Read this book to discover how you can make the transition from completely dependent employee to empowered entrepreneur. This book will take you through some common sense yet powerful concepts that will open your mind to a new reality. You will be caused to think, reflect and discuss your new understandings within your circle of influence. This book is intended to be informational and actionable in building a profitable business. The common denominator of this book is that it is all about you. You making a choice that you must fully understand and a choice of great purpose beyond what you have today as an employee.

Nine Steps to Becoming a Transition Entrepreneur

From Employee to EntrepreneurBy J. Bilal

AuthorHouse

Copyright © 2011 J. Bilal
All right reserved.
ISBN: 978-1-4685-2364-5

Contents

Step One Define Yourself................................3Step Two Make the Connections...........................25Step Three Center of Gravity............................37Step Four Business Research.............................49Step Five Build Your Business Brand.....................57Step Six Network Marketing Plan.........................63Step Seven Business Plan Format.........................71Step Eight Investment Strategy..........................75Step Nine Initiate the Business.........................81

Chapter One

Step One Define Yourself

Do you have thoughts about how it would feel to be your own boss? Do you then dismiss those thoughts, fearing the risks involved? Reality check: as an employee, you already risk losing your job today. Imagine your boss calling you into the office, presenting you with your last paycheck, or escorting you from the building. How would you support yourself, pay your bills, feed your family, maintain your lifestyle? Furthermore, what would you lose in terms of dignity and self-worth, or respect and reputation within your community?

Defined in its most literal sense, an employee is a person who works for another in return for financial or other compensation. How well does the word employee define you? That identity is suitable for many happy and hardworking citizens; it may be a perfect fit—today. But what does the future hold? In this first chapter we will explore whether or not you wish to accept that identity for the long term.

Becoming an entrepreneur is the polar opposite of being an employee; an entrepreneur is someone who assumes risk for a business enterprise. A transition entrepreneur is someone who transfers his or her value as an employee into an independent business as an owner. This transition is done seamlessly over time while maintaining consistent employment. Such a transition takes patience and personal sacrifice and investment.

There are intrinsic and material reasons for becoming a transition entrepreneur. I propose to you that by doing so, you can gain a higher level of self-actualization, unlimited earning capacity, and more freedom to create a personal legacy. If you agree, you may be ready to take the leap of faith and become part of a very special group. To get there, however, we will need to take a journey together through the three important sections of this book:

1. You will rediscover who you are by further defining yourself beyond the context of employee.

2. You will learn how to create a career bridge for your business opportunity through effective research.

3. You will design a transition business plan that will help you arrive at your destination of becoming a transition entrepreneur.

Self-Actualization

Defining yourself begins with understanding what you need and what motivates you. We all have needs and are driven to act based on our motivations. Let's apply this basic principle to how we evaluate ourselves as employees.

Skilled workers and working professionals are often defined by their job or their earnings, and those earnings typically shape their social status. We are motivated to work by the type of lifestyle we believe we need.

To take a deeper look at the dynamics of human motivation, let's draw upon the classic psychological concept developed by Dr. Abraham Maslow.

Maslow's Hierarchy of Needs

1. Physiological needs: all biological needs including food, water, and oxygen

2. Safety needs: shelter, public security, health coverage, and safe environmental conditions

3. Social needs: love, affection, and relationships of all types—platonic, romantic, and familial

4. Self-Esteem needs: self-respect, respect from others, self-worth, and recognition for accomplishments

5. Self-Actualization: self-awareness, fulfillment of full potential, and the realization of one's passion or purpose in life

The benefits of the top motivation level, self-actualization, can only be attained by fulfilling the four lower levels, and fulfilling those lower-level needs is often enough for one to have satisfaction in life. In most cases, stable employment and income can enable a person to fulfill those lower motivations. Nine Steps to Becoming a Transition Entrepreneur Ironically, your employment situation can potentially inhibit your ability to attain self-actualization.

The process of reaching self-actualization is the first and most important variable in the transition entrepreneur equation, and it is the one that most people struggle with as employees. Self-actualization is important and highly underrated in the hierarchy of needs. It is often confused with self-esteem; therefore, few people seek to achieve it. We are going to address the mysterious human need to attain self-actualization, removing the question mark from your pyramid and replacing it with your answer.

