Have you ever wanted to be truly wealthy? For most the answer is yes but I am about to tell you something that many will never tell you. If you would like to be rich you will never get there with the conventional way of thinking. Meaning you will never get there by going to college, getting your degree, getting a good job and saving for a rainy day. It never works, ever. It’s not supposed to. Oh sure you can amass a sizable nest egg that way but what will really make you money under that scenario is where you invest your money, namely into companies or other cash flowing assets. When you take risk you get paid a return or you lose some or all of your investment. The lower the risk the lower the potential for loss and the higher the risk the higher the potential for loss. But the lower the risk the lower the potential is for return and the higher the risk the higher the potential for return.
So why do companies tend to make the highest return? Because that is where the entrepreneurs are. Entrepreneurs make the lion’s share of the profits because they were willing to take the risk. They put it all on the line to make their dreams come true. They usually weren’t able to get investors interested until they had some level of success. That’s when the investors come in and get to share in the pie but again the lion’s share goes to the entrepreneur.
You don’t believe me? Look at the top 50 wealthiest people in America. The majority of them make their income from capital gains. Meaning they invest a certain amount of money into something and it grows in value so much that you have to pay taxes on the growth. Typically these gains happen in businesses or real estate, which is also a business. That is what entrepreneurs do. We take our money, time and effort and invest it into something to make it grow. When it grows we make a return.
If you look at the top 5% of income earners in the US you will find that over 95% of them are self-employed. Coincidence? I doubt it. The reality is that if you want true security in life you have to know how to start and run your own business. This for some is terrifying to think of but what’s the risk in having a conventional job? Have you read the news recently? Do you remember just 4 years ago? Nearly 7% of the population was unemployed and another 15% had completely dropped out of the work force because they couldn’t find work. I’ll admit thankfully at the moment we are in a recovery and people are back to work but no one fixed the underlying problem. It is scary when you have been working for a company for 15 years and all of a sudden your position is eliminated. It’s extremely sad but this happens every day.
How about our kids who were told to go to college, get a degree and when you get out you will get a good job only to find out there are no jobs when they get out. Today the risk is in having a conventional job not in being self-employed. Now mind you there are exceptions to the rule but for the most part no job is 100% secure any more than any business is assured success.
Life carries risk, plain and simple. Learning to minimize risk and learning from the mistakes and successes of others is what it takes to succeed. This helps to limit the risk and still offer the upside potential. The reality is, we have to create entrepreneurs if there is any chance for your and my future, our children’s future and the future of our nation. Entrepreneurs create jobs. We need to create entrepreneurs and it starts with you taking a step toward learning what you need to do to start and run your own business.
Before I go into upside potential I want to take a couple moments and talk about what to look at when considering having your own business. What may be a great opportunity today may not be forever. In fact I would venture to say it is a rare business that has a life of 20 years or more if the owner of that business does not constantly adapt to a changing marketplace. What I mean by that is we have all heard the story of the buggy whip. Companies who made buggy whips were going along being very successful when one day the buggy whip was no longer needed. What about companies who made film for cameras? Ever heard of a little company called Blockbuster Video or Kodak? Things change so when you are considering starting your own business you should really look at something that tends to be in great demand for long periods of time. For instance, people from the dawn of civilized humanity until now will get their hair cut. So granted the business model has a long life but at the same time there are literally millions of people in it and large companies everywhere so trying to become wealthy by cutting hair is not highly probable. Not impossible, just highly improbable.
You have to find a niche, preferably in a massive industry. The bigger the industry, the bigger the upside potential. You want to find a niche that offers high margins. But remember, the higher the margin generally the higher the risk. So you may want good margins with less risk. You have to find an opportunity, which you have the time and ability to learn. The medical industry is a massive industry and if you wanted to find a niche in the medical industry you might need 8 to 10 years of schooling and hundreds of thousands of dollars on college just to have the ability to play on that field. To me that is way too risky.
Let me show you what I believe are the most important items when considering having your own business.
What I believe you need to have in place to get started.
You must believe in yourself.
You must have the right mindset.
You have to be willing to work hard.
You must have products or services in high demand.
You must have products or services that people want and are willing to pay for.
You have to be involved in a market that will be here long after you are not.
You have to be willing to learn how to sell without being a salesperson.
You must make a fair profit for your effort.
You have to have the ability and willingness to learn.
You need a coach or mentor to show you what not to do.
You have to have someone who can teach you what you need to know to get started and stay up and running.
You have to have the ability to profit off the efforts of others as well as your own efforts. This only happens to the self-employed.
Now what you don’t need to get started.
You don’t need a million dollars to start your own business; you don’t even need a hundred thousand. You might even be able to get started with less than a few thousand, maybe even a few hundred. You need to be able to pay your bills while you build your business so in most cases you will start a business on the side.
You don’t have to sell to family and friends to be successful.
You don’t need to know everything about something to go into a new field.
You don’t need to pay a consultant $30,000 do be successful although it could save massive amounts of wasted time.
You don’t need a staff of people to get your company off the ground.
If you are in business I congratulate you for taking the chance but I also congratulate you for taking action to make your own dreams come true.
If you are not in business for yourself what’s stopping you? If you can look yourself in the mirror and convince yourself that the answers you just came up with were true than don’t start. If not the time is now.
To your lifelong prosperity,
David Mulvaney