Why does every go-getter investor-type want to start multiple businesses?
I’ll tell you the three reasons why, regardless of what they tell you:
- Mistaken belief in how most entrepreneurs actually get wealthy
Reason #1: Fear
I have heard comments like, “Do enough things to make money and one of them is bound to work!” This is like mixing every ingredient in your kitchen and saying “It’s bound to taste good!”
I can tell you that the folks who say things like that are so afraid that their ventures will not work, that they actively engage in several of them in a misguided attempt to ensure their success in general.
And, I can tell you who does NOT subscribe to this belief-Bill Gates, Sam Walton, Ray Kroc, to name a few. Can you see Bill Gates working on real estate, multi-level marketing, information marketing, being a realtor on the side, and, oh yeah, founding MICROSOFT all at the same time? Neither can I.
The reality is….pick the venture that is most likely to succeed and don’t waste time on anything else. Growing the best business faster is better than several businesses poorly. If you’re wrong about which idea is the best, then you can stop it and focus on something else 100%.
And if you’re that worried that your (1) business will not succeed, then just get a job until it is a consistent moneymaker. Then you’ll have the freedom to start and stop your business as you wish and you won’t be in a position where you HAVE to succeed or else.
Reason #2: Macro-A.D.D.
Starting a business is fun. I get a rush out of it. I’m an Idea Guy, so I like coming up with idea of how I could take advantage of some great opportunity. The reality, though, is that for every serial entrepreneur who owns several profitable businesses, there are 100 Idea Guys who tried the same thing and failed.
If your first business is not providing you with enough income, why invest capital and time in another one? Why not grow the first one? Most people who toil towards the almighty standard of success, “multiple streams of income,” have not created multiple PASSIVE streams of income, but ACTIVE streams, becoming overwhelmed with work and not being particularly successful at anything.
If you have not yet created one passive stream of income, what business do you have starting another one? Systemize or automate the first one and then do it again, if desired. Otherwise, you are filling your mind with the gratifying feelings you get from starting a businesses but are not filling your bank account. Which is more important?
I’m telling you-show me one “serial entrepreneur” and I’ll show you 100 people who failed trying.
Reason #3: Mistaken belief in how most entrepreneurs actually get wealthy
When I first read The Millionaire Next Door, I was not impressed. It’s been a few years, and now I have finally accepted the fact that it is smarter to do what has worked for the vast majority of millionaires than to try to do things according to “Rich Dad’s” one successful example.
The book says that most millionaires gained their first million by running one successful business. And guess how they gained their second million? Running their first business for another few years, NOT starting a new one.
What is easier, starting a new venture with no track record from scratch, investing time and money based on a gut feeling and taking a year or more to become profitable, or to just keep doing more of what you’re doing and making even more money this year than last year. You will find that as you grow one successful business, the increase in revenues may grow faster every year-10%, 20%, 50%, 100%, and so on.
Seems smarter and easier to me to do more of what works. Plus, you’ll have learned the ropes and can systemize that business a lot easier and make more money in less time.
I don’t care what you say–it’s all about your dollars per hour. And I dare you to find a way to make more dollars per hour than by growing an existing business. Go ahead. Seriously, I dare you.