Does It Take Money to Make Money?
“I’m just so tired of working for someone else and making them rich,” lamented my friend Mitch.
“You should start a small business on the side,” I replied. “Then, once it’s big enough, you can quit your job.”
Mitch shook his head glumly. “I don’t have enough money to start my own business, so I’m stuck.”
I get so frustrated when I hear people say that. Now don’t get me wrong. I admit that having substantial cash to begin a new business can be very helpful. But having a lot of money on the line also means you’re taking a bigger risk.
The truth is, money just doesn’t matter all that much when it comes to starting a business. I know from firsthand experience that it’s possible to start a profitable business with virtually nothing.
When I began my entrepreneurial career, I was a college student living at home with my mom. And while there was enough money to pay the bills, there wasn’t much more than that. I had a part-time job, but I was desperate to find a way to make more money. And though I had zero start-up capital, I had no trouble starting a pool service business. Before I knew it, I was earning three times as much as I had been making at my part-time job.
That business made over $100,000 its first year. Since then, I’ve started more than 20 profitable enterprises with under $100 in initial capital. So having minimal capital should never stop you from starting a new business. And it shouldn’t stop you from marketing your business either.
Some people assume that they need to throw around big piles of cash in order to “properly” market a business. But a little creativity can go a lot further than money. Here, for example, is one zero-cost strategy I used…
When I was looking for ways to promote my ballroom dance instruction business, I discovered that most cable companies have a public access channel that’s available to almost anyone in their viewing area. And there’s more to public access TV than nutty shows like “Wayne’s World.” If you create a format for a show that’s informative, it can become quite popular and bring in lots of business.
Keep in mind that cable access is supposed to benefit the community, so the cable companies can be finicky about too much blatant self-promotion. But they do allow you to say who you are or what company you’re with, so people can find you.
One exciting thing about these shows is that the cable company bears the expense of producing them. For my show, I brought on guests and gave them a dance lesson on the air. I would arrange to have my guests meet me at the cable company’s studio, where they had a director, three camera operators, and other stage help to produce the show. And I didn’t have to pay anything for it.
You’d be amazed by how many people watch cable access. I was getting stopped on the street by people who were excited to meet that “dancing guy” from television. The show increased my business by about 25 percent. (I know that because I asked every new client how they heard about me.) And remember, I got this bump without spending a penny.
Not only did I get a steady stream of new clients, but having a television program gave me more credibility as an expert dance instructor. I began including the fact that I hosted a local ballroom dance TV show in my marketing materials, and I mentioned it whenever a prospective client asked about my credentials.
Almost anyone with a business that has a local customer base can take advantage of this strategy. If you’re an attorney, you could have a program where you answer call-in legal questions. If you sell real estate, you could interview guest experts on your local market. If you’re a copywriter or public relations specialist, you could provide information to help small businesses get more out of their advertising budgets. If you’re a marriage counselor, you could work with couples on the air. If you run a restaurant, you could give cooking lessons. The possibilities are endless.
If you’re interested in having your own local cable access show, here are the basic steps:
1. Contact the cable companies in your area to find out about their local access programming.
You’ll want to know about any rules and regulations they have. If there are any costs that you’ll have to cover. When they shoot and how you get a slot on their schedule.
2. Come up with a format that will be entertaining but also have the potential to bring you business.
Interacting with guests on your show is a good way to demonstrate your expertise. And you won’t have any trouble finding local experts who will be excited to appear on television. Getting the exposure will often be enough of a payment for them. Or maybe you can do what I did and give your guests free instruction in your area of expertise in return for their participation.
3. Plan the show.
A half-hour can be a long time if you don’t plan it out well.
When professionals plan a television program, they plot it out visually on a “storyboard.” You can use a similar, though less formal, tool.
Let’s say you will be producing a 30-minute show. Take a piece of paper and draw a horizontal line across it. Mark off five-minute increments, and then write in what the audience will be seeing during each of those increments. The first five minutes will probably be your introduction. The next 10, you might spend interviewing guest number one. The next 10, you might spend with guest number two. And then you’ll give a five-minute closing.
4. Do it!
Most of the cable companies that produce public access programs are used to working with people who aren’t experienced, and they can help you a lot.
