Self Evaluation

One of the most important tools we have is Self Evaluation. Anyone who is successful at anything has been through a lot of self analysis and good business person will be constantly analysing themselves and their business.

Kolbs learning Cycle is a graphic that can show us how we analyse ourselves, and whilst most people will look at it and go "well that's completely obvious", very few of us consciously do it as part of our self developing. Our learning experience can start at any point on this cycle and by knowing at which stage we are, on anything we trying to get better at, we can use the cycle to systematically and methodically learn at a greater pace than before.

Kolbs Learning Cycle is pretty simple once you've got a grasp on what each part actually means. I have created a simple exercise for you to follow on any project you are doing right now. This could be running your company, managing a store or trying to bake a cake.

Reflective Observation:

To make this exercise work, we're gonna start at this point on the learning cycle. Whatever project you've got in mind, you need to write step by step what it is you did. Let's say you're tried to get more clients so you ran a promotion, advertised in some local newspapers and leafleted. Think about where you advertised, what was the promotion and where you sent leaflets and write it all down as precise as possible. It seems obvious and basic, but when have you ever done that before?

Abstract Conceptualisation:

At this stage it's time to make some conclusions about what it is you did. I always ask myself two questions at this stage.

What Worked?

What Didn't Work?

Again, this seems really simple, but it's about actually sitting down, asking yourself those questions and writing it all down. Keeping with the same example as before, how many more clients did you gain from the promotion, did the advertising work and did many people take your leaflets? If so, did they ring you or buy your products?

Active Experimentation:

It should seem obvious now to stop doing what's not working and put all that extra focus and work into doing what is working. Let's say the promotion attracted 10 more clients and took very little effort. The advertising attracted 2 clients and took a lot of money, and the leafleting attracted 15 clients but took a lot time. It would seem wise to detract the advertising and put that effort into leafletting, and to carry on with the promotion or come up with a new one.

Concrete Experience:

Now that you have planned what to do... go do it!

Then you can start the whole cycle again.

It's very easy to get into the habit of doing something, even if it's not working particularly well. Very few people sit down and spend a few hours analysing their work and planning how to make it better. Those that do are constantly improving and becoming more successful in different areas in their lives. By developing your skills, your value goes up and employers have no choice but to pay you more, and clients will see the benefits in paying extra for the better quality service or products you supply. I constantly ask myself these three questions...

What Am I Doing?

What Is Working?

What Isn't Working?

Without actively asking yourself these three key questions, you'll find yourself getting stuck in a rut and never improving.

FM

The Three Types Of Income

In The UK, the richest 25% of the population own approximately 85% of the wealth (according to HMRC in 2003). The distribution of wealth all around the world has always been more favourably split to a smaller percentage of people, leaving some people who may work just as hard during the day, struggling to put food on the table, whilst others who seemingly live a life of leisure are never in short supply of cash. Learning about the three types of income can give you a real insight into how they do it, the wealth it can bring in and more importantly, how you can do it too!

Work

This first method of bringing in an income is the most popular and seemingly the first option when looking at revenue streams. You trade hours of your day for a wage or salary that's determined on your skills and education... or work.

The problem with work is that the amount of income you can bring in is completely dependable on the amount of hours or clients you have in a week and the amount of time in a day. The vast majority of people, when looking to bringing in more income, either take on more hours at work or look for better employment. Unfortunately there is a finite amount of hours you can work in a day. Even if you get to higher management or director levels, there is a limit to your salary and you have to spend a lot of your hours in the office working.

Whilst you can be successful at work and it can bring in a level of financial freedom, it is not an easy or sensible option when you are looking to bring in that extra cash and doesn't allow freedom of time.

Investment

People who have created a successful business or perhaps have come across inheritance often choose to invest in other peoples business ventures. Successful investors can see their stocks and shares increase dramatically in the good years and when they sell, can often have a lump sum of money that is far greater than what they put in initially. This can be then used to invest in other opportunities or used to buy the dream house/car/holiday etc.

Investment can be incredibly risky. Although every care should be taken to make sure that all investments are done with the least amount of risk possible and the businesses they invest in have solid business plans, every investor should know that there is a good possibility they will lose the money they invested. On top of this, once you have invested the money, that cash is tied into the business for a few years, and whilst the odd cash dividend can help boost your income, you have to be in it for the long term and can't count it as a regular income. Investment is gambling, and gambling is never a sure way to bring in income.

Passive Income

The people who make serious money, tend to be the people who have a lot of passive income. Passive income is money coming in that doesn't cost any time or extra money after the initial set up. Imagine being able to wake up in the morning, check your balance sheets or bank account and find that you made a thousand pounds or dollars whilst you were asleep.

