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Success as an Entrepreneur Stems from 4 P’s

Four Ps for BIGG SuccessHow do you reach BIGG success as an entrepreneur? Remember the 4 P’s:

People

Put people first. This starts with you. Your business should serve you, not the other way around.

It continues with your employees. You may not have any at first, but as your business grows, the need will likely arise. Don’t neglect these people. Happy employees lead to healthy profits – another one of the p’s as you’ll soon see.

But neither you nor your employees will have any job security if you don’t please your customers. Attracting and, more importantly, retaining customers should be job #1 for everyone in your business.

Purpose

Your purpose lies where your passions and strengths intersect with a market need. You and your people are able to solve a problem for another group of people.

Your purpose defines your firm’s reason for being – your why. It should be easy to say and even easier to remember.

More importantly, your stated purpose explains the difference you make in the world. It should inspire you and your people to perform at your highest capacity.

Process

Stated simply, a process is a set of procedures. A set of processes forms a system – more specifically, your operating system.

Purpose helps define the what while process describes the how. Purpose helps you determine the right things day to day. Process helps you do them the right way.

Together, purpose and process help you do the right things the right way. You need them both to be a BIGG success.

Profit

Finally, we come to the final P – profit. Contrary to many people’s misperceptions, profit is not a dirty word. Without profit:

  • you won’t be able to replace equipment as it wears out
  • you can’t repay your bank debt
  • you won’t have any money to invest in growth
  • you won’t be able to justify pay raises
  • you won’t have the funds to hire more help
  • you would be better off investing your time and money elsewhere

Even non-profit entrepreneurs have to earn a profit if they want to serve more people. It may come in a different form than a for-profit entrepreneur but – make no mistake – it is essential for all enterprises.

There you go – 4 P’s that lead to BIGG success!

Image in this post from stock.xchng

How the Rich Make Money

golden_eggs.jpgThe Federal Reserve recently published some new wealth data [PDF]. They looked at levels of net worth and the income associated with each. They defined net worth as total assets (including a primary residence) minus any money owed.

You need a net worth of over $8 million to make the top 1%, $2 million gets you in the top 5% and it takes about $900,000 to place yourself in the top 10%.

So those are your targets if life on your own terms means being in the top 10% or above.

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Making more doesn’t mean having more

This report also looked at share of total wealth. As it turns out, the richest of the rich – the top 1% – didn’t get richer. They still held approximately one-third of the country’s total wealth in 2007, the same as 1995.

However, their share of income was up significantly – from 17% in 1997 to 22% in 2007.

The wealthiest people in our country saw a bigg increase in share of income, but their share of net worth didn’t go up. Does that mean rich people got caught up in the “spend, spend, spend” economy? Possibly.

We often think, “If I could just make a little more money.” This study offers further proof that making more doesn’t necessarily translate into having more – even for the richest among us!

Make do, then make more

The crucial thing – the starting point – is to figure out how to make do with what we already have. Then when we make more, we’ll have more because we manage it all better.

We can enjoy some of it now and invest the rest for our future – for the life we dream of living.

How the rich make money

As might be expected, the average person gets most of their income from salaries and wages. As we move to the top 5%, we see that a larger share of income comes from business ownership and investment real estate.

It really kicks in for the top 1%. Plus they have built up enough assets to get a significant boost from selling those assets for a profit. It’s Economics 101 – buy low and sell high.

But it’s no panacea

We’ve recently seen people losing money in business and real estate. Like most things, it’s no panacea. It’s risky. But if you aren’t trying to get rich quick, you can greatly improve your odds.

The best advice

We also found it revealing that this study showed that the bottom 50% lost money holding assets and from the ownership of businesses and real estate.

The rich made a lot. The bottom half lost money. What do the rich know?

Before you jump into investing in a business or real estate, educate yourself. Get advice from someone who’s actually succeeded at it. If they’ll mentor you, that’s great. If they charge you for it, it will be worth every penny.

You’ll get where you want to be faster by learning from people who have done it rather than trying to learn it on your own.

So if life on your own terms means building wealth, get started creating multiple streams of income today – even if it’s just part-time!

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Please join us next time when we ask, “Are you talking to the right person?”

Thanks for reading our post today. Until next time, here’s to your bigg success!

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Direct link to The Bigg Success Show audio file:
http://media.libsyn.com/media/biggsuccess/00381-042709.mp3

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(Image in today's post by barunpatro)

Am I Paying My Salesperson Too Much?

Bigg Challenge
Max is a business owner. He hired a salesman about a year ago. Max put him on the same compensation plan that his other sales people were on (a small base salary with an incentive).

The guy has done a phenomenal job. Max’s company is showing record sales and profits, largely due to this sales person. But here’s the problem: this salesman is now making more money than Max.

Max wants to know if he should adjust his salesperson’s compensation.

Bigg Advice
What should you do about this, Max? Here’s what we think …

Nothing!

Here’s why …

Is it costing too much?
It is possible to over-compensate your people. You can’t design a system where a small number of top performers win bigg while the company loses money.

But that’s not the case here. You’re also making more money, Max. So if it ain’t broke, don’t fix it!

Handle with care
We’ve heard of great sales people who were let go when a situation like this occurred. It does happen. But remember the nursery rhyme about the goose that laid the golden egg?

This sales person is the goose. Handle him with care. Like the old Proverb says,

“Kill not the goose that lays the golden eggs.”

Your bigg payoff
Don’t miss the bigg picture. The bigg payoff for owning a business often isn’t what you make each year. It’s what you make when you sell it.

You’re building an asset whose value is based on the income of the business, sometimes called owner’s cash flow. As your bottom line increases, so does the value of your asset. That’s your bigg payoff.

