Last Saturday a group of women came to my workshop “Business School for Women” and we had so much fun!
One of the things I shared during the workshop is the biggest reason why a business fail. 85% of new businesses fail within the first 5 years and only 4% will make it for the next 5 years. But it doesn’t mean that all of those who survived are successful. Most of them are struggling to stay afloat. I don’t want to disillusion you, but I want to be totally honest with you because the truth helps you increase your chance of success. So why is that?
Robert Kiyosaki, a best-selling author of Rich Dad Poor Dad explains that there are four different of people in a business world.
- E – Employee
- S – Self-employed or Small Business Owners
- B – Big Business Owners
- I – Investors
Most of people start their business in “S” – Small Business Owner. These people usually work as hard as being in a job, if not harder. When there is a public holiday, employees would say “Yippee! I don’t need to go to work!” while small business owners would say “Oh no, I’m going to lose sale!”
For people in S, their business depends on them. If they don’t’ work, there is no income. If they go for a vacation, the business also goes for a vacation. They have to wear so many hats from selling, answering phone calls and emails, making their websites to doing legal and administration… the list goes on. They are so busy that they don’t have time focusing on things to grow their business and bring more income.
People in B owns a business that works without them. They have a system, network or team that works for them, therefore they still make money even when they are on vacation.
It’s unavoidable to be in S for the beginning unless you have a lot of money to start your business, but the problem is, 80% of the businesses stay in S (S also means survival mode) and never move to B and it is the biggest reason why a business fail. Business depends on them and they’re too busy to grow their business.
Not sure if you are in S or B? Very simple. Do you make money while sleeping? If no, you’re S. 😉
So what do you need to move from S to B? It’s Passive Income. Passive income doesn’t always mean that you don’t have to do anything, but you set it up once and you continue making money with little effort. There are two ways to make passive income:
- Do it on your own – For example, write books, songs, license your invention, product or idea. You can also create information products such as ebook, home study course, online course. If you already have a course or service that is selling well, you can teach others to do the same and earn a percentage from their sales. Creating your own affiliate program, distributorship, licensing and franchise with your business are also great option.
- Leverage other people’s product – if you are just starting up or want to create another income stream fast without re-inventing the wheel, you can leverage what’s readily available and proven to work. For example, many network marketing companies have high quality products at low price and it is designed to create passive income with low start-up cost. You can join affiliate program, become a distributor or buy franchise of businesses that have great competitive advantage in your market. You can also take a program that is already successful in a certain language and offer it in another language.
We all have different motivations to start a business, but the ultimate goal for most of us is to have a freedom – freedom to be able to do anything you want. Do you agree? For that, you have to focus on shifting from S to B as quickly as possible. Otherwise either your business kills you or you kill your business.
Love & Success,
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