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Source of income – grow more than one!

It is crucial in managing start up business that once you have established your independent source of business income, you don’t take it for granted.  It needs constant care and attention to maintain and grow it.

Regular income is the foundation of family wealth building.  That is why positive cash flow is critically important.  Negative cash flow means negative wealth because you have to dip into your saving or credit card to make ends meet.

So don’t stop at one!  It helps to have more than one source of income.  It also helps a lot to have at least one source of income that doesn’t rely totally on your personal exertion to earn. 

In other words, strive towards establishing a source of “money while you sleep”.  That way, you can take a holiday or afford time out of your business if you are sick or have an accident.

For more reading on managing start up business go to http://garyweigh.com/business-building-%e2%80%93-make-your-own-luck.html

Until next time

Gary

How badly do you need a lease?

Managing start up business Australia

A young couple who I have known for a long time was managing a start up business in Australia, specialising in the personal services industry.  They came to me recently and asked me for my thoughts on renting a sub-tenancy that was available in a near city Brisbane suburb.

Their desire, like that of many other entrepreneurs, is to have a place they can call home; a base to travel to and work from; a fixed address for their marketing.

The upside is that it is on a very busy road, which means that with effort, their offering could be visible and attract some walk in customers.

The downside is that the area does not contain the right demographic for the services offered.  This match is vitally important to attract local customers.

If attracting local customers is not the prime aim of moving into this property, then what is the real purpose?  When I asked that question they said that they hoped to pick up referrals from the primary tenant who operated a complementary business.

Experience has taught me that if I asked the same question of the primary tenant, it is likely that the answer would have been the exact opposite.  That is, he is advertising for a complementary sub-tenant in the hope of attracting referrals from them.  

Mmmm…. the problem is not solved; it has doubled.  As is so often the case, no discussion on this point has taken place and the transaction would have proceeded on hope only.

Making a major financial commitment to a lease or sub-lease just to have a fixed address to put on cards and brochures is a very risky strategy, particularly if the money is borrowed. 

Doing it in the hope of attracting walk-in customers and referrals from a co-tenant doesn’t reduce the risk at all.

When managing start up business in Australia, it is a much safer strategy to let customer demand drive the need for a permanent premises, rather than make a big financial commitment and relying on hope alone to attract them. 

In the case of the young couple, it would be more cost effective when starting up a business to consider other options such as working from a home office, renting rooms by the hour or day as required, and offering a mobile service.

Check my other blog site http://www.aikido-secrets-to-calm-success.com and learn how the (not so secret) secrets of Aikido can be applied to whatever is important in your life.

If you want to learn and understand the secrets of Aikido for yourself visit http://www.griffithaikido.com.au

Until next time!

Gary

#1 for managing start up business in Australia

Call 0408 756 531 or email gary@garyweigh.com