Imagine living with a sense of enjoyment and purpose that you've created on your terms. Visualize the empowerment you can gain from being your fully creative self and feeding your passion through what you do every day. As a transition entrepreneur, you will have a higher probability of attaining self-actualization on your own terms. The rights, risks, and rewards of owning your own business come with a self-understanding beyond the bounds of a job description created by an employer.

Having been a hardworking employee, I must note that many employees are fully satisfied with that position; many are working in great careers or fulfilling job assignments for well-regarded employers. There are obviously millions of employees who earn reasonable compensation and fringe benefits and, as a result, feel some level of job security. I speak from experience when I say it is perfectly feasible for an employee to earn respect, merit, and recognition from an employer; still, that does not guarantee self- actualization, a sense of purposefulness, fulfillment of passion, and creative freedom.

As an employee, is this position where you begin or end? Who owns and has rights to all the work and time you have invested in your experience, training, education, and professional relationships—you or your employer? If you believe that you have potential beyond your current job or career, you may be on the verge of making a powerful and motivated step towards becoming something more than just an employee. Take a moment to think about and write down answers to the following questions. (I would recommend that you use a notepad or journal that you can reference as a working document of your learning experiences with this book.)

What are your talents and passions?

What is your potential to grow and learn in your current role?

Your answers to these questions will help you with the gap assessment exercise later in this chapter. A gap assessment measures where you are versus where you aspire to be. After you have written down your answers, therefore, set them aside; you will revisit them at the end of this chapter.

Financial Wealth

Now let's build upon our first conversation about self-actualization by discussing what can be an uncomfortable and perplexing topic: financial wealth. Employees work to earn a personal income, and that income is a form of power. Your current financial position is likely tied to your earned income. An employee's earned income and future earning capacity are determined by his or her job performance and by the process by which his or her employer evaluates that performance. Pay raises and bonuses driven by performance evaluations are controlled by the employer compensation process. Therefore most working professionals depend completely upon this process to achieve or maintain their desired lifestyle. Now that we've established these fundamentals, let's delve into the importance of financial wealth.

What are financial resources? They might include current earned income as well as past earned income in the form of cash on reserve and capital assets that can be readily converted into cash.

Your wealth is the sum of your financial resources and your material possessions that have market value. The market value of those possessions varies according to the type of assets and the market conditions. Furthermore, what you consider to be valuable resources may be less valuable to your co-worker or neighbor. Therefore, your position of wealth can vary daily by the market valuation and opinions of potential buyers.

Your economic wealth is the net worth of your total assets less total liabilities. If you add all your tangible resources (land, property, and capital) and your financial resources (cash reserves, stocks, bonds, business equity, and total capital investments) and subtract all your liabilities (loans, revolving credit balances, and other debts), you arrive at a numerical net worth. See the following example.

In this simple example, the net worth is calculated Nine Steps to Becoming a Transition Entrepreneur by subtracting the total liabilities from the total assets: $360,000 - $150,000 = $210,000 (net worth). This is a positive net worth of $210,000, which is favorable. In some instances, however, hardworking individuals come to the unfortunate realization that they have a negative net worth. That happens when the total liabilities (what you owe) exceed the total assets (what you own). An employee with a positive net worth has a favorable financial exit strategy in the case of unexpected loss of employment. But whether an employee has a positive or a negative net worth, it is risky for him or her to rely solely on an employer to determine his or her future financial wealth.

Before you continue reading, take a moment to calculate your current net worth. List all your assets, as in Table 1.1. Next, list all your liabilities, as in Table 1.2. Use a calculator to total your assets and liabilities and then subtract your total liabilities from your total assets to determine your current net worth.

Your net worth is what you have to fall back on if you were to find yourself without a steady source of income tomorrow. The type of assets you possess could be easy or difficult to convert to cash quickly. Remember, cash is king—it's the fastest way to replace your income. Understanding your net worth should help you think about your personal income differently, as conditional and not constant. Many employees feel secure with just their income, their current savings, and their assets—until the income stops coming in. Your income could end tomorrow if you find yourself unemployed.

You have seen a simple example of how to calculate wealth in the form of net worth, and you have completed your own calculation to see where you stand. Now it is time to do some soul-searching about your current position. Answer the following questions:

How much financial wealth do you need to attain your lifestyle?

What will it take in terms of job performance and earnings to reach your life goals?

