The idea of setting up your own business is a great one, if your goal is financial security, however we all know the inherent risks associated with starting a business – in that the majority of small businesses go out of business within the first five years.
Yet, as entrepreneurs you have a much more defiant and adventurous spirit, where you strive to become the exception to the rule and defy the odds, rather than become yet another statistic of business failure. In that sense, entrepreneurs by nature, must be optimistic and confident – yet there’s a significant difference between being optimistic and realistic, and there’s a similarly significant difference between being confident and arrogant.
In this article, we’re going to face the fact that being an entrepreneur is risky, as even if you are the peak of your success, it doesn’t take too many wrong turns to find yourself in financial ruin and despair.
In this sense, entrepreneurship is a lot less comforting than employment, as employment tends to have a considerable amount of safety and security attached to it.
Admittedly, the days of a job being for life are well and truly over, and many employees face the risk of companies downsizing them, resulting in a rapidly changing labour market where people are now expected to have portfolio careers and think much more entrepreneurially in terms of self promotion and positioning in terms of personal branding.
Yet, if you have a job, there is still the safety net of things such as sick pay, health benefits, and paid vacation. Also, if someone wants to fire you, they tend to have to navigate their way through the rather protracted process of employment law.
As an entrepreneur, however, you don’t have any of the same safety nets, in fact, it’s the reverse for you – because as a small business owner, all you need is a member or two of your team to have a baby, or to get sick, and suddenly you are under staffed and over burdened in terms of still having to pay their salary without getting any of the benefit, from their employment.
Therefore, in this article, we’re going to take a look at a few ways to ensure you don’t put all your eggs in one basket – and have a portfolio of revenue generating options, so if one should fail, you have several others in place; thus creating your own safety net of sorts, that nobody can take away from you.
It’s very easy to invest your profits straight back into your business, in the early days, and many people have been known not to take a salary – yet, this is a risky approach, as you’re putting everything you have into one business. Now, the counter argument to that would be to view a business as being akin to marriage – you commit to one person and therefore get much more out of it.
Yet, when it comes to money, you might want to consider the approach of broadening your options and this is when investing in other things, external to your business, come into play.
Ultimately, you could very easily set up an automated process of trading, simply by doing a little research on the best indicators for day trading and using an app to manage your investment strategy. In the alternative, if you feel like investing your money in something you can get to know about at a deeper level, you could invest in other start-ups that are perhaps within your industry or at least sphere of influence.
Indeed, many business owners opt to become a non-executive director, acting as a consultant for start-up businesses in return for an equity stake in their business.
2) CREATE AN ASSET
The best way to make money, on a consistent, ongoing basis is to develop a portfolio of assets that you can reliably leverage to generate income. For instance, some people will invest in property – as this way, they know they can get a particular amount of revenue, each month, from the rent paid on a property… thus, providing a very secure and stable safety net should anything go wrong with their business.
In the alternative, if you don’t have the cash to invest in property, you could create an intellectual asset such as an online course where you share your knowledge of a particular topic, and sell it online, for a profit. The great thing with an idea like this is that once you have created the course, you can leverage it time and time again, making more and more money – without having to put in any extra effort… because it’s simply a matter of marketing the asset, which can be done in an automated way, via things like Facebook Ads.
3) CONSIDER A SIDE HUSTLE
It might seem a bizarre idea for a business owner to consider setting up a side hustle, as most people perceive these to be for employees or stay at home parents that just want to dip their toe into the entrepreneurial lifestyle – yet, side hustles can be remarkably low risk and highly profitable.
Consider setting up a blog, or even a number of blogs, that you then leverage to generate revenue from sponsorship and advertising, or even affiliate marketing, where you recommend a particular product and provide a special link that ensure you get paid for your recommendation.
If you consider the fact that Success Resources typically pays around 20% commission to their affiliates, and the fact they sell tickets to events that are in excess of $5,000 – that’s $1,000 per sale. Imagine you recommended just five products that people went on to purchase at that level of commission – this would be $5,000 per month, with almost zero cost or risk.
Side hustles might not be as innovative and disruptive as many start-ups feel compelled to create, but they are highly profitable, and therefore, it might pay to consider what ide hustles you can set up to supplement your main business and provide an additional safety net, should things not go as expected.