Liz Koh.
Owning a business is often touted as a great way to increase wealth. Wealth coaches urge employees to give up their jobs and start a business to get themselves on the path to riches. So, is owning a business the path to riches? It depends.
There are several ways to
get into business and they each have potentially different outcomes. If you have a great idea and plenty of enthusiasm, you can start your own business. You don't have the upfront cost of buying an established business, and if you get it right, you may be able sell it for a lot more than what it cost you to establish. However, start-ups are notoriously risky and most fail within the first five years through lack of money.
A safer option is to buy an established business with a proven track record. The trick here is to do your homework and make sure that the information presented by the seller is accurate, and there are no hidden problems with the business, such as falling sales or a change in technology that will make the products or services obsolete.
If you have lots of enthusiasm but need help with ideas or business skills, buying a franchise is another option, however this comes with the added cost of franchise fees.
With any business proposition, ask yourself what you want from it. If you are looking at as a way to increase your income or build wealth, the business has to have growth potential and you have to be prepared to put in the effort to make it grow. With all the risks and hard work involved, you need to be sure you will be better off financially in the long term. Buying a business needs to be more than just buying a job for yourself.
