Overcoming barriers to your income ceiling
I talked with a friend today about strategies to grow our businesses.
The main barrier to how much you can earn is the amount of time you have each day.
Even if money seems to be your most scarce resource now, once you’ve got a decent amount, the main issue is how much you can get done in 24 hours.
Here’s one commonly-misunderstood way to grow your business: It takes money to make money.
This doesn’t mean that you should spend more on what you’re already paying. But do consider hiring someone whether it’s a freelancer, part-time employee or a full-time staff member to help you do your stuff.
I especially like to delegate/outsource stuff I don’t like – administrative work, working on my taxes.
Hiring an employee might give the highest ROI in your business.
I typically get a 200 – 500% ROI on my labor costs each month.
Couple that with software/automation and you up that increase by a higher multiple.
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So there’s the fallacy that partnership/JVs are the way to go.
Most people forget that that works only if everyone is putting in their 100%, or at least 50%. The reality is that many “partners” will drop the ball and put in only 10% or in the worst cases, be deadbeats and do nothing.
If you’re stuck with such partners, you’d better run for the hills.
How do you avoid this? Simple, protect yourself.
Start with smaller projects. If the partnership doesn’t work for those, then don’t bother working on anything big.
Set specific goals and deadlines: Same logic. If a partnership which combines resources and is supposed to be greater than the sum of its parts can’t get its act together, then you are really in trouble.
If this all sounds too general, that’s because there’re many moving pieces in any partnership.
Trying to condense it into a 300- or 500-word post is just silly.
Here’s the synopsis:
1) Set tough, aggressive (and very profitable) goals.
2) Everyone has to pull their weight.
3) Get rid of the losers.
4) Profit.
Now, get back to work.
neil
October 5, 2010 at 6:03 am (14 years ago)Sometimes finding help is a job in itself.
Earl Grey
October 5, 2010 at 6:19 am (14 years ago)Good post.
Somewhat a theoretical and ideal situation when reality is very different but good anyway.
Hannah
October 5, 2010 at 12:52 pm (14 years ago)You’re absolutely right. Never forget about sunk costs: it’s never worth staying in a terrible partnership just because you’re already put something in, since chances are you’ll never get anything out.
Niko
October 5, 2010 at 7:14 pm (14 years ago)It’s all about setting goals and being aggressive.
Thanks for sharing,
Niko
andrew wee
October 5, 2010 at 7:34 pm (14 years ago)The scenarios were based on situations and projects I’ve been in over the years, although it might seem theoretical because I’ve stripped out identifying details, but still kept the core lessons on why the project succeeded or failed (happened more often).
andrew wee
October 5, 2010 at 7:35 pm (14 years ago)Yep.
I met a consultant who spends 2-3 months pitching for a project, then considers only the revenue for that 1 month of work, when his time is actually billed out at 1/3 or 1/4 of his actual rate (after factoring in the time needed to get the work).
Carl
October 6, 2010 at 12:13 am (14 years ago)Hey Andrew! Nice to see you posting again. Good info, as usual… 🙂
When are you going to start the Friday Podcast series again? Those were always informative and motivating, too.
Andrew Wee
October 11, 2010 at 10:04 am (14 years ago)Hey Carl,
Good to see you here.
Fri Podcast: Taking a rain check on it for now, cos I’m a little overloaded on projects at the moment.
Dane
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