Running a Profitable Business
Running Your Own Business
Most people realise that if you ever want to be in control of how much you earn, and the hours that you work, you need your own business.
As an employee, you will always be building someone else's dream instead of your own. You will also be stuck in the trap of trading time for money. This means that your earnings will always be capped by the amount of hours in a working day or week.
The challenges of running your own Business
Of course, being your own boss is not as straightforward as you might think. In reality, the hours that you put in may be longer, and the holidays may be even harder to take. There are also the challenges of understanding and abiding by the legal guidelines. Ultimately, the buck stops with you, which is not always a good thing.
Also, remember that the profits may not come straight away. So you need to have funds behind you to last 1-3 years. A good option is to start your own business as a sideline. Then, when you see the potential profits start to come in, that is when you go part time in your main job, or even think about quitting it.
Product and Service Based Businesses
Most people who start their own business see two main options – a product based or service based business.
If you create a product based business, your mark-up needs to give a good profit margin (mark-up should be 2.5X cost price at least). Your profits are also dependent on the volume of product shifted, which is why market research is essential.
Produce a service based business and you may find yourself more in control of your hours. However, your profits are still restricted by time. In other words, all that you have essentially done is create your own job!
If you really want to make money, your business model needs to have a plan of exponential growth or residual income.
Business Models with Residual Income
If you really want to make money, you need a business plan that allows you to grow residual income. True entrepreneurs are time rich as well as money rich. They can enjoy a vacation on a beach wherever they want, whenever they want, because the money is still coming in. If this is what you want, then you need to think about investing and having a business with exponential growth.
Property is an excellent way to make a residual income, as long as you pick it up for the right price and go for an interest only mortgage. You also need to allow for times when the property may be empty. Once your house is let and good tenants are in it, this can bring you a residual income for many years.
Another business model with exponential growth is network marketing. Donald Trump recently recommended finding a strong network marketing company and riding it to the top. The great thing about network marketing is that you can grow and train a team to do what you do, exponentially growing your earnings. Some companies allow for unlimited width in your team, meaning that your earnings are uncapped.