These questions are provocative by intent, and again, your answers will be part of the upcoming gap assessment exercise. Take some time now to write down your answers in your notepad or journal.

It is important to expand the scope of our discussion about wealth. The distribution of wealth among employees and business owners in the United States reveals a lot about the potential winners and losers in our economy. The statistics that follow and a simple illustration of wealth distribution (Chart 1.1) will explain my point. Then we will discuss common ways to acquire wealth and the power that comes with it.

First, let's point out the painfully obvious: the distribution of wealth in the United States is imbalanced, favoring the wealthiest 20 percent of Americans.

• The wealthiest 1 percent of Americans owns 35 percent of all privately held wealth.

• The next 19 percent owns 50 percent of all privately held wealth.

• That leaves the remaining 15 percent of wealth to be shared by the bottom 80 percent of the American population, as blue collar and white collar employees scrap for that small slice of the economic pie.

• The top wealthiest 20 percent of American citizens have accumulated or received their wealth over time. This wealth is concentrated in the following financial buckets: business equity, financial securities (e.g., stocks, bonds, mutual funds, and non-residential real estate). These sorts of assets are high-return, unearned-income-producing resources. The income gained from these assets significantly reduces the need for the wealthiest citizens to work to produce earned income. These citizens don't depend on an employer to maintain or expand their lifestyles. The income gained from these high-return return assets also empowers the wealthy to minimize their use of credit (liabilities) in order to expand their spending power. The net effect of this imbalance in American wealth distribution is that the wealthiest likely will own the largest percentage of wealth as a minority within the overall population. To reiterate this point: more than 300 million people live in the United States, and about 30 million—the top 1 percent—have more than twice the wealth of the bottom 240 million.

I know what you are asking yourself right now: How do I move into the top 1 or 20 percent tier? I'll answer with another question, which will offer some perspective and further support my argument for becoming a transition entrepreneur:

How did the wealthy get wealthy?

Did they earn it by working more overtime at their day job? Did they work two jobs to accelerate their earning capacity? Did they climb the company ladder overnight by making friends with all the right people? The answer to all these questions is a resounding no. Knowing that should help you be realistic and accept that you will need to acquire more wealth on your own terms. Move beyond the limitations of acquiring wealth as an employee.

Now that you have completed a calculation of your net worth, you can determine if you are where you need to be now or where you want to be in the future. Remember, it is not your employer's responsibility or objective to ensure that you achieve your financial goals. It is up to you to expand your wealth beyond the reach of your personal earned income. I propose that the opportunity of reaching your financial goals can best be achieved as a transition entrepreneur.

So how did the wealthy acquire their wealth? The top three ways that wealth is acquired today are through ownership of business equity; significant, high-return capital investments; and inheritance—or a combination of these sources.

Up to 60 percent of the privately held wealth in the United States is acquired through business equity. Owning equity in a profitable business can happen in a variety of ways. You can purchase an existing business, which requires assets; you can invest in a business (stocks), which also requires assets; or you can build a business enterprise, which again requires assets. Note that assets are what drive and deliver wealth, no matter how you cut it.

Some 35 to 39 percent of American wealth is attained through capital investment in financial securities of all types, including stocks, bonds, annuities, and mutual funds. Guess what? That takes assets too! Finally, about 1 percent of the total wealth in the United States is gained through inheritance. So if you do not possess large assets or a large inheritance, own a very profitable business, or have an abundance of successful capital investments, you probably are not among the wealthiest 20 percent of American citizens.

Of the three main ways to attain wealth, the most likely way to do it is by using your assets to build a successful business. Use what you have in the form of human assets (intellectual assets, skill assets) and personal earned income to invest in a business of your own and gain a high return on those assets. Attaining greater self-actualization and expanding your financial wealth as a business owner helps establish your personal legacy as you become a transition entrepreneur.

Personal Legacy

So far we have unlocked the door to understanding the highest level of human motivation using Maslow's Hierarchy of Needs. We have also addressed the cold reality of American economics: the difference between personal earned income and wealth. By discussing net worth and breaking down the distribution of wealth in the United States, we've assessed how you fit into the big picture.

(Continues...)

Excerpted from Nine Steps to Becoming a Transition Entrepreneurby J. Bilal Copyright © 2011 by J. Bilal. Excerpted by permission of AuthorHouse. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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