When you looked to start your business did you ask yourself the question, Why?
2 Gambling Clubs You Need To Avoid
I would suggest that if you don’t have a future strategy in mind when you start out in business you are more likely operating on hope. You drift into membership of the 55% Club, those whose business doesn’t last 4 years. Crash and burn.
Or the 90% Club, those who are living the nightmare of subsistence earnings with net profit at 10% or less, but no savings for the future. Wither and die, slowly and painfully.
Do Miracles Happen?
You can be a member of the Miracle Club from a lucky inheritance or win the lottery, with nothing more to worry about forever.
You might also get there on your first day in your new business by developing a software package that Facebook wants to buy for billions of dollars. The percentages for miracles are of course extremely low, and I can’t recommend this Club as a business model either.
What’s the Premier Business Club?
If you’ve made enough money by the time you’re 50 to enable you to stop working with enough assets to cover your needs through to death (including your bucket list) then you’re a member of the 6% Club. That’s roughly the percentage of people who can claim that privilege. You would need at least $1.5 million put aside and that amount will give you an annual living allowance of $50,000 for about 30 years.
If you’re in your 20’s then those who know say you would be looking at putting away around $18,000 per year to raise $1.5 million. If you’re already around 35 then you need a surplus of nearly double that every year.
What Is My Business For? What is My Life For?
Here is the clue for choosing the best possible Club you can belong to.
If you can’t meet that age 50 target then your next objective is to have enough at 60 ($1 million), and if really necessary, at 70. Between your current age and your target, you have to earn income for your present needs and your future non-earning life.
When you finish with enough funds to cover you forward, you are then a member of the Freedom Club.
Very simply, your business can be your Freedom Fund, your entry to the Freedom Club. This is the one area that, if you get it right, can fund your work and future Freedom. Getting freedom right is all about wealth generation. Wealth isn’t just money, it’s also good health, low stress, time with family and friends, and freedom to do what you want with your life.
How to Join Early and Prosper
You can join the Freedom Club by building up your business assets over time to the desired amount and then selling it.
Or, you can join the Freedom Club early with less than the required lump sum, especially if you can convert from being a manager of your business to an owner. Think of “The 4 Hour Work Week” as a model.
What you are looking for is getting your business to the stage that can run largely without you. Strategic direction, just like any company director should provide. But otherwise, a steady income that can follow you through your days while others do the work.
But first things first, which means getting your business to be generating sufficient income to let you live in the lifestyle you desire. Invest in specialist business advice (accountant, lawyer, business coach) and a practical plan to help you generate wealth and save you time.
In the past two articles, I’ve mentioned a couple of key ingredients, which were developing a customer base. And developing a top team based on workplace respect. I’ve also previously mentioned standardizing your processes so everyone is in synch. As well as being a lean organization and working on ways to double or triple your profit. There’s one other key ingredient required that is best illustrated with music.
The Second Best Example of a Business Club
To build a sustainable Freedom Fund your business needs to be a fully paid-up member of the Orchestra Club. I would (seriously) like you to call up YouTube and watch and listen to at least a part of this piece – G. Gershwin – Rhapsody in Blue, http://youtu.be/qLTManObB40
Notice the way everyone is using the same score and are in perfect synch. Notice how the Conductor is the Director, ensuring not just the right meter of the process but also placing emphasis on the right areas. Notice all the soloist players who have specific roles as well as combining perfectly in the workgroup. Notice all the paying customers and the instant feedback of appreciation.
Which Of These Two Orchestras Represent Your Business?
Compare this other version of the same piece: Rhapsody in Blue by Windy City Harmonica Club, on http://youtu.be/79-aCqRoO94. You don’t have to listen to this for long, I couldn’t.
In the first piece, you can easily tell the benefits from using superior resources (ie instruments) and the higher level of professional skill (capabilities). You don’t become a member of an Orchestra Club without lots and lots of practice, not only in the individual skills but also in combining them. This takes time and application, with no wasted notes, no unnecessary overheads. Raw enthusiasm simply isn’t enough.
Avoid Going Too Far in Becoming Lean
I know I’ve spoken a lot about cutting costs as a means of improving profits. But you can take it to extremes and lose the plot, as this Work Study report for an orchestra did:
“Recommendations concerning the performance of Schubert’s “Unfinished Symphony” by this city’s symphony orchestra as observed under actual working conditions:
- The attendance of the conductor is unnecessary for the public performances. The orchestra has obviously practiced and has the prior authorization from the conductor to play the symphony at a predetermined level of quality. Considerable money could be saved merely by having the conductor critique the orchestra’s performance during a retrospective peer review meeting.
- For considerable periods, the four oboe players had nothing to do. Their numbers should be reduced and their work spread over the whole orchestra, thus eliminating peaks and valleys of activity.
- All 12 violins were playing identical notes with identical motions. This is unnecessary duplication: the staff of this section should be cut drastically with consequent savings. If a large volume of sound is required, this could be obtained through electronic amplification, which has reached high levels of reproductive quality.
- Much effort was expanded playing 16th notes or semi-quavers. This seems an excessive refinement, as most listeners are unable to distinguish such rapid playing. It is recommended that all notes be rounded up to eighth. If this is done, it would also be possible to use trainees and lower grade musicians with no loss of quality.
- No useful purpose would appear to be served by repeating with horns the same passage that has already been handled by the strings. If all such redundant passages were eliminated, as a determined by the utilization review committee, the concert would have been reduced from two hours to about 20 minutes, resulting in substantial savings in salaries and overhead.
In fact, if Schubert had addressed these concerns on a cost containment basis, he probably would have been able to finish this symphony.”
And thus rock bands were born!