Economy & Finances Explained

It is clear from the responses of business owners that most consider wealth creation and independence to be their primary objectives. But, it is worth asking whether these objectives are achieved more easily through owning a business than they could be through working for someone else. Similarly, will you, as head of the family, create more wealth for your family by going into business than you could by being employed?

The most obvious difference between owning a business and having a job is that with a business you have the potential to create wealth in two ways, firstly by earning income and secondly by building capital value in the business. With regard to income generation, the average small business owner probably earns less than an employee in a senior management role, either because he is putting back most of the profits into the business, or because profits are not large or predictable enough to allow for generous drawings. So, in most cases, if a business owner is to create greater wealth than an employee, it is necessary for him to build capital value in the business.