Why should you build a business? How will you build a business? What will my business look like? These questions are pretty common among budding business owners. I think the only question that should be asked is the first one: ‘why?’ If you have the why, the others will follow.
There are three main reason why someone will build a business.
- To provide you with some excess cash.
If you have a yearly salary of $70,000 you would say you’re going pretty well. But if you have several different lines of income providing $10,000 worth of income each yearly (which is only $200 a week you are making $70,000 though passive income. This is why people build many businesses, often spreading themselves though different industries.
Professional business people often build businesses that they don’t have to manage full time, or they buy into franchises so that they can hire managers to do their work for them, they merely just oversee the work that is being done. This provides them with a yearly income for minimum work
- To Sell It.
90% of the working population holds some kind of profession that they have to work for. The drawback of this is that the only thing that they can get out of it is a pay rise or promotion, when they retire, they can’t sell it, they simply just lose it and have nothing to show for their hard work. This is why business people often build businesses so that they can sell it in the long run. Although they work for the business for 5 years at a time, they can still make an income, but have the added benefit of selling it when they want to. Many technology start-ups do this by manufacturing and revolutionising a product and selling it to the highest bidder, usually huge corporations such as Apple, Amazon or Samsung.
- To take it pubic
Although in Australia we don’t have a very successful rate of taking private companies public, here we can turn to look at the USA to see success, as they hold 5 of the top 10 businesspeople in the world.
Warren Buffett, Jeff Bezos, Mark Zuckerberg, Elon Musk and Bill Gates have all seen massive success in taking their businesses public in the past 30 years.
You don’t have to be a young gun to start your business, you just have to have that bright spark that will take off. Work on it for a few years before launching your business to make sure that you have all the small creases ironed out.
For example: Ray Kroc was 37 when he franchised the famous McDonalds restaurant, while Colonel Sanders was near double his age at 66 when he started Kentucky Fried Chicken (KFC)
All in all, there are definite benefits to starting your own business, but you have to make sure that you are willing and able to do so. You have to be committed and have a subject in mind before you start splashing cash that you may not see again. Make sure that your business plan is checked off by 5 or 6 professionals before you go ahead, to ensure that you’re legal and can cover your bum if need be.