Most small-business owners with $50 million to $100 million in revenue have over 70% of their net worth tied up in their own company. They keep reinvesting profits because they believe they can grow their money faster than outside firms can. Corporate employees, by contrast, spread their wealth across diversified 401(k)s.
I read a stat the other day that for most small business owners in America, and small being, you know, up to, you know, kind of $50 to $100 million, so even fairly large but not the, you know, sort of giant corporations, 70% or more of their personal wealth is actually tied into their business versus, you know, those corporate folks that have been steadily investing in their 401 over time. And so their wealth is kind of diversified. Business owners have been steadily reinvesting into the business every time they had additional money, because oftentimes entrepreneurs feel like no one can grow their capital better than me. Why would I give my money to some other company that's trying to grow their business? I'm going to give it to myself and continue to bet on myself, which is, you know, very different sort of perspective
How Can You Maximize Your Business Value Before Selling? with Randy Katz Video
