Many of us make assumptions about others financial status or income with relatively little information to go on. Only the accountant knows for sure. As far as evaluating income earning potential, I think back to my many experiences with many businesses and professionals in varying sectors of the economy. It's hard to just to buy a job or to be treated as a commodity. But sometimes it just takes another look at what you can do and add flavour to the pot. Here is how money is made.
For those that are specialized and have a real niche and customers with deep pockets, income can be lucrative and possibly sustained if the contracts (e.g. maintenance, annual filings, continued services) continue year after year. These activities are based on relationships or insider contacts but are risky because loyalties are not what they used to be.
The real money and value creation for the future sale of any business is in either high margin, repetitive, high customer count activities or special situations we must create.
Examples:
Where the activity involves use of standard practices, templates and processes that can minimize or automate the customization of services or products provided for a large group of customers requiring such a product or service.
Large customer base where the product is created inexpensively and marketed (the most expensive cost) to specifically targeted groups. The renewable subscription-based model or the providing of attractive new products or optional add-ons to the same customer base. (software, publications, user fees, licencing). The proof - most government fees are required annual renewals for doing nothing except renewing.
Other activities that seem to be quite lucrative once they achieve momentum and specialized knowledge are those that involve:
Singular large contracts (going for big one).
Planned obsolescence (toner cartridges anyone?).
Exclusive arrangements - monopolies (supply control).
Necessities versus luxuries (got to have those pills).
Helping people in trouble.
Large assets that provide a steady stream of income that is already paid for (buying that apartment building with a 25-year mortgage and finally paying if off).
Low-cost substitutes that achieve a % of the bigger brand name business.
Fees tied to asset value, not effort or cost (financial advisers, brokers).
Contractual penalties (waiting for customers to break covenants or default on contract terms).
Excellent sales skills (selling someone else’s product or service is no risk, high reward).
Buy low - sell high (scavengers and predators unite or having lots of cash to make a great deal).
Taking advantage of other’s positions. Making the deal easier.
Affiliations with groups (multi level marketing still works for many with nominal risk).
Turnkey services (they love how you do everything).
Talent that is recognized and useful (seminars, entertainment excellence).
Absolute differentiation of product (just give me Grand Marnier).
Sue somebody and make them settle.
Good contacts and alliances– insider advantage.
Good fortune.
Ken Lagasse