Turning your expertise in to an asset
by Peter Anderson
BrokeSucks.com Editor
Making money from your knowledge and turning it in to a business that you can walk away from do not always go hand in hand.
Traditionally a person using their own expertise to generate a self employed income puts that person in a state where that business is dependent on them. In this situation you trade your hours for money.
An example would be being a consultant. Your name, your face, and your time are the business. Without these three things there is little left. If you want a business which is a true asset that can be sold for many multiples times earnings this is not good.
In the graphic about I have given a brief glance at what is before us. On the left side is Knowledge. Your income comes through the answers you give. People pay you money because they recognize you as an authority in your field.
On the right side is assets. An asset is something that is transferable and has value. On the knowledge side you are the asset. You are not planning on selling yourself, are you?
Number one, the asset is either passive or semi-passive. You walk away from it, its not going to stop making money.
When you sell it you should be able to get a lot more than a months income but instead several years income or more. When you are putting work in to an asset your income is not just what you see today but also what may materialize in the future when you sell.
Third is growth. Growth is important because if you have it that multiple times earnings number gets bigger.
What you can do to turn knowledge in to an asset
You need something you can sell that is scalable. That means the additional work when you sell 10 of something verse selling 1000 is minimal to nothing.
To start with you could write a book. The purpose of this is to widen your audience. In some fields this is not necessary, however when you are dealing with a large market it is.
Lets say you are a web designer. You have a core group of clients either locally or in a particular vertical market. If you are a web designer in Miami no one in Tampa may no who you are much less in New York City. By writing a book you are making the leap from a small stage to a far bigger one.
Books are a very low profit margin item. In fact, most business authors write them to gain recognition rather than money. However, once someone has bought your book they are now a potential customer for further, bigger ticket, sales. This means your book has to have some kind of hook to reel these leads in, preferably a web site.
Where you can go from there is wide open. Below I list common products and services experts sell an audience tiered by price. In fact, I have done some of these myself. Typically, but not always, a customer will purchase a cheaper product before the more expensive one
- The book. Price $15-$30
- Single CD Price $30-$40
- CD set $100-$300
- Subscription newsletter $200-$500
- Information product consisting of any or multiples of the following: CDs, DVDs, Books, $200-$1000
- In-person seminar $1000-$5000
But wait you say, these aren't assets, you have to make them! Slow down cowboy. Yes you are correct, but this is only your first step. Let me tell you why.
People buy from people. Having a face and a name behind a product is a massive advantage. You are the guy who shakes peoples hands and speaks to them by name, not a nameless company with a silly logo.
Just wait.. here is where the asset part comes in. You are taking the expert to asset transformation one step at a time -- not as a giant leap. I have seen a lot of people who want to be big so they do everything to act and look like the big guy immediately. It usually doesn't look so pretty a year later.
You have started out as a person who trades their time for dollars. You are now in a transitioning phase where you are trading you are still trading your time for dollars, but not nearly as much. You are also bringing new people on board and slowly teaching them elements of what you know. These guys are "helpers" at your seminars and may also play a role in your products.
At this same time you are building an large, targeted audience of buyers. By the way, if your products are rubbish this won't work, and here is why. Your audience is the asset. Without that loyal audience you have just trained a bunch of apprentices who will walk away and copy what you are doing. I've seen it happen dozens of times -- don't make that mistake!
As the transition occurs you slowly want to build up a nameless brand. First, the company name is in the background. Then its next to you, Then it is you. If you truly can deliver results people will look up to you (by the way, that book part really helps.) In the transition phase you move from a co-brand to an endorser.
The fact is products with real people's names and faces have been been bought by other companies. In this case, you don't want your name and face all over everything. It will still be part of that business and may never truly disappear.
A pioneer internet marketer named Corey Rudhl sold information products through the web much like I have described above. Although Corey was killed in a racing accident in 2005 his businesses live on. If Corey was simply a consultant his death would have meant the end of that business stream.
Even if you choose to stay on the path you are now I recommend developing some projects that can bring you a residual income for years to come. While its great to imagine a big pay day from a seven or eight figure check we may also be faced with less than ideal circumstances forcing us to dramatically reduce our work hours or stop altogether.
If you have any questions about this article or anything else I have written feel free to contact BrokeSucks.com addressing the e-mail to Peter.
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