The Fundamental Concepts
Financial Baseline: This is an overview of your current financial situation by analyzing a basic profit and loss statement which includes revenue (earnings) and expenditures (expenses) as well as a balance sheet that lists assets and liabilities.
Wealth Roadmaps: This is a financial blueprint showing where you are currently financially and where you plan to go.
Financial Freedom Point: This is the point where your finances have begun to work for you instead of you working for your finances. This point of financial freedom can be strategically mapped out and if followed, can be realized.
Debt Management: This five step plan is designed to erase consumer debt which is the greatest obstacle to creating wealth.
Entities: These are the structures that are created to hold and protect your wealth. These structures are trusts, partnerships, limited liability corporations and other corporations that are created to assist you in taking advantage of the tax strategies offered by Congress and The State Legislature to protect companies and simultaneously help your business grow wealthy, if done correctly.
Automatic Money Machine: This is the fuel that powers your wealth cycle. This automatic money machine is initially built upon skills that you already possess, and is expanded by knowledge and skills that you will acquire.
Financial Freedom Investment Account: This is the account that you will create and contribute to on a regularly scheduled and consistent basis. This account is established so that you pay yourself first.
Forecasting: This is a prediction of our earnings, expenses, assets and liabilities, and the benefits that will be experienced using tax strategies.
Assets: These are the things that will supply you with passive streams of income. These are objects such as real estate investing, online stores, dividends from properly structured investments and businesses.
Leadership: This skill is very necessary for a successful business. You must know how to be the captain of a well organized team that is lead to success by you.
Teamwork: Just like “it takes a village to raise a child”, it takes a team to create, operate and lead a business to success.
It is extremely important that you choose your team members wisely because it is true that “one bad apple can spoil the bunch”.
Paradigm Shifting: This is the way that you think about what you are thinking about and is one of the most essential parts of your business planning and development process.
Self Development: What you do with your mind and your time will determine what you can do with your life. How you view the world around you and how you respond to various situations can be a key factor in gaining success.
Power Marketing: How will your customers know that you exist if you do not let them know, and how will you let them know if you do not market your business? Marketing must be part of the foundation of your success.
The Business Process
Step One: Determine your Skill Set
This involves using skills that you currently have that will enable you to create an income producing business without having to be trained. Whether you are a barber, a baker or a candlestick maker, you can make money with knowledge and know how that you already possess. This will be your fastest way to creating an income stream and you can begin in this process even while you are currently working at a job.
This startup business is designed to create a stream of income that you will use to replace you job. Once this income is established, if this is not the business avenue that you had in mind, you now can begin to create the business of your dreams. If you are unsure of what your particular skills may be, you should:
- List your responsibilities at your current job
- List the specific tasks associated with these responsibilities
- List the industries and markets that you currently have experience in
- List the tasks you do at home
- List the activities that you do in your spare time
- List those tasks that others may request of you often
- List those tasks that you are good at
Once you have uncovered your skill set, you will need to also consider what additional skills you
will need to learn in order to lead and manage your wealth maker. Things such as:
- The characteristics of an entrepreneur
- The skills and personality of an entrepreneur
- The psychology and conditioning of an entrepreneur
You may also need to learn or strengthen the following skills or hire someone that
already possess the needed skills which include:
- Energy and Time Management
- Navigating Business Meetings and Communications
Step Two: Lead your Business
A good entrepreneur is a leader that has the character and the ability to create a vision and simultaneously influence others to visualize and follow that vision through to realization. In order to make this a reality, you must be able to visualize your business from a futuristic viewpoint. You must know where you are going and what it will take to get you there. It’s important that you are not weighed down by the day to day operations of the venture that you are oblivious of the outcome of your actions. That is why it’s important to have a plan in place to continuously refer to. It is equally important to put together a team of people that have those skills that you lack. These skills must be a needed compliment to your business.
Step Three: Create a Business Plan
Jesus is quoted at Luke 14:28 as saying “who of you that wants to build a tower does not first sit down and calculate the expense to see if he has enough to complete it? Otherwise, he might lay it’s foundation but not be able to finish it”. Your business plan is extremely important to the success of your business venture because it will serve as a roadmap and reference manual to guide you to the end result which is success. Your business plan will also be a key element if funding from an outside source is required.