Help them by making sure that you and your guests arrive on set early. Have an outline of the show for the director, so he understands what will be shot. Bring any props or other items you might need on the air. And if you’re going to be interviewing your guests, be prepared with a list of questions.
[Ed. Note: Paul Lawrence is the creator of the Quick and Easy Microbusiness System, ETR’s program for starting a business for under $100. Producing your own cable access show is just one method he teaches in his Cheapskate Marketing Program. Check out the details here.]
Cut to the Chase… Dammit!
By Rich Schefren
Do you ever end your day wondering, “Did I really get the important stuff done today?”
Most entrepreneurs, both online and off, often do. But today, I’ve got a quick strategy for you that’ll eradicate any lingering doubts you might possess about your productivity.
In my work coaching many of today’s top Internet marketers, these questions surface frequently:
- How can I stop wasting time?
- How can I get other people to stop wasting my time?
- How can I get more done in less time?
At the end of the day, how can I feel good about what I accomplished?
Do any of these questions sound familiar? If so, you know that increasing productivity means more than just working faster. In fact, it’s about discipline and purpose. Two traits entrepreneurs often struggle with.
Let’s talk about discipline first.
If you find yourself struggling to accomplish what’s on your to-do list, or sticking to your schedule, these tactics often do the trick:
- Take Advantage of a Powerful Part of Your Brain.
Identify your most important outcomes for the next day before you go to bed. You don’t necessarily need to know exactly how you will spend the day when you hit the sack. But, while you’re sleeping, being sure of the results you want gives your subconscious mind a chance to figure out the best ways to get it all done. The next morning, when you plan your schedule for the day, you’ll be surprised by what you come up with. - Include Anchor Activities in Your Schedule.
When planning your schedule for the day, make sure you include anchor activities to keep yourself on track. An anchor activity is a task that will force you to be disciplined.
For example, left to my own devices when I am talking to a friend/peer, the conversation might go on for hours. But if I have an important call to make 30 minutes later, I know I won’t spend longer than 30 minutes on the first call. So the second call is an anchor activity.
Anchor activities ensure that though you might lack discipline right now, it won’t interfere with what you must get done. - Do the Uncomfortable First.
Attack your most important, most intense, and highest leverage activities first. Doing so generates momentum and confidence you can ride the rest of the day. - Look at Yourself and Learn.
At the end of the day, evaluate your performance. If you did a good job, what, specifically, helped you get it done? If you got off track, what happened? And how can you prevent that from happening in the future? This step is frequently neglected… and that’s a shame. Because it’s the fastest path to ever-increasing productivity.
Now, let’s talk about being purposeful…
Far too many entrepreneurs don’t keep their eye on the prize. They go into meetings, make phone calls, talk to staff and contractors… without being clear about the specific outcome they want from each of these activities.
The solution? It’s simple. Get into the habit of asking yourself “What’s my outcome?” every time you transition into a new activity. To make asking this question a habit, put visual reminders where you can’t miss seeing them… until it becomes your default way of operating.
Write it in your daily schedule, on a Post-it on your desk, on an index card that you carry in your briefcase, and on a label on the bottom of your computer monitor. Having so many reminders makes it easy to be consistent when you’re trying to develop a new way of thinking. And anything you do consistently develops into a habit quickly.
So there you have it. You now have a four-part strategy to become more disciplined, more purposeful, and, ultimately, much more productive.
[Ed. Note: Rich Schefren’s businesses have done over $35 million in sales. A renowned business strategist, Rich coaches many of today’s top Internet gurus and service providers on streamlining their businesses while exploding their profits. Learn more at www.StrategicProfits.com.
Becoming more disciplined and more purposeful are two ways to make sure you accomplish your most important goals. You can learn dozens more strategies for achieving your dreams with ETR’s Total Success
Achievement program. Get the details here.]
How to Survive - Even Profit From - the Declining Economy
By Michael Masterson
I was in Baltimore recently for meetings with some of my biggest clients. My job was to review their progress in 2007 and give them ideas about how to grow their already profitable businesses in 2008.