Passive income can come from lots of revenue sources. It could be a second home that you rent out, it could be advertisement on a website you own or it could be a book you have written that is steadily being sold. Many musicians live on a passive income once their touring days have finished through copyright ownership, many top bloggers live on the income generated from advertising on their blogs and anyone that creates a successful TV show can almost be guaranteed passive income through the selling of show ideas to other countries and TV companies.

Passive income may take a few months to set up, and sometimes can take years to generate income but successfully creating many passive income sources can be your ticket to financial freedom with little effort.

When you're next thinking about creating a different income stream, try to imagine how you could generate money whilst you sleep. Try to visualise something that you could do that people would pay for, making you money for no extra effort. Perhaps there's a book you've written that is just sitting on your hard drive, perhaps your savings could be invested into a second house or flat that you can rent out, perhaps you have a website that is getting thousands of hits a day but there are no adverts on it that could give you an extra income for no extra work.

Thinking in these terms, rather than trading time for money is a rich way of thinking. Being Rich doesn't mean sacrificing time. Time is our most precious commodity and any time spent working, should be done creating more free time and financial freedom for the future.

FM

Get The Most From Your Current Network

Stanley Milgrams study came to the conclusion that we are only six people away from anyone in the world. Knowing about the six degrees of separation and using that knowledge to make the most out of your networks of friends, families and peers can help you find the people who are going to take you that one step further in your career.

With Facebook, Twitter and other Social Media sites making it easier than ever to keep up with friends as well making new ones, you'll be surprised at how close you are to contacting the right people, whether that's Investors, Managing Directors or people working for companies you would like to make a client of.

First of all, start off with anyone you've worked with or for. Ask yourself how well they know you, whether you think they would rate your work highly and whether you think they know people who will be able to help you progress your career, or become a client of yours.

Example: If you were music tutor, think of everyone you've ever come into contact with to do with music. Old teachers, former students, current students other music tutors etc... Write down a list of all these people and write down next to the name of each of these people whether they would rate your work highly or poorly. For everyone on that list that you think would rate your work highly, it's time to get back into contact.

So now you should have a list of a few people who would rate your work highly and it's time to get back in contact with them. Email or write a letter to each of the people on list and simply tell them what you're doing and ask them whether they know anyone who would require your services/can offer employment or whatever it is that's inline with your business or goals. I would avoid ringing as this can seem a bit cold and rude, but a friendly email or letter is fine and you'll either get a response saying that they don't know of anyone but will keep their eye out, or they do know someone.

Something that could take less than an afternoon to do may well change the direction of your career or give you a few more clients.

Do this with your friends and family. If your friends and family are supportive, they will be more than happy to help you find work or clients and the great thing is, word of mouth is the most effective form of advertising... and it's free!!

Now it's time to get methodical!

You'll need a good programme or a very comprehensive address book to do this, but now it's time to research makes notes on everyone you've ever come into contact with. Good Networkers know everything about everyone; where they met, what they do and even what conversations they've had because they organise and note down everything they learn about the people they meet.

Start forming a list of everyone you know on facebook to start off with. Write down how you met them and what they do. You will probably find that the far majority of the people you know, don't have much use to you... but their friends might. By doing this you start to get a feel of the circle of friends you currently move in and develop an awareness of your friends social groups. You'll see which friends are successful, which ones are stuck in dead end jobs and which ones do something that could prove invaluable to you.

Although it's unlikely in this age, some of your friends and family may not be on facebook or other social networking sites. Although this makes it a little bit harder to find out information about these people, it's worth making the effort to find out. You only need one link in the chain to help you find the influential person you need.

Example: You may be an aspiring film editor. You look through your list of friends and find someone who works as an admin... for the BBC. You can make a note about that person and start developing a closer relationship in order to get a foot in the door. You build rapport with their circle of friends and discover who their work colleagues are and what jobs they do. Each relationship you build gets you closer to the influential person that can give you the right opportunity.

In order to network successfully, you have to be this methodical. This doesn't mean that you shouldn't be around people because they have a dead end job. It just means that some relationships are more useful in your careers than others and once you are aware of this, you just need to exploit it.

I mentioned in a previous post that Millionaires hang around with other people they think are Millionaires. This is because they network and build relationships that they think may be valuable to their careers. Although this may seem a bit cold on the surface, in truth you actually meet loads of new and interesting people who have similar life goals to yourself, and can often end up making very good friends for life. By working methodically at your networking and baring in mind, the six degrees of separation, you increase your chances of success and can often gain a happier life with the discovery of new friends.

FM