In Thomas Stanley’s book, The Millionaire Next Door, he points out that the profile of your average millionaire generally includes getting FIRED from his previous job and starting his own business. That’s right, the ultra-risk-taking macho entrepreneur millionaire you know generally became successful because, quite literally, he had no other option. Of course their are the guys, like me, who seemed to have everything going well but that just wasn’t enough and we had to venture out on our own and forge our own paths in business and in life. But don’t kid yourself, that give-up-something-great-to-get-something-better mentality is the VAST exception.

Keep that in mind the next time you’re reading a book or blog by a successful person who just happens to be in the minority who was just naturally programmed to never except “good enough”. If that’s not you, you need to learn how to get over your current “security” in order to venture out on a “risk”. (I put both of those in quotes because they’re often not reality, but just figments of our imagination.)

So for the majority of people who have a job, house, family, car payments and a steady income, how do you decide to make the jump and take the risk of leaving your steady paycheck behind and trying something else?

1. Risk-taking is just a lack of knowledge. – If buying a business, writing a book, starting a band, quitting your job to take a new one or just being the first one at your work to try a ground-breaking new idea seems like a risk to you, then you simply need to study more. You need to make sure you understand how to take that business to a level of profitability before you buy it. You need to know how to effectively market your book or band and develop a following. You need to know that you have options for your livelihood before you tell your boss off and walk away (something I never recommend). And if you’re simply trying to get everyone at work to get out of their rut and change, you better be able to backup your reason for the change with some hard evidence as you’ll undoubtedly be met with nay-sayers. Whatever it is, you can always trace an increase in risk to a lack of knowledge on the subject matter and vice-versa. Let me make this even more clear. If you consider a “standard” medical operation like removing an appendix as safe, would you consider the same operation under the same conditions safe if it was performed by your plumber? What’s the difference? The risk is mitigated when the procedure is undertaken by a knowledgeable doctor.
2. Hedge your bet. – One of the cardinal rules of marketing is ONLY the consumer knows if the marketing is effective or not. They vote on their choice for great marketing by spending money. The same is true in almost any venture where you’re going out on your own. You really don’t KNOW that your customers, readers, listeners or coworkers are going to love the idea until it’s out there, right? Well then, in addition to becoming knowledgeable, make sure you have a backup plan… Or 2 or 3. Of course we all know of the stories of people overcoming impossible odds to make their ideas work. Heck, the entire 3m success can be built on the concept of passionate people overcoming all odds to bring their ideas to fruition. Michael Jordan was cut from his high school basketball team as a sophomore. Albert Einstein’s first 2 graduate thesis’ were rejected. A successful business owner friend of mine told me he was turned down by 27 banks before finding one who would loan him money for his first business. My point is not to throw the towel in because of adversity. My point is that consumers are impossible to predict, so if you’re going to bet the farm on an untried idea, you better have a few tried and true ideas in your back pocket to fall back on. Most entrepreneurs you speak with will tell you about their myriad failures that were necessary before becoming successful. They always had another plan and another way to succeed. Even at 3m where a culture of risk-taking and never accepting no is programmed into the culture, everyone knows there’s little risk of losing your job for pursuing that passionate idea. In other words, 3m developed that culture with a built-in hedged bet to encourage innovation.
   
3. What is your time worth? – Though this is third item, this one is the most important. Most people grossly over-estimate what they’re capable of in a year but also grossly under-estimate what they’re capable of in 10 years. So what does that mean? We are likely to set goals for the next year that are unreachable but then either not set goals for longer-term or set drastically underestimated goals. If you always spend less than you make, you will never run out of money. But no matter what you do, you will run out of time. So how do you determine if you’re going to stay at your current job, position, or business? If you’re learning on a regular basis from those around you AND your given an opportunity to express your own talents and ideas then stay. The former is more important than the latter, but you should be able to do both. Keep in mind that you should be learning things that you couldn’t otherwise learn on your own. Notice, I did not say that you have fun at work or you have a reasonable wage with lots of perks. Those temporary benefits are important for someone who will live forever and so has plenty of time to find something better later on. However, if you’re not immortal, and you’re not learning at work on a regular basis, it’s time to move on. The reason for this is because with the knowledge you can be learning at an underpaying job, you can leverage that at your next job, business, or passion. That’s why people underestimate what they’re capable of in 10 years. It’s sometimes challenging for us to step outside of our situation today, whether good or bad, and view it as a step forward or backward in our 10 year goals because we’re just trying to make it day-to-day.

