Category Archives: Finances

3 Ways Your Business Will Make Money

Throughout my business career I had a philosophy that sustained me whenever I made a stupid, read costly, mistake. My first year I lost out on about $20,000 because of a carelessly worded agreement. The client terminated it after I had solved his problem but before I reaped the benefits of my hard work.

How Your Business Will Make Money

So I told myself I had just bought a semester at the Wharton School. I don't know why I chose this eminent business school. But over two decades of entrepreneurship, I lost enough to pay for a MBA. Still, I gained practical knowledge that helped me become more successful in the future.

Like many new entrepreneurs, in the beginning, I was perpetually short on capital. I feared to ask for too high a fee thereby losing a client. Through experience, I learned that limits on my income were self-imposed.

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The 3 Business Models

Whether you want to be a solo-trepreneur, also known as a freelancer, or build a business, you can make money in three ways:

1. Fixed Fee: I started with this arrangement. It works a couple of ways. In real estate typically you get a percentage of the transaction price, whether a sales price or an amount of income generated by a lease or from managing a property. Numerous other businesses such as plumbing and auto repair operate on a fixed fee. Retail businesses and restaurants are also fixed fee enterprises. Whether a job takes you four hours or 40, the fee does not change.

To be successful you have to be good at estimating the amount of time it will take to handle a job. In the beginning when you have little experience you may have to charge a lower fee to undercut your competition while also learning how long different tasks take and gaining efficiency. Start counting the classes you could have bought at Wharton.

2. Hourly Fee: After a few years of paying my accountant and lawyer by the hour I realized they had something. If they misjudged how long a job would take I paid more. So I added consulting to the services I offered. If you are a solo-trepreneur this fee arrangement will eventually limit your income based on the number of hours you can work and the hourly rate above which you price yourself out of the market.

3. Passive Income: While most of my income came from the first two categories I had a few projects that generated passive income. In this arrangement, you make an initial investment of time and resources and the venture generates income thereafter with little additional work. Many types of investments fall into this category.

So does intellectual property. A training company asked me to do a video class on real estate appraising. The preparation and shoot took about 20 hours. Thereafter I received a royalty every time someone watched it. About every two or three months I had to answer a question from a student who had seen it. The checks came every three months until I joined the navy.

None of these is better than the others. Each has positive and negative aspects. The key: Understand the model into which your idea falls and the details of how to apply it.

Look for more on this topic over the next couple of months.

What other income models are you aware of?

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What I Learned from a Bugler

Countless people castigate me for my taste in music. Yet until I finish mining the enjoyment and meaning from Nostalgia Music (a term the folks at Kings Radio in the California Central Valley minted for popular music from the 1930s to the 1950s) I feel no compulsion to listen to anything else. Case in point:

Boogie Woogie Bugle Boy of Company B

So what can a bugler teach? Virtually every line of this song has a lesson for life and business:

  • Start the day off with a blast, like a bugle call.
  • “He was the top man at his craft, but his number came up and he was called to the draft.” – No matter what your place in life, the unexpected will happen. Always bring in the best to your life and business.
  • “They made him blow a bugle for his Uncle Sam. It really brought him down because he could not jam” - Even when life or your business isn't working out the way you want it to, be upbeat.
  • “The captain seemed to understand, ‘cause the next day the cap went out and drafted a band” - Great entrepreneurs, leaders, and parents look for opportunities to support their customers, people, and children by supplying what they need to be successful.
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  • “He can’t blow a note unless a bass and guitar is playing with him” – Life and business are team sports.
  • “He makes the company jump when he plays reveille” - WQe all need to inspire others.
  • “And when he played boogie woogie bugle he was busy as a bzzz bee” – Occupy yourself pursuing your passion.
  • “He puts the boys to sleep with boogie every night and wakes them up the same way in the early bright” – The way you go to sleep determines the way you'll wake up the next morning.

Don Raye and Hughie Prince wprobably just wanted to write an upbeat, popular ditty to lift America’s spirits after the imposition of the draft during the lead up to World War II. But whether I'm running, cooking, or just listening. When Boogie Woogie Bugle Boy of Company B plays on my iPod or KCEA my life immediately perks up!

What song describes life as you think it should be lived?

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How to Achieve Your First Goal This Year

How to Achieve Your First Goal This Year

Crucial to achieving your goals for this year is gaining momentum. What happens with your first one will set the pace for the rest of the year. Here are the qualities it should have:

1. Set a deadline for your first goal during January or February. Your first success needs to come early in the year to create energy for your longer-term goals.

The deadline for my first goal is January 22. In fairness, I spent December working on it but execution will happen in January.

2. While your goals should stretch you, be confident you can extend yourself to make this first one. Do not make the mistake of tackling your most difficult goal first. You need a victory to carry you through the rest of the year.

My first goal for this year is something I have never done before but I am confident I can reach it because everyone working on it is dedicated to making it happen.

3. If possible, connect achieving this goal to accomplishing an even bigger, tougher goal later in the year.

Success with my first goal will set the stage for a major initiative and is a crucial component to reaching a year-long goal.

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Having achieved your first goal, make sure you celebrate it. For me, once I reach a goal often I am too quick to move on to the next one. But it is essential to mark your triumphs since this is part of creating the excitement to take on to more challenging goals.

So what is my first goal of the year? Keep reading my blog. You will find out soon!

What is your first goal of the year?

