Assuming you want to make more money, have you ever considered there are just three ways to make more money?

1. Find more people to pay you. This might imply taking a second job or multiple other jobs including selling stuff on eBay. If you are an employee and think like an employee – all you have to sell is your time. So sell more of it. If you are a bit entrepreneurial you can always sell something besides time (which still takes your time) by finding new people to pay you for your stuff. Note that of the three methods, this one is the hardest to do. It is the same problems companies have when they need to get more customers. We call is customer acquisition – and the cost of customer acquisition can be high. In your case you give up more of your life and also have to find that other customer who is willing to pay you.

2. Get your customer to pay you more frequently. If you are an employee you have this one licked since your employer already pays you on a regular basis. But as a way to make more money this is still something we need to look at. A business can get customers to purchase more frequently. How? Provide great service is one way. But for you, if you do not have an employer paying you frequently, how do you make the money flow more often. For instance, if you are an on-call independent contractor, what could you sell more often to get them to take out their wallet. The independent computer technician will often try to get a maintenance contract where he or she will come in periodically and service equipment to keep it running instead of waiting for something to break. If you are not being paid frequently by one of your customers or employees, what can you do to make that happen?

3. Add more value. While your employer is already paying you, what else can you do? Forget the political concept of a “promotion.” Instead think about what other roles you could do. Could they pay you an incremental amount more if you do some other things, even things that are a slight increase in what you are doing? Perhaps you can take over the roles of a vacant position – or even some work from your boss. If you go to a fast food restaurant, they do this by asking, “do you want fries with that?” You are already buying fast food when you here this statement. So the food chain figures if they can just add a little more value while you are already paying they can make more money.

Note of the three listed above, they are in reverse order of difficulty. The easiest way to make more money is to get the people already paying you to pay you more when you increase your service to them. The hardest to do is finding new customers.

One reason few people start their own comapny is that they are afraid of being broke. Or, as Pamela Slim puts it, they are afraid of living in “a van down by the river” (because that is all they can afford).

My ideal path would not be one of starvation between day job and the work you love. In fact, I like money and the things it does for me so I prefer to never move in a backward direction.

So here is how I would do it. 

First, if your endeavor is going to take significant capital or full time effort, consider how you could start with less. If you need to develop software that will take 6 months of full time activity or require a $30,000 investment, start instead by consulting on the side. Work with customers who will let you start small after hours or on the weekend. If instead your new plan is a storefront or selling product that has you working all day, then consider how you might start marketing your product on the internet.

Note that no matter what the business model, you can find a way to start small. But more importantly, you can find a way to start today. 

Now when do you quit?

• Option 1 – When your new business income is getting close to your day job pay. If you are making $60,000 at your day job and have grown your new business to $40,000, you might notice that you can now quit. You might take a small hit in income for a few months, but the extra time at work might allow you to make it up and surpass it quickly.
• Option 2 – Wait till they are about equal. When your new business is making $60,000 you will become confident that you can do it.
• Option 3 – Wait till it is so obvious it is just silly. I have seen this many times. One friend of mine was making five times his annual day job salary on his part time work before he quit.

Each of these options has two assumptions:

1. You do not want to starve and are willing to work extra hours for your financially conservative approach.

2. You are not living on both your day job and your new business income!

If you are like me, you often find yourself needed someone else to do work for you. But who do you need? Do you hire a pro who will cost serious cash, hire in someone like an intern, or delegate to someone on your staff. (And be hire I mean pay an outsider to do the work. I do not mean put them on the payroll permanently.)

Here are my rough rules on this issue.

Rule 1 : DELEGATE – I know how to do it myself and I have a team member who want to learn.  In this case I delegate it to the team member and offer them the resources to help them grow such as tools or training.

Rule 2 : HIRE – I know how to do it myself and I have time to train someone. If I am an expert and I know exactly how to do it and can show someone, I hire anybody who is conscientious. Skills may not matter as much in this case since I have the skill to show and tell.

Rule 3 : SUBCONTRACT - I am not an expert and what needs to be done needs special attention. Things that might cost me more money if done wrong are in this category. Things such as websites, product creation, etc. In this case I find an expert and pay them. I also spend some time searching for the RIGHT expert.

I know many of you do it differently and have your own reasons, but this method works for me pretty well. At least up to now!

