This is where most people fail. The key to success in any type of business is not to be greedy at all. Your business will only work if you are prepared to give away the largest portion of the business’s income to the people who are doing the work for you.
After all the commissions and expenses are paid, only about 10% of the business’s total income could find its way to your pocket. This may sound like very little, but if you build this business correctly that 10% could yield a substantial amount of many thousands of dollars per month!
And remember, with the correct management structure in place, you’ll earn this amount of money by only working for about an hour per week yourself.
Why putting profit in your pocket?
Some people don’t understand that when you receive income from any source, you need to compensate yourself. Setting up and maintaining a business requires a lot of hard work, time you spend working on it, the monetary investment , your monthly expenditure are all your efforts. It’s for that reason that you need to putting away a 10% profit from your business income to compensate for your hard work.
It’s a rule all big or medium businesses follow. In the business context, the amount is called owner’s equity. It’s that portion of profit after you have paid all your business financial commitments.
It depends on you, how you spend the amount, whether you open investment plan or purchase your own household goods or pay your family bills. But it’s a rule all business owners usually follow.
There’s no reason why you, as business newbie should not follow. If you follow the 10% rule, you will be surprised how much this amount could grow in 10 year period or the value of asset you will own.
It’s indisputable fact that, the income you generate must be ploughed back into growing your business, however, your business must also make money to compensate for your effort.
What if your business makes no profit?
All business entities were created to make profit, if it suffer from lack of profit, it is incumbent on you to cause it make profit. At the beginning, all business ventures, suffer the same problem, but as time goes by, it has a tendency to grow and eventually start to make profit. You need to be patient, work hard, stay focus, soldier on. It will yield the desired results (profit).
Once your business project is up and running, consider taking away 10% of its profit for your own good. You should first pay all operating expenses and make provision for 10% for yourself.
This is the money to compensate for your effort and hard working. You will be foolish if you don’t cater for your hard work, skills and knowledge you applied to generate such profit.
Every business, private or public organization political or not that was created by any person, that individual simply becomes the co – founder. It doesn’t matter who runs and maintains it. Any income generated by such entity, the co – founder acquires a specific percentage of its income.
It also applies to you as a business founder/owner, you are entitled to 10% of any profit generated by that entity. Therefore, learn how to put 10% business profit in own pocket.