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8 Ways Life is Like Laying Wood Laminate Floors

When even my daughter chided me that our house was not unpacked after almost three months I knew it was time to buckle down and get it done. I am the hold up. Our living room and dining room have tile floors that make the rooms cold, noisy, and well, shall we say unattractive? Melanie and I decided the answer was wood laminate floors. Having been taught to be handy around the house by my father I figured I could install them no problem. Yeah right …

8 Ways Life is Like Laying Wood Laminate Floors

Have you ever laid flooring? It is not as easy as it looks. The dining room took more than ten hours to complete. But at least we had a place to eat. The living room, which is bigger, took about the same amount of time. Experience was useful.

Why was it so difficult? While showering my aching muscles it hit me. Laying the floors is a microcosm of life. Here's why:

You have to keeping searching until you find yourself and the right set of directions. I spent hours just figuring out how install the flooring since the directions did not make sense and the techniques in videos I found online did not work. Three false starts and a fortuitous call to Lowe’s customer service later, at least I knew what needed to be done. It turns out that was the easy part.

  • You come into this world not knowing who you are and what you are supposed to do. Lots of people want to tell you, but many times they do not have any better direction then you do. Much of life is trial and error. Face it and move on.

You need to have the right tools and know how to use them. A miter box and back saw are fine for cutting base molding, but an electric saw is what you need to cut wood laminate. Kneepads are a must. I have the bruises to prove it.

  • My friend Bill Gross, who coaches real estate agents, insists that they know how to fill out the basic forms without hesitation or needing to read them. If you are a Marine, you better know how to use your rifle and field strip it, in the dark.
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Just get started. Most of the time I spent studying the directions would have been put to better use working on the floors. Trial and error taught me much more hence why I got more efficient the more flooring I laid.

  • You can read the directions a million times but until you put them into practice you will never get anywhere. In fact, you probably will not know if you have good directions until you try them out.

You are going to make mistakes. My perfectionism caused me huge anxiety. While the defects stare at me, the people who have seen the floors do not even notice them.

  • Blunders and failure are as much a part of life as breathing. You can avoid them, but only by never attempting anything new.

Most of life is grinding it out. The work was mind-numbingly boring: fitting pieces together, sizing boards correctly, taking apart some of the finished work to redo it correctly. But since I wanted the prize of nice floors, monotony was the price.

  • The breakthrough moments in your life will be few and far between. And they will be surrounded by a massive amount of hard, routine, work. Setting goals is the fun part. Reaching them requires disciplined daily action.

Life is not always on the square. When I completed the dining room I found out one end of the room was about an inch and a half wider than the other and the floor was slightly bowed. Hence one of the reasons the flooring did not set quite right.

  • Some people refuse to play by the rules. Often you do not find this out until you have already been burned. But if you did the job with integrity you can walk away with your head high and a sense of accomplishment no matter what damage the other person did.

Emotional release has its place. I confess to an inappropriate amount of pouting and self-pity. Who wants to be beaten by a bunch of floor boards?

  • You have to let out your frustration and anxiety. While you cannot throw a fit in your workplace, I bet if you threw a pep-rally at the office with every body screaming for 15 minutes productivity would skyrocket.

You need a true friend to help you through. If Melanie was not there to help me calm down and get back on the right track those floors would still be in the packages.

  • What is the point of life if you cannot share your triumphs and frustrations? A spouse and several friends are best, but at least cultivate one close friendship.

The floors are done, the rooms are much nicer, and there is one blogger who is very glad to get back to writing.

Do you agree with my life lessons?

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6 Things You Can Do Now to Become an Entrepreneur

Frustrating as it is to be unable to pursue your dream, you can still be preparing yourself to become an entrepreneur. Any big goal needs to be broken down into incremental steps. When starting a business you can do these basic things, all of which cost little or no money to accomplish.

6 Things You Can Do Now to Become an Entrepreneur

One vestige of my misspent youth was not practicing my clarinet more diligently. Had I done so I would be able to play swing and big band tunes reasonably well. Now I have the desire to routinely practice. One of the greatest clarinetists of all time, Benny Goodman, says it takes at least an hour a day to gain proficiency. For two years I would get into a regimen and make progress only to have to give it up. When I started blogging and building a platform there was no margin in my schedule.

Yet I feel extremely strongly about learning to play the clarinet well. I decided I would find some way to work toward my goal that would not take more than five minutes a day. A bit of thought and research later, I found some hand exercises for clarinet players that improve dexterity. After several months I have definitely made progress..

Here are the things you can do now to prepare to start a business:

  1. Set the amount of time each day you will work on your business planning. Even if it is only 10 or 15 minutes, that is five to eight hours a month. If you focus even for such a small amount of time you can make progress. As a bonus, you will be building self-discipline.
  2. Decide what product or service you want your business to be about. Assess your skills, inventory your likes, read articles and blogs about likely industries, and talk to entrepreneurs.
  3. Name you business. No matter that you may change it, naming your business makes it more tangible. Play around with logo designs and design some business cards.
  4. Determine its start-up size. Are you going to have a microenterprise run from your home or a larger company? Will you need a workshop, office, or employees?
  5. Work out whether you can start your business while you still have a job. Can you scale what you are doing so that you can keep your “day” job and moonlight starting your business? If not, how much money will you need to set aside so you will not run out of cash during the start-up phase?
  6. Make a list of the things you will need to get going. What equipment will you need? What forms and records will you have to keep? Which skills you do not have can you get before you start-up or fill with an employee or virtual assistant?
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Note that none of these steps will cost you more than your time and perhaps a few dollars for printable business card blanks. And do not forget, you can always be learning more about the subject of your business. The Internet provides a wealth of free information and classes.

There is no reason to delay any longer. Start today, or no later than tonight, to plan for starting your company!

Question – What will be your first step in planning your business start-up?

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