Net Worth

In small business,  many owners are not only trying to build income, but they are also trying to build their “net worth.”

I recently heard a new perspective (from Tim Ferris’s blog) on “net worth” that relates to many firms in the building industry.    Most people derive “net worth” by taking your assets and subtracting your liabilities.

What if your “net worth” was what you are left with if you lost all of your money, and started at zero?  And, it could be calculated on the speed of you re-building back to where you were before losing it all.

What he meant by this was,  all of the activities, relationships, past clients, intellectual capital that you build on a weekly basis throughout your career can turn into your “net worth.”  We have all heard of millionaires who have lost it all, and within a year are back above the million dollar mark.

Focusing on building the intangibles of “who” you and your business are will create a situation that will allow you to bounce back quicker from a temporary slow down in demand.  It will allow you to cross into new segments to supplement a decline in your business, sell a different set of skills, and be more confident in re-building your “net worth.”

*Patience is the key to building this type of “net worth,” but it can be accelerated with a focused plan.

Action Items to determine if you need to spend more time building your “net worth”:

1. Make a list of 5 things you have done in the past 6 months to further educate yourself within your industry?

2. Make a list of 5 people you have added to your core network within the past 12 months that enhances your chances of future opportunities?

3. If your past customers were your only advocates to build a future income, how confident are you in how you you have treated them if your future  “net worth” was in their hands.  (1. absolutely  confident  2. not confident).