Starting a Small Business...

One of the advantage of a small business over the Stock Market investing is the control on your money. When you start a small business, you usually make a feasibility study on it. You draft the income it will flow, the expenses it will incur, the profit it will generate, the competition, its strengths, weaknesses, etc. You yourself is planning the outcome of your business. Of course, you will control your expenses, set aside specific funds for payroll, equipment, materials, etc. You are at the helm of your funds at the end of the day. When the business starts rolling, you have a sense of ownership and accountability over your funds or resources. Stock Market on the other hand relies on various factors outside your control.The stock price can either go up or down because of Japan tsunami, Middle East brouhaha, US recession, investors timing and of the course the most important, Company Earnings. These are all outside your control and the money you invested in the stock market may eventually be wasted.

However starting a business is risky especially if you do not know the ins and outs of your business. Having lots of cash is actually harmful than beneficial for people starting his own business. You know why? Because you will normally use that cash to buy everything you need instead of being resourceful. You can use your own house before you start renting from others. You can use your existing stuff before buying new equipments or materials. You can ask your friend's assistance instead of hiring a new one. Your first business should only have little cash because first businesses usually fail. Some will thrive but others will collapse. Consider it God's redirection, redesign or rehashed, etc once it happens.

Years ago, I started selling wine with flavors because I like the wine and besides I have extra cash with me that I can spend on this stuff. I gave the wine to my auntie and ask her to sell it in her store. Ask me what happened, nobody bought it. The wine are still on the shelf waiting to aged for one decade! My point here is simple: because of extra cash, little business sense, excitement on my first business venture, it failed. I also know a lot teens who started business with the help of their millionaire parents and then lost millions. Money is easy for them and they do not value it. In these instances, these teens lost the art of imagination, creativity, passion, perseverance which are necessary for a startup business. Yes, I don't have those values years ago.

Micheal Jordan is arguably the greatest basketball player in the world. He has 6 NBA championships, 5 MVP award, 10 NBA Scoring Titles, 2 Olympic gold medals, etc. After his first three peat Championship, he retired and ventured into baseball. The great Jordan in basketball is just an average in Minor League Baseball. The same legs, same arms, same body and same DNA is great in basketball but average in baseball. All of us has the gift or talent bestowed upon us that if fully utilized will propel us to greater heights. However, trivial decisions will come just like what Micheal Jordan did. Baseball is not his gift. After that baseball struggle, he came back to basketball and won another 3 Championships. Basketball is his core gift. He bless the world in basketball by inspiring a lot of people. His work ethic is just phenomenal. And people try to emulate the attitude he has put into his skills.  In business, the concept is the same also. You must venture into something you are very good at. A business that will serve as your playground. A business that you will be passionate about.


My friend Pedro wanted to start a business in the Philippines while working abroad. He wants a passive income. He commissioned his friend in the Philippines who is struggling financially to establish the business.Besides, he wanted to help his friend who cannot continue sending his children to school. He will provide the capital and his friend will manage it. He will earn profits while working abroad and at the same time help his friend who is in dire financial need. He trust him so much. Before he sent the first capital, he told me about his plan. I asked him some questions:


"Is your friend knowledgeable and skilled about the business you are going into?"


"Are you willing to refinance if the 1st project fail?"


"Do you have a control to avoid misappropriation of funds?"


Pedro paused and think for a while. He said he will come back again to answer those questions.


Startup business is risky and you might lose all your money although life favors the brave. Those who tried simply keep learning until they have mastered the art of doing business.


Better yet, in order to avoid all of the stress your passive income in business may bring, why not invest in the stock market, real estate, gold, etc for our future.

Disclaimer:

Investing involves substantial risk. I do not make any guarantee or other promise as to any results that may be obtained from using this blog. No reader should make any investment decision without first consulting his or her own personal financial advisor and conducting his or her own research and due diligence, including carefully reviewing the prospectus and other public filings of the issuer. To the maximum extent permitted by law, I disclaim any and all liability in the event any information, commentary, analysis, opinions, advice and/or recommendations in this blog prove to be inaccurate, incomplete or unreliable, or result in any investment or other losses.