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Turn Misfortune Into Fortune: Tips for Starting Over

Last time, we talked about Todd, a young real estate entrepreneur, whose triumph turned to tragedy. Todd’s story comes from an article, in the New York Times, by John Leland, entitled A Real Estate Speculator Goes From Boom To Bust. We discussed some lessons you can learn from Todd’s misfortune.

Today, we want to go beyond the lessons and offer some advice on how to recover from a devastating turn of events.

Keep your dream alive.
Stay positive. Reach out to people close to you. People love helping people. Let them.

You should also be thankful for your misfortune. Yes, we do mean that. It means you’re one step closer to success! History is ripe with examples of people who failed before they succeeded bigg. Plan on your name being added to that list!

Here’s the first step to starting over:
Assess your strengths and weaknesses. If you’re not going to repeat the past, you have to learn from it. That’s how you 13 fail forward]. Learn from it and then forget about it – move on.

In Todd’s case, it’s obvious he is a dynamic young man. His banker said he performs. That’s a striking compliment coming from a banker who has foreclosed on him. It appears that Todd is good with Operations and Sales. Management, particularly financial management, is his weakness. This is common among entrepreneurs.

You want to build on your strengths and get around your weaknesses. For example, Todd may take in a partner with strong financial skills to complement his abilities.

What if you’ve declared bankruptcy (or are deep in debt)?
We’re not attorneys, or financial planners, or anything else worthy of giving you information for your specific situation. Keep that in mind.

A successful business person referred a friend, who had just declared bankruptcy, to a banker. The bank turned him down. The business person called the banker and explained that his friend was a better risk than he was.

“How can that be?” the banker asked. “You have stellar credit.”

The business person replied, “Because if you lend me the money, I can declare bankruptcy tomorrow. My friend can’t do that for seven years.”

We’re not sure if that’s still the case, but the point is to find ways of turning your liabilities into assets. Todd has changed from a merchant-model (i.e. he buys it, then sells it), to a broker-model. Now he makes money without having to invest any capital. Brilliant!

Our quote today comes from the great Dig Hammarskjöld.

“Never measure the height of a mountain until you have reached the top.
Then you will see how low it was.”

Keep climbing. You’ll find that many of your mountains were really just mole hills.

Tune in next time to see what people regret the most, according to a recent study. Until then, here’s to your big success!

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One Man Band

By Bigg Success Staff
December 06, 2007

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Home Office

Every year, Inc. magazine publishes the Inc. 500, the 500 fastest-growing private companies in the U.S. A recent article, written by Terri Lonier, about one of those companies caught our attention.

Lessons From a Soloist Who Reached the Inc. 500 List is about a one-man company that made their list. Now that’s an unusual feat! You may be shocked to learn that Jim Fairchild, who bought out his partner several years ago to become the sole employee of Coggin & Fairchild Environmental Consultants, Inc., finished 2006 with $3.4 million in sales. That’s right – a single person operating alone!

The article is chock-full of good advice spread among 9 tips for becoming a “solopreneur”. It’s definitely worth the read. Here are some tips for getting started as a soloepreneur:

  • Stick with what you know.
  • Don’t stray too far. Focus on what you already do. Study it even more so you become an expert in a micro-segment of your industry. As a solopreneur, your market doesn’t have to be that big.

  • Find a void.
  • What’s a problem you see that you can solve better than anyone else? Think the “d-test”. Do something that’s dirty, difficult, dangerous, or designed. By designed, we mean customized (but we had to have a “d”). Find something that either your customer doesn’t want to do or doesn’t know how to do.

  • Make your size your advantage.
  • There are advantages to being big. There are benefits to small. And there are pluses to just being you. You can move faster and provide a higher quality service by going it alone. Make this your advantage as you design your service.

  • Find a customer.
  • A wise businessman once asked, “How do you start a business?” Then, he answered his own question, “Find a customer.” That’s what it really takes. That customer may even be your current employer. There may be advantages to hiring you as a consultant, rather than as an employee.

  • Ask for referrals.
  • Thrill your first customer. Then ask for referrals. Get another customer. Ask for more referrals. Leverage your way into a diversified income. Then, when one of your customers decides to start using someone else (and they will), only part of your income will be affected.