During that time, I taped an interview with J. Christoph Amberger for Taipan Financial News, his multi-media e-letter. In the interview, Christoph and I discussed the coming economic recession, as well as the special opportunities a declining economy provides for entrepreneurs. I thought you’d be interested in reading this rough transcript of our conversation…
JCA: The American economy may or may not enter a recession in 2008. But even if the economy doesn’t fulfill the technical criteria of a recession (two consecutive quarters of negative growth), anyone doing business or working for a business these days is experiencing or expecting a severe downturn.
Michael, we both have been through a couple of recessions and bear markets. What are the secrets to surviving a recession - and maybe even prospering in an adverse environment as an entrepreneur?
Me: That partly depends on the kind of recession. This one is different from recent downturns and stock market declines in three important ways.
- First, there is the fact of inflation. Oil has already hit record highs this year. Gold is on its way to $1,000 an ounce. And a gallon of gas is costing $4 in some states. Agricultural prices are going up too. One figure I saw had inflation pegged at 6.8 percent on an annual basis over the last three months. But it is actually worse than that. Because that figure was based on government-supplied data. Our government has made an art of obfuscation - of hiding certain economic realities. Inflation is already eating away at our buying power. It is bad and it is getting worse.
- Next, there is the falling dollar. The dollar is weaker now than it has ever been in history. That makes foreign goods more expensive. Which increases inflation. On the bright side, it makes U.S. manufactured goods more attractive as exports. But in most areas, we still can’t compete, price-wise, with China, India, and the Third World.
- The third way this downturn is different is the level of debt. For the first time in modern history, American consumers owe more than they have. Credit card debt has skyrocketed. Mortgage debt, which increased enormously during the past 10 years as a result of irresponsible loans, is now at a crisis point because real estate values have fallen, making tens of thousands of loans untenable. It makes more sense to walk away from these loans than to renegotiate them. And behind all this is the federal debt - which has skyrocketed because of runaway spending by an earmark-addicted Congress and Bush’s $3 trillion war.
These are our economic weaknesses - and they are big weaknesses. But there are strengths too. Unemployment numbers are relatively low. Earnings are relatively good. And new business start-ups - which to me is always the most important indicator - are still strong.
Unemployment will certainly increase in some sectors. It is already a fact in the real estate market and will become a factor in banking and the financial industries that support real estate. But other sectors of the economy are okay for the moment. They may absorb some of these people. And new businesses will continue to create jobs, as they always have, because of the amazing growth of the Internet.
What all that amounts to, in my book, is a period stagflation that may be followed by a recession but may simply continue to exist until our debts have been paid by the working man, as they always are.
JCA: Not everyone is familiar with the term “stagflation.”
Me: “Stagflation” was coined ages ago when I was still in college. It describes an economic period of both inflation and flat growth. The best description I’ve heard was provided by Rich Karlgaard, publisher of Forbes. He said:
“Stagflation is present when gas and grocery prices are rising faster than your paycheck is - and in an economy that is strong enough to employ you but not strong enough that you feel emboldened to ask for a raise.”
There are three ways to defeat stagflation: (1) Tighten the money supply. (2) Restrict credit. (3) Lower taxes.
When too much money/too-easy credit is driving up prices - that’s classic monetary inflation. This should tell the Fed to restrict the printing of money and tighten credit. But so far they’ve been doing the opposite because they are afraid that if they tighten credit, the economy, which is already weak, will collapse.
Lowering taxes, particularly taxes on individual and corporate income, capital gains, and dividends would grow the economy by encouraging investment and stimulating production. This is classic supply-side economics. But it’s very unpopular today. The common view is that tax cuts reduce the effectiveness of government and increase government debt. But the evidence contradicts this. Government receipts usually go up after tax cuts because the economy grows and there is more income and profits to tax. When you reduce the cost of doing something, you tend to get more of that thing. Reduce the tax costs of production in America and you will get more production. More production means more goods and services competing for your dollars. “That’s how prices go down, not up,” says Rich Karlgaard.
It’s simple. Supply and demand. If you want prices to go down, increase the supply. Incentivize the suppliers.
But that’s probably not going to happen because it’s not politically expedient for politicians to do it. Chances are our problems will be cured by a period of negative or flat growth along with inflation. This is the solution preferred by politicians because it is a way for average consumers to pay for government debt and bad loans without understanding they are paying for it. It’s another form of taxation.
Assuming we are entering a period of stagflation, certain investing principles apply:
- Cash is king.
