Grow your own wealth! Image from ECDPM.org
Real wealth is created through business
Business is the delivery of goods and services to people who need them, at a profit to the business.
If you are not in business, you either work for a business, or are a customer of a business, or both.
Salaried people rarely experience true wealth, because as in the very old song “You don’t get rich on a 40 hour week!”
“Wealth” is a term that has warm and fuzzy connotations. However, true wealth cannot exist without the financial component and income stream that enables you to live the life you desire, with the goods and services you want. Living costs money, whatever your currency. More in some countries, a lot less in other countries, but relative to national incomes, living expenses consume a large proportion of the average annual income of the population, with a little left over for savings.
Real wealth takes you way above this basic income subsistence level. And real wealth is created through business.
Real wealth is consolidated through investments
Whilst business is the engine that generates financial wealth, that wealth has to be consolidated through investments. There are three types of investments for consolidation of wealth, with a myriad of sub-sectors in each. They are:
1. Property, real estate, whether residential or commercial or agricultural. Investment in land and/or buildings to appreciate over time and earn an income from use of the property.
2. Paper investments. Shares, bonds and the thousands of other financial investment strategies that have and still are being created.
3. Other businesses. Buying and selling businesses is a valid and lucrative way of consolidating wealth. Each one is a potential profit centre. There are always businesses that are not doing well, where the owner is tired, jaded or unwell and is prepared to sell to you at a great price just to get out. Buying that business, firing it up and reselling for more when it shows a great profit is good business too!
You want to start a business of your own?
My New Business? Image from usingmindmaps.com
That’s great, but you know all the statistics about the proportion of businesses that fail too. Around 85% in the first 5 years. Whilst the statistic might be close, it doesn’t tell all of the story.
Many businesses are started by people who only want a business for a few years to retire with, so they really have not failed. They merely served their purpose and had a finite lifespan.
Other businesses grew and changed structures; they started as a sole trader, and then became a company, and then perhaps a public company. The same original business, but it ceased trading and restarted under another name and structure twice, affecting the statistic again and again. Not a failure either.
Even more businesses are sold between business owners. In the transfer they are either merged with a larger company, or transferred to a new structure or trading entity. A success story but one that is reflected yet again as a business closure.
However, many businesses do fail, and there are three very simple reasons why.
The Three Primary Reasons Businesses Fail:
1. They start without the required or necessary capital or resources. Quite simply, they run out of money or resources to keep going, past initial start-up phase. The first financial hurdle, they fail.
2. They are run on purely entrepreneurial thinking. Entrepreneurs are visionaries, driven and incredibly powerful at creating new enterprises. However, just as often, they are terrible managers. They need to get out of the way once they have done their job and let a good manager follow-up their great work. They need to get on with the next new thing that has come along for them, and leave management to people with management temperament and skills.
3. They do not have a sound business plan. They might be a great idea, and the concept might be excellent. However, a great business plan is required to launch the business, to fund and market the business, plan the selling and income strategies and to transition it into a mature business as it grows. It needs to have a great management team in the plan, show where the capital backing is coming from, what is expected from the business and have contingency plans already in place.
Understanding these problems before they occur can prevent your great business idea becoming one of the real “failure statistics” and ensure success follows your ideas and activities!
Is your path to true wealth through your own business?
If so, you MUST plan to overcome or avoid the obstacles to success in business. The first step to success is through educating yourself on the fundamentals of business creation, planning and start-up. Trying to establish a business on the basis of a great idea is a path to failure and heartbreak. Taking time to nurture your business idea into a successful commercial enterprise can provide you with more wealth, in every sense of the word, than you could imagine!
Should you be in business on your own or with a partner?
This is a question you also need to answer. The simplest method is to take the FREE ENTREPRENEURS QUIZ on Life Change 90. Some people are born to be entrepreneurs. Others have strengths in some areas and need associates to complete their team. Some people are not the calculated risk-takers that business requires. This FREE ENTREPRENEURS QUIZ will answer those questions, and provide the answers to other questions about your business leadership and management platform and style, fundamental to your business structure and start-up strategy.
Take the FREE ENTREPRENEURIAL QUIZ now!
Starting or empowering your own business
If you are ready to take the next step and create or empower you own business, that next step is the BUSINESS PROFITS PROGRAM. The BUSINESS PROFITS PROGRAM has everything you need to create a new business concept, plan it and implement it through start-up to consolidation of the wealth it generates.
Explore the BUSINESS PROFITS PROGRAM HERE NOW!