The Wealth Algorithm (7) – Business Plan


 

In the last post, we concluded by listing few steps you’d need to take, in order to finance your dream via a partnership.

Before you can engage a potential business partner in the process, you must be ready in terms of your plan and strategy of developing the capital to reach the intended result.

According to Wikipedia.org, “A business plan is a formal statement of a set of business goals, the reasons they are believed attainable, and the plan for reaching those goals. It may also contain background information about the organization or team attempting to reach those goals.”

In our case, there’s only one “goal”, which is the intention we clearly defined. Next, you need to explain “the reasons you believe that intention is attainable”.

There could be different reasons to different people. Imagine your potential partner asking you this question: “Why do you believe that you are able to grow this “X” amount of money into, say, one million, over the course of the plan”?

Here, one should look closely at his/her skills and talents related to managing money, and financial assets in general.

If you feel you don’t have what it takes to succeed at this task, don’t be disappointed, you’re not alone. That’s why lifelong learning is so important, not only for our bank accounts, but also for our physical and mental health.

Keep things simple, pick one or two methods from the ones we’ve covered here. Make sure you understand the ins and outs of each one, then use that in answering the above question.

Let’s assume you were interested in building an online store. After reading and fully understanding the article, expand your knowledge further. Do more research. Try to actually build a simple online store and see if your interest was still the same, more or maybe less. Take all of that into consideration while writing your business plan.

Once you’ve answered that question, the rest is much easier. You want to do your best to prepare a plan that is precise, presentable and convincing. Include a step-by-step action plan that specifies the activities, the desired accomplishment from each activity, the time-frame, and the resources you may need (financial, human, etc).

A good way to start would be to use a “template”. This is available online. Pick one that you understand and can fill out effectively, in light of our discussion above.

The following points cover major areas of a business plan as described on the BDC™ site (Reference: http://www.bdc.ca/EN/articles-tools/entrepreneur-toolkit/templates-business-guides/Pages/business-plan-template.aspx):

  • Business overview: A brief description of your company and where it stands in the marketplace;
  • Sales & marketing plan: The sales & marketing strategies that will be used to target your customers;
  • Operating plan: A description of the physical aspect of your business operations;
  • Human resources plan: Details on your key staff, HR policies & procedures;
  • Action plan: The planned actions of the business over the next 2 to 3 years;
  • Executive summary: A summary of the reasons you are seeking financing, together with a summary of your business operations;
  • Financial appendix: The facts and figures that back up what you say in your plan.

 

All the best,

The Wealth Maker

 

The Wealth Algorithm (6) – Partnerships


 

Since the beginning of this series, we’ve been on a journey. No hurry, no rush. It’s a journey of a lifetime. Most of us have spent their days under pressure, trying to do several things concurrently. It’s different here. When you come to this blog, I want you to set everything else aside. Read, focus, apply, enjoy the dream of eventually reaching abundance. Through these articles, your reading and application, together, we shall make that dream your reality!

Today, I’m going to talk about the second option of financing that dream, which is partnerships.

I had written an article titled “Investment Partnership (TM)“. It would be helpful to go back and have a look at it before you continue reading.

According to the online Merriam-Webster Dictionary (TM), a partnership is “a relationship resembling a legal partnership and usually involving close cooperation between parties having specified and joint rights and responsibilities”

The keywords in that definition are: Relationship, legal, cooperation, parties, specified rights and responsibilities.

How does that relate to our discussion?

Your intention is to reach a certain sum of money by a certain date. In order to do that, you need a capital to grow. Obtaining that capital requires some sort of financing. An investment partnership (TM), is the option we decided to pursue to secure that financing.

As I mentioned in the article referred to above, this partnership takes place between two parties: One party provides the capital, the second party provides the time, energy and expertise to grow that capital, over a specified period of time. The two partners are equal. They share profit and loss on a 50/50 basis.