Why you need a business plan
The character Alice in the story Alice in wonderland asks the Cheshire cat “would you tell me please, which way I ought to walk from here”? His reply “that depends a good deal on where you want to get to”. To that she said “I don’t much care where”. “Then it doesn’t matter which way you walk” said the Cat. This demonstrates that without a destination, any direction will take you there. However, your destination is success and a business plan is the road map that puts you on the right road.
Important note: Hope is not planning and the best way to predict the future is to create it!
Your business plan is a very crucial element and is truly the only way to get your business where you want it to go. It is a tremendously powerful tool, one that is destined to make your company better. A business plan works because it forces you to stop and think about what you are doing. It prompts you to figure out what you want your company to be in the future and how you intend to make the future happen. The plan acts as a template, guiding you through the steps required to meet your goals.
- Requires you to look carefully at your industry, your market, your customers and your competition, to determine what your real opportunities are and what threats you may face
- Takes a good hard look at your company so that you can honestly and objectively recognize its capabilities and resources, its strengths, its weaknesses, and its true advantages.
- Coaxes a financial report, a forecast and a budget from you, so that you know where you stand financially today and tomorrow.
- Prepares you for an uncertain future by encouraging you to come up with business strategies and alternatives to increase your chances of success
- Is a strategy for business survival
- Is a ready made description of your company which can attract a certain kind of investor that will be interested in funding your plan
- Is a view of the future as seen from the present
- Is only as good as all the assumptions that you put into it. To make sure that your assumptions make sense, much of your planning should involve trying to understand your surroundings today. Ask yourself what are the significant things in your industry and the market place
- Maps out a direction to go in and the route in which to take to accomplish what you set out to do
It is important to have an action plan when creating your business plan. Your action plan lays out how you intend to carryout your business plan. You should point out proposed changes in management or within the organization itself, as well as the new policies and procedures that will eventually come about as circumstances change, and they unfortunately will. This could be your back up plan to the plan.
What the RICH know that you must discover
Did you know, Nevada offers the greatest protection from liability and this is the number one reason for incorporation in that state? This is because of a well known legal concept called “piercing the corporate veil”, which is the process by which a court removes the protection provided to individual members of a corporation and holds the members responsible. For example, many states require capitalization or net assets of a certain amount, say $1000, but in Nevada, it is only $100. In addition, many states will hold you personally liable, as the owner/officer for corporate debts and obligations if you did not yield to yearly formalities.
Nevada is much more liberal about this and usually will not pierce the veil and make the owner/officer liable for corporate debts if they had not adhered to all the formalities. The catch is that courts will not allow this degree of protection if it can be determined that the officers committed fraud or malpractice. Incorporating in Nevada offers a higher degree of privacy in that the shareholders of the company are not made public record.
Nevada is less willing than many other states to share this information about it’s corporations with other states or even the federal government, although due to terrorist activities occurring in this country, it may make exceptions for the federal government. In addition, incorporating in Nevada will offer no joint or several liabilities, meaning, if you are found jointly liable for a debt in may other states, you could be responsible for the entire amount if it cannot be collected from the other debtors. In Nevada, however, the courts must assign a percentage of responsibility and every owner found liable is required to pay a share of the judgment which is no greater than his or her responsibility.
Building your Team
It has been said “it takes a village to raise a child”. Well the same holds true for a business in that it takes a team to run a business. The best entrepreneurs are great leader, and great leaders know exactly how to build great teams, because they are clearly aware that they cannot do it all themselves. Great leaders put together great teams by inspiring those around them to perform at their utmost best.
Most people like to have a purpose and a mission, and if they do not have a mission of their own, it can be very rewarding to join a team that is moving toward a challenging and exciting goal. The best team players are self motivated and resourceful. They know what needs to be done and are courageous enough for the task at hand. Your duty as their leader is to motivate them through your energy, your clear and unobstructed vision of the ordered sequence of steps that must take place in order to reach your final destination of success.
In addition, you as the leader of the team can keep your teammates encouraged by giving achievable goals and highly rewarding incentives. You as the teams leader must be able to recognize if someone on the team is not encouraging, supporting and facilitating the vision and if this is the case, never continue to keep that person as a teammate because the adage “one rotten apple can spoil the bunch” bears some truth. Attitude is contagious and therefore you will need to make certain that the members of the team are those individuals who will give you loyalty and assist in navigating your ideas and strategies onto the road of success.
