| What Everyone Needs to Know About the First | | | | you can take vacations and continue to get paid. The |
| Steps to Starting a Small Business | | | | problem with this particular business model is that the |
| Establishing a business model that adheres to basic | | | | policies eventually expire and if unattended, your |
| wealth building principles is among the first steps to | | | | customers fade away. |
| starting a small business. | | | | The interesting thing in relation to both of these |
| Some of these principles are: | | | | examples is that they require you. You are part of the |
| - Residual Income | | | | formula. There is a big difference between being an |
| - Leverage | | | | entrepreneur and being self employed. If you are part |
| - Assets and Liabilities | | | | of the equation, that means you are a necessary part |
| This article focuses on the first of those principles, | | | | of the long term business model then you are |
| understanding residual income. | | | | self-employed! |
| What is Residual Income? | | | | Residual Income as Part of Your Business Model |
| Occasionally referred to as Passive Income, Residual | | | | Planning and creating your own business model to |
| Income is an income source received regularly, without | | | | include a strong element of residual income is vital |
| having substantial effort necessary to sustain it. | | | | during the first steps to starting a small business. |
| So let's take a look at some examples of business | | | | Unless you are merely searching for a job or a place |
| models utilizing various amounts of Residual Income. | | | | to go to work every day, you need to learn how to |
| Building Contractor | | | | build residual income into your business model. |
| Contractors are usually hired for various construction | | | | Let's return to our insurance company example. |
| jobs. In most cases they're hired to do a certain | | | | Instead of becoming a self-employed insurance agent, |
| project, they will carry out the job, after which they get | | | | consider it from a higher, more entrepreneurial level; |
| paid. They perform a job once and they get | | | | create an insurance selling team. There are lots of |
| compensated once. If they want to get paid again, | | | | jobs to be filled. Your role would be as the president |
| they must go out and complete another job. | | | | and to merely oversee the operations. You will have |
| This probably appears to be fairly normal to you | | | | to have a manager to oversee the employees. You |
| because most folks are accustomed to receiving | | | | will want numerous agents doing the actual product |
| payment in exchange for work; it appears normal. | | | | sales. Perhaps you would want some office workers. |
| However, this particular example business model has | | | | Most importantly, You will definitely require a written |
| actually zero dollars of residual income! If the building | | | | set of operations manuals in order to direct the |
| contractor wishes to take a family vacation or gets | | | | employees regarding their duties and responsibilities. |
| sick, he isn't getting paid. If he hopes to retire, no more | | | | You see, with this example you're not necessarily part |
| income comes in. If he passes away, his business dies | | | | of the long term formula. You develop the business |
| with him and his family does not continue to live from | | | | model and you develop the procedure, but then you |
| the business proceeds. | | | | are totally free to retire or go on vacation or start a |
| Insurance Sales | | | | different company. |
| As an insurance sales company, you are able to sell a | | | | Think about your small business during these crucial |
| variety of insurance plans. You may sell car insurance, | | | | first steps to starting a small business. Does your |
| life insurance, medical health insurance, or whatever. | | | | business model offer residual income? How will you |
| Whenever your company sells an insurance plan, you | | | | structure the business model so that it does deliver |
| receive money once at the start, but then you will | | | | residual income? If you do not have residual income as |
| receive money each and every month in which the | | | | part of your business model, how will you ever take |
| customer pays his or her payment. People usually | | | | time off or at some point retire? |
| keep the same insurance provider for a long time and | | | | I really hope you now possess a basic awareness of |
| as a result you would continue to be paid for many | | | | this essential wealth building principle. I would |
| years. | | | | recommend also reading my other business building |
| As you have seen, this particular business model | | | | articles on Leverage and Assets Vs Liabilities. Feel |
| offers some residual income. You work once then get | | | | free to take a look at my web page to read more. |
| paid for years into the future. This is exciting because | | | | |