Identifying Strengths and Revenue Streams
I was broke.
The first thing I did was to get organized. Personally, this is how I solve every problem. I continue to organize it until there are no more problems within the problem. In essence, I create a system and the system then solves the problem.
This may not be the most effective way to solve a problem, but it is how my mind works and it is one of my strengths. I feel strong whenever I am categorizing things, especially when I have to name or rename things in order to categorize them.
Ask yourself what makes you feel strong, then to write that down. In the same way, notice what makes you feel weak and write that down. Start to do more of what makes you feel strong (your strengths) and less of what makes you feel weak.
I began by simply listing out all of my daily expenses in a Google Spreadsheet. I used to just pay bills as they came. I had no idea how much money was coming in or how much money was going out. If I wanted to know how much money I had, I logged into online banking and whatever the balance was, that was how much money I had. I’m astounded about how many people manage their finances this way, or maybe it was just the people I was hanging around (more on that later).
Once I had all of the bills, debts, and income listed out on a spreadsheet, I could start to do my analysis. It wasn’t pretty. I was getting charged late fees, overdue fees, and loads of interest charges. I could save a boatload of money just by getting my bills caught up and paid on time. And if I could get debt free, I could save even more on minimum payments and the interest.
I had listened to enough Dave Ramsey to know that I needed to have a budget, start an emergency fund, and begin the debt snowball. The question I had was how to do all of this when your budget is already negative? I decided I had to increase revenue, while keeping expenses low. And that is exactly what I started to do.
I did not wait to do anything. I knew that time was of the essence to as soon as I identified the next step. This sounds easy, but it was highly contingent on my motivation, my energy, and my measurements. Sometimes you know what you need to do, but you do not want to do it. It’s a motivation issue.
You might want to do something you know you need to, but you don’t have the energy because there is only so much time in a day. Then there is measurement, which shows what you value. I can’t manage what I’m not measuring. I found that picking the right metrics and the right measurements was crucial to managing and growing my personal finances.
I used a variety of sources to help motivate me towards my goal. One resource I used was TED Talks. TED is a website of inspiring videos of entrepreneurs, teachers, futurists, and writers. When I am feeling less motivated, I simply browse to ted.com and watch a video or two until I am sufficiently motivated to be more like that person, whom I view as successful.
My children’s desires are another source of motivation. As I wrote in 4 Steps from Wanting to Receiving, having to decide what I can and can’t buy my children at the gas station is not a good feeling for me. I would like to be able to choose what candy to buy them for health reasons rather than financial ones. This exercise motivated me more than any late fee ever did.
We all get the same amount of time each day, but because of our body’s limitations, energy is finite. This means that energy must be spent in the most useful way as much as possible. At my day job we would call this “utilization”.
While production is the sheer amount produced, utilization is production mapped against time, in other words it is how much was produced (how productive were you) in a given amount of time. That is your utilization rate, which energy (and motivation) can play a large part in.
Managers wanting to more fully utilize their employees might want to invoke actions that either increase energy levels (by say rearranging a department based on strengths, not just needs) or increasing incentives (positive or negative).
After approximately 10 hours of working and drive times, I had approximately 3 hours of energy left to do work at home or somewhere else each day. In order to be successful, I was going to use motivation in order to spend an additional hour each day in order to achieve the goal in 2 to 4 weeks. To do this, I ate more fruits in the morning, more whole grains at night, and less or no meat for supper in order to stay energetic as I can throughout the day.
The Law of Focus states that whatever you are focusing on (measuring) will grow. There is a clear link between value and measurement. What you measure you also value.
You could say that a measurement of your values is in what you are measuring. If you, as a manager, are only tracking stats on whether or not your staff shows up on time or not, then your staff will probably show up on time daily. It shows that you only care (value) about whether or not they are there, but past that point, you are out of the loop.
Contrast that with the manager who tracks personal performance daily to get the utilization rate of each individual staff member, which he can do after implementing the staffing model I developed for his department. Each staff member is now performing highly and if they come in late, it doesn’t matter, so long as they maintain their personal productivity numbers.
So what did I decide to measure?
Remembering that what you measure will grow, I decided not to measure how much debt I owed. Instead, I measured net worth, income (revenue), profit, and savings. I also made another Google Spreadsheet which listed all of my assets, all revenue streams, the profit of each revenue stream, and savings from reducing a debt.
Every day, I would log into the various websites which contained information about my metrics and update the spreadsheet with new values. Because my mind was focused on net worth, revenue, profit, and savings, I consciously and subconsciously began taking actions to increase those numbers. In the same way that a manager sees improvement in whatever he or she measures in their department, I would see improvement in my net worth, revenue, profit, and savings simply by measuring them.
Once I identified the problem, identified the tools I have available (time, motivation, and energy), and identified what metrics we are going to use to measure success, the first phase of this goal was complete. You might call the first phase of research and discovery, “Analysis,” and this next phase, “Execution.”