The partnership agreement “specifies” the details of the “relationship”: The legal aspects, the type of cooperation, the involved parties, and the rights and responsibilities of each party. It also specifies the capital, the timeframe, and the way any outcome shall be shared between the parties.

From your perspective, here is what you need to do:

  1. Prepare a convincing business plan, that outlines your strategy of how you intend to grow the capital
  2. Find an interested party, who has that capital, and who is willing to consider a partnership with you
  3. Present your plan, and hopefully, win the approval of your potential partner
  4. Work with your new partner on the partnership agreement
  5. Get the funds and start working!

In the next article, I’ll shed more light on each of the above steps. Please spend some time on this post, and let me know if you have any questions or comments.

The Wealth Maker

 

The Wealth Algorithm (5) – Financing Your Dream!


 

We’re now ready to tackle the process that will take you from your current financial state (networth) to your dream (the clear intention you set few posts ago).

I’m not going to use any assumptions concerning your work status. So whether you were employed, self-employed, unemployed, running a small business, etc, our discussion would start from the networth we calculated in article (3) of this series.

There are so many ways to make money. I’ve covered a number of them in this blog. You could go back and pick the one that suits you. We’ve talked a great deal about value investing, making money online. I touched on HYIP’s. Then finally spent few articles exploring online trading, including binary options trading.

Any one of those requires an initial investment, a capital, a principal. Each method employes a certain technique to grow that capital, while preserving it (this is quite important).

The question now is this: How would you go about securing that principal?

In general, there are two ways: You could either borrow the money, or create a partnership.

The first route includes banks, friends, family, government funds, etc.

The second is a sort of business deal between two equal parties: One party provides the capital, the second provides the time, energy and expertise to grow that capital.

The first option could be difficult these days. Requesting a business loan from a financial institution (like a bank) presents two major hurdles: a) you must provide enough evidence that you’re capable, financially, of returning that loan, at the end of the term. The bank doesn’t care whether you succeed or fail!

The second issue is interest. You might end up paying 50% on top of the original loan in interest. If the loan was $100K, you would be required to pay back $150K at the end of the loan term. Those 50K would come out of your net profit. In some cases, the percentage could be more, depending on how convinced the bank would be of your eligibility for that loan.

Asking friends or family members for financial support to start a business or enter an investment adventure, would raise many eyebrows, and would put you under the spotlight for the duration of your journey. This would add to the pressure, and would exhaust a good deal of your energy.

In the next article, we’ll explore the second option, as I believe it’s the path you should take.

The Wealth Maker

The Wealth Algorithm (4)


 

Please read the last four articles, if you haven’t already.

We now have the start and end points of our journey defined. That is a clear, believable intention, and the current networth.

What’s left is the process to go from the start line, to the end point.

Why is it important to define these two points? The answer is very simple: Imagine going online to book a plane ticket. What are the first two questions you have to answer? Leaving from? And going to? Right? You can’t make a reservation without knowing your source and destination points.

Same here. Actually, this is the first lesson in Success 101!

They say: To make money you’ve got to have money. Is that always true? Can you start your financial wealth building journey with zero-out-of-pocket investment?

Well, you could, but it would take much longer, which means you must start off at a much younger age, say at 10 years old!

Are you 10 years old now? I guess not. Then let’s focus on the other route, which is financing.

How can you finance your dream? A big question, eh..?

Unfortunately, it’s not enough, most of the time, to have only the start and end points well-defined, in order to obtain the financing you need. A third critical component is required, and that is your plan. In professional terms: Your business plan.

So let’s talk about that in the next post.

Between now and then, write your intention statement on one side of an empty page, and your networth on the opposite side. Read them to yourself, then start exploring ways to move from the left to the right of the page…

All the best,

The Wealth Maker

 

The Wealth Algorithm (3)


 

Please read the last three articles, if you haven’t already.

