In its most basic form, earning a living means trading an hour of your life to your employer for a fixed wage. However, unless you become a doctor or a lawyer, there are strict monetary limits on this simplistic time-for-money profit model. Structure enables you to take a valuable concept and exponentially magnify its influence and earning potential. Structure allows you to leverage your time, and therefore earn higher and higher amounts of money for the same level of input. You can even set up a structure that runs mostly or entirely independently of you, earning ongoing passive income.
You don’t need a formal business plan to get started making money independently or add structure to a basic valuable idea. Here’s how anyone with a good idea can start making at least a little bit of money on day one of implementation:
- Create something of value – either a product or a service.
- Identify the type of person who needs it most.
- Compare it to similar solutions in regards to function, message, and price.
- Describe it concisely, including what it does, how it works, who it’s for, and what makes it unique.
- Figure out how to get this message in front of the people who need it most.
- Take their money, and give them the product or the perform service in return.
This is simple in principle, but gets more complex the bigger your idea, or the more you attempt to scale it. To create a more complex product or service, you will need to identify manufacturers and suppliers who can provide all the different parts you need at a price that is significantly lower than what you can charge for the finished product. These are the kinds of businesses that typically take both time and a fair amount of startup capital to get going. They may not see a profitable return for months or years, and are therefore not as appealing to bootstrapped first-time entrepreneurs.
If you are not in a position to make profits from the very beginning that you can reinvest into the business, you can seek out an infusion of cash from an investor in exchange for some ownership in the company, or an instant royalty on everything sold.
As an entrepreneur, your job is to hold the whole business together, and plan its future. At the start of your first business, you and whoever else is on your team of founders will probably be handling most of the tasks yourself – all the way from production, to distribution, to sales and marketing. As you grow, you should begin to rely on technology and other people to handle the tasks which do not require your direct intervention. In time, you will be able to structure your business in a way where you are only left dealing with the tasks you are best qualified to handle. That is when you will start making more and more money for far less work than you would previously have thought possible.
The ideal role of a founder is that of the master strategist and the heart of the company. Yet, most CEOs and other leaders end up taking on the role of gap-filler. They hire specialized employees to take care of the major functions to keep the business running, but little things inevitably pop up that fall on the boss’ shoulders to take care of. It’s common for founders caught filling the gaps in their company management to run out of the time to implement new strategies and test new ideas. Often, the person who should be taking on the highest-level tasks is relegated to busywork and maintenance instead. It’s not emotionally rewarding, and it’s potentially lethal to your business.
As the leader in your business, you time is the most valuable asset you have. When you are confident in the value of your own time, you realize how important it is to delegate tasks which can be done to the same level of quality by someone else for a reasonable price. Work to turn your company’s daily tasks into processes which can be passed on to others. Simplify what you do every day, and identify whatever ways your current employees are already wasting effort and resources. All it takes is a mind attuned to efficiency in all things to turn a functioning business into a scalable profit-producing machine.