  • Leverage your time.
  • Find ways to bill your customers for the value of the service you deliver. It’s hard to get wealthy billing by the hour. If what you’re doing meets one of the “d” tests above, you’ll find it easier to charge a premium for your services.

    Another way to do this is to sell the services of people or companies with whom you’ve strategically aligned yourself. You can diversify your service mix without increasing your overhead. Make sure you screen these providers, though. You don’t want your reputation to be harmed by someone else’s imcompetence.

  • Keep costs low.
  • Start out at home, if you can. Outsource, so you don’t waste precious time and money. Focus on your core competencies. You may find other home-based solopreneurs whose core competencies meld perfectly with yours.

  • Analyze each project from multiple viewpoints.
  • Is the customer happy?
    Are your strategic partners happy?
    Are you happy?

    If your answers aren’t all affirmative, what should you do differently the next time a project like this comes your way?

Being a solopreneur can be both lucrative and fulfilling. Hopefully, our article and the article we’re referring you to will provide some inspiration for you to get started. Maybe you’ll be the next solopreneur on the Inc. 500!

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The Young And The Restless Seniors

By Bigg Success Staff
December 07, 2007

Success Stories

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What’s the best age to own your own business? That’s a tough question to answer judging by two recent profiles.

33 Success Stories
You’ll see that age is not an issue because Inc. focuses on octogenarians (and then some) in business with their profile of 8 business owners over 80. These entrepreneurs are about 87 years old, on average, although Jack Weil is the sage of the group at 106. He runs Rockmount Ranch Wear, which sells western apparel.

Business Week looked at the other end of the age spectrum in their third annual profile of 25 entrepreneurs under 25. On average, they’re just over 22 years old, with the youngest entrepreneur profiled being 16-year old Jasmine Lawrence. She is the founder and CEO of Eden Body Works, which sells all-natural personal care products.

So what can you learn from these 33 success stories?

  • You’re never too young to start your own business. You’re never too old, either!
  • If you’re too young to be trusted with major responsibilities, start your own business. Now that’s responsibility! If you’ve reached that age where no one will hire you, start your own business and hire yourself!
  • You have to take risk, but make it manageable. If you read between the lines, you’ll see most of the entrepreneurs in these two profiles started small, often from their home or apartment.
  • On a related note, you don’t need a lot of money to start a business. Let’s not kid ourselves – money may help. However, many of these entrepreneurs started businesses that required relatively little money or were in industries desirable to capital providers.
  • More people, of all ages, are launching their own business. Why not you?

Bonus: 30 more success stories
If you’d like to see more profiles of young people starting their own business, check
out 30 under 30: America’s Coolest Young Entrepreneurs from Inc. While not as timely as the other two (it was released in July of this year), you’ll get even more ideas and inspiration from this slide show.

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Lessons Learned From A Bankrupt Business Owner

Last time, we talked about jump starting your passive income by investing in rental real estate. Today we’ll look at what we can learn from a bankrupt business owner.

We came across an interesting article a little bit ago in the New York Times. It was about a young real estate speculator named Todd.

Back in 1994, after attending a seminar on buying real estate, 20-year old Todd found a property which he bought, fixed up, and sold for a $4,000 profit.

By the year 2000, Todd, now 26, was holding as many as 25 houses at a time. He had perfected his system – making up to $15,000 on every house. Eight banks were in line to provide him money when he needed it. Todd decided to start building new homes because prices had gone up so much on the houses he was buying.

Fast forwarding to May of 2006, Todd was living the American dream at 33. He had a 5,000 square foot house that cost $1.2 million. He had a BMW and a Corvette. An inventory of 89 lots was waiting for buyers. He owned an office building. Life was good!

Now, his marriage has collapsed. Banks have taken back his lovely house; he now rents a small one. His beautiful cars are gone. He’s driving a pick up truck. He’s lost everything else. He sells beverages full-time, and brokers deals to other speculators part-time.

We applaud Todd for sharing his story. And a big salute to John Leland for this excellent article – A Real Estate Speculator Goes From Boom to Bust.