As for your mentors, these should be those individuals that are successful entrepreneurs because you will want to learn how to earn, and successful people have undoubtedly made their share of mistakes, but have become proficient at fixing those mistakes to make things right. After you determine your skill set, and your idea is solidified into a business concept or strategy, you will need to establish the business structure and systems. Unless you are a proficiently licensed entrepreneur, you will need an accountant, a lawyer and an entity specialist to assist you in figuring out which structure is best for you.
In addition, you will need to set up your financial systems, which means you will need to recruit a bookkeeper to the team. Getting your finances into a database at the beginning of this business process will save you a lot of time and lost expenses later. As you build more businesses and invest in other assets, these financial databases will make the forecasting of revenues and expenditures into various entities much more efficiently. It will be important to create a database for your clients, customers, suppliers and vendors.
As you began to create your marketing materials, you may find that you will need to add to your team a copywriter, a graphic designer or illustrator and perhaps a merchandising and promotions specialist. Be aware that as you assemble your team, the subject of payment will inevitably come up. Rarely do people do anything for free. We will discuss the four most common ways to compensate your team.
First, you can hire them as employees or contractors which involve a contracted project fee, wage or salary. The employee may be eligible for certain benefits such as healthcare and pensions. There may also be withholding taxes that you will have to manage, and this will need to be discussed with your accountant and/or bookkeeper.
The second avenue of compensation for your team is to offer the person equity or ownership in your company, although it may seem risky for an individual to take equity or ownership rather than a salary, if the company grows, the rewards can be great. In addition, when employees and partners are owners, they have a vested interest in doing their very best work to get your vision accomplished.
The third way to compensate your team is to give the person both cash and equity, and the fourth option is to give a bonus based on specific criteria, which is different from an equity position in that the person receives a real cash payout, not just paper profits. Any combination of salary, equity and bonus works well if it motivates your employees and team members to help the company grow efficiently and effectively.
You may find that as your business grows, you will need more of a sales force to reach your clients or customers. Many businesses use public relations as part of their marketing strategy because the media can be incredibly effective in getting the word out about your business, your product or service. Therefore, a public relations professional or media liaison will prove to be a valuable team member.
Marketing and Sales 101
Marketing and sales are the vital link that will take a business from concept to execution. The first task at hand is getting the word out about your business, because the revenue will come from people buying your product or service and they will discover your business through your marketing and sales efforts. Your first step is to engage the customer.
In order to develop your marketing plan, your team will need to know how you define your business, meaning, they need to know what you do, how you do it, for whom you do it for, and why you do it. Answering these questions will help you discover the message that you are trying to get across to your potential clients and customers, which will be the basis of what you use for all of your marketing materials.
Then, once you understand your target market, you will tailor the message to appeal directly to that specific group. The message must fit into the marketing vehicle and must stand out, be brief and create a call to action. Sampling, third party endorsement and flyers are three very good examples of effective and efficient marketing tools that can be used to start your marketing campaign.
Some other marketing avenues for getting your business started are classified ads in the newspaper, a display ad in the newspaper, Internet sites, Radio announcements, Targeted Emails, Posters and Flyers, Theme parties, seminars and social gatherings, third party endorsements (getting another business or institution to recommend your offering, you not only maximize your exposure, but simultaneously enjoy the benefit of having a already successful company vouch for you thus enhancing your credibility).
Effective marketing is that vehicle that delivers your product or service from obscurity and puts it into the hands of millions of potential customers and clients. It is very important to know and understand that marketing is not sales and sales is not marketing as they are two different delivering your business, although they both have complimentary functions.
Marketing is about targeting people who have a need that you can fulfill and a sale is a way to finalize the transaction. It is the sequencing of doing the right step at the right time that makes the marketing-sales partnership work so well.
Marketing strategies begin at the idea stage and involve every aspect of the business including the packaging of the product, the presentation of the service, the place of sale and the promotions. The main elements of marketing are product, price, place and promotion.
The product or service is the core of marketing and it is here that you engage the customer; it is here that you will want to emphasize your offerings through unique selling propositions and demonstrate your distinct advantage over your market competition.
The price of the product or service can make or break a marketing strategy. Not only do the potential promotions need to be factored into your marketing strategy, but so do the revenue model, the production costs and your competitors prices.
