I just received a magazine in the mail that is dedicated to exclusive homes that are for sale around the United States. The houses range in investment from $750,000 to over $36 million. Of course the $36 million dollar home has a beautiful view of Lake Tahoe and is complete with a three-hole golf course!
Personally, I am in the middle of an extensive remodeling project on my home. I know how fast you can spend money on a house. Today it takes a lot of money to buy a nice house. It takes an enormous amount of money to obtain your dream home.
Most people are content to settle for “okay.” If it’s a little better than your parents or your siblings, then you are satisfied. If when you go back to your high school or college reunion and you can show that you’ve kept up with the Jones’, then you are happy. Why not have it all? Who says you can’t have a million dollar home, or the boat, or the second home, or anything else your heart desires?
Are you able to provide your children with an outstanding education? To send your child to a top private college in the United States it will cost upwards of $50,000 a year or more! And, those are after tax dollars.
We must to be accountable for our financial security. If you are not making top money today, don’t worry. You don’t have to be stuck in your situation. There are ways to break out and create the wealth and happiness you deserve.
Here are seven steps to create wealth and a fantastic future.
1. It’s All In Your Head
Do you have a mindset of what you are “supposed” to earn and have that is based on other people’s poor performance? If your dad was a coal miner, does that mean you have to be a coal miner also?
I’ve seen this over and over in my career. People perform to the standard and expectation that is set for them. We let our family and friends set that expectation, and if they have low standards, our standard is set low.
It is time for you to take the responsibility of setting your own expectations. You must decide for yourself what standards in life you are willing to accept and work towards. People aren’t lucky. They create opportunities. If one person can earn $250,000, or $350,000, or $500,000 a year, then a lot of people can. And, so can you!
In all aspects of life it is very rare to get more then we desire. If you go to the grocery store to buy a pound of potatoes, then that is what you will come home with. You are not going to get ten pounds of potatoes.
If you want to earn $20,000 then that is what you will earn. If you desire and work towards a significantly higher figure, then you will create ways to achieve that goal.
The first step to creating wealth and happiness is believing that you deserve it, knowing that you have a right to earn it, and understanding that you are responsible for setting your expectations high enough to achieve them.
2. Study Financial Success In Others
All to often people try to reinvent the wheel. They think that they must come up with all the answers, find the systems, and discover what makes something work. It is faster and cheaper to learn from other people who have achieved what it is you desire.
Something I have done all of my business life is to take successful people to lunch. I invite someone to lunch that I feel has achieved significance in an area that I am interested in. Up front I tell them that I admire their accomplishments and would like to have a brief conversation over lunch.
I have developed a list of questions that I ask my guests, and throughout lunch I casually direct the discussion with my questions. I don’t want my guest to feel like I am drilling them, so I keep everything conversational.
Some questions I might ask are:
How did you start your career?
What was a major turning point for you?
If you could go back in time, what would you do differently?
What advice would you give to someone such as myself who is trying to achieve similar results?
What main attribute do you have that has led you to your success?
What new opportunities do you feel are available today?
Ask open-ended questions so that your guest can elaborate. Always respect the time of your guest. Don’t let the lunch go over an hour. Finally, always pay for the lunch. The investment you make will be returned to you many times over.
After the lunch send your guest a thank you note and possibly a gift. Maybe a book that based on the conversation would be of interest to them. Write a note in the book and sign it. Your guest will appreciate the personal touch and will cherish the gift.
3. Look Outside For a Competitive Advantage
Xerox Corporation made benchmarking an art form. Xerox discovered that if they could collaborate with another company and study best practices that they could learn and grow at a faster rate than just working internally at improvements.
Benchmarking can work for any size company. Just like learning one-on-one with someone over lunch, studying what successful companies do and then applying those ideas to your business can be a real boost to the bottom line.
There is a hidden element here that many people overlook. If you only study the best in your industry, then you can only be almost as good at the best. Studying inside your industry is just the starting point. Real gains can be achieved by studying companies that are not in your industry.
Here is how to significantly magnify your business growth and blow your earnings through the ceiling. Your important business systems may be your lead generation system, your sales system, and your relationship maintenance system.
Most companies in the same industry all use the same systems, tools, and ideas. Look to other industries and see what works for them. Maybe a particular industry has created a better warranty system. If you use that warranty policy for your products, you could explode sales. It is possible that in another industry they highly leverage different marketing tools and ideas. If you use those marketing tools, you will look different and could possibly create a tremendous competitive advantage.
Basically, what I’m talking about is to take proven ideas from other industries and put them to work for you in your industry. This way of thinking helps create uniqueness. It also gives your customers a new and exciting way of getting involved with or enjoying your specific products and services.
Wealth and happiness are yours for the taking. In our next issue we will discuss the other four valuable techniques. Start using these three, and you will be on your way to Building a Better Biz!