A frequent question from budding entrepreneurs is

“How do I hire people? And when?”

My Answer:

When you doing the work is getting in the way of you growing the company AND when I have the cash to pay. Or when you just cannot stand it anymore!

How?

My general rule is that I NEVER hire anyone – I always contract via 1099. I only make exceptions if I cannot get away with contracting or if there is some overwhelming reason not to do so. (People I might hire inside UAB or other corporate structure is one example – the risk is not all mine.)

Generally when you hire I would suggest you do so as 1099 or on contract also. (I know – go ahead and flame me!) By doing this contract role, you get complete control of the work without the risk of having an employee.  This way you pay them a direct amount and use them when you need them. I would even do this for a long term worker! Some IRS rules apply, and if in doubt seek the advice of your CPA.

It is not a big deal

Some people really freak out over the hiring deal. Really is it not rocket science. You need work done, they want money. You agree to terms and commence in a working relationship. Just forget all the complexity you might see in your day job or HR, employee handbooks, benefits, etc. These matter – but later.  In the beginning just get the work done.

Next time we will take a look at how to find define who you need to do the work.

“How do I identify investors so I can start my company?”

This is one of the most frequent questions I get from hopeful entrepreneurs. It is often centered on getting VC (venture capital) or angel investments.

Here is my short answer! Don’t.

I have nothing against investors. But, practically speaking, most of investors are not going to invest in ideas. Instead they usually want to invest in a company that is taking action. So if you want investors to be interested in you – start by making money. Trust me. A company that has made some money without spending much up front is very interesting to investors!

So figure out how to start with nothing or next to nothing. We call this method of funding “bootstrapping.”

How to start with nothing – some practical hints.

• If you need a storefront for your big grand plan, can your start out of the trunk of your car or by selling on the internet? The result would be that you learn what products the customers really like and which they do not. You get to test your assumptions.
• If you need a giant piece of software to solve a problem in industry, can you start by offering consulting for your customer base. By doing so you learn more about the problem and establish yourself as an expert.
• If you need a nice plush office, forget it. You have the wrong idea anyway. Even Warren Buffett does not do this.

Point is – get started NOW and do something to bring in some money. Forget plans, forget investors (at least for the moment) and just make something happen.

Related posts:

Gerard Butler and Pursuing Your Dream In Spite of Difficulties

What sets apart the winners from the losers?

The Secret to Getting More

Myths and Truths on starting your own business

We across the corporate world have read Pamela Slim’s open letter to CxOs. In her letter she is telling those of us in the executive wings how we SHOULD treat our employees. She gives us a good whipping – even calling us oppressive. Yes, we have read it. After our initial anger with her tone and accusations we decided to craft a more reasoned response.

We would like to note right up front that Pamela is not quite fair. Some of us are stellar performers –  leaders people want to follow. But lets go ahead and admit, most of us are gutless figureheads without any desire to really lead. We know it! We get it!

But since you have listened to her letter (and yes – we heard the cheer)  you owe it to us to listen to our side of the story.

First remember that some time ago, we were where you are now. We were frustrated with upper management and the decisions they made. We felt like one day when we ran things we would be different. We would listen to the people. We would make wise decisions based on something beyond this years profits. We would really take excellent care of our customers. We would reward performers. We would, in fact, be different!

The reality has set in. Now that we are at the top we realize we still do not have all that control we thought we would have. Now, instead of being dominated by the boss making stupid decisions, we now seem to have way too many bosses. We really thought we would be THE BOSS and be in control. We really did. Now we struggle daily to dance between the demands of the lawyers, the board, the customers, the stockholders, and even governments.

Our new fears. Just like you, we fear losing it all. Everyday we wake up and look in the mirror and know today is the day we will be found out. People will realize we are incompetent. We will become not only unemployed – but publicly shamed. When one of you lose your job, you are a number. When we lose our job, publications list out all our mistakes. We are shamed. When you lose your job, you pretty much know you can find another – but not us. Will anyone let us lead again? Will anyone trust us again? We confidently and proudly proclaim that we can find other meaningful teams to lead, but underneath it all we are scared to death. As bizarre as it may seem to you, we too fear living in a van down by the river.

