Copyright 2016 Zane Rozzi. All rights reserved.
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Zane Rozzi is a successful entrepreneur. He is also well known in the field of executive development. Zane Rozzi has a large and loyal following as a pickup artist who teaches others the keys to success in attracting the opposite sex. He designed and produced the popular and highly praised Communication Fundamentals course.
I’m a self-made entrepreneur. Many people who are interested in creating their own path to success have asked me how I was able to find success in business. After giving the same advice over and over, I realized there is a real need for this information. I thought it would be great to create a book which tells people what they need to know to get started and realize their dream of becoming an entrepreneur.
Despite where I am now, in the beginning, there was nothing glamourous about starting a business. I started with nothing and put in lots of hard work to get to where I am now. I’m not embarrassed to say there were ups and downs and the glamorous lifestyle didn’t come instantly or easily. It takes years to build an empire. But, from where I’m sitting now, I can honestly tell you everything I went through was well worth it.
In this book, I’m going to share many of the tips and tricks I used to start from nothing to get to the level I’m at today. There is no other book like this. I wish this information was out there when I first started out. I hope you can use this information to find success too.
I wrote this book as a pet project. It’s a bit of a departure from my usual work. Because of the success of my other bestselling books on psychology, and my popular and highly praised Communication Fundamentals course, I’ve decided to give away this pet project for free. I feel my status as a successful author has already been established; so I have no qualms with giving away this work for free. Please feel free to share this book with anyone you believe might benefit from the content. While the eBook will be free, the paperback must be priced at the breakeven point to cover printing costs.
Most entrepreneurs are far more ambitious than the average person. Before starting their own business, while working for someone else, they were operating at less than 50% of their capacity. Their job didn’t challenge them. They found the first few weeks of working for someone else interesting—while they were learning. But that interest quickly faded once they stopped learning. The job became boring and repetitive. There was no challenge day-to-day. There was nothing about the job that motivated those ambitious people to excel and no extra rewards for doing so.
Becoming an entrepreneur is the perfect fit for those ambitious people. Running their own business allows them to operate at 100% of their capacity. They are not held back by a job description. They grow as their business grows. Starting their own business provides the challenges that make their work life interesting. Their business provides the motivation to excel and there is no limit to the rewards they can obtain when they do.
Those ambitious entrepreneurs are the people who revolutionize entire industries. They are the people who change other people’s lives through their business. Think about the successful entrepreneurs you’ve seen on the covers of business magazines. They are lauded for the ways their ideas and ambitions have changed the world for the better. Imagine how different the world would be if those people spent their lives working for someone else instead of developing their ideas and doing things their way.
Many people dream of opening their own business. They dream of the excitement, challenges, and rewards of building a successful business from nothing. They want to create a business which supports a cause they believe in and grows to something bigger than themselves. The possibilities and opportunities are endless.
Some people want to start their own business to become independent. They don’t want to be dependent upon someone else for their survival through a biweekly salary. They don’t want someone else deciding whether to hire, fire, or promote them.
People also start their own business to have control over their lives. Those people realize their work is a large portion of their lives and they don’t want someone else dictating that portion of their lives. They want to make their own decisions. They want to decide the work they do, how they do it, and the hours during which they do it. Those people start their own business for the freedom it provides.
Some people need a higher level of flexibility than employers are willing to offer. They have commitments in their lives, such as family or social obligations, which require a lot of flexibility in their work schedule. Those people become their own boss to set their own work schedule. They schedule their work around the commitments that are most important in their lives instead of trying to do things the other way around. They don’t want to work for someone else during set hours and then try to fit their lives into the time that’s left over. They put their lives first and their work second.
People also start their own business because they’ve found a better way to do something. They discover their previous employers, and other businesses in their city, are not offering certain goods and services in the best possible way. Those people don’t want to be forced into mediocrity by working for those companies. Instead, they want to cash in on the rewards of offering the world a superior good or service. They do so by opening their own business and doing things their way.
There are also people who start their own business because they have a great idea for a corporate culture. Creating their own corporate culture allows them to create an atmosphere that improves the customers’ buying experience and makes the company a great place to work. They create a competitive advantage not by improving the goods and services, but by improving the way the goods and services are offered. They know a great corporate culture is essential to attracting loyal customers and the best employees.
Some people are driven to start their own business because they seek the pride of ownership. They enjoy the sense of accomplishment being an entrepreneur can provide. They enjoy being able to see how their business is helping their customers. They enjoy being responsible for the success of their business. Pride of ownership allows those entrepreneurs to continuously improve their business. They’re not forced to do things in a suboptimal way by other people’s company policies. If they see something that’s not working, they change it. They don’t need to ask for management’s approval to make changes. They are the boss. They offer their goods and services in a way they’re proud to put their name on.
Entrepreneurs can choose the people they work with. They’re not forced to work with coworkers someone else hired, vendors someone else chose, or customers someone else brought in. They’re not stuck with those people because of company policies. Entrepreneurs choose their own employees, can change vendors any time they want, and can drop problem customers at any time without needing to justify their decision to anyone else. Entrepreneurs are not forced to work with anyone who makes their life miserable.
Many people dream of the potential for success when they think of starting their own business. People who are truly successful don’t work for someone else. They work for themselves. The success of employees is capped by their salaries. There is no such limit to the success business owners can achieve. Business owners are limited only by how much effort they want to put into running and improving their businesses. Entrepreneurs can accomplish anything if they’re willing to put in the effort to do so. Anyone thinking about becoming an entrepreneur is likely willing to put in the effort to maximize his or her potential for success.
Some people start their own business with the intention to have more free time in the future. They recognize starting their own business can take a lot of time and effort up front. But they know, once the businesses up and running and employees are taking care of the day-to-day operation, they will only need to be present to make the big decisions. That frees up their time to improve their work-life balance. They know hard work now will improve their quality of life in the future. They’ll have more time to do what’s really important in their lives.
Entrepreneurs are not motivated solely by the potential for their own success. Some start a business so they can give back to their communities. They start businesses to fill needs in their communities that were not previously being met. They can fill those needs directly through the goods and services they offer, or indirectly by contributing a portion of their profit to the community. Being in control of their business allows entrepreneurs to choose how to use the resources of their business to improve their community. The most successful businesses are good corporate citizens. They give back to the communities they are a part of.
Some entrepreneurs have their legacy in mind while starting a business. A business bearing their name can live forever. Many of the largest and most well-known businesses worldwide are over 100 years old. Each of those businesses were started by ambitious entrepreneurs. The vision, mission, and goals of entrepreneurs can live on forever through their business.
We’ve covered many of the reasons why you might want to start a business. The things that motivate you to start a business are the same things that have motivated the founders of great businesses all over the world. Those motivations have driven great entrepreneurs to success.
Every would-be entrepreneur shares a number of those motivations. They want to be challenged and fulfilled while choosing how they will make a difference in many people’s lives. They also want to reap the rewards of their hard work. The rewards they could obtain are unlimited.
Why isn’t everyone an entrepreneur if the potential rewards are so great?
There are a number of reasons not everyone is an entrepreneur. The reasons have nothing to do with each person’s life circumstances. There are many rags to riches stories about great entrepreneurs. People who’ve overcome countless hardships to become some of the most successful people in the world. Instead, most of the reasons not everyone is an entrepreneur can be classified as a combination of fear and procrastination. The two are closely related. One feeds the other. Not everyone can overcome fear and break through procrastination to reap the rewards of becoming a successful entrepreneur.
Some people have made a list of skills and knowledge they are lacking and need to obtain before they can start a business. Other people haven’t gone so far as to make a list. They see only some vague—but large—number of things they lack. They haven’t taken the time to define what they lack. In both cases, those people believe they don’t have what it takes to start their own business. That belief can make the task seem overwhelmingly impossible.
No matter who you are, or your current skill level, there is always something else you could learn and some way you could improve your skills. No one could possibly know everything there is to know. Even the best businesses in the world have room for improvement. You probably have ideas how several of the top businesses could improve. Every business is constantly learning and growing. They all started somewhere. They did not get to the point where they are now overnight.
Many people falsely believe they need to master a specific skill set or body of knowledge to start a business. There is absolutely no truth to that belief. To start a business, and offer value to other people, you need only be better at performing a specific task than the general public. Even if you’re only average within your industry, you are likely significantly more knowledgeable and better at performing the tasks of your industry than the general public. That means the general public could get value from doing business with you. You can help people solve specific problems better than they could manage on their own. That’s a great reason for them to do business with you.
If your skills and knowledge are average within your industry, you likely know enough to start a business. With average skills, you should be able to handle the majority of your customers’ needs. You don’t need to worry about being stumped. Even experienced entrepreneurs occasionally find themselves in situations where they encounter a problem they don’t know how to solve.
There’s no reason to fear encountering a problem you’ve never solved before. Within any field, there are experts who specialize in a specific small area of that field. You can always subcontract an expert with the specialization you need to help you solve a tough problem. Consultants and specialized companies willing to subcontract are widely available. In fact, many highly specialized experts receive a large portion of their business through subcontracts with companies who generalize rather than specialize.
You can usually pass the cost of hiring an expert along to your customers. If you know about the problem up front, you can even mark up the cost of hiring an expert so you can profit on their services. You might even be able to learn from the experts and solve that problem on your own next time. With experts widely available, there’s no reason to let the potential of encountering a tough problem hold you back from starting your own business.
Too many people let low confidence in their own abilities hold them back. They fear being caught in a situation where they are unable to solve a tough problem. They know, as the business owner, they are accountable to solve the problem. They don’t have a supervisor they could ask questions and transfer responsibility to. They fear being unable to solve the problem on their own. They don’t realize help is widely available and there is never a situation they can’t get themselves out of with the help of an expert.
There’s another way low confidence affects the abilities of the fearful. Some fearful people, who are stuck working as employees, make it a habit of transferring responsibility to their supervisors. Any time a problem arises, they immediately ask their supervisors for the appropriate course of action. They have zero confidence in their own ability to solve difficult problems. They’re accustomed to having someone to transfer the responsibility to. Perhaps it’s even company policy for them to do so at their current job.
Those fearful people, however, are often very intelligent people. If forced to, they would be completely capable of solving the problem on their own. They’ve simply never tried. Running their own business would allow them to operate at 100% of their ability. Instead of immediately transferring the responsibility, they would take a moment to think through the problem and use their knowledge and experience to find a solution. They’ll quickly find they are capable of solving the vast majority of the problems they would have referred to someone else. Their confidence will improve with each problem they solve. They might even find they are very good at solving problems.
Some people are confident in their knowledge and skills with respect to their profession, but are worried they don’t know how to properly run a business. Managing a business day-to-day and navigating government red tape can seem overwhelming to someone with no experience doing either. It can seem overwhelming because people often overestimate what’s really required.
Sure, it can be complicated at times. There’s more to running a business than there is to zoning out day-to-day performing repetitive tasks as an employee. But that’s one of the reasons most people want to start their own business. They want to challenge themselves to learn and grow. They don’t want to waste away performing boring and repetitive tasks to generate a profit for someone else.
As an entrepreneur, you will eventually encounter situations you don’t understand or know how to work through. However, you’re never on your own. A simple Internet search brings up thousands of resources describing business issues. Online, you can find step-by-step guides for just about any aspect of running a business. Most of those guides are free for anyone to access. The guides range from getting your new business up and running to solving specific problems encountered by well-established businesses. Ensure you take advantage of all of the free resources available to you.
As you’ll learn from the articles, running a business is not as complicated as you might think. Fear of the unknown can cause people to exaggerate unknowns into worst-case scenarios. Moreover, looking at everything that needs to be done as one task, instead of as a series of simple steps, makes the process seem overwhelming and more complicated than it really is. Tackling the necessary steps one at a time in an orderly fashion makes the process seem simple and straightforward.
For a reasonable cost, there are also a number of great business books available. The topics of business books range from general guides on running a business to solving specific problems businesses can encounter. For the low price of a book, you can learn from experienced entrepreneurs, professional business advisors, and management consultants.
You can find a book or an article covering just about any topic. But if you ever need custom advice, there are always professional advisors and consultants willing to help you for a fee. Accountants, lawyers, and management consultants are in the business of helping other businesses. If you’re ever uncertain about the right course of action, and the risks of making the wrong choice are high, seek the advice of a qualified professional.
This book teaches the basics of several skill sets required to run a business. It should be enough to get you started. With this basic knowledge, you’ll be able to avoid—or know how to work through—many common problems encountered by new entrepreneurs.
This book also outlines different skill sets you should develop to maximize your chance of success as an entrepreneur. After reading this book, you can read other books focused on those skill sets. If you don’t want to invest 6 hours and $15 reading a book, you can read a number of shorter free articles online covering those skill sets.
After reading this book, and developing the recommended skill sets, you’ll know more than enough to get started running your own business. In fact, you’ll know much more than most entrepreneurs knew when they were first getting started.
You’re probably a very smart person. You’re able to solve problems and overcome challenges. You’ve done so many times in many different areas of your life. There’s no reason why you would not be able to solve problems and overcome challenges related to starting your own business.
Throughout the world, there are many people who run their own businesses. Those entrepreneurs have various levels of intelligence and various skill sets. All of those people had to get started somewhere. Most of them know much less about running a business than you’ll know by the time you’re done reading this book. Despite having limited business knowledge, they’ve found a way to realize their dream of becoming an entrepreneur. Most of them are successful. If they can do it, so can you.
The next obstacle that prevents people from becoming entrepreneurs is another type of fear: The fear of failure. People fear the worst-case scenario. They worry their business will fail and they’ll be completely ruined. It is, however, important to keep in mind, out of a huge variety of scenarios, the worst-case scenario is at the extreme end. Out of the thousands of possible scenarios, any other possibility is better than the worst-case scenario.
The worst-case scenario is not as likely as many people believe. People are prone to worry and are sensitive to potential losses. It’s a survival mechanism. That survival mechanism helped humans survive thousands of years ago. It was important to fear potentially being attacked by a large predatory animal. That fear kept people alive. Today, that fear is less useful. In fact, it can be detrimental if it prevents us from taking the risks necessary to succeed in business, profit, and significantly increase our access to resources.
The fear of things going wrong prevents many people from starting the process of becoming an entrepreneur. They don’t even give running their own business a chance to see if they will succeed. They immediately jump to the conclusion that things will go wrong. The fear of something that might happen in the future prevents them from realizing their dream of running their own business. If that fear prevents them from getting started, it guarantees they won’t enjoy the success, pride, fulfilment, and other benefits of running their own business.
For a moment, let’s forget that highly motivated, prepared, and resourceful people are likely to succeed. Let’s pretend the fear of failure is well-justified. If your business were to fail, what is really the worst that could happen? Would you die alongside your business? Would anything happen that you could not recover from within a year or two—if not sooner? Sure, it would probably be unpleasant and inconvenient. But would it really be the end of the world? Your desire to become an entrepreneur makes you more ambitious than the average person. Being an ambitious person, do you really think there is any setback from which you cannot recover? Less ambitious people have experienced far greater setbacks in life and have fully recovered. With time, you can easily recover from a failed business.
You’ve probably heard the statistics that many small businesses fail. The lives of the entrepreneurs who owned those businesses are not over. In fact, many of those entrepreneurs go on to start second, third, or even fourth businesses. Search online for successful failures. You’ll find many inspiring stories describing how some of the most successful entrepreneurs in the world started multiple businesses that failed before starting the successful ventures that made them famous worldwide. What effect did failure have on those entrepreneurs? It was a learning experience. That experience taught them the lessons they needed to succeed. They didn’t let the fear of failure prevent them from getting started and neither should you.
Let’s pretend you started a business and it failed. The business failure scares you away from being an entrepreneur. You don’t want to try starting a business a second time. Instead, you want to go back to being an employee. If you currently have a successful career working for someone else, how hard would it be for you to pick that career back up where you left off? There are probably many companies that would be willing to hire you at your current level or even the next level above your current level. If you have a good working relationship with your current employer, they would probably rehire you. They wouldn’t need to train you and they know your work ethic. As you can see, there really is nothing to fear. After a business failure, you can easily revert to your current situation. And that is, of course, only if you decide you don’t want to use what you’ve learned from the business failure to start a second business. Once you get a taste of being an entrepreneur, you might never want to go back to being an employee.
Most of the people who are interested in starting their own business are very ambitious and resourceful people—just like you. Ambitious and resourceful people can work through any kind of problem. They are willing and able to overcome challenges and setbacks. All entrepreneurs make mistakes. But, being more ambitious than the average person, entrepreneurs are able to learn from their mistakes and keep pushing forward. By learning from their mistakes, they become better and their businesses become better.
There is yet another reason some people are held back from their dream of becoming an entrepreneur. They are held back not because of their fears, but because the timing isn’t right.
Is the timing ever right? Think right back to the beginning of your life, was there ever a time in your life when everything was perfect and money wasn’t tight? There will never be a perfect time to start your business. If you keep doing what you have been doing your situation will never change. Things will never be perfect and money will always be tight.
The economy moves in cycles. Sometimes it’s up and sometimes it’s down. If you start your business when the economy is up, in a few years, you’ll be running your business when the economy is down. Despite starting your business while the economy is up, you’ll still have to deal with a down economy.
People are always complaining about some aspect of the economy. Yet, people are starting new businesses every day. People who wait for the perfect time to start a business will be waiting forever. Their dreams of becoming an entrepreneur will pass them by. Don’t let your dreams pass you by.
Let’s say your country is in the middle of an economic crisis. That has probably been the case several times throughout your lifetime. You figure it’s too risky to start your own business given the current economic conditions in your country. If the economy is too bad to start a business, and you’re working as an employee, is your job really safe? Are you not at least as much at risk of losing your job and not being able to find another as you are of having your business fail?
You probably have very little control over your job security while working for someone else. If the company employing you decides to downsize, and eliminating your job is one of those cost-cutting measures, there’s probably nothing you can do about it. In contrast, while running your own business, there are many aspects you have control over and many actions you could take which could prevent your business from failing during the tough economic conditions. In both good times and bad times, you have significantly more control over your fate as an entrepreneur than you do as an employee.
A down economy can present a significant opportunity. A down economy creates fear. That fear prevents your competition from starting their own businesses. They’ll be waiting for a better time. A time that will probably never come. People in the media will always be forecasting doom and gloom about some aspect of the economy. That’s good news for you because it’s much easier for you to succeed when you have less competition.
If you start now, you can get into business ahead of your competitors who are waiting for better days. There are significant advantages to being in business first. By the time your competitors get into business, you’ll have a large loyal customer base and your business will have grown substantially. Your business will have developed a great reputation and earned the trust of your customers.
The timing will never happen to be perfect. You have to make your own perfect time; and make that time as soon as possible. Ensure you’re properly prepared, but don’t let factors out of your control decide when you can start your own business. You are in control of when you start your own business. The sooner you get started, the better off you’ll be five years from now.
Time is the root of another problem: People believe they don’t have enough time to start their own business. Most people are so busy they are short on sleep. They are busy from the moment they wake up until the moment they go to bed exhausted. Their life is full of commitments that demand their time. They don’t have room for any new commitments. They believe they couldn’t possibly fit anything else into their lives. That belief is wrong.
Not having enough time is often just another excuse people use to rationalize their fear of getting started. They might even fool themselves into truly believing that excuse.
Most people have a number of family and social obligations they can’t give up which require the majority of their time. They stay busy because they don’t want to let down the people who depend upon them. They believe any time used to start their own business would have to be time taken away from another important commitment.
People rarely get less busy. They are likely to be even busier next year than they are this year. The responsibilities will continue to pile on. It will be even harder for them to find the time to start their own business next year than it is this year.
Like money, if you get more time, you’ll always find a way you need to spend it. If a time block in your schedule frees up, you’ll quickly find an unavoidable commitment which requires that momentarily freed up time block. You’ll never have an abundance of free time.
Also like money, most people aren’t lucky enough to fall into an abundance of free time completely by accident and without effort. You won’t be gifted an abundance of free time to start your own business just as surely as your lottery ticket won’t have the winning numbers.
If you need time to start your own business, you need to make that time. You need to reprioritize your life to focus on what is really most important to you. It’s easier to do than you might think.
If a family member developed an unfortunate health issue, you could always find the time necessary to care for him or her. No matter how busy your current schedule, your family member would immediately have priority in your schedule. You’ll find that things which seemed urgently in need of your time no longer need to be done at all. You’ll also find ways to do things more efficiently to make the time you need. You can always make time for what is most important to you. How important to you is becoming an entrepreneur?
Most people are amazed at what they can do in a limited amount of time while under pressure. If people are given a month to complete a task, the task will probably take an entire month to be completed. However, if given only one day, those people could probably find a way to substantially complete the same task.
Have you ever found yourself facing a deadline that seemed impossible, but you still managed to complete the task? At first, you might have believed there was no way you could possibly get everything finished before the deadline. Not unlike how you currently believe you’re so busy you couldn’t possibly start your own business. But, despite how much work you had to do, and how little time you had to do it, you still managed to complete the task. You probably even did a great job. Perhaps you can think of a time where you didn’t complete the whole project under an intense deadline, but you were probably amazed how you completed 90% of the project—which normally would’ve taken two weeks—in only one day.
As discussed above, take a moment to consider two things. First, you can always make time in your busy schedule for things that are truly important to you. Second, when the pressure is on, you can accomplish amazing things in very little time. As such, if your dream of becoming an entrepreneur is truly important to you, you can always find the time to make it happen.
Many people dream of starting their own business, but they have no savings and they live paycheck-to-paycheck. They spend their money just as fast as they earn it—sometimes faster. They feel trapped in the rat race.
If those people feel trapped in the rat race today, they’re going to feel even more trapped in the rat race in the future as they take on more responsibilities, develop more expenses, and incur more debt. Statistics tell us those people are unlikely to experience some chance event—such as a lottery win—which instantly frees them from the rat race. If they’re waiting for such an event to start their own business, they’ll be waiting forever. For most people, a financial windfall is unlikely. The future is more likely to bring additional commitments, expenses, and debt. If they’re living paycheck-to-paycheck now, and don’t make any significant life changes, they’ll still be living paycheck-to-paycheck in the future.
As young potential entrepreneurs, and as trapped as they might feel right now, those people are likely freer now than they will be in the future. In the future, they’ll likely have more kids, a bigger house, more commitments, more responsibilities, more debt, and they’ll be more dependent than ever on that very next paycheck. The time for them to escape the rat race is now. It’ll only get harder to escape in the future.
Despite being more difficult to escape in the future, it’s never impossible for people to escape the rat race. That’s true no matter the commitments people have in their lives. Ambitious and resourceful people can always find ways to realize their dreams of becoming entrepreneurs.
If you feel hopelessly stuck in the rat race, I’ve dedicated an entire chapter to describing how you can start your own business while keeping your full-time job. You can use the strategies in that chapter to start your own business around your full-time job. That chapter includes a range of topics from managing time conflicts between work and your business to avoiding potential legal pitfalls.
It’s necessary to dedicate a whole chapter to keeping a full-time job while starting your own business because many people need the income from a full-time job until their business takes off. They need effective ways to maximize how they use what little time and money they can spare to start their own business.
Once their business starts generating income, they can reduce the hours they spend at their full-time job. Soon they’ll be able to quit their job and focus on their business full-time. By becoming entrepreneurs, they can free themselves from the rat race.
Many people want to start a business, but believe they can’t because they have limited resources. They’re accustomed to hearing phrases like, “You need money to make money.” They know the key to having more money is to get out of living paycheck-to-paycheck working for someone else. But they feel trapped because they need more money to start their own business. It seems like they’re faced with an impossible task when their money is being spent as fast as it’s coming in.
The focus of this book is stretching the smallest amount of resources as far as possible to start your dream business. You’ll learn a number of strategies to significantly reduce the startup costs of your business. With a little bit of effort, you can drastically reduce the startup costs of just about any type of business. You’ll also learn simple ways to do a number of things yourself that you would’ve otherwise had to pay someone to do for your business.
You’re probably also not starting with nothing. It might seem like you have nothing, but take a look around your home. You probably own a number of things that could potentially be used for your business. You might own a vehicle, a computer, and a variety of stationery supplies. You might also have a basic toolset, or even all of the tools you’ll need to do the type of work your business is based upon. Perhaps you have some tools that could work, but are not perfect. Use those tools to generate a profit until you can afford to buy the perfect tools. Take advantage of everything you already own. Find creative ways to leverage what you already have to eliminate some startup expenses.
Most people don’t have any idea how much it really costs to start a business. They simply have a vague idea that it costs a lot—much more than they currently have. They never sit down, write up a plan, and work through the actual numbers. Some people do write a plan, but use vague estimates. It’s important to spend time researching the actual costs. Do some online shopping. Get some price quotes. Put real numbers into your business plan. Real numbers give you a concrete and realistic goal to work towards.
Getting real numbers is only the first step. Few people take that first step. Many of those who do are dissuaded by the costs. This book teaches you how to perform a crucial next step. You’ll look at each of the items in your business plan and find the absolute cheapest way to check off that item. You’ll learn how to combine several items into one purchase for a lower overall cost, obtain some items for free, complete some of the items yourself for free, determine which items you absolutely need to get started and which items could be delayed until you’ve generated profit using the first items, and eliminate some items altogether. After taking the time to critically review your business plan and drastically slash its costs, you’ll have a much more achievable number. You might be surprised how little it really costs to start a business. After slashing costs, you might even find you’re able to get started building your own business the very next day.
Some potential entrepreneurs become discouraged by making the mistake of looking at the costs of everything all at once. Their dream business is a mirror image of a business that has been operating for 30 years. They don’t stop for a moment and realize that business has been reinvesting profits to grow for 30 years. That business didn’t start out the way it is today. But those potential entrepreneurs expect to start their own business at the same advanced stage as the 30-year-old business. They need to take a moment to realize their error. Every business has to start somewhere then grow.
The key to starting your own business with the resources you have is to find the smallest and lowest cost portion of that 30-year-old business you’re modelling your own business after. You would then start your own business with that small low-cost portion. You might start offering only one good or service instead of the complete package. Once you get that small portion up and running, and generating a profit, you can reinvest the profit to expand your business. Over time, you can grow your business and expand beyond the 30-year-old business you’ve used as a benchmark. Depending upon how ambitious you are, you might reach that level in significantly less than 30 years.
The advice in this book helps you determine the smallest and lowest cost portion of your dream business: Your starting point. You’ll learn how to start small, dream big, and then realize your dream business over time. You’ll learn you can probably get started much sooner than you think.
Some soon-to-be entrepreneurs know exactly which type of business they want to start. They’ve been planning every aspect of going into business for themselves for quite some time. However, not everyone has such clarity in their goals.
There are many people who know they are destined for more than working for someone else. They are way too ambitious to spend their days making a profit for other people. They are also way too creative to be constrained by the rules and policies of other companies. They know they are meant to be entrepreneurs. They just don’t know which type of business they would like to get into.
There are many different routes you could take to becoming an entrepreneur. Throughout this book, I discuss many factors to consider while deciding which type of business is right for you. Considering the factors relevant to your situation will help you make the right choice.
Don’t let indecision about which type of business to start hold up your dreams of becoming an entrepreneur. Indecision makes it easy to procrastinate. It’s easy to tell yourself you need more time to think about it. Indecision keeps you in the rat race longer than you need to be. The longer you delay before getting started, the longer it will be before you reach your goals. The time you spend delaying would be better spent growing your business.
If you’re uncertain about which type of business to start, even after considering the factors given in this book, don’t worry. If you don’t have a clearly defined dream business today, you can work on that dream as you go. You don’t need to find the perfect business. You need only find a suitable business to get started. You can then grow and adapt that business to realize your dreams as you develop clarity in your goals.
Some of the most successful businesses operating today are in completely different lines of business than where they started. There are many reasons why businesses change their course. To name but a few: the vision of their leaders has changed, to take advantage of market trends, to adapt to tough economic conditions, because technological advances have presented new opportunities, and because technological advances have made their previous lines of business obsolete.
As you can see, it doesn’t matter where or how you start. Where you start as an entrepreneur is not necessarily where you’ll end up. The future is impossible to predict. As an entrepreneur, you’ll be presented with a number of challenges and opportunities that could change your course. The important thing is getting started.
So without further delay, let’s get started!
It can seem overwhelming when you think about everything necessary to start your own business. There’s so much to do. Like any other large task, you can make it more manageable by breaking it into smaller pieces and tackling those smaller pieces one at a time.
Begin by making a list of everything you need to do. If you’ve already written up a business plan, you can use it to start your list. Simply copy everything from your business plan onto a new list. Your business plan will include the top-level tasks you need to complete, but it likely leaves out the finer details. The finer details, while not necessarily included in your business plan, are still tasks that need to be completed.
Each type of business, in each city, is going to have a different list of tasks that need to be completed to get the business up and running. It’s impossible for me to give you a complete list here because a construction company will have a different start up list than a consulting company. I don’t know which type of company is your dream business. A quick search online can help you find the majority of the tasks you’ll need to add to your list.
First, search for the steps necessary to start the type of business you want to start. If you want to start a landscaping business, search for the steps necessary to start a landscaping business. That should provide you with a number of tasks to add to your list that are necessary for the specific type of business you want to start. Different types of businesses have different needs for equipment and tools, retail or office space, and permits. Learn what’s necessary to operate the type of business you want to start. Add any tasks you believe are necessary for your business to your to do list.
Next, search for the steps necessary to start any type of business in the jurisdiction you plan to operate the business. Once again, I can’t give you a complete list here because starting a business in the United States has different requirements than starting a business in England. For instance, if you want to start a business in New York, search online for how to start a business in New York. This search will help you list the tasks that are necessary to start any type of business in your jurisdiction. This will help you determine your legal requirements, including the places you need to register your business, and any permits or licensing required to operate any type of business in your jurisdiction. Add any of the steps required to start your business to your to do list.
It helps to make your to do list electronically so you can move the items around, group tasks together, and create space to break a larger task into smaller tasks.
Don’t worry about having absolutely everything on your to do list. It’s impossible to have a complete to do list before starting your business. You’ll never be able to add everything necessary before getting started. There are some tasks you won’t know are necessary until you get other tasks completed. Your experience getting the first few tasks completed will teach you what else might be necessary. You’ll also be presented with new opportunities you can capitalize on once you’ve started completing the tasks on your list. Moreover, businesses grow because new tasks are continuously being added to their to do lists. No matter what stage a business is at, there are always additional things that could be done to improve the business. You need only worry about recording the critical tasks on your list—the tasks that you know are absolutely necessary before you can move forward with your business.
To identify the critical tasks necessary to start your business, consider applying the Pareto principle. You might have heard of it referred to as the 80/20 rule. There are many examples to demonstrate the rule. For instance, 80% of your results are likely to come from 20% of your efforts. It could take over a year to complete every task on your to do list. Most people, however, don’t have that kind of time to spare while starting their own business. Make the best use of your time by focusing first on the 20% of the tasks that are likely to get your business up and running at 80%.
Obviously, you’ll have to get all absolutely necessary tasks completed first, such as all of your licensing and legal requirements. While reviewing your to do list, you’ll see many other tasks that need to be completed, but could be done in any order you choose. Take a moment to carefully evaluate the remaining tasks. Find which of those tasks, if completed, could get your business up and running at some level. With a few of the tasks completed, you might not be able to offer the full line of goods and services you want to offer eventually, but you might be able to get the first few core products of your business available for sale.
Once you’ve identified the critical tasks—the tasks you must do and the 20% of tasks that are going to give you the most benefit for your effort—you need to determine the best order to complete those tasks. In many cases, you’ll find the order is not completely up to your discretion. You’ll find certain tasks must be completed before others. Sometimes the order is determined by legal requirements. Other times the order is determined because something needs to be in place before you can use it to move to the next step. Arrange the tasks that need to be completed into a flow chart. That helps you identify which tasks must be completed before beginning other tasks.
For example, you’ll need to register your business with the required government branches before you can open accounts in the name of the business such as bank accounts or cell phone accounts. You might also need to acquire retail space before you can begin with the interior design work and order exterior signage.
Once you have your flowchart drawn up, it’s a simple matter of following along the chart to ensure you complete the critical tasks in the necessary order. The flowchart saves you from looking up and down your to do list while trying to decide what needs to be done next. The flowchart provides the answer. It streamlines the process for you. You’ll know immediately what you can begin working on next.
You might want to include any time delays into your flowchart as well. For instance, some of your government paperwork might state there is a 14-day turnaround time to have your paperwork processed. Including that delay into your flowchart lets you know all tasks dependent upon that paperwork will be delayed 14 days from the time you submit your paperwork. Being aware of that delay allows you to start tackling other items in your flowchart that are not dependent upon that paperwork.
Moving along your flowchart will seem as easy as following a map on a cross-country trip. It provides the guidance necessary to reach your destination as quickly and efficiently as possible. Having a clear path to your goal converts the journey into a number of small tasks that are easily completed. The clear path to your goal makes starting your own business much less daunting and overwhelming. In contrast, looking at everything at once with no clear plan makes it seem like everything has to be completed at the same time. Moreover, you’re uncertain about what needs to be completed if you don’t have a clearly defined plan. Thus, you can easily overestimate the amount of things that actually need to be done. A clearly defined plan removes most of the unknowns. The unknowns are responsible for the majority of your stress.
Don’t worry about making a perfect plan. It will never be perfect. As you begin working through the plan, you might find some steps could be done a different way or skipped altogether. You might also find additional steps that need to be added. It is, therefore, necessary to always leave your plan open to modifications as you progress through it. Every business has the potential to grow, which means there could always be new tasks to be completed. Don’t try to do everything at once. Focus first on getting your business up and running. You need to have at least a minimal version of your business up and running before you can focus on expanding it.
You might have a number of different lines of business you want to get into. Those lines of business probably consist of a few primary goods or services and several accessory goods or services.
Each good or service you want to offer your customers adds to your startup costs and your startup preparation time. You need to have the skills, tools, equipment, inventory, and business processes in place to offer each good or service. Time spent acquiring skills, and startup capital spent on business assets, are time and money tied up which can’t be used in other areas of your business. Keep that in mind. You have a finite amount of time and money. Properly allocating limited time and money is crucial for a successful startup.
A common mistake is looking at a business that has been operating for 30 years and trying to match all of the different goods and services offered by that business. Those businesses didn’t start out offering that wide range of goods and services. Those businesses likely started by offering only a few products then expanded by reinvesting the profits.
You’ll likely start your business the same way. You’ll focus on providing value to your customers with a limited product range. That limited product range becomes the foundation upon which you can expand your business. You must begin by building that foundation.
How do you decide which goods and services to start with?
You could begin where you have the most expertise. That allows you to get started without any additional training. You’ll also be very confident operating a business in your area of expertise as you know how to address most issues which could arise. You’ll also likely be able to deliver a high level of quality to your customers in your area of expertise. Delivering a high level of quality is essential for word-of-mouth advertising to quickly grow your business.
You could also begin with the products for which you believe there is the largest market demand. All successful businesses need customers. It could be easier to obtain a small percentage of a very large market than to operate in a very small market where there is intense competition for customers.
You’ll also want to consider whether the goods or services you plan to offer are accessory goods or services. It can be harder to break into an accessory good or service market because many of your potential customers might buy accessory goods or services bundled with primary goods and services from your competitors. Some of your competitors might even include accessory goods or services for a low cost or free in order to sell higher value primary goods and services.
Look at what your competitors are offering. If you want to offer accessory goods and services, you have to find a way to make your offering competitive enough to convince your customers not to buy the accessory goods or services from the same competitor they buy the primary goods or services from. It can be inconvenient for your customers to deal with two companies instead of one. You have to make it attractive to go through the inconvenience. Alternatively, you might choose to offer the primary goods or services.