- Buy value.
- Buy into the recovery.
- Invest in what you know.
- Limit expenses.
- Be ready to seize opportunity when it arises. Because it will arise.
JCA: Unemployment may kick-start some would-be entrepreneurs’ plans to start their own businesses. Are there any particular sectors that you think will do well, especially for new businesses?
Me: As I said, I don’t think unemployment is likely to be a huge problem - at least in the short run. But it will be a factor. More important will be the squeeze people will feel from stagflation. Prices are going up but not their salaries. This will trigger some start-ups. And there will also be lots of job displacements as some sectors of the economy - real estate-related - go down for a while and others - natural resources and even agriculture - go up. At some point in time - probably in the next year or two - real estate prices will bottom out. Then the vulture funds will come in and begin to buy up excess inventory. When that inventory is absorbed, the construction and building sectors will revive.
In the meantime, I favor:
- Certain investments - like gold, oil and gas, natural resources
- Certain services - such as for legal settlements, divorce settlements, business litigation settlements, home remodeling and repair
- Information and advice on investing, retirement, estate planning, entrepreneurship, tax avoidance
- Natural supplements and pharmaceuticals
- Rejuvenation products and services
- Retirement homes and other retirement businesses
- Soft exercises and sports - such as yoga, Pilates, tai chi
- Spiritual wealth information and products
- Self-improvement information and products
- Real estate (longer term)
JCA: Judging by the promises of our presidential candidates, U.S. businesses will almost certainly be hit with higher taxes, compulsory health care contributions, higher labor costs. Is it still worthwhile setting up shop in America? Or should entrepreneurs relocate to a more business-friendly climate… like Eastern Europe… or China… or the Caymans?
Me: There is a big misconception here. One I had until I began doing business overseas. Location of the business matters only in certain industries that depend on cheap, unskilled labor. If you are producing clothing or furniture, it makes sense to have a factory in the Third World. But if you are producing sophisticated products for which labor is a small part of the cost - or selling information or advice - you can do it from the U.S.
Information and advice is especially good because the brute labor cost is almost non-existent. Thanks to the Internet, the cost of storage and shipping is minimal, so you can easily produce your product here and sell it anywhere… anywhere in the world.
In the coming recession, I would want to be in a business that has the following characteristics: (1) positive cash flow, (2) no debt, (3) no accounts receivable, and (4) no merchandise to store. That amounts to a service business or information publishing. Of the two, information publishing is better. In fact, it is the best business to be in for the foreseeable future.
There are some advantages in setting up overseas, but there are also many disadvantages. I would not pick up shop and open up overseas unless I had a proven formula that was working in the U.S.
JCA: The title of your latest best-selling book is Ready, Fire, Aim. What do you think, Michael? Will the coming recession require entrepreneurs and business owners to aim BEFORE they fire?
Me: Entrepreneurs must seize the day. You have to be READY to do that.
When real estate prices bottom out, there will be a rush to buy from the vulture funds. Private investors must be ready with protocols, plans, and money.
The same holds true for any business you plan to launch. Don’t waste valuable time and money trying to perfect it. Figure out a marketing proposition and test it as soon as you can. If it works, then refine it. If it doesn’t work, move on to the next thing. Ready, Fire, Aim!
JCA: What are the biggest mistakes an entrepreneur or business owner can make right now?
Me: There are three:
- Starting a new business without knowing anything about it. I call this the Principle of One Step Removed.
- Wasting time and money on activities that are not directly related to sales.
- Not having a Disaster Recovery/Opportunity Plan.
JCA: That leads to my final question for you: Given today’s economic climate, what does a new business have to have to give it the best chance of success?
Me: It’s no different now than it’s ever been.
- First is a management team with character, experience, and ingenuity.
- Second is a plan that clearly identifies the way they will efficiently bring in customers from day one.
- Third is their use of resources. Will 80 percent of them be devoted to making a profitable sale?
- Fourth is capital. Do they have enough of it?
- Fifth is product. Does their lead product have a raison d’etre in the marketplace?
JCA: Thanks for joining us today, Michael.
