Rich people come from all branches of business. An infinite number of companies can get rich.
Plus, you don’t have to be brilliant. You needn’t be a workaholic. If you want to get rich you don’t need to have some unique talent either.
Another common misconception is that you have to be in a high-flying business. There are plenty of rich business owners in ordinary everyday businesses (although you must choose a profitable business–more below).
Here’s the secret most people don’t know.
The most popular way of getting rich is to be patient, make moves in smart money and handle your finances well.
This is it.
Getting rich is about how you live and run your business, and what you do with your money.
So, back to your question: how does a small business make people rich? In their businesses and personal lives, mostly by following good behaviors and money habits. They’re financially focused. They are good at managing their money. And that can be learnt to do by anyone.
Take these 10 moves to get rich:
1. Start your day as early as you can
Early birds that begin work early before others swear by the boost in productivity and creativity. You get a few uninterrupted hours each day before customers and staff start contacting you. You also benefit from extra time to think and to plan.
The more time you need to concentrate, the more you can focus on how to think about new opportunities from which to get rich. It’s not about tougher work, it’s just smarter. Give yourself time to think, set goals and plan, without interruption.
You may get the same benefit if you’re a committed night owl — just after hours. It is the same thing, in reverse only. You work when others don’t. This is going to help you build riches.
2. Be a risk taker
As a group, business owners and businessmen tend to have a higher risk taking tolerance than the general public.
PODS founder Pete Warhurst was already in the traditional storage business when he came up with the idea of mobile storage units. He says you can’t be afraid of risk-just calculate yourself.
“You have come up with an idea and your gut and instincts are telling you it’s a good idea to take the risk. But keep an eye on the decisions you make and be willing to admit when you’ve made a bad one, and change it and fix it, “he says. He sold the business, and it ultimately became a billion dollar business.
When you want to get rich, be prepared to take risks. But, walk into it with eyes open and protect the downside by carefully managing the risks.
3. Live within your income
You have to save and not let your money flow out of the door if you want to get rich and stay rich. A lot of wealthy people live below their means. No matter what their earnings are, they spend less than they earn.
Rich people like the rest of us love a bargain. For instance, one Reuters study found Millennials enjoy shopping in dollar stores. About 29 per cent of the millennials shopping there paid more than $100,000 a year.
If you can early accumulate money, you can invest it, and grow it. Rich business owners: Don’t live in neighborhood’s biggest house.
Do not eat out every night at expensive restaurants-they save it for special occasions.
4. Start businesses that have high profit margin
Rich people pick up a business with low operating costs and good potential for profit. That definition fits into thousands of different businesses and industries.
Stay away from businesses that have high operating costs unless you are able to get outside investment. A biomedical startup would be an example of a business that would take many years to be profitable— because of the lengthy development and regulatory approval process.
Most of us want something much cheaper that would throw income off. Also, pick a simple business to get rich without running yourself ragged.
5. Have a wise spending habit as a business owner
Rich business owners are known to be frugal about spending on business, and not just personal spending. Create and stick to a business budget. A whopping 93 per cent of wealthy people say they usually stick to the budgets they create, according to one study.
Before you take on any new business expenditure there is a good test to do. Ask yourself, “How many sales do I have to make, or how many hours do I have to pay for employee time to cover this expense? “A proposed expenditure may not be essential, if you put it that way.
6. Pay your employees well
Best practice is to pay your team as much as you can afford, in line with the pay rates in the industry. This may seem to contradict the frugal advice but it is perfectly consistent.
Paying people well eliminates hidden costs like employee turnover, negative behavior towards customers and low productivity due to poor morale. In the long run, charging for quality aid and reducing turnover is less costly.
For a while you can get away with paying very low salaries. But when the labor market booms, it ultimately catches up and you lose your best talent. Treat manpower as an asset. At the same time as building yours they can help build the company wealth and their own wealth. That is a triple triumph.
7. Don’t joke with your taxes and investments
Rich small business owners realize wealth is based on smart tax strategies and funding strategies. If you want to grow your money, just put it to work for you.
Also, learn how to use tax-reduction strategies — legally, of course. Take advantage of the top small business tax deductibles.
Many wealthy people say tax deferred investments such as Individual Retirement Accounts or 401(K) plans are instrumental in enriching themselves. You have even more options for business owners including Simplified Employee Pension (SEP) and Savings Incentive Match Plan for Employees (SIMPLE) schemes.
Learn the value of the annual growth rates for compounds. The power of the annual growth of compounds can turn a modest 401(K) into something much bigger over time. It also has real power to build wealth by applying regular savings to your portfolios, such as 10 per cent of your salary. That is what it means for you to get rich to make your money work.
Many small business owners will never get close to producing somebody like Facebook founder Mark Zuckerberg’s sort of income. And by that, most of us are just fine. You needn’t be a billionaire in order to be wealthy.
Follow the example of rich business owners, no matter what money you earn. They treat the money which they earn with respect. We know that cultivating habits that give them the ability to accumulate assets and generate more money, year after year, is the path to become wealthy.