Though moving slowly, many facets of the economy are indeed recovering. As such, many people who have high net worths are opting to leave the workforce and instead start their own small businesses as a means of improving their job security.
Because some companies are still struggling financially even years after the end of the recent recession, many people who have done a good job of building their personal wealth throughout their careers are now opting to leave their old jobs and start small businesses, according to the latest Market Pulse Quarterly Survey Report from Pepperdine University's Graziadio School of Business and Management, the International Business Brokers Association and M&A Source. This may help them to better pursue potential goals they may have financially, as well as allow them to better control their own destinies and pursue business interests they might not have been able to achieve when working for their older employees.
"As our economy picks up steam, more high-net worth individuals are transitioning from employees to business owners," said George Lanza, president of Plethora Businesses. "Many of these individuals are buying businesses for job security or because they anticipate a better [return on investment] than with other investments."
However, even those with high net worths should be aware of the ways in which the cost of starting their own companies can add up quickly, and therefore each step should be carefully considered. For instance, it might not be easy for some applicants to obtain the type of financing they might need to get their small businesses off the ground, and many might also face high costs typically associated with running a business, particularly when the hiring process starts.
Independent companies with employees other than their owners have many things to consider beyond the salaries they pay. For instance, there is the fact that companies have to cover workers' compensation insurance costs, in addition to the many other insurance needs they may have. Small business insurance policies are also growing more expensive these days, and that in turn might lead to far higher costs than some unprepared owners might have anticipated. Other considerations, such as general liability insurance, should also be taken into account as well when hopeful entrepreneurs are trying to determine the full cost of having their own company.