6 Hurdles to overcome to making it Rich

There are many reasons why people enter the world of entrepreneurship, but the one that seems to draw the most attention is the prospect of “getting rich.”

But it’s unlikely that merely owning a business is going to make your rich and here are six reasons why:

1. BUSINESS FAILURE IS NOT UNCOMMON

Not only do you need to come up with an idea that’s original, appealing and profitable, you also have to get the timing right.

Coming up with an idea is just the first part. Successful entrepreneurs have done their research and are willing to change if circumstances evolve over time. Despite of this there is a failure rate of over 50% of start-up businesses during the first 2 years. Scary statistic indeed!

2. GET-RICH-QUICK STORIES ARE OFTEN EXAGGERATED AND RARE

In many instances you come across stories of entrepreneurial “Rock Stars”, –

only to find out later that the media played up this stories or exaggerate them to make them more interesting for their readers.

Many inexperienced entrepreneurs have been led into thinking that overnight successes and instant riches are not just possible, but likely.

The truth is; with rare exceptions, it takes years of effort and the ability to work past multiple failures for most people to get to the “millionaire” point.

3. RUNNING A BUSINESS IS EXPENSIVE

Don’t confuse sales with profit. Running a business is more than just collecting revenue. Everything has to be paid for that happens behind the scenes, which include many unforeseen expenses.

You will have to pay your suppliers, have various other overheads, such as utility costs, rent, equipment costs and — don’t forget the often overlooked outgoings  like taxes, insurances and legal fees.

Many start-up entrepreneurs have not made a realistic assessment of start-up funding needs, enter into a business underfunded, end up selling themselves short and end up bankrupt in a short period of time.

 4. THERE ARE ALWAYS UNSEEN VARIABLES

Let’s assume you have a documented Business Plan that has realistic projections. But even then there are always unpredictable variables affecting how your business plays out. Think of a new competitor threatening you or new technology that might change the way your customers think about your product.

Make contingency plans for fluctuations in revenue and be ready for changes in the market place.

5. HIGH PROFITABILITY ALONE WON’T MAKE YOUR RICH

To achieve success you need personal financial skills; or have a partner who possessed them if you want to become and stay rich.

Many businesses have very large turnover, but end up with very little profit by the end of the financial year.

Regardless of how big your business is, getting profitable and staying rich demands careful attention, frugality, smart investments and responsibility.

6. MOST WEALTH IS ACCUMULATED FROM MULTIPLE SOURCES

Another important lesson is that even though many entrepreneurs have accumulated a chunk of their wealth through their business endeavours, in many instances personal wealth is gathered from multiple sources of income.

Having earned significant money, smart entrepreneurs invest a portion of their cash into shares, bonds, real estate or even other start-ups. Aim to optimize your own income from multiple sources.

Even if that great idea of yours may not make you a billionaire, it should at least earn you a good living and provide you the satisfaction that comes with being a creator and leader.

2018-10-24T19:06:46+00:00