You can become a millionaire, so it’s time to stop thinking that you can’t. If you have this limited belief that money isn’t obtainable or that you’ll never reach your financial goals, you’ll continue on that path. But, you really want to start opening your mind to endless possibilities and have a growth mindset as Carol Dweck puts it. There are, what, 56 million millionaires worldwide. You mean to tell me that you can’t be one of them? I’d disagree. Actually, I think that you can do it faster than you think.
Now, I want to explain that there is a difference between net worth and net income. People get this confused.
Net worth and income are financial terms that are often used interchangeably, but aren’t the same. Your net worth is the combination of all your personal assets minus debts and liabilities that you owe. It is what you are worth if you were to sell all of your assets and paid off all of your debts.
Income, on the other hand, refers to the money that a person earns through their work, investments, or other sources of income. It is the total amount of money that a person receives in a given time period (such as a month or a year) before any taxes or other deductions are taken out.
In summary, net worth represents a person’s overall financial position, while income represents their current earnings or cash inflows. Net worth takes into account both assets and liabilities, while income only considers cash inflows.
We have that out of the way, let’s touch on how easy it is to become a millionaire. Becoming a millionaire is generally not easy, and it often requires a combination of hard work, dedication, skill, and luck. The path to millionaire status is different for everyone, but some common factors that can increase the likelihood of becoming a millionaire include:
- Education and/or specialized skills: Many millionaires have specialized knowledge or skills that they have acquired through education or training.
- Entrepreneurship: Starting a successful business or investing in profitable ventures can be a path to millionaire status.
- Saving and investing: Living below one’s means, saving a significant portion of income, and investing wisely can help build wealth over time.
- Inheritance or windfall: In some cases, inheriting money or receiving a windfall can lead to millionaire status.
Entrepreneurship or launching a new venture is going to be the point that we focus on for this article.
Achieving a goal of going from 0 dollars to 1 million dollars as a business owner is a challenging but achievable goal. To achieve this goal, it is important to develop a solid business plan that includes a detailed description of the business, target market, competition, marketing strategy, financial projections, and more. Focus on sales and revenue growth by developing effective marketing and sales strategies and continuously refining them. Building a strong team that shares your vision and is committed to achieving your goals is crucial to the success of any business. Manage expenses and cash flow to keep overhead costs low, negotiate favorable terms with suppliers and vendors, and maintain tight control over expenses. Continuously innovate and adapt to stay ahead of the curve by seeking new opportunities, refining your products or services, and staying on top of industry trends. Speaking of industries, you’re going to have to choose the right one for you.
Choosing the right industry for your business is a crucial decision that can significantly impact your chances of success. To identify an industry that has the potential to make a lot of money, you should start by researching growing markets and evaluating the profit potential of different industries. This can help you identify opportunities that are expected to continue to grow and offer strong revenue potential. In addition, consider choosing a niche that fills a gap in the market or addresses an unmet need, as this can help you differentiate your business from competitors and provide a unique value proposition to customers. Assessing the level of competition in the industry and considering your skills and interests can also help you choose an industry that is well-suited to your needs and preferences.
Once you have identified potential industries, it is essential to conduct thorough research to evaluate the potential profitability of the business. Consider the cost structure of the business, including the cost of goods sold, overhead expenses, and potential revenue streams. Seek advice from industry experts, business advisors, or mentors to help you evaluate the potential of the industry and assess the feasibility of your business idea. By taking the time to carefully evaluate different industries and conduct thorough research, you can increase the chances of success for your business and position yourself for long-term profitability.
You’ve figured out your positioning, great. It’s time to start executing. But, you want to execute with a purpose. Either you can chase after the company’s market worth and focus on getting a seven figure exit through a liquidity event, or you can build a high revenue generating business. Both of these require that you create a system. However, an initial public offering (IPO) breaks your company into smaller pieces that give you an opportunity to sell minority shares, majority shares, or the whole company. This can be a little more rare, but not at all impossible to accomplish- it can be done pre-revenue, whereas revenue generating businesses focus on evaluating based on what they are selling.
Do you want to raise capital or build from the ground up?
In both instances, you’re going to need a team to expand the business. Offering equity in the business allows you as the founder of the business to grow it without having to spend money on human resources. And, if you are paying your team, they aren’t going to work nearly as hard as you will, because they don’t own it. By having a business parter or a team that works on equity, they will be more motivated and will have skills and talents that are complementary to yours.
Here’s what you’ll need to do to make that happen.
- Identify the roles and responsibilities: Determine the key roles and responsibilities that are needed to launch your new venture. It doesn’t need to be too formal (CEO, CIO, CTO, etc.), just have an understanding what everyone needs to do. Identify the skills and experience that are necessary for each role and develop a clear job description.
- Find potential team members: Reach out to your network, attend networking events, and use social media to identify potential team members who have the skills and experience needed for each role. Look for individuals who share your vision and passion for the business and are willing to work hard to help it succeed.
- Discuss equity compensation: Once you have identified potential team members, discuss equity compensation with them. Explain how equity compensation works, including the vesting schedule, the percentage of equity being offered, and any other relevant details. Be transparent about the risks and rewards of working for a startup and ensure that each team member fully understands the terms of the equity compensation package.
- Develop an equity agreement: Work with a lawyer to develop an equity agreement that outlines the terms of the equity compensation package. This should include the percentage of equity being offered, the vesting schedule, any performance metrics that need to be met to receive equity, and any other relevant details.
- Monitor performance: Once your team is in place, monitor their performance closely and provide regular feedback. Ensure that each team member is meeting their goals and contributing to the success of the business. Be prepared to make changes if necessary, such as removing team members who are not meeting expectations or adding new team members to fill any gaps in skills or experience. When they are removed, their shares can go into a treasury account. This will hold everyone accountable and performing well enough to keep the ship sailing.
You’re on the right track. At this point, it’s important to buckle down and improve the efficiency of your system. As you are monitoring the performance of your business, discern what is working and what isn’t working. Use Pareto’s 80/20 rule; what 20% of activities are creating the 80% of results. Trim the fat of the 80% of activities that aren’t contributing the same results. Add leaner processes and devote the time to see your business flourish.