3 Multipliers of Income

My friend Larry is a speaker for corporate seminars. Many years ago, He earned P5,000 for every seminar he gave.

Over time, He became more well known.

His network expanded and his skills improved. Today, he earns P25,000 per seminar. Pretty good, right? 

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In a month, he can give eight seminars. That’s P200,000 a month. Minus taxes of 30 percent, that’s P140,000. Minus the salary of his full-time secretary and part-time accountant, plus other office expenses, his take home pay is P110,000. Still very nice. But last month, He visited me and asked me how he can earn more. “How much more?” I asked my friend. “I want to earn P500,000 a month,” he said. “That’s a pretty big leap,” I chuckled. “I’ve got big dreams,” he said, “because I’ve been listening to your talks. I really want to give big to God. 

I’m sure you’ve thought of some ways you can earn more,” I said. “Can you tell me your ideas?” “Well, I could increase the seminars I give in a month,” he said. “How many more can you give?” “From eight a month, perhaps I could add four more. Twelve is my maximum.” “Will you still be alive by the end of the month?” I frowned. “Barely,” he laughed. “And will your kids still see you?” With a sad look on his face, he answered, “Some of my seminars are held in Tagaytay. Or Subic. No, I won’t be able see them often.” “Any other ways of earning more?” “Well, I could charge more…” he said with hesitation in his voice. “Yes, that’s possible. How much more?” I asked. “Perhaps 35,000 per seminar. But not more than that. My competitors charge only P25,000 per seminar. So I need to convince the companies I serve that I’m worth the higher price.” “So how much will you earn if you raised your price?” “Let me see… if I still gave eight seminars, I’ll earn P280,000.” “Your take home?” I asked. “About P160,000.” “Still not P500,000…” “Nope,” he said. “No other ideas Larry?” He shook his head. “I’m stumped. That’s why I came to you.” “Unfortunately, the two solutions you thought of—increasing your number of seminars or increasing your fee per seminar—is still exchanging your time for money. 

That path can increase your income but only incrementally.” “And clearly, I don’t want incremental growth.” “You want a quantum leap in your income.” “Exactly. What should I do?” That’s when I shared to Larry the three multipliers of time and income. 

How to Multiply Your Time and Income 

“If you keep exchanging your time with money, it will always have a limit. Because time is constant for every human being. All of us have only 24 hours a day and seven days a week. I’ve never met anyone who has 25 hours a day and eight days a week. In order to earn massively more, you need to multiply your time. To do that, you need to use the three multipliers of time and income.” “What are they?” he asked. “Manpower, Media, and Money.” 

1. Manpower 

“Can you train other seminar speakers?” He nodded. “I’ve got two guys that I’m training right now. In two or three months, I’m positive they’ll be able to give my seminars.” “Great. Manpower is the first multiplier. If you train 10 speakers and sell their seminars, you can earn 30 percent from every seminar they give. Can you see yourself doing that?” “I think I can,” he said. “Ultimately, you can even hire another person to sell the seminars for you. Just give him a share of the commission. Perhaps 5 percent for every seminar he books for your team of speakers.” “Hmm, I didn’t think of that before.” “So let’s do the numbers. Let’s lower the figures since your speakers are just starting out. If they get paid P20,000 per seminar, and each can only give four seminars a month, that’s P80,000. If you earn 30 percent of that, that’s P24,000. If you have 10 speakers, that’s P240,000 a month for you.” “Wow! But can I really manage 10 speakers?” “That’s a question only you can answer.” “Like what will prevent these guys from leaving me and doing it on their own?” “When you use the Multiplier of Manpower, you need to grow in your leadership and relationship skills. That’s another topic we can discuss for many days. I have two dentist friends. One is happy being a dentist in his own clinic. My other friend is a dentist who runs six dental clinics with 12 dentists working with him. Guess who earns more?” Larry took down copious notes. He asked, “Okay, what’s the second multiplier?” 