You could also begin by offering the products with the lowest barriers to entry. Barriers to entry make it difficult for new businesses to get started in a particular industry. There are many different barriers to entry. High startup costs, certification, licensing, permitting, specialized knowledge, and high costs for customers to switch suppliers are all barriers to entry.
You’ll likely want to consider beginning by offering the products which require the lowest investment of startup capital. This factor will probably be weighed heavily as startup costs are a significant issue for most people. Take stock of any assets you own personally that could be used for your business. Also look for lines of business that do not require expensive equipment. Your business will have trouble getting off the ground if all of its startup capital is tied up in one asset.
You can also begin by offering the products you can get on the market the fastest. Time is money. The longer it takes you to get your business up and running the more potential profits you’re missing out on. Also, the longer it takes you to get your business up and running, the longer your startup capital is tied up in the business without bringing in revenue. That becomes even more of a problem if you’re paying interest on any of your startup capital.
Your goals for your business also come into play. The business that makes the most sense for you to start might not necessarily be the business of your dreams. You’ll have to consider all of the factors listed above in addition to your goals for your business. Your own unique circumstances will affect which goods and services make the most sense for you to start with.
You might be able to use profits from a line of your business that’s cheap, quick, and easy for you to start now to expand your business to offer the goods and services you ultimately want to offer. Getting started with something, then expanding to reach your goals, could help you realize your dream business much faster than trying to save money working as an employee.
Your decision on how to begin your business will likely be based on a combination of the factors listed above. There is no one best way to decide which products to offer first. That’s where your personality, personal circumstances, and the art of being an entrepreneur come into play.
Your dream business might provide both goods and services. It is, however, not always possible to get your dream business up and running at 100% right from the start. It’s not fair to compare your new business to a business that has been operating for 30 years. A mature business has had the time to grow and expand. Your business is just getting started. You have to start somewhere.
If you’re selling goods, you need to be able to supply those goods to your customers as fast as possible. Most people don’t like waiting. Many people expect to leave your business with the goods in hand. If your customers are faced with the decision between a two-week order period with you, and same-day delivery with your competitors, you might lose the sale—even if your competitors charge more or offer lower quality service.
There are a lot of costs and problems associated with selling goods. Offering goods for sale requires nearly everything required to offer services, plus much more. In some cases, starting by offering only the service portion of your dream business can be the key to getting your business up and running.
Selling most goods requires dealing with suppliers. You need to buy inventory for resale and raw materials for goods you manufacture. Depending upon the type of services you offer, you might not have to deal with suppliers to offer your services. The prices you charge your customers will be dependent upon the prices your suppliers charge you. You are also dependent upon your suppliers having the goods you need in stock when you need them. If the goods are in stock, you also need to have them delivered to your premises or your customers on time. Those factors add another level of complexity to your planning.
Getting products from your suppliers when you need them is only the first aspect of inventory management. You also need to manage the level of stock you carry for your business. You have to estimate ahead of time how much of a specific good you think you’re going to sell so you can order the appropriate amount of inventory. You also have to determine how low you can safely allow your inventory level to fall before you need to reorder more stock. Your suppliers’ stock levels and ability to deliver on time will factor into that decision. You disappoint customers when you run out of stock, but you tie up too much of your limited startup funding when you purchase too much inventory.
When ordering inventory, optimal order size to take advantage of bulk discounts also needs to be factored into your decision. You’ll have to determine whether the discount offered to make larger orders is worth having the startup capital tied up in extra inventory. You’ll also need space to store extra inventory if you’re taking advantage of large order discounts.
Carrying inventory creates a number of other problems as well. Space is required to store that inventory. Some inventory might be difficult to store because of its size, risk of spoilage, or other requirements such as needing to be refrigerated. Storing inventory also presents the risk of loss. Inventory stored on your premises could potentially become obsolete, be stolen, be damaged in a flood or fire, or be damaged while being handled by yourself, your customers, or your employees. Thus, you face the risk of loss or the cost of insurance premiums to protect yourself from those risks. Despite being insured, many loses will probably be below your insurance deductible. Many small losses can add up and strain a business with limited capital.
Depending upon what you sell, you might also need retail space to display your inventory for sale. Retail space in a prominent location, where customers are likely to visit, is expensive. A warehouse in an industrial area often has a much lower lease rate per square foot than premium retail space. You’ll also have to spend money on interior design and construction to make your retail space look appealing to your customers.
Inventory costs money. Some suppliers might require you to pay for your inventory in full at the time of purchase. That means you’ll need to come up with the money to buy your inventory before you can have it available for sale to your customers. Money tied up in inventory is money you can’t spend on other areas of your business. Moreover, if you took out a loan to invest in that inventory, you’re paying interest on that money until your inventory is sold and you repay the loan.
Some wholesalers or distributors allow you to purchase your inventory on credit. Their credit terms range from 30 to 90 days or more depending upon the industry. Credit offered from vendors is not free. You’re paying interest on that inventory until you pay the vendor.
As you can see, there are a number of costs and complications when dealing with inventory—many of which can be avoided by offering services first. That’s not to say you can’t start your dream business of offering goods for sale. If startup resources are extremely tight, however, beginning with offering goods might not be feasible for some people. Limited startup resources, while insufficient to begin offering inventory for sale, might be sufficient to begin offering a service. Profits from offering that service could then be reinvested into the company to begin offering goods for sale.
If your dream business is to sell goods, you could be willing to do whatever it takes to sell those goods. For some people, that means waiting longer to get started in business. For other people, that means doing something now to generate the revenue necessary to start their dream business selling goods in the near future. Starting your business with selling services eliminates the extra complications and costs associated with selling goods. As a result, you can often get into business for yourself much quicker and at a lower cost by starting with selling services. Selling services first could move you from being an employee to being an entrepreneur much faster.
Depending upon the type of service you offer, your customers might not even need to come to your place of business. You might perform the service at your customers’ place of business or home. You can easily offer services at your customers’ place of business out of your home office. That means you don’t need to invest in expensive retail space or decorating your place of business so it’s suitable for customers to visit. You can also store your service equipment and tools anywhere. You can store your tools at home, or if you don’t have space at home, you can rent storage space in an industrial area much cheaper than prime retail space. You might even have a friend who could offer you storage space free of charge, at a low cost, or even for barter.
Getting the first line of your business up and running is crucial. Find the quickest and easiest way—suitable to your startup budget—to get that first line of your business up and running. You can then use revenues from that first line of business to expand your small startup company into your dream business.
Depending upon your type of business, there might be a number of accessory services that your customers commonly buy along with the primary goods and services you offer. However, trying to offer everything at once is likely too expensive for a small startup company. With a limited startup budget, you might have enough startup capital to offer the primary service, but not the accessory services.
For instance, you might not be fully equipped with all of the tools you need to offer those accessory services. But, if your customers are highly likely to want the accessory services bundled with the primary good or service, you don’t want to put yourself at a competitive disadvantage by not offering the required accessory services. As such, you need to perform an analysis and make a decision.
Your first step is to estimate what percentage of your customers are likely to refuse to buy from you if they can’t get the accessory service at the same time.
For example, you might start a business selling specialty door locks. A certain percentage of your customers would expect you could custom key those door locks for them at the time of purchase. Some customers might want to use an existing key on the new lock, or purchase multiple locks which can be opened using the same key. If you offer unique specialty locks, where you can’t just adjust the pins, you might require expensive equipment to custom key those unique specialty locks. Equipment that is too expensive for your limited startup budget. But, you risk losing the sale of the primary good—the door lock—if you’re unable to offer the accessory service of custom keying the lock.
If you believe not offering the accessory services won’t cause you to lose much business, you can probably do without them until you have profit to reinvest in your business.
If you believe only a portion of your customers will require the accessory services, you can consider ways to make those accessory services available to only a portion of your customers. The first way you could do so is to rent the equipment necessary to offer the accessory services only when you need it. You can likely rent the equipment for a much lower price than it would cost to buy it. Especially if you need the equipment for only a few hours per week.
If renting is not feasible, or you’re unable to offer the accessory services because you lack the training, you can also consider outsourcing the accessory services until you’re able to perform them on your own. Depending upon the accessory services you are outsourcing, your customers might not even know the services have been outsourced.
There are two ways you could go about outsourcing the accessory service.
You could negotiate an agreement with an outsourcing partner ahead of time. You could probably secure better terms, perhaps even a deep discount, if you make one business your sole outsourcing partner because you’ll be able to send that business a high volume of work. You have less bargaining power when you spread out your business between multiple suppliers because you’re dealing on a lower volume and lose bulk discounts. Dealing with one supplier, however, is putting all of your eggs in one basket should something happen with that one supplier. If you’re able to negotiate a discounted rate from the outsourcing partner, you can markup the accessory service to make a profit when selling it to your customers and still offer a competitive price.
If you’re able to make a profit by outsourcing the accessory service, you could offer the accessory service to all of your customers through outsourcing. It can become a regular part of your business offering.
There’s also a second route you could go. You’ll want to consider this second route either when you’re unable to negotiate a discount on the outsourced accessory service, or when you’re trying to be as competitive as possible to attract new customers—as you should be when you’re first getting started. You would still outsource the accessory service, but you would not mark it up. Even if you are able to negotiate a discount on the accessory service, you would pass on the accessory service to your customers at your cost. You will be offering that accessory service at a discount as a bonus to sell your primary good or service. You will be making a profit on your primary good or service, but not on the accessory service. That bonus creates goodwill with your customers. It helps you establish a reputation for offering exceptional value. That encourages referrals from positive word-of-mouth advertising.
Outsourcing, however, is not without risks. You risk sending customers to your competition with outsourcing. You could try to mitigate the risk with terms included in your outsourcing agreement or by outsourcing with companies who are not your direct competitors. You could also minimize the contact between your customers and your outsourcing partners by always acting as an intermediary between them.
If you manufacture your primary goods, you might not yet have the ability to manufacture the accessory goods. Perhaps manufacturing the accessory goods requires additional equipment you can’t afford to purchase. You have to start your business somewhere before you can expand your business to offer everything.
Like accessory services, your customers might expect to buy common accessory goods along with your primary good or service.
For example, if the primary good you sell is vacuum cleaners, your customers would probably expect to also buy different specialty cleaning attachments and replacement filters from you. You don’t want to risk losing customers because you aren’t able to offer the accessory goods your customers are likely to need.
If not offering the accessory goods is likely to hurt sales of your primary products, you’ll want to consider a method to supply the accessory goods to your customers along with your primary goods or services. You’ll have to outsource the manufacture of those accessory goods. You could outsource custom manufacturing of your own unique accessory goods. However, it would be significantly cheaper, faster, and easier to buy accessory goods already designed and manufactured by another company.
Since you’ll be reselling many of the accessory goods, you can buy them at a higher volume than your customers—the end consumers. Your customers might buy one of the accessory goods per year, whereas you might buy 100 per week. High volume purchasing means you can negotiate discounts. Purchasing at a discount allows you to markup the accessory goods to make a profit when the goods are sold to your customers.
In fact, until you begin selling a very high volume of accessory goods, you’ll probably be able to buy the accessory goods cheaper than you would be able to manufacture smaller batches of those goods on your own.
Many companies outsource portions of the goods they offer. In many cases, it’s a good strategy. Especially if the accessory goods require specialized knowledge to manufacture or are patented by other companies and would require a complete redesign to manufacture on your own.
For example, companies that manufacture computers don’t manufacture the entire product on their own. Their products are manufactured by assembling components from many different companies. Computer companies add value with their ability to combine components to create a product that is greater than the sum of its parts.
You’ll be able to get the best prices on accessory goods for resale from wholesalers and distributors. You’ll have to make large orders if you want to buy at wholesale prices instead of retail prices. Making large orders means you’ll need to tie up a large amount of startup capital in your inventory and you’ll also need a place to store that inventory.
If you don’t have the storage space or money required for large orders, you might be forced to buy the accessory goods at retail. Buying retail allows you to purchase only a small number of accessory goods as you need them. Buying accessory goods in small numbers eliminates many of the hassles of dealing with inventory. It’s much easier to store a small number of accessory goods and a small inventory level ties up much less startup capital.
Buying the accessory goods at retail means you’ll be paying full price for them. Consequently, you won’t be able to markup those goods when selling to your customers because the price would be too high. Instead, you’ll have to make your profit only on your primary good or service and pass through the accessory goods at cost to your customers.
If you’re forced to pass through the accessory good at cost to your customers, don’t look at it as a waste of effort. Look at it as a necessary part of doing business. If your customers expect to purchase the accessory goods along with your primary good or service, you have to make those accessory goods available in order to make sales of your primary good or service. You don’t want to lose sales simply because you’re not able to offer the accessory goods along with your primary good or service. Even if you’re not making a profit on the accessory goods, they are necessary to make a profit on your primary good or service.
Depending upon what you sell, some customers might insist upon buying the accessory goods at the same place they buy the primary good or service because it’s much more convenient for them to deal with only one vendor. Moreover, if your customers must go to one of your competitors to buy the accessory goods, you risk losing the entire sale to your competitors. You also risk losing repeat business to your competitors.
You’ll have more options as your business grows. You’ll be able to invest in the equipment necessary to manufacture the accessory goods on your own. Alternatively, when your sales increase, you won’t need to buy accessory goods in small orders at retail prices. You’ll be able to buy the accessory goods from wholesalers in high volumes at discounted prices so you could markup the accessory goods to make a profit when sold to your customers.
Your good or service will never be perfect. Striving for perfection will take forever and you’ll never launch your business. The sooner you realize that, the sooner you can get started.
You have to start somewhere. Often, it’s impossible to know exactly how you can improve your good or service until you begin offering it. You’ll need reviews and feedback from your customers to learn where you can improve.
Continuously striving for perfection before getting started continuously pushes back your business launch date. Nothing will ever be perfect. So if you’re aiming for perfection, you might never launch your business. You have to decide when your good or service is developed to an acceptable level of quality to begin marketing it.
When starting out, if your good or service isn’t the best in the industry, price it accordingly. Many people are willing to accept a lower level of quality in exchange for a reduced price. For instance, think about the different car manufacturers; their prices and levels of quality vary significantly. Not everyone wants—or can afford—the best. You can always raise your prices or begin offering premium service levels as you learn how to improve your goods and services from customer feedback.
But that being said, you do want to deliver a high enough level of quality to satisfy your customers. You need satisfied customers to obtain repeat business and word-of-mouth advertising. Word-of-mouth advertising is essential to building a new business. Your customers must be satisfied enough with your good or service to recommend you to their friends.
You also want your customers to leave positive reviews online. Just about any good, service, or business has a place online dedicated to reviewing that particular type of good, service, or business.
Obtaining a new customer can be difficult and expensive. A repeat customer is the easiest and cheapest customer for you to obtain. You’ve already done the work upfront to obtain that customer for the first time. All you have to do is keep him or her happy.
You’re likely proud of your creation. You’ve corrected most of the mistakes that were obvious to you. But it’s easy to be biased when reviewing your own work.
You might have been working on developing your good or service for quite some time, but failed to notice an obvious flaw because you’ve been focused on other aspects. Nothing will ever be perfect. Much less so on the first try. Getting your product ready for market is simply a matter of getting all of the important things right.
You can’t be aware of a fault if you have no idea what to look for. That’s why feedback from others is extremely valuable for improving your goods and services.
Getting feedback from your friends can help. But your friends can be biased as well. They’ll be reluctant to say anything that could hurt your feelings and compromise your friendship. You have to get your friends to be honest to obtain valuable feedback from them.
If you simply ask your friends for their feedback on your good or service, they’ll see how proud of it you are, and be reluctant to say anything negative. Don’t just ask your friends for feedback. They’ll tell you white lies to make you feel good. Instead, tell your friends you’re not happy with your good or service. Tell them you see a number of things wrong with it, but don’t be specific. Tell them you believe there are many things you must improve on. Tell them it’s your first prototype and you have a long way to go before your final product. Tell them you want to get their opinion so they can help you improve it to something you can be happy with.
Don’t let them off the hook until they recommend a few ways your product can be improved. Tell them you know there are things that need to be improved and want to see if they recognize the same things you have. Don’t tell them what you think should be improved.
Also tell them you value their opinion or expertise and elaborate on the reasons why. If you can’t think of a specific expertise, tell them you value their opinion because they are honest people or because you know they have an eye for quality. Tell them you value their input. Tell them their ideas to improve your product could be crucial to its success because right now you’re not happy with it and you know it needs to be improved. Tell them you need their opinion as soon as possible so you can get your product fixed and ready for market as soon as possible.
Asking for feedback as I’ve described above should help your friends avoid the temptation to take it easy on you and simply tell you your good or service is perfect. If your friends tell you everything is perfect, you know they’re lying to you. Don’t let them off the hook that easy.
Think about any given product you can find on a store shelf. Those are finished products ready for market. Despite being finished products, possibly developed by teams of engineers and other design specialists, you can likely think of several ways those products can be improved. As such, it’s highly unlikely that your prototype product is perfect and has no room for improvement. It is, therefore, likely your friends are telling white lies to avoid hurting your feelings if they tell you your product is perfect.
The same applies to services you are offering for sale.
Your prototype is going to need improvements. Maybe lots of improvements. But you have to start somewhere. Don’t let the impossible quest for perfection delay the start of your business.
You can apply the Pareto principle (80/20 rule) to get your business up and running faster. Get your product up to 80% effectiveness. You’ll likely find that 20% of the issues that need to be addressed will result in 80% of the improvements in your product. Focus on getting that 20% right to get your product to market as quickly as possible. You have the entire future of your business to improve your product. Businesses are always improving their products.
Obtaining customers is one of the hardest aspects of starting a new business. Obtaining your first customers brings revenue into your business and also engages people who could potentially advertise your business through word-of-mouth by telling their friends.
Word-of-mouth advertising is crucial for new businesses. Some people (innovators and leaders) will take the risk and try a new business. But most people wait to hear what other people think before taking the risk and trying a new business themselves.
Don’t wait until you officially launch your business to begin gathering customers. It’s best if you can launch your business with your first customers already sold on your goods or services. How do you obtain customers before you launch your business?
You have to do it through your personal network. You have to recruit friends and family who are willing to be your first customers. You’ll also have to ask your friends and family to reach out to their own personal networks to recruit their friends and family to become some of your first customers. Call in every favour you have coming your way. Getting those first customers to spread word-of-mouth advertising is crucial. You need people who can recommend your goods or services to others so that others feel more comfortable spending their hard-earned money at your business. Those recommendations reduce the risk of trying a new business.
Your first customers do more than bring in revenue and spread word-of-mouth advertising. They also build your portfolio. Once you serve those first few customers, you’re no longer a brand-new business. You now have a portfolio of work you can advertise to other potential customers. A portfolio of quality work shows potential customers that you’re competent and capable of doing the work they need. It’s also an opportunity for you to show off your skills or products. Some of your first customers might also be willing to provide a reference—especially if those first customers are from your personal network.
Having a list of customers you’ve already successfully satisfied lowers the risk for your potential customers. They are no longer taking a risk by purchasing from a brand-new business. They’re taking a much smaller risk by purchasing from an established business—even if the business is still relatively new. You now have a portfolio of completed work that speaks much louder about the quality of your work than anything you could possibly say. Potential customers no longer have to take you at your word. They can see proof of your work. You have a proven track record.
A portfolio of your work is working for you all of the time. Great work speaks for itself. If people notice a high quality job or an excellent product, they’ll ask the owner where they purchased it from. That owner can then proudly tell those people the name of your business. Your work is performing some of the most powerful advertising possible for you and it is doing so passively without further effort on your part.
Sometimes your friends and family will feel they are entitled to a discount because they know you. If that’s the case, oblige them. Obtaining your first few customers, and building your portfolio, are crucial first steps. If you have to offer some of your goods or services to your personal network at a discount to take those first steps, consider it a necessary aspect of starting your business. Selling your products at a discount to people in your personal network provides you with all of the benefits described above. Consider those benefits your profit on the sale.
Your first customers can also provide you with valuable feedback. They can tell you how to improve your offering so you can attract your next set of customers. People in your personal network could be more willing to tolerate an imperfect good or service than other paying customers. Especially if the people in your personal network obtained your good or service at a discount. Take advantage of that opportunity to receive feedback to improve your offering. Improving your products with the feedback from your first customers makes it more likely you’ll satisfy your next paying customers on your first try. Satisfying paying customers outside of your personal network on the first try is essential to getting good reviews and obtaining positive word-of-mouth advertising that reaches beyond your personal network.
The rules surrounding offering your goods or services for presale vary from jurisdiction to jurisdiction. Particularly with respect to taking payment. Learn the rules in your jurisdiction prior to offering your goods or services for presale.
If you know your business is going to be ready to begin offering goods or services on a particular date, you can begin offering those goods and services available for presale. Offering products for presale allows you to begin taking orders early. Those orders enable you to supply goods and services immediately upon the launch of your business giving your business an instant cash boost. Your first customers purchasing through the presale also provide all of the benefits described above including building your portfolio and obtaining customers who can spread word-of-mouth advertising.
Depending upon the rules in your jurisdiction, there are a number of ways you could make your goods or services available for presale. If possible, you should take payment in advance. If you can spend the advance payment, it supplies your business with the cash you need to buy the inventory to offer those goods for sale or can help cover the purchase cost of equipment you need to offer the service. That provides a much-needed boost to your startup capital and can reduce the amount you might need to borrow to finance your startup costs.
Taking payment in advance also commits your customers. There’s a big difference in follow through between people suggesting they could be interested in buying from you and people actually putting money down.
If you’re not able to take full payment upfront, you should consider whether you could take a deposit such as 10%, 30%, or 50%.
If the rules in your jurisdiction, or your customers’ sentiment, prevent you from taking any money up front, you’ll need to consider other methods to offer your goods or services for presale. Depending upon what you sell, you might be able to get presales under contract. The contract commits your first customers to buy. If you can’t get customers under contract, you could also provide customers with a written price quote describing their order. In most cases, however, a written quote won’t commit your first customers in the same way a contract or taking a deposit would.
If you’re having trouble pre-selling your goods or services, you might want to offer an incentive to attract people to commit to a presale purchase. You could offer free add-ons, free accessory services, or higher quality for the regular price. That maximizes the amount of cash you can bring in with the presale because you’re still getting full price. The best way to make the offer more attractive is to find ways you can offer more value to your customers that cost you very little.
For example, you might be able to offer an additional accessory service to your customers that takes you very little time but would normally cost your customers quite a bit in extra fees. You could also offer free accessory goods along with the presale purchase that you are able to purchase for a very low price and would normally mark up significantly. The key is to maximize the value to your customers while minimizing the cost to yourself.
You could also attract customers to your presale by offering discounts. Keeping in mind all of the benefits you obtain from your first set of customers, you might even choose to offer a discount right down to your breakeven price for some, or all, of your goods and services. Once you’ve established a track record of satisfied customers and a portfolio of work, you’re no longer a brand-new business. That is a benefit that could far exceed the benefit of making a profit on those first few sales. A good track record and a portfolio of high quality work makes attracting customers willing to pay full price much easier.
Advertising is essential to getting your business started. People need to know you offer a good or service before they can buy it. You need to spread the word. More people knowing about your business means more potential customers.
Advertising, however, can be quite expensive. There is no limit to what you could spend on advertising. You could always find more places to advertise and the prices vary significantly. Being a brand-new business likely means you have a very limited advertising budget. As such, you should take advantage of all sources of free advertising available to you. You could advertise to thousands, maybe even hundreds of thousands, of people for free.
In many cases, free advertising is only free with respect to money, it still costs your time. That’s usually not a problem for many new companies that have some extra time, but very little startup funding. Finding extra time is often easier than finding extra money.
From the free advertising strategies listed below, pick those that work best with your schedule. This section includes some of the most popular, and most effective, ways to obtain free advertising. Some require more time than others and some will reach larger audiences than others. Some of the strategies might also be more effective, or more appropriate, for certain kinds of businesses than others. You’ll have to use your discretion to determine which advertising strategies work within your schedule and are most appropriate to the goods and services you’re selling. You’ll also have to consider which of the strategies listed below are most likely to reach people who are likely to convert to paying customers.
Your time is valuable. Budget the time you spend on free advertising strategies just as carefully as you would budget limited startup capital.
Creating a blog has a number of benefits for your business. A blog serves as an entry point for your customers. It’s out there on the Internet and accessible to anyone who could potentially convert to a customer. Your blog introduces visitors to your goods and services.
Blogs also help with search engine optimization. Your blog can be engineered to rank high in search results and contain links to your business website making it more visible as well. A quick Internet search for search engine optimization (SEO) should provide you with enough information to learn the basics. The topic of SEO is a book on its own.
A blog also establishes your credibility. Your writing demonstrates your expertise to potential customers. By writing about the subject matter, you are able to give concrete proof you have the expertise, rather than simply saying you do. That’s much more credible to somebody unfamiliar with your business.
Your blog can also turn into a place people regularly visit to seek information. People who trust your blog for advice can easily convert into paying customers. In some cases, the people seeking advice from your blog won’t end up converting to customers, but if they trust your advice, they might recommend you to a friend.
Potential customers can also comment on your blog. That turns your blog into a two-way communication channel. Your customers’ questions and comments on your blog can provide you with a lot of insight into what is important to your customers. That helps you determine which goods and services your customers want most. Knowing what your customers want helps you fine-tune your good and service offering to match your customers’ needs.
Learning what’s troubling your customers also helps you anticipate new problems you can solve for your customers. Solving new problems could lead to new products and services that no one else offers. Being the first in the market could be an extremely lucrative position for you.
You can also add social media sharing buttons to your blog so anyone visiting your blog could potentially share it with all of their friends and followers. That’s free word-of-mouth advertising to hundreds of people for each person who shares your blog post. If you write content people find useful, your blog posts could be shared thousands of times or even go viral. People share your blog posts on social media because they believe their friends and followers will find the posts interesting.
You can also use a blog to answer common questions your potential customers are likely to ask. While addressing their concerns, you can also include a sales pitch that aims to convert them into paying customers. Answering common questions helps people overcome some of their uncertainties with respect to buying your goods or services. Including those answers on your blog might also save you from answering many of the same common questions over and over again.
A blog is free and easy to set up. There are many great resources available on the Internet to walk you through setting up a blog. If you’re uncertain, check YouTube for videos that take you through the process step-by-step. Most free blog hosting websites have very straightforward user interfaces and step-by-step tutorials on their websites. The straightforward user interfaces allow someone with no web design experience to easily set up a blog in a couple of hours.
The main downside to a blog is it can be very time-consuming. Most new businesses, however, find it easier to come across extra time than extra money. A blog can be time well spent to establish your credibility. Keeping your blog up-to-date with new posts could be worthwhile if you’re converting a lot of blog visitors into customers. If not, you can reduce the frequency of your posts or stop updating your blog altogether. You can keep the articles you’ve written online forever, even if you’re not writing new content. Once written, your articles will continue providing benefits as long as you leave them online. Your old articles will continue to come up in search results and continue to provide advertising for your business.
You might want to consider writing a number of articles for your blog while your business is just getting started, then cutting back on the number of new articles once you become busier.
Just keep in mind, repeat blog visitors will stop coming to your blog if you stop updating it. Like anything else, you have to weigh the benefits derived from your blog against the time you invest into it. Invest your time wisely.
It’s possible to leverage the power of blogs without having your own blog. If you find a blog that is relevant to your business, you could ask the blog owner if you could submit a guest post for their blog. Make sure your guest post is something the blog owner feels would be relevant and add value for his or her readers. You could even write your guest post ahead of time and propose that guest post to several blog owners until you find one who accepts it. That allows the blog owners to see exactly what you intend to publish on their blog. If they see value in what you want to post, they might agree to post your article on their blog.
At the bottom of your guest post, you want to include a paragraph about yourself. It’s the same type of paragraph you would include at the bottom of a news article. The media refers to that paragraph as your boilerplate. It’s a paragraph that you copy and paste to the bottom of all of your articles. The paragraph contains a brief description of yourself and your company, which helps to establish your credibility in the subject matter you are writing about. Not only does that paragraph establish your credibility, it also advertises your business. Any potential customers who want to learn more about you should be able to look up your business from the information included in your last paragraph.
Another way to capitalize upon the benefits of a blog is to write a comment in the comments section of someone else’s blog. Comments are indexed by search engines. When commenting on other people’s blogs, you should keep your comments relevant to the subject matter of the blog article. Don’t just write a comment advertising your business without adding anything of value to the readers of the blog. Not only is that disrespectful, it’s frowned upon because it’s spam.
Most blogs have a comments section. Some of the more popular blogs actually have a very active comments section. By commenting on a popular blog, you could potentially have thousands of people read your comment.
You don’t need to persuade anyone to accept your comment. It’s usually posted instantly. Comments, however, are seen by fewer people than the main blog article because not everyone reads the comments section below the article.
There are probably many places in your community where you could put up a flyer advertising your business for free. Some of those places might require you to be a member of a specific group, while others are open to anyone.
Consider sports complexes, churches, recreation centres, parks, theatres, stadiums, art galleries, centres of the arts, libraries, leisure centres, and any other public community centres.
Some centres have bulletin boards or walls where you can post your flyers. Some are self-serve, where you can simply post your flyer on the board as you desire. Others might require you to receive approval from the administrative staff. They might also limit the amount of time your flyer will be displayed. Two weeks or 30 days are common limits.
For centres that require approval, you can increase your chances of having your poster put on display if you can advertise you are offering some sort of special discount or promotion for the users of that centre or members of the group that owns the centre. You can offer the same special discount to the users of every centre that displays your flyer.
Often, the people who tend to look at bulletin boards in community centres are people who are looking for deals. To reach those people, you’ll have to advertise some sort of promotion or discount so they believe they’re getting a deal by purchasing through you instead of one your competitors.
You can also consider making the deal time-limited to encourage people to take action now. People will be more inclined to make an impulse purchase if they believe they’ll lose the discount and be forced to pay full price if they wait until later. That reduces the chance of people forgetting about your offer because they plan to look into it later. Time-limited discounts put pressure on potential customers to act now.
Word-of-mouth advertising is free marketing. It is, however, a huge mistake to look at it as only a free source of advertising. Word-of-mouth advertising is an extremely effective form of advertising. In fact, it is very likely the most effective form of advertising.
Many people, when uncertain about a good or service they would like to purchase, turn to their friends and family for advice. They trust their friends’ judgment and feel safe purchasing from a business that someone they know has already tried and had a good experience with. If your potential customers’ friends and family are satisfied with your goods and services, they’ll recommend your business.
A recommendation from a friend or family member is not simply another advertisement like something you would see in a magazine or on TV. Advertisements in magazines and on TV are difficult to trust and make many people sceptical. A recommendation from a friend or family member, however, comes from someone you know and trust. You are hearing good things about a business from someone you believe has your best interests at heart; not a company advertising to make money and serve their own interests. That makes word-of-mouth advertising very credible and very powerful. As such, word-of-mouth advertising can convert a much higher percentage of potential customers into paying customers than any advertising you pay for.
Word-of-mouth advertising works great when people ask their friends and family for advice. That is, however, not the only time word-of-mouth advertising works in your favour. If your customers are extremely satisfied with your goods and services, they’ll go around telling their friends and family about your goods and services without being asked first. Satisfied customers become walking advertisements for your business. But most importantly, they become highly trusted advertisements for your business because they are recommending your goods and services to their friends and family—people who trust them.
Even if you had the money, there is no way that you could buy that highly trusted advertising. An enthusiastic satisfied customer is a much more effective promoter of your business than anyone you could pay to spread the word.
New potential customers might not even know they need your good or service before they hear about it from an enthusiastic friend. If your satisfied customers go around bragging about the goods or services they’ve received from your business, their friends will be envious and want those goods or services for themselves. That allows you to turn one satisfied customer into many without spending any money on advertising.
Most people understand word-of-mouth advertising is great to have. But most people don’t understand just how powerful it really is. To put the power into perspective, let’s say you have two satisfied customers. Those two satisfied customers then recommend your business to two of their friends who also become satisfied customers. Then each of those people go on to recommend your business to two of their friends who also become satisfied customers. After that happens only 10 times, 1,024 people have just heard a trusted friend recommend they try your business.
Think about the times you’ve heard your friends recommending businesses to you. You might have heard your friends raving about how good the food is at a new restaurant they’ve tried. Perhaps you’ve heard your friends telling you how good a new movie is as they recommend you go see it right away. Your friends are recommending those things to you because they genuinely believe that you will enjoy them. That’s very powerful free advertising for the sellers of those goods and services. They have someone you trust telling you how good their products are and they didn’t have to pay your friends anything for the advertisement. In fact, they made a profit from your friends because they bought the products.
Regular word-of-mouth advertising happens when your satisfied customers tell their entire network how good your products are. They are recommending your goods and services to their friends without you asking them to.
Besides doing your best to offer a quality good or service, there’s not much you can do to control whether or not people recommend your goods and services to their friends. But you can ask people in your own personal network to recommend your goods and services to people in their networks.
It can be a great help for you to have the people in your personal network recommend your goods and services to people they know every time an opportunity comes up. But it takes a lot of effort for people to recommend your products to people in their network. Even if people in your network are willing to put in the effort to help you, they have to remember to do it each time an opportunity arises.
An easy way for you to ask your personal network for help spreading the word, that requires only a bit of effort on their part one time, is to ask them to write a post to share with their friends and followers on social media. You could make it even easier for people in your network by sending them a private message including the post you would like them to share so they can copy and paste it if they’re willing to do so. Or you could write up a post and ask your friends and family to share your post. Sharing your post requires little commitment and takes very little effort from people in your personal network—perhaps as little effort as one click. That small action can help you reach thousands of people very quickly. That’s much easier for most people to do than to recommend your goods and services in person.
Having people in your personal network share your post is not as effective as having them brag about or recommend your products in person. But every little bit helps. If you can have your close friends and family do both that’s great. For people who might be willing to make a lesser commitment, you could ask them to simply share your post on social media. That’s free advertising for you and it will have some of the benefits of word-of-mouth advertising since people are seeing your message relayed through their friends.
The benefits of asking your personal network to share a post on social media can be huge considering how little of your time it takes. That makes it well worth the small amount of time and effort you invest. If you write a great post, some friends of your friends might even be motivated to share your post with their networks without you asking them to.
Tell your entire network about your business. It’s easy to reach out to your entire network through social media. You could probably ask your closest friends and family for favours that help you actively promote your business. Those people can be a tremendous help to you.
There are probably also hundreds of other people in your network that you could contact through social media. You’re probably connected to lots of people through social media whom you haven’t talked to for years. You’re probably also connected to several acquaintances that you don’t know that well. You would probably not be comfortable asking those people for help. Moreover, many of those people are probably not as willing to put in the effort to help you as your close friends and family are. You can, however, still leverage your connection with those people. Not by asking them to help you, but simply by telling them about your business.
Social media is not the only connection you have with other people. If you have any sort of connection with other people—social media, clubs, groups, teams, or otherwise—find a way to use that connection to simply let those people know about your new business.
Just be careful not to go overboard and annoy everyone. Don’t repeatedly spam your entire network. You just have to get the word out. A good way to reduce the chance of annoying your network is to simply tell people about your company to get everyone anticipating your launch—and perhaps helping spread the word. You could share the news about a month ahead of your business launch. You would then share info about your new company once you’re open for business. Sharing twice isn’t excessive, and shouldn’t annoy your entire network. If you’re taking preorders, you can also announce the time at which you begin taking preorders.
You might also wish to share specials or promotions, but be careful to keep that to a minimum. You don’t want to be sharing a new special every day or even every week. That comes across as spam to most people in your network.
You’re likely very excited about your business and wanting to tell all of your friends and family about it repeatedly. You want to tell them not to advertise, but because you’re genuinely excited about it. It’s at the top of your mind, and a major part of your life, so you want to talk about it. Your business, while a big part of your life, is not a big part of other people’s lives. It’s not as relevant to them as it is to you. They’ll likely become annoyed by hearing about your business repeatedly. So be careful not to get carried away repeatedly sharing everything about your business.
