Monday, September 24, 2018

Create More Income Month - Chapter 4

For the last post of the month, I want to focus on creating a stream of income through investing the money you earn from your business. Before going into any ideas on this topic, I want to make sure that these are only ideas, and are not meant to be financial advice. Nor do they apply to all of you who are reading these lines. The one piece of advice I want to start with: talk to an investment adviser that will take into account your personal financial situation and create a plan specifically designed for you. Of course, there is no obligation for that person to be me, though I can be - for anyone who would like a consultation.

When deciding to invest, the first thing you need to know is that you have to make a long-term commitment. Getting into the market should not be seen as a short-term plan to get rich because that is very risky. There are people who are preoccupied with timing the market and buying stock that they estimate will grow in value and then sell it for more; also a great many of them end up losing even the shirt off their back. Therefore, unless you can afford to lose the money you play in the market, this most likely is not the best scenario for you.

The reason I decided to have this post as part of the month on streams of income, is that when you invest you are creating a stream of income for the future. This is a way to build your egg-nest that will generate your stream of income. It can be your retirement plan or it can be an investment that generates income that has no preferential tax treatment. This is a choice between qualified and non-qualified plans, in financial speak. Here is the translation:

1. Qualified plans receive preferential tax treatment - money that goes into these plans is either before-tax, which means it goes in before being taxed and gets taxed when it comes out; or the money goes in after-tax and is taken out tax free. These plans are either Traditional (with before-tax money going in) or Roth (with after-tax money going in). The money you invest in these plans has to be for your retirement or else you lose your tax advantages, and may also be liable of penalties.

2. Non-qualified plans do not carry any tax advantages - you are paying taxes on the money going in and also have to pay taxes on any gains as you accumulate them. This is the type of long-term investments that one would make because they want to increase the value of their estate and the market has traditionally had higher returns than any other investments. There is a risk involved because there are no guarantees of a return on the investment. The growth of the funds usually beats anything a savings account can generate over a long period of time.

My hope with this post is that I can inspire some of my readers to start investing (or continue) so they can have a stream of income for themselves in the future - be it in retirement or before.

Monday, September 17, 2018

Create More Income Month - Chapter 3

This week I would like to address those of my readers who are experienced in their field, achieved expert status and most likely have been in that industry for a long time. I'm not saying that someone who is in the first years cannot apply these ideas, I only have the opinion that an experienced person is more likely first to be interested in doing this, and second to have more confidence in their ability to go through with the plan.

One idea to make more money in your business is to start a new stream of income by teaching people in your field how to build a business in the field, or people who are interested in getting started in your field of business how to enter the industry.  

I have a friend who is an attorney, and a very good attorney with a successful practice. She came out of the big lay firm to start her own business a little while ago, and her business is growing to the point where she was able to bring in an associate. Besides growing her business in the field she operates in, the law, she has also developed a side business connected to her law firm, where she works with attorneys who are interested in opening their own practice. 

This friend has earned my respect with her business knowledge and acumen. I'm proud of her accomplishments and I feel blessed to be her friend. On top of the success she has achieved in her field, she also wants to mentor others to build businesses in the same field. Her idea to grow her business through this program comes from a place of abundance, where she understands that helping other attorneys build a practice does not affect her business - there are enough clients for everyone.

If you have a good understanding of your industry and know more than a lot of people who are in the same industry, or if you know how to build a business, you can develop a stream of income by teaching others to enter or build a business in your industry. There is no downside to this business endeavor. 

Monday, September 10, 2018

Create More Income Month - Chapter 2

This month we are talking about ways to make more money in your business. After we talked about the way to select ways to develop new revenue streams, we will talk about how to execute on starting and growing those revenue streams.

Let's first list a few revenue streams:
1. Start a new business
2. Develop a new product/service in your existing business
3. Expand in a new market: geographic or demographic
4. Develop partnerships with complimentary businesses and cross-sell
5. Write a book about your expertise

There are other ways to expand your business, so please write some of your favorite ones in the comments. This week we are exploring some ways to implement the strategies mentioned above.

The first step in working on any of these ideas is to write down the ideas you have about starting the business or the revenue stream. Once you list them all in the order you have them in your head, you start arranging them in a mind map, so you can figure out how they work together. This is a great way to make sure that you cover all the ideas that are in your head. Many times we think that the ideas we have will stay in our head - writing them down ensures that we don't lose them.

The second step is deciding what stream of income we are going to pursue first. After it passes the values test and we establish that this stream works with the mission and the vision, we figure out the actions that we need to do in order to start and grow the income stream.

If developing different products/services or expanding in new markets, your business plan is a great way to have a working action plan. The most important thing about a business plan is to use it continuously. It is not supposed to stay on a shelf, it is supposed to be worked on. A business plan is meant to be changed according to the needs of the business.

If your goal is to develop partnerships with complimentary businesses, you can consider business that are in areas that are also needed for your clients. While you can get referrals from your partners and make money from those sales, there is also the added possibility of making money by becoming an affiliate for your partners and making money from referring clients to them. You can also increase your revenue from these partnerships when your partners sell your products/services - while you pay them a commission or affiliate fee, your sales increase.

Many business people share their expertise through books they write, while also leveling up their expert status. This may not be a huge source of revenue but it can bring some money from book sales while also opening doors to new opportunities: speaking engagements, workshops and seminars related to your field of expertise.

These are a few ideas that hopefully will give you some food for thought. Please add your own ideas in the comments and let's exchange some interesting thoughts.

Monday, September 3, 2018

Create More Income Month - Chapter 1

Are you leaving money on the table?

We are talking to the business owners, independent contractors, mompreneurs and all women solopreneurs this month. As the summer is over and the families are back home and ready for the new school year, many entrepreneurs choose September to refocus and recommit to their business goals. We will be focused on business growth this month, so we can all grow our businesses together.

This first week, I would like to talk about business growth by developing new streams of income. This can apply to you if you own a business and are looking to develop new revenue streams, or if you have a job and are considering a side hustle to increase your income. Whether you have a business already or just considering one, you need to have a goal that motivates you to do the work, so you can succeed. 

Once you have a goal, you are set to start working on your business. The next step is to make a plan for it. If you already have a business, you probably already did this, but if your business is still just an idea in your mind (or on paper), you need to give some deep thought, put on paper and then make clear what your values are - personal and in business. You write down your business vision and mission; they should be reflected in your business goals. 

This will help you stay focused when you feel an inkling of the S.O.S. (shining object syndrome) - a condition quite common to the entrepreneurs. Too many times we all start new paths in business because we think that the new idea can be our next big success, because we get excited for the new opportunity and because we want to try multiple things when we think more stuff done will bring more money. While these ideas and opinions are not necessarily a bad things and are not necessarily wrong, they are not conducive to high levels of income. 

The best way I can illustrate this point is to paint a picture: if the income is in a bag in the middle and each of the ways you choose to get the money to come to you is a direction you pull the bag, you will not be able to drag the bag in any direction. You will move a few steps in one direction and then another few steps in a different direction, but will never make great progress in any direction.

If you focus on what thing and make progress in that direction, then you move the money bag in that direction for a while. You can always pivot and make changes in your business, then you will make progress in that other direction. You can add as make revenue streams as you want, as many times as you want, as long as you are committed to each new direction at the time that you are working on it.

The best way to make sure you stay true to your values is to ensure your actions are aligned with your mission and vision. As long as you focus on the goals that contribute to your mission, your actions will fall in line. Your actions will lead the money bag in the direction you are going. 

Let's go into more ideas next week.