If after evaluating your situation, you’ve now determined that it’s most likely time to move-on, check out a few of my other blogs that might help you get started:

The most important life lesson, and the key to success…

Why not?

The first 3 steps to becoming wealthy

To your success, Bryan

P.S. If the concept of setting 10-year, or even 1-year, goals is a bit foreign to you, check out my blog on The 3 steps to become successful at anything…

1. It can generate immediate cash.
2. It will generate consistent cash over time.
3. It will increase the value of your business if you’re looking to sell.

Since your business is struggling, building recurring revenue by offering payment plans for your equipment and services is not what we’re focusing on right now. At the moment, we need to generate cash today with little up-front investment, which I covered in detail in my blog on this topic. For that reason I won’t spend any more time on it again. Since August 2009, my business has created an additional $314/month in recurring revenue. That doesn’t sound like a lot (and it certainly isn’t considering our potential), however we’re just starting this program, everyone is still learning how to sell it, and our up-front costs, for a predictable $3768/year, are very close to nothing. Our goal is to have $500/month by 2010 and $3000/month by 2011.

In reality, the idea behind building recurring revenue and improving your sales and marketing is the same. Your goal at these last 2 steps is to develop a way to create consistent cashflow. Whether that means you need to sell something new to your customer again and again, or you need to bring in new customers regularly, a great sales and marketing system will generate predictable income for your business. I would venture to suggest that if you had a sales system in place during boom times, you wouldn’t have nearly the problems you do now in a slow economy.

So let’s summarize once again what it takes to fix any business in trouble (and though I write passionately for small businesses, nearly everything can be applied to Fortune 500 companies):

1. Change yourself - By making a commitment to do so, particularly by working ON your business instead of IN it, and making by making lists.
2. Know your numbers – If you don’t know where you are, you have know idea where your problems lie and can’t develop a plan of attack to fix them.
3. Cut Costs – As drastically as necessary based on your current circumstances.
4. Improve Efficiency and Productivity – Since your business is not doing well, your profit per person is obviously lower than it needs to be for you to succeed.
5. Improve Marketing and Sales – Though this is number 5, you need to work on it along with the rest to make sure you always have money coming in.
6. Build Recurring Revenue – Make this a priority. It can help you through the next tough time.

Several times I’ve mentioned the importance of lists, systems, and procedures. These items are not just for your team members, they’re for you (and me). You need your checklist to fix the weak links in your business systematically without losing focus. You also need a daily schedule to block off your time for each of the 6 items above. You literally need to block off time for each one without any phone calls, emails, door knocks or other interruptions.

My final bit of advice is 3-part:

1. Steal the best ideas you can. This can be from your competitors, other similar business, businesses you see on TV, from reading books, asking people who are doing well, taking classes, or almost any other business related source. Granted, there are a lot of people who don’t provide much “meat and potatoes” advice, however when you find a source that does, learn as much as you can. As I like to say, “It’s always better to learn from others’ successes than your own mistakes.”
2. Apply the pareto principle. 20% of what I’ve covered in the last 5 blogs will give you 80% of the results. The trick is determining which 20%, right? Well if you know your numbers this isn’t that tricky. Your numbers will tell you where you have the greatest potential for improvement. This is how you will prioritize everything.
3. Know when to cut your losses and move on. If you’ve legitimately done almost everything we’ve reviewed over the last 5 blogs and you’re seeing little to no improvement, you need to move on. Don’t be the guy who holds onto GM’s stock thinking “they’ll never go bankrupt.” Salvage what you can and sell either the whole business or the assets and move to the next project. No amount of money can ever buy you more time, so if your time isn’t being invested in a business that’s moving forward and making your life better, you need to get out of that business.

In less than 5,000 words we’ve reviewed literally dozens of directly applicable things you can work on today to improve your business. Take action and make the improvements.

To your success, Bryan

P.S. If you’re looking for a business to buy, find one that does very few of the things reviewed in the last 5 blogs yet is still making money.

Now let’s clarify our goals by answering a few questions:

1. How much money do you want to make?
2. How much time do you want to spend working once your business is done?
3. How much time are you willing to spend building a business?

1. How much money do you want to make? Let’s say you want to make a million dollars per year. That’s over $83,000 per month, $19,230 per week, and $2740 per day. Would that satisfy you? If not, add your number in here. It helps to figure out and visualize EXACTLY how you’re going to spend your $2740 per day. The mind doesn’t know the difference between dreams and reality so start conditioning your mind now for that lifestyle and it’ll be a lot easier to get there.

