Moving Words – Wealth
Written by Timothy Brady.
“Wealth is the ability to fully experience life.” – Henry David Thoreau
Building wealth is a process; it’s not based on luck, or being in the right place at the right time. Individuals who become wealthy and remain wealthy do it with a plan, no matter what business they enter. We’ve all seen the person who has the Midas touch—every business he goes into rockets to the stratosphere. If you sat down with such a person and asked what were the most important things he did to make each of those businesses successful, here is what he would answer:
- Have a complete business plan. Know the numbers, expenses versus income, be sure the business has a real opportunity for success.
- Don’t follow the crowd. Select a niche that gives you an edge against your competition.
- Have a vision of the future, and how you’ll reach each plateau to the top.
- Evaluate, evaluate, evaluate. Have the facts and figures of what you’re doing according to your plan. If it’s working, stay the course; if it’s not working, adjust if possible or scrap the portion which is not achieving its goals.
- Know your break-even point, the figure which changes every time any expense increases or decreases. It’s not the amount of incoming money (revenue) which covers your costs. It’s the point where losing money stops and profit begins.
- Be sure you’ve included in your break-even costs a salary for yourself, and anyone else who is performing tasks for your company. Any company owner who is waiting for the profits to pay his salary is doomed to working for someone else. Your profits are where your performance bonuses come from, not your salary.
- Never allow product or service to be sold which is below your break-even point.
- Base your business model on creating value in your services, not attempting to compete on price.
- “Don’t put all your eggs in one basket.” You shouldn’t let a single customer represent any more than 20% to 25% of your total revenue or accounts receivable.
- Customers are the core of your business, so it’s best to focus on continually farming for new business.
- Have a system in place to control cash flow and augment it when necessary.
- Remember to invest in your company. Profits from your company sales efforts need to be reinvested into the company to build value in your company’s worth.
- Engage experts to do what you either don’t have time to do or don’t have the skill or resources to do.
- Enlist expert advisors to provide direction and advice on how to maintain and grow your business.
Of these all-important skills, the one which will ensure your success and underwrite all the other requirements for success is your cash flow management and reinvestment system. Remember cash is king in any business; without it, you cannot operate. In your business plan and your day-to-day strategic plan, you must have an accounts receivable management system in place. Keep in mind, any company attempting to grow will experience a cash flow deficit. You need a cash flow system which becomes your backbone for sustainability. Your objective: a way of reinvesting your profits to maximize return while sustaining your operation and providing the substance for growth.
“Wealth is just consistency… I don’t want to be rich. I want to be wealthy.” – Quavo
