Over the last few years, we’ve all learned some very valuable business lessons as the real estate market tanked and the economy sunk into “recession.”
The BIGGEST lesson is that we need multiple income streams and the reason why is because any ONE income stream can disappear rather quickly.
My mentor, Dan Kennedy, taught that the number ONE in business is the very dangerous.
ONE sales/buyers agent…
ONE administrative assistant…
ONE lead generation advertisement…
ONE lead conversion system…
ONE source of income…
Depending on ONE of anything puts us at significant risk. Your ONE buyer’s agent can leave you, quit the business, or simply stop selling. Your ONE lead generation advertisement might stop generating new leads. Your ONE lead conversion process or system might stop converting leaving you with zero new clients.
The problem is that once we have things working in our businesses, we tend to just keep doing the same thing over and over again.
We have to fight this tendency and always work to build diversification into every aspect of our businesses. TWO buyer’s agents are better than ONE. Two part-time administrative assistants are better than ONE full-time assistant.
It’s a pain to design your business with diversification built-in, but you’ll have a lot more protection.
For the rest of this article, I want to focus on diversifying your income and to do so, I want to ask you a very important question:
Are you an agent with one business selling homes or are you an entrepreneur with multiple businesses, one of which, is selling homes?
Here is how the typical real estate agent’s business looks:
When the real estate market is strong and sales are increasing, the income flowing into your bank account increases. However, when homes sales drop, the income into your bank account drops, too.
This is what we’ve all dealt with over the last few years. Now what most agents do in this situation is they work harder trying to sell more homes. The reason why is because they see themselves as a real estate agent instead of an entrepreneur.
Sometimes their hard work increases sales and increases their income, but their dollars per hour definitely drops because you have to work so much harder for each and every sale. The BIG problem is that your business is still dependent on ONE income stream – commissions from home sales.
Another option to consider is to view yourself as an entrepreneur and leverage other business opportunities to your advantage. The cool part is that you have some very valuable skills and assets that you’ve acquired in your real estate business. These skills and assets can be leveraged into additional income.
More than likely, you have the following valuable skills:
1. Can generate and capture targeted leads using online and offline marketing.
2. Ability to convert leads into appointments using email, outbound phone calls, print sales letters, video sales letters, client newsletters, free classes, tour of homes, and more.
3. You can sell one-on-one! (Getting sellers to list their homes with you or buyers to write an offer on a home)
4. Ability to follow-up consistently to nurture relationships and built trust with prospects and clients for referrals and future sale opportunities.
These 4 skills transfer into almost every single business in every single industry. And to see how valuable skills are, watch this cool movie clip from Taken below. Fast forward to 3:30 for the best part of the clip:
“What I do have are a very particular set of skills that I have acquired over a very long career!”
Well, we might not be trained operatives who can hunt down, find and kill bad guys, but we are trained at making money out of thin air, which is what we do in real estate. And these skills that we have acquired over our career very valuable to you – if you leverage them! In addition to these valuable skills, you also have the following valuable assets:
1. Database of local residents who know you, trust you and who pay attention to you.
2. Network of other professionals in your area. These professionals include other agents, insurance agents, lenders, accountants, attorneys, inspectors, title agents, inspectors, contractors, painters, landscapers and more.
These skills and assets can be combined into something like this:
Instead of working harder trying to sell more homes in a down market, reinvest this time into creating a second or third business that might provide diversified income and cashflow.
When considering different business opportunities, I believe it’s important to follow a certain set of rules or guidelines. I’ve detailed these rules and guidelines in my Zero Negative Cashflow Report (ZeroNegativeCashflow.com) I wrote a few years ago.
You don’t want to run off and start any old business because most businesses opportunities aren’t very good. You want to focus on the “right” opportunity. Here are four things I look for with every new business opportunity:
- Doesn’t require a great deal of money to get started.
- Provides recurring monthly income.
- Doesn’t require 40 hours a week of your time.
- Low overhead.
The goal is not to create another “job” and work harder. The goal is to create and run a business that provides monthly income with limited risk and limited time.
A great example of a business meeting these criteria would be a residential cleaning company. You can start this business out of your garage. You don’t need expensive equipment or inventory. You don’t need expensive cash registers, and have no set hours where you have to have employees standing around waiting for a customer to appear.
You can hire people and pay them hourly to provide cleaning services on your behalf. They can drive their own cars or you can provide a small inexpensive car for them to drive with your real estate website and phone number on it.
The best part about a residential cleaning business is that it provides recurring monthly income, because you clean the same homes each week/month. If you charged your customers $100 a month to clean their homes and you had 100 customers, you would generate $10,000 a month. You’d probably pay half of this to the people actually cleaning the homes leaving you with an extra $5,000 a month of income. Remember, you don’t have any overhead for rent or utilities in this business!
Do you think you could get 100 cleaning customers with the skills and assets you have at your disposal?
I certainly do.
You could obviously market your cleaning company to your database and offer new customer specials. You could ask other real estate agents and professionals you know to market your cleaning company to their databases, too.
On top of this, you could obviously market your cleaning company to the public by generating and converting targeted leads.
Now I’m not suggesting you run out and start cleaning company and I’m not trying to sell you anything at all.
My goal is simply to try and get you to think like an entrepreneur instead of an agent. My goal is to get you to value the skills and assets you already have and possibly leverage them into additional monthly income and cashflow. My goal is to help you diversify your business and protect your family.
P.S. In this newsletter, I included a snap shot of you owning multiple businesses providing monthly income. One of these businesses should be engineered to funnel a significant amount of money into your retirement account. You can see how to do this at FamilyMoneyMachine.com. In my opinion, this is the most valuable report I’ve every written. I’m not kidding. If you only invest in one of my products or reports, please make it the Family Money Machine Report, because it will have the biggest long-term impact on your family.