[Ed. Note: Michael Masterson’s latest book, Ready, Fire, Aim: Zero to $100 Million in No Time Flat, has hit the New York Times, the Wall Street Journal, and now the BusinessWeek lists of business best-sellers. Inside, Michael shows how veteran and rookie entrepreneurs alike can take their businesses to the next level. You’ll learn how to identify and solve the problems that crop up during each stage of a company’s growth… and how to take advantage of profit opportunities along the way. Order your copy of Ready, Fire, Aim now.
This article appears courtesy of Early To Rise, the Internet’s most popular health, wealth, and success e-zine. For a complimentary subscription, visit http://www.earlytorise.com.]
The Secret to Entrepreneurial Success
by Clayton Makepeace (03/7/2008)
To achieve entrepreneurial success, you need five things:
- A product that delivers a benefit people already want at a price they’re willing to pay…
- A strategy that puts your sales copy in front of your best prospects…
- Great headlines and lead copy that compel them to read your sales message…
- Sales copy that convincingly presents the reasons why the prospect should buy and overcomes any objections he might have, and…
- A quick, easy way for him to order.
Now you can do all that with a product that has already been proven to appeal to prospects, and where you’ll go head to head with well-established competitors. Or you can attempt to be a pioneer with something completely new.
If you decide to become a pioneer, you can do items 2 through 5 brilliantly and still fail miserably if your product misses the mark - if it doesn’t deliver a benefit your prospect intensely desires at a price he’s willing to pay. And when you’re a pioneer, your chances of missing the mark are substantial.
Pioneers are famous for winding up with arrows in their keesters. Given the choice, I’d rather compete in an established area.
[Ed. Note: Clayton Makepeace has spent the last 35 years creating direct-mail, Internet, and print promotions that have sold well over $1 billion worth of products. He publishes the highly acclaimed e-zine The Total Package to help business owners and copywriters accelerate their sales and profits.]
This article appears courtesy of Early To Rise, the Internet’s most popular health, wealth, and success e-zine. For a complimentary subscription, visit http://www.earlytorise.com.]
A Quick Start Guide for the Internet Entrepreneur
I recently got an e-mail from a man I’ll call Jim, a longtime ETR reader. His question is probably the most common question I get. If you are interested in breaking into the Internet, pay attention. What I have to say to Jim might give you the information you need to get started.
Jim writes:
“I have been struggling with the idea of starting my own Internet-based business. The question is, how and with what product or service?
“I have been a loyal fan of ETR for many years now, and you guys throw so many sound ideas and businesses at me it gets a little confusing. I would like to start small with some proven methods and techniques and build from there. I do not have countless thousands of dollars to experiment with, nor do I have the luxury of being able to sit in front of my computer day in and day out. I need your help to get me started in the right direction with a system that will hopefully start generating some return fairly quickly.
“I believe in and trust your advice more so than anyone out there when it comes to building an Internet-based business - or any other type of business, for that matter. Please help me make this the year I finally took the plunge and started achieving success!”
Everybody knows what a great opportunity the Internet offers. It is the only medium where someone without a lot of money can start a multimillion-dollar company. There are lots of good programs available that teach the ins and outs of Internet marketing. But choosing the right product or service to market… there’s the rub!
I’m going to give Jim some general advice. And then MaryEllen Tribby (ETR’s publisher and CEO) and Patrick Coffey (ETR’s Director of Internet Marketing) will jump in with some specific suggestions.
Which product to choose is a big question. Not the kind that can be answered simply and quickly. It depends so much on you - who you are, who you want to be, what you know, what you don’t know, etc.
That said, a few general suggestions apply.
First, and most important, it is always best to start a business in or around an industry/area that you understand. So many of the most expensive mistakes first-time entrepreneurs make are “outsider” mistakes - errors that someone with experience in the field would not have made.
Lots of first-time health publishers, for example, spend too much time explaining the disease or health problem they hope to cure. They do so both in the publications they create and the promotions they use to sell those publications. What these novices don’t understand is that the most active health buyers don’t need to know more about their problems. They can find out all they want to know on the Internet - for free. What they need are solutions.
So the first thing you must do is make a list of all the things you know about. Start with the business you are in (or employed by). But don’t stop there. Include all your hobbies and interests too. You don’t have to have any professional experience to know enough about a subject to start a business based on it.