The place is the location where the transaction takes place. This place should be easily accessible, safe and appealing to the eyes. This is also called the “supply and demand chain” or “the channels of distribution”, which are the avenues along which the product must travel to get to the consumer. Understanding the importance of the chain in your marketing strategy is vital to your success.
The promotion is the piece of the marketing strategy that is the most familiar to people and includes advertising, merchandising, promotions and publicity. You will need to find the best way to create awareness of the product or service that you are offering, with the optimal advertising campaigns delivering a message that is interesting, distinct, relevant, and believable. You can also consider offering incentives such as guarantees and sweepstakes to enhance the probability of acquiring new customers and simultaneously retaining current customers thus fostering customer loyalty.
Extensive signage, free samples, blast emails, coupon mailers, membership programs and incentives for referrals are also great ways to extend the promotion of your product or service to your targeted audience. Be sure to set aside a portion of your earnings or incorporate into your budget an allowance just for marketing and promoting your product or service.
Marketing is only valuable if it brings in sales. Your marketing strategy might be the most creative idea that you have ever had, but unless the concept sell your product or service, it is useless. If the promotion you create stirs up a need without stirring up the need for your particular product or service, you might drive your consumers to your competitors. It is important that you direct the demand that you create in the direction of obtaining and retaining customers.
The objective of marketing is to get someone to do something. A call to action requires a specific time period in which action is to take place, an incentive for taking the action and an easy avenue for taking that action. The advertising creates awareness; a call to action drives intent to purchase.
Traffic represents consumers coming to the point of purchase, and it is the call to action that should drive the traffic. One topic in question is: Does this traffic produce a customer or a consumer? These terms are often confused because they can be one in the same.
However, the customer is the next person in the supply and demand chain and the consumer is the end user. A consumer is always a customer but a customer is not always a consumer. Your marketing efforts should be geared toward enrolling the customer, and your strategy is only as good as the tactics you use to implement it. You will enroll the customer by selling your vision. In marketing, the aim is to create awareness; in sales, the aim is to seal a relationship. Understanding the goal and objectives of the person to whom you are selling will help you bridge the gap between what that person wants and what you have to offer.
Be cautious because many people are afraid of being considered a salesperson since they do not want to be seen as “pushy”. However, if you believe in what you are offering and you are convinced that what you are offering will make the customers life better; you then are not being pushy, but passionate. For example, in pushy selling, the sales person talks to the consumers and attempts to control the situation omitting to discover what the needs and desires of the consumer is.
In enrolling, the salesperson talks with the consumer attempting to discover what their needs and desires are and omit to force the product or service onto the consumer. There is an effort to find out what the consumer wants and a valiant attempt to help them find it.
You as the producer or seller of the product or service must be the first customer or consumer of what you are offering, because before you can sell anyone else, you first must be sold on the product or service yourself. When you yourself are completely sold on what you offer, you will communicate this confidence in the product or service with clarity on two levels of communication; conscious communication, which includes words, writing and body movement as well as unconscious communication which includes the feelings and vibrations that you send out to the person with whom you are communicating. There are distinct steps to selling. They include:
Selling yourself- This is where you generate the feeling to enroll the customer. The can feel it and see it, and it is known as confidence and this fosters credibility.
Sell your prospect- This involves getting to know your customer and the details of their need
Sell their reality- Show the potential clients or customers where they are and how you can help them get to where they want to be. Show how you can be the one to take away their pain, solve their problem and provide them with comfort.
State the factual truth of the benefits of the product or service.
Bridge the gap between what the clients are looking for and what you have to offer using questions to draw out both the problem and the solution form the customer, because if they state it (the problem and the solution), they own it.
The qualities that make sales work are: enthusiasm, customer service, knowing and understanding the customers or clients objections or problems and igniting interest by influencing them to be excited about what you are offering.
Drive the outcome, meaning you should go into every sales opportunity with an idea of how you would like to end the meeting, always keeping a goal in mind and steering toward it. Try to think your customer or clients thoughts. Before you sell, you need to understand your customer. Find out what they thought before they bought. If you know what made them buy and how they felt before, during and after they bought, you can infuse that into your own selling process.
Likewise, if you can discern the customers decision process and what was said to them just before they decided to buy, you can use this language for your sales presentation. Remember that your money machine will have both marketing and sales and keeping the two complementary and sequential is very important. Marketing promises must be delivered, the benefits of the product must be honest and the offering has to be available at the price and place that it was advertised.