when you’re gone. This translates to bosses that are reluctant to let you take a real vacation. Of course, this happens in large companies, too. If vacation days are important to you and you’re looking at working for a small business, make sure to pick a boss who values his vacation time as much as you do and will want you to stay home and recover when you’re sick.
3. Increased workload: There is a lot of work involved just to operate a business, including payroll, taxes, business insurance, and business licenses, and these things alone can take up a lot of time. On top of that, the business’s actual work needs to get done. With more work and fewer employees to spread it around to, any increase in workload will frequently fall on you and you alone.
4. Less opportunity to meet new people: Large companies can be great places for making new friends. If you don’t really click with the people in your department, you can always find some people in accounting to have lunch with instead. If your company only has five employees and you don’t get along with them, you’re out of luck. Working for a small company can be lonely at times, too — there will be days when everyone is out except you.
5. Less job security: In the age of Enron, this one is questionable, but let me put it this way: if your company has one boss and five employees (none of whom have any ownership of the company) and your boss suddenly dies in a car accident, there goes your job. At a large company, someone would be next in line to take over your boss’s role, the the company and your job would remain intact.
6. Increased likelihood of menial tasks: Small business often do not have cleaning staff, suppliers, or dedicated receptionists. If you think that taking out the trash, doing the dishes, answering phones, opening mail, and making trips to Office Depot shouldn’t be in the job description of someone with your credentials, a small business environment may not suit you. You may be able to avoid this issue if the business has multiple employees and your skills and experience automatically place you high in the ranks.
7. Limited mobility: Particularly in well-established small companies and extremely small companies, job titles may be well-filled or beyond your reach. If the only job titles in your company are President and Assistant, there isn’t a lot of room to get promoted.
8. More blame when things go wrong: Since you’re likely to have greater responsibility in a small business setting, you’re also more likely to be the one who gets blamed when things go wrong. If you work for a small company, you’ll need to be extra diligent about not making mistakes or be convincing enough to successfully blame your errors on potted plants.
9. Fewer resources: Small business usually can’t afford the kind of top-of-the-line software and equipment that bigger companies can. They can’t get volume discounts on these purchases and are operating on a smaller overall budget. You’re also unlikely to get invited to a lavish company holiday party in a fancy art museum — the resources just aren’t there. In my experience, smaller companies seem to be more focused on work product and less focused on impressive perks.
10. Lack of name recognition: In many fields, it doesn’t matter if anyone has ever heard of your company or not, but in some fields, working for a company with a big name can be the key to your future success (McKinsey, anyone?).
Now that you are familiar with some of the most important pros and cons of working for a small business, you’ll be well-equipped to decide if this option is for you the next time you’re searching for a job.