Doing the math in business is critical to ones success. Business is about mathematics. You have to become a numbers person in order to become successful in business. Traditional people will disagree because many classically trained MBA types are trained to think that becoming the best at something makes you do well. This is partially true. I have personally seen the best software engineers in the Silicon Valley make $100,000 per year while people that dropped out of school made $300 million.
To illustrate this point, I know one of the best software architects in the Bay Area. They are world renowned and respected throughout the finest organizations in the Bay Area. This individual makes over $125,000 per year. In contrast, I know a young software developer who dropped out of The University of California Berkeley and developed his own software and turned around and sold it to some investors for $25 million. He did not want to be the best software developer. Instead, he wanted to build a company and sell it for millions. This was his plan from the start.
He had a two page business plan that identified the goal, the strategy, and how he would do it on his own from his shared apartment in Oakland, California. It worked and now he’s living in Boca Raton, FL in a waterfront mansion that cost him $2.5 million. In the music industry, people always say that they want to sell 1 million records and go platinum. The only reason that they must sell 1 million records is because they only receive roughly $.10 per dollar in sales of the record. If they sell $1 Million worth of records, they will only see $100,000 in income.
Conversely, if they own their publishing and get a decent distribution deal, they will earn $.80 per dollar of album sales. In the above scenario, they would take home $800,000 instead of $100,000 in total income. Knowing numbers intimately will determine how high you go. Make sure you have a lawyer or an accountant review all numbers before you ink a deal with anybody.
Be careful out there in the market especially when you get successful. Make sure you handle your business and focus on the numbers first and foremost. The numbers do not lie. Make sure that your business documents or articles of incorporation outline you as the majority shareholder of your business. When it starts to get successful, present your potential investors and partners with your articles showing them that you have ownership of your work or your writing.
