You, Inc. – Beyond Marketing

Whether we are focused on You Incorporated (LINK: http://www.amazon.com/You-Inc-Art-Selling-Yourself/dp/B003UHUBFY or http://www.amazon.com/You-Inc-John-McGrath/dp/0732276365)  or as a Free Agent Nation (LINK: http://www.amazon.com/Free-Agent-Nation-Working-Yourself/dp/0446678791, individual responsibility for careers and economic well being is and will continue to be a recurrent theme in the 21st century as companies and governments show less inclination and ability to provide for individuals well being.  Most people realize, absent a legacy job in the government or at a big company, they need to be promoting and developing themselves as their own personal business.  Here is a great article on people becoming solopreneurs:  http://www.nationaljournal.com/next-economy/you-inc--20120607

The Business Godfather takes this theme and goes beyond simply generating income through your efforts as a consultant or employee.  As we look at ourselves as complete economic entities – businesses that drive our own net worth and economic future – we need to realize we can make money from our efforts but we can also make money from our assets.

No matter how you slice it, there are only 7 ways that I have figured a business (including you) can build income and wealth:

1.    Generate Income from Your Efforts

2.    Generate Income from Efforts of Others

3.    Generate Income as Profit Margin from Buying and Selling Commodities

4.    Generate Income from an Interest in an Asset (royalties, rents, etc.)

5.    Own an Appreciating Asset

6.    Create an Appreciating Asset

7.    Make Yourself or Your Business Attractive to Others

We will have separate post that goes into this in more detail but these are the basic ways to generate income and grow wealth in a business and for yourself.

As we look at ourselves as a business, we want to learn from other more successful business owners.  The most successful business owners I have worked with did not have just one business stream of income.  The most successful business owners I have worked with might own a restaurant, but they also had rental real estate, they might have ownership in another business or generate income through other financial interest.  The most successful business owners I have worked with have at least 5 streams of income within a single business or through multiple businesses.

Let’s look at how this might work for a person with a 40 hour per week job.  The most obvious stream of income comes through your efforts as an employee.  You can develop a stream of income through a second job, by performing odd jobs or through monetizing a hobby like selling crafts at a farmers market on the weekends.  You can use your 401k as an income stream for retirement and actively trade in an IRA or taxable account as a fourth stream of income.  A fifth stream could be owning an appreciating an asset such as a house.

Not so far-fetched for most people but before you start patting yourself on the back and falling into the slumber of complacency, the key is to make sure that your additional streams of income are actually working for your benefit and not just sitting there growing moss or generating income for others and not you.

By developing multiple streams of income you will protect yourself from overreliance on a single stream of income.  Diversification of income streams is how you are going to build a happy, healthy and growing business.  If you remember the go-go Internet days, one of the hottest companies was Iomega whose claim to fame was a single product – the Zip drive.  Those of you brought up in the digital age won’t appreciate how cool the Zip drive was.  LINK: http://en.wikipedia.org/wiki/Zip_drive  Instead of waiting all night for your tape drive to back up your data (complete with a lot of whirring and spinning), all you had to do was put a Zip disc in the Zip drive and your data was backed up in a matter of minutes.  Awesome, time saving, a must have product – until USB technology and writable cds allowed you to copy data even faster.  And Iomega, with its single stream of income, fell into the dustbin of history.  This story has played out thousands if not millions of times.  Don’t let it happen to you and your business.

How many productive streams of income do you or your business have? 

How are you diversifying your streams of income and sources of wealth in your business – personal or professional?