Make your sharing strategic. Get the maximum benefits while minimizing the chance of annoying others with spam.
Take advantage of being able to build a free page on any high-traffic platform. Most social media platforms allow you to create a free page for your business. Consider Facebook, Twitter, LinkedIn, and Pinterest to get you started. Continue moving on to less popular social networks if you have time to create a page on additional networks. It might take you an hour or more to create a page on each social media network, but once you put in the effort, those pages are online forever.
The more places you can promote your business to people, the better. Social media is based on sharing. As such, your social media pages for your business are optimized to be shared with other people on the social media networks.
Many social media pages also rank high in search engine results making it easy for potential customers to find your business. In fact, many social media pages for your business could actually rank higher in search results than your small business website. That means some potential customers could be more likely to find your business through social media than through your own website. If you have a business website, you should include a link to your business website on each of your social media pages to direct customers to your own website—especially if people can buy your goods and services online through your website.
Once you set up your first social media page, setting up a page on each additional social media platform will be much easier. You’ll find you can often copy and paste large portions from your first social media page when creating your page for each additional social media platform. Copying and pasting makes it quick and easy to create a business page on many additional social media platforms.
Just about any topic you could possibly be interested in has a forum where people meet up online to discuss that interest. Discussions on forums include general conversation, offering advice, writing reviews, and asking questions. Any forum dedicated to a topic relevant to your business is likely filled with people who could potentially be your next customers. They are a group of people who are more likely to be interested in your business offering than the general public. They are your target market. Get in touch with your target market by signing up to any forums relevant to your business.
Once you sign up to the forums, begin networking and building relationships with the members of those forums. That will make you a member of those communities. Depending upon the size of those communities, being a member might put you in touch with a huge number of potential customers. Some forums have membership numbers in the millions. Others have a small membership local to one city. Networking on forums is the same as networking in person. You make contacts and develop relationships. Your business contacts could be your future customers or people who refer customers to your business. People like to buy from their friends. If you’ve made friends on the forum, your business might be the natural choice when it comes time for them to make a purchase.
You want to avoid making several self-promoting posts advertising your business on the forum. That’s spam, and no one likes being subjected to spam. Moreover, many forms have strict rules prohibiting spam.
Instead of spamming forum members, you promote your business by adding value to the discussion. You can do so by helping forum members. Answer their questions and provide advice when they post about problems. That establishes your credibility on the forum. People recognize you as someone who knows the subject matter well enough to offer credible and dependable advice. Each post you make adds value to the discussion and promotes your business. How do you ensure people know about your business? Add a brief tagline about your business in your signature.
Every time you make a post on a forum, your signature is attached to the bottom of your post—just like an email signature. That means every time you offer valuable and helpful advice to people on the forum, they see a brief tagline about your business below the message. Your valuable advice turns into a very effective advertisement that demonstrates your competence and credibility. Your tagline can include your business slogan and a link to your business website or your business email address.
Your posts advertise not only to members of the form, but also to everyone else browsing the forum. Most forum discussions (threads) are indexed by search engines. So anyone searching for the answer to a question will see that question being asked in a forum in the search results. When they click through to read the answers to the question they’ll see your answer and your signature advertising your business.
Being an active member in forums filled with people in your target market can be a valuable networking activity. If you don’t have time to invest in networking regularly through forums, you can also take advantage of the publicity you’ll receive from answering a few questions on random forums across the Internet.
Just do a search for forums likely to be filled with people in your target market. Then quickly browse through those forums for discussions where people are asking questions relevant to your business that you’re able to answer. Sign up for the forum, create your signature, then post an answer to any questions you know the answer to. Each of your responses will stay in the discussion thread and be indexed by search engines. So anyone searching online for an answer to the question can find your response and see your signature advertising your business—whether they are members of that form or just browsing. That’s great free advertising that demonstrates your competence and credibility. Your posts are likely to stay online as long as the form stays online. Your posts could easily be long-term advertising for your business.
Responding to questions on forums can be time-consuming. But your responses could potentially be seen by thousands of people who have an interest in a topic relevant to your business. They’ll see you’ve established yourself as a person knowledgeable in the subject matter because you are able to answer other people’s questions and provide the advice they need. If those people want to contact you for more in-depth advice and services, your business information is available in your signature.
Many specialty forums also have general discussion sections and separate sections for specific interests. For example, a bodybuilding forum might have a section specifically for discussing golf. If your business sells golf equipment, you could make posts in the section dedicated to golf on the bodybuilding forum even if your business has nothing to do with bodybuilding.
Use search engines to find discussions relevant to your business on specialty forums. That significantly multiplies the number of places where you can post responses to people’s questions on forums. You’ll reach a much wider audience when you branch out to a number of different forums covering a wider array of interests.
Take care when deciding which forums to sign up for and which questions to respond to. Responding to people’s questions requires an investment of your time. You want to get a return on that investment by converting forum members and forum browsers into paying customers. If your business is restricted to a certain local area, and does not make any online sales, you would receive little to no benefit posting on a forum dedicated to people in a specific city in a different country across the world from you. Spend your time making posts in forums filled with people who could convert to paying customers.
Try searching for forums local to the region your business operates in. You might be surprised just how many local forums serve your region.
The businesses which stand to gain the most from posting on forums are those which make sales online. An online business could potentially sell goods and services to people all over the world. Anyone with an interest in the subject matter relevant to your business and an Internet connection could potentially be converted to a customer. They need only follow the link in your signature below your posts in forums to visit your website and make a purchase.
Businesses offering knowledge-based services where specialty expertise is required are able to benefit from providing specialized advice on forums. Establishing trust and credibility is important in knowledge-based industries.
It’s up to you to decide how much time and effort you should invest posting on forums. You can spend just about an unlimited amount of time cruising through forums and posting responses.
If your business is slow getting started, and you have nothing else to do, you could spend some of your time posting to forums. Your posts are free advertising and could help bring in new customers. It’s a good activity to do outside of your normal business hours because there is no time limit or time zone when posting to forums. You can post to a forum at any time. Most businesses couldn’t cold call customers at 10:00 PM, but there is no problem posting to a forum late at night. If you’re putting in long hours trying to kickstart your business, you could manage your time by cold calling customers during your normal office hours, then posting to forums at night when you can’t contact customers. That allows you to be productive during a time you normally wouldn’t be able to be productive.
Being interviewed by local media is a great way to get a lot of free promotion. However, it can be difficult to secure an interview. Just like you need to sell to your customers, you have to sell the idea of interviewing you to the local media. You need to make them believe that interviewing you in their broadcast or publication will be interesting for their viewers.
Make your pitch to the media interesting not only to the reporters and editors, but also to their viewers. An easy way to make your story interesting and relevant is to relate your goods and services to some major current event that is popular in the news right now.
For example, if there was a major rainstorm, and you offer flood restoration services, you could approach the media with the pitch that you could offer their viewers several tips to do basic flood cleanup and recovery, tips to prevent their home from being damaged in the next rainstorm, and some warning signs people need to be aware of that indicate they need to call an expert to do repair work.
Also, if it’s the spring season, and you offer landscaping services, you could approach the media by offering them a story providing different landscaping tips for their viewers to get their yard looking great in the spring.
To make your story appealing to the media, your best bets are to make it timely, by linking it to something in the calendar like holidays or seasons, or to link your story to some current event getting lots of news coverage right now.
Put just as much effort into your sales pitch to the media as you would to secure an important customer. It can take some work to carefully develop a pitch to the media. You’ll also have to pitch your story to several media outlets to maximize your chance that one or more news outlets will accept your offer. Despite the amount of work that could be required, the payout in the amount of free advertising you’ll get in return could be huge. You’ll be featured in the media, appearing like an expert in the subject matter, offering advice to the general public. Thousands, perhaps millions, of media viewers will hear or read your advice and see you positioned as an expert. That exposure could quickly result in a huge spike in your business. If you are successful in obtaining media coverage, be prepared to handle that huge spike.
It’s often much easier to secure an interview with local media than national media. Some local media outlets actually have a feature section specifically for new local businesses. You can approach any local media outlets with feature sections for new businesses when you’re launching your business without needing to wait to make your interview timely or relevant. Simply being a new business qualifies you to potentially be interviewed for the new business section.
Spend some time learning how to perform basic search engine optimization (SEO) for your business website. The topic of SEO is a book on its own. But you can find a lot of good information on SEO online for free. I won’t go into detail here. I’ll let you learn from the experts. Take advantage of any tips you can use to boost how your business website ranks in search engine results.
Find out which keywords people are searching for when they’re looking for the goods and services you sell. Make sure your business website ranks high when people search for those keywords. The Google Keyword Planner is great for finding relevant keywords and it’s free to use.
If your competitors rank higher than you, and people begin browsing from the top down, potential customers will visit your competitors’ websites before yours. If your competitors’ websites are effective, people will buy from your competitors and won’t even visit your website.
The higher your website ranks in search engine results, the higher chance you have of gaining the person searching as a customer.
Performing some of the search engine optimization tips you’ve found online might require some web design expertise. If you don’t have web design expertise, you could either recruit someone to do the work for you, or you could perform only the tips that don’t require web design expertise. Every little bit helps. Do as much as you can.
The most important thing you can do without any web design experience is learn how to optimize the way you include keywords in everything you write and publish online. Apply those search engine optimization tips to every one of your online pages. Apply those tips not only to your business website, but also to all of your social media pages. You’ll also want to consider using some of those tips while writing your posts for blogs and forums.
Find other entrepreneurs to develop mutually beneficial agreements to trade advertising. If you offer goods and services that are complementary to those offered by other businesses, approach those businesses with a proposal to advertise their goods and services to your customers in exchange for them advertising your goods and services to their customers. This strategy works very well when customers from one business are likely to need the goods and services of a second business.
For example, people buying sinks and other bathroom fixtures from a retailer are likely to also need the services of a plumber. The retailer could agree to recommend a specific plumber’s business to its customers in exchange for that plumber recommending the retailer’s business to each of his or her customers who need to buy new fixtures.
To find potential agreements, think about all of the things people are likely to buy along with your goods or services. Consider what people will need before, after, and while using your goods and services. Also think about things that are likely to interest your customers. You can advertise anywhere your customers are likely to visit. Trading customers with other businesses can be highly profitable to both parties.
Obviously, this won’t work with other businesses who are competing directly against you. So be certain you’re approaching businesses that sell goods and services that are complementary to yours, not competing directly against yours. You can also approach businesses who serve the same customer base as you; even if their goods and services are not complementary to yours.
For example, a store that sells fishing equipment might serve many of the same customers as a store that sells hunting equipment, which might also serve many of the same customers as a store that sells camping equipment. If you own one of those businesses, consider trading advertising with the other two. All three businesses should be able to send customers to each other and boost each other’s sales.
To provide another example, if you sell health supplements, you could look for other businesses that target health-conscious customers. You could consider gyms and sports centers. You can also consider retailers that sell clothing for athletes. Stores that sell sports and fitness equipment are also candidates for trading customers. Those businesses are visited by people who are likely to be interested in buying your health supplements. Both your business and those other businesses could benefit from trading customers.
When developing a mutual advertising agreement, it’s important to clearly define the level of commitment expected from each other. Agree upon whether you expect each other to actively promote each other’s businesses by verbally recommending them, only to hang a sign recommending each other’s businesses, to allow each other to place a stack of business cards and brochures on each other’s service counters, or to simply exchange links on each other’s websites. Determine the level of effort each business wants to put into recommending the other.
Strategically consider who you’ll make your customer trading agreements with. You likely won’t be able to make agreements with several businesses who compete directly against each other unless you have a high enough volume of customers to send a reasonable number of customers to each competing business. You’ll likely only be able to recommend customers to one of each type of business, especially while you’re just starting out and building your own customer base. Rank competing businesses of each type and approach the businesses likely to send you the most customers first.
Consider not only the volume of customers, but also the quality of customers referred to you. An agreement with a business that sends a high volume of potential customers who don’t buy from you is not as good as an agreement with a business that sends a few customers who do buy from you. The first case wastes your time, while the second case generates a profit for you.
It’s often easiest to make agreements with other entrepreneurs who are in a position similar to you. They will likely see the value in recommending customers to each other. If they are also just getting started, their new businesses could need the boost in customers just as badly as your new business.
While possible, it can be difficult to create reciprocal agreements with managers at large national companies. It’s often easier to deal with other entrepreneurs because you can speak directly with the business owners. You are speaking decision-maker to decision-maker. As the business owners, you can both do whatever you like with your businesses. You don’t have corporate policies and head offices creating hoops you have to jump through to create reciprocal agreements.
Make agreements with other entrepreneurs to bundle goods and services that are complementary to yours. The simplest way to create bundles with other entrepreneurs is to subcontract each other. Subcontracting each other allows your customers to deal with only one business instead of being referred to another to buy the complementary goods or services.
For example, if you offer landscaping services, you could create a bundle with a company that installs underground sprinklers. You could then offer a complete landscaping package to your customers including all yard work and the installation of underground sprinklers. You could also create bundles with companies who do stonework such as paving stones and retaining walls. You would sell your customer on the entire package, then subcontract out the portions to be handled by the other companies.
To quote your customers the appropriate price, you’ll either need strict price agreements in place with the other companies, or you’ll need to have the other companies visit the job site to estimate their portion of the contract.
For you to benefit from the agreement, the companies you subcontract with will agree to return the favour and subcontract your company on their own contracts with their customers. Those bundles allow all participating companies to turn their customers into customers of many of the other participating companies. That results in a boost to everyone’s sales.
Subcontracting has two important benefits over simply giving a referral.
First, subcontracting is easier for the customer. The customer needn’t shop around, negotiate, research, or enter contracts with any other companies. All of which takes time and effort. Dealing with one vendor for everything needed is much simpler for the customer.
Second, subcontracting complementary goods and services to be sold to the customer eliminates the possibility of the customer getting the complementary goods or services from one of the other companies’ competitors. The subcontract locks in that customer as a customer of the companies you have agreements with. You don’t allow that customer the chance to shop around for the complementary goods and services from the other companies’ competitors. That benefit works in your favour as well. The other companies’ customers are locked in as your customers.
Sometimes it’s not possible to subcontract with other entrepreneurs. Perhaps you can’t find other entrepreneurs willing to do so, or your goods and services aren’t well-suited to being subcontracted. That could be the case when you need to evaluate or estimate each contract before accepting it. The next best option is to simply work on referrals.
You can refer customers to the other businesses by telling your customers you highly recommend the goods and services of the other company. Those other companies can do the same for you. Each business could have marketing materials from the other businesses at its office. That allows you to hand out each other’s marketing materials, such as brochures and business cards, to potential customers.
You can increase the chance of a referral successfully converting a customer into someone else’s customer by offering discounts to each other’s customers. For example, you could tell your customers that the other companies offer a 15% discount to your customers or a flat rate discount such as $100 off the price. You could even give each other coupons to hand out.
Most people will be interested in taking advantage of that discount if they are in the market for the other companies’ goods and services. To avoid losing the discount, most customers will at least get a price quote from the other companies—if not purchase immediately. That makes customers at least look into the other companies instead of going directly to one of their competitors. Again, all of those benefits work in your favour as well when other companies do the same for you.
Bundling your services with other entrepreneurs offering complementary goods and services can be very effective marketing. Customers purchasing any goods and services are more likely to be ready to purchase complementary goods and services than the general public. For instance, someone buying a new kitchen sink is much more likely to require the services of a plumber than a random person walking through a shopping mall. That person has a high probability of being converted into a customer for a plumber. The plumbing business that gets the subcontract or recommendation has an advantage over other plumbing businesses that are not recommended. Take advantage of opportunities to sell your goods and services to other people’s customers who are buying complementary goods and services.
When getting your business started, obtaining those first few customers to build your portfolio is crucial. You should not spend time sitting around passively while waiting for customers to roll in. Spend your time doing something that works toward obtaining those first few customers. If you have nothing else going on, start making some cold calls by telephone or knocking on doors.
Make a list of people who could potentially be your customers. Then find a way to contact those people. Between customers, or any other time you have a few minutes to spare, contact the next few people on your potential customer list. Cold calling should generate some sales. But even if you don’t make sales when cold calling, it’s good practice to develop your sales skills so you can close more sales when dealing with customers who come to you.
Going door-to-door could be more time-consuming and more uncomfortable than making cold calls over the phone. But it can be more effective for certain types of businesses. Some businesses are well-suited to door-to-door sales.
For example, if you run a landscaping business and don’t have any clients today, instead of sitting around waiting for the phone to ring, load your equipment into your trucks and trailers, pick a neighbourhood, park your vehicles, and begin going door-to-door. Tell people your landscaping crew is currently working in their neighbourhood (even if the work they’re doing is going door-to-door) and you could offer them a special discount if they hire your crew for some work today. You could elaborate on how the majority of your day is spent zigzagging across the city to different jobs. Since you’re already in their neighbourhood, you eliminate the travel time and could pass that savings along to them.
That creates a pressure sales situation for your potential customers. You’re offering a special discount that expires right after you leave their doorstep. Some people just can’t pass up a deal.
Working at a discount is often better than not working at all. Especially if you have costs to cover whether you’re working or not. Not only does the discounted work bring in revenue, but it also exposes new customers to your goods and services. Many customers who are satisfied with your work could easily turn into repeat customers at your regular price.
Buying from a new business is risky. People have no idea what to expect or what level of quality they’ll receive when dealing with a new business. A special discount makes people more inclined to try a new business. Then, once people know they can receive high-quality goods and services from a certain business, the safest choice for them is to become a repeat customer to that business. It would be risky for them to try another new business not knowing whether they’ll receive the same high level of quality as the business they’ve already tried. Different people are willing to accept different amounts of risk and uncertainty in their lives. Some people could become loyal customers for years because they fear the risk of switching. For those people, it’s easier to stick with what they know.
Do you always take the time to evaluate new businesses to make sure that you’re not missing out on a better business? Or do you routinely visit the same businesses over and over again without evaluating any new businesses? Many people fall into routines and keep going back to the same businesses. Cold calling can break people’s routines and convert someone else’s customers into your customers by convincing them to try your business. Once people have tried your business, routine could turn them into your repeat customers.
Going door-to-door works very well for the type of businesses where doing so allows you to spot your potential customers before you get to the door. For example, exterior painting businesses can easily see which houses badly need a paint job and which have been freshly painted. They wouldn’t know that over the phone. That knowledge allows them to target their cold calling efforts to the people who are most likely to convert to customers, which makes their cold calling efforts significantly more effective. Moreover, going door-to-door would allow the painting businesses to see exactly what the job entails. Knowing the details of the job allows them to prepare a price quote on the spot.
Cold calling during your idle time turns time that would’ve been wasted into productive time generating new customers and building your sales skills.
If you need to improve your communication skills, The Zane Rozzi Communication Fundamentals course offers modules which develop your ability to make small talk and close sales. The Communication Fundamentals course is available at:
Technically, this strategy isn’t completely free as it does require a small expense to get signs or stickers made. The advertising space to display those signs or stickers, however, can be free. I’ll also discuss how to obtain that advertising space at a low cost if you can’t obtain it for free.
Depending upon the nature of your business, you might be presented with a number of opportunities to display a sign or sticker claiming your good work. You’ve probably seen this strategy in action. For instance, one of your neighbours might have had his or her house painted. The painters might have negotiated placing a sign in your neighbour’s front yard. The sign would read similar to: “Another quality paint job by ABC Painting Company Inc. Phone: (555) 555-5555 Online: www.ABCPaintingChicago.com.”
This strategy works best for companies whose good or service is visible to anyone reading the sign. Companies offering services ranging from roofing to landscaping could have their quality work on display at the same time as people are reading the sign. Having your work visible to everyone reading the sign serves as proof of the quality of your work to anyone considering purchasing from your company.
While the strategy is most effective if your work is visible, it’s not necessarily required. Even if you’ve performed services inside the home, not visible from the outside, a sign in the front yard is still good advertising to neighbours and people passing by.
If your customers are pleased with your goods or services, as they should be, try asking if they would be willing to temporarily display a sign advertising your business. Some of your customers who are pleased with your work could be willing to help you out. If they say no, you might want to consider whether or not it would be worth your while to negotiate placing a sign in front of your work.
You might be able to convince unwilling customers to advertise your business by offering them a bonus. The key is to try offering a bonus that would be valuable to your customers but cost you very little to offer. Perhaps you could offer free accessory goods with a high markup which cost you very little. Or perhaps you could offer free accessory services that take very little of your time to offer. If neither of those offers persuade your customers, you could also try offering a discount in exchange for advertising for a specified period of time.
Before negotiating with your customers, take a moment to place a value on the advertising. Think of it just like paying for advertising in a magazine, on TV, or on a billboard. The more potential customers who will see the advertising, the more valuable the advertising space is. You would, therefore, be willing to give more valuable concessions to your customers in exchange for advertising on a busy street or other prominent location than you would to place a sign on a quiet cul-de-sac with little traffic. You would also likely be willing to give more valuable concessions if your work is visible while reading the sign than when your work is not visible to persuade potential customers.
Work for other businesses and organizations with premises located in prominent high-traffic locations could offer very valuable advertising real estate. Prominent locations could have thousands of people passing by every day.
Advertising work you’ve completed also serves as word-of-mouth advertising. People are more likely to trust your business if they see one of their neighbours has hired you. Seeing one of their neighbours has hired you means you’re no longer an unknown business with an uncertain track record. They see that you’ve provided quality work to their neighbours and it would likely be safe and low-risk to hire you to do the same for them. Your work speaks for itself. Moreover, your customers seem to be so pleased with your work they’ve allowed you to place a sign in their yard.
Your sign could also generate interest. After seeing your sign, people who didn’t know they need your products are now thinking about your goods and services. Those people might approach their neighbours displaying your sign and ask them if they’re happy with the work before hiring you. If your customers reply positively, you’ll gain new customers.
A sign in front of a home or business is not the only way you can apply this strategy. Fencing contractors often attach signs on the corners of the fences they build. Vehicle dealerships often attach stickers and license plate frames advertising their dealership on the vehicles they sell. Mechanical contractors often place stickers on mechanical equipment, such as furnaces or air conditioners, they’ve installed. You can get thousands of stickers printed for a low per unit cost. If appropriate, attach a sticker advertising your business to everything you sell or install.
Be creative. Advertise your business with signs or stickers claiming your good work anywhere you can—especially if you can get the advertising space for free from satisfied customers.
All businesses should have a website. There’s no excuse for not having a website when you can get a site online for free without any web design expertise. Anyone searching online for your business should be able to find it. Consider how often you personally use the Internet to look up information on businesses. You could lose a customer every time someone can’t find your business online while searching for your goods and services. Get your business in front of potential customers by having a web presence.
A quick search for “free website” will return many free website platforms for you to consider. Review the features and terms and conditions of a few free website platforms to choose one that’s right for you. Different free website platforms make money in different ways. Some make money through advertising, while others make money through offering premium services to upgrade your free website.
Free website building platforms are targeted to people who don’t have web design expertise. Most of their users are individuals and small business owners who don’t have the budget to hire a professional web developer to create a professional website. To appeal to those users, they’ve made the process to create your own website as simple and straightforward as possible. Using their services, most people can get a professional looking website online in as little as a few hours.
Free website building platforms have a number of templates you can use to quickly create a professional looking website. That means you don’t need to have any artistic talent or web design experience to get started. You need only pick a template and fill in the blanks. The process couldn’t be easier. Most free website platforms have hundreds of templates to choose from. They have a variety of templates targeted to many different kinds of small businesses.
You can apply the tricks you’ve learned while looking up search engine optimization while filling in the blanks on your chosen template. It’s crucial to learn how to include keywords while describing your business and your goods and services. The higher your website ranks in search results, the more potential customers will visit your website. Most people won’t look past the first page of search results. You should try to get your business website on the first page of search results for keywords relevant to your business.
If you’ve been commenting on a variety of forums, and including a link to your website in your forum signature, all of those links back to your website from the different forums move your website higher up in the search results.
Ensure your business website has all of your contact information. Make it as easy as possible for potential customers to contact you.
You can also use your website to display a portfolio of your work. You can describe projects you’ve recently completed and display pictures of your high quality work. That highlights the importance of obtaining your first few customers as quickly as possible. Those first few customers build a portfolio you can show off online. You can also include quotes and reviews from customers who are satisfied with your goods and services.
Again, having a portfolio to show off is one of the reasons why it’s important to reach out to your personal network to get your first few customers as quickly as possible. Those first few customers provide you with the work to include in your portfolio. Customers from your personal network are also likely to agree to provide a positive review or quote promoting your goods and services to post on your website. You should be able to count on your personal network for positive reviews.
Getting positive reviews from people in your personal network to post online adds credibility to your business. Posting their reviews online works best if the reviewers don’t have the same last name as you. The reviews are much more credible that way. But even if they do have the same last name, you need only quote them as: “—first name, city.” It’s perfectly acceptable to leave out their last name and no one will be the wiser. Omitting the reviewer’s last name gives the impression you did so to protect their privacy.
Reviews and quotes praising your goods and services boost potential customers’ confidence in your ability to deliver a quality good or service. It’s proof that you have satisfied customers. Use your website to display your high quality portfolio and positive reviews. Putting that proof of your quality online for all potential customers to see makes your business look appealing and trustworthy.
Publishing articles is similar to publishing guest posts on other peoples’ blogs. Look for websites that post articles in your area of expertise that are relevant to your business. Then find a topic for an article that would add value for the readers of that website. Read some of the articles on the website to get an idea of the format, length, and the type of articles accepted by that website.
Like blog posts, articles are a great way to establish your credibility and show off your expertise. By targeting special interest websites, your articles will be in front of an audience of people who are likely to be interested in your area of expertise and the goods and services sold by your business.
For a few quick ideas, try a common article format such as: how to, top X, explaining changes in government policies or regulations, common problems to avoid, or how to solve common problems. Most people with an interest in your industry will find articles of that nature interesting. Potential customers can read your article, then get in contact with your business for more in-depth services.
Some websites might require you to write your articles in advance and submit them for approval. If that’s the case, and you have the time, write several articles and keep submitting them to different websites until someone agrees to publish them. Publishing articles on popular websites is well worth the time and effort required. Many popular websites could be visited by thousands, or even millions, of viewers. Writing an article that establishes your credibility in front of millions of people could create a significant payout for you.
You’ve earned the bragging rights of being published on a well-known website. That further establishes your credibility. Brag about it wherever you can. You can print the article and hang it in your business or include links to the article on your business website. Share links to the article on all of your social media pages.
When you contribute an article, you’ll include your boilerplate paragraph at the end. Your boilerplate is a brief description of yourself and your business that tells readers who you are, what you know, and why you are qualified to speak about the subject matter. But more importantly, it advertises you and your business after someone has just enjoyed reading your article.
As an added bonus, many websites even pay you for your articles. For instance, you could be paid a flat rate of $250 per published article, or a variable rate of one tenth of a cent for each person who reads your article. If you write interesting articles for high-traffic websites, you could be paid a nice cash bonus on top of the benefits of advertising your business and establishing your credibility.
Depending upon your planning, a party can be free, or it can get expensive in a hurry. A grand opening party for the public could require a large budget. Instead, throw a business launch party for your friends and family. Invite them to come celebrate your achievement. Find ways to reduce or eliminate your costs of hosting the party, such as making the party potluck and bring your own beer.
Throwing a party is a good way to spread the word to your friends that you are now officially open for business. A party helps your friends and family remember, if they need a good or service you sell, they should come to you. It also helps them remember to recommend your business to people in their personal networks when an opportunity comes up.
If you host the party at your place of business, your guests can see your facilities, browse your inventory, and get to know your business. You could host the party at your place of business a couple of days before your grand opening, or perhaps the weekend prior to your launch.
You can also host the party at your home. Your guests can still ask you questions about your business at your home. If you run a home-based business, you could show your guests the marketing materials you have at your home or any equipment and tools you’ve purchased for your business.
Your guests know the purpose of the party is celebrating your business. As such, your business will be a common topic of conversation at the party—both between you and your guests and among your guests. That means your guests will be interested to learn about your business and will be asking you a number of questions. Their interest gives you the opportunity to tell them about the goods and services you offer. Your friends will be interested to learn what you’ve been busy with the past while.
A party is great for ensuring everyone in your personal network knows the details of your business. That puts your business at the top of their mind if someone they know needs a good or service you sell. That allows them to refer people in their personal networks to your business. Some of your friends and family will probably also be your first customers.
It also feels great to celebrate your achievement by throwing a party. It’s a great way to take a break from the hard work you’ve been putting in to get your business ready to launch. Being ready to launch your business is a huge milestone. You’ve come much farther than many other people. Celebrate your accomplishment.
After you’ve taken advantage of the free methods of advertising described above, there are also a number of low-cost methods of advertising your business. Take advantage of marketing opportunities that allow you to obtain a lot of benefits for a minimal cost.
Marketing is an area where it’s exceptionally easy to waste money. Your money is wasted if you’re not advertising to the right people in the right place using the right medium. The wrong marketing efforts will quickly increase your costs, but won’t increase your revenues. You don’t have much money to throw into marketing, so make every dollar count. Make sure your marketing efforts connect with your potential customers in a way that’s going to convert to sales.
Write up a press release to announce your grand opening. Many press release services are available online. Compare the costs and features of several press release services and choose one that fits your needs. Most offer multiple tiers of service, where the more expensive tiers give you wider distribution.
Different press release services have connections with different media outlets. Choose a press release service that gives you distribution to the media outlets you want exposure with.
Most press release services have a tutorial page that tells you how to format a press release. You can also search, “how to write a press release” to learn the proper format. It’s easy to write a short press release.
Using a press release service is not a sure thing. The press release service will get the information out there on the Internet. But simply having the information available doesn’t guarantee any media outlets will pick up and run your press release. Press releases are hit and miss. The quality of your writing and the newsworthiness of your press release both make a difference in whether or not your press release is picked up by the media outlets.
If your press release doesn’t get picked up, it’ll be on a back page buried deep in the media outlets’ websites. It’ll be buried so deep it won’t ever be viewed by anyone. Despite being buried, your press release will still be indexed by search engines. So even if your press release doesn’t get picked up, you’ll still benefit from search engine optimization because you will include a link to your business website and any of your important social media pages in your press release. If your press release is distributed to 300 media outlets, even if your press release is buried on a back page, that creates 300 links back to your business webpage, which can improve its search engine ranking.
The real benefits of a press release come if your press release is picked up by the media. Your press release is picked up and run on the main page of a news outlet if someone from the media outlet reads your press release and deems it newsworthy enough to include on the main page. Being featured on the main page of a news outlet can give your business exposure to thousands, or millions, of viewers depending upon the size of the media outlet’s readership. The media outlet may also contact you for additional details before running your press release on the main page. Main page exposure is where you get the most bang for your buck with the press release. There is, however, no guarantee your press release will be picked up.
Submit your press release to local media outlets. You can do this for free on your own without using a press release service. Local news outlets are more likely to pick up your press release and run it on their main page. Local news outlets have a larger focus on what’s going on in your city than national media outlets. You have a much better chance of having your press release picked up by your local media. Several local news publications even have a section specifically for new businesses opening in the city. If interested in your press release, local media could contact you for an interview. Getting interviewed in the local business section gives your business launch a huge boost.
See the section above on getting interviewed by local media for tips to increase the chance of your press release being picked up. In summary, make your press release timely and relevant by linking it to stories currently receiving a lot of publicity.
You could advertise promo codes for your business or hand out coupons to the public. Promo codes and coupons make people think they’re getting a deal. You should include a short time limit on your promo codes and coupons so people realize they have to act now, or they’ll miss out. People fear loss. Even losing the opportunity to save money makes it seem like they are losing something. That fear of loss could make a limited time discount coupon more appealing than simply advertising you have a sale price. Giving someone a promotional code or coupon seems like you’re giving them something of value.
Offering promo codes and coupons doesn’t necessarily cost you a lot of money to set up, but they do reduce your profits because you’re offering goods and services at a lower price. The advantages obtained from offering promotions can far outweigh the foregone profit. When your business is just getting started, and you need to get your first customers to establish a portfolio and spread word-of-mouth advertising, offering a discount could be very effective. You’re receiving benefits beyond profit when you attract your first customers with promo codes and coupons.
Promo codes for online businesses are often free to create. Physical coupons require an investment of time and money. First you need to design and print the coupons, then you need to distribute the coupons.
To give out your coupons, you could hire flyer distribution services to deliver your coupons door-to-door. You could also deliver them yourself. Mail distribution is not targeted, it works best if anyone from the general public could potentially be your customer.
You could also approach other businesses and community centres and ask them to display a stack of your coupons for their patrons to take advantage of. Strategically target which businesses and public venues to approach with your requests. Try to approach businesses and venues likely to be frequented by people who could potentially be your customers. For instance, you could ask the manager of a fitness club to display your coupons offering discounts at your health supplements store. Make it seem like you’re giving their members a special discount. You could offer the same special discount to the patrons of multiple businesses and community centres.
Go to an office supply store and find a nice business card holder or other small display apparatus to make your coupons look nice on display. Don’t just place a pile on the counter. Also consider putting a sticker with your company logo on the top of the coupon holder.
You can also handout a stack of coupons to your friends and family to pass out to their friends. That allows your friends and family to feel like they’re giving people something of value. They’re not just telling people about your business, they’re offering people a valuable discount at your business.
There are a number of websites focused entirely on special deals or discounts. Those websites post special discounts and promotional codes for just about any type of business. The list of discounts is continuously updated by the website administrators. Many of those websites also allow the users to submit any discounts or promotional codes they’ve found so others can take advantage of them. Consider advertising your promotional codes on those websites. Many people will be inclined to try your business on the basis of taking advantage of a deal.
Submit your promo codes to as many discount websites as you can. The more places you have advertising your promotion, the more people you could potentially convert into customers.
A great way to spread the word about your new business is to offer some of your goods and services for free. But don’t just offer your goods and services for free to any random person. You need to have some goals in mind to get the maximum value for your time and expenses invested to offer those goods and services for free. You need to consider that time and expense an investment. If it doesn’t seem like a wise investment, don’t offer your goods or services for free.
Strategically plan when, where, and to whom you will offer some of your goods and services for free. You want to offer free goods and services to the people who are most likely to spread a good word about your business. Also consider, of the people likely to spread a good word, who could potentially spread the good word to the widest audience of your potential customers.
Consider not only the number of people who will hear the good word about your business, but also the targeting of the people who will hear the good word. If anyone from the public could potentially be your customer, it’s great to spread the word to as many people as possible. Many goods and services, however, are targeted to people with specific needs or interests. As such, it could be important for your business to keep targeting in mind.
A business selling scuba diving gear probably won’t benefit much from word-of-mouth spread to the general public as only a small percentage of the general public would ever consider buying scuba diving gear. It’s important to keep targeting in mind. Someone who is an active scuba diver likely knows other scuba divers. They might hang out in online forums frequented by other scuba divers and they could be members of scuba diving groups. Those people could spread valuable word-of-mouth advertising about your business to other people who could potentially be your customers.
You could also offer free goods and services in exchange for advertising. Claiming your good work was discussed above in the section on free advertising. If a person or business could offer you advertising in a very prominent location, it could be worth your while to offer them free goods or services in exchange for the advertising.
For example, a business located on a busy street corner could be offered a free exterior paint job or landscaping services in exchange for posting a sign advertising your business in front. The free goods or services might cost you very little in comparison to the value you receive from the advertising.
In many cases, even if you had the money, you couldn’t buy advertising in front of a business on a busy street corner. It’s not for sale. But you might be able to obtain that advertising in exchange for free goods and services.
