Start tiny, take 3% of any income into your checking account, and move it into a savings account. How are you going to work your way up into big deals, if you don’t have any money to buy-in to smaller deals?
By: Francis Kier
To build any serious income you have to use leverage. You accomplish this by spending your time creating and managing levers. I’d bet that if you are creative enough, you could probably create a lever on anything that can provide an income. Let me explain this with several examples.
If you do not have an employee, you are not leveraging your time. Start leveraging your time in a tiny way with something that doesn’t require complex skills, like a dog walking service. But, get other people to walk the dogs. You never walk the dogs, you focus on marketing and increasing the number of dogs to walk, and more walker employees. Then you hire an employee to handle the marketing and sales duties, and then you’ll have a business that runs on its own without you. You’ll have an absentee ownership model where you have the free time to start another business to leverage. You have to learn that you can’t run an empire if you are doing everything yourself. The old quote for this situation is, “The more I do, the less I accomplish.”
If you are not saving money every month, you cannot leverage your money. Start tiny, take 3% of any income into your checking account, and move it into a savings account. How are you going to work your way up into big deals, if you don’t have any money to buy-in to smaller deals? There are ever larger playing fields, but saving money is necessary to get into the entry-level business game.
If you haven’t converted your ability into products, you are not leveraging your skills. Start tiny with something that doesn’t cost anything. Like writing an article or a song, whittle an animal figure from wood, record a speech. Any start will be helpful that gets you thinking about creating products from your skills. If you only know services, they can also be turned into products: books, tapes, software, newsletters, subscription services, etc. If you only have service skills, you can leverage them like step one above. But beyond that, you can start marketing to new market channels by developing your own proprietary products that I just mentioned.
If you don’t have business contacts, then you are not leveraging a social network. Start talking to people about what you want to accomplish; I can’t remember the source of the quote, but it is, “He who has the bigger rolodex wins.” The more entrepreneurial business people that you know, the more business opportunities you will hear about, and thus more financially successful you may become.
You can employ non-physical assets that can be leveraged. This is one area that I use a lot. For example, I have offered my credit to purchase an income property for a partner to manage, but we split the income by 50/50. You can offer your credit and be paid to co-sign on a loan. By having good credit, you have access to loans that you can use to buy investments.
When you’ve worn yourself out on those exercises, you can start figuring out how to leverage everything you have done toward what you want to do next. This is a critical phase. If you have an idea, do you start thinking like this, “I don’t know what to do, so I guess I can’t do that.” Or, do you start to think like this, “Get my rolodex, and find three people already in the industry that may be able to point me in the right direction. Then call my bank and let them know I’ll be asking for some money in the next couple weeks for a new project.”
Now, who would you bet on to make quick progress that will lead to success, and who won’t be able to move beyond their own fears and drop the idea altogether.
About the Author:
Francis Kier has an MBA in finance and shares his two decades of experience with investing and personal finance. More of his articles are available at http://investing.real-solution-center.com.