Why it is essential to build a business to become rich?
People who are financially rich says that the probability of one becoming rich is very low while working for others (in job).
The problem with doing a job is that, it never gives one enough cash.
In job, majority lives by compromising ones desires due to lack of sufficient funds.
No matter how much is the salary, one will always feel cash-starved.
Business allows one to generate excess cash.
Please note that excess cash doesn’t always mean abundant cash.
To become rich, one must first find several ways to generating excess cash.
Several sources of excess cash will become “enough”.
This enough cash one can invest and buy assets.
So could you see the point why it is essential to build a business to become rich?
Business generates excess cash. The excess cash buys assets. More and more assets makes you rich.
The process of becoming rich is simple. But the trigger point is excess cash.
While doing a job, ones hands are always short of cash. Why it is so?
Because, the more we earn, the more we spend.
Doing a job, and earning a paycheck has made making money too easy.
Hence needless spending’s goes unnoticed.
We know that even if we spend recklessly today, next month there will be a paycheck to nullify all overspending.
People have also lost the connect between “effort and monetary return”.
In job, there are people who puts-in huge efforts in their job.
But still they are not the people who earns the most.
In job, there are people who earns the most are not necessarily the most hard-working people.
This is the problem with doing a job. There is little connect between hard-work and returns.
Why it is so?
This is because paycheck control is in the hands of others, the boss / the company.
Company would always like to get the most out of you, and pay you the least.
No matter if you are making a million dollar a year in your job, but the effort that you are putting to make those million dollars will be more costing on you.
But in business, the system doesn’t work like this.
A successful business is more productive.
Even small-small efforts to run a successful business yields much better returns.
This is what makes a big difference between a JOB and a BUSINESS.
Let’s do business and become rich!
If it is possible to make more money out of business, why do a job?
But the question arises, why everybody is not doing business?
Starting a business is still easy, but making it profitable (successful) is a bigger challenge.
Businessmen who are rich, knows how to run their business profitably.
This profitability factor generates excess cash for the owner of the business.
And the extra cash in turn helps the person to buy more assets.
The asset accumulation, while running a successful business is much faster. This is what makes businessmen richer than majority.
But doing a business is risky, right?
Imagine yourself in a situation.
You are somebody who is doing a 9 to 5 job and earning a decent paycheck.
Tomorrow you get a brilliant idea to start a business.
You approached your family and friend and everybody encouraged you over your brilliant idea.
Now, when you dropped the bomb-shell that you are going to leave your job to pursue this business, the same people’s thoughts will change and become upside down.
Parents will become insecure. Family will be concerned. Friends will be cautious.
Suddenly everyone will be extremely critical of your idea of business.
Business looks rosy only on paper.
When it comes to real world, not many encourage their loved ones to venture into doing a business.
But what is the problem? We are more trained to do a 9 to 5 job. We not trained to do business.
Hence few are supportive to the idea.
Withing this limitation, even if you have a brilliant idea, it dies in the bud itself.
The same set of people (family, friends) who were earlier optimistic, will soon start bombarding you will TOP 100 QUESTIONS emphasising why your business will FAIL.
The beauty is that, they will do this to increase your awareness.
You must be prepared for everything, right? But why not a single word of “why you should do it”?
Majority people remain glued to their job not only because of the aptitude, but also because of the social pressures.
Under such pressures, the energy and enthusiasm of the person ultimately takes the LEAST RESISTANCE path.
Let’s continue with the JOB. At least some money is better than inconsistent money.
There is no doubt that JOB is a much safer bet. But it also limits your ability of what you can really earn.
What is the best part of doing a business?
If you leave a GREAT JOB, you will get another great job.
But when you let go a GREAT BUSINESS, you become filthy rich. How?
Suppose you are an individual who runs a famous blog.
After few year, a big website like MSN, YAHOO etc approaches you and ask you to sell your famous blog.
They are offering you a fortune. What you will do?
You will do your math and come out with an answer.
In most cases, where the buyer is more than interested in an asset (like a blog, shop, workshop, property etc), the yield for the seller is GREAT.
So you see, letting go a GREAT BUSINESS can really make a person rich. In cases, filthy rich.
This is also true that, it is very unlikely that a good businessman would sell his GREAT BUSINESS to else.
But this is also a fact that, everything in this world can be sold for a price tag.
If someone is ready to match the price tag, a good businessman will sell it eventually.
Jan Koum ultimately sold Whatsapp in 2014 to Facebook at a whopping price of $19 billion USD.
So what is the point I want to make here?
The returns of a GREAT JOB can never match the potential returns of a GREAT BUSINESS.
So if you have inclination and skill, divert your efforts in building a GREAT BUSINESS.
How one can build a GREAT BUSINESS?
Converting a great IDEA into an great business must pass through a process.
Step 1: will be to define a MISSION statement for the business. The mission statement should clarify why the business is done in first place.
It is essential to embed the spirituality factor into the core of ones business. And this must reflect in the mission statement.
Business done only from point of view of making money is often not sustainable.
