People start their own company for many reasons but they often boil down to two:
- They believe they can make more money being in their own business.
- They need to be their own boss.
Very often the second reason outweighs any logic for the first reason.
For example, what if someone started their own company selling widgets for $100. Each one costs them $50, and the overhead costs them $20 each. Profit is $30. Someone else comes along and tell them they can sell under their name for the same price but the costs are $40 for each widget and $10 for overhead leading to a profit of $50. Logic says that the person would take the deal.
As much as it may seem logical, the value that people place in being their own boss and having control of their own destiny often outweighs any profit they may make from working for someone else. There is also the lure that someday they may be that big and make even that much more money. Furthermore there is the sense of pride that someone gets from creating a business on their own. For some they might be satisfied to give this up for more money, but for others it cannot replace that emotional need to manage their own business.
This comes into play when you consider exit plans or consolidating other people’s business under your own. Never forget the need to be your own boss as the motivator.
