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Free NewsletterAre you working for a for-profit business large or small for an hourly wage or salary? If so, then you are essentially working at wholesale prices. I can show you why this is true.
All for profit businesses exist to make money for their owners, whether those owners are shareholders in a large corporation or the proprietor of a small family owned business. The business makes money by taking in more in revenue than it spends on expenses. The difference is the profit. The business exists simply to generate more revenue than they spent. The profits, however, are the spoils of the business owners and not the employees.
What does this mean for the average wage owner? Well, unless you are in a money losing business (which would not last long), the company is paying you significantly less than the value you generate. As an employee in a profit business, you must generate more value for the company than you earn, or the company would go broke.
How much more? A rough figure for overhead in a company is equal to your salary – so you need to generate a minimum of twice your salary to just cover the overhead costs of paying for your workspace, buying materials for the business, paying your benefits, paying the salary of your bosses, etc. You need to generate twice your pay in value for your employer. But that’s not enough either, since the company also wants to make a profit. The real truth is that most people generate three times their salary in income for the business.
By working for someone else, you are selling yourself at a wholesale price. You’re getting paid a third of the actual value you’re providing for your company.
What if there was a viable alternative – where you could work from home at a much lower overhead rate, and you could keep the full value of the profits instead of handing them over to someone else? My internet business last year had expenses in the 14% range – including all of my capital and operating expenses for the entire business. All of the remaining profits made, less taxes, were mine to keep. Instead of 33% minus taxes, I kept 86% minus taxes.
Is this some magic entity? Some secret formula? No – its just good old fashioned entrepreneurial spirit. The salaried job is a relatively recent invention, that is a little over 100 years old. Hourly wages and salaries are a product of the industrial revolution where big businesses were formed doing repetitive, mechanical assembly line jobs. Prior to that people were paid not by the hour or by the year – they were paid by the job. If you wanted a task done by an artisan such as a blacksmith or cooper, you simply went to them and negotiated a price for the finished job. No one was paid by the hour – they were paid for the results they produced.
With the internet opening up huge opportunities for people to connect with others of shared interest, it is possible for someone with a few hours a week to build a large following and market, and make a full time living as an entrepreneur. And in the process, you can get the retail value for the results you produce, rather than working for wholesale.
Can everyone do it? No – some people are so conditioned by the “do what I say” mentality that they will never make the shift to entrepreneur. Is it easy? Well the work itself is not hard – I wrote a post once a week on my blog and spend a few hours each weeks on developing new products. However, you do need persistence and consistency over the long term. You won’t necessarily get rich quick, but if you have the right niche it is possible to generate real profits in a few months and also to grow those profits consistently every year.
To learn more, subscribe to my newsletter or visit my site at OnlineBusinessZen.com – I can help you get started on your internet business today.