Now that you have a target, here’s how you’re going to get it. Become a master at business and start searching for great businesses to buy and grow. If you want a million dollars, all you need to do is own a business that does $5 million in sales per year with a net profit of 20%. Twenty percent of $5 million is $1 million. Or find a business that does $10 million in sales with a net profit of 10%. Ten percent of $10 million is again $1 million.  I wouldn’t look for a business that can’t accomplish at least a 10% net profit.

2. How much time do you want to spend working once the business is done? – Some people like to work and there’s nothing wrong with that. I work extremely hard right now, but it’s not because I have an unhealthy infatuation with it. If I had a trust fund I’m sure I’d be investing in businesses but I’d also be traveling, racing, engineering, and spending a lot less time working… Eventually I’d like to work less than 10 hours a week without ever coming into the office. How about you? If you’re going to buy a business and be the service leader, sales leader, and customer service representative then you’re never going to get out from under it. The only things that can truly be done remotely are marketing and communications…  If you’re an owner taking on more then marketing and communication with your leaders then either plan to delegate or find another business. The other option is to sell your business once completed and live off of interest or rental properties…

3. How much time are you willing spend to build a business? Let’s face it, if you want to make a million dollars per year, it will probably take a bit longer than if you’re happy with $100,000. So if you’ve educated yourself, have some money saved up, have some decent connections, and already know how to negotiate, you can probably be making $100,000 per year within 2-3 years. Less if you’re really good. To turn that into a million per year will probably take another 5-7. Michael Masterson even wrote a book called Seven Years to Seven Figures: The Fast-Track Plan to Becoming a Millionaire which is worth a read. Realistically if you can do what you want with $10,000 per month, then why keep on working to make that $80,000 per month? Do you really need that much to enjoy life? If so, go for it.

There’s really only one trick to this… If you HATE business then forget about it. You’ll never be an expert at something you hate and obviously to achieve these goals you have to become an expert. If you only kinda like business then go for it. You’ll be amazed at how much more you’ll enjoy it when you start making regular deposits into your bank account.   Keep in mind, the business building doesn’t have to be your life – it’s just a means to an end if that’s what you want it to be. Determine what you want right now, though, before you get started!

Now that you have your clearly defined plan, you need to put it into action. Sell your PS3 and X-box, get rid of your television, and get to work. If you aren’t willing to make the sacrifices that provide you with the knowledge you need to make this goal a reality it’ll never happen anyway. The old fashioned way isn’t easy. It’s real work but with a real payoff. In my mind I’d rather work 80 hours per week when I’m in my 20′s so I can have some freedom later in life then work 40 hours per week for the next 40 years and have “nice” stuff all along the way. If you’re not willing to make that sacrifice, then just stop now and enjoy your 40 years in the work force. That doesn’t make you better or worse then me – just different. Granted, in my first 9 months at the businesses I’ve purchased I’ve spent over a month out of the office on trips. Some were business trips and some were vacation. I worked during all of them with the help of some technology, however I also had a lot of freedom to do other things. So, though I work really hard when I’m in town, I haven’t exactly given up my youth for the promise of a bright future. Life’s too short for all that. I have more freedom and time to enjoy life now then I have ever had while working for someone else.

Just today when I was coaching 1st and 2nd graders basketball, Andrew walked up to me and said “Coach, you should get a job like my dad.” “Oh really who does he work for?” “I don’t know but he can work whenever he wants he just has to let his boss know.” “Wow, that’s awesome Andrew, but I don’t have a boss.” His eyes got real big like only a 7 year old’s can – “So you can work whenever you want?” Laughing, I responded simply, “Sure.”  A 7 year old understands the greatest part of being your own boss is your freedom – do you?

To your success, Bryan

Freedom to do what I want, when I want, how I want. If I find a motorcycle for sale 1500 miles from home (as I just did) and I want to take off a few days to go pick it up and ride it home (as I’m doing this week) then I want the freedom to do that. In other words, freedom with my time. Nothing is more important then that. You can always get more money, you can never get more time.

Financial freedom. This one should be simple to understand. After all I can only do the things I enjoy (traveling, photography, motorcycling, coaching, reading, writing, adventure-sports etc.) if I have the money to afford those things. Is there a better way to get both financial freedom and control of your own time than being a business owner?