In the same way that an idea is first created in the mind of man, then written down, and finally designed; it does not take shape until it is developed, manufactured, or implemented. This second phase is what most people would consider the meat, the actions, the specifics. It is where you actually do what you say you are going to do. It’s the “fire” part of “ready, aim, fire.”
I began by doing a cost-benefit analysis of what activities would net the most gain in the metrics I had chosen. I identified the resources I had available (the tools), which were my day job, a consulting business on the side, some affiliate marketing websites, and by helping my wife with her businesses, getting another side job, or having a garage sale.
My wife or children could also get a job or create more revenue for the family. All options would be considered in order to achieve the goal. This was a brainstorming exercise, which I’ll discuss with you later on to help you decide what activities you could do in order to achieve your goals, but first I’ll discuss how I did my cost-benefit analysis.
Costs and Benefits
It is easiest sometimes to decide what you are not going to do first. I first struck the last choices having to do with my children and wife working. My wife is a stay-at-home mom, but she also home-schools our five children, is a member of La Leche League, and the president of her local Alpha Chi Omega chapter — in addition to running her essential oils business.
Since my day job at the time just had just given me a raise that July for the year and so is not likely to give me another one and it is not currently allowing any overtime. Therefore, I thought opportunity was maxed out (but that was just a limiting belief I had at the time). I thought that if I found an opportunity that reaps more revenue than this avenue in my cost-benefit analysis, I could scrap the day job altogether, but I didn’t know.
After striking those choices, I could then analyze what was left over, which was much easier. This is the same technique used in the TLC show, Clean Sweep, where the first step in the organizational process is figuring out what you don’t need. In Clean Sweep, the first step was dividing everything in their house into two piles: trash or keep. This was the first sort.
The next sort moved everything from the keep pile onto a keep pile or a sell pile. Only the things left in the keep pile went back into the house. Even if items did not sell, if it went to the sell pile, it didn’t come back in the house. Troubleshooting can work the same way.
Let’s say you are troubleshooting a broken computer. One “pile” would be hardware problems, the other “pile” would be software problems. Once you decide the problem is hardware and not software related, you then do a fine sort to find out whether the problem is with the hard drive or RAM (memory), for example.
I created two units of criteria in order to decide which pile the above revenue streams would be placed in. To sort, I made the following rules: 1) it must be currently making revenue and 2) it must have the potential to make more revenue than it is currently making.
The next criteria is time. What is the sales cycle on revenue? Will the money be able to come within the next 2–4 weeks? Once I finished this sort, I was left with a solution that I could improve on. To do that, I would focus on my strengths.
How you can brainstorm to find your “strengths and streams.”
“Strengths” are the opposite of weaknesses. Weaknesses make you feel weak, whereas strengths make you feel strong. “Streams” refers to revenue streams, which is any and all the ways in which you can or have made money in the past.
Brainstorming is the act of recording as many different ideas as possible in a short time without criticizing them as you go. Save the criticizing (analysis) for after the brainstorming session. Sometimes bad ideas can help you think of good ideas, so write down any idea that comes to you during this time.
- What makes you feel strong?
- What makes you feel weak?
- What activities are you not just good at, but also feel good doing?
- What revenue streams do you have, no matter how large or small?
- What are some ways you have made money in the past, which you no longer do?
- What are some areas or ideas of things you have thought of doing, but for one reason or another never got around to doing?
- Have you noticed any changes in technology lately that would make something easier for someone to do something?
- Have you noticed a change in the demographics around where you live that might open a possibility for a new product or service?
- Have you noticed any “cuckoos in the nest” where something that wasn’t supposed to happen did, or something was an unexpected success?
- Have you noticed any examples of something that was supposed to succeed, but didn’t? What could you do to adapt to this new reality?
When I was young I used to collect aluminum cans to recycle for money. As I got older I collected antiques to resell. Later on I bought books to resell online or through local book dealers. These were all retail activities which involved both labor and a product.
Eventually I started trading labor for revenue, which is called service. I began doing IT support and web design. Eventually people began paying me for my advice and I got a better job that paid more. Eventually I achieved my goal. But I wasn’t immune from limiting factors.
In order to be successful, I needed to overcome obstacles. The first limiting factor I faced was in my own limiting thoughts and the second was who I was associating myself with at the time.
An example of a negative thought I had was, “I can’t do X. That’s impossible.” The first step I did was to to realize that I was having a limiting thought, acknowledge it, then let it go. Just because your brain creates a thought, doesn’t make it true. Learning to manage my thoughts helped me to manage my actions.
The second factor is the people I was associating myself with. I realized that if the people I was hanging around were not successful, were not following their dreams, or did not have multiple streams of income, then they were a limiting factor. If you want to change, then you’ll need to spend less time with these people. I did this by listening to business podcasts.
During this process I learned how to set a goal, make a plan, and execute (ready, aim, fire). Mitch Hedberg said it best when he joked, “I bought a jump rope — but man, that thing’s just a rope. You have to do the jump part yourself.” No blog, no self-help book, and no business can help you succeed more than a determination and drive within yourself. If that is missing, everything else is just a rope.