Business is generally done to serve the needs of the public; which in turn makes money for the company.
MISSION statement for Tata Group companies is like this:
This is classing example of how GREAT BUSINESS is shaped.
Tata’s first talks about how they are going to serve the community in totality (not just customers).
Then they also talk about value creation of all stakeholders (customers, lenders, employees, shareholders, suppliers etc).
And finally, they talk about doing business to build TRUST.
Companies which are most trusted are the ones who are also the richest.
Classic examples are global giants like: Apple, Micosoft, Mercedes, Google, BMW, Berkshire Hathaway, Samsung etc.
I have personally learnt from great companies around me and build a mission statement for my small blog.
My blog’s mission is to “improve financial intelligence of its readers by establishing the importance of savings and investment of money.
This is done to establish the importance of attaining financial independence in ones life.
The more passionate I write about savings & investment, the more popular my blog becomes.
This in turn makes more money for me.
This is the beauty of engaging spirituality with business. Even a small blog like mine can feel its benefits.
Having a clear and deep-meaning mission statement is a very important step in building a great business.
Experts say that, just abiding by a wise mission statement can make more money for the company than anything else.
Step 2: will be to build a TEAM who will operate and manage the business.
One cannot scale ones business alone.
A dedicated team of two can do ten times more than what a person alone can do in a business.
The mathematics of teamwork does not give traditional answers. Here One Plus One is not two.
Here one plus one can be eleven.
This is the power of teamwork.
But why a business needs team?
The founder of a Business need not be good in every aspect of business.
He may be good in technology but he may not be good in sales and marketing.
It means, sales and marketing is a weak point of the founder.
Having a team member on-board who is excellent in sales and marketing, will allow the founder to delegate this responsibility to this team member.
This way the founder can concentrate on his core area rendering better output.
Similarly, an expert of sales and marketing will further add better value to the company.
Form point of view of sharing responsibilities, building a team is essential.
But a reliable TEAM does something even better.
A dedicated and reliable TEAM is like an extension of that business itself.
Every step they take, is for the betterment of the business.
Together as a team, they have potential to make the FOUNDER of business absolutely FREE.
Together as a team, they can deliver results better than what the founder alone would have done.
So what does it sum-up to?
While the business is scaling, having more people as a team member is a must. Founder cannot do everything from his own hands.
On top of this, a qualified TEAM can achieve more than an individual.
This way, the founder can be a free man, where he still makes more money than before (when he was fully involved in business).
Step 3: of building a great business is to have a GREAT LEADER.
Generally, in the initial years of business, founder themselves make for an apt leader.
But over a period of time, when business expands, the business may need a more specialised person to run the operations.
In today’s terminology we call such a leader a Managing Director or CEO’s.
But the need for a GREAT LEADER who has a more holistic vision for the company cannot vanish.
To provide such type of leadership generally Founders remain as a Chairman of the Board.
No matter whatever is the composition of the management of the business, presence of a LEADER cannot be compromised.
No successful business is built without a focused and guided leadership.
Why doing business is better than a job?
To become rich, one has to get out of the rut of doing a job. If your job sucks, leave and try starting a business.
Why you must try business?
A successful business can be one assured way of attaining financial independence, ultimately leading to abundance richness.
These words sounds very good, but how business makes one rich?
We know what is important to build and ultimately run a successful business.
Mission, Team and a Leader.
All these three important entities together manages several intricacies of a business.
But what is their common goal?
In a business, profit making is the ultimate goal.
Strong mission statement, useful team and effective leader, all have a common goal of improving company’s’ profit and profitability year after year.
Higher is the profit, more will be the excess cash generated by the business for the owner.
In our example, we have considered LEADER and OWNER as one and the same.
The Team members here are the employees of the company.
They do their designated work and gets a paycheck.
At the end of the year, based on their performance they get the stipulated pay hike.
But the team members (employees), do not share profit of company.
No matter how good they do their job, their income is dependent on the pay-hike they get from the company.
The Leader here is the owner of the company.
I have made this assumption for the sake of simplicity.
The principles of the company (mission), the team and the leader all works day in and day out to serve their customer.
A happy and satisfied customer in turn generates profits for the company.
These profit are partly shared with the stakeholders as applicable.
Some portion of the profit is invested back into the business in form of reserves and surplus.
Balance what is left is called Owner’s Income.
This owner’s income generates excess cash for the businessmen.
The more successful the business gets, higher is the owner’s income.
How businessmen uses this excess cash?
He uses this excess cash to buy more assets.
It is the accumulation of assets that happens at the fastest pace when person is earning money from a successful business.
Salaried people can also accumulate assets, but for that they have to do extensive budgeting and planning.
Even for a business man, budgeting and financial planning is necessary, but for them the advantage is “ever growing excess cash”.
Business makes is easier for businessmen to generate excess cash.
A person who is in job and earning a fixed paycheck, finds it more challenging to generate excess cash.
Ultimate objective is to become rich.
Person who has more excess cash will be able to buy more assets.
And more assets in one’s investment portfolio makes one richer.