Offering your goods and services for free also has the advantage of giving you your first customers. Your first customers establish a portfolio of your work and can provide you with references. Your first customers also spread word-of-mouth advertising about your business. No matter what you sell, it’s always easier to build a portfolio by giving away some of your products for free.
You can offer referral bonuses to anyone who refers customers to your business.
You can make agreements with other businesses. You could first try to negotiate a straight exchange where you refer customers to another business and that business refers customers to your business. That type of exchange doesn’t cost you anything. If you’re unable to negotiate a straight exchange, you could propose offering other businesses a referral bonus for every customer they send to your business.
Businesses aren’t the only place you could get referrals from. You can also tell your friends and family you’ll offer them a referral bonus for every customer they send to your business.
You can also tell all of your customers you offer referral bonuses. Tell them about the referral bonus you’ll give them if they refer any of their friends and family to your business. Referral bonuses offered to your customers work particularly well if you offer goods or services with recurring payments such as membership fees, monthly payments, or ongoing regular work. You could offer your customers a free month of services for every customer they refer to you who signs a one-year agreement with you. Obtaining a new customer can be well worth offering a free month of services.
There are a few ways you could offer a referral bonus. Cash is often the easiest way, and also often the most convincing for most people. You could offer a flat rate bonus such as $10 per customer. Or you could offer them a percentage bonus such as 10% of the sale. The bonus that works best for you is a credit with your business. A $20 credit with your business will provide $20 of value to your customers, but it might only cost you $5 to deliver the goods and services valued at $20. You give a lot but it only costs you a little.
You could also offer some of your goods or services free of charge as a referral bonus. Offering your goods or services free of charge is a good referral bonus for individuals. This type of referral bonus doesn’t work as well for businesses who refer customers to you. A business might be referring a high volume of customers to you and have very little use for a high volume of your goods or services. A business would be more attracted to cash as a referral bonus.
You can also negotiate custom referral bonuses for any people or businesses who are referring you a high number of customers. When setting up referral bonuses, you’re limited only by your own creativity.
You could also offer people gift cards from other businesses. Gift cards from restaurants, coffee shops, and movie theatres are good choices. If you choose to offer gift cards from other businesses, try to negotiate a bulk purchase of gift cards. For instance, if you’re making a large order of gift cards, you can often negotiate a discount of 10%, 25%, or more.
Offering referral bonuses makes it more likely other people and businesses will refer customers to you. Your close friends and family might refer customers to you out of the goodness of their hearts. They’ll remember to do it any chance they get. Most other people, however, won’t have your business at the top of their mind. They won’t think to refer customers to you unless a very obvious opportunity arises. Help those people remember to refer customers to you by offering an incentive. Those people are more likely to remember if helping you helps them.
You can also promote your business by offering free trials. Offering a free trial is a common approach when something is new or unknown to people. Something new and unknown seems risky to most people. They don’t know what to expect and don’t know whether they’ll like it or not. That makes them reluctant to invest the time and money required to try it. An easy way to help people overcome their fear is to eliminate a large portion of the risk by making it free to try. Many people are more liberal with risking their time than their money. There are also some people who just can’t pass up something offered for free.
Offering something for free is a common strategy used with goods and services billed on a regular basis. Services billed on a monthly subscription often run promotions offering the first few months free or at a reduced rate. Those businesses know if customers try the services for a few months free of charge they’ll be hooked and convert into paying customers. People will be accustomed to having access to the goods and services and won’t want to give up that access once the free trial is over.
Those customers are hooked and will likely become long-term customers generating a healthy profit. But they might not have ever tried the service if they had to pay for it right from the start. They were persuaded to try the service because it was low-risk to do so free of charge.
Offering a free trial is a very effective strategy—especially if you have a high quality good or service. People will become dependent upon having access to your good or service. They won’t want to lose something they’ve become dependent upon at the end of the free trial. People fear loss. The easiest thing for them to do is start paying for the good or service so they can maintain access to it. A testament to the effectiveness of this strategy is visible in many forms of advertising. How many times in the last week have you heard a business advertising a free trial of their goods or services? Businesses that commonly use this strategy offer goods and services billed monthly such as cable TV, telephone services, Internet services, gym memberships, and other subscription services. If your business also offers services billed monthly, consider using this strategy to hook your customers.
This strategy is low cost and low effort. Simply have an extra box of your business cards printed out when you’re ordering your initial run of business cards. You can often get the additional business cards for a reasonable price because you’ll be buying in bulk and receive bulk discounts. Give each of your friends a stack of 10 or more of your business cards to hand out to people they know that might use your goods or services.
Business cards are cheap. So if you can get even a few customers this way the profit will likely exceed the cost.
A slightly more effective twist on this strategy, as discussed above, is to give your friends and family a small stack of discount coupons to hand out. That allows your friends and family to feel like they’re giving people something of value instead of simply spamming people they know with your business card. Get coupons printed on business card stock. That makes them as cheap to order as business cards. Coupons printed on business card stock are also the perfect size to put into wallets and distribute.
This strategy is a combination of two other techniques. This strategy combines offering a referral bonus with allowing your friends to give their personal networks a discount on your services. That doubles the motivation for your friends and family to recommend your business. Not only do they benefit from your referral bonus, but they are also able to give the person they are referring to your business something of value by offering them a discount.
For instance, you could tell your friends and family you’ll pay them a referral bonus of $10 for each paying customer they refer to you and they can offer each person they refer a 10% discount if that person mentions their name.
To give an example, someone might come into your business and say your friend John Smith said you’re offering a 10% discount to his friends.
Your friends and family might feel important when they are able to offer people a valuable discount at your business simply by having those people mention their name. That gives their name some influence and makes them seem important and connected. That provides a psychological motivation to promote your business.
If you pay for a custom website, you’ll probably purchase a domain to go along with it. If you’ve used one of the free website design platforms discussed above, you might be able to purchase a cheap domain to direct traffic to your free website.
A domain is a web address. It directs people to your website. For example, “www.ABCexampleCompany.com” is a domain. When you buy the domain, you choose where it directs people to when they type it into the address bar in their web browser.
If you built a free website, your website address probably contains the service provider’s domain in your website address. Using your own domain allows people to type in your business name, instead of the free website provider’s domain, to get to your business website.
Just like real estate, the price of domains can vary significantly. The most desirable domains are the most expensive. Since you’re working with a limited budget, you’ll be looking for a cheap domain instead of a premium domain.
Short domains, particularly one word domains, are premium domains and command a high price. Those domains are the most desirable domain real estate. You can get a domain much cheaper if you make it more specific. Adding more words to your domain to make it more specific makes it considerably cheaper. For example, www.computers.com is going to be significantly more expensive than www.ABCcomputerCompanyMilwaukee.com.
A good way to make your domain cheaper is to use your business name and add other keywords relevant to your goods and services. You could also add your city to the domain if you plan to operate primarily in one city.
More specific domains are more likely to be available for purchase. Most one word domains, where the word is a common good, service, or name, are already taken. There are millions of webpages online. A long and specific domain has a higher chance of being available for purchase.
Low cost domains can be purchased for as little as $10 per year, whereas premium domains could cost tens of thousands of dollars. You’ll have to renew the domain on an annual basis. You can find instructions online to buy a domain and direct it to your website. Most domain retailers offer tutorials and tech support on their website to help you.
Depending upon the package you buy, you might also be able to get custom email addresses at your domain. For instance, [email protected] That looks much more professional than giving out a business email address hosted by a free email service provider.
Claim your piece of real estate online.
You drive your vehicle around your city on busy streets. In any given week, you could drive past thousands of other vehicles. You also park your vehicle on busy streets and in parking lots where hundreds of people walk by. Take advantage of all of that publicity.
Because of the number of people who are likely to see your vehicle, it can be an effective source of advertising for your business. Get decals made for your vehicle to display your company name and logo. Also be sure your contact information is visible. Keep in mind, people driving by your vehicle might have trouble memorizing your business phone number. But, if interested, they’ll likely remember your business name. A business website address containing easy to remember words is also much easier to remember than a phone number. Include your business website address on your vehicle, perhaps even more prominently than your business phone number.
After seeing your business advertised on your vehicle, people who are interested in your business can search for your business name online. If they remember your website address, they can go directly to your business website.
To advertise on your vehicle, the vehicle doesn’t necessarily need to be legally owned by your company. Nor do you need to use the vehicle for tax write-offs. Even if it’s your personal vehicle, it’s still valuable advertising space. The advertising space is free, the publicity is free, and decals for your vehicle can be fabricated for a reasonable price.
If you have a couple of hours of free time, consider driving your vehicle around and making a few laps on a busy street. The strategy might not convert to a lot of customers, but every little bit of publicity for your business can help—especially when you’re just starting out and need to build brand recognition.
If you don’t need to use your vehicle for a few hours, park your vehicle in prominent places where hundreds of people could pass by in a few hours. If you have more than one vehicle, or can arrange for someone to drop you off and pick you up, you could park your vehicle in a high-traffic location for the day.
If you’re worried about being ticketed or towed, move your vehicle around every few hours. Not only within the same parking lot or street, but to different high-traffic places around your city.
Take advantage of the free publicity every time you go to a shopping mall or other high-traffic place. In parking lots, strategically choose the parking spots likely to be passed by the most people. Those are usually the spots at the end of the lot farthest away from the shopping centre’s door. Some of the best spots are adjacent to busy roadways. Also consider choosing parking spots at the entrance or exit to the parking lot so everyone entering or exiting the lot will see your vehicle. You might have to walk a little farther to the entrance, but the extra effort could be well worth the publicity your business gets from the advertising on your vehicle.
You might have converted your vehicle into a moving billboard for your business. Do the same for yourself. Get custom T-shirts and hats printed for your business. Clothing advertising your business might not necessarily bring in a lot of customers, but every little bit of advertising helps.
Big corporations know the value of brand recognition. That’s why they’re willing to pay millions of dollars to have their logos printed on the sides of sports arenas. They know the more often people see their logos, the more familiar people will be with their brands. To their potential customers, choosing a familiar brand always seems safer and less risky than trying a new business they’ve never heard of before. Don’t underestimate the power of other people recognizing your logo.
Custom clothing does more for your business than just advertising. It can also serve as your company’s uniform. Depending upon the type of business you operate, having a uniform with your business name on it could make your business look more professional and more legitimate. That’s true whether it’s just you, or several employees coordinating their outfits.
You might even be able to persuade some of your friends and family to wear your uniforms to advertise your business.
You, your friends, and your family don’t necessarily need to wear the T-shirts and hats all day every day. Instead, only wear the uniforms when it’s likely to be most effective. If you’re just sitting in your backyard, there’s no need to wear your uniform because hardly anyone will see you. But if you’re going out to a large public event, attending a major sporting event, or going to be walking through a busy shopping mall, you could pass by thousands of people in a matter of hours. Those few hours are some of the most productive times to wear your uniform.
Wearing your uniform to major sporting events gives you free advertising and exposure to the thousands of people at those sporting events. That saves you from having to pay thousands of dollars to have a billboard put up on the wall.
Have you ever read anything on someone else’s T-shirt as you walked by them? Many people do. Especially if the shirt is brightly coloured or features an eye-catching design or logo.
Like the advertising on your vehicle, ensure the advertising includes something easy to remember that people can use to find your business when searching online. Ensure your business name is clearly written on your shirt so people can remember it and search for it if they need your goods and services. People are much more likely to remember your business name and website address than your business telephone number.
Custom T-shirts and hats can be ordered for a low cost online. The higher volume you purchase, the lower the per unit cost. Order multiple units at a time to take advantage of the lower per unit cost. Especially if you plan to use them as uniforms to be worn every day while serving your customers. If you have extras, try to convince some of your friends and family to wear them occasionally while they attend public events, sporting events, or any other event where they’ll be walking by thousands of other people throughout the course of the event.
The people you, your friends, and your family pass by while wearing your uniforms probably won’t stop you to ask about your business. But they might remember your logo and business name the next time they’re looking through a business directory deciding which business of your type to buy from. Remembering having seen your logo before makes your business seem more familiar to those people. Your business seems safer and more trustworthy as a result of that familiarity.
Remember, big corporations don’t pay millions of dollars to have their logos plastered everywhere for nothing. It’s working for them. You can make the same strategy work for you on a smaller scale and at a much lower cost. Despite being untargeted advertising, the low cost of ordering and wearing uniforms makes the strategy worthwhile to try.
You can also promote your business by running a contest offering some of your goods or services for free to the contest winner. Promote the contest for maximum exposure.
A contest presents people with the opportunity to potentially get something for free. Many people take advantage of any opportunity to get something for free. That helps contests spread through word-of-mouth advertising. Kickstart word-of-mouth advertising for your contest by telling everyone in your personal network. Also promote the contest everywhere you have an online presence, such as your business website and your social media pages.
You can also promote your contest on many different websites that specialize in providing information about contests their visitors can enter for free. There are many popular websites listing contests anyone is free to enter. Having those websites list your contest provides free advertising for your business to thousands of people. It costs you only the goods or services you plan to give away for free and any costs associated with administering the contest. It is, therefore, probably very cheap advertising for your business.
You can also promote your contest using any traditional advertising methods. When using traditional advertising, however, your costs can escalate quickly.
Promote your contest by putting up flyers in different locations visited by people who are likely to be interested in your goods or services. Depending upon the value of the goods or services that you plan to give away for free, you could make separate contests for separate venues.
For example, you could have contest entry forms and draw boxes for separate contests at several places. You might be able to persuade more places to allow you to run a contest for their visitors or members if you make the contest exclusive to their members. You do so by making separate draws for each place you advertise your contest.
There are several benefits to running a contest.
First, your business gets a lot of marketing exposure by running a contest. Not only from the advertising you do to promote the contest, but also from word-of-mouth advertising. People like to share an opportunity to get something for free with their friends.
Second, the contest gets people thinking and talking about your goods and services. Most people who enter contests are overconfident in their ability to win the contest. They’ll be telling their friends what they plan to do with your products if they win the contest. That spreads word-of-mouth advertising. It also gets people thinking about using your products. The thought of potentially obtaining your products free of charge kickstarts the process of imagining what it will be like to have your products. That helps people find a need for your products in their life. Once the need for your products is developed, if people don’t win the contest, they might buy your products to fill that need.
Third, and one of the most common reasons for running contests, all of the people who enter the contest provide their contact information on the entry form. Harvesting the contact information from all of the entry forms provides you with a valuable list of people who could potentially be interested in your goods and services. Being interested in potentially obtaining your goods and services for free does not necessarily mean they’re interested enough to buy your goods and services. Some people will take anything if it’s free. But it does show that they were at least interested enough in your goods and services to take the time to enter the contest. You’re probably more likely to close a sale by cold calling the people who entered your contest than cold calling random people out of the phone book.
If legal to do so in your jurisdiction, you could send out a mass email to everyone who entered the contest if your entry form requests an email address. A mass email can be delivered in a fraction of the time as cold calling people by telephone.
You could also key all of the contest entrant’s addresses into a spreadsheet and use the mail merge feature in a word processing program to print out letters to all contest entrants that automatically fill in their name and address. You write one letter, hit print once, and thousands of custom individually addressed letters are printed. You can then use window envelopes to send out your marketing materials to all of those potential customers by mail and their name and address will show through the window of the envelope.
The use of a mail merge also allows you to make each letter seem customized to the recipient by including his or her name several places within the body of the letter. If you had several draw boxes, you can also add a field for the location that person entered the draw to further personalize the letter.
An effective strategy using a mail merge is to send all non-winning contest entrants a letter apologizing because they didn’t win. You would then go on to say that you have included a $20 voucher they can use with a minimum of $100 purchase (include a limit of one per customer in the fine print). People will feel like they’ve received something of value from you. Some people throw away coupons, but would be reluctant to throw away a $20 voucher because it seems similar to cash. You could also include any other promotional offer that makes sense given the nature of your business.
Signing all of the letters in blue ink is a nice touch. But if that’s too time-consuming, you could sign a piece of paper, scan it, crop your signature, then insert the picture of your signature electronically in the appropriate place on the letter. That automatically signs all of your letters, but you lose the personal touch of signing by hand.
To save the cost of postage, you can also do a mail merge using email. Attach your marketing materials or vouchers to the email. Just be certain you’re not violating any anti-spam laws in your jurisdiction by doing so.
Fourth, your contest entry forms also give you an opportunity to ask your potential customers questions and get feedback from a large number of people. Consider it a market research opportunity. You could ask open-ended questions, or pose multiple-choice questions, on your entry forms. Those questions help you determine which of your goods and services your potential customers are most likely to buy, ways you can improve your goods and services, and which new goods and services you might want to offer through your business.
Depending upon the cost of the goods and services you’re offering for free to the contest winner, you could potentially gain all of the benefits described above for a very low cost.
Some jurisdictions have laws regulating how contests are administered. Ensure your contest complies with all laws in your jurisdiction.
You can get a lot of exposure by joining industry associations. Once you join an industry association, your business will appear on its list of members. Anyone looking to do business with a member of that industry association will see your business name on the list while browsing the member directory.
Industry associations also give your business credibility. You’re no longer standing on your own. You now have the industry association standing behind your business. That tells your customers that your goods and services meet the quality standards of the industry association. That credibility boost can make potential customers feel comfortable taking the risk and trying a business they’ve never tried before. It seems less risky to try a business if it has an industry association standing behind it.
If allowed by the industry associations, be sure to include their logos on all of your marketing materials, social media pages, and on your website. Their logos on your marketing materials serve as a seal of approval that you meet their standards and are a member in good standing.
Many industry associations heavily advertise the industry. By being a member, you’ll gain some of the benefits of that advertising. Many industry association websites get a high volume of traffic. Especially those where potential customers like to browse the member directory.
Industry associations also attend many tradeshows. You’ll benefit from that exposure to the public by being a member.
Industry associations might also hold media conferences to discuss issues affecting their industry. When new issues affect an industry, news reporters often seek out industry association leaders to comment.
Industry associations might also provide a number of helpful services to their members. Some negotiate special discounts with major suppliers for their members. Others have valuable information resources that teach you how to improve the quality of your goods and services. Being a member of an industry association is also a valuable networking opportunity. It allows you to meet other business owners and network with companies that serve your industry.
You can get a lot of benefit for a reasonable cost by listing your company in several different business directories. There are likely several different business directories for your industry, specific type of business, city, state, or country. The benefits and price of listing in each directory vary.
Most business directories are sorted by type of business and location. Most allow users to browse by those categories or to search.
It will take a bit of research to determine which directories are likely to provide enough benefit to justify the cost of listing your business in the directory. Consider the number of people who visit the directory. Also consider the number of people visiting the directory looking specifically for the type of business you operate. If your customers are likely to favour one directory over another, you’re better off listing on the favoured directory if you were to choose only one because of a limited budget. You’ll have to find out which directory is favoured by your customers.
If you have the budget to do so, and believe you could obtain some benefit by doing so, feel free to list your business in every directory you believe could bring new customers into your business.
To determine which directories to use, see which directories rank highest in the search results using search terms your potential customers might use to search for your business. You could also look up the site rank to see which directories get the most visitors every month. Look up site ranks on www.alexa.com, which ranks all websites and provides analytics data for the world’s most popular websites.
Some directories post statistics about their visitors so you know how many potential customers visit their website and what they could potentially be interested in. Those statistics might also give you the demographics of their visitors. If they don’t publish that information publicly, you might be able to request it before paying to list your business.
The directories usually offer a variety of listing services in a range of prices. You could purchase packages from a basic listing, displaying only your business name and phone number, to a premium listing giving a description of your business, a link to your website, displaying your company logo, and listing your business at the top of the directory so potential customers your business first.
It’s up to you to decide how you want to distribute your limited budget for directory listing services. If you believe one directory is extremely popular with people looking for goods and services in your industry, you might want to spend a larger portion of your budget listing your business in that directory. You could choose a premium listing on that popular directory, and forgo listing your business on other directories less likely to bring in customers. You might be better off listing your business at the top of the most popular directory than having your business name mixed in with everyone else’s on several less popular directories.
Some directories give you a basic listing for free. Take advantage of any directory that allows you to list your business free of charge.
Retailers often offer discounts to members of professional associations, unions, clubs, and other businesses that require the purchase of a membership. For instance, members of a specific union might be offered a 10% discount at a large retailer. Approach the administration of those organizations with your offer of a discount to their members.
If publicly posted on the organizations’ website, check what other businesses are offering their members. Make your offer of a discount to the members similar to the other offers to have the best chance of being accepted and advertised.
If accepted, being listed as a business offering a discount to the members is great advertising for your business. Because of the discount, you won’t make as much profit on each sale, but the volume of new customers should make up for the discounts.
There are a number of ways you could partner with nonprofit organizations. Often, the easiest and cheapest way for you to get involved is to offer the nonprofit organizations some of your goods or services free of charge.
When offering goods and services free of charge, you might be able to obtain some small amount of advertising for your business with the nonprofit organizations. For instance, putting up a sign claiming your good work. The nonprofit organizations might also list your company as one of their supporters on their website. Most nonprofits will even display the business logos of large donors.
Partnering with nonprofit organizations can also provide your business with beneficial tax write-offs. Check the tax laws in your jurisdiction for specifics.
Supporting nonprofit organizations also makes your business look good. After donating to nonprofit organizations, confirm whether you can use their logos in your marketing materials describing yourself as a proud supporter of their organization. That shows your business is a good corporate citizen. Supporting the same nonprofit organizations as some of your potential customers also shows your business has the same values as they do. That makes it easier for potential customers to relate to your business and could convert potential customers into paying customers.
Partnering with nonprofit organizations goes beyond the benefits to your business. It’s the right thing to do. It’s important to give back to your community and support organizations that advocate causes you believe in.
Advertising is priced according to the number of people who will see your advertisement. The cost is increased as the audience size increases. You have to pay for every single viewer who will see your advertisement.
If each person who sees your advertisement will increase the cost of advertising, doesn’t it make sense to advertise in places where you’re most likely to be paying for viewers who are likely to buy your products? That’s called targeting; figuring out who are the people most worthwhile for you to advertise to.
Think about TV advertising. An advertisement on TV is likely to be seen by millions of people. It is also going to be very expensive because you have to pay for access to those millions of people. But out of the general population that’s watching TV, there might be very few people who actually have a need for your good or service. As such, by advertising on TV, you’re paying for advertising to millions of people who have no need for your product. It’s not targeted.
To get the most value for your advertising dollars, advertise in places that are likely to reach the people who could potentially be your customers. For example, if you want to advertise to people who are interested in health and fitness, you would advertise in places where those people are likely to be. You would not advertise to the general public because only a small percentage of the general public is interested enough in health and fitness to buy your goods and services. Instead, you would advertise with health and fitness magazines, bodybuilding websites, health clubs, sports facilities, and other places where people interested in health and fitness spend their time.
The people you’ve targeted, those who could potentially convert into customers, are the audience for your advertising. Look for the cheapest way to advertise to the same audience. For most audiences, you can find many different places where that same audience is likely to spend time.
For instance, people interested in health and fitness are likely to be found at fitness clubs, health supplement stores, fitness equipment stores, sports clothing stores, recreation and sports facilities, the fitness sections of book and magazine stores, health and lifestyle sections of newspapers, athlete fan pages, health and fitness social media pages and groups, and online groups and forums related to all of the above.
The individual people in the audience at each of the places listed above will vary. But some of the individual people in one audience will also be in several of the other audiences. Moreover, the same type of people—your potential customers—are found in each audience. Each of the places listed above likely has a different price to advertise to their audience. When you’re looking to advertise with a limited budget, find the cheapest place to reach the same target audience. You might be able to advertise on several lower cost platforms for less than it would cost to advertise on one high-priced platform.
A marketing expert could go into further detail about the effectiveness of different forms of advertising and different ways of reaching the same audience. But that discussion is beyond the scope of this book. Hiring those experts is best left to corporations with large marketing budgets. If you want to learn some of the specifics, a quick online search for marketing principles and strategies can help you improve your marketing expertise.
In many cases, the most effective form of advertising can only be determined through trial and error and A and B testing. That testing requires a large marketing budget to advertise everywhere and track which sources of advertising your customers are coming from. Doing so allows you to determine which sources are most effective at converting customers for the lowest cost. That option is typically only available to companies with large marketing budgets.
With a limited advertising budget, you’re best off finding the cheapest way to reach the same audience. You can get more elaborate with your marketing efforts as your company grows and your budget allows you to do so.
You don’t need to be a professional graphic designer to make your own marketing materials. You can get many professional looking templates free online. Get free templates by searching for free brochure template, free flyer template, free business card template, or any other free template you’re looking for.
By searching online for free templates, you’ll get thousands of matches to look through. Browse through them and pick your favourites. Be sure to check the licensing agreements when downloading the free templates to ensure they really are free and your intended use meets the requirements of the free download licenses.
Free templates are available for most popular graphic design and word processing software packages. The easiest to use, and most common, is Microsoft Word. There are many templates available for Microsoft Word. When searching for templates, simply include Microsoft Word in your search phrase. For instance, free Microsoft Word brochure template.
Once you download the templates, all you have to do is click the text boxes to delete the placeholder text and type in your own information. It’s easy to create professional looking marketing materials by using professionally designed templates.
Many websites that offer free templates also have premium templates available for purchase. If your budget allows for it, also consider looking through the premium templates to see if any are better suited to your needs than the free templates. Be sure to shop around and browse many free templates before choosing one. If you’re buying a premium template, be sure to check other websites as prices vary significantly. It is, however, not necessary to buy templates as there are many excellent free templates available.
You are not the first small business that needs marketing materials. There are thousands of templates available for just about any type of marketing materials. Templates for signs, flyers, brochures, business cards, pamphlets, report covers, and pretty much anything else you could need are available online.
Once you’ve written your own text into the templates, you’ll have to decide whether you want to print your marketing materials yourself or use a professional printing company. If you plan to print your marketing materials yourself, ensure your printer produces an acceptable level of quality. It’s unacceptable, and would give a very poor impression of your business, to hand out marketing materials that look blurry because they were printed using a low quality printer. If you need to upgrade your printer, consider purchasing a low-cost laser printer. Many low-cost colour laser printers deliver great quality for a reasonable cost.
When doing the printing yourself, you must also use high quality paper. Good quality paper creates a final product that not only looks good but also feels good. If you’re printing brochures and flyers, use paper designed specifically for brochures and flyers.
Also, if printing templates on your own printer at home, you probably won’t be able to print full bleed because you won’t be able to trim the end product. Full bleed means the printing goes right to the edge of the page with no border. Professional printers do that by trimming the printed end product to take out the margins. If you were to choose a template with a solid coloured background, your home printer will leave a thin white border around the edges. You could either do the trimming yourself, or look for templates with white backgrounds so you don’t notice the border.
If you need a high volume of marketing materials printed, you might be able to purchase the printouts at a lower per page cost by outsourcing your printing needs to a professional printer.
Some of the websites with the biggest selections of free marketing material templates are professional printers. Many professional printers have invested in graphic design services to have hundreds of high-quality templates designed for their customers. You can select those templates and edit them directly through the printers’ websites. The only catch is, you have to order the printed marketing materials through the printing companies to use their templates. But depending upon your printing needs, and whether or not a high-quality printer is available for use in your own office, you might be further ahead using the services of a professional printer anyway.
For high-volume printing, professional printers can usually offer a lower per page cost than you could realize using your home printer. Moreover, the quality will be much higher and you have the option of printing full bleed to print solid coloured marketing materials. Professional printers also provide a selection of paper ranging from basic to premium. Those are all advantages of hiring professional printers beyond access to their high-quality free templates.
Your decision of whether to use a professional printer or print your marketing materials yourself will be based upon the number of pages you need printed and how frequently you need to make changes to your marketing materials. For small print jobs, or print jobs requiring frequent changes or customization, you might be further ahead printing the marketing materials yourself. Printing marketing materials yourself means you could customize each print job to specific customers or frequently update your marketing materials.
Many professional printers have minimum order sizes. You might need to order a minimum of 100, or even 500, copies to use the services of a professional printer. You lose the ability to customize your marketing materials to each customer, or make frequent changes, if you have to order marketing materials in batches of 500 copies. Shop around and weigh all of your options.
Now that you’re an entrepreneur, you’ll always need to be networking. Networking is crucial when your business is just getting starting. Everyone you meet could potentially be your next customer, or the person who recommends your business to your next customer. You need to spread the word to build your brand and attract your first customers as quickly as you can.
You don’t need to sound like a salesperson in front of everyone you meet. But you should develop an introduction you can use to introduce your business to other people whenever appropriate. When meeting new people, a common question is, “What do you do?” Spent some time preparing a great, reasonably brief, sales pitch describing and promoting your business to other people when they ask that question.
Having that sales pitch prepared in advance allows you to spend time perfecting it. Keep it brief so you keep people’s attention. Make every word count. Include only the most important information people should know about your business. From your short sales pitch, people should understand exactly how your business could help them and other people they know.
You should never be stuck giving a bland description of your business by simply listing the name and type of business. You should always promote the benefits people will realize when buying from your business. If you specialize in a specific area, make sure people know. Specialization implies you have a higher level of expertise than the average business in that area.
Get other people interested in your business so they could potentially convert into your customers and recommend your business to people in their personal networks.
Delivering your short sales pitch to most people you meet is not enough when you’re just getting started as an entrepreneur. Building your brand and customer base is crucial. You should also look for events you could attend for the purpose of networking.
In any given city, there’s likely a variety of events where you could network with people in your industry, other businesses who serve your industry, and your potential customers. Some events are free, while others have an entrance fee. The entrance fees for attending networking events vary significantly. Some events charge only a token amount to cover their costs, while others deem their event to be high value and charge a premium fee. Events like tradeshows and conferences could cost thousands of dollars to set up a booth or attend.
Look for events put on by any industry associations you belong to. You can also look for events hosted by other industry associations likely to attract the type of people who could be your customers. If you have the time, and the cost is reasonable, attend any networking events where you could potentially build valuable relationships with customers, suppliers, or other people who could benefit your business. Weigh the cost of attending the event against the value of the relationships you could potentially build by the attending the event.
Be creative. Just like there are many places you could advertise to reach the same group of people for different prices, there are also many places you could network with the same group of people for different costs of attending the event. While there are many paid events that might attract your potential customers, there are likely also many free events in your city likely to be attended by people who could potentially be your customers.
Find free, or low-cost, community events focused on interests complementary to the interests served by your business. Check your local newspapers and community websites for events in your city. If you have the time to spare, attending a free event costs you nothing but your time. You never know who you’ll meet.
Fundraisers hosted by nonprofit organizations are a great place to network. Just be sure you don’t try to hijack the purpose of the event by promoting your business excessively. Find the right balance between self-promotion and supporting the organization hosting the fundraiser. Depending upon your jurisdiction, your donations to nonprofit organizations might have tax benefits.
While networking, it’s a good idea to have business cards you could hand out to anyone who seems interested in your business. Depending upon the nature of your business, and the type of event you’re attending, you might be further ahead handing out discount coupons to people at the event instead of business cards. You can have coupons printed on business card stock by professional printers. Printing your coupons on business card stock makes them easy to handle and give out.
People might be more inclined to hang on to a coupon or discount card than a business card because it has a perceived value. People are reluctant to throw out anything that has a perceived value. Most people will hang onto that coupon just in case they ever have a need for your goods and services so they won’t have to pay full price. That coupon serves as a reminder of your business. People will also be inclined to shop at your business to use the coupon instead of paying full price somewhere else.
If you need to improve your communication skills, The Zane Rozzi Communication Fundamentals course offers modules which develop your ability to make small talk and close sales. The Communication Fundamentals course is available at:
Consider networking with other businesses and professionals who work in industries that also serve your target market of customers. Look for businesses you don’t compete directly against. You can refer customers to each other.
For example, a real estate agent could network with home inspectors and lawyers because people who buy houses frequently need all three services together. All three service providers can refer customers to each other so that all three benefit from the sale of a house. With a system of referrals, no matter which of the three professionals is contacted by the customer first, all three professionals benefit from that same customer by referring the customer to each other.
Find the people who also serve your target customer base and develop a relationship with them. Suggest creating a system of referrals with them. If the referrals are likely to be one-sided, you could also discuss a compensation system with referral bonuses paid to the referring party if only one party can send customers to the other. Referral bonuses can motivate people who might not otherwise send customers to your business to do so—especially if you can’t send customers to them in return.
Try first for an agreement where you simply send customers to each other. That costs you nothing and brings in extra customers. But if you don’t have the ability to send customers to the other business, you probably need to suggest a referral bonus to make the arrangement valuable to the other business owner as well. You need to motivate them to send customers your way, either by returning the favour, or by making it profitable for them to do so by other means.
Large online retailers have customer bases of millions. Some serve your local area specifically, while others serve customers all over the world. Take advantage of their large customer bases and their marketing efforts to draw additional customers to their sites. List your products with any large online retailers that make sense given the nature of your products. Doing so gives your products exposure to millions of potential customers.
Look into listing your products with all large online retailers that allow the type of products you sell. Look into eBay, Amazon, Etsy, and any others that will give your products exposure to millions of potential customers. Depending upon the site you choose, and the type of products you’re selling, the price for listing your products varies. Typically, you would expect to see a listing fee and also be charged for a percentage of the selling price. You can set the price of your products at any amount you choose. So you don’t have to worry about the listing fees eating into your margins. When pricing your goods, consider whether a higher volume of sales for a lower price will result in a higher total profit.
If you list your products online, you need to be prepared to deliver your products to any region served by the website. If you’re already selling online through your own website, there might not be much change to your business model. You also need to consider which countries you’re willing to ship to if the retailer could list your products worldwide.
You could also list your products on local webpages such as classified ad sites. Many businesses advertise their new goods on classified ad websites. Many classified ad websites allow the choice between a free listing or a premium listing. Take advantage of anywhere you could potentially reach customers that allows you to list your products for free. You can find online classified ads serving your area by searching for your city name and the words classified ads.
You could also try searching for classified ads specific to your industry. There are many specialized classified ad websites listing goods and services specific to certain industries. Try searching for the name of your good or service and the words classified ads to find classified ads specific to your industry. Those websites allow you to reach a targeted audience that are likely to be potential customers looking specifically for the type of goods and services you sell.
Leveraging the customer base of large online retailers is not limited to the sale of goods. There are also a number of websites listing services with user bases of millions.
Not all services can be rendered to anyone anywhere in the world. Therefore, not all services could benefit from being listed online worldwide. Services that must be rendered in a specific city, however, could still benefit from a number of service listing websites that have sections for specific regions or cities.
To find places to list your services online, search for the type of services you offer. Include your city name in your search phrase if you only offer services in your own city. See which service listing websites are returned in your search results. Look into listing your business on those websites. If your search found those websites, your customers should also find them.
Often, the listing fees you pay for listing on those websites are low considering the number of potential customers you can reach.
Listing with large online retailers and classified ad sites can bring in a significant number of customers. In fact, many people run their small businesses solely from those websites. They have nothing else generating customers for them. Those sites alone keep them busy. When browsing for products at large online retailers that allow customer reviews, you might notice several sellers have tens of thousands of customer reviews in the last year alone. That demonstrates the sheer number of customers some entrepreneurs are able to reach using those websites.
If you plan to run your business from your home, check any zoning laws, homeowners associations, condo boards, and rental agreements that regulate the use of your home to ensure you’re permitted to do so.
Depending upon your jurisdiction, there could be a different set of rules for home-based businesses that don’t require customers to visit your home. Many businesses can be operated from your home if you don’t have customers visiting your home. A high volume of traffic visiting a home is often what causes problems for home-based businesses because neighbours become annoyed with the extra traffic in their neighbourhood. Excessive traffic generates noise and takes up parking spaces.
