As the title implies, there is a business principle that all great companies adhere to that produces wealth and abundance beyond the infusion of cash into a business.
It is the principle that value can be created in a business in ways other than by direct cash deposits. It's a pretty simple concept, really, but many folks looking at business from the outside (like an entrepreneur deciding that he wants to create a business) don't think about growing a valuable company from within without spending money to do it.
Why is owning a business so profitable? Why is small business such a prized and universal dream for so many people? Most would tell you that the reason they want to have a business is for the income stream that it can provide.
It seems that the majority opinion is that income from one's own business is preferred over income from an employer. Most of us would rather derive our means from our own efforts rather than relying upon someone else to tell us what our time and energy is worth to them.
But few of us think about the implications and profitability of creating a business, not just for an income stream, but for the value we can create and own and control by growing that business over time. We have unlimited potential to create and grow a valuable asset in ways other than dumping cash into it. Does that make sense?
Typically, when a business is valued, it is appraised for its physical assets and also it's income generating potential over time. What a marvelous way to increase your personal wealth! Your company is valuable because you've shown that it can generate cash years into the future.
If you were to sell your business, you would be paid not only for what assets you own, but for this cash stream today and for its value for years to come!
Of course, your business must have a proven concept or idea will work tomorrow just as well or better than it works today.
Think about all the small little start-up companies that have a great idea, product, or technology that could prove to be worth millions and millions in the future. Some of them are valued at hundreds of times what their intrinsic value is because investors recognize their future value.
I'm always amazed when Microsoft (MSFT) or some other huge company pays millions or even hundreds of millions of dollars for some little no-name tech company based on the ideas, or patents that the little guy holds.
The point of this discussion, of course, is to urge you to create and add value to your little start-up company, whatever it may be. You do that by being innovative, forward looking and thinking, creative, and by continually growing your business.
Aggressively pump all the value you can into your company. Give your customers more than they ever bargained for when they purchased your product or service. Strive for efficiency in your processes.
Leverage your own effort with smart tools and resources to build and grow your company faster than you could ever do it on your own.
Constantly strive to increase your reach and customer base, to strengthen your market share, and seek new chances to expand into logical areas of opportunity.
Create the very best products and services that you can. Use them to become the logical buying choice for anyone looking to make a purchase in your niche. Command loyalty of your customers by becoming an exceptional company with remarkable leadership.
When you build this kind of value into a small business, you not only increase your revenue stream, but you make your company worth much, much more than all the other average companies in the niche. Then, when it eventually comes time to sell or pass the business on to your heirs, you will reap the reward of your effort multiplied many, many times over.
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