2. Media 

“Media. Can you put your seminar in book form?” “Yikes, I’m not a good writer. Just a speaker,” Larry said. “Then record your seminar and ask an editor to write it down for you.” “I can do that?” “Sure.” “But that means getting a publisher. They tell me that’ll be very hard. Almost impossible.” “Don’t get a publisher. In today’s Internet-connected world, new authors don’t need publishers anymore.” “They don’t?” “Authors self-publish.” “What do you mean?” he asked. “Computers have made it very easy to print a book. Just hire the right people—a good editor, a good proofreader, and a good layout artist. And then shop for a printing press that can publish your book.” “I’ll earn more that way?” he asked. “Publishers give authors an author’s royalty of 7 percent of the price of a book. If your book sells for P300, they’ll give you P21 per copy. If you sell 300 copies every month—and that’s a big IF—you’ll earn something like P6000 a month.” “Not very impressive.” “That’s why I tell all first-time authors to try self-publishing. Because after subtracting your printing costs and sales commission to bookstores, you get 30 percent of your cover price. If your book sells for P300, you get P90. If you sell 300 copies every month, you get P27,000.” “That sounds better. But I don’t know anything about publishing a book. Or selling it in bookstores!” “The first thing you do is create a following through the web. Use Facebook! Use YouTube. Use Twitter. Give parts of your work away for free. Create a relationship with your audience. And when people know you and love you, sell a hard copy through the web, sell through bookstores, and sell an ebook. Later on, you can sell books of other authors related to your topic.” “I can do all that?” he asked. Larry had this overwhelmed look on his face. “I don’t know,” I answered. “Only you can answer that question. But if you have the passion and perseverance, you can learn anything.” “You’re absolutely right, That’s what I teach in my seminars!” We both laughed. “The book is just the start,” I said. “Later on, you won’t even think of the book as your source of income. It’ll just be your marketing tool. You can create a video seminar and distribute that through the web. You can even sell it to the companiesthat have already taken your seminar—as a way of reviewing the material you gave to them.” “My gosh. How much will I earn if I use media?” “The amount depends on you. Another P100,000? P200,000? This morning, my friend told me he earned P1 million last month using the Internet as his media.” “Unbelievable. Okay, what’s the last multiplier?” 

3. Money 

“After manpower and media, the third multiplier is money.” “What do you mean?” “Tell me. Where do you give your seminars?” “Plenty of companies. Jollibee. Ayala...” I interrupted him. “Let’s take those two companies. Your seminars are improving them?” “Absolutely!” he pumped his fist to the air. “Then buy those companies.” “Huh?” Larry asked. “Buy Jollibee and Ayala shares. You become part owner of those giant companies. Your money is working for you. So you’re not just a speaker of these companies, you’re also a part owner of these companies.” “That sounds really nice.” “Of course, you can also start other businesses with your money, hire people to run it for you, and earn a bundle. But that will require a lot of time, a lot of trial and error, and going out of your core gift. So my suggestion is just invest in the stock market and let others manage your companies.” “Wow.” “Use all three multipliers. Manpower. Media. Money. When you’re earning P500,000 per month, tell me.” He smiled from ear to ear. “Jen, you’ll be the first to hear about it!”

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How To Grow Your Business Fast

If you’re an entrepreneur, this article is for you.

And if you’re an employee, but want to become an entrepreneur, this article is for you too. This will guide you on what business you should get into.

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Here’s my message: Don’t make your product sell on low prices alone. Avoid it if you can. 

Though I must admit. There are a few businesses out there that compete on price. 

I’m thinking of Walmart. 

That’s the mega-giant discount store in the US that guarantees the lowest prices.

My wife loves Walmart. It’s actually the largest publicly held corporation in the world in terms of revenue.

And it’s also the largest employer in the world with two million employees. Yes, they’re incredibly successful, no doubt about it. 

But I believe that a business that uses the “lowest price” needs to be the biggest also. Or he gets wiped out by new competitors. 

I believe there’s a better alternative. 

When the Lowest Price Isn’t Good Enough 

This morning, I read about Rack’s, a restaurant that made ribs a popular dish in Manila. I’m a vegetarian, so I wasn’t a fan. But meat-eating friends loved their melt-in-your-mouth ribs to bits. It became the talk of the town. And I saw Rack’s rise. 

From one restaurant, it grew to 30 stores all over Manila. 

But I didn’t know that it went downhill from there. I learned about it firsthand some years later. 

One day, my wife and I were looking for a place to eat—and the only restaurant nearby was Rack’s. I knew they served fish, so we went in. I was shocked. There was a sign that said, “P99 meal—with ribs, rice, and iced tea.” Huh? The dishes at Rack’s were P250+ upwards. 

What happened? And the ambiance was gone. 

It looked like a canteen of an office. As expected, branches closed down one by one. 

