Investors fed up with the volatile stock market may opt to throw in the towel this year and put their money into something they have more control over - like their own business.

Risky stocks in particular may be abandoned in 2008 by people with entrepreneurial dreams.

"The stock market is scaring a lot of people, and property prices are too high. People will consider putting their money into something real - like a business," said Edwin Lee, the founder of Hong Kong Business Intermediary.

His company serves as sort of a middleman, pairing potential buyers and sellers. Speaking to a group of reporters yesterday, Lee said the recent market turmoil, coupled with surging inflation and property prices, creates a catalyst for people to brave the small- to medium-sized business waters.

He said many people aspire to become their own boss, but he warned that starting a business from scratch is far from easy.

"Some may look to buy an existing business as a more attractive option," Lee said, going on to explain that the the entrepreneurial path is wrought with obstacles - particularly the region's high rental prices.

Lee expects that rent for many commercial spaces will climb at least another 20 to 30 percent this year, thereby eating up that much more of a business's revenue.

Other than rent and expenses, making a sound valuation of a business can be a challenge for many people looking to buy or sell a business.

"Sellers will want a higher price for their businesses; buyers worry that they might be ripped off," Lee said.

Then there's the fact that 70 percent of business investors are first-timers, he said, adding that most don't have any experience in the field they're investing in.

"There are teachers buying cafes and university students becoming owners of tutorial centers," Lee said, stressing the importance of those types of people seeing operational and financial advice.

According to his company's figures, food and beverage businesses are most popular among entrepreneurs, and education ranks a close second. "Everyone has to eat, and many people are very willing to invest in their children," Lee said.

With the mainland developing at such a rapid pace, Lee said, more and more people are interested in buying businesses in provinces such as Guangzhou.

However, Lee said the different accounting rules on the mainland, and a lack of options there to verify the books of many businesses, remain huge challenges.

He advised against investing in mainland businesses for the time being.

"It will likely take another two years before the mainland market is mature enough," Lee said.

(HK Edition 02/14/2008 page2)