A.1: Starting A Business: Why Do People Go Into Business?

Doing Business Is The Best Way To Create Wealth

We were shown these statistics when I attended a presentation of a certain network marketing company:





This graph presents how the wealthy in America create wealth (source: The New Interagency Report: Older Americans 2000: Key Indicators of Well Being [US Census])

A resounding 74% of the wealth in America was created through BUSINESS. For the "un-entrepreneurial", fear not, you still can be "wealthy". Well that is if you're a Michael Jordan, a heavy hitting salesperson, or if you've climbed the top of the proverbial corporate ladder and become the CEO of the company you're working for. But then again, do those other methods use LEVERAGE? I guess not.

*Side Note: I was brought up by my parents to believe that wealth could be created only if I climbed up the corporate ladder. For my parents, the only measure of FINANCIAL wealth was having fat paychecks every month, having a big house and having luxury cars. When I developed my financial literacy I realized that wealth was measured by TIME. Wealth is how much time it will take you to live the lifestyle that you want without having to physically work or depend on others for money. Wealth, therefore, is FINANCIAL FREEDOM.*

Now the above statistics do not only hold true for the US but for any other places as well. Here in the Philippines, we all know who possess the majority of the wealth -- the Ayala's, the Sy's, the Lopezes. All of these families have created their vast billions by, what else, BUSINESS.

I have heard that the number one dream of Filipinos is to own a business. There are various reasons for this but in my observation (including of myself) some of them may be:

• For extra income (sidelines)
• Got laid off or in the verge of getting laid off/fired
• Retired from service
• Tired of working for someone else
• Prestige of being the CEO of one’s own company
• To pursue an idea
• To invest one’s extra cash
• Forced by circumstance (i.e. can’t find a good job coz of lack of education)

Many then start their businesses. They get excited and tell their friends about it. But there's just one thing most do not understand -- business is not a substitute for employment. If you're thinking that when you start a business you'll immediately get rich, think again. You should brace yourself for several months of having no regular income, if there's any at all. As I said in the Preface, may can't stomach entering business because they are too scared to lose regular salary. So if you wanna go into business, prepare for months of drought and longer working hours. It's like seven years of famine before the seven years of plenty.

If you're contemplating on having your own business what is your reason? Have you already started your business? If not, what is stopping you?

I encourage you to take part in a mini-discussion through your comments. Take note that I am not a business teacher. I set this whole blog up so everybody can share and teach through it.

In my next post (On Wednesday) I will be discussing reasons as to why most startup businesses fail. Be sure to invite your friends and family to this blog.