From 30 restaurants, only one was left. Before that last restaurant closed its doors forever, someone else bought Rack’s. (The same owners of Shakey’s.) And they removed the low prices. 

And brought back the old Rack’s ambiance. 

Today, they’re back with 11 stores and doing splendidly well. 

Instead of Competing on Price, Compete on Value 

What am I saying? 

Don’t try to be a Walmart. 

It works for Walmart because they’re the biggest thing in the world. 

If you offer the lowest price, you may win for awhile. But for how long? If you don’t become the biggest soon, another store will offer even lower prices. 

And all the businesses in that sector will suffer because the margins (profits) will be like how my mother sliced cheese when I was a kid. It was so thin, it was transparent. Owners will suffer, because they won’t have money for innovation. 

Employees will suffer, because their wages will be very low. And customers will suffer, because of poor value. 

Give Them 10 Times the Value! 

Here’s what you do. 

Instead of lowering your price, give 10 times the value at the same price. Or increase the price, so you can deliver the best. 

Obviously, this will need marketing skills. (Offering the cheapest price won’t need marketing skills.) 

You need to convince your customers that what they’re paying for is a steal—because you’re giving something so much better than what they’re paying for. 

Remember: Keeping your margins high is necessary to function as a business. The profits aren’t for you. The profits are for your employees and for your customers. 

How come? First reason: So you can do research and development—and create and innovate better products for them in the future. 

Unless you keep innovating, your business deteriorates and dies after a few years. Second reason: So you can pay your employees better—and these employees will serve your customers better too. 

Don’t Get Customers; Get Raving Fans! 

Customer loyalty is the magic bullet of business growth. But when you have to compete on price, you’ll never gain customer loyalty. 

Your customers will always leave you if someone offers the same product at a lower price. 

Face it: Low prices attract the wrong kind of customer. In any of my businesses, I don’t want regular customers. I want raving fans. That’s my goal. 

I’m not always able to convert every customer into a raving fan, but I’m able to convert enough of them that my businesses have become very successful. In other words, you want your customers to love you and your product. 

You want them to be so loyal, they’ll tell the world about you. They’ll talk about you in Facebook. They’ll share stories about you in family reunions. Heck, they’ll even defend you when others criticize you. 

Do Your Customers Want to Tattoo Your Brand on Their Chest? 

Harley Davidson is one such brand. Many of their customers carry a tattoo on their arm that says, “I love Harley Davidson.” Will customers of Suzuki do that? I seriously doubt it. 

And if you want a Harley, you’ll have to wait for six months for your bike to arrive at your doorstep. But if you go to a Honda showroom, you can place your order and ride out with your new bike. So why will Harley customers be willing to wait for six months? Because they’re not customers. They’re raving fans. 

Note: Harley isn’t cheap. 

But that’s why they have fans. 

A 24-Hour Store Selling…Gadgets? 

Apple does the same thing. I just came from the States. 

And I dropped by the Apple store in New York. It was insane. On that day, there was a snowstorm. I could hardly walk on the sidewalk without being blown away. 

From the car, I ran to the store, holding my jacket and my hood for dear life. The wind was biting. And what did I find inside the store? 

Five hundred plus people lining up for their gadgets. . 

And get this: The store is open 24 hours a day. 

You think only Jollibee is open 24 hours? 

Think again. 

Why is Apple able to charge high prices and create such a demand? 

It’s the magic of customer loyalty. It’s the magic of raving fans. 

Apple users simple love Apple. That’s what you want to do with your business. 

As much as possible, you don’t want to commoditize your business. Or enter into a business that sells commodities. Or nameless products that won’t create customer loyalty. 

As much as possible, build a business that spawns raving fans that create more raving fans.

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Online Financial Tips 101 - Why Learn Financial Literacy?

If you to become rich you need to learn how money works and this blog is all about it.

The goal of this blog is to motivate you towards thinking about entrepreneurship.

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If you want to you know how to drive a car like a professional driver, you get a driving lesson. You go to a driving school or you hire a good experienced driver to teach you all things you need to learn to become a good driver.

If you want to know how to cook well or bake well you go to a cooking or baking class. Learn the correct procedures in cooking or baking and then become a world class cook!

Same as with money..If you want to know how to make more, how to grow, how to keep, how and where to invest your hard earned money, you need will financial education or financial literacy.

And this blog (online financial tips) is made for that purpose, to teach financial literacy.

In this blog I'll share everything I know and will learn about money and investing from my experiences.  

Ready to learn?

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