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Objectives
Explain what individualpreneurship is Explain why it is important Discuss how to get involved
Individualpreneur develops multiple income streams from many sources Thus better hedged against uncertain economic, regulatory, and social conditions than those who rely upon once source of income
What is individualpreneurship?
Activity whereby an individual (the individualpreneur) behaves like an enterprise (the individualprise) in their own right In business for themselves unlike a solopreneur, can have multiple businesses and can employ other persons
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What is entrepreneurship?
Entrepreneurship is a competency required to start, develop, and assume risk for an enterprise
Who is an entrepreneur?
An entrepreneur is an individual who organizes, operates, and assumes risk for an enterprise with the intention of transforming innovative ideas into products and/or services for a profit
Founding entrepreneur An active owner-manager A passive owner with a management team in place
Enterprise
Undertake for prize or cause Group of activities intended to produce income organized as a:
Types of income
Gross income
Types of income...(cont'd)
Gross income...(cont'd)
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Types of income...(cont'd)
Net income
Gross income Less: cost of revenue Less: expenses required to generate revenue
Cash flow generated from net income generates wealth for investing and supporting a personal lifestyle
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Full-time job, sometimes supplemented by a part-time job Exchange time for money Active form
Residual income results from an initial transaction in the past for which an ongoing cash flow is received Passive income results from transactions where the individualpreneur is not actively involved
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Enrolling members in systems where downstream commissions can be earned Selling items
Where subscription is automatically renewable Consumables where ordering is handled by thirdparties Affiliate programs
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Having a full-time job Having one or more part-time jobs Being a trader on online auction sites Being a trader in securities Being a part-time real estate agent Owning a lifestyle business, such as a restaurant or a retailer Owning a network marketing business Managing a real estate investment portfolio Managing a securities investment portfolio
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What is Plan B?
Plan B is an alternative course of action in case Plan A fails For most individuals, Plan A is having a good education that leads to a well-paying job For some individuals, Plan A is achieved through entrepreneurship/business ownership
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An effective Plan B begins with the notion of an individual behaving as an enterprise in their own right... ...and thus working on Plan A and Plan B at the same time generating multiple income streams from many sources
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Plan A may involve full-time employment or entrepreneurship/business ownership Plan B may involve:
Part-time employment Home-based businesses (Physical businesses not encouraged) Investing in real estate and/or securities
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Sources
Wages Interest (schedule B) Dividends (schedule B) Business income (schedule C) Capital gains (schedule D) Supplemental income from rents, royalties, partnerships, and subchapter S corporations (schedule E)
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Types
Wages all forms of compensation for full or parttime employment Interest on investments Dividends on investments Capital gains on investments Net income from active revenue generation commissions, fees, rents, royalties, and sales Net income from passive revenue generation primarily rents and royalties
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Sole proprietorship Partnership and limited liability company Subchapter S corporation Subchapter C corporation
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Part-time employment Developing a home-based business on a part-time basis that has the potential to become full-time (lifestyle to upwardly mobile) sometimes based upon a hobby or passion Earning fees and commissions from referrals through affiliate marketing relationships
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Earning fees and commissions from referrals through affiliate marketing relationships Earning royalties through writing and speaking engagements
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Investing in real estate for rental income and capital gains Investing in securities for interest and dividend income and capital gains
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Business development and marketing capability everything else can be outsourced Active trading in investing activities (real estate and securities) to ensure that capital gains can be properly realized Focus on residual and passive income where possible
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Challengers who appreciate action and adventure Causals who appreciate creativity and relationships Stabilizers who appreciate law and order Visionaries who appreciate innovation and understanding
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Enrolling customers in membership systems where commissions are earned from ongoing sales of consumables, for which the ordering and distribution is handled by third-parties this activity generates residual gross income and is a form of network marketing
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Investing residual income in an investment portfolio that diversifies risk, and generates cash flow from interest and dividends this activity generates residual gross income, which is passive if the portfolio does not require active management through trading
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Shorter-term objective of Plan B is to provide a hedge against Plan A Longer-term objective of Plan B is to gain financial independence through income producing assets and activities generating wealth to cover all professional, physical, and personal expenses wealth is a source of capital for future investment
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Famous quotes
Profits are better than wages Wages make you a living; profits make you a fortune Formal education will make you a living; selfeducation with make you a fortune
Direct marketing is a relationship-based form of business development Usually involves commissions earned on sales of products to customers and those of their referrals - commission structure equivalent to overrides in sales organizations
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