Some jurisdictions do allow home-based businesses where customers are visiting your home. Those jurisdictions often have restrictions that limit both the number of employees you’re allowed to have working at your home and also the number of customers allowed to visit your home in a given time frame.
If you’re living in a place where the rules forbid you from running a business from your home, consider using a registered office address and a PO Box. A registered office address is where your business is legally located. Many businesses use the address of a lawyer’s office for the registered office address. Many lawyers’ offices offer this service for a fee. Some forward all of your mail, while others will forward only government mail as part of the service. The speed, cost, and reliability of the Mail forwarding service varies. In many cases, your best option is using the law office’s address only for your registered office address and having all of your business mail sent to a PO Box you can check any time you wish. List the law office as your registered business address for all government forms, but use your PO Box as your mailing address anytime you’re required to give a mailing address.
Depending upon the rules in your jurisdiction, once your business is legally registered at your lawyer’s office, and your business mail is going to your PO Box, you could probably do some work for your business from home as long as customers are not visiting your home. If you’re simply doing some work at home, it might be no different than an employee working at home for the day.
In addition to a high volume of traffic, storing a lot of business equipment and inventory at your home could also cause problems. If you’re filling the street in front of your home with trailers and other business vehicles, your neighbours are likely to become upset. Your neighbours might also disapprove of large delivery trucks constantly dropping off inventory at your home. That creates noise and traffic in front of your home. A large pile of inventory boxes on the side of your home might also look unsightly to your neighbours.
Upset neighbours will complain to your municipality, homeowners association, or any other body governing the use of your home. One of the keys to running a successful home-based business is to keep your neighbours happy. Your neighbours might not warn you they are unhappy. They might avoid the potential for a confrontation and go straight to the authorities. Their complaints could cause the authorities to step in and put an end to your home office. Make the effort up front to keep your neighbours happy. Try to avoid doing anything that would inconvenience them.
You can get low-cost office space by spreading out the cost among many small business owners. Cost sharing arrangements include office space sharing and office space co-ops. Sharing office space with other small business owners is a good option when you either don’t need a lot of space, or you don’t need office space all of the time
A large corporation could lease an entire floor of an office tower, but it would be cost prohibitive for a small business owner that needs only one office to do so. An office space co-op would lease the entire floor of an office tower, just like a large corporation, but each individual office on the floor would be subleased to a different small business owner. An office space co-op allows several small businesses to share the cost of rent on one large office space. That allows small business owners to pay for only the space they need. Office space co-ops also allow small business owners to have an office in a prestigious office tower, or with a prestigious address. You’ll usually get a mailing address at the office space co-op.
There are a variety of arrangements for office co-ops. Some co-ops permanently lease you your own office or desk. That’s your private space for your use only. Other office space co-ops allow you to rent a desk for only the days you need it. The desk will be rented by someone else on days you’re not renting it. There are also office space co-ops that allow you to rent larger meeting rooms when you need them.
If you don’t need office space full-time, it can be cheaper to rent office space only when you need to meet a client. Having an office downtown to meet a client often looks more professional than meeting a client in your home office. If you’ll only be meeting a client a couple of times per week, you could rent office space for a few hours per week as needed. That prevents you from paying for that office space for the other 90% of the week when it would be sitting vacant. Renting office space only as you need it could make a limited startup budget go further.
Depending upon the nature of your products, you might be able to batch meetings with potential customers. Batching your meetings is possible when you can get several of your potential customers to meet you at the same time so you can give a presentation. Batching your meetings can allow for significant cost savings on your meetings. Batching 10 potential customers into one meeting allows you to rent a meeting room from an office space co-op or a conference room from a hotel only once instead of 10 times. Depending upon the number of potential customers you’re presenting to, you could batch meetings once per week, or once per month. That allows you to spread the cost of renting the meeting space over the revenue generated from several customers.
You can also plan your meetings during low demand times to rent conference rooms for a lower rate. When you’re looking at booking a conference room, always ask if there are times that are lower demand than others where you could rent the room for a lower rate. If you frequently rent meeting rooms, you might qualify for rewards programs or repeat customer discounts with certain hotel chains or other meeting room providers.
Batching your meetings works well in situations where you run an advertisement and receive a bunch of new potential customers immediately after each advertising run. You would group all potential customers from each advertising run into one meeting then rent the meeting room one time instead of once for each customer. You would repeat the strategy each time you run a new advertisement.
Delivering an effective presentation in front of multiple potential customers does require some planning. You have to find a way to effectively deliver the presentation which also allows you to close sales with multiple people at once.
If you’re going to be giving presentations, you’ll want to brush up on your presentation skills. You can significantly improve your public speaking ability by learning the basics from public speaking books. You’ll also want to develop your sales skills as it will be critical to close sales as quickly as possible with each customer in the group. You’ll also want to develop your impromptu speaking skills so you can convincingly answer any potential customers’ questions in front of everyone you’re presenting to.
Your sales skills and your ability to effectively answer questions on the spot will be crucial to converting an audience of potential customers into paying customers. The Zane Rozzi Communication Fundamentals course offers modules which develop your ability to make effective presentations and speak impromptu. The Communication Fundamentals course is available at:
If your business has employees, or you know good salespeople whom you could hire for the presentation, you could take advantage of the strategy used by large professional service firms. Large professional service firms often have elaborate banquets, information sessions, and presentations to bring in new clients. They create a seating arrangement for all potential clients by placing small groups of people at each table. Using name cards, or other means to identify the seating plan, the firm ensures one of their own people with excellent sales skills is seated at each table with potential clients. That allows those salespeople to build relationships with the potential clients at their table, answer any questions, and close sales throughout the evening.
It’s not necessary for you to have employees to do this. If you have friends with great sales skills, you can offer them a referral bonus for every person they are able to close a sale with. You would have your friends strategically seated at tables with your potential customers. You could also offer them a flat fee such as $100 for the meeting or an hourly rate. Just be aware of any legal and tax requirements in your jurisdiction if you’re paying salespeople to attend your meetings.
When presenting in front of a large audience, and you don’t have your own salespeople seated at each table, it’s important for you to allow time after the presentation to circulate through the crowd and talk to your potential customers. Depending upon how much information you need to give to each potential customer one-on-one, and how long it will take to close a sale with each individual customer, you might be limited in the number of people you can batch into one meeting.
You can’t have 20 potential customers waiting while you spend half an hour talking to one person because they will leave and you’ll lose those sales. If it’s necessary for some people to wait to talk to you, it’s important that you have something to entertain them and keep their interest while they’re waiting. You don’t want people to leave before you get the chance to try to close a sale with them.
You want to be able to close sales with your potential customers at the exact moment they’re all pumped up and ready to buy after being captivated by your presentation. They are more likely to buy while they’re caught up in the moment than they would be if you were to call them a week later. A week later, the enthusiasm generated by your presentation might have waned.
Processing orders is another task you could hire friends to perform for a couple of hours during your presentation. Those friends don’t necessarily need to have excellent sales skills, they need only know how to process orders from enthusiastic customers who are pumped up to buy as a result of your presentation. Get help quickly processing orders at the moment your customers are ready to buy.
Your friends might also need to know the answers to questions frequently asked by your customers. You’ll probably find many of the same questions are asked over and over. Ensure your friends have good answers to those frequently asked questions.
Being able to quickly process orders minimizes the chance of your potential customers becoming frustrated with waiting and walking away without buying.
Recruiting one friend cuts your potential customers’ waiting time in half because you can each meet with half of the people one-on-one. Recruiting three friends will cut the waiting time down to a quarter of what it would be if you had to address each person one-on-one on your own.
When batching your meetings, you need to bring lots of information and marketing materials along with you. Setup your marketing materials on a table so anyone who is interested can take those marketing materials and read through them. That gives potential customer something they can take home with them if they don’t decide to purchase from you on the spot. The marketing materials your potential customers bring home with them might do their job and sell your products at a later date.
To prevent people from standing around bored after your presentation, or leaving without buying, it’s a good idea to have lots of different information and marketing materials set up on a table to keep your potential customers entertained. As your budget allows, include posters, cardboard stand-ups, pamphlets, brochures, business cards, demo products, customer reviews and testimonials, a slideshow or video on a projection screen, and anything else that can keep potential customers entertained until someone is able to address them one-on-one to close the sale.
You also want to be sure you bring all of the paperwork and equipment necessary to process orders and take payments. If you need contracts signed, ensure you have several contract templates ready to go.
You can also pass out clipboards so you can have everyone filling out sign-up sheets, reading and completing service agreements, or completing any other forms you need your audience to complete. That gives everyone something to do while you’re meeting one-on-one with other customers.
You can also pass out questionnaires. They take time to complete and the information you collect will be valuable for closing sales in the future.
You might have a friend who leases a large office space for his or her business. That business might not be using all of the space being leased. Your friends might have an extra office or some warehouse space you could sublease from his or her business. Depending upon the floor plan of your friend’s building, it may or may not be ideal for your business when meeting clients. But it could be a significantly cheaper alternative than renting a large space on your own. You might be able to sublease an office from your friend for a very reasonable price. Especially if the office would just be sitting vacant otherwise.
This arrangement works well when you’re not permitted to operate a home office, and it wouldn’t pose any problem having your customers walk into a building with a different business’ sign on the front. This arrangement could work well if your customers primarily buy through your website or through a major online retailer. You could have your inventory dropped off, packaged, and shipped from the subleased office space and it wouldn’t make any difference to your customers whether or not your own business’ sign was on the front of the building.
This arrangement also works well if you run a business that primarily serves your customers at their own home or place of business. You could store your tools and inventory at the subleased office space, then load what you need into your vehicle and travel to your customers’ home or place of business. For example, when running a landscaping business, your customers are unlikely to ever visit your place of business. You would typically bring your tools to your customers’ premises and perform the services at their home or place of business.
It’s also possible to sublease space from a business that is not owned by a friend. Sometimes businesses with extra space will advertise the space available for sublease. Check your local classified ads for space available for sublease. While the arrangement is not ideal for all businesses, it can be a great way to get started for a much lower cost. If necessary, you can always move to your own space once your business grows.
You can also meet clients at restaurants or coffee shops. While sometimes not ideal, it could be significantly cheaper than renting office space. If you need only meet a few clients per month, it might be unnecessary to pay for office space that would be sitting vacant for 90% of the month. If you don’t meet a lot of clients in person, this option could be cheaper than renting office space from an office space co-op. You’re able to rent a space to meet your clients in the coffee shop or restaurant for the price of a coffee or a meal.
If you’re going to meet clients at a restaurant, I recommend meeting for lunch instead of supper. Meeting for lunch is a better option for several reasons.
When you invite clients out, you’ll be paying the tab. At most restaurants, the menu options for lunch are cheaper than the menu options for supper. Also, most people are busy during office hours. Your clients probably have a number of things they want to accomplish in the afternoon. So they are less likely to linger around after lunch than after supper. If your clients are less likely to linger around, that means you likely won’t have to pay for additional appetizers, desserts, or drinks for a long meeting. Also, people are less likely to consume alcohol during a lunch meeting. For a supper meeting, the cost of alcohol could easily double the tab.
If acceptable, you could meet clients for a quick coffee at a coffee shop to discuss the details of your agreement. Meeting for coffee is even cheaper than meeting for lunch. Consider what type of business you’re running and the impression that will be made by meeting for lunch or coffee. Would meeting for coffee send the right impression? If there is no problem meeting for coffee instead of lunch, take advantage of the lower cost meeting.
Look online for coffee shops or restaurants close to your clients. If you’re marketing business-to-business, look for coffee shops walking distance from your clients’ office. For instance, tell your clients you can meet them at the coffee shop on the main floor of their office building at the time most convenient for them.
Suggesting meeting at a coffee shop or restaurant close to your clients makes it seem like you’re going out of your way to accommodate your clients, because you are, but it also hides the fact you’re choosing a low-cost option instead of having your own office space.
Prestigious professional service firms, like national accounting and law firms, often take their best clients out to sporting events. They often have box seats at sports arenas where the partners entertain clients.
If you don’t have office space, you can do something similar—but on a smaller scale—to entertain your clients. You could suggest meeting your clients to see a popular professional sports team’s game. Your client meeting won’t be as lavish as watching the game from a catered box seat, but you’re still giving your clients a bit of the VIP treatment by taking them to a professional sports team’s game.
For a lower cost option, you can take your clients to a lower-level professional sports team’s game. Most cities have lower-level professional sports teams for every sport. Typically, the teams will be in a league one level below the major leagues. Tickets to their games are significantly cheaper than tickets to the major leagues. That allows you to take advantage of lower costs, or to buy better seats and still probably spend less overall.
When taking your clients to a lower-level sports team’s game, learn a bit about the team and the league. Make it seem like you’re taking your clients out to see the lower-level game not because it’s cheaper, but because you have specific reasons for enjoying the sport played at that level or watching that team in particular. Make it sound like you deliberately chose a game at that level over the major leagues because you see some benefits of watching sports played at that level which you don’t get through watching games played in the major leagues. Knowing a few facts about the team and the league makes it sound like you’re very enthusiastic about sports played at that level. If you sound enthusiastic about the game, your clients are more likely to be enthusiastic as well.
When treating clients to a sports game, you’ll also be expected to purchase food and drinks for them.
Meeting to watch sports works well if you find out your clients have an interest in that sport. That allows you to set up a meeting watching something your clients enjoy while hiding the fact you don’t have an office to meet them in.
Meeting at sports games also gives you an excuse for meeting your clients on evenings and weekends if you’re still working full-time as an employee during office hours until your business grows. The strategy works well if you’re working full-time during office hours and trying to market business-to-business. When marketing business-to-business, your clients expect you to deal with them during their office hours. Enjoyable entertainment, such as a sports game, could convince those clients to meet with you outside of their office hours.
In addition to the benefits described above, treating your clients to a sports game also has the wine and dine feel of a big national company treating their best clients to a sports game. Make your clients feel like VIPs.
You could also strategically arrange your business, and the goods and services you offer, so you are always going to your client’s place of business if you need to meet them in person. That makes it convenient for your clients and makes it seem like you’re catering to their needs. It also hides the fact that you don’t have your own office space. When you meet your clients at their premises, and have a PO Box for a mailing address, you could run your business out of anywhere.
Make use of as many of your personal assets as possible for your business. Don’t worry about technicalities. It doesn’t matter if you own the asset or your business owns the asset. There are likely differences for tax purposes, but on a limited budget, you don’t want to buy a second copy of an asset you already own personally to use for your business.
If you have tools that will work for your business, use them. They might not be the best tools, or the fastest tools to use, but using what have already can be a great way to make a limited budget go further. You might only need to use those tools for your first few jobs. Once your business is generating revenue, you can invest in new tools that make your work more efficient.
Buying business assets can be expensive. More so for some businesses than others. Taking advantage of assets you already own personally that can be used for your business could be the difference between starting your business now and needing to save up money for another year. Using acceptable tools instead of the best tools might mean your first few jobs take twice as long. When you’re just getting started, your time might not be booked solid anyway. If taking longer doesn’t reduce the quality experienced by your customers, get through the first few jobs with whatever tools you can. The key is getting started. Once your business becomes profitable, you can invest in any tools you want.
Depending upon your tax jurisdiction, there might be tax benefits to writing up a rental agreement between yourself and your business and paying yourself rent for the business use of your assets. Discuss the business and personal tax consequences with your accountant.
Your friends might also have the tools you need and allow you to rent them for a reasonable price. This is likely not a permanent solution. But it could allow you to get your business started right now, then purchase your own tools once you have the revenues to do so.
Your friends might even allow you to pay them for renting the tools after your customers pay you at the end of the job. A tool rental centre, in contrast, would require payment at the time of rental instead of after your customers pay you.
You might also be able to barter renting tools from your friends instead of paying cash. Offer your friends goods and services from your business, or anything else they might value, in exchange for renting the tools. If you’re working with an extremely limited startup budget, any place you can avoid spending cash helps.
You can avoid buying expensive tools by renting them only as you need them. Depending upon how often you need to use the tools, over the long run, renting could cost more than buying. When first starting your business, however, you likely won’t be able to afford to buy all of the tools you need up front. Renting allows you to use the tools for a few days as you need them at a significantly lower cost than paying for the tools in full up front. Shop around for the cheapest place you could rent the tools you need on an hourly, daily, or weekly basis as you need them.
The cost per use while renting tools could be higher than owning, but the total amount of cash you spend on renting the tools could be lower over the course of a month than the monthly payment would be if you financed owning those tools. That means you’ll have more cash to spend in other places.
Renting tools means you’re paying for them only when you need them—when those tools are making you money by being used. You’re not paying for those tools while they sit idle in your shop like you would if you owned them.
When your business is first getting started, you might not need every tool every day. You might have several weeks or even months between specific types of jobs that require specific tools. In those cases, renting is particularly cost-effective because you’re paying for the tools only as you need them. The same applies to established businesses which need certain specialty tools only once in a while. Owning an asset means you’re paying for it even while it’s not in use.
Renting tools might also free you from maintenance costs. Check your rental agreements. You’re responsible for your own maintenance on everything you own. When renting, you’re always renting a tool in good working order.
Some rental stores also offer rent-to-own agreements. If you find you’re frequently renting the same tool, but can’t afford to buy it, check if you can apply your rental payments toward a rent-to-own agreement. Those agreements allow you to eventually own tools that you rent frequently. Like any other purchase, before entering a rent-to-own agreement, be sure the terms of the agreement meet your needs and provide a good value. This strategy is commonly used by people and businesses with poor credit ratings who can’t obtain traditional financing to make purchases.
In many cases, renting tools for longer periods allows you to rent the tool at a lower cost per day or per hour. For instance, renting a tool for an entire day usually allows you to take advantage of a lower hourly rate than renting the tool for 2 hours. Likewise, renting a tool for a week usually costs less per day than renting the tool for one day. Take advantage of lower rental rates offered for longer rental periods by batching your jobs that require the use of that tool.
For example, instead of renting the tool for one day to complete one job, then renting the tool again next week for one day to complete another job, try to book the jobs back-to-back so you can rent the tool for two days in a row and obtain a lower rental cost per day.
Minimizing the number of times you rent the tool through batching is a very effective strategy when a tool rental centre charges you set up, cleaning, or maintenance fees for renting the tool. Those fees are typically a fixed charge each time you rent the tool. The fees are usually the same whether you rent the tool for one day, or one week. If you rented the tool for one day seven times, you have to pay those fees seven times. But if you rented the tool once for a week, you would only have to pay those fees once. That cost savings is in addition to getting a lower average daily rental rate by renting at a weekly rate instead of a daily rate.
You might be able to rent the assets you need from noncompeting businesses. If you know businesses in your city have the assets you need, you could try to negotiate renting their equipment during their off hours while they’re not using the equipment.
For example, if the businesses operate Monday to Friday during office hours, you could try to negotiate renting their assets on evenings and weekends while the businesses are not using those assets.
Approach businesses that use the equipment for different purposes than you intend to so you won’t be a direct competitor to those businesses. Most businesses would not rent their equipment to one of their competitors. You can often find businesses that use the tools you need for different purposes and wouldn’t mind renting those tools to you while they’re not using them.
This is an area where your negotiation skills can pay off well. You might be able to negotiate a more favourable rental rate from other companies than you could from an equipment rental centre. The other companies won’t have set rental rates and rental policies like an equipment rental centre would because they are not normally in the business of renting their equipment. That allows you and the other business owners to negotiate custom agreements that work great for both of you.
If the equipment requires specific training or skill sets to use, be sure to make it clear you are qualified to operate the equipment safely and without damaging it.
You need to ensure your rental agreement specifies how maintenance costs and accidental damage to the equipment will be addressed.
Many businesses could be more open to renting their equipment to you than you might think. The businesses that own the equipment are paying for that equipment 24 hours a day, seven days a week, whether those assets are being used or sitting idle in their lot. Assets sitting idle are incurring costs because of lease payments, financing charges, and the opportunity costs of having money tied up in the assets. Idle assets don’t bring in revenue. Renting their equipment to you allows those businesses to generate revenue from their assets when the assets would otherwise be sitting unused in their lot.
When your business is just getting started, making sure you don’t overspend is critical. Making the most effective use of your limited startup capital can be the difference between getting started now and needing to save up cash for several more months.
It might be convenient to have multiple copies of the same thing. Perhaps you would like to have a second copy of an asset for different locations or for different uses or applications. But you could make a limited startup budget go further buying only one copy of each asset. You could share the one asset with your employees, transport it to different locations, adjust it for different applications, or by cheap accessories that allow you to use that one asset for multiple purposes.
You could spend the money saved by avoiding multiple copies of the same asset on other assets that are critical to starting your business. Don’t waste limited startup capital buying duplicate copies of the same asset when a little extra time and effort could make one copy of the asset work for you.
You might need to buy three different business assets to perform three different tasks. The three assets might cost $100 each for a total of $300. If you’re unable to spread out the cost over time because you need all three assets right away, consider looking for a combination asset able to perform the tasks performed by all three assets. Instead of buying three midrange quality assets for $100 each, you might be able to buy one high-end asset for $250 that performs the job of all three assets for an overall savings of $50. Depending upon the assets, you might need to buy low-cost accessory parts to make one asset do the job of three.
You’ll not only save money, you’ll also have a better quality asset to work with. A better quality asset could make your work easier or more efficient. The better quality asset might also last longer and require less maintenance further increasing your cost savings.
Buy higher quality assets if they replace multiple lower quality assets for an overall cost savings.
This tip is common sense, but it’s easily forgotten so it needs to be mentioned. You should buy premium assets only when you can realize a cost savings by doing so—such as being able to avoid other purchases as described above. If you could start your business with a basic asset, don’t waste your limited startup budget buying a premium asset. Once your business is established and generating revenue, you can upgrade any basic assets that are reducing your overall efficiency or effectiveness. When getting started, it’s important to reduce costs wherever you can. Paying for add-ons or extra features not critical to starting your business wastes a limited startup budget.
Buying an upgraded model of one asset here and another there might not seem like that big of a deal. But the little bit of extra cost buying premium versions of several assets can add up quickly. You’re probably better off having all of the assets you need instead of premium versions of only a few assets. With a limited startup budget, you’ll probably need to choose between buying mid-level quality to start your business now and waiting until you can save up additional startup funding to buy premium assets. Most people want to start their own business as soon as possible.
This tip is also common sense, but needs to be mentioned. Don’t immediately buy everything you think you might need. Before you buy something, always stop and think, or search online, to see if there’s any way you could use an asset you already have to perform the function of the asset you would like to buy. Also look into whether the same task could be performed with a cheaper substitute asset instead of the first asset that comes to mind.
Not buying on impulse allows you to look at different vendors online to price match. Waiting a few weeks to buy assets also allows you to watch for sales. While delaying your purchase, someone might list a second-hand copy of the asset you need for sale online at a greatly reduced price. Use time to your advantage to save money.
It would be nice to have everything you could possibly need for your business just in case you need it. You would always be prepared for anything that could come about. With a limited startup budget, however, you can’t have everything all at once. You have to prioritize. Buy only what you’ll need to complete your first few weeks of business.
If you won’t need something in the first few weeks, don’t buy it to start your business. Focus on getting your business started for the lowest possible cost when working with a limited budget. Once your business is up and running, it will be generating revenue. You can use revenue generated by your business to buy additional assets as you need them.
Don’t allocate valuable startup capital to buying assets just in case you need them. Cash will be tied up in those assets you might not use for weeks, or even months. The just in case scenario might never come about.
The only exception to not buying assets just in case you need them is when there could be severe consequences if something goes wrong. For instance, if there are health and safety risks. Under those circumstances, you should buy any precautionary assets that allow your business to operate safely or minimize the damage if something does go wrong. There could also be laws and regulations in your jurisdiction stating you must have certain assets just in case something goes wrong. Ensure you comply with all laws and regulations.
If the consequences of an unforeseen event are minor, or you could easily go out and buy an asset if it turns out you really do need it, there is usually no need to tie up limited startup capital buying that asset until you really do need it. Money is tight, don’t allocate it to things you might never use.
It’s unnecessary to tie up money in assets you might not use which could be purchased from a retail store in 10 minutes. While going without the asset, you might even find a substitute for it using an asset you already have.
Hiring employees to help you adds a lot of complexity to your business. You have to be aware of labour laws, tax requirements, and government forms that need to be completed for each employee.
Your business might not launch with a steady stream of new customers coming in. You’ll probably find you move between busy times and slow times unpredictably. It would be nice for your new business to have help during the extremely busy times, but you can’t afford to pay employees who will be sitting around bored during the slow times.
When you hire employees, you’re making a commitment to pay them regularly as agreed upon—whether you can keep them busy or not. The risk of profit or loss lies with the business owner, not the employees. The cost of employees’ wages can be significant, especially for a small business with limited and unpredictable income.
But at the same time, you don’t want to have to turn down larger projects because you don’t have the manpower to complete them. You want to be able to take on any project that comes your way—big or small. You need to remain flexible so you can take on large projects, but also avoid facing excessive costs during slow periods. You need a scalable work force so you can match your workforce to your business’ manpower needs day-to-day.
You need to be able to hire 10 people one week to fill a large order on time, but operate the business on your own next week if only a few small orders come in. That flexibility allows you to avoid worrying about whether or not you can complete a large order or job on time. Flexibility also makes hiring the help you need affordable.
You might also need help from people with a specific skill set one week, then need people with an entirely different skill set next week. You need that help, so you can’t go without it, but you can’t afford to permanently hire employees with those skills.
Managing employees is a difficult and complex issue. Posting help-wanted ads, conducting interviews, making job offers, and managing employees day-to-day are subject to human resource issues and labour laws. As a business owner hiring employees, you’re responsible for learning and complying with all labour laws in your jurisdiction.
You’re also responsible for supplying any required benefits, such as different types of insurance, when you hire employees.
How can you gain access to additional manpower and people with specific skill sets only when you need them; and also avoid many of the costs and complexities of human resource issues and labour laws? Outsource your human resource needs.
Below, I discuss several options available to your business to get help when you need it and only when you need it.
Your first option to get help is to hire freelancers instead of hiring employees. Most freelancers have a high level of skill in a specific area. By hiring freelancers, you often gain access to highly skilled workers without having to commit to hire them full-time as an employee.
Hiring freelancers is a great solution when you need skilled help. If you need general labour, I discuss other outsourcing options below.
Most freelancers are experienced workers. They are highly skilled and effective. They are running a business. You’re dealing directly with the business owner when you deal with a freelancer. The success of their business depends upon keeping their customers happy. As such, they likely want to ensure you are satisfied with their work.
Freelancers, being skilled workers, can begin doing the work you need right away. You don’t need to spend time and effort training them like you would a new employee. There are probably several freelancers available for hire who have experience with the exact work you need completed.
If you hire a freelancer and it doesn’t work out as planned, you don’t need to hire that freelancer again. It’s much easier to terminate your business relationship with a freelancer than it is to fire an employee and navigate labour laws. The next time you need help, you need only hire a different freelancer with whom you’ll probably have better luck. You can improve the chance of hiring the right freelancers the first time by reviewing a portfolio of their work and getting references before you hire them. By reviewing portfolios and getting references you often have a good idea what to expect before you hire freelancers. You can see the quality of their work first-hand by reviewing their portfolios.
The price you pay for freelancers varies from person to person. The price can vary quite a bit. This is another area where developing your negotiation skills will help you. Great negotiation skills help you get a great deal and avoid being taken advantage of.
The freelancers often have their own workspace. Many of them work out of their homes. That means you don’t need to rent office space for the freelancers to work like you might with an employee. Freelancers are accustomed to working out of their homes and managing their own time efficiently without direct supervision. You can usually count on them to get the job done without having to stand behind them to make sure they do it.
Freelancers are often paid per job instead of per hour. You can negotiate those terms when hiring them. Paying the freelancers per job lets you know in advance exactly what having the job completed will cost you. In contrast, paying by hour, you might not be certain exactly how many hours you’ll be billed for. Paying freelancers a set price for the job ensures they stay efficient because they won’t be paid for additional hours wasted. They’ll want to complete your job quickly, but at a high enough level of quality to satisfy you and look good in their portfolio, then move on to the next job.
You can usually hire freelancers much faster than employees because you don’t need to go through a lengthy process of advertising for a position, reading resumes, screening applicants, conducting interviews, making job offers, hiring employees, then training the employees. Instead, you need only find a freelancer with the skills you need who has availability in their schedule when you need them, check their portfolio and references, then negotiate the terms. The whole process could be completed in as little as a few hours. As a result, you could have a freelancer begin working for you almost immediately.
Freelancers are usually motivated to do your job exceptionally well because it builds their portfolio. Freelancers know a portfolio filled with high quality work is the best way to secure future work. They might also ask you to give them a reference for future work. Moreover, freelancers are business owners. Just like you, they want to keep their customers satisfied so they can get repeat business and obtain new clients through word-of-mouth advertising. In contrast, some employees might be motivated to work only hard enough to not lose their jobs. An employee might not have the same passion and dedication as a business owner.
Hiring freelancers allows you to hire someone very skilled with experience performing the exact job you need completed. In contrast, when hiring an employee, you might try to hire a well-rounded employee who could do many different things at different times. A well-rounded employee would be average at many tasks, whereas a specialized freelancer would be exceptionally good it at performing the exact task you need completed at that moment. Instead of having an employee with average skills complete three different tasks, you could hire three specialized freelancers to have the three tasks performed exceptionally well. That means you always hire the best person for the job.
You don’t need to provide tools or equipment for freelancers like you would for employees. That could be a significant cost savings for your business. Especially if the employees’ tools and equipment would need to come out of a very limited startup budget. Freelancers are in the business of providing a specific service. They likely have all of the equipment necessary to provide that service. That also means you don’t need to train freelancers to use their equipment whereas you might need to train an employee to use the necessary equipment.
Freelancers are experienced. So they should be able to provide a high-quality end result on the first try.
Most freelancers also know their own ability and skill level. That allows them to give you a reasonably accurate estimate of how long they believe your job should take. Running their business, and scheduling their own work effectively, requires freelancers to accurately estimate the time they’ll need to spend on each project. They need to be able to accurately budget and quote their time. In most cases, you should be able to depend upon the time estimates freelancers provide you.
Freelancers’ time likely costs you more than an employee’s time when averaged out to an hourly rate. But for that higher hourly rate, you save yourself all of the expenses and troubles associated with hiring and training an employee to do the work you need. You also gain the flexibility your small business needs. You’re usually not only getting your money’s worth, but also saving money because you pay for freelancers only when you need them. You pay only for the services you need and don’t have to cover a salary during idle time.
Hiring a freelancer, however, does have some downsides. You have less control over freelancers than you would an employee. Depending upon your agreement, you might specify only your desired end result, not how the freelancer accomplishes your desired end result. Most contracts with freelancers are focused on end results.
Freelancers are running a business. They try to keep themselves busy and generating income. As such, the exact freelancer you want to hire might be working for someone else exactly when you need them. That means you’ll have to hire a different freelancer, or rearrange your schedule to accommodate hiring the freelancer you want.
You can search for freelancers on freelance websites like Elance and Upwork. Many freelancers also advertise online using classified ad websites.
You can hire extra help from employment agencies. Many employment agencies offer people with a specific skill set. Hiring people from employment agencies means you’re dealing with an agency; not individuals like you would with freelancers. Employment agencies are a good place to find extra manpower when you need several people. You simply call the employment agencies and tell them how many people you need and when you need them. The employment agencies take care of making people available when you need them.
Some employment agencies offer people with different skill levels for different rates.
Employment agencies have many of the same benefits and drawbacks described above for freelancers. The primary difference is you are dealing with an agency that manages several people instead of an individual. Depending upon the skills you need, the employment agency might even subcontract out your work to freelancers whom you could contact directly on your own.
Employment agencies often have better availability than freelancers. That’s because they can schedule whoever they have available when you need extra help. You’re not dependent upon one individual’s availability.
Employment agencies also have a level of continuity not available when you’re reliant solely upon one person. With an employment agency, if any one person doesn’t know what to do, is sick, quits, or is otherwise unable to complete the task, the employment agency can easily substitute another person in that person’s place. That means an employment agency can complete your tasks seamlessly despite running into human resource issues.
Employment agencies also reduce the amount of time, hassle, and paperwork required to hire extra help. You are dealing with a business, not hiring employees. The employment agency handles all human resource issues. By dealing with one other party, the employment agency, you can hire as many extra people as you need. You don’t need to negotiate terms with each person individually.
You’ll likely also be satisfied with the help supplied by the employment agency. If you’re not happy with one of the people assigned to your task, you can likely ask the employment agency to substitute that person for someone else for the remainder of the project. That means you’re likely not stuck with one person for the entire job like you could be with an employee or a freelancer. The employment agency likely has many people they could assign to your task.
Some of your friends might be able to provide the general labour you need. Some of them might even have specific skills and abilities you need. You might be able to work out an agreement to subcontract your friends on evenings, weekends, or other times they are available to help you. If you make an enticing offer, your friends might even be willing to take a vacation day to get away from their job to help you.
You could subcontract your friends for a few days to help out with a large project, or to process a large order. You can also subcontract your friends to finish a current job faster enabling you to start a new job earlier if a new customer wants you to start his or her job right away. That prevents you from having to turn down the new job if you’re already booked for the next few days.
Working with friends can be great. You already know you get along with them well. You probably also know a bit about their character and work ethic so there shouldn’t be any surprises while working with them.
The advantages and disadvantages of working with your friends are similar to those listed above for hiring a freelancer. Your friends, however, are probably not set up as a business for hire like freelancers. Also unlike freelancers, you might need to supply your friends with the tools and workspace they’ll need to perform the job.
If your friends aren’t set up as a business for hire like a freelancer, ensure you’re aware of any tax consequences or legal requirements when subcontracting work to your friends. Some people like to subcontract their friends by paying cash and not filling out any paperwork, but I don’t recommend that. I recommend doing everything according to the laws and regulations in your jurisdiction.
You might be in a situation where you need manpower to perform some general labour. You don’t need people with any specific skill set or experience. You can often get cheap labour to perform unskilled work through employment agencies that specialize in general labour. The people assigned to your job by the employment agency won’t have any particular skill set, they’ll simply take on odd jobs the employment agency assigns to them.
Hiring general labour from employment agencies works well if you need a task completed that doesn’t require much skill or training.
For example, general labour could be the right choice if you’ve recently run an advertising campaign and have received a huge rush of orders you need to package and ship on short notice. You could quickly instruct the people supplied by the employment agency how to package your goods and affix the shipping labels. By using the services of an employment agency, you could have all of your orders filled in 1 day by 20 people instead of taking 20 days to do it by yourself. Many customers won’t be willing to wait 20 days to have their order shipped. A 20 day delay would result in many negative reviews.
The ability to hire an employment agency means you don’t need to fear overnight success. You can hire the people you need to fill unexpected large orders anytime.
If you run a business that has regular clients, such as a landscaping business where you perform the same tasks at the same clients’ properties every week, you would hire the number of full-time employees you need to fulfil all of your long-term contracts. You could then use an employment agency to temporarily hire workers needed to complete one-time jobs your employees would not have time to complete in addition to their regular work. That means you don’t have to turn away work. You need only price the additional work to cover your costs of hiring the additional help from an employment agency.
You can also have people work for commissions and bonuses instead of wages. This type of agreement is common with salespeople. It is, however, important to check the labour laws and tax consequences in your jurisdiction when offering commissions and bonuses. Knowing the laws in your jurisdiction ensures you don’t run into any unintended legal obligations to the people you’re offering commissions and bonuses to. You also want to be sure you don’t miss any of the required paperwork.
Offering commissions and bonuses, especially with salespeople, means you could have a large number of people working for you with very little risk. The people working for commissions and bonuses are only paid for results. That means you pay them only once the results have been proven. It also means anyone who is not getting results is not getting paid for idle time.
