Maybe you have a job that pays you a decent income.
Or you feel your job’s secure
And you like the work you’re doing.
So you ask, Why go through the effort to start a venture?
Here are 6 reasons to start a business, or a side-gig that may eventually replace your job income.
- Expenses and inflation are rising, but wages are not keeping up.
- Automation, technology, outsourcing, and robots are taking away jobs.
- Multiple sources of income are more secure than one.
- You can pursue interests and use skills that are not used in your primary job
- Extra cash can be used for many purposes.
- If you do lose your job, you’ll already have something started.
Let’s explore each of the six reasons.
1. Expenses are rising, but wages are not keeping up.
A recent Bankrate survey finds that among employed Americans, 62 percent report not getting a pay raise or better paying job in the past year. That’s more than half the working population that is losing purchasing power and experiencing a decreased standard of living.
At the same time, the rate of inflation, according to government statistics is close to 2%. However, they calculate their inflation figure by leaving out some key items needed to maintain a constant standard of living. Other estimates believe the real inflation rate is a lot higher. See Shadowstats.com for a different look at inflation.
2. Automation, technology, outsourcing, and robots are taking away jobs.
The possibility of losing your job is a major reason to have a second income. Companies are aggressively looking to cut costs. They look to automate everything they can. One example is the automated checkouts put in places like supermarkets, big box stores, Panera Bread, McDonald’s, and others, jobs that have typically employed many lower-level people. In addition, they are gaining use in factories, warehouses, hospitals, nursing homes, and food services, for now.
In this Statistia article, a study conducted at the beginning of 2019 showed that 50% of US companies expect robots to reduce the number of employees by up to 20%.
Add to this other advanced technology that makes some jobs obsolete, and outsourcing to freelancers. contract employees and temporary firms. That puts a squeeze on the hiring of new workers.
3. Multiple sources of income are more secure than one.
Earning an income from more than one source gives you additional security than depending on just one. It makes sense, when all your earnings are from one job, if that job disappears, your livelihood does also. Alternately, if you had a side gig or passive income you still have some income. And while it may not pay all your bills you’re not flat broke, and you have the potential grow it to a substantial source of earnings.
Multiple streams of income is a long term strategy of the well to do.
“One of the principles of accumulating wealth is to have ‘a lot of lines in the water,’ meaning multiple sources of income,” says Greg McBride, CFA, Bankrate chief financial analyst. “Those with a higher level of education and unique skills and talents are in the best position to capitalize.”
4. You can pursue interest and use skills that are not used in your primary job
If you’re like some of my clients, you have an interest or even a college degree in an area you’re passionate about. but you can’t find a job in the field. Instead, they have created a business out of that fascination and get enjoyment out of what they are creating. It also makes their day job tolerable until they can make the money they need to quit their job and pursue their passion full-time.
5. Extra cash can be used for many purposes.
Even if your full-time job pays you enough to meet all your living expenses, a side-business could provide extra money. That money can pay off debts, save for a house. invest, travel or start a business. Additional income creates a sense of financial security.
6. If you do lose your job, you’ll already have something started.
If you do lose your job, you can direct your attention to your business, put the time in, work harder, and earn more from your side venture. If things go well you can grow it into a full-time gig that will replace your employment income. There are endless stories about people turning their side job into their main revenue source.
Technology can work for you as much as it may work against you at your 9-5 job. You can be productive, efficient, and run a lean business with technology, software, and outsourcing. To read about a successful one-person business read A One-person Million Dollar Business. – Is It Possible?
Of course, there are many other reasons to start a business – like having the freedom to do what you want, escape the rat race, make your own decisions, control your destiny, and maintain a source of income right into retirement.
The Solo Entrepreneur’s Guide