Entrepreneurship Starts With Your First Dollar

first dollarWhen most of us think about entrepreneurs, we think of billionaire success stories like Mark Zuckerberg, Bill Gates, and Steve Jobs. However, most entrepreneurs are not billionaires (though we can all dream) and are not from tech companies. Most own local, small and mid-sized businesses and started the exact same way you did.

 

The Wealthiest Americans Are Typically Business Owners

A while back, I read the book Rich Like Them by Ryan D’Agostino. The biggest takeaway I found was that the majority of people who live in the richest zip codes in America did not get rich in corporate America. They started a business that many of us would consider a “small business.” They turned the small business into a successful business that pays for their family to live a comfortable life.

Most of the folks in this book had net worths over $1 million, but they were not so rich it would be unattainable for smart, dedicated, hardworking entrepreneurs.

 

Small Business Scales Your Income

When you work for a big corporation, or even a small business, your income can only grow as much as your boss allows. Some years, your pay may be flat, others you may get lucky and earn a 3-4% merit raise. Typically, however, that is the most your salary will grow.

As a business owner, your take home pay has no ceiling. You have unlimited earning potential.

Think about it. If your company makes a $100,000 profit this year and $200,000 profit next year, you get a $100,000 raise. Other than top paid CEOs, you will rarely find an opportunity for a $100,000 raise. Even for top CEOs, a 100% raise year over year is almost unheard of. For small business owners, however, that is a very real possibility.

 

You Also Get the Risk

With unlimited income potential comes risk as well. When you have a corporate job, you know you will get your paycheck as long as you are working there. Of course, there are risks of being laid off or fired, but assuming your company is solid and you do a good job, your paycheck and benefits are guaranteed.

When you work for yourself, that isn’t the case. If your company has a bad year, you have a bad year. Your employees get paid first and you get whatever is left over. If your profits sink, so does your paycheck.

 

Don’t Forget to Invest in Your Business

When you start seeing your business bank account grow, it can be tempting to write yourself a big check and take the money home. While you are growing, resist that urge.

It took me over a year to take my first paycheck from some of my businesses. Sometimes, I had to put more money in than I made for quite some time. I have some businesses that have still not made a profit, and may never make a profit.

In order to give those projects a chance, though, I have to invest. Some of the revenue always goes to staff or development costs. If I’m doing well, some of it goes to my bank account too.

 

It All Starts With Your First Dollar

When you walk into a restaurant or bar, you often see their first dollar earned framed on the wall. That first dollar means a lot. It represents the planning, preparation, and execution of successfully starting a business. Just don’t spend too much time planning, or that first dollar may never come.

About Eric Rosenberg

Eric is a finance blogger at Narrow Bridge Finance and a serial entrepreneur. He runs a media company, flash mob company, and DJ business from his hometown in Denver, Colorado. You can read more about his finance background and connect with him around the web.

Comments

  1. Great tips, Eric! Very true! My favorite part was the ending…I can’t wait to frame my own dollar like I’ve seen so many successful business owners do!

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