How to Make a Million, without Spending MORE…

A few years ago I sat at my computer performing the excruciating but necessary year-end bookkeeping review for my martial arts business. I was fully immersed in the tedium of correcting account assignments, reconciling bank statements and trying to remember what the heck I spent $49.95 on that ended up somehow in unassigned expenses.

Just for fun I punched up a profit & loss statement and entered “ALL” in the date range. I thought; let’s take a quick look at the big picture. To my surprise and I must say, with a tinge of pride the gross income total was just a whisker over one million dollars. I had made my first million!

It didn’t seem to make sense. I still hadn’t drawn a real paycheck on any consistent basis. I had no cash reserves and the only profits I’d made existed only on paper. Thankfully before I put a deposit on my Learjet, I took a good look at my gross expenses, debt service and balance sheet. I had indeed made my first million; but it had taken a million and a quarter to do it!

Here are a few tips from my How to Make Your First Million as an Entrepreneur without Spending More than a Million to Do It seminar, whew! I share my experiences and offer some advice with the hope that you’re your day of becoming a millionaire will be a little more satisfying than mine!

1) Ever hear the scalded frog story? Debt works the same damn way!
Borrowing a large sum at once may be a challenge to a new entrepreneur, but it’s all too easy to borrow small sums and those small sums can add up to big debt. It’s very easy to use unsecured credit, lines of credit and credit cards to dig a big credit hole.

If you dropped a frog into a pan of boiling water he’d jump right out. Put him in a pan of cool water and slowly turn up the heat and he won’t notice the gradual change; despite becoming a par-boiled frog! In the same way short borrowing can turn you into a par-boiled entrepreneur.

Part of the problem is that debt service on your principal doesn’t show up on your profit & loss statement. It does reduce the liability on your balance sheet, but only interest is an expense. Be sure to create full cash flow reports with all debt service, principal and interest included, to see where your money is going. This is how you can inadvertently create “paper profits.”

2) Family business is above all, business.
You’ve no doubt had someone tell you never to do business with family or friends. From personal experience I may be inclined to offer the same advice; but for many of you involving family and friends may be a great way to get started or expand your business. Before accepting help from family and friends there is some business you should take care of.

In matters of business treat family like strangers. That means above all get everything in writing. Nothing can destroy a business or a family faster than leaving business matters to trust. Blood may be thicker than water, but ink is thicker than blood.

In writing establish how the business relationship will start and how it will operate. Clearly define rolls, responsibilities and distribution of revenues. At the beginning, establish in writing how the business will end. Provide clear exist plans for each person involved or investing in your business.

3) Contrary to popular belief, your passion does not always make a great business and you need more than passion to succeed.
There are a lot of books, seminars and speakers that teach that the key to success is to find your passion and pursue it relentlessly. Well, not exactly bullshit but not exactly true every time. Your customers don’t necessarily have to care about your passion as much as you do; but they have to care enough to want to buy it! If there aren’t enough customers who want what you love and you still want to pursue your passion; you better be prepared to move.

The next problem with this line of thinking is that there are people who are extremely passionate about something, but just plain suck at it! An essential part of creating your vision of success is to identify your talents and abilities. You’ll also need a good inventory of your material, emotional and spiritual resources to make sure you’ve got what it takes to get where you want to go. If you find you lack the talents and abilities to make a living at your passion, make it hobby and enjoy it! Hobbies are an important component of emotional and spiritual wealth. Chasing off creditors and worrying about keeping your home while you try to save your business of passion is stressful, unhealthy and just plain sucks.

I’ll support the theory that passion is an important part of success. Rationally assessing your passion in relation to your talents, abilities, resources and market is just as important.

I’m not throwing water on your entrepreneurial fire. If your talents and abilities are raw, your first step may be to develop those talents. If you’re lacking in resources, you may set short-term goals to increase these resources. If you truly believe in your ambition and you have the courage to risk failure, you’ve got most of what it takes to make it as an entrepreneur. You can learn the rest.

Passion without balance becomes obsession. With focus, timing and some planning your passion can fuel your greatest success.

Join Jim Bouchard, America's Black Belt Powervator for a special webinar on Business Expert Webinars:
How to Make Your First Million as an Entrepreneur…Without Spending More than a Million to Do It!

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