3 reasons to start your own business

February 1, 2011Post by Laura Humphreys

Why do people get into business for themselves?  When I present to business groups I often ask people why they decided to start a business.  The answers are always the same.  To be my own boss/to be free to choose how I work/I’m good at what I do… so why should I line someone else’s pockets/I’ve got a great idea, I know it will work…

The reality of owning your own business is that it is hard work, it is high risk, it takes its toll on your time, your pocket and your energy.  In the early years you have to put more in than you get out.  Most business owners work harder than they did when they were employed, they pay themselves less and take on more stress.  This is especially true of first time business owners.   If you work out how to do it successfully the first time and go on to create other businesess, it typically gets easier as you have more experience and more capital to invest.  When you know how to plan and how to grow a business, the ride can be less bumpy and less risky for sure.

I’ve owned or part-owned 5 businesses now.  The first I bought off someone knowing nothing about business and passed it on to someone else two years later having made no money and lost my initial investment.  The second I started with a partner and left after 6 months because I didn’t share the same ethics (they went on to be mega successful but I still don’t regret that decision).  The third I built and sold, becoming financially independent.  The fourth and fifth I still own and am on track to further grow my future wealth from them.  I expect to be involved in more businesses before I put myself out to pasture too!

Having failed, then succeeded and now teaching others how to fast track the success and hopefully avoid the failure, I can conclude that there are really only three reasons to go into business for yourself:

1. To build wealth.  Make no mistake a business is a wealth creation vehicle.  Put bluntly, if you don’t have a plan to build a business that will one day contribute to your passive income, you have not built a business, you’ve created a job.

2. To make a difference.  A business that sets out to change something for the better generally succeeds.  Whether its a change in an industry or a beneficial change to people and/or communities… with a higher purpose, a business has focus and a clear reason for people to support it.

3. To feed your soul.  A new business can suck you dry.  In the early years you have to work hard, invest your money, energy and time.  You take on stress and a level of commitment no employee really experiences.  So you need to be sure that your passion for the first two reasons list above is clearly in place.  If you are passionate about creating future wealth and you are passionate about making a difference, you will find that your business excites you and feeds you an energy hard to find in a job.