I’m sure you have heard about this concept before and I’m also thinking that you don’t apply it. And that is why I’m writing this piece. Have you ever considered yourself as a corporation? Think about it:
– You are producing income
– You have a balance sheet
– You have the power to diversify your sources of income
– You are selling your competencies to a third party (your employer in most cases)
What makes you so different than a “real” corporation?
Not much. In fact; nothing! The concept of considering oneself as a corporation is not new. But I’m sad to see that most people don’t use it. When you invest money, you want to earn a good return on your investment. Why would it be different when you go to work where your employer is “investing” money in you? I am both an employer and an employee (depending on who you ask) so I can understand both realities:
As an employee, I want to make as much money as possible and feel that I’m well paid for my hard work. I know I produce a profit for my employer and therefore want to get the biggest piece of the cake as possible.
As an employer, I want to make the biggest investment return on my expenses. Therefore, I expect my employees to produce more income than what I’m paying them. If not, there is no point of paying them and I’ll just drop these activities or do them myself.
Sometimes I see employees whining because they don’t get what they think they deserve. We all think we deserve more… until we consider ourselves as a corporation and look at our own return on investment. You think you deserve a raise? Can you tell me why? Can you, honestly, look at your performance and consider that if you had to pay you, you would shell out more than what’s written on your pay check?
If you want to make more money (both from work and from your side gig), you will have to consider yourself as a corporation and take action.
Regardless if you are an employer or an employee, you both want the same thing; make as much money as possible from your time, competencies and money. These are the three things you control as the president of ME Corporation: your time, your competencies and your money. You may use your time to watch Lost, not use your competencies and waste your money on stuff. Or you may decide to use these three things to the maximum so your ME Corp will become a profitable company.
I’ve been considering myself as Mike Corp for a while now and can see the benefits in both my personal and professional lives. In making sure that I show a high Return On Investment (ROE), I earn more income raise and build a side company at the same time.
A healthy company starts with the basics. Are you in shape? Do You work out or play a sport? If not, you need to start this morning. Being in shape will ensure that you have energy to complete your tasks. I don’t think that we all should become Mr. or Ms. Universe, but 3-4 hours of intense activity (this doesn’t include sex… that’s a bonus 😉 ) per week is a must to avoid fatigue and ensure a constant performance throughout my workweek. I currently workout 4 times a week plus I play soccer on Sundays. I’ve noticed that if I cut a little bit on my sleep in order to work out, I feel more energized during my day. On the other hand, soccer is hurting every part of my body… but that’s because I play with younger and better players, lol!
If a company doesn’t have the right structure, it will be difficult to perform. It’s the same thing with my body. There are several people asking me how I do what I do. The secret simply lies with being in good shape. A Healthy body will be more receptive to motivational bursts and will help me keep a positive attitude all the time. In fact, there is nothing better than running 5 miles on a treadmill to get out of a rut!
I’ve been investing massively in Mike Corp over the past ten years. I made sure I was productive (so I learned to type and read fast). I also made sure that I was knowledgeable (so I got a bachelor degree, CFP license and an MBA). I then made sure that I’m up-to-date (I read a lot of newspapers and do continuous training).
Investing in my corporation makes me employable and desirable for my employer. I’m productive, knowledgeable and up-to-date. I’m like the new iPhone5 and constantly upgrade myself to make sure I don’t get dropped in the recycling bin one day (we don’t throw employees in the trash can anymore, we recycle them!). Each year, I look at my corporation, identify its weaknesses and work on them. I want to make sure that I can be a performing corporation, not an old and tired one.
When I invest in my corporation, I want to make sure to create value. I’m looking forward to becoming more productive and more knowledgeable. Productivity and knowledge are two great assets I must master if I want to see the company succeed.
A big challenge for any type of company is the risk of losing a part of its business. What would happen to your shoe business if your main client is Wal-Mart and they shut down the clothing department in their stores? So let me ask you: what happens if your employer decides he doesn’t need you anymore? If 100% of your income is coming from the same source (your employer), you suffer a high risk due to the concentration of your “business activities”.
There are several ways I can diversify my corporation. I’ve created a sub-division with the online business and a very small division in the investing industry (my RRSP / Pension plan). I intend to eventually add a real estate segment and grow my online department. These are ways I’ve found to diversify my sources of income.
It’s definitely not easy at first to diversify your sources of income when most of your time is used to please your first client; your employer. When I started working in my early days (man… that hurts; I just realized that I’ve been working full time for 10 years now!), I had kept my bread delivery gig on the weekend. I was a banker by day and a delivery boy on the weekend. The reason why I kept my second job was to A) produce more income and B) have a plan B if I ever lose my first job. This was quite a good idea as I needed my second job for a few weeks and I quit my first job after only 6 months. It was a gutsy move but it was much easier to make since I had already another source of income.
I always knew that having more than once source of income was important. As I mentioned in my recent post How much do you need in the next 30 days?, I could lose my job tomorrow morning and still live from my other sources of income for at least 2 years before starting to worry. If one day my “side income” could make over 50% of my overall income, I would be like Johnson & Johnson which makes 55% of its income outside of the US: my income will not depend on my employer.
Would I buy me? Am I a good investment? Do I produce an interesting return on investment? These are questions I ask myself every day. If I wouldn’t buy me or hire me, how can I think that my employer or partner will be happy to do business with me? We all have days where we put ourselves in the recycle bin (I’m the first to think about that!). Since even great companies have bad quarterly results, it’s okay to have rough days, weeks or months. The key is to make sure the company is a good one at the end of the year.
So do you want to get a raise?
Do you want to make more money on the side?
Do you want to be able to tell your boss that you are working for him because you want to instead of because you need to?
psst! all my techniques to answer those questions are in my book 😉
It’s simple; start considering yourself as a corporation. Once you will start taking care of yourself as if it was a business, you will see that you won’t be wasting your time, money and talent. You will start investing them for your future. This will make a huge difference!
Are you considering yourself as a corporation? How do you “invest” in yourself?
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