For example, you could have 100 salespeople working for your business, but you would only need to pay for their services when they get results for you. A business that could never afford to hire 100 full-time employees on salary could easily afford to pay commissions and bonuses to 100 commissioned salespeople. The commissions would be paid out of the revenue generated by their sales efforts. That guarantees you’ll be making a profit on their services.
Your business might be just starting out and desperately low on cash. Then, out of nowhere, your business is awarded a huge job or makes a huge sale. Maybe some of your advertising went viral, or another business wants to buy a large number of your goods for resale. You don’t want to turn down the large job or order, but you have no idea how you could possibly get all of the work done on time without the money to hire additional help.
You might be able to hire your friends for one-time help to complete the large order using the most well-established currency for the labour friends: Beer and pizza.
Obviously, depending upon the nature of the work, you might have to supply the beer and pizza after the work is completed. Use your judgement.
Hiring friends for beer and pizza could be a lifesaver in the early days of your business. You might have no other option with limited startup capital. However, don’t make a habit of it. Your friends will probably be enthusiastic and willing to help you out a couple of times while your business is first getting started. But their enthusiasm will quickly wane if you ask for their cheap help repeatedly. It would also be rude for you to continue to do so.
Don’t make your friends feel like you’re taking advantage of them. Their help can get you through a few tough times, but you should work on developing an effective permanent solution for your business to pay for the extra help you need as you need it in the future.
Retail businesses generally receive cash from their customers at the time of sale. Most other types of businesses send out invoices to their customers. Even many retail businesses that sell business-to-business must invoice their business customers so their accounts payable departments can issue cheques.
If you invoice your customers, you need to plan the payment terms you’re going to offer them. This is referred to as your accounts receivable policy. The nature of the goods and services you sell, and the industry you operate in, play a large part in determining the payment terms you offer your customers. Your competitors likely all offer their customers similar payment terms.
Depending upon your industry, certain payment terms might make more sense than others. If certain payment terms are clearly advantageous in your industry, or all of your competitors offer the same payment terms, you’ll likely choose to offer your customers the same payment terms they expect from businesses in your industry. Alternatively, you might also choose to offer your customers more favourable payment terms to set your business apart. Doing so could create a competitive advantage, but will probably increase costs borne by your business.
Your accounts receivable policy will need to be clearly stated on your billing invoices. That tells your customers when and how you expect payment for the goods sold and services rendered.
A typical accounts receivable policy is to require payment within 30 days of invoice. Some businesses offer longer terms, requesting payment due within 60 or 90 days. However, payment terms longer than 30 days are uncommon. Usually payment terms longer than 30 days take on a financing structure with interest included.
Any time you allow your customers before paying you is time you’re financing your customers’ purchases for them. If you offer payment terms of 30 days, you have to put up the cash to buy the inventory and render the services for at least 30 days before you’ll be paid for selling the inventory or rendering the services. That ties up cash in that transaction until your customers pay you.
You’ll also need to plan for some of your customers making late payments. With a 30 day receivables policy, you still won’t receive some payments for 60 or 90 days due to late paying customers. Longer payment terms further extend late payments.
Longer payment terms also increase the risk of not being paid. Your customers that are in good financial health today might not be in as favourable of a position 90 days from now.
You might also choose to have a receivables policy requiring payment due immediately upon completion of services or delivery of goods. That receivables policy is common in some industries. Choose the policy that works best for your business. You need to properly manage your business’ cash flow, but you also don’t want to choose a receivables policy that’s going to deter customers because your competitors are offering more favourable terms. Consider both your business’ needs and what is common in your industry when setting your receivables policy.
Your billing invoices also need to clearly state how you plan to enforce your receivables policy. For instance, if payments come in late, your invoice should state whether you plan to charge late payment fees or interest, and if so, state the amount of the fee or the interest rate.
You’ll also have to use your judgment when enforcing your receivables policy. For instance, if you give payment terms of 30 days, and a payment comes in after 35 days, you’ll have to decide whether or not you want to enforce the late payment fee or charge interest on the late payment. If the late payment was made by one of your best customers, or a customer with whom you want to develop a good business relationship in the future, you’ll likely want to waive enforcing any late payment penalties if payment is made a few days late. Look at the bigger picture for your business.
The purpose of the late payment fee is not to make extra profit for your business through penalties or interest. That’s a very minor part of it. The purpose of the late payment fee is to tell your customers you expect payments to be made on time. Late payment fees also provide motivation for your customers to pay on time to avoid the consequences.
Enforcing late payment fees upsets your customers. No one likes paying more than they expected. Despite paying late, they might be good customers. Typically, late payment fees are enforced only for very late payments. For instance, if you have to use a collection agency or the legal system to obtain payment from a customer, you would also add the late payment fees and interest charges on top of the amount you’re attempting to collect.
You can improve your cash flow by getting a deposit from your customers. You can set your deposit rate according to what’s standard in your industry, or by determining what’s necessary to cover your basic costs of selling the goods or rendering the services.
For example, if you know a specific job is going to require materials valued at 20% of the cost of the project, you could ask for a 20% deposit before starting the project. You could then use that person’s deposit to purchase the materials you’ll need for the job. Using the deposit to buy the materials means your business does not need to put up the cash to buy the materials for the job. That prevents you from tying up your own cash in materials or paying interest on cash borrowed to buy materials until your customer pays you and you can repay the loan. You have the cash to buy those materials up front.
If you plan to spend the deposit, ensure there are no legal requirements for the type of deposit you’re collecting that would prevent you from doing so. Some jurisdictions have special regulations for specific types of deposits. There might also be different rules for refundable and non-refundable deposits.
Getting a non-refundable deposit reduces your risk. Any cash received as a deposit is cash you’re no longer at risk of not being able to collect. If for some reason your customer doesn’t pay your invoice, or cancels the job part way through, your loss on the project will be reduced because the deposit will cover some of the project costs.
Certain industries and certain types of work commonly require deposits. Most custom orders require deposits. Businesses taking custom orders often require deposits because inventory needs to be modified to meet custom specifications. Once customized, the inventory can no longer be sold to other customers. The inventory is ruined if the customer decides not to go through with the purchase.
For example, a business selling custom kitchen countertops would likely require a large deposit. The material for the custom kitchen countertops would need to be cut to match a specific customer’s unique kitchen. Once the material is cut to shape, the material cannot be resold to another customer. A deposit covers the business’ risk of loss on the cost of the materials if a customer decides not to go through with the purchase.
To provide another example, a business might require a deposit to special order unique inventory for a customer. The business would request a deposit if it would have trouble selling that unique inventory to other customers. The deposit could range anywhere from 10% to full payment. If the business would never be able to sell the unique inventory to anyone else if the customer doesn’t come back, the business might request full payment in advance. If the business has a chance of selling the unique inventory, but it might take quite a while to do so, or require a deep price discount, the business might choose to request a partial deposit. A deposit of 50% of the purchase price could allow the business to avoid losing money if the customer does not return to finalize the purchase.
When progress billing, you invoice your customers for a portion of the total contract value based upon reaching certain milestones. Progress billing is typical for longer jobs that take several months to complete. Progress billing allows you to receive payment from your customers as the job progresses. Progress billing allows you to use your customers’ payments to cover your expenses for the next portion of the job.
Progress billing also greatly reduces the chances of not being paid for your work. If your customers miss a progress payment, you could always stop working on their job until payment is received.
When progress billing, you identify the significant points in delivering the good or service you offer. You would then invoice your customers at each significant point. For instance, you could invoice your customers 20% once the materials have arrived at your shop, the next 20% once the first half of the materials have been processed, the next 20% once the second half of the materials have been processed, then 40% upon delivery of the final product.
You could also progress bill based upon certain percentages completed. For instance, you could bill your customers at the following completion points: 25%, 50%, 75%, and 100%. You could choose any interval that makes sense for your project. The intervals don’t need to be equal. You could bill at 10%, 50%, 80%, and 100% completion.
You could also require a deposit before starting the job in addition to billing at specific progress points.
Progress billing is commonly used by industries where the goods and services are extremely expensive and industries where delivering the goods or services is a long process such as construction or custom manufacturing.
The advantages of progress billing are the same as discussed above for getting deposits. Progress billing means the company offering the goods and services doesn’t have to finance the entire cost of offering the goods or services. This is crucial for very expensive goods and services. Progress billing allows the company offering the goods and services to pay for only a small portion of the total contract, then get payment from their customer to cover their costs incurred up to that point, and then use their renewed cash flow to begin working on the next portion of the contract. That prevents the company offering the goods or services from having to pay interest on borrowed money or tie up significant amounts of cash for long periods of time. The company offering the goods and services has to put up the cash to pay for all of the materials and employee time invested in that contract until they receive payment from their customers.
Progress billing also reduces the risk to the company offering the goods or services. Progress payments allow the company offering the goods and services to never be at risk of not being paid for any more than the next progress payment. The company can easily stop working on the project if the progress payments are not being made on time. The company could stipulate their right to do so in the contract. That prevents the company offering the goods and services from incurring a large loss if a customer doesn’t pay. The loss is reduced to only one progress payment, instead of the entire contract.
If you need payment for your goods or services up front, you might be able to persuade some of your customers to pay in full in advance by offering a discount. If it’s common in your industry for customers to pay after delivery of a good or rendering of a service, you’ll probably need to offer a fairly large discount to motivate your customers to pay you in advance. Especially for customers with no prior business relationship with you because you have not yet earned those customers’ trust.
Getting payment upfront allows you to have a cash cushion to comfortably buy the raw materials or inventory you need to deliver goods or render services to that customer. Ideally, you should have that cash cushion by other means, but it doesn’t always work out that way for new businesses started with limited capital.
You could also request payment upfront if you’re uncertain about being able to collect from your customers.
If you plan to request full payment in advance in exchange for a discount, you might choose to raise your regular prices a bit so you can offer a larger discount and still make a profit when taking payment in advance. By inflating your regular prices, you can make it seem like you’re offering a bigger discount for accepting payment in advance.
Your final price, after offering the discount, might have to be below market rates to convince customers to pay you in advance instead of going to your competitors to pay after receiving the good or service.
You can improve your cash flow by eliminating delays between fulfilling your obligations, such as delivering your goods or rendering your services, and getting your invoice out your customers. If your invoice states payment is due within 30 days, the clock doesn’t start until you print out an invoice and give it to your customer.
If you delay a week between fulfilling your obligations and sending out invoices, you provide your customers with free financing for a week. You give your customers an extra week before they have to pay you. That financing has costs, either from the opportunity cost of cash tied up, or in the interest you pay on borrowed money. Prevent yourself from having to incur those costs by sending out your invoices as fast as possible after fulfilling your obligations.
Delays between fulfilling your obligations and receiving payment strain your cash flow. Cash flow problems cause many new businesses to fail.
You can send out your invoices faster if you gather all of the necessary information in advance. Have everything ready to be keyed into the invoice so it can be issued without delay after fulfilling your obligations. Delays in gathering information delay your invoice. Resist the temptation to get caught up in the next job before invoicing for the previous job. Good cash flow is crucial to any business.
You can get cash coming into your business faster by offering your customers early payment discounts. The discount doesn’t need to be significant, a discount of 2% could motivate customers to pay early. For instance, you could require full payment within 30 days, or offer a 2% discount for payments made within 10 days. A 2% discount for payment within 10 days is common in many industries.
Many large corporations instruct their accounts payable staff to take advantage of all early payment discounts.
Getting paid early could be the difference between a strained cash flow and having a comfortable cash cushion. The difference could be significant for a new business with little cash to spare. Getting paid sooner means you’ll have cash to cover your costs for the next job sooner.
If you offer early payment discounts, the offer should be clearly stated on your invoices along with your other payment terms. Clearly stating the discount ensures your customers are aware the discount is available if they want to take advantage of it.
If it’s common in your industry to offer longer payment terms, but you need to have the money as soon as possible, you could factor your receivables. Factoring receivables is also a quick solution for businesses caught in a cash crunch and desperately needing cash.
Factoring your receivables is like a payday advance loan for businesses. A factoring company will buy your accounts receivable from your business at a discount.
For instance, if you have outstanding invoices that you do not expect to be paid until sometime in the future, you could sell those receivables to a factoring company at a discount and get most of those receivables in cash today.
Factoring your receivables might also allow you to transfer the risk of non-paying customers to the factoring company. Factoring without recourse means the factoring company bears the risk of non-paying customers. Factoring with recourse means you bear the risk of non-paying customers. If you bear the risk, that means you have to pay the factoring company if your customers don’t pay the invoice.
Factoring can be expensive. So you probably want to use it only as a last resort when your business is in a cash crunch and desperately needing cash to pay bills.
Send invoices issued to non-paying customers to collection agencies. Collection agencies will take a percentage of the cash recovered from your delinquent customers in exchange for doing the work to collect those receivables.
Using collection agencies is expensive. It will also damage your business relationship with your customers. As such, it should be used only as a last resort. Getting a percentage of the amount you’re owed by hiring a collection agency is better than getting nothing at all.
Up until now, we’ve discussed the first half of managing your cash flow cycle: money coming into your business. Now it’s time to address the second half: money flowing out of your business.
Anything you can do to delay money flowing out of your business will improve your cash flow. One way to delay cash flowing out of your business is to negotiate longer payment terms with your vendors. Many vendors are willing to work with you to extend your payment terms. However, some will require higher payments, or interest, in exchange for offering a longer payment term.
If you plan to negotiate longer payment terms, it’s best to negotiate those terms upfront while dealing with a salesperson who has the ability to include the longer payment terms as a condition of the sale. A salesperson could be willing to make the payment terms more favourable for you to close the sale with you. The salesperson might even be able to extend the payment terms without interest or additional charges. You have much more negotiating power before you agree to purchase. You lose all of your leverage to negotiate once you’ve already committed to the sale and the regular payment terms.
You can also delay cash flowing out of your business by paying your bills on the due date instead of paying them early. Paying your bills early ties up cash before it absolutely needs to be spent.
Some people choose to pay bills early so they don’t forget to make the payment. You can eliminate the risk of forgetting to pay your bills on time and incurring late charges by automating the process with online banking. Most online banking systems allow you to set the payment date for bill payments. Set the payment due date, and then your online banking software will process the payment on the due date you’ve specified. Setting up the payment in advance helps you avoid forgetting to pay the bill on the due date. You could take the time to set up the payment when it’s convenient for you.
When automating bill payments for the due dates, be aware of any payment processing delays required by your bank. Your bank should clearly state those delays. Many require 24 hours to process your payment. If that delay would affect your payment, set your payment due date one day earlier than the due date specified on the invoice.
Some people don’t see the significance of tying up cash by spending it earlier than it needs to be spent. They think if the bill needs to be paid, it doesn’t matter when it’s paid. They owe the money anyway.
By delaying paying your bills until the due date, you have that cash available in your bank account to be spent as you choose right up until the due date. If you pay a bill two weeks early, that cash is gone two weeks earlier than it needs to be. So why is that significant?
In the next two weeks, you might be able to complete several jobs for several customers. You could use the cash that would’ve been tied up by paying the bill early to buy the inventory or materials you need to sell goods and render services to your customers during the next two weeks. You would then use payments received from those customers (or other customers, depending upon your receivables policy) to pay your bills on the due date. That means, during those two weeks, you are able to use that cash to buy additional inventory and materials and make additional sales to your customers. That means you’re able to use that cash to generate additional profits by turning over more inventory. If you spent that cash by paying a bill early, that money would’ve been gone for those two weeks and not available for you to use to buy inventory and materials.
Getting cash coming into your business faster, and cash flowing out of your business slower is good cash flow management. Obviously, you want to avoid the business version of living paycheck-to-paycheck. A healthy business has a healthy cash cushion so it’s not dependent upon the very next cash inflow to pay the next bill. However, not all businesses have that luxury—especially while starting with a limited budget. Good cash flow management keeps a business alive.
This tip is a direct contradiction to the tip given above. But it’s an important part of effective cash flow management. If your business has a sufficient cash cushion to do so, take advantage of any early payment discounts offered by your vendors. If your business has a comfortable cash flow, the cost savings from paying early to take advantage of discounts can be worth tying up cash early. Paying less improves your cash flow and increases your profits. You’ll have to evaluate the discount against the costs of paying early. Choose the option that works best for your business at that moment.
Even if you don’t have a comfortable cash cushion, there is still a way you could take advantage of early payment discounts. It involves the creative use of financing. If you have a line of credit for your business at a low interest rate, say 3%, and one of your vendors is offering a discount of 5% for early payments, you can save money by borrowing from your line of credit to pay your vendors early and take advantage of the discount. You’ll save the difference of 2% (5%-3%). However, you only save the difference if you pay the interest rate you expect. If the interest rate is 2% per month, and you wait three months to repay the loan, it will cost you 6% interest to take advantage of the 5% discount—you’ll lose the advantage.
Many of your vendors are willing to spread out large expenses over a number of payments. A business with limited startup capital could benefit from making monthly instalments instead of making a large lump sum payment. Being able to make instalment payments could allow you to purchase equipment and inventory you wouldn’t otherwise be able to afford.
Even if your business does have the cash available, being able to spread out a large payment over several small payments allows you to use the cash that would otherwise have been tied up paying in full. You can use that cash to buy inventory and materials that can be sold for a profit in the meantime. You would then use the cash generated from those sales to pay the instalment payments as they come due. That allows you to use the cash to turnover more inventory, serve more customers, and make more profit.
However, the benefit of making instalment payments isn’t usually offered for free. Your vendors will likely require interest to be added to the amount they finance for you by allowing you to make instalment payments.
You have leverage to negotiate favourable payment terms before you agree to buy anything. Many salespeople have the ability to adjust the payment terms in order to close the sale. If you can negotiate instalment payments for a lower interest rate than a bank would offer on a loan, it could be a good idea to take advantage of that cheap financing. A vendor offering you financing on their merchandise makes a profit from you in two ways: The margin on the product, and the interest added to the instalment payments. A salesperson could be willing to accept a lower profit on one or both aspects to close the sale.
Negotiate favourable payment terms before you agree to buy. Good negotiation skills are essential for entrepreneurs.
Speeding up cash coming into your business and delaying cash flowing out of your business maximizes the amount of time the cash is in your hands and available for use. Both efforts are important aspects of cash flow management. Proper cash flow management, however, is more complex than that.
It’s critical to consider your cash cycle as a whole. Paying attention to timing is key. You must time cash inflows ahead of cash outflows. That ensures cash is available when you need it.
For instance, you should try to ensure payments from your customers will come in before payments to your vendors must be made. If it were the other way around, you wouldn’t have the cash until after you need it; your payments to your vendors would be late.
An oversimplified example illustrates the effect: If your vendors require payment for your inventory within 15 days, but you allow your customers 30 days to pay you, your business would need to have cash available to pay your vendors 15 days before you receive payment from your customers. Sometimes that’s unavoidable. You’ll have to build up a cash cushion that allows your business to use that cash cycle.
The opposite could also be true, you could require payment from your customers within 30 days, but your vendors might not require payment for your inventory for 60 days. That gives your business a cash surplus for 30 days in between receiving payment and needing to pay your vendors.
As you know, paying for inventory is not the only way money flows out of your business. You might have other expenses such as rent, insurance, and instalment payments for equipment. You need to consider the timing of those payments as well when establishing your cash flow cycle.
The cash a business uses to manage its day-to-day operations is referred to as working capital. Businesses can use loans to obtain the working capital they need to pay their expenses before their customers pay them.
Keep your business’ cash needs in mind when billing your customers.
An oversimplified example illustrates how to arrange your billing: Your business might need to pay rent and make instalment payments for equipment on the first of the month. Therefore, your business will need to have cash available on the first of every month. If you run a maintenance company, or any other company that bills customers monthly, you should require your customers to pay you by the twenty-eighth of each month. That ensures you have the cash available when your payments are due a few days later on the first of the following month.
A detailed discussion of the cash flow cycle is beyond the scope of this book. Entire books on managing a business’ cash flow are available. They are complex books typically only read by accountants.
Properly managing your business’ cash flow is a very complex—but absolutely essential—aspect of running your own business. Setting up a proper cash flow cycle is something you should plan to discuss with your accountant.
Cash is the lifeblood of every business. Cash flow problems can quickly sink a business—even one with a hot trending product.
We’ve covered cash coming into your business and cash flowing out of your business. We also need to discuss cash being tied up in your business. Depending upon the type of business you run, your inventory could tie up a significant amount of cash. The price of individual items in your inventory is not the only consideration. The number and variety of items you keep in your inventory also impacts the amount of cash tied up.
In many cases, you have to invest cash in your inventory before you can sell it. You can’t recoup that cash from your inventory until you sell it. Cash is tied up in your inventory the whole time it’s in your possession. That tied up cash can’t be used anywhere else. Moreover, if you’ve borrowed money to buy your inventory, you’re paying interest on that cash the whole time it’s tied up in your inventory.
Holding inventory has many costs: The opportunity costs of having cash tied up in your inventory, the interest costs of financing your inventory, storage costs, loss prevention costs, and insurance costs—to name only a few. It is, therefore, important to have an inventory policy that minimizes your costs when holding inventory. You need to use the inventory policy that best matches your business model.
You need to find the right balance of having inventory available for sale when you need it, but not holding so much inventory that it sits available for sale much longer than necessary. Different goods and services take different average amounts of time to sell. If it’s typical in your industry to hold inventory for only a couple of weeks before selling it, you should manage your inventory levels so you’re holding inventory for no longer than that time.
But it gets more complicated than that. You have to minimize not only the costs of holding that inventory, but also the costs of purchasing that inventory. If you could get a significant discount on your inventory by doubling your order size, you have to determine if it’s beneficial to do so. You’ll compare the costs of holding your inventory for twice as long against the discount available for making larger orders less frequently. If applicable to your inventory, you’ll also have to factor in spoilage and obsolescence costs of inventory that goes to waste if your inventory sits too long before being sold. Shipping costs also come into play.
If it works for your business model, consider using a just-in-time inventory system. Using a just-in-time inventory system, you arrange to have inventory delivered to your business exactly when you need it. That eliminates a number of costs for your business. Getting your inventory exactly when you need it means you need not have a place to store large levels of inventory. Nor do you need to tie up cash in your inventory before you actually need it. The time between paying for inventory and selling it is minimized.
A just-in-time inventory system could work great for a new business that doesn’t need to have a lot of retail inventory on hand for customers to browse through. If you’re able to schedule and predict your inventory needs, you could use a just-in-time inventory system with any of your vendors. If your inventory needs are difficult to predict, it would be easier to use a just-in-time inventory system only with vendors in your region who could deliver either the next day or the same day. Ordering from vendors able to deliver the next day means you don’t need to predict inventory levels more than one day in advance.
Depending upon the nature of your business, you might also be able to pick up the inventory yourself within a matter of minutes, send an employee to get it, or hire a third-party courier to pick up your order and deliver it to your business.
To provide a textbook example of a just-in-time inventory system: A manufacturing company would have exact scheduling of its production needs. It would have a computer system that communicates with its vendors to automatically order raw materials to be delivered to the manufacturing floor exactly as the next production run is about to begin. The inventory would be delivered exactly when it needs to be fed into the production line. There is no storage of raw material inventory.
A true just-in-time inventory system might not make sense for your business. Adapt the just-in-time inventory concept to your business. You could use the fundamental idea to minimize the amount of cash tied up in your inventory.
For instance, you might not have your inventory delivered to your production line minutes before it’s needed. But you could stop at your suppliers to purchase materials on the way to the jobsite instead of holding an inventory in your shop. You’ll have to find the right balance for your business between making extra trips for inventory and tying up extra cash by holding inventory.
You can also use different inventory systems for different types of inventory your business holds. For instance, you can hold a stock of some inexpensive retail items your customers need to see sitting on your shelves, but purchase expensive inventory items only as you or your customers need them.
You could also consider only holding an inventory of the items that sell quickly so your inventory turns over quickly.
Using some variation of a just-in-time inventory system allows your business to pay for only the inventory it needs as it needs it. That allows you to get started with a lower amount of startup capital because you can reduce the amount of cash tied up in your inventory.
There is no one type of inventory system that works best for all businesses. Your inventory system has to be matched to the way your business offers goods and services. You also need to consider the amount of cash your business has available to tie up in inventory, the costs of holding that inventory, and the costs of running out of inventory or not having inventory on hand if you or your customers need it available right now.
Your business might offer a variety of goods and services. Making goods and services available for sale costs you money. There are costs associated with holding an inventory of items for resale, holding an inventory of materials used to perform services, and holding an inventory of tools necessary to perform services. There are also a number of other costs associated with displaying those goods and services available for sale and having systems in place to offer those goods and services.
It’s inefficient to offer goods and services that aren’t selling well. If you don’t have cash to spare, don’t tie up cash offering goods or services that aren’t selling well. Focus on the goods and services that are generating revenue for your business. Cut product offerings that are increasing your costs without bringing in sufficient revenues to justify making those products available. Doing so frees up resources to be refocused on goods and services that are actually generating a healthy profit for your business.
Your dream business might be to eventually offer a full basket of goods and services including all accessory goods and services. However, when your business is just getting started, and has a very limited amount of cash to use, you should focus on offering the products that are generating sufficient revenues to make it worthwhile to offer those products. That’s good advice for businesses at all levels.
If you’re reselling goods manufactured by another business, you could have the goods shipped directly from the manufacturer to your customers. This is often referred to as drop shipping. Many manufacturers offer drop shipping, however, not all do.
This inventory system is commonly used for goods sold online—where your customers expect to have the goods shipped to them. You could use this inventory system with all of your sales, only with the portion of your sales made online, or only with online sales made to customers in other cities.
Shipping direct from the manufacturer to your customers is similar to using a just-in-time inventory system because you’re not tying up cash holding inventory before your customers purchase it. You don’t have to pay for the inventory until you have a customer committed to buy it. Your customer might even have paid for the purchase in full before you have to order the inventory from the manufacturer. That means you’ll have the customer’s cash to purchase the inventory. So you don’t need to finance the purchase and incur interest charges.
You also eliminate the need to have space to store and display your inventory since you’re never in possession of the inventory shipped directly from the manufacturer. That eliminates the costs associated with storing inventory. The manufacturer stores the inventory at their own warehouse.
Never being in possession of the inventory also allows you to eliminate all risk of loss. If the inventory were to be stored by your business, you risk the inventory being lost in a disaster, being stolen, spoiling, or becoming obsolete. You also eliminate the need to pay for insurance on the inventory while it’s in your possession. The manufacturer bears the risk of loss while the inventory is at their premises, then the shipping company provides the option to ensure your shipment which makes them bear the risk of loss until the goods are delivered to your customer.
Shipping directly from the manufacturer also lowers your costs because you avoid paying for one leg of shipping. If you hold inventory, you would have to pay for the inventory to be shipped from the manufacturer to your business, then pay for a second leg of shipping to deliver the inventory to your customers. Shipping directly from the manufacturer to your customers eliminates the shipping costs to deliver the inventory to your place of business.
Depending upon your business, you might choose to offer free shipping from the manufacturer to your customers; meaning you still have to pay for shipping the goods once. You could also choose to pass on the shipping cost directly to your customers, or perhaps only to certain customers, such as those buying from out of country. Either way, you can offer your customers a lower price because you don’t need to recoup the cost of shipping the inventory from the manufacturer to your place of business.
Shipping directly from the manufacturer works better for certain types of businesses than others. If people are visiting your bricks and mortar retail store, they might expect to walk out of your store holding their purchases instead of waiting for them to come in the mail. You could, however, expand your product offering by allowing customers to browse a catalog and special order items that don’t sell frequently enough for you to hold an inventory of those items. You could then have those special orders shipped directly from the manufacturer to your customers
If you’re selling goods online, your customers will expect to wait while those goods are shipped to them. That makes shipping directly from the manufacturer particularly effective when selling goods online.
If your business is short on cash, and you’re having trouble bringing in new customers with your main lines of business, consider offering a few new side lines of business.
Take stock of any skills you have personally and any skills possessed by your employees. You’ve likely developed a number of skills through your interest in various hobbies. You’ve also gained experience with a variety of goods and services from different jobs you’ve held throughout your life. Also, take a moment to determine which skills you could easily learn that would allow you to use some of the business assets and tools you already have in a different way to offer new services.
You could use any of those skills to begin offering a new side line of business. You could even begin offering that side line of business at a discount just to get cash flowing into your business.
Offering a side line of business might not boost sales for your dream business idea, but it will bring revenues into your business if your business is struggling to stay afloat. If you’re in a cash crunch, and you’re not busy serving customers with your main line of business, offering a side line of business is a good way to use your time effectively to bring in revenue. Cash is the lifeblood of your business. You need to have cash flowing in to cover your expenses.
There are many examples of well-known businesses that have become wildly successful using side lines of business. Those businesses started by offering one type of good or service and were average or struggling. They began offering a side line of business, either as a means to stay afloat or to take advantage of a market opportunity, and the branch of their business offering that side line of goods and services grew exponentially. That side line of business is what you know them for today. The businesses featured in many of those success stories have abandoned their first lines of business altogether to fully capitalize on their success with the side lines of business. A side line of business can unexpectedly turn into a wildly successful and profitable new primary line of business.
If one of your side lines of business is a success, you might decide to capitalize on the unexpected success by pursuing that side line of business as your primary focus. At the very least, the additional revenues from a side line of business should help your business avoid a cash crunch if your primary goods and services are not selling as well as expected.
Consider bartering with other entrepreneurs. There are likely many small businesses just like yours trying to get established in your city. Those businesses were also started by entrepreneurs with limited startup budgets. Many of those businesses could offer goods and services your business needs and also have a need for the goods and services your business offers. You might be able to work out barter agreements with the owners of those small businesses.
Barter exchanges allow you to offer something that costs you very little in exchange for something that would cost you a lot if you paid the retail price with cash. That allows you to get other goods and services at cost instead of paying the mark up. As such, you get a lot of benefit for little cost. The exchange looks just as good for the person on the other side as well.
For example, you and another entrepreneur might both need a good sold by each other. The inventory item you sell costs you $50, but you mark it up and sell it for $100. The good you need to buy from the other entrepreneur would cost $100 if you were to buy it from the other entrepreneur by paying cash. The other entrepreneur gets his or her inventory for only $50. By bartering, you could each get something that would cost you $100 to buy in trade for something that costs you only $50. That’s a 50% savings for both of you. If you need to make those purchases often, or the price is much higher and the savings much greater, that cost savings could make a limited startup budget go much further.
When bartering, your tax jurisdiction might impose tax consequences upon barter transactions. Be sure to check the tax laws in your jurisdiction to ensure you’re properly accounting for barter transactions. Typically, the tax treatment of barter transactions is to consider the cost of what you’re offering in trade as an expense and the value of what you’re receiving in trade as revenue.
When your business is first getting started, you might have some extra time if customers are not instantly rolling in. A slow start combined with a limited startup budget could mean you have more time than money. If you have extra time, spend that time learning how to do something that you would otherwise need to pay someone to do. That allows you to stretch your limited startup budget by doing extra work yourself.
You can learn a number of new skills free on the Internet. You can search for walk-throughs or even watch videos to learn how to complete the task yourself. There many great YouTube videos teaching you how to perform a wide variety of tasks. Many of those videos walk you through the steps one at a time and allow you to see each step performed by an expert. You can replicate the results by duplicating what you see in the video. You can also buy books to learn skills for a low cost.
You also gain the benefit of learning a new skill. That means you can continue performing those tasks for yourself in the future. That gives you a lifetime of savings by doing the work yourself. You can also use that new skill to offer a new side line of business.
A line of credit can be a lifesaver for a business in a cash crunch. A line of credit is like a loan that is available on demand. A line of credit gives you preapproval for a loan up to a certain amount. But unlike a loan, you don’t get all of the money up front and begin paying interest on it right away. Instead, the money is available if you need it, and you only pay interest on the amount you’re currently using.
A line of credit is similar to a chequing account at your bank, but you pay interest on the withdrawals. You take money out as you need it and repay it as you have extra cash to repay the loan. You pay interest only on the portion of your pre-approved loan amount that you’re actually using that month. Once it’s repaid, the interest payments stop.
There may be fees in addition to interest for setting up and using a line of credit. The fees charged vary from bank to bank. If you need a line of credit, check the banks in your area to see what’s available and choose the service that works best for your business.
Many of the subsections in this chapter have described ways for a business to manage its cash flow when cash is barely coming in as quickly as it needs to be spent. That’s not a great situation for a business to be in.
Ideally, a business should have a comfortable cash cushion to reduce the risk of getting caught in a cash crunch. That is, however, not always the way it works out in reality. Just like some people are forced to live paycheck-to-paycheck as employees, some businesses get caught in the unfortunate situation of managing their cash flow in a similar way. New businesses with limited cash reserves are especially at risk of having a strained cash flow.
A strained cash flow is a warning sign that a business is unhealthy. If you find your business in such a situation, try to make changes to your cash policies to improve your business’ cash flow.
Poor sales are not necessarily the cause of a cash crunch. Businesses that are growing extremely fast can also experience a cash crush. As such, it’s possible for success to cause a business to fail. Expanding a business faster than its policies and business practices allow for can cause cash flow problems. Properly managing a business’ cash flow requires careful attention in both good times and bad times.
Your business’ life depends upon a healthy cash flow.
To boost the economy and encourage the creation of jobs, the governments of many jurisdictions offer grants and loans specifically for young entrepreneurs. The age limit to qualify for young entrepreneur grants and loans varies from region to region. It’s commonly under 40 or under 35.
Grants and loans could be offered by various levels of government. Municipal, state, and federal levels of government might have different grants and loans available. A quick Internet search can help you look into which grants and loans are available in the jurisdiction you plan to start a business.
There are also grants and loans offered for specific types of businesses to encourage entrepreneurs to start those businesses. Be sure to check for industry specific grants and loans as well.
Governments are not the only organizations who issue grants and loans to entrepreneurs. There are also a number of nonprofit organizations that help entrepreneurs start new businesses. Nonprofit organizations set their own criteria for who they believe is most deserving of their grants and loans.
Many nonprofit organizations are set up to provide support to entrepreneurs in certain demographics that are underrepresented in business. For instance, some nonprofit organizations are set up specifically to help entrepreneurs of a specific age, race, or gender. Those nonprofit organizations are set up to encourage more equal distribution of business ownership among people of different demographics. Look for grants and loans available to people of any demographic you personally fit into.
Each nonprofit organization will have a different list of requirements and its own unique application process. Apply to as many organizations as you can. You never know which organizations might deem you and your business most deserving out of all of their applicants.
Getting a startup grant or loan from one of those organizations could help you start your business much sooner. Especially if you have very little savings to invest.
What’s the difference between a grant and loan? Most people know what a loan is. Money is loaned to you and you agree to pay back that money within a fixed period of time. Loans often charge interest on the borrowed money so the person borrowing the money to you can make a profit in exchange for taking a risk on the loan. Many loans offered to entrepreneurs by government branches or nonprofit organizations are offered at very low interest rates. Some of the loans are even offered with no interest component. Many of the loans are also offered with very favourable terms to make it easy for a new business to pay back the loan. For instance, the loans might not require monthly payments for the first six months or the loans might allow the business to postpone a certain number of monthly payments if cash is tight.
Grants don’t have to be paid back. They are money given under certain conditions. Many organizations that provide grants specify exactly how the grant money must be used. For instance, a grant might be given to cover startup legal costs, office space lease payments, and equipment purchases.
The organizations offering grants and loans also provide a number of valuable services to entrepreneurs. In addition to money, they also provide the knowledge and support entrepreneurs need to succeed. The organizations offer training sessions, resources for solving problems, and match entrepreneurs up with experienced and successful business people within their community who can mentor them. The support systems those organizations provide entrepreneurs can be more valuable than the money. Having someone to call who can help you through a tough time for your business can be priceless.
