Archive | November, 2015

Investments Create Business Opportunities and vicer versa

23 Nov

Investments create business opportunities and business creates investment opportunities. It’s a continuous cycle and it begins with you and your ideas.

There are only 4 categories to invest in Business, Cash, Property and Paper. Business generates cash, cash provides the money to buy property or paper assets. As each asset grows there are more opportunities to build other streams of income. With each income stream a new business opportunity will present itself.

Using property as an example. By building a property portfolio there are services required to run the portfolio each of which can be a separate business. A management company can be created to manage your portfolio and the portfolios for other property investors. An inventory company can be formed to do 3 monthly rental property checks for your portfolio and other customers. Other potential businesses can be cleaning, maintenance, gardening and utilities. Each providing a service to your property portfolio investment. Each business can have external customers to allow a more organic growth within the business structure.

As each company becomes a successful standalone business it will generate more profit and income which can then be added to your cash pile for reinvestment into more properties and more paper assets. As each company grows it will need more suppliers for the business which can be new businesses created by you.

There are various ways to grow your business. Franchising is one where you sell a successful business model providing access to your proven systems. This will allow a business to grow without the normal exposure to overhead and financial liabilities that often stifle business growth.

In the previous blog we discussed changing the mindset to that of an investor. With an investor mindset you will continually see opportunities around you. Sometimes, there are so many opportunities it’s hard to decide which to put into the ‘not now’ categories and which to put into the ‘yes, now’ category.

Business can be used to offset taxes legally and reduce tax liability on investments. An accountant is the best person to advise you on which structures will fit best within your investment strategy.

The next time you are wondering what you can invest in remember – Investments create business opportunities and business creates investment opportunities. It’s a continuous cycle which starts by investing in you and your ideas.

 

 

 

 

Advertisements

Change your Mindset

9 Nov

There are 4 categories for earning income – Employee, Small Business Owner, Business Owner and Investor. Each category has a different mindset. A different way of thinking about business and money. The mindset you develop will determine your success in each category.

Employees

The mindset for an employee is usually based around ‘What’s In It For Me?’ They will be concerned with the hours they work. How much money they get paid either on an hourly basis or salary basis. How far do they have to get to work? What sick leave entitlement will they have. How much holiday pay? Is there a pension.

Small Business Owner

This is probably the worst category to be in but this category results in employment for 80% of employees. A Small Business Owner will be thinking about products and services; marketing; customers; staff; the location of their business; what equipment is needed; infrastructure; accounts; pay; pensions; hours of work; travel; holiday pay; holiday coverage; legislation and the list goes on and on.

Business Owner

A Business Owner is someone who has grown their business to such an extent they now have managers who run everything for them. Their mindset will be based around the structure of their business; how managers are performing; strategy for the business and are targets being met; is the business local or international; financials and legals although they will have specialists who deal with each area for them.

Investor

An investor will have a totally different mindset from the other 3 mentioned above. An investor is focused on

  • ROI (Return on Investment) how much will it be and is it worth the effort.
  • Exit Strategy – how quickly will you get your capital back? The quicker your money comes back to you the quicker you can get it invested elsewhere and be earning more investment income
  • People – who are the people who want to do business with you? What sort of track record do they have? Are they someone you think you can trust to invest with?
  • Markets – are they investing in the right market at the right time? They will look at investment cycles and determine if this is the best time to invest in that category
  • Taxes – legal ways to reduce tax liability

Which mindset do you have?

Do you have the right mindset for what you are doing right now?

Each mindset can be learned through practice. By being aware of where you are at this moment you can decide which mindset you need to move to the next level of where you want to be? Practice the mindset that suits that level best. Once you have the right mindset the rest will fall into place naturally.

Only you have the ability to change your mindset and change your outcome.