The first principle of getting rich is to not be directly involved

Most people who set out to make serious money make a fundamental mistake: they include their own hours in the model. That is, revenue is proportional to the work they personally do.

There are people who get rich on their own time: lawyers and media stars spring to mind. But the first group have to be really smart, and work really hard for years; and the second group have to be born with some talent and then get really lucky or sleep with the right people. Either way it is hard to arrange, so keep your hours out of it.

Whatever model you come up with, income needs to be independant of how many hours you have in a day. (Otherwise you will reach a limit. You will also be very tired and unhappy as you approach that limit.)

Whether you have a product that you have created or a service you deliver, you need to run the business so your personal hours do not increase linearly as the business grows. In fact, some of you will much prefer to reduce your own hours as the busienss grows (see below). There are three ways to do this:

Buy other people's time.

You can be a boss of a company with employees. More work = more employees. Personally I plan to never have employees. The complexities of payroll, tax, recruitment, development, safety, discipline, law etc spoil the fun. But if you fancy yourself as the baron, this is an option for a scalable model. (We'll treat outsourcing as a separate variant of buying other people's time). Think: Amazon's warehouse or Google's server farm.

Sell other people's time.

Sell services or products and subcontract/outsource the work to others. They are a service provider to you, hopefully with a nice simple contractual arrangement that eliminates most of the headaches of being an employer. Think: web hosting services; drop shippers; virtual assistants (more of them later)

Sell on commission

Let somebody else have all the hassles and take a cut. You'll still need one of the two options above to set up the infrastructure through which you sell. Think: Adsense, Amazon Associates etc



It's cool to use your own time to get started but always have a plan for getting out and an eye on when you need to do it. You need to extricate yourself as soon as the business can manage without you - make sure you built it from the start so that it can do without you.

Nothing that depends on knowledge in your head, or on your pretty face showing up is scalable. Package the IP, record yourself on DVD, or don't do it.

You need to get out soon enough that the rest of your portfolio does not suffer excessively.

And you definitely need to get out before the business booms like you dream it will. The worst thing would be for the business to take off, only to fall flat because you couldn't expand to fulfill it. The not-coupled-to-my-hours infrastructure needs to be in and tested before that day comes.

We'll talk about "independing" a business another day, but a good start is to read "The 4-Hour work Week"