There are many reasons why people may consider starting their own business:
– A vehicle to create wealth.
– The potential to build a business and sell it at a significant profit.
– The freedom to be your own boss.
– The freedom to work your own hours.
– The potential to be flexible around your specific circumstances.
– The desire to do your own thing.
– The power to be creative.
– To be free of the limitations of working for somebody else.
– To reap the rewards of your own hard work.
For many, these reasons become a reality. However, for many others, having their own business is one of hard work and little reward compared to the amount of time and effort they put in.
I believe it is important to set your business up so that it operates as a separate being to you. Your business must run whether you are there or not.
Think about being an employee. If you are sick for a day, or take a two-week holiday, the business doesn’t just shut down. Another employee, would cover for you while you are away. The challenge for many small or even medium sized business owners, is that the business just cannot seem to operate without them. They are the business. This is certainly not a formula to enable you to become financial independent or to spend more time with your family. The business may be generating income, however this flow of income may stop as soon as your activity stops.
When I work with clients who own their own businesses, I get them to think about how they can generate passive income through the business. To me, passive income through a business means the ability for the owner to be hands off the daily operations of the business. The owner becomes free to work ON the business rather than in it.
To me working ON the business means:
– Monitoring the longer-term business strategy to ensure it accommodates current market conditions.
– Monitoring financial reports to ensure the business is on target.
– Creation of systems to further streamline the business.
– Monitoring and responding to client satisfaction surveys to ensure the clients needs are being met.
– Implementation of effective marketing strategies to ensure the ongoing existence of the business.
– Recruitment of quality employees to deliver a quality product to meet client needs.
There are many ways to generate passive income through a business. Some examples may include:
– Selling products or advertising space on-line
– Licensing or franchising fees
– Systemising the business so it works without you
My chosen method is to systemise the business so I can spend my time working on the business rather than in it. This will protect my income stream whilst having time to pursue my Primary Aim. Income earned through the business will then be used to purchase investments to generate further streams of cash-flow and generate wealth.
Honestly assess your business. Are you free of it? Do you have a model that enables you to free yourself in the future, or are you the business? Would your business stop generating an income if you were not there as many hours as you are now?