So what can we learn from Todd’s experience? Here are some lessons:

Just because a bank will give you $$$, that doesn’t mean you should take it!
Todd had a banker who did him a favor, if he would have only recognized it. She told him “no”. So Todd went to another banker who kept the funds coming. If Todd had only paused to consider why his first banker said no, he may be in less of a mess now.

When you’re living on borrowed money, you may be living on borrowed time.
Todd was highly leveraged, in business and at home. Being levered in business may be fine. Piling on to that with personal debt is a bad idea. Borrowing money is a two-edged sword – it will make you rich, or poor, more quickly.

When it comes to your standard of living, keep your standards low.
Todd had the best of everything – the house, the cars, and more. Which is fine, if you have assets that will produce the income to pay for everything. But when you’re borrowing to buy status symbols, you’re bound to wind up in trouble.

Know how you’re getting out before you get in.
If Todd had done this, he might have noticed that it was getting more expensive for his customers to buy houses. He could have shifted his business model once – find a customer, then build it. That would mean he was “out” without getting “in”.

Fully analyze your situation by considering a number of situations.
Todd did this once – he shifted from flipping houses to building new ones. He didn’t contemplate how rising prices were affecting his customer’s ability to buy his product. He failed to consider how long it would take him to sell his inventory of lots. Had he done so, he may have prevented the major disaster that happened.

Todd learned the hard way – by making the mistakes himself. Hopefully, you can learn from his mistakes so you don’t make the same ones.

Our quote today comes from Jonas Salk, the developer of the polio vaccine.

“I have had dreams and I have had nightmares,
but I have conquered my nightmares because of my dreams.”

So shake off the nightmare and rest assured, your sweet dreams will come true.

Next time, we’ll offer some tips for starting over, for turning misfortune into fortune. Until then, here’s to your bigg success!

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Get Real Estate

Last time, we talked about how to get started in your own business or franchise. Today we want to discuss how to jump start your passive income by investing in rental property.

You may ask why you should think about investing in real estate now. The daily news is ripe with horror stories of houses in foreclosure, people getting slammed by increases in their adjustable-rate mortgages, and others struggling to sell their houses in this down market.

Believe it or not, that’s why we think now is a great time to buy! Relative to historical norms, things are not as bad now as they were good a little while ago. We’re comparing now to one of the most lucrative markets for sellers in history! Take time to note the word “sellers” in the prior sentence.

There’s less competition for property today. It’s a buyer’s market.
That’s why we think you should buy now.

We’ll assume you’re convinced – where should you start?

Start by buying your own home.
In the past, financial planners often recommended renting and investing in other assets, such as stocks. Historically, stocks have outperformed real estate. The problem – the investing part was voluntary.

Buying a home is a commitment. It forces you to save. And if you’re like most of us, you need that “forced” part. So as you pay your mortgage, month after month, you’re reducing your outstanding debt. That’s why, on average …

… homeowners are significantly wealthier than renters.

So owning your own home is the foundation for creating wealth. Now you’re almost ready for the next big step. Remember our discussion of 38 getting aggressively passive]? You’ve found money from watching your spending and paying off debt. Keep piling that money up to prepare for your next move.

Buy your first investment property.
Your next real estate purchase may be your first rental property. Or it may be your next home. Consider moving up to a nicer place and renting out your first one.

Either way, be sure you have more money coming in than going out. Hook up with a good realtor who can help you determine what your rent should be. Now, estimate your bills – property taxes, insurance, mortgage payment, and all the others. If you don’t project having money left over, don’t buy that property – find another one!

Don’t start without a cash stash.
Owning real estate comes with its risks. For example, what if your property suddenly requires major repairs? As with any business, don’t invest in real estate unless you have a cash stash. If you don’t have one, find a partner who does. Otherwise, you may lose everything.

Our quote today comes from the Australian author, Noel Whittaker.

“Becoming wealthy is like playing Monopoly …
… the person who can accumulate the most assets wins the game.”

So roll the dice, take a chance, pass GO, and collect more than $200! It’s not just play money!

Next time, we’ll look at some of the things that can go wrong – lessons from a bankrupt business owner, who happened to be a real estate speculator. Until then, here’s to your bigg success!