Business Owner means you have other people working for you. In fact, the only way to be a successful business owner is to use other people's money and other people's time to make you money. The only way to make a million dollars is if your business idea is not only residual, but reproducible. With this in mind my partner Wayne and I created Townstate Corporation.
The idea was simple. We make cute websites for small towns and neighborhoods. The websites have streets full of little storefronts that look like the businesses downtown. We charge local businesses a small fee to have their cartoon storefront link to their website. We started with our hometown: salmonidaho.com. Our site zoomed to the top of search engines, and we realized we had something that could be reproduced for every small town and neighborhood in the country!
We brought in partners, got an SBA loan, hired web designers, got a few employees and signed the papers for a house up in Hamilton Montana so we could jumpstart hamiltonmontana.com. Then all the sudden, one day, the search engine Google decided we were a link farm, and dropped a bunch of our townsites down from page one to page seven... virtually destroying our business. We were left with only a few townsites going, and a mountain of debt. All in one day the outward cash flow swallowed the incoming cash flow and threw us into disaster. Although we consulted with the best SEO folks in the nation, and put together a plan to save the business, we were in such debt that all we could do was work like mad to keep up with the interest payments, and there was no time for implementing the new plan to get back on top.
It's been two years since that time, and it was really such a fantastic thing to happen. Here's what one of our famous fore-fathers has to say about it:
"Our greatest weakness lies in giving up. The most certain way to succeed is always to try one more time."
Thomas Edison, 1847-1931, Inventor and Entrepreneur
Here's what happened. In order to make enough money to pay for this horrible amount of debt, I had to throw all my talents into the fire. Wayne got himself a good job so that we would have the basics taken care of, and I started working night and day, improving my web design skills and selling whatever I could sell. We also worked hard fixing up our houses to sell, and then "participated" in the recent economic crash that made it impossible to sell anything.
Because I am a big believer in cash flow, I kept a close watch on my financial statement through this time. I was now in a situation where I had very little control over the outgoing side of the statement, so I had to push every resource at the income side. So, push I did. I remember sitting there one day, looking at the disaster in numeric form, and realizing that I was making tons of money. It didn't feel like it because every cent I made flowed right back out the mailbox... but it was a lot of money. All the sudden I realized that when the houses finally sell, and all the money stops going towards debt, that I will be the cash flow queen. My bank account hovers at zero, but I am rich! Right there, was proof that understanding cash flow is the thing that creates financial freedom.