Opening a line of credit was discussed in the chapter on cash flow. In summary, a line of credit is a preauthorized loan. You can access the loan on demand as you need it and you pay interest only on the amount of money you’ve borrowed. You can repay the amount borrowed at any time. You need only make the minimum monthly payments. In addition to getting you out of a cash crunch, a line of credit can be used to start your business or to expand your business.
Because of the high interest rates, credit cards should be used to finance your business only as a last resort. Ideally, you want to find a loan somewhere else at a reasonable interest rate. But if no other options are available, a credit card could be the difference between starting your dream business and being stuck as an employee forever. In that case, the high interest rate could be justified.
The benefit of using a credit card is you only need to make the minimum monthly payments. The minimum payment on a credit card balance is typically much lower than the monthly payment that would be required to repay a business loan. That can make all the difference for a business short on cash. The low payments can help keep your business afloat until you develop a steady stream of customers bringing revenue into your business.
A credit card is also easier for most people to obtain than traditional business loans or lines of credit. Credit card companies are often more willing to extend credit to individuals and new businesses than other financial institutions. In fact, many people already have at least one personal credit card.
If you have an incorporated business, you can still use a personal credit card to make business purchases. You simply need to record the purchase as a shareholder loan to your business. Look into the proper way to record a shareholder loan in compliance with tax laws in your jurisdiction.
You can also consider obtaining credit cards for your business from any major retailers whose goods and services you’re likely to be using frequently. If your business is short on cash, the availability of a credit card from one retailer might dictate where you can purchase your materials.
For instance, a construction company could get business credit cards from hardware stores that sell construction materials if they anticipate buying a lot of construction materials from those retailers.
By using a credit card to purchase materials and inventory, your business can buy what it needs now, then pay for the materials and inventory after your customers pay you. Depending upon how long it takes for you to complete the work and be paid by your customers, you might be able to pay off the balance before the interest date. Thus, you might not even have to pay any interest on the credit card balance if you pay it off quickly.
To encourage your customers to pay you quickly, you could offer them an early payment discount. Consider offering a discount less than or equal to the interest charges you would have to pay on the materials and inventory you purchased using the credit card if you don’t pay the balance in full.
Some large retailers also offer special discounts if you make purchases using their credit card. If you frequently buy materials and inventory from large retailers, the discounts could make it worthwhile to use their credit cards even if you don’t need the loan. Simply pay off the credit card balance in full every month. You’ll take advantage of the discount without paying interest on your purchases.
Be cautious when using credit cards to finance your business. If you make only the minimum payments, it could take over 20 years to pay off your credit card balance.
The high interest rates of credit cards can seriously eat into your business’ profit. Because of the high interest rates, if your business isn’t able to quickly pay off the balances, the credit card companies could be making more profit from your hard work than you are.
If using credit cards, pay off the balances as quickly as possible. If your business generates a lot of profit, don’t treat yourself until you’ve paid off your credit card balances. Maintain your current lifestyle until you get those balances paid off.
There is yet another reason caution is necessary when using credit cards. You probably don’t want to think about the chance your business could fail, but it’s important to prepare for all scenarios. The credit card companies will likely require you to personally sign for your business credit cards. If your business fails, you’ll be personally responsible for paying off the balances on those credit cards.
Pay off credit card balances as quickly as you can. Leave a balance on your credit cards only when you have no other lower interest funding options available to you. If you are able to secure financing at a lower interest rate, you can use the cheaper financing to pay off high-interest credit card balances. Doing so allows you to save money by paying the lower interest rate.
If you can’t get the startup loans you need from a bank, keep in mind, you might be able to get the loans you need to buy equipment from vendors who sell the equipment. Many vendors who sell expensive business assets will finance those assets for you. It’s very profitable for vendors to offer financing to their customers. As such, it can be easier to obtain financing from your vendors than from a financial institution.
Vendors who offer financing will make a profit from you in two ways. First, from the mark up on their products. Second, from the interest on the loan when you finance their products.
Many vendors who sell expensive assets add extra markup to their prices to make it look like they’re offering a lower interest rate when financing your purchase.
For example, you’ve probably seen financing on vehicles advertised at extremely low interest rates. That’s not the true interest rate being offered. The real interest rate is hidden in the price of the vehicle. Those vehicle dealers will usually offer large discounts to buyers who are able to purchase using cash instead of financing.
If your vendors offer financing, but you can afford to pay cash for the asset, ask if cash discounts are available.
If you do have the cash to pay for an asset in full, but the vendor doesn’t allow you a cash discount, review the terms being offered to spread out the cost of the asset by financing or leasing it. If the financing terms are reasonable, spreading out the cost of the asset over several years could significantly improve your business’ cash flow. Spreading out the cost means your business doesn’t need to tie up cash by paying the full purchase price of the asset in a lump sum. Your business can spend that cash other places, or use it to maintain a comfortable cash cushion.
It’s easy for vendors to hide a number of fees when you finance an asset. The fees will be buried in your payments. A $1,000 fee spread out into monthly payments over 5 years looks deceptively lower. You might refuse to pay a $1,000 fee up front, but an extra $16.66 every month for 5 years can seem like much less.
To get a better understanding of the true cost of the financed asset, add up all of the payments and compare that to the cost of paying cash today. Even if you don’t have the cash, you might be able to obtain a loan from a bank and pay the vendor cash if you can get a much better deal by paying cash.
For example, when financing an asset for 5 years, you would multiply the monthly payments by 60 months to find out exactly how much you will end up paying for that asset over the course of five years. You could then compare that cost to paying cash for the asset today. This estimate doesn’t take into account factors such as the time value of money and the opportunity costs of having the cash tied up. It will, however, give you a better idea of what you’re agreeing to. You can then make a better informed decision.
When starting a new business with limited startup capital, you might be dependent upon vendor financing. Being able to avoid tying up the majority of your startup budget in a single asset by spreading out the payments could be a higher priority than getting a cash discount. If you have no other options for financing at a lower interest rate, you might have to accept the vendor’s terms in order to obtain the assets you need to run your business.
For some businesses, crowdfunding can be an effective way to raise funds. Crowdfunding takes a different approach than traditional funding. With traditional funding, you received the entire lump sum from one source. Crowdfunding, in contrast, provides you with several small payments from hundreds, or thousands, of people. You might even choose crowdfunding to obtain funding from people in your personal network.
Typically, the businesses that do well with crowdfunding focus on exciting new ideas. That’s not to say that a more common business, such as selling pet food, won’t succeed using crowdfunding. But a new business offering an exciting new technology or product has the potential to raise much more money using crowdfunding.
Exciting new ideas have the potential to go viral. When your crowdfunding campaign goes viral, millions of people all over the world could see your request for funding and share your request with their friends. The businesses that raise the most money with crowdfunding are those whose campaigns go viral. Their business ideas are so interesting and exciting that people want to buy in and share the campaigns with their friends.
When crowdfunding, you could offer people rewards based upon the amount they contribute to your business. The rewards offered, and the minimum pledge to obtain those rewards, will be stated on your crowdfunding page. The rewards offered could include a stake in the business, being guaranteed a product from the first production run, one-of-a-kind prototypes, or tours of your facilities. Just about anything you can think of that would encourage people to invest in your business could be offered as a reward. Rewards that will not be available to the public once the business is up and running, like one-of-a-kind prototypes, could encourage larger donations. If offering prototypes, ensure your intellectual property is adequately protected by legal means.
Running a crowdfunding campaign before starting your business can help you gauge how popular your business is likely to be. However, the method isn’t foolproof. Some businesses that don’t do well with crowdfunding could still be wildly successful.
Crowdfunding can be excellent publicity for your business if your campaign goes viral. People will be sharing information about your business. That sharing is free publicity and helps generate anticipation for your business. Media outlets sometimes write feature articles about popular crowdfunding campaigns for exciting new products. That publicity not only helps you raise more money, but also promotes your business and your products.
A lot of information on how to run a successful crowdfunding campaign is available online. I’ll let you learn from the experts by doing a search for “how to run a crowdfunding campaign.” Be sure to read up on crowdfunding before developing your crowdfunding campaign. Use that information to maximize your chance of success.
Government branches encouraging economic development, universities, and nonprofit organizations hold competitions for startup companies. It could be worth your while to enter those competitions. There is usually prize money awarded for the winning business idea. The reward could also be large contracts for your new business. The rewards also go far beyond money. The winners of the competitions usually also receive valuable business advice and mentorship.
The winners of the competitions also receive a lot of publicity for their businesses. The organizations holding the competitions usually distribute a lot of marketing materials advertising the winners of their competitions. They also promote past winners to encourage future contest entrants. Promoting your business as the winner of the competition advertises your business, the competition, and also the organization hosting the competition. Take advantage of the opportunity to be featured in the organizations’ marketing efforts.
Many of the organizations will feature all competition entrants in some form of advertising. While the promotion is not as good as winning the competition, it’s still free promotion for your business.
Winning the competition is also bragging rights for your business. You can advertise your business as the winner of the contest in all of your marketing materials. That adds credibility to your business. It could also make your new business seem more trustworthy.
Some of the competitions are sponsored by large corporations operating in your area. If your business could offer goods and services to those large corporations, it could be extremely valuable for you to enter those competitions. Sometimes those large corporations support the winners of competitions they’ve sponsored. You could gain a large corporation as one of your first customers. Orders from a large corporation can help get your business off the ground.
Even if you don’t win the contest, you can still benefit from any publicity of being a contest entrant. You’ll also benefit from any business advice and mentoring you receive throughout the competition.
Many young would-be entrepreneurs have no savings they can use to start a business. They’re working a full-time job and living paycheck-to-paycheck. If they were to give up that full-time job, and start a business full-time, they would have no savings and no income until the business is generating a profit. It can take months to get a business running at a level sufficient to support the business owner. That won’t work for most young entrepreneurs. They need money to live off of right now.
Young would-be entrepreneurs living paycheck-to-paycheck with no savings need a way to bridge the gap between starting a business and being able to live off of the profit generated by that business. They’ll need to continue working while they’re starting their business so they’ll have money to live off of, and hopefully, through a few lifestyle changes, a little extra money to invest in their business.
If you’re living paycheck-to-paycheck with no savings, it’s easy to say now is not the right time to start your business. You have no savings and you’re totally dependent upon your job. You’re stuck in that position of having to work every day for your very next paycheck. If you ever want to get out of that cycle, you’ll have to make an effort to break that cycle. Right now is as good of time as any to take action and break that cycle. Starting your own business can free you from that cycle of working for someone else every day and living paycheck-to-paycheck.
You need to make the effort to start your own business right now. It’s too easy to say you’ll do it next year. Will next year really be any different? If you’re living paycheck-to-paycheck with no savings right now, are you likely to be in that same situation next year? Last year, were you hoping this year would be different?
If you haven’t been able to build up any savings yet, you probably won’t have any savings by next year either if you continue doing the same thing and living the same way. Delaying starting your own business until next year, when you’re going to be in the same position anyway, only wastes time. You delay starting your dream business a year for nothing.
Make the effort to change your future right now. Start today. You’re probably not able to leave your job today. But do what you can to work at starting your own business around your job. Today, do anything you can to help you work toward starting your own business.
Balancing your full-time job with starting your own business, which could be at least as time consuming as a second full-time job, takes hard work and dedication. But that might be your only choice. As an entrepreneur, you’re more ambitious than the average person. You can handle it; as many other entrepreneurs have while getting started. You need to make the sacrifice now to accomplish your goals and improve your future.
The discomfort of working the equivalent of two full-time jobs will be only temporary. Once your business is up and running, you can quit your day job.
The demanding schedule is not the only thing you have to consider when starting your own business while working a full-time job. There are many other important factors you have to take into account as well. You’ll have to strategically work your business around your full-time job while avoiding any potential legal problems with your current employer. This chapter provides a number of strategies to help you run a business around your full-time job and avoid many potential legal pitfalls that can snare entrepreneurs who aren’t careful.
If you’re working full-time, you need to find ways to run your business during your time off from your day job. Some businesses are well-suited to operating outside of your regular work hours. For instance, if you work during office hours, there are a number of different businesses you could easily run during evenings and weekends.
Your dream business, however, might be a type of business that typically operates during office hours. A business that sells to other businesses, for example, will typically operate during business hours so you can contact your customers while they are at work. If that’s the case, you might need to get a different full-time job so you can operate your dream business during office hours. If starting your own business is important to you, you should be willing to make whatever life changes are necessary to get your business started. Finding a new job working evenings and weekends will allow you to operate your business during office hours.
You can often find creative ways to make your new business work around the hours you need to be at your current job. Research and develop ways you can make it work. Find out which customers you can reach in the hours that are available to you. There are probably many potential customers you could contact outside of normal office hours if you must be working at another job during office hours. Some businesses have later or earlier operating hours than others. Different people have different needs at different times. Depending upon the nature of your business, you might be able to take advantage of time zone differences. With some creativity, you could make just about any type of business work with any schedule.
You might even be able to turn unusual business hours into a competitive advantage. For instance, you might be the only company of a certain type open for business evenings and weekends. People are busy. It’s hard for them to work everything they would like to do into their busy schedules. There are probably many people who could visit your business outside of the typical hours for that type of business. For that strategy to work, people have to be aware your business is open while most businesses of that type are closed. If people need your goods and services at an unusual hour, you might be their only choice.
Depending upon the nature of your dream business, and what your current job is, you might find yourself in a bind. You might not be able to hold your current job while starting your dream business. The hours might conflict. You might also find switching jobs to start your dream business is not a realistic scenario for you. For most people, if they’re willing to put in the effort, there’s no reason why they can’t switch jobs to start their own business. Some people, however, will have unique circumstances that prevent them from switching jobs.
People who can’t switch jobs, and have a dream business which conflicts directly with their job, have to consider another option. They can’t start their dream business directly, so they might have to start their business by offering related goods and services or accessory goods and services that could be offered at times that work around their day job. While not their dream business, it is a business that is serving customers and generating revenue. That revenue will eventually allow those people to quit their day job and run their business full-time. Once people are able to run their business full-time, they can make changes to their business to begin offering the goods and services that convert their business into their dream business.
Once a side line of business is generating revenue, you might be able to cutback your hours at your full-time job. You might be able to start working only part-time instead of full-time. That will give you more time to devote to your business. Once your business grows further, you can quit your day job altogether and focus on your business full-time. You’ll be living the dream.
Don’t think about what’s stopping you from starting your dream business. Don’t think about what won’t work. You always have options. Focus on finding ways you can work around, or change, your current situation to make your dream business work today.
Find ways to make your business accessible to your customers while you’re working at your full-time job. Using a website is the best way to do so. Your website is available to customers 24 hours a day. Customers can access your website whether you’re sitting in your business office or working your full-time job.
Your website can provide customers with an email address to contact you. You should also have a business voicemail greeting on any phone numbers listed on your business website. A professional sounding voicemail greeting allows your customers to leave a message for you to return their calls. Customers can call while you’re working your full-time job, leave a message, and then you can call them back once you’re available.
If you set up an e-commerce website, you could very easily ship your goods after your work hours. It doesn’t matter what time of day you’re packing boxes and affixing shipping labels as long as your products are being shipped within a reasonable time after customers place their orders.
Also, if you’re providing services you could do on your own time, instead of needing to perform the services at your customers’ place of business, it doesn’t matter what time of day you do the work.
For example, you could do graphic design work from your home computer at any time of day. The end result you deliver to your customers will be the same whether you do the work in the morning, afternoon, or evening.
You need to find ways to make your business accessible to customers when they are interested in looking for your goods and services. If you’re not available, put systems in place to give your customers feedback that tells them you’ll be in contact with them shortly. If you leave your customers with nothing, they’ll simply move on to your competitors who are available while they’re looking. You can provide customers with feedback using email auto responders, voicemail greeting messages, telephone answering services, automated processes on your website, and any other means you can think of. Find ways to reassure your customers you’ll be in contact to meet their needs shortly.
Some businesses need to operate during office hours. Your dream business might be that type of business. You might also need to work office hours at your full-time job. In that case, you’ll need to find ways you can do the work for your business outside of normal office hours, but deliver goods and services to your customers during office hours. Use this strategy if you operate a business that sells to other businesses and need to deliver during their office hours.
Maintaining your credibility is important. You might also want to use this strategy if your customers expect your business to operate during standard office hours. For instance, most professional services would be delivered during office hours. Your business might not look as professional, or would not operate as expected, if you operate outside of normal office hours. If operating outside of normal business hours would make your business look unprofessional, you need to find ways to deliver your goods and services during office hours.
There are many ways you could use technology to time delivery. For example, you could use the delay function on your email client to send email messages whenever you want. If you’re working for a client at midnight, you could delay the email message so it’ll be sent automatically at 10:00 AM. That gives the appearance you’re working during normal office hours, but allows you to finish your client’s project at night after working your full-time job. You could email documents, reports, or any other work that could be delivered in electronic format automatically during office hours the following day. The email will be sent while you’re working at your full-time job.
Making it appear as if you’re in your office working during office hours gives the impression you run your business full-time; instead of working a job for someone else full-time and running your business on the side. There are many apps available to automate and manage your workload. The apps range from client management software to personal assistant software. Creative use of those apps can help you automate certain business processes to take place at the ideal times.
You can also take advantage of other businesses that offer services that allow you to work and deliver to your customers anytime you want. For instance, you could do all of your work at night, drop the products off at a courier company, then the courier company could deliver the products to your customers during office hours the next day.
You need only hire other companies, or use technological tricks, when it’s absolutely necessary to give the impression you’re working during office hours. Some customers won’t care when you work, others will. Some customers won’t care if your business is a side line or your full-time occupation.
For certain types of businesses, it might hurt your credibility if people see your business as only a side line of business for you. For example, would you feel more comfortable having heart surgery at 11:00 PM, performed by a doctor who sells sporting equipment full-time during the day, or during normal office hours, performed by a doctor who works full-time as a heart surgeon? That same difference in credibility affects some professions, but does not affect others. Consider what’s acceptable for your own profession when starting your own business.
If customers need you while you’re required at your full-time job, you could simply tell them you have another commitment at that time or you are already booked for that time. Using vague wording allows you to be more flexible. You don’t need to tell your customers you have a full-time job that you need to work when they need you. Vague wording could imply that you’re working for another client at that time. That makes your business seem busy and more in demand.
You could also offer full disclosure to your customers. If there’s no harm admitting your business is a side line of business for you and you work a full-time job, go ahead and tell your customers that you work a full-time job that prevents you from meeting their needs at a specific time. Tell them you’re happy to help them outside of the hours you’re required to be at your full-time job. Full disclosure might be the best option for businesses where your credibility won’t be hurt by working a full-time job somewhere else.
Always be conscious of the impression you’re creating with your customers. People want to do business with others who appear credible, competent, and trustworthy. Ensure you always demonstrate those characteristics.
Your business might occasionally require you to be present at your customers’ place of business or home during the hours you work at your full-time job. If you need time off from your day job, use your vacation time. Don’t abuse your sick time. Your employer could catch you abusing your sick time and that could be grounds for dismissal. It could be easier to get caught than you think. Especially if any of your coworkers know you’re running your own business on the side. They might automatically assume you’re abusing your sick time to run your business, even if you are sick. Don’t underestimate how quickly workplace gossip can spread.
If you’re a young entrepreneur, you probably haven’t earned a significant amount of vacation time. You can stretch out your vacation time as much as possible by taking only a few hours as necessary instead of taking a whole day off. Taking the last part of the afternoon, or your shift, off works the best. That way you’re not in a rush to get back to work. That allows you to book appointments with your customers for the last part of the afternoon. Thus, you can still work your full-time job and serve your customers during office hours. You need only tell your customers that you’re booked solid for the first part of the day. Tell them you have an opening later in the afternoon on a certain day. You can then use a couple of hours of vacation time to take the last part of the day off and serve your customers.
Also consider the nature of your work. Depending upon your business, you might only need to meet with your customers during their office hours for a couple of hours. After meeting with your customers, you might be able to do the rest of the work independently at whatever time works best for you. In that case, you need only take a couple hours of vacation time during office hours for the initial meeting.
By taking vacation time in two hour blocks, you can stretch one 8 hour vacation day into 4 separate 2 hour breaks where you could meet your customers and perform your business services. That could potentially quadruple the numbers of days you could use vacation time to run your business.
Some full-time jobs might require you to take vacation time in full-day blocks instead of by the hour. If you’re forced to use an entire day of vacation time, you should schedule multiple client meetings for the same day. Book your client meetings a couple of weeks into the future so you have time to try booking additional client meetings for the same day. Scheduling your client meetings for one day could still allow you to get four 2 hour client meetings into one 8 hour vacation day.
If your business is already generating some income, or you’ve found a way to adjust your lifestyle so you don’t need the income from a full-time job, you could change the hours you work at your day job from full-time to part-time. If you can’t reduce your hours at your current job, you could always find a new job with part-time hours.
Working part-time gives you more time to devote to your business. You might be able to reduce your hours to part-time right away if you’ve secured your first few customers through your personal network before launching your business. You could use the income from those customers to replace the income you would have needed from the additional hours at your job.
If you’re working part-time, find ways to adjust your availability to work with your business. For instance, it might be possible to work your part-time job every morning then have every afternoon free to work on your own business. Alternatively, you might work your part-time job Monday through Wednesday, then have Thursday through Sunday to work on your own business. Having regular hours works better for your business than working random shifts here and there. Having regular hours allows you to have predictable and consistent business hours for your customers. Your customers will know when they can depend upon you being available.
If that’s not possible with your current job, consider looking for a new job. There are many different jobs out there with a wide variety of hours. Find a job with hours that work around your business. Your first priority is starting your own business. You want your business to succeed. That’s your dream, not working your current job. Your current job is only temporary until you can get your business up and running. If necessary, make the sacrifice of switching your job to find a job that will work around the hours you need to dedicate to your business. You want to be an entrepreneur, not an employee working a specific job for someone else.
Sometimes, when splitting your time between a job and your business, you won’t be able to maintain the appearance of running your business as your full-time occupation. Your customers might request you being available on a schedule that won’t work around your part-time job. In those cases, your best option might be to be honest with your customers about working a part-time job.
Tell your customers your business is brand-new and just getting started. As such, you’re still working part-time hours at a job during your downtime until your business gets busier. Tell them any reason why you’re working your part-time job you want to. Tell them it prevents you from being bored, it gives you something you enjoy doing during your downtime, or you enjoy working with your coworkers. Be positive.
Letting your customers know you’re still working a part-time job should help them be more understanding about your limited availability. If you’ve already convinced your customers you deserve their business, they probably won’t decide to shop somewhere else if you tell them you have a part-time job. They might even admire your dedication and work ethic.
In certain industries, your credibility could be negatively affected if your customers find out you’re working at another job and running your business on the side. In other industries, your customers won’t care at all. Evaluate how working another job could affect your credibility. If it won’t hurt your credibility in any way, or cause you to lose business, honesty about your other job might be your best option. That means you won’t need to come up with excuses or try to hide the fact you’re working somewhere else. Your customers will also understand why you can’t be as flexible to meet their needs as you would like to be. You might only need to mention your other job to certain customers who are making a lot of demands on your time.
Depending upon your current job, and the type of business you want to start, you might be interested in starting a business that would compete with your current employer. Most employers will not allow that. You might have even signed a noncompete agreement for your employer when you were signing paperwork on your first day of employment. A noncompete clause could also have been included in part of your employment contract.
If you plan to keep a day job while starting your business, you must ensure your employer will allow you to do so. Competing directly with your current employer and having signed a noncompete agreement are both signs that your business and your current job won’t work together. If you’re uncertain, ask the right person at your current employer. Depending upon your job, you might have to ask your manager, your human resources manager, your union representative, and anyone else who would need to approve you operating a business on the side.
You don’t want to put yourself into a position where you could suddenly be fired if your employer finds out you’re operating a business on the side. Or worse, you don’t want to be in a position where your employer could sue you because of your business.
Many employers require you to disclose any other jobs or side lines of business you are involved with. Your employment contract might require the disclosure or require you to request approval before starting any second jobs or side lines of business.
If your current employer prevents you from starting your dream business, that doesn’t necessarily mean you can’t start your business. It just means you can’t work for that specific employer and also start your business. The obvious solution, while maybe not the most convenient, is to find a new job that will work with your business. You wouldn’t want to give up your dream of becoming an entrepreneur just to stay working for someone else; would you?
If you will be competing against your current employer, your new job might have to be in a completely different industry. You’ll have to ensure your new job will allow you to operate your business on the side.
It’s best to discuss your availability up front. For instance, if you’re available to work every morning but want every afternoon off to focus on your business, you’ll have to be clear on that. Alternatively, if you want to have Monday through Wednesday to focus on your business, but are available to work Thursday through Sunday, you’ll have to discuss that with your new employer before accepting a new job.
Changing your job could be inconvenient, but be sure to look at it for what it really is. It’s not a career change. You don’t plan to work that new job any longer than you have to. Your career change is that you are now an entrepreneur. You eventually want to be running your own business full-time. Your job change is only a temporary inconvenience that allows you to support yourself while your business gets up and running. Do whatever is necessary to help you through starting your own business. As your business grows, you can leave that job behind. Living your dream tomorrow is worth a few sacrifices and inconveniences today.
You should never be doing work for your business on your employer’s time. Not only is it unethical to do so, but it also exposes you to many negative legal consequences.
Your employer has legal grounds to claim ownership of any ideas, inventions, or other intellectual property you’ve developed for your business on your employer’s time. That means your employer could sue you for any income you’ve generated using that intellectual property. Your employer could also copyright or patent any of that intellectual property for themselves—leaving your business with nothing.
For those reasons, you must absolutely avoid doing any sort of work for your business on your employer’s time.
You also want to avoid assisting any of your business’ customers on your employer’s time. Doing so could result in immediate dismissal. Doing so could also have legal consequences for you.
You also need to be cautious of using any of your employer’s property for your business. Even if you plan to use that property on your own time. Using your employer’s property for your business carries all of the same risks as using your employer’s time for your own business. Your employer has legal grounds to claim ownership of any intellectual property, income, or customer lists generated using your employer’s assets.
Even if you’re on your break, you’re still on your employer’s premises. Beware that even during your unpaid lunch hour, you should not do any work for your business on your employer’s premises. If you plan to work on your business during your unpaid lunch hour, be sure to leave your employer’s property. Perhaps you could do the work at a coffee shop down the street. You should also double check the laws in your jurisdiction to ensure you won’t run into any unintended legal consequences by doing so.
A common area where people get into trouble is thinking they can use their employer’s computer to quickly check something related to their business during their unpaid lunch break. Doing so could have legal consequences. People who do that are both using their employer’s property and on their employer’s premises. There is a record of everything done on that computer, even if you delete your history. Depending upon your jurisdiction, employers might have the right to see everything employees have done using their computers.
Another area where people could get into trouble is using their personal cell phone for their own business on their employer’s premises. They could be tempted to quickly respond to an alert on their employer’s time, or wait until an unpaid break. Even during an unpaid break, they are still on their employer’s premises. If you’re going to use your cell phone for business purposes, be sure you leave your employer’s premises and only do so on your own time. However, ensure you understand the laws in your jurisdiction to make sure you really are safe doing so. Make sure you understand and avoid all of the risks of contacting your business customers on your break.
Be sure to protect yourself legally. Ensure you take all of the necessary steps to clearly separate work you do for your own business from work you do for your employer. You don’t want your employer to have a claim to anything you do for your own business. Don’t risk everything you’ve worked so hard for by being tempted to take shortcuts.
In some cases, you might be starting a line of business your employer is currently outsourcing or considering outsourcing. If you know your employer is in the market for the type of products you’re offering, leverage your good working relationship with your employer to negotiate an outsourcing contract between your business and your employer.
Your good working relationship with your coworkers could help you get preferential treatment over your competition when awarding contracts. Your coworkers know you personally. They know you’re dependable and have good work ethic. They can feel confident awarding you the contract because they know you and have an idea what working with you will be like. That allows them to be confident working with you is unlikely to have any unpleasant surprises. They don’t know your competitors as well as they know you, so there’s more potential for unpleasant surprises when working with your competitors. Take advantage of that edge you have over your competitors. Just be certain you’re not violating any sort of conflict of interest laws, fair trade laws, or other similar laws in your jurisdiction.
You could also use your detailed knowledge of exactly what your company needs to better meet their needs than the competition who doesn’t have that same inside perspective. The inside perspective allows you to carefully tailor your product offering to exactly meet your employer’s needs in a way that an external party would not be able to.
You could propose outsourcing in two ways. First, you can still work for your employer part-time and sell your business work to them outside of your normal work hours. Alternatively, you could quit working for your employer and have your employer signed up as one of your first customers when launching your business. Quitting would help prevent some conflict of interest situations.
If you have to quit your job, but you still need additional income on the side, you could get a part-time job somewhere else that won’t present a conflict of interest.
It’s difficult to find and hire good help. It’s also time-consuming. You have to advertise the vacancy, shortlist the applicants, hold interviews, make job offers, and then hire employees. Even after all of that, you’re still not guaranteed to end up with a good employee. It’s a gamble.
Many extremely successful businesses were started by groups of employees who left their employer and started a new business together. When you’re looking at starting your own business, consider any of your current coworkers who might be able to help you either by working for you or by founding the business with you.
If you think it’s wise to discuss your business idea with some of your coworkers, see what they think about the idea of joining you. Just be aware, once you begin discussing your business idea with others, word that you’re considering going into business for yourself will likely spread throughout your entire office.
Starting a business with your coworkers has advantages. They’re people you know very well. You are not taking a gamble by hiring someone new with whom you’ve never worked before. You know your coworkers’ strengths, weaknesses, and work ethics. You know their skills and abilities. You also know their personalities and whether or not you get along with them. You have a good working relationship with some of your coworkers. You know you can depend upon those select coworkers because they are capable and competent. There’s no way you could learn that much about a potential employee through the typical job interview process.
There are a few ways you could approach hiring your coworkers. You could partner with them, make them shareholders, or hire them as employees.
You could also consider hiring them to do part-time work for you as a side line of business if they want to keep their full-time job. If you plan to start your business on a smaller scale, you could hire them to perform work around their full-time job such as evenings and weekends or perhaps on a few vacation days. You’ll only be paying for their services as you need them instead of hiring them full-time.
To encourage your coworkers to leave their full-time job and join you, they’ll likely need to be just as excited about your business idea as you are. They’ll probably also want to be your partners instead of your employees. There are many success stories of groups of employees who’ve started their own company. Famous success stories are available in just about every industry—particularly startups in the tech sector.
Set realistic goals for yourself. Don’t plan to be working 100 hours per week every week for months. You’ll never be able to keep it up. You’ll burn out and you might even suffer negative health consequences. You’ll be stressed out and the quality of your work at both your business and your job will suffer.
It’s important to set realistic goals when planning your schedule. Don’t let your business and work cut into your personal time. You need that personal time to relax. If you find your business needs more time, you’ll have to adjust your job to accommodate your business. You’ll need to either reduce your hours at your job, or find a new job that allows you to work less hours. Between your job and your business, your business has priority. But you also need to prioritize time for yourself. You need time to unwind and relax so you are able to keep performing at your best.
You might be able to work all day and shortchange yourself on time to relax for a few days if you have a big order to fill for your business. But you won’t be able to keep that up for any length of time. Nor is it healthy to do so.
You also have to be sure you keep time in your schedule to spend with your family and friends. You can’t work all of the time. Don’t sacrifice your personal life for your business. Don’t push away your family and friends because you’re too busy with your business. Be sure you balance the time you spend on your business with the time you spend with your family and friends.
You also want to make sure you have time to keep up your health. Ensure you’re not sacrificing sleep every night. Being short on sleep affects not only your health, but also the quality of your performance while working at your business. If you’re tired, the quality of your work won’t be as high as it should be. That will affect your reputation both at your job and at your business. Your social life will also suffer if you’re tired.
You also want to ensure you have time to exercise and eat healthy. Allocate the time you need right in your schedule. No matter how busy you get, don’t get into the habit of bumping those activities from your schedule. It’s never worthwhile to sacrifice your health for the purpose of starting your own business. If you’re not healthy enough to enjoy the success of having your own business, it will all be for nothing.
There are many skills you’ll need to develop quickly as an entrepreneur. I’ve listed some of the most important skills you’ll need below. I highly recommend learning these skills quickly for a low cost by reading books. There are many excellent books to choose from. I cannot do these skills justice as a chapter in a book. Effectively learning these skills requires reading at least one full-length book. I recommend reading several books on each skill. Your success as an entrepreneur will be proportional to your ability to apply these skills.
If you have a higher budget, you might also consider enrolling in training programs to learn these skills. Time and money invested learning these skills will pay huge dividends.
Great negotiation skills allow you to save money by reaching agreements that work well for you. In simple negotiations, what one party gains, the other party loses. For instance, if the seller agrees to lower the price, the seller loses the discount and the buyer gains the discount. An effective negotiator can ensure they get a fair share of the profit to be made in any agreement.
With good negotiation skills, you’ll also be able to develop new ways both you and the other party can gain from your agreement. You’ll learn how to expand negotiations beyond simply splitting up the profit to be made. Using those skills, you’ll be able to reach agreement in a number of situations where agreement first appeared unlikely. That opens a number of new opportunities for you that might not be available to others who are not as skilled in negotiation.
Good negotiation skills also help you avoid conflicts. You’ll not only be able to de-escalate a conflict, but you’ll also be able to find ways to make both parties better off after agreement than they were before agreement. Both parties will appear to be winners. Your customers and vendors will be happy, and your business will benefit.
Negotiation skills also help you become a better listener. Negotiation depends heavily upon listening to others instead of simply trying to sell others on your solution. Your improved listening skills help you learn exactly what your customers want. You’ll then be able to find ways to meet your customer’s needs at the lowest cost to yourself. That means you’ll make a large profit on the spread. Your satisfied customers also have a good chance of turning into repeat customers. Repeat customers are great for boosting profits.
You’ll also learn how to creatively structure deals in ways that work great for your customers. You might be able to customize an offer in ways your competitors would never think of. By doing so, you’ll make more sales, your market share will expand, and your business will grow.
Good negotiation skills also help you avoid giving unnecessary price discounts. You’ll be able to find other ways to create value for your customers. You preserve your profit margins when you can find other ways to make a deal more valuable to your customers. Different people place different values on things. Good negotiation training teaches you how to find aspects of the deal your customers value highly and you value little. You can then create a lot of value for your customers at very little cost to yourself by offering those aspects of the deal instead of price discounts. Your customers end up happier and you keep your profit margins healthy.
Having good negotiation skills improves your confidence while dealing with your customers. You’ll have a high level of confidence you can provide your customers with exactly what they need. Thus, you’ll also have a high level of confidence you’ll be able to close the sale. Your confidence will be obvious while you’re dealing with your customers. Your confidence will make you look capable and competent, which reassures your customers they’re making the right choice dealing with you. Your customers will believe they can depend upon you to get the job done.
Good negotiation skills also reduce the chance of others taking advantage of you. You don’t have to worry about someone with much stronger negotiation skills getting a better deal than they should because they’ve taken advantage of your weak negotiation skills. You level the playing field when you are able to hold your own in a negotiation. Through negotiation training, you’ll also learn many different negotiation tricks people might use when trying to squeeze extra value out of you. You’ll be able to avoid falling for those tricks. As an effective negotiator, you’ll be able to maximize the chance you’ll reach a fair agreement when dealing with both your vendors and your customers.
If you need to improve your communication skills, The Zane Rozzi Communication Fundamentals course offers modules which develop your ability to make small talk and close sales. The Communication Fundamentals course is available at:
Good sales skills help you give your customers exactly what they want. You’ll be able to determine your customers’ needs and match your goods and services to their needs. Your customers will be satisfied when you’re able to match your products to their needs.