In the first part of this article we discussed the first three steps to wealth and happiness. Below are the final four. If you missed the first part of this article, you can read it here.
4. Create Synergistic Growth Patterns™
Synergistic Growth Patterns (SGP) is a powerful business growth strategic concept. I’ve used this fantastic concept many times throughout my business career. The funny thing is that I didn’t realize at first that I was doing it!
Let’s say your sales are $500,000. Now, let’s say like most all businesses out there you set a goal to increase sales. For illustration purposes we will say 12%. That would amount to a $60,000 increase in sales or a total of $560,000.
Let’s break the sales process effort into it’s components.
How many clients do you have? Your annual sales revenue is based on your number of clients multiplied by the times per year that they buy (frequency) which is then multiplied by the size of the order (value).
If you have 200 clients that buy on average twice a year at an average sales price of $1250 you get your $500,000.
Now instead of seeking a 12% growth in sales, let’s seek a 12% growth in each of the components to sales.
So, you are looking for 224 clients who buy on average 2.24 times a year with an average purchase price of $1400. If you multiply that out you would have annual sales of $702,464. That is a total sales increase of $202,464 or 40%!
Your focus is now on getting new clients, increasing the number of times per year you are able to make a sale, and growing the average sale. It means looking for ways to generate leads. It means creating additional reasons throughout the year for your clients to invest in your products or services, and it means finding ways to “add on” to your sale.
SGP can be used in other areas as well. Let’s say that you are in the real estate business. You need referrals to get buying clients or listing clients. If you can increase the number of people who are referring you and the number of times per year that they refer you, you can achieve synergistic bottom line results here as well.
SGP will push your sales through the roof! There is, however, one other component in sales that we haven’t discussed. That is margin. You can increase margin one of two ways. You either increase the sales price or you reduce your costs. If you can also increase your per sale margin, your bottom line will absolutely explode.
5. Grow Earnings and Equity
It is one thing to bring home a big paycheck, but it is another to grow your net worth. Earnings in a business and personal earnings are essentially cash flow. Many people build their business and life style around their cash flow. If they make $3000 a week then they buy a house and cars and other items that equals out to costing $3000 a week.
As long as cash flow remains the same or improves, they are fine. As soon as the economy takes a slight downturn, and eventually it always does, they are in trouble.
The key to accumulating wealth is to build cash flow, control costs, and then build equity. Let’s make this real simple. Spend less then what you earn. Invest the rest in your business, in stocks, in real estate, or other smart investments and watch your net worth grow.
The stumbling block that most people fall on is they want everything overnight. It takes time to build your equity. Time, interest or market appreciation, and additional contributions to your investments will all pay off big if the big picture. Constantly work on growing your equity.
6. Time Is On Your Side
Put the value of time behind you. Saving a dollar today is worth far more then saving a dollar tomorrow. Time and interest magnify your investments and will pay big dividends over the long run.
This concept has made people millions of dollars. Let’s look at a retirement account. A young person gets a job at the age of 15. They earn $2000 and invest it all. For the next 6 years they repeat the process. After 7 years of saving $2000 a year they stop saving and let the account grow in value on it’s own. If this investment has an average annual return of 12% over its life, when the child turned 65 the investment would be worth over 3.3 million dollars.
Now, let’s say the same person put off investing in a retirement account until the age of 21. Again they save $2000 a year for a total of 7 years and then stop adding to the account. When they turn 65 under this scenario the retirement account would only be worth 1.67 million dollars. Waiting 6 years to start the saving process cost the person half of their retirement fund and over 1.5 million dollars!
Start saving today. It does not matter how small the amount. Start saving.
7. What Are You Feeding Your Brain?
If you eat poorly you become over weight and unhealthy. If you don’t feed your brain the right foods, it becomes lazy and unproductive. What are you feeding your brain?
A recent study showed that more than 95% of all adults have not read a non-fiction book since their last day of formal education. Another study showed that the half-life of an education is seven years. The world around you is changing. Technology is evolving. New tactics and business opportunities are constantly coming onto the scene.
To remain competitive and advance in this tough business climate it is critical that you expose yourself to new ideas, challenging concepts, and proven tactics. Reading, listening to tapes, going to seminars, and participating in a powerful Mastermind Group are all ways you can feed your brain the “right stuff” and stay ahead of the pack.
Additionally, you can learn about goal setting, building relationships, and getting the most out of life. Grow your business and improve your life. That is what you should focus on.
When people learn, endorphins are released into the blood stream. You feel a charge of energy, and your desire to make things happen is heightened. Education will take you to the next level.
Be accountable for your wealth and your happiness. Follow all seven steps for creating wealth and happiness and watch your business and your life soar. Now, you are on the road to Building a Better Biz!