Ladder 7 Financial Advisories offers financial planning services to individuals to achieve their life goals.
A holistic plan is drawn up after understanding the income/ expense pattern, past investments, their specific situation, the time horizon, risk appetite etc. Tax, Estate, risk management issues are looked into and built into the plan. In short, this is a complete plan which is focused on achieving the clients’ goals in the best way possible.
21 October, 2016
What is green on the other side may be moss & algae!
We all have somebody we envy. It may be someone with that fancy car or a home in a tony neighbourhood... or could be another who does those foreign vacations every year... or that guy who owns a business & whizzes across the country / abroad, incessantly.
These days, that guy who owns a business - who sits in the corner office in that glass & chrome building, is the cynosure of all eyes. He is that guy who has broken out of the rat race, the stud who has achieved glory by doing his own thing. He is the ultimate achiever & role model - never mind if his startup has been kept alive by oxygen pumped in periodically by angel investors. He has not made money yet, in the past two years- but he is living his dream & has a 25% stake in the company. If it goes public, he will be a rich man !
I find such adulation & envy among a lot of people, I deal with. People are fed up with their day jobs...it's staid, predictable & to a great extent linear. It's not that they don't earn well... they do. But, the grass seems greener, much greener on the other side. But that’s not the whole picture.
The risks involved - Though business may appear exciting, it comes with a large dollop of risk. Many businesses, especially at the startup stage may appear to have some very unique business model, with a unique solution to a problem. The business potential may seem insanely exciting. However bullet proof the business model may appear, there are lots of reasons why it may not work.
One of the reason is prosaic & straight forward – a business can fail if the execution/ operations are not upto the mark. Many do, just for this reason. There are so many other gears which need to engage & perform seamlessly – like people, production, service delivery, efficient management of capital, sales & marketing etc.
Competition is another problem. Every business / idea can be copied & differentiating one’s offering becomes difficult. When service offerings are similar, the businesses start competing on price – which depletes everyone.
Starting a business for wrong reasons - One of the reasons people start a business is to get rich quick! Many businesses look great from outside but takes a lot of doing to run them well, as a profitable business. Every business needs to make money & every business has the potential to make money, if run well.
Good businesses happen when someone establishes a business which they are passionate about & have deep knowledge / insights about. Such businesses have the best chance of success. There are many who pursue this course. These businesses have a high probability of success. How much money the business makes is a factor of how well the business is run.
The chances of success comes down - when people start businesses in entirely different fields, the service or it’s delivery is completely novel ( hence how successful it might be is not known in the beginning ), when the business is capital intensive, when the business is not self-sustaining & needs cash infusion at regular intervals etc. Inspite of all this, we find people regularly talking about starting businesses in unrelated fields & some actually end up doing.
There are others who start a business with the idea of just starting up something, getting it going and selling it after a while. Many startups today do not have a business model which can make a profit at all. There are too many me-too businesses. Many of them are stuck in client acquisition & topline, while the bottomline is in the red. The model itself depends on just building a business ( albeit without any profit which is the raison d’etre of a business ) and selling it off to make money!
Getting away from the rat race - When someone is in a corporate job, they get fed up with their jobs for various reasons. It may be the boring routines, the cantankerous bosses, the business pressures to deliver performance, growth prospects for them are dim etc. That is when disillusionment settles in & the job which they are doing seems like a drudgery, even meaningless. That is when they decide to get away from the rat race & do something on their own. Also, people form the impression that they are working too hard in their jobs for someone else’s benefit and they deserve to do their own thing & earn all the profits – for some, that is their other reason for getting out of the rat race!
But, there are things which they will realize only when they are no longer in the job –like the certainty of a pay-cheque every month, the many perks which their job was offering, holidays & leaves which they could avail, the fairly high remuneration for the time they were giving, the insurances which were available for them and their family etc.
So, getting away from the “rat race” is not always easy, especially when one has EMIs, lots of commitments & a fairly good lifestyle that needs to be sustained. This becomes all the more pronounced, when the prospect of taking any money out, is a long time away. It creates all kinds of stresses, which they have never experienced before.
Flexibility & timing - People want to get into business as they can be their own boss, it offers flexibility & freedom to pursue what they want & they can do it in their own time!
Being one’s own boss suits people who are very disciplined - not all. While flexibility & freedom would be there, the onus of shouldering enormous responsibility, also comes hand-in-hand.
Some people think that they will have more time, which is the biggest delusion! When one starts a business, 24 hours are not enough. There are going to be no leaves, no holidays & lots of back breaking work. The other aspect is that in a corporate job, there are people and systems to take care of almost everything.
When one starts a business, one may have to do virtually everything – from strategy, composing the marketing brochure, client pitches, admin work to even paying bills! This would be very trying for the corporate types! Not everyone is going to like doing all these & only those who have fire in the belly and are ultra-passionate about their vision for the business, are going to get past this.
Conclusion – While one may have rants about the current job, one needs to evaluate whether throwing up the job & entering a business is really suitable for them. Inexplicably, many want to throw up their well-paying, enviable jobs & start a business, inspite of the enveloping uncertainties.
This is what I would call the black widow spider syndrome (a male black widow spider offers itself to be eaten by the female during copulation ) as one wants to throw up everything that they have for a chance of a potentially glorious, but uncertain future.
The grass certainly looks greener on the other side. Only when they get to the other side do they realize that the green carpet is super slippery moss & algae & not the green grass they had imagined it to be! And then, the grass on the other side would look greener!!!