I have a friend who started a successful business providing advice about astrology. She’d never taken a course in it or received certification. But she’d read about it for 30 years, and her knowledge was deep and wide. Because of that, she began her enterprise with a good idea of what kind of astrology she would practice and what kind of products and pricing would work.
Another friend started a successful Internet business selling martial arts information. He was a world-class black belt who had been competing for 20 years. He knew the industry inside and out. So he had some good ideas about new and exciting instructional videos he could produce that really caught fire.
This brings us to my second-most-important suggestion: If you are not an expert at direct marketing, you should become one before you spend a nickel on your new business.
I cannot overstate the importance of understanding the techniques of direct-response marketing. Direct marketing is the primary method for generating profits on the Internet. Other forms of advertising - from public relations to event marketing to social media and branding - are usually not nearly as effective.
Luckily, there are plenty of good information products and educational programs available that teach direct marketing for the Internet. On top of the list, I’d put ETR’s own Internet Money Club, The Magic Button, and Instant Internet Income. But I’d also recommend Bob Bly’s Internet Marketing Retirement Plan.
My third and final suggestion is this: In addition to focusing on an industry you are already familiar with and becoming an expert at direct marketing, you must learn the fundamentals of entrepreneurship. Starting a business can be a daunting task for the beginner. Most of those who try fail. And with good reason: They make some very basic mistakes.
The biggest mistake first-time entrepreneurs make is spending too much of their time and money on all sorts of secondary business concerns (getting business cards, setting up a website, finding a business location). But when you’re starting any new business, your priority has to be on making sales. In fact, at this stage of the game, at least 80 percent of your time should be devoted to selling.
To bring yourself up to speed, I recommend that you read Ready, Fire, Aim: Zero to $100 Million in No Time Flat. The book is based on my own experiences with building small businesses. It’s all about how to get your business off the ground and continue to grow it.
Okay. Those are my general suggestions. Now, here’s some specific advice from MaryEllen and Patrick:
To develop your marketing materials, hire a copywriter who has in-depth and up-to-date knowledge of your niche. They should be on the cutting-edge of their specialty and always learning, whether it’s the financial markets or alternative health. “I never hire a copywriter who says they can write about anything,” says MaryEllen.
Do some quick research, then TEST your idea. Says Patrick, “One of the biggest problems I see is that people will take too much time analyzing what market to get into. I’ll talk to people who have been studying one of our programs for months and they’ll say, ‘I’m still in the market research stage.’ In my opinion, market research for a new online business should take no more than a week.”
A week is plenty of time to decide what to sell. In fact, it’s a generous amount of time. At ETR’s annual 5 Days In July Internet Marketing Conference, attendees have to make this decision in a day.
To figure out what market to enter, you need to look for two things:
1. Are people looking for this information?
2. Are people buying this information?
“And,” says Patrick, “you can get the answers to these questions very quickly with a few key strokes.
“One of the best ways to find out who is looking for what is with a free tool like WordTracker. And to determine if people are buying, simply enter a few search phrases for your product in Google. Then check the Web pages of the advertisers that come up. The fact that they’re paying for advertising and selling stuff is a good indicator that the market they’re selling to is buying.
“Sign up for e-mail lists of potential competitors, study their marketing materials, and even purchase some of their products. After that, you immediately begin working on your own offer so you can start testing. That’s what students of our Internet marketing programs who become most successful do.”
Will all the ideas you’ll come up with work? No. But the only way you’ll find out is by trying to sell to the market. If an idea does not work, simply try to re-work the offer or explore a new idea.
Remember that starting an Internet business - just like beginning any worthwhile venture - will take work. In his e-mail, Jim talked about wanting to generate some return “fairly quickly,” despite the fact that he does not “have the luxury of being able to sit in front of [his] computer day in and day out.” You need to have realistic expectations when you begin a new business. And one thing you must be prepared for is that it takes time and energy.
One last piece of advice from Charlie Byrne, ETR’s Editorial and Creative Director: Get started. Now. By no means is this all you need to know about starting an Internet business. But the best way to get it going is to begin. Ready, Fire, Aim. You can take time to adjust your product or marketing later. What’s most important is taking that initial leap.
This article appears courtesy of Early To Rise, the Internet’s most popular health, wealth, and success e-zine. For a complimentary subscription, visit http://www.earlytorise.com.
