Living within your means alone will not give your financial freedom. Without boosting your income sources, retiring comfortably is close to impossible. Perhaps, this is where our education fails. We are taught at a very young age that we should follow a certain formula to ensure success: earn a diploma, get a stable job, settle down, and live off our last days with our retirement benefits.
Then came business trailblazers founded by young college dropouts who practically started from nothing. Microsoft, Facebook, and the explosion of start-ups challenged our old view of attaining financial freedom. Neither a college degree nor a substantial inheritance is needed to make it big in life. Your business idea, if executed well, can change the course of your life and the people around you.
Who knows, you might be a trailblazer in your chosen industry.
From active to passive income
Financial freedom can be achieved with a combination of active and passive income sources. An active income source is something that requires your direct effort such as your job and consultancy work. In contrast, a passive income source doesn’t need your actual involvement like the dividends from your stocks and royalties.
Ideally, your business will start as an active income source. You will need to invest money, time, and effort to set things running. The goal is to turn your venture into a passive income source. How long will the process take? That depends on how soon you can earn back your capital investment, establish a cost-effective marketing strategy, and convert leads into profits.
Forget about fads, capitalize on your skills
Once, I received a text message from a high school classmate inviting me for coffee. I knew that we weren’t meeting solely to reconnect. His posts on Facebook was a give-away: he’s selling food cart franchises. Investing in food cart business worked on those who entered the market before it’s congested.
You can see a line up of carts selling instant munches in a single street. But even if the food cart market isn’t as congested as it is right now, I’ll pass up. Why? Because I know nothing about food. What do Facebook’s Mark Zuckerberg, Mashable’s Peter Cashmore, and Groupon’s Andrew Mason have in common? They specialize in their trade (They’re also in their 20s when they became multimillionaires.) These young entrepreneurs turned their skills into passion, and their passion into business empires.
Start with assessing yourself. What do you have to offer others? You don’t need to be a tech geek. Your skills may be in culinary, events management or writing. You may also have a knack for training people. What is your passion? You can be a licensed teacher with an enthusiasm for fashion, or a civil engineer with special talent in literature.
Identify your market, create a competitive advantage
After determining the type of business for you, based on your skills and passion, do a research if there’s a market for your offering. This may sound basic but many entrepreneurs fail in this regard. Look around you. How many restaurants, clothing shops, and online stores disappeared after only several months of operating?
Sure, people will always be looking for a new dining experience, but is there a market for your menu? Is your market sustainable, or are you at risk of being drowned by the large players? Here’s one tip: create a competitive advantage.
Competitive advantage is an economic concept applied on international trade. To illustrate, country A focuses on a product it can produce with lower cost and higher efficiency, and buys its other needs from country B which similarly specializes on a certain product. The key word is specialization.
There are lots of lechon restaurants in the Philippines, but people prefer to line up at Lydia’s Lechon. Banco de Oro extended its banking hours and simplified transactions, bringing serious competition in retail banking. Create your competitive advantage. Why would a customer choose you? What makes your offering special?
Deliver your message via digital marketing
After identifying your offering and developing your branding, the next important task for you is delivering your message to your target market. You can have a combination of digital marketing and experiential marketing. The former refers to “advertising delivered through digital channels such as search engines, websites, social media, email, and mobile apps.”
With roughly half of the global population using the Internet, and more owning a mobile phone, no business can do without digital marketing. This is especially true if you wish to cater to social network-savvy Filipinos. The Philippines leads the world in social media.
According to Digital in 2017, Filipinos spent an average of 4 hours and 17 minutes per day on Facebook, Twitter, and other similar platforms. In fact, a Filipino would check a restaurant, an item or a company online before visiting or making a purchase.
Digital marketing is not simply putting up a website or creating a business page on Facebook. It involves a set of techniques that lead you to the right platform, content, and timing of exposing your offering to your target market. Stop taking shots in the dark. Let a professional digital marketer help you deliver your message effectively.
Engage your customers with experiential marketing
Experiential marketing, also regarded as engagement marketing, is allowing your customers to experience your offering or to participate in your brand evolution. Glyn Atwal and Alistair Williams, in the well-cited paper “Luxury Brand Marketing — Experience is Everything!”, noted that experiential marketing “focuses on providing sensory, emotional, cognitive and rational values to the consumers.”
Bread company Marby’s lets its target customers, middle-class workers, experience their offering in a fun way: by distributing fresh Marby’s bread to commuters in a terminal and having a stand-up comedian liven up the stressed-out atmosphere. The Bulacan-based company allowed hardworking Filipinos, their main consumer base, understand the real meaning of its tagline, “Itawid Mo.”
Digital marketing can help you plan fruitful experiential marketing campaigns using data from your social media platforms, search engine searches, etc. You can also use digital marketing in measuring the success of your experiential marketing. Your digital marketer can guide you through.
Your journey towards financial freedom may be fraught with challenges, but it’s a venture worth taking. Keeping a stable job and living within your means may or may not give you the life you aspire. Nevertheless, you can try another route: starting your own business. It’s not a walk in the park. You may fail and lose significant capital. But if planned and pursued well, you can make real changes in your life, as well as others’.