So that explains the Buy and Build portion, but what about Selling? What does that have to do with freedom? Most businesses have a certain point at which they’re about to hit “critical mass”. Simply put, that business is ready to explode and just needs the right leader at the helm to guide it along. Rarely do businesses have 2 different points of critical mass, however. In other words, if you find a business that has a great need, is in a great market, and has the potential to double or triple in under 2 years, the chances of doing that again at the end of those 2 years is very slim. However, there are always other business’ available where that is true. You just have to find them before the point at which they hit that critical mass and then sell them at their peak (since the sale price will be based on that most recent sales history).

The other reason for selling is that it gives you complete freedom with your time once again. If you buy, build, and sell a business and cash out a short while later with a few hundred thousand dollars (which is very possible) now you can go buy another business, do the same thing all over again, and make more money… Or you can take a vacation. A trip around the world. A missions trip. Buy that car you always wanted, etc. etc. etc. As Timothy Ferriss points out in The 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich, the New Rich don’t save their whole lives so they can hopefully retire and, at 65-70 years of age, start enjoying life. The New Rich understand the goal isn’t a certain amount of money in your bank account, but the amount of freedom you have with the money you make. The New Rich don’t save up for retirement because they take mini-retirements all the time. It could be every year, every 6 months, or every other year. That mini-retirement could be for a month, a year, or 10 years. Now is the time to live your life. Not when you’ve saved up enough vacation days or have $1 million in the bank.

Since buying my 2 most recent businesses, I’ve taken trips to Pennsylvania, Florida, Texas, and am taking another cross-country trip this week. All of those trips required me to be out of the office for anywhere from a day to 7 days (the total will be about 3 weeks). They’re all within 5 months of me buying my first business. In the interest of full-disclosure, when I have been at the office, 7 day work-weeks with 14 hour work days are quite frequent.

So how does one setup their business and life to have those freedoms?

1. You have to be willing to step away from a mistake.
2. You must never lose track of your goal.
3. You must be able to work remotely.
4. You must empower your people.
5. You can NOT be the expert at the product or service of your business.

In a bit more detail:

1. If you buy a business, work 60-80 hours per week, and 6 months later haven’t made any significant progress, you need to get out. Take from that experience what you’ve learned and apply the lessons to the next one. Don’t toil for years. It doesn’t take that long to start seeing specific improvements (i.e. more cash in your pocket and more freedom with your time).
2. For me this is easy. When I was 19 I was diagnosed with Hodgkins Lymphoma. I didn’t think it was that big of a deal. I went through chemo for 6 months and radiation for 3 weeks. It wasn’t fun, but I survived. It never felt to me like it was a near-death experience until 3 years later… My friend, Lindsey Popelas, was 17 at the time of her diagnosis which came within 2 weeks of me learning the same news. After battling for 5 years, it took her life. Why didn’t it take mine? For whatever reason, the Lord wants me here and I KNOW its not to work for 60-80 hours per week for the next 40 years to save up $2 million to retire. Lindsey reminds me of that every day. For that she may be the most influential person I have ever met. That’s a lesson I will never forget. My goal is to have freedom – not job security. Don’t wait till you acquire a deadly illness to resolve to start living your life.
3. Blackberry’s, servers, ubiquitous internet, GPS tracking, Virtual Assistants, IP phones, etc. etc. etc. make working remotely on almost any business a reality. Start making it your reality.
4. If your whole team must look to you to take care of every customer complaint and handle every supplier issue and tell them what to do every day, then you have no freedom. Empower your people to make decisions they can effectively make and then use technology to encourage and monitor them.
5. If you’re the salesman, serviceman, customer service specialist, designer, engineer, doctor, lawyer etc. for your business then what happens when you’re not there? The goal is to leverage the talents of others so that you don’t have to be an expert at anything – except leading and leveraging the talents of others.

The only exception to selling your business is to keep it if your business is on auto-pilot and can work without you or with very minimal input from you. Neither of my businesses are at that point yet. However if I can’t get them to that point then you can be certain I will sell them, take a mini-retirement, and keep my eyes open for the next opportunity.

To your success, Bryan

P.S. In previous jobs of mine I have earned the ability to work remotely from my basement, take vacations when I want, travel extensively, and still make a considerable living. The hardest thing for every business owner is to find and rely on great quality team members. If you’re one of them, then you’ll be amazed at the freedoms your boss will be willing to provide for you.