Some of your customers might not know all of their needs. Good sales skills help you work with those customers to uncover all of their needs. You have a high probability of closing the sale if you help your customers determine their needs and find ways your products can satisfy those needs.
Good sales skills help you avoid giving unnecessary price discounts to make a sale. You’ll have the skills to find other ways to motivate your customers to buy your goods and services. It’s hard to compete on price alone. Especially for a new small business. Larger well-established businesses have systems in place and high-volume advantages that allow them to offer lower prices than a new small business. Good sales skills help you find other ways to add value for your customers instead of competing on price. Showing your customers the value of buying from you at your regular price allows you to keep your profit margins healthy.
Each customer interaction takes time. Good sales skills reduce the number of potential customers who require a lot of your time asking questions without buying anything. You’ll be able to convert more potential customers into paying customers. Each customer interaction should have the highest possible chance of turning into a sale. Good sales skills make it likely that your investment of time with each potential customer will pay off with a sale.
Good sales skills also help you close sales faster. That allows you to use your time more effectively. The more customers you can sell to during a limited time frame, such as one day, the more profit you can make each day. Being able to close sales faster also helps you avoid losing customers to your competitors. You could also use the time savings to improve your work-life balance.
Good sales skills increase your profits. Not only will you close sales with more customers, but you’ll also be able to keep higher profit margins with each customer. You’ll be able to sell your goods and services for full price, and you’ll also be able to upsell your customers on accessory goods and services. That allows you to maximize the amount of revenue received from each customer. Good sales skills allow you to help your customers recognize needs for your goods and services they might not have been aware of before talking with you. That allows you to turn a small sale into a larger sale while preserving your profit margins. It can be hard to obtain new customers. Use your sales skills to make the most from each customer and keep each customer satisfied.
Your sales skills apply to all areas of your business, not just selling goods and services to your customers. Good sales skills can also be used to motivate your subcontractors and employees. Sales skills are applicable any time you have to motivate another person to do something. That’s the essence of sales. There are many different situations where you need to motivate someone else to do something while running a business.
Your sales skills will also help in negotiations. You’ll be able to determine the other party’s needs and find ways to motivate them to accept your offers. Sometimes people need help to realize what you’re offering in a negotiation could make them better off than they were before dealing with you. Your sales skills will help you obtain great results in your negotiations.
Effective sales skills increase your confidence while dealing with customers. Improved confidence makes you look more capable and competent, which allows your customers to feel comfortable dealing with you. They can feel reassured you are able to provide the goods and services they require. Customers who are confident in your abilities are more likely to buy from you. If you don’t look confident in your own abilities, why should your customers be?
Sales skills also improve your customer retention. Retaining existing customers is much cheaper than obtaining new customers. You’ve already overcome the hurdle of getting those customers to buy once. Good sales skills help you keep those customers satisfied and buying from you going forward. Repeat customers are usually more profitable than new customers because you don’t incur any additional marketing costs or set up costs to obtain the repeat business.
It can also be quicker to close additional sales with repeat customers because you don’t need to spend as much time building your brand and reputation before making the sale. Those customers are already familiar with your brand and reputation. You need only maintain their trust.
Sales training also helps you realize when your customers are losing interest in your sales pitch. It’s important to be able to read whether or not your customers are interested in your sales pitch at any point in time. You don’t want to get too far ahead of your customers during your sales pitch. Doing so reduces their engagement and breaks the connection between you and them. Learning how to move your sales process along while keeping your customers engaged is an important part of developing your sales skills. Good salespeople are able to tell the moment their customers begin losing interest so they can change the content and direction of their sales pitch to reconnect with those customers. Doing so helps avoid losing customers. Being able to keep your customers interested allows you to close significantly more sales.
Good sales skills also enable you to overcome your customers’ objections and effectively answer their questions. Objections can be difficult to overcome. Your sales process will flow through to a sale much easier if you’re able to prevent your customers from raising objections in the first place. Good sales training helps you avoid having your customers raise objections.
To develop skills essential to the selling process, I recommend completing the Zane Rozzi Communication Fundamentals course. The Communication Fundamentals course is available at:
The group of skills associated with presenting and promoting your business to potential customers is referred to as marketing. Your marketing efforts present your goods and services in a way that encourages potential customers to become paying customers. Marketing also presents your business favourably to potential customers so they’ll choose to buy from your business instead of your competitors.
Knowledge of marketing concepts allows you to make the most effective use of a limited advertising budget. For different types of businesses, different types of advertising are going to be more effective than others. There are many options available to you to market your business. You need to learn how to properly evaluate which marketing options are likely to provide the best return on your limited marketing investment.
An important part of marketing is determining your target market. You need to determine who your customers are. There are many people in the world, but not all of them will be a good match for your goods and services. Many people don’t have a need for your goods and services. Many people also have preferences that make them want a different good or service. Advertising your goods and services to those people who would never buy your products is a waste of your limited advertising budget. You need to learn how to target your advertising to the people who are most likely to buy your goods and services. That helps you focus your advertising dollars on attracting the people who are likely to convert into paying customers.
When you pay for advertising, you have to pay for every person who is likely to see your advertisement. The price of advertising is determined by the number of people who are going to see the advertising. More people seeing your advertising means the advertising is more expensive. By targeting your advertising to people who are likely to buy your goods and services, you minimize the number of people you’re paying to advertise to who are not likely buy your products. As such, you’ll get better results while minimizing your advertising expenses.
People are exposed to advertising everywhere. Overexposure can make people blind to it. To make your advertising effective, you have to make it stand out. Your advertising has to grab people’s attention so they’ll actually get your message. Learn the basics of marketing so you’ll know how to design advertising that stands out. If no one is interested to read your advertisement, the money spent buying the advertising space is wasted. You need to motivate your customers not only to read your advertisement, but also to be interested enough in learning more about your goods and services to investigate further. You need customers to see your advertisement, then visit your website, phone you, or walk into your store to learn more about your goods and services.
Developing brand recognition is another important part of marketing. Brand recognition is very powerful. It can play a huge part in determining which company customers buy from. Brand recognition will help you attract new customers and also help you retain your existing customers. Brand recognition helps make your customers recognize and trust your brand. That makes buying from you seem like the right choice. Brand recognition makes buying from you seem safe because customers recognize your brand. Your brand is not new and unknown.
Take a moment to think about any kind of product. Look around the room you’re in and pick the first product you see. When you think of that product, which major companies who make that product come to mind? Those companies you think of first have developed strong brand recognition with you. As a result, they are the companies you are most likely to buy from if you need to replace that product. You want to develop that level of brand recognition with your potential customers. Brand recognition makes your potential customers think of your company first when they need to buy the goods and services you sell.
Learning marketing concepts helps you learn how to determine the needs of your customers. Improving your marketing skills, therefore, also helps you improve both your sales skills and your negotiation skills. To advertise effectively, you need to be able to predict what customers in your target market need. That’s the only way you can advertise fulfilling their needs. Being able to use advertising to demonstrate how your goods and services fulfil your target market’s needs makes your advertising more effective at converting people into paying customers.
Being able to identify the needs of your target market also helps you develop new products. To develop new products, you need to be able to anticipate what people need. Successful products fulfil needs. A product that does not fulfil a need is useless. Being better at predicting needs than your competition allows you to develop new products ahead of your competition. That allows you to get the first mover advantage when selling new products.
Being first in the market has huge advantages. For a period of time, you’ll be the only business offering that product. By the time your competitors catch-up, you’ll already have a large number of repeat customers who are loyal to your brand. That’s a very lucrative position to be in. In fact, most of the overnight success stories are businesses who offer brand-new products many people need. Those wildly successful businesses find new needs, or better ways of fulfilling existing needs.
Anticipating needs also helps you bundle your goods and services. You’ll learn which goods and services your customers typically need together. That helps you bundle those goods and services to increase the total dollar value of your sales to each customer. You’ll also be able to better meet your customers’ needs by offering bundles that satisfy multiple needs.
You should also learn how to develop market forecasts and determine the demand for your goods and services. Knowing the potential market for goods and services is essential to starting a new business. You need to be sure there is a sufficient demand for the goods and services you plan to offer before you begin offering the goods and services. Otherwise, you could be offering a good or service no one wants. You want to be sure, before you invest the time, effort, and money into starting a business, there is a sufficient market for the goods and services you plan to offer. You’ll also need to estimate how that market is split up between existing companies and how much business you think you could steal away from those existing companies.
The portion of the market who buys from one company is referred to as that company’s market share. A company that sells to 10% of the total market for that product has a 10% market share.
Learning how to spot and analyse market trends is another valuable marketing skill to develop. Being able to spot and take advantage of a market trend early is a very lucrative position to be in. You stand to make a large profit from the trend while it’s hot. You also get in earlier than some of your competitors. Getting in on a trend early makes it easy to gain a large market share while there is less competition.
Analysing your competition is another important aspect of marketing. Before starting any business, it’s valuable to learn who you’ll be competing against. Analysing your competition helps with estimating the total potential market and how much market share each competitor has. Analysing your competitors’ strengths and weaknesses can help you find ways to outdo them. If you know where your competitors are weak, you could make your goods and services strong in those areas. That could allow you to attract some of their customers who are not satisfied. Knowing where your competitors are strong helps you determine whether or not you can effectively compete against those strengths. You might be better off slightly adjusting your product offering to avoid competing directly against areas where your competitors are strong.
Differentiating your products from your competitors’ products can be an effective marketing strategy. Advertise the aspects in which your products are strong and your competitors’ products are weak. That makes your products seem like the obvious choice.
There are many books covering a variety of marketing tactics. To start, I recommend reading a book that covers marketing fundamentals. Once you’ve learned the fundamentals, you can consider reading books focused on specific marketing strategies. You’ll get more value from strategy books if you understand the fundamentals.
You should also spend time improving skills directly related to your business. That allows you to perform those skills more effectively and deliver higher quality products to your customers. Improving your quality could move you from an entry-level provider to a high-quality provider. High-quality providers can charge a premium for their goods and services. Premium prices allow for higher profit margins.
Improving skills directly related to your business also improves your efficiency. With improved efficiency, you can complete service jobs faster or manufacture more goods in the same amount of time. Both improvements in efficiency allow you to serve more customers and generate more revenues. Improved efficiency allows you to pass some of the cost savings along to your customers by offering lower prices. That could help you get ahead of the competition. You could also keep the whole cost savings for yourself and have higher profit margins.
If you’re able to increase both efficiency and quality, you can serve more customers and charge each customer a premium price. Thus, improving in both areas significantly increases your profits.
You can also develop new skills to offer accessory goods and services related to your main goods and services. Developing new accessory skills allows you to sell additional add-on goods and services to your customers. Selling accessory goods and services allows you to generate more revenue from each customer. You also move closer to being a one-stop-shop for your customers so they don’t need to go to one of your competitors to get accessory goods and services. That makes it harder for your competitors to steal your customers.
Offering accessory goods and services is one of the most common ways companies expand. Depending upon the nature of your business, it could be significantly cheaper to expand by offering additional goods and services than opening a second location.
If you’re dealing with employees or subcontractors, you’ll benefit from learning the basics of human resource management. There’s a lot to learn when it comes to managing other people. You’ve probably had a variety of managers with a variety of people skills throughout your working career. Some of those managers might have been great to work for, while others made you hate coming into work every day. Learning the basics of managing other people will help you become a manager your employees love to support.
Your employees play a big part in whether or not you succeed. Make them want to help you succeed. A highly motivated employee is much more productive and much more effective than an employee who is working just hard enough not to lose his or her job. You want to be able to get your employees just as motivated about your business as you are. Motivated and happy employees deliver the most value to your customers. Not only are they the most productive, they’re also the most creative when solving problems.
Highly motivated employees require less supervision. You can depend upon them to do what they need to do in the best way they know how.
Happy employees are also a pleasure for you to work with. Even if you already have experience managing other people, learning the basics of human resource management could help you improve your ability to manage other people. The benefits you’ll realize are well-worth the time and money invested improving your people skills.
Learning people skills helps you in other areas of your business as well. You’ll be able to apply those skills any time you’re interacting with other people. For instance, when negotiating with your vendors or customers.
The advantages of good people skills are not limited to your business. You’ll be able to apply your people skills in all areas of your life. People with good people skills are generally more pleasant to be around. For that reason, they have a lot of friends and a large personal network.
As part of your human resource management training, you’ll also need to learn labour laws in your jurisdiction. As an employer, you have a number of obligations to your employees. It’s best to learn what’s expected of you before you hire people, instead of risking running into problems by learning as you go. If you don’t know what’s required, you could run afoul of labour laws even when advertising a position—before you even talk to any potential employees. Labour law violations are very serious and expose you to large fines and lawsuits. A lawsuit could end your business. Protect yourself by learning what’s expected of you.
As an entrepreneur, you should know the basics of accounting. You definitely don’t need to become an accountant, but you should know enough to keep your business finances running smoothly. Your business’ accounting records are similar to a person’s health records. The accounting records tell you the health of your business. Knowing the basics of accounting can help you see where your business has health problems. You’ll also know likely causes of common business health problems.
A basic knowledge of accounting concepts helps you understand the way cash flows through your business. Understanding your business’ cash flow cycle helps you develop cash policies appropriate to your business. Review the chapter in this book on cash flow for a quick primer. An uncorrected cash flow problem is the most common cause of business failure. Learning to detect a cash flow problem early can prevent it from turning into a cash flow crisis.
As an entrepreneur, you’ll be signing many different legal agreements. Other than basic retail purchases, nearly everything you need for your business will require some sort of contract. Leasing office space, obtaining a cell phone, renting tools and equipment, purchasing inventory from your suppliers, and applying for credit and loans, are only a few of the many places you could be required to sign a legal agreement. For all aspects of registering and licensing your business, you’ll also need to read a number of government documents written in legal language. Depending upon the nature of your goods and services, you might also need to enter into legal agreements with your customers.
That means you’ll be reading a lot of different legal documents. Learning basic legal concepts will help you avoid being taken advantage of. You’ll also be able to avoid being caught off-guard by terms and conditions you didn’t know you’ve agreed to.
You’ll also need to keep your business operating within the laws of your jurisdiction. Laws affecting your business include labour laws, zoning laws, consumer protection laws, and laws regulating the provision of your specific goods and services—to name only a few.
Basic legal knowledge is not a replacement for getting a qualified lawyer’s opinion. If you’re uncertain, always check with a lawyer. You should depend upon your basic legal knowledge only in circumstances where you completely understand everything you’re signing. For instance, you might not bring a cell phone contract into a lawyer’s office for review if you completely understand what you’re signing. But you should have a lawyer review any contract where a misunderstanding could have serious consequences for your business. High dollar value contracts, long-term contracts, or any other contract where the risk of loss is high should be reviewed with a lawyer. You should also get a lawyer’s opinion on any contracts that use complex legal language you don’t understand. Don’t get yourself into trouble by signing an agreement with fine print you don’t understand.
Learning basic legal concepts helps prevent people from taking advantage of you. Not only by ensuring you understand contracts, but also by ensuring you know your rights and obligations as a business. You’ll know what your vendors, customers, and employees can and can’t do. You’ll be able to recognize when people are violating laws in place to protect you and your business.
You’ll also know what you can and can’t do while dealing with vendors, customers, and employees. That helps you avoid putting yourself into a position where you could be exposed to lawsuits or other legal liabilities.
Your basic legal knowledge will never fully replace a qualified lawyer’s opinion. But it will help you avoid exposing yourself to negative legal consequences as you operate your business day-to-day. Basic legal knowledge also helps you recognize situations where you should seek the help of a qualified lawyer.
Government branches and non-profit organizations offer information seminars covering a variety of topics relevant for new businesses. The seminars are targeted to new entrepreneurs who are unfamiliar with many aspects of running a business. A lot of useful information can be obtained free of charge at those seminars.
Non-profit organizations hold seminars to teach skills necessary to run a business. Some seminars are general, teaching entrepreneurs the basics of several skills. Other seminars are specific and focus on covering a specific skill in-depth such as time management, basic finances, and managing employees. The seminars help new entrepreneurs get their businesses up and running quickly while avoiding common mistakes. The organizations want entrepreneurs to maximize their chance of success.
Some government branches hold seminars that teach new entrepreneurs how to work through all of the red tape and paperwork necessary to get a business up and running. Those seminars help entrepreneurs start their businesses in accordance with the laws and regulations of the jurisdiction. They’ll tell you which forms need to be filled out, and go through any common issues encountered by other entrepreneurs while filling out the forms. They’ll also make sure the new entrepreneurs are aware of important deadlines.
Many government branches also provide new business checklists that describe each step necessary to open a business. Following the list and completing the steps makes it very straightforward to open a business in your jurisdiction.
It’s important to properly register your business to ensure your business is legally established. Your business must be properly registered not only to avoid fines and penalties, but also to legally enter into contracts with other parties. Ensuring your business is properly registered provides your business with the legal protection it is entitled to by law in your jurisdiction.
Many for-profit companies such as professional service firms, banks, and other service companies will hold free information seminars for entrepreneurs. Those information seminars can provide a lot of valuable information. Just keep in mind, the whole purpose of the seminar is to recruit new clients for their business. As such, the information seminars do provide some good information, but they usually focus on identifying the situations in which you’ll need to purchase their goods and services.
Search online for information seminars for small businesses in your area. You don’t need to already be an entrepreneur to attend those information seminars. You might want to begin attending information seminars in the months leading up to starting your own business. That ensures you’ll know what you need to do when the time comes to launch your own business.
Many universities also put on events and information seminars for small businesses. Some of the events are open to the public, while others are for alumni only. Check online to see if any universities in your area are offering free information seminars that could be helpful when starting your own business.
Most branches of government that require you to fill out forms to start your business also have information guides on their websites. The guides teach you how to fill out the required forms and are usually written using easy-to-understand language. By reading the guides, people with no prior business experience should understand how to fill out the forms. Many guides walk you through the forms line by line explaining each line in detail. The guides also list any supporting documentation that must be sent in along with the completed forms.
Many government websites also have frequently asked questions sections. Those sections often cover questions such as who needs to fill out the forms and which type of forms are for which type of business.
You can save the expense of having a professional person fill out government forms if you’re able to do it yourself by following the instructions in the guides. Most government branches also have toll-free numbers you can call to get help filling out any areas of the forms you’re uncertain about.
If you’re saving costs by filling out government forms on your own, be certain you understand everything you’re filling out. If you’re uncertain about anything, and you can’t get the help or explanation you need from someone at the government branch, you should always hire a qualified professional to help you.
Join entrepreneur support networks. Many will be exclusive to your city, while others will be statewide or national. There are also many entrepreneur networks available worldwide online. The cost of joining each entrepreneur network varies. Some networks allow members to join for free. You should join any free networks you believe will provide some benefits for you. Also consider joining paid membership networks that provide benefits you deem worth the cost of joining the network.
Entrepreneur support networks provide a wide variety of services to their membership. Some offer information sessions, downloadable information on their websites, guidance working through problems, and various other services that support their members. The networks are often a valuable source of information. You can get valuable advice not only from the organization itself, but also from the other members.
Through the networks, you’ll meet a number of other entrepreneurs in a situation similar to yours. You can benefit tremendously from helping each other. In addition to providing support to each other, you might also be able to negotiate valuable business deals with other companies in your networks. The business deals go beyond simple transactions, they could also include referral agreements, joint ventures, cost-sharing agreements, and any other agreement that could benefit both of your businesses beyond simply making a sale.
Entrepreneur networks also allow you to pool your resources with other entrepreneurs. By pooling your resources, you can obtain low-cost access to valuable services that would be too expensive for you to buy on your own. For instance, you might gain access to a valuable paid database simply by being a member. The database access fees would be paid for using a small portion of each member’s membership fees. All members would then have access to the database.
You could also pool your resources to leverage the buying power of many small businesses to get bulk discounts from large suppliers. None of the small businesses would be able to negotiate a high volume price discount on their own. But together, they have significant purchasing power and can negotiate a much better price.
Many entrepreneur networks also negotiate discounts with large companies for their members. For instance, you might be able to obtain a 10% discount at a major national retailer simply by presenting your membership card. If a network offers a discount from a retailer you visit frequently, the value of the discount could far outweigh the cost of the membership.
Some entrepreneur networks also pair up new entrepreneurs with experienced entrepreneurs who can mentor them. Mentors can be a valuable resource to new entrepreneurs. They can provide the benefit of their experience. Their experience can help new entrepreneurs avoid many common mistakes. Being paired with an experienced entrepreneur you can ask questions could be priceless.
Search online for various entrepreneur networks available to you. Don’t limit your search to your city. Try searching for state, national, and industry-specific networks you are eligible to join. Each network provides different benefits and has different members you could build relationships with. There are networks that are free to join in most regions.
You can find information on how to do just about anything online. That information is available on demand at any hour of the day. You can, therefore, develop nearly any skill through a simple online search anytime you like.
When learning new skills online, you need to ensure the information you’re obtaining online is accurate. Look for information from multiple independent sources. If the sources all agree, the information has a higher chance of being accurate. However, that does not guarantee the information is accurate. Use your discretion. If you’re uncertain, ask a qualified professional.
YouTube videos can be a valuable way to learn new skills. The benefit of watching a video is being able to follow along as the task is performed or the skill is demonstrated. That allows you to see the task being performed instead of simply being described in text. That distinction can make a huge difference when learning new skills.
There are many very helpful videos available online for just about any skill set you could want to develop. The videos are available on demand any time you want to learn a new skill. Like how to sites, use your discretion to determine whether you can depend upon the advice given in the video. Anyone can make a video. That means people could make a video without the professional qualifications necessary to teach the skill.
Many professional services firms have several articles on their websites. The articles usually describe general solutions to common problems. Between all of the professional services firms in your jurisdiction, you can often find an article that touches on your issue. Issues related to laws and regulations will likely need to be covered by a professional who operates in your jurisdiction. Other issues, that are not jurisdiction specific, could be answered by articles written by any professional services firm in the world.
The articles are written to improve the professionals’ credibility. The articles are also a marketing tool. They provide just enough information to help you through the most basic form of that problem. The articles then described factors that complicate the problem and necessitate contacting the professional services firm for professional advice. Sometimes, the basic information solves your problem.
You can use a search engine to find relevant articles. If your topic is jurisdiction specific, such as laws and regulations, include your jurisdiction in your search phrase.
Just like any other written document, the articles vary in their quality and usefulness. Some professionals write excellent articles, and others write articles that provide little information. Read through several articles written by a variety of professionals at a variety of firms before you hire a professional. You could save a lot of professional fees if you find articles that solve your problem. Once again, if you’re uncertain, or the correct course of action is not clear, you should always seek professional help.
You can also learn valuable skills through colleges and universities in your area. You can often learn those skills through evening classes or by correspondence. Many colleges and universities also offer a lot of valuable information online for free. You might even be able to access many of the resources for courses online without logging in as a registered student. Some of the resources commonly found on course websites include PowerPoint slides and information sheets.
Many of the top universities throughout the world are now offering massive open online courses (MOOCs). A MOOC allows you to get a university education online for free. Most of the courses aren’t for credit. So you get the knowledge, but not the degree stating you’ve completed the course. If you’re in business for yourself, the information could be more valuable than the degree that proves you have the information.
For some college and university courses, everything you need to know to pass the course is covered in the textbooks. You could look online to see which textbooks are required for the courses that interest you. You could then order those textbooks from any bookstore (or the university bookstore) and read through them on your own time. Doing so allows you to obtain the knowledge for a fraction of the cost of completing the university course. You might also be able to read the textbooks in a fraction of the time it would take to complete the university course. Reading the textbooks gives you the knowledge, but not the university degree. If the knowledge is all you need, buying the textbooks could be a great way to learn.
Many vendors will offer you incentives to persuade you to sign long-term contracts. If there are certain aspects of your business for which you are uncertain, avoid signing long-term contracts no matter how good the discounts might be. Instead, enter into a month-to-month agreement until the uncertainty passes over. You can always enter into a long-term contract to take advantage of cost savings the very next month.
Limiting the length of your exposure allows you to explore new lines of business with little risk. You might want to try offering a new line of business for a few months to see how well it’s accepted by your target market. You don’t want to worry about being committed to an unsuccessful line of business for multiple years. Being committed to an unsuccessful line of business could cause your whole business to fail. Therefore, even if you’re offered an enticing discount to do so, you would avoid entering long-term agreements for an experimental new line of business. You’re better off paying full price for the first few months to see if the new line of business is successful. You can always take advantage of discounts offered for longer term agreements once you know the new line of business is successful.
For example, you might start your business offering three different goods for sale. You might find that one of those goods is not selling at all and the other two are selling very well. You don’t want a long-term contract to force you to continue incurring expenses related to the one good that’s not selling. If one good is not selling, you want to cut it, and its expenses, from your business as soon as possible so it’s not weighing down the rest of your business.
Your business could turn out to be a huge success. But what made your business successful, might be a completely different line of business than what you started out with. Perhaps, one of your accessory goods or services really took off and is now responsible for the vast majority of your profit. That happens unexpectedly to many businesses.
The most successful businesses over the long term are those that are able to quickly adapt. Long-term contracts reduce your ability to adapt.
Once your business is established, and you have a better idea which lines of business you’re going to continue offering for the long-term, there is usually no problem signing long-term contracts to take advantage of cost savings. But when your business is first getting started, there are a lot of uncertainties. Those uncertainties might require quick changes to keep your business alive. Don’t unnecessarily limit your ability to adapt.
Also, even if your business is incorporated, as a new business, many vendors will require you to personally sign all agreements. New businesses will have zero credit history and most vendors know many new businesses fail. So to protect themselves, many vendors require the entrepreneurs to personally sign agreements.
Personally signing the agreements means if your business fails within a year, and you’ve committed to a three-year agreement, you’ll be personally responsible for fulfilling the remaining two years of that agreement—even if your business has failed. That means you’ll have to pay for that contract with employment income, income generated from a second business, or with income from whatever else you end up doing after your business has failed.
Even if your business is incorporated, and you’re signing a contract on behalf of your corporation, be sure to read the fine print. Ensure that you aren’t also signing to be personally bound to the terms of the contract if your business fails.
Obviously, you don’t want to think about the possibility of your business failing. If you bring your passion, and do everything right, you maximize your chances of success. But you’ve probably heard the expression, “Better safe than sorry.” Smart businesspeople always manage their risk. There should be a good reason and high potential payoff for any risks you take. You shouldn’t take unnecessary risks. Especially not for minor price discounts that you could easily take advantage of next month. Small discounts are rarely worth significantly increased risk.
No one can predict the future. The future is full of risks and opportunities. Smart businesspeople know they must manage their risks so they can survive to take advantage of future opportunities.
This subsection is going to sound like common sense. But it’s easy for many people to forget this advice when they get caught up in the stress and busyness of running their own business.
Certain tasks for your business can only be performed at certain times. The nature of your business, and the target market you serve, determine how you have to allocate your time. For instance, cold calling and service delivery need to be performed during the hours your customers are available. For many businesses, that time will be normal office hours.
That time should be considered your prime time. Maximize your business’ potential during that time by performing only the business activities that must be performed during that time. For instance, you can do your business paperwork at midnight if you have to. But you can only cold call new customers to generate more business during office hours. Don’t waste your prime time during office hours doing business paperwork you could do at any other time. Plan your time so it’s used most effectively.
Obviously, you would not take time management to the extreme. Work-life balance is important. You would not always be doing all of your paperwork at midnight. But you do need to remember to properly manage your limited time. Some things can be done anytime. If certain things can only be done at certain times, make sure you make the best use of that prime time.
Many of your vendors offer additional perks and services that are thrown in for free when you purchase their primary goods and services. Take advantage of those extras offered free of charge. Some of them might be extremely valuable to your business. When comparing vendors, don’t simply compare products and prices. Consider the whole package, including the extras each vendor provides.
For example, you might have a company truck used for a construction business. That truck needs new tires. You’ve found the vendor who offers the lowest price for the tires you need. But that might not really be the best deal. You might find another vendor who charges a bit more for the tires, but offers free flat tire repairs for all tires they’ve sold. You know from experience, driving your truck through construction sites means you often pick up screws and nails in the tires. Your cost savings from free flat tire repairs could be considerable. Over the course of a year, that cost savings could far outweigh paying a little bit more to purchase the tires. Consider the whole package offered by each vendor and how any extras could benefit your business.
To provide another example, credit card companies are in competition which each other for your business. Consider the entire package you get with each credit card, not just the interest rate. Each business credit card offers a number of benefits to the cardholder. The value of some of those benefits is significant.
Some credit cards offer free extended warranties on items purchased using the credit card. That saves you from having to buy an extended warranty from the vendor. Over the course of a year, you could save thousands of dollars from free extended warranties alone. Some credit cards also offer replacement guarantees if the item purchased using the credit card is stolen within a year. That can eliminate your insurance costs or your replacement costs. Some credit cards also offer discounts on hotels and rental cars. If the credit card benefits prevent your business from incurring additional expenses, your cost savings from using the credit card could be significant.
You could get multiple credit cards to take advantage of each card issuer’s perks.
Of course, if you don’t pay off the credit card balance in full each month, the interest charges could outweigh the benefits obtained by using the credit card. Always consider all aspects of the deal and be careful when using credit cards to make purchases.
Many groups, clubs, and other organizations that charge membership fees offer great discounts to their members. In many cases, those discounts far outweigh the cost of the membership.
For example, you might need to buy an expensive piece of equipment from a large retailer. You might notice the retailer has a sign advertising a 10% discount for members of an automobile association. You investigate and find out the automobile association costs $100 per year to join. You could pay $100 to join that automobile association, and then get a 10% discount when you purchase the $10,000 piece of equipment. Your 10% discount saves you $1,000. Your net savings is $900 ($1,000 - $100). You gain from the savings, but you also get all of the benefits of a one-year membership to the automobile association.
Before making a large purchase, ask if the vendor offers discounts to members of any organizations. You could then investigate the savings that could be had by joining those organizations. Some organizations whose members are given discounts are free to join.
You might also already be a member of an organization that is offered a discount. Many clubs, unions, and professional associations have negotiated discounts for their members. Be sure to visit the websites of all organizations you are a member of to see if they list the member benefits. If benefits are listed, check which retailers offer discounts to members. Which vendors offer you discounts is something to keep in mind while you’re shopping for business assets.
If you’re having trouble developing a steady stream of new clients for your new business, consider approaching other businesses for subcontracting agreements. Just be sure you don’t sign any sort of exclusivity agreement because you still want to be able to market your business on your own to obtain customers directly.
Subcontracting means the other companies make the sale with the customer then hire you to do the work. The other companies profit on the difference between the amount they charge the customer for the work and the amount they pay you to do the work.
Subcontracting can be a good way to quickly generate revenues for your company. Subcontracting is beneficial for the other companies as well. They are able to make a profit on the work you do without having to invest any of their own resources to perform the work. By subcontracting your company, the other companies are able to take on more work and generate more profit. Depending upon the circumstances, subcontracting your company could be a better option for other companies than hiring and training new staff and buying equipment for them.
It can be difficult to obtain your first customers as a brand-new business. Subcontracting is a great way to develop a portfolio of work and a number of references. Developing a portfolio of work through subcontracting means you’re no longer a brand-new business with no track record. Through subcontracting, you have a portfolio of work you can show others. You also have satisfied customers who might be willing to provide a reference to help encourage new potential customers to purchase from your business.
The customers you serve through subcontracting might recommend you to their friends and family. They might recommend your company directly instead of the company you subcontracted through. That helps generate valuable word-of-mouth advertising for your business. Even if satisfied customers recommend your company through the other company that subcontracted you, the recommendation still generates extra revenue for your business.
Subcontracting can be an effective way to get your business started if your business is in a trust-based industry like professional services. In a trust-based industry, clients need to trust the professionals they hire are capable and competent because the consequences of getting incorrect professional advice can be severe.
For example, if you’re facing serious potential legal consequences, you want to hire a lawyer you trust has a high level of skill and the ability to deliver the results you desire. You would be reluctant to take a chance by hiring a lawyer who has not yet developed a reputation for delivering positive results. When the stakes are high, you would probably begin by looking at law firms with brand recognition. You’ll be looking for firm names that you believe you can trust because you’ve heard the name before. Whether by positive word-of-mouth, or by the firm’s own advertising, a firm name you’ve heard before feels like the more reliable choice for your needs.
That same brand recognition applies to any company in any industry. The majority of people are more inclined to go with the familiar choice than take a risk trying a new company. Especially when the consequences of poor results are severe.
You might have no problem trying a brand-new restaurant for lunch tomorrow. A bland lunch won’t necessarily ruin your life. But if you need a high-risk surgery, you’ll want to choose the doctor who you believe has the best track record of success and the highest potential to perform your surgery successfully. You might be reluctant to choose a doctor with little experience performing the high-risk surgery.
By subcontracting through established companies, you can take advantage of customers generated by those companies’ goodwill and brand recognition. Of course, you have to make it profitable for those companies to subcontract work to you. So your profits will be less than if you had generated that work yourself. But it’s a great way to begin developing your own portfolio of work and some of your own goodwill and brand recognition.
Established brands are able to charge a premium for their work. So the other companies might charge customers more for work subcontracted to you than you could charge on your own. That places a higher value on your work.
When subcontracting, be certain your subcontracting agreement clearly establishes the rules with respect to which company the clients belong to. Some companies might require subcontracting agreements that prevent you from directly serving clients you’ve obtained through subcontracting. That type of agreement would prevent you from taking clients from the other companies. You would need to continue subcontracting for all future work performed for any clients initially obtained through the subcontracting agreement. Some subcontracting agreements might also prevent you from advertising your business as distinct from the company you subcontracted through. Make sure you understand what you’re agreeing to when signing a subcontracting agreement.
You might be able to obtain more favourable terms subcontracting through some companies than through others. Evaluate all of your options and keep your goals in mind. Use your negotiation skills to get a fair agreement. Developing a portfolio of work and references is important. But you also want to eventually develop a list of your own clients who deal directly with your company.
Some people want to become entrepreneurs because they have a specific dream business in mind. They have a very clear goal and know exactly how they are going to accomplish that goal. They might have been thinking about the specifics of starting their own business for quite a while; visualizing what it’s like to be an entrepreneur.
Other people might only know they don’t want to work for someone else. They want the freedom to manage their own schedule, to be their own boss, to be the one who’s making the decisions, and to reap all of the benefits of their hard work. They know the end results they want; they just don’t know which type of business they want to use to obtain those end results.
This section will help people who are uncertain about which type of business they would like to start. Each person’s unique circumstances, goals, and preferences make certain types of businesses more appealing to him or her than to other people.
The first thing you have to consider is your personal skill set. You need to know how to do something before you can start a business doing it.
Many people end up starting a business using the skills they’ve learned through their first job. Their first job probably wasn’t their dream career. They took that job simply because it was available at the time they needed to make some money. While working at that job, they realized a number of ways their employer wasn’t running the business optimally.
They thought of many ways they could vastly improve the business. Perhaps they’ve even mentioned those ideas to their employer, but their employer failed to take action. Those people took their own great ideas and turned them into huge competitive advantages for their own new businesses.
There are many famous success stories of employees who’ve left a large company to start their own business doing the exact same thing they were employed to do. Some of the most successful companies in the world were started that way.
Your first few jobs, as terrible as they might have been, were a great learning experience. Through your first few jobs, you’ve learned the basics of running a business and serving customers.
You might have also developed skills throughout your life as hobbies or other forms of entertainment. Many of those skills could be applied to a business as well.
The skill you choose to start a business with determines your market. For instance, you might choose to start a business using skills most people have. You’ll be doing things most people could do for themselves. But they would rather hire you to do it because they are short on time or would prefer not to perform those tasks themselves.
Alternatively, you could start a business using a skill very few people have. You’ll