We now have a clear intention. So we should be ready to go to work, right? Not quite yet. I want you to read your “own” intention, and notice what you “feel” as you read it. Your first impressions. Don’t think! Just allow yourself to “notice” or “observe” your internal “echo” to the intention.

If you observe any resistance, any disbelief, you should work on that first. Inner barriers are the ones you must deal with. Outer barriers fade away as soon as you become completely clear within.

How would you do that? The best method I’m aware of for “emotional releasing” is called The Sedona Method (TM). Please visit http://www.sedona.com, and explore some of the principles and processes of “Letting Go”.

Once you feel ready, once there is no more resistance to the intention, you may move towards fulfilling it. But always keep your intention statement vivid in your mind and heart. It’s your guide throughout your journey.

The first logical step after that is to know where you stand right now, relative to your intention. Do some inventory of your financial “health”, and come up with your “net-worth”.

A net-worth is calculated by adding up all your “assets”, then subtracting from the result the summation of all your “liabilities”.

Let’s have an example. Say you have 10K cash in your bank account, a car that is worth 8K, a stock portfolio that can be sold for 15K today, and an equity of 30K in your house. Then on the other side of the equation: You still have a mortgage of 100K to pay, and a 5K loan to one of your friends.

Your net-worth is: 10 + 8 + 15 +30 – 100 – 5 = -42K

Your networth is negative, which means you should add that negative number to the amount in your intention statement. If your intention was to make one million, considering your networth, it would become $1,042,000.00

Knowing your current net-worth helps you have an even clearer start. Your target is very well-defined now. It’s time to go to work.

Does that mean what we have done so far was not “work”? It absolutely was! In some sense, it’s the most important part of the algorithm. What follows is mainly “physical” and “mental” work. We’ve set the spiritual and emotional foundations, upon which, the remainder of the “work” shall rely!

The Wealth Maker

The Wealth Algorithm (2)


 

 

Hopefully you had a chance to “decide” what “you” really want. Let’s explore that a bit further.

If the main target was financial wealth, financial freedom, financial security, financial independence, or financial abundance, then we would need to make that crisp and clear to the subconscious. Why the subconscious? Because it’s the part of our minds that gets the work done. No matter how convinced we were at the conscious level, unless that conviction trickled down to the subconscious, to the engine that makes things happen, we would stop at that; a mere verbage!

Words have tremendous effect on our minds. Let me give you an example. Suppose you’re thinking about buying a new phone. Which statement has a better chance of getting done: “I’m not quite sure which phone I “might” buy “,  or “I intend to buy an Android (or I-Phone) N.x smart phone, next Saturday”?

I guess the point is now clear. Let’s use that in setting an objective. We already know the “What”. Now we will write that which we “want” in a language that gets the subconscious cranking! Here it is:

“I intend, and allow myself, to make (specify amount) dollars by the end of (specify year), or before”.

Notice that we did not say anything about the “How”. Never include that in your intentions. You shall figure that out as you start moving in “the general direction” of your intention. You want your intentions to be specific, and at the same time, flexible enough to grab better opportunities along the way.

I’m going to leave you with this statement till the next post. Once you reach a phrase that is believable to you, stick with it, write it down where you can see it at least once a day. Read it loudly to yourself. Feel the emotion and excitement behind every word. But don’t stop at that! Go to work on your intention. Your task would be more enjoyable and easier now that you “know” what you “want”.

Another observation is that we didn’t use the word “want”. Wanting implies a strong desire, which is a sign of weakness. It usually leads to moving targets. Since you “want” to be wealthy, you will stay in that state of wanting, as the target is pushed farther.

On the other hand, intentions are affirmative. They reveal confidence and belief. When an intention reaches the level of “knowing”, without any shred of doubt, it gets manifested for sure, one way or another. We’re not counting on miracles here, but rather, on the effective alignment of inner and outer forces.

The intention alone won’t make you a fortune. However, it sets the stage for you to start off your journey on the right footing, and that is exactly what you need!

The Wealth Maker