Tag: passive and residual income

Before the rise of corporations in the Industrial Revolution, most people worked for themselves. Now, we’re circling back as millions of workers have had a taste of freedom.

The Entrepreneurial Scale

Before we get into what a proven business model is and why it matters, it’s important to understand the scale of entrepreneurship. On the very left side, you have the self-employed 1099 contractor. On the right side, you have someone who creates something out of nothing, a trailblazing visionary who takes 100% of the risk.

The proven business model concept can work well for those in the middle of that continuum. They are directing their daily lives on their own with no one telling them what to do, but they also don’t need to do all the experimentation and risk-taking that comes with creating something from scratch.

Make no mistake: Following a proven business model doesn’t restrict your autonomy. You’ll still have mastery over your time. But you’ll need to follow the system you’re given consistently to set yourself up for success without having to reinvent any wheels.

If you’re looking for more freedom than the corporate world could give you, the first place to look is inward. Take a step back, confirm you have what it takes to be an entrepreneur, and figure out what kind you are. If you’re the type who might benefit from some established structure, the next step is to discover the business model that’s right for you. Start here:

1. Honestly assess whether you have the makings of an entrepreneur.

You know you’re an entrepreneur if you don’t need to be told what to do. You don’t ask for permission; you ask for forgiveness later. You act now, and you just go with your ideas. You’re a risk-taker, but you take responsibility and blame no one for your failures or setbacks. You can think outside the box and see problems and solutions where others don’t. And, most essentially, you have a passion and drive to perform on your own and for yourself.

Once you confirm you’re an entrepreneur, assess where you fall on the continuum. If you’re somewhere in the middle between the self-employed contractor and a from-the-ground-up entrepreneur, you can find success with a proven business model. But be sure to carefully assess where you fall. If you’re a visionary with big, creative ideas, for example, you might be too far to the right to find fulfillment following an existing model.

2. Identify the purpose that will fuel the fire in your belly.

Work without purpose becomes dull very quickly. That’s why so many workers with entrepreneurial leanings become disengaged. Accordingly, you want to name and claim your purpose. For instance, I have had a lifelong passion for helping entrepreneurs. This led me to find a proven system that allowed me to become a business coach.

To make your list, record everything that you’re passionate about. Maybe it’s working with kids or college students. Whatever it is, write it down. Then, flesh out your purpose a little more.

Let’s say you like working with school children: Do you want to teach them? Do you like the activity so much that you want to do it on a day-to-day basis? Once you confirm what will give you the motivation to keep going, you can start looking for a corresponding business that features a proven income model.

“Entrepreneurship is about turning what excites you in life into capital so that you can do more of it and move forward with it.” – Richard Branson

3. Search through existing business models that line up with your purpose.

Plenty of entrepreneurial ventures are out there. Some have high levels of investment; others require relatively low financial outlays. Make sure you have a budget in mind and then seek out business models in your range. For instance, going back to the idea of tutoring young people, you might consider owning a local Kumon Learning Center. Those usually fall into the low-to-middle investment end.

Maybe your budget is higher and your passion is serving food to families. Opening a well-known chain restaurant could be the right choice. You’ll likely need access to a substantial upfront capital, but many chains have known working models that tend to be lucrative when followed closely.

As a caveat, be cautious when hunting for entrepreneurial ventures. If part of the model’s revenue system is based on somebody else making money from you joining, that should raise some red flags. It matters who is bringing you into the model. If it’s an individual who is personally incentivized financially, beyond maybe a nominal referral fee, to get you into the model because they get a significant portion of your revenue, then be wary. You should only be dealing with a model’s business operations group and not individuals looking to fill their downline.

4. Decide who you want to operate the business.

You need to honestly interrogate yourself and confirm what type of entrepreneur you are and want to be, then go through the process of filtering the many opportunities. For example, do you want to be in charge, or do you want to hire others to operate your business?

If you want to be an absentee owner, look for something hands-free like WaveMax, a coin-operated full-service laundry franchise. You just need to write the check, hire the general manager, and do nothing else after that. It’s recurring passive income, and you can then scale it from there based on your investment returns.

5. Gauge the business model’s support system.

You’ve narrowed down your business model options to one or two possibilities. Now, it’s time to evaluate your top contenders on the support they give.

A proven business model should give you leads, a sales and marketing process, a business development framework, and more. This enables you to skip a lot of the back-end startup responsibilities and start earning faster.

Be diligent about checking references as well. Talk to other users of the business model: Do they feel like the model works and allows them to realize their purpose? Are they profitable or on a path to becoming profitable? The more hard and anecdotal data you have at your fingertips, the easier it will be to pinpoint the right model for you.

The road to entrepreneurship isn’t a straightforward, exacting one. Many entrepreneurs never get liftoff. However, aligning yourself with a business model that’s proven itself time and again can afford you the runway you need to soar.

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