We do not mean to proclaim that we are a bunch of imbeciles. We are not. We are highly intelligent people with lots of experience – just like you. Could you do our job? Probably many of you could. Would you be in the same situation after a few years? We bet our fat salaries on it!

Suffice it to say we could answer Pamela’s letter point by point. But, you need to understand the overall issue. Do we want to see the employee as assets – building them up and listening to them? Yes – many of us really do.  When we were where you are now, we dreamed of such. But, when our investors are demanding short-term growth and profits we forget the people and even common sense at times. When the customer is demanding service we demand it be met – even if you are on vacation. We have bought into the idea that the customer comes first. When the competition seems to be getting the edge on us we get crazy and change plans overnight telling all of you that we are leading the industry – but in fact we are just responding and following.

Are we gutless leaders? I am afraid often we are.  We have set aside the desire of being great leaders so we can be pragmatic.

The battles are too many to fight. Were we prepared for this job? No – not really.  Most of us have few leadership skills. We were never taught that. In school, college, and MBA programs we too were taught to follow. To follow the leaders and to follow the processes.

But now that you have blasted us and applauded our faults – let us turn it back to you by addressing SOME of Pamela’s points.

1. Why do we need to change the culture? Because we are told by consultants that is the thing to do! Do we think it sounds silly? Yes. But we also recognize there is a problem. The larger the organization is, the more culture is lost–and so often are results. So what are we after? We want to hire consultants who come in and promise us they can turn our angry mob into a machine where everyone is motivated and everyone performs to the top. We are all free to make it happen – and we as the leaders get to smile down from the top of the mountain. Sounds egotistical? Sure – but have you not dreamed the same thing? Do you want the same out of your teams you lead? I know you do. Pamela suggest the culture starts with our actions. But what actions? We really have lost control. We need someone to tell us what actions to take!
2. The Godfather – Yes, we do get angry when you leave for new opportunities. We know it is shortsighted. We really do want the best for our people – but remember the fear. When you go, what will be revealed? And, quite frankly, often we are jealous. We know, we have already made it in your eyes – but we are strapped with serious golden handcuffs. We wish we could take the risk and run for the new opportunities, but we are stuck here trying to make this deal work.
3. Walk around and talk to you. This is on our to-do list daily. That is the kind of leader we want to be. Some of us are just introverts and this is way out of our comfort zone. We do not hate you. We just prefer to be with people we know well. For the rest of us, we would love to be among the little people (whoops – did we let that slip?). But we have bigger things to do. Our bosses are demanding a ton from us. And when they are not – well we want to enjoy the fruits of our labor. Again – you would be no different.
4. Want us to teach you to be rich? Forget it. We are not sure how we got here anyway. Look at the stats – a small percentage of people get rich doing what we do – but MOST get rich in business for themselves. Study how to do this and you will prosper – that is all we have to offer you. Think you are a better leader? Do it NOW.

We will not bore you with answering every point. We are already way too tempted to put this into a PowerPoint and call town meetings.

Now our advice to YOU.

1. Think you are a better leader? Do it NOW. How would you deal with the points Pamela brings up? You cannot change us – we can promise you that. So now you take the mantle. How do you lead from where you are?
2. Do not waste your life! Do something meaningful. Early on many of us were driven by passion and desire. It has landed us in nice places. Some of us continue to be led by the desire to have real meaning. The rest of us have succumbed to the life of luxury. That is our problem – but what about you? If you do not find working for us meaningful then do something that is.
3. Do not let fear control you. Listen to Pamela. We do have some concerns that many of you will get over your fears and look opportunity straight in the eye and go for it on your own. But in reality we know it will be very few of you. So develop a solid plan and go for it. Fear will always exist. Remember, fear controls even us. You can still overcome! Do it now!

I received this email as part of an application to Information Engineering and Management. I thought it so described what others tell me that I would share it with you. 

Escape From Cubical Quick Sand 

It is 5 by 5 feet wide, 5.5 feet in height and the floor feels like quick sand.

It appears that there is no one around to pull me out, so I must take matters into my own hands and figure out a way to escape.  It, is just a regulation cubical used by 100’s people everyday but for me it’s the hole filled with quicksand from which I must escape.  But how?