How you can get paid more
You’re making record sales and profits so you can probably afford to add another salesperson. Before you do, look at your infrastructure and capacity to make sure you can support an additional salesperson.

If you can, then go for it!

There’s a good chance, if you do that, you’ll be the highest paid employee of the company again!

Model this employee
We would suggest cloning, but okay … we won’t go there! 

So try to find someone with traits and characteristics similar to this salesperson. To do that, think about what you know about him.

What industry did he come from, if he came from outside your industry?

What experience did he have?

What education?

Are there any other clues you can get from his background?

If you did a personality assessment as part of your hiring process, what did his look like?

And ask your sales person if he knows anybody who might work out well. Bigg goal-getters know bigg goal-getters.

Thanks Max for sending us your bigg challenge. We wish you bigg success!

Subscribe to The Bigg Success Show in iTunes. 

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Don’t Fear the Banker!

A lot of us are very uncomfortable talking about money, whether that means negotiating your salary, asking for a sale, or asking for a loan. So the thought of going to the bank to get a loan can be very intimidating.

The loan process seems somewhat mysterious. Wouldn’t it by nice to know where bankers are coming from? Then you would be better positioned to get the money you need.

3 things to understand about your banker

#1 – Banks can’t afford to lose money.
A lot of people don’t realize that banks operate on relatively thin profit margins. So, contrary to popular belief, they don’t make that much money on every loan.

The biggest question every banker has when looking at every loan proposal is …

Will we get paid back?

They’re more concerned about the return OF their investment than the return ON their investment. That comes later.

#2 – Banks don’t fund start-ups.

This is perhaps one of the biggest misperceptions in the business world. People think the bank is the best place to go for money they need to start a business.

To which we say, reread our first point! Bankers are relatively risk averse for the reasons stated above and more. So banks don’t tend to lend money to new, unproven firms.

You might be saying, “But I know people who got money to start their business from a bank.” Here’s the distinction – the bank wasn’t loaning money to their BUSINESS; they loaned them money as individuals FOR their business. If you look deeper, you’ll find that, in almost every case, they secured the loan with equity in their house or some other asset.

#3 – Banks need to lend money.
That’s their business. So if you need money, and you can prove that you can pay it back, and you have some assets to secure the loan, go to the bank with confidence!

Your bank is just like your favorite video store.
Video stores rent DVDs for a fee. Banks rent money for a fee. So going to the bank is just like renting a movie. You have to return the movie and pay a fee. And hey, unlike video stores, bankers don’t charge their fees upfront!

Click on our Comment link below to share your thoughts on today's post
Click on the Share This button below to Digg, Stumble, Mixx more

Our bigg quote today is by the great Stephen Covey:

“Seek first to understand, then to be understood.”

Understand your banker’s needs so you stand to get your money needs. 

Next time, we’ll discuss how to offer criticism without being critical. Until then, here’s to your bigg success!

Subscribe to The Bigg Success Show in iTunes. 

Subscribe to the Bigg Success feed.

Related posts 

How To Become A Millionaire

Good Debt vs. Bad Debt

How To Get Your Customers To Finance Your Business

5 Places to Find Cash for Your Business Today

I Have An Idea For A Business! Now What?

Lessons Learned From A Bankrupt Business Owner

(Image by svilen001)

Don't Fear the Banker!

A lot of us are very uncomfortable talking about money, whether that means negotiating your salary, asking for a sale, or asking for a loan. So the thought of going to the bank to get a loan can be very intimidating.

The loan process seems somewhat mysterious. Wouldn’t it by nice to know where bankers are coming from? Then you would be better positioned to get the money you need.

3 things to understand about your banker

#1 – Banks can’t afford to lose money.
A lot of people don’t realize that banks operate on relatively thin profit margins. So, contrary to popular belief, they don’t make that much money on every loan.

The biggest question every banker has when looking at every loan proposal is …

Will we get paid back?

They’re more concerned about the return OF their investment than the return ON their investment. That comes later.

#2 – Banks don’t fund start-ups.

This is perhaps one of the biggest misperceptions in the business world. People think the bank is the best place to go for money they need to start a business.

To which we say, reread our first point! Bankers are relatively risk averse for the reasons stated above and more. So banks don’t tend to lend money to new, unproven firms.

You might be saying, “But I know people who got money to start their business from a bank.” Here’s the distinction – the bank wasn’t loaning money to their BUSINESS; they loaned them money as individuals FOR their business. If you look deeper, you’ll find that, in almost every case, they secured the loan with equity in their house or some other asset.

#3 – Banks need to lend money.
That’s their business. So if you need money, and you can prove that you can pay it back, and you have some assets to secure the loan, go to the bank with confidence!

Your bank is just like your favorite video store.
Video stores rent DVDs for a fee. Banks rent money for a fee. So going to the bank is just like renting a movie. You have to return the movie and pay a fee. And hey, unlike video stores, bankers don’t charge their fees upfront!

Click on our Comment link below to share your thoughts on today's post
Click on the Share This button below to Digg, Stumble, Mixx more

Our bigg quote today is by the great Stephen Covey:

“Seek first to understand, then to be understood.”

Understand your banker’s needs so you stand to get your money needs. 

Next time, we’ll discuss how to offer criticism without being critical. Until then, here’s to your bigg success!

Subscribe to The Bigg Success Show in iTunes. 

Subscribe to the Bigg Success feed.

Related posts 

How To Become A Millionaire

Good Debt vs. Bad Debt

How To Get Your Customers To Finance Your Business

5 Places to Find Cash for Your Business Today

I Have An Idea For A Business! Now What?

Lessons Learned From A Bankrupt Business Owner

(Image by svilen001)