How Money is made in Business

Not all effort or work has the same value, as we will see in this post.

The first investment, whether it be in time, money or labor is virtually useless unless it is maintained until critical momentum is achieved.

And even then, it can be ruined pretty easily.

This is a normal curve. It serves many purposes, most of them statistical.

It’s amazing to realize that so many things in life fit almost perfectly under a normal curve. For example, the average height of a population, average intelligence and average ability to complete any task will almost always fit a pattern very close the normal curve.

At the lowest end, there will be very few examples; in the middle will be the great bulk of the population and at the end another very small select group.

The curve can also be used in a completely different manner. For example, it can be used to view how money is made in just about any business.

Forget about the second half of the curve and just look at the first part. Let’s also double the percentage we attribute to each section since the second half of the curve doesn’t exist anymore. That leaves us with the following figures:

First section: 4.30%

Second section: 27.2%

Third section: 68.2%

Also notice how each section has the same length on the graphic.Which brings me to whatever it is I’m writing this for in the first place.The first section, equal in investment of time, money and effort to the following 2 sections brings only 4.30% of the value.In real world terms, this means no profits or even losses.Let’s switch back to the internet marketing world of ebooks and scripts and purported money making systems.

There have been some bad ones and lately, eyebrow raising awful products. But most of them aren’t. Most of them have some foundation to them and could in fact be used as the basis for a real business.

Because most of the buyers don’t understand how business works, they never get anything out of it other than a little excitement and some cheap thrills.

For this example, buying an ebook and reading it corresponds to the first section of the graphic. It is responsible for 4.30% of the overall success of the enterprise. I say ebook here but it could be any idea one hears about and researches to the point where they have enough to take action.

Sadly, this is where most people drop off. They’ve obviously seen no results and already, they yearn to move on to the next “opportunity”, thinking it will be easier, more profitable or in some mystical way, better than the one they are looking at now.

Then comes the second phase. Of equal length to the first and last, it is responsible for 27.2% of results.

In this stage of a business, effort, money and time are still being fed into the machine. Results are starting to show but that may be the equivalent of breaking even or making minute profits, hardly getting anything back at all and certainly not justifying everything that has gone into the business so far.

This phase kills off another solid percentage of new entrepreneurs, even those with solid determination. This is particularly true of those that don’t know the scientific, mathematical precision with which businesses develop.

Which brings us to the third phase. The numbers don’t lie; this is where almost everything happens. 68.2% of the value is created here.

What’s even better is that at some point in this phase, things take a life of their own and continue spiraling upwards even with decreased effort and investment.

I’m not advocating this as the time to become lazy, but it’s ridiculous to see how things have a tendency to all come together at once. I’ve experienced this again and again in business.

You work and work and nothing happens. You keep plugging away and see some very small signs of encouragement which sometimes almost feel like slaps to the face. You’ve put in all that effort and the results are pitiful, but they are there, where there was nothing before.

And then you wake up one morning to see you have 5 times more orders than you usually get in an entire day. You have a request for an interview and have been blogged on a big site. Plus you have a JV offer.

And it’s no fluke, it keeps going that way and you try to find where this sudden craziness is coming from, but it’s not one single thing.

It’s all those prior investments that have suddenly gelled together in one cohesive entity, forming something greater than the sum of all the parts.

Critical velocity.

And it happens like clockwork, only most people never find that out for themselves…