My tip of the hat to you, very interesting topic. This might become my favorite topic of all time.
First I'd like to say that wealth is only relative to the individual. Assume you have $1,000,000 and I only have $100,000. From my point of you you are rich, but let's say there is a third person involved who only has $10,000. From this persons point of view, I am in fact rich. So then, let's go about my reply by rewording your question. How does one become wealthy in the computer industry?
Let's look at the types of computer industries that are relatively easy to join. We have the computer OEM industry, software development, computer sales, software sales, computer service, security service, data service, forensic services. Okay, so that's a pretty nice list of basic computer industries. Now that we know what's easy to enter, let's look at how we penetrate.
Assuming you start with the computer service industry you can probably grow rather quickly. Start locally by passing around some flyers go door to door and sell your service and grow by word of mouth. The first couple years you'll probably be making a max of around $50,000/year, a comfortable start but still no where near "wealthy". So with your income you decide to open up a retail location. maybe something small around 600 square feet in all, low rent, decent visibility and with some demographic analysis around your biggest client base. Now you can consider yourself a competitor to the other local shops in the area like yourself, although Best Buy, Staples, etc. just sweeps you off like a spec of dust still so they aren't your direct competition.
Now you have a store, great! A store! Just like the 10 other stores in a 5 mile radius. You need to stand out a little more. Sure you got your client base, but what about your clientele, your potential customers. You need to attract them in too. So you start to do other things, move into other markets and possibly begin to sell your services to business and business don't only want virus removals and tune-ups, no no no, they need things like security, consultations, and a single one-stop-shop for all their IT needs. So you move into the next level of computer services.
Great, now you are part of two large industries. the Residential computer service markets and the Commercial IT industry. By now your business is probably making around $200,000~$250,000 per year, but you have things like your lease, advertising, and even payroll, so let's say you're taking only $75,000~$100,000 per year on your own accord. Still no where near wealthy so you will have to expand even further.
Now lets say you think you should start selling some things and grow both of your current markets so you begin to stock software, computers, laptops and accessories to go with it. Uh-oh, your tiny 600 sq. ft. shop can't support all of that, so you decide that it's also time to open up a second, more larger store possibly in the next town over. Now we're making double the amount we were last year, although you need to hire a manager for one of the other shops since you can't run two shops at once. So, you're not taking in double, but still a considerable amount. Let's say $125,000~175,000. That's more like it, now we're getting somewhere!
So you continue to grow for a couple years, maybe 2 or 3 and you hit a brick wall. You got about 4 maybe 5 shops by now and you simply can't manage the chaos anymore. Your dream all of a sudden has become a nightmare and you simply don't know how to manage it anymore so you open up a corporate office where now you sit back and relax and let all your workforce do the hard stuff. You hire managers for each of your shops and they simply report to you with what's going on all the while you consider ways to grow your business further. Now that your business is more efficient you can expand explosively and move into the market of franchising!
Your franchising starts out small- 2 maybe 3 takers if you're lucky on the first year. Nothing big, but it brings you in those franchise fees and you now make around $250,000/year and all it took was about 7~8 years to get here. give it another three years and you're franchising one shop every couple months. Now here we are 10 years later and you're making around $300,000/year. Not much growth anymore and the 10 years of constant work has put you on stress. You're aging faster than you should and you want to just quit. So you hire a CEO, give him a lofty payroll and let him do what you don't want to do anymore so that you can either retire or just grow.
Your CEO decides that it'd be beneficial for your company if you expand into the software development market and begin making your own software for your customers to use and your employees to use. So you open up a new company dedicated to making software for your company. Start off with maybe some AV programs, some PC cleaning utilities and then expand into things like utilities, and if you're willing to drop that low- some font collections, maybe some cheap games, and even some cruddy office applications. This company is solely yours and generates maybe $100,000 more for your personal income per year. now you're up to about $400k/year.
The two companies are now two growing flowers and you're the gardener who gives them the water they need and decide to grow your flower garden into a flower field by entering the world of stocks! So you convince an investor to buy off 49.9% of your company, leaving you 50.1% of your stock, and 100% of the control and he gave you probably $3~5,000,000 for your company. In return he wants to see BIG growth. Now with your money in pocket you run an advertising campaign to investors and tell them to open up more locations! You begin by opening in the next state over, soon it's two states over and by the end of the year you have 20 new locations across the north-east region and have become somewhat of a large company. You hire region managers, analyst, and even get your own private advertising company and now make around $750,000/year based on client base and franchising fees.
Your software company has boomed and so has your computer service company and your CEO comes to you advising opening up a private label for things like cables and the like. You oblige and are now the owner of a third company who gets all their parts made in China. You have a warehouse that distributes and stores all the things you make like cables, pc add-on cards, wireless network adapters and even laptop accessories and this generates hype amongst the investors. So you sell off another chunk of your stock- losing control of the company but getting millions of dollars over night.
By now you can consider yourself wealthy, and it only took about 15 years. Although, you can still grow from here. Not only does your franchising have the ability to reach sea from shining sea, but you still haven't even gotten into the OEM PC business yet, and you also haven't invested your own money into other things yet either. Of course, this is all theoretical stuff and is very, very unlikely to happen. Not to mention you can't expect it to go according to plan because there is a saying in business..."Everything always cost twice the amount thought and sells half as much as expected"
Now...I don't know if I veered off course here. But yeah this is all stuff that's running in my head right now.
What I really want is to make enough to pay the bills, make sure the kids always have what they need, have money saved up, and be able to buy some toys. So, basically what pretty much anyone expects with a "normal" job. I treat my business as a job. I have a set starting time and end time. When I go home I don't bring my work home with me. That's family time. I have a strict separation between family and business. I don't deal with anything business related on the weekends or in the evenings. That way when I am at work, I'm focused on work and when I go home I can enjoy my kids. Plus this way I don't get burned out on the job.
