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Investing in small business can build you the greatest wealth. You can invest in small business by starting one yourself, buying an existing business, or investing in other small business.
Starting your own small business
When you have self-discipline and a product or service you can sell, starting your own business can be both profitable and fulfilling. Consider first what skills and expertise you possess that you can use in your business. Millions of people operate successful businesses that are hardly unique, such as dry cleaners, restaurants, tax preparation firms, and so on. Begin exploring your idea by first developing a written business plan. Such a plan should detail your product or service, how you’re going to market it, your potential customers and competitors, and the economics of the business, including the start-up costs. Of all the small-business investment options, starting your own business involves the most work. Although you can do this work on a part-time basis in the beginning, most people end up running their business full-time — it’s your new job, career, or whatever you want to call it.
Buying an existing small business
If you don’t have a specific product or service you want to sell but you’re skilled at managing and improving the operations of a company, buying a small business may be for you. Finding and buying a good small business takes much time and patience, so be willing to devote at least several months to the search. You may also need to enlist financial and legal advisors to help inspect the company, look over its financial statements, and hammer out a contract.
Although you don’t have to go through the riskier start-up period if you buy a small business, you’ll likely need more capital to buy an established enterprise. You’ll also need to be able to deal with stickier personnel and management issues. The history of the organization and the way things work will predate your ownership of the business. If you don’t like making hard decisions, firing people who don’t fit with your plans, and coercing people into changing the way they do things, buying an existing business likely isn’t for you. |