Idea after idea comes to me but I just cannot seem to come up with a method to make them work.   I feel the quick sand under my feet as it begins to shift and I begin to sink ever farther.  I am starting to shake and sweat, I can’t seem to catch my breath, but I will not panic, then suddenly I get this great plan of action, use those God given gifts and talents as a ladder that’s been there all of the time and climb, climb, climb.   Enhance my tools and skills; more education, better credentials, information and networking.  Go back to school get a Masters Degree in Information Engineering Management.  Although, I previously earned a degree it has not exactly served me well. Unfortunately, I failed to be as aggressive as needed in that pursuit and thereby a subsequent career path in this area failed to manifest itself.  A now I find myself in this cubical of quick sand needing an immediate means of escape and this is what has brought me to this specific juncture in life.

I need to obtain the knowledge as to how to market, network, package and be financially and emotional rewarded as I use my previous education, experience and skills while affording for new experiences outside of a cubical of quick sand.  Now I ask you, please take my hand help me climb out of the quick sand and then show me the way to personal success and fulfillment as a self empowered entrepreneur.

How about you? Does this describe your career?

We often reflect on the slavery issue our country has struggled to get past. We have books, movies, and even days to remember the struggles. But, as I look around and meet with people I see new forms of slavery in the most prosperous country in the world.

1. Debt – The debt crisis has overtaken us – and many have become totally enslaved to serving their debt. Their solution to get out is often a more creative slavery relationship through refinancing or “debt-consolidation.” While I do not consider myself to be a financial counselor – I have had to dive into this area of slavery many times. Debt causes people to give up on their dreams since they can never break free from what is holding them back.
2. Corporate America – No… I am not bashing the corporate machine in this country. But lets face it – the Dilbert syndrome has crushed many of our desires and forced many of us into another slavery trap. We now worry about what changes are going to take place in our companies in the coming months – worrying what benefits we may loose, what jobs may go away. Like refinancing deals – we sometimes find a glimmer of hope by changing employers – at least until the reality of the new slave relationship we have just gotten into hits home.
3. Entitlements – Our government (which is “we the people”) in our goodness to take care of our own, have in fact created slaves. I meet with people every week who have the mindset that getting free money from the government – from food stamps to free housing or free tuition – is the way to live. Yet, they are stuck. Again – one law change crushes them – or gives them hope.

Of course you see the problem – neither debt, corporations, nor government programs are the real slave masters – we are. Something has happened in our country that has taken all the spirit away. People in NASA will often say they do not know if they can get back to the moon. The technology is better – but the spirit is missing. Could we ever prosper as a nation if we found times of struggle again? Have we become so soft? In all three cases of modern American slavery we have given up our freedom, hope, and future by taking the easy way out.

Not to be a pessimist though – we can take back control. As I look at my own life and those around me – I think we have lost personal discipline and at the same time we have become to self-centered in society. But who can change that in our culture? I do not think anyone can – but I can change me, and you can change you. No more being a slave because it is the easy thing to do.

In the barrage of daily questions I get – I think there is more centered about the reverse interview as a means of finding opportunity than any other subject.

So today I thought I would revisit those posts on the reverse interview.

The reverse interview was first explained in a post about a guaranteed way to find a job.

Then a few videos followed which gave more details. First was The Reverse Interview Explained followed by the UAB Media Relations video Turn the Interview Around.

Who Tries It

Now this is interesting. When I tell 20 engineering students all looking for work how to do this, just guess how many will really do it?

And remember, I tell them it is a GUARANTEED way to get a job!

Just one. Just one out of twenty – or 5%.

And these are people who are paying me dearly for education. Can I assume only 5% listen and take action on anything else I teach?

And I can only guess when I speak or write, the numbers might be about the same.

So let me make it more interesting!

I dare you to try it! Yes – I dare you!

If you are looking for work, stretch out and talk to people who are where you would love to be in years! Forget about a job – just go talk.

If you already have a job, do the interview with people who are really where you want to be one day! Stretch yourself! See what you learn.

If you are in business for yourself, 0r want to be, do the interview with business people way ahead of you in your same field. See if you learn how to mimic their success. See if 15 minutes with them is not a VALUABLE education.

And I will sweeten the pot! Anyone who does and sends me your story or posts it on comments – you will get a free copy of my book Resumes Are Worthless: How to Find the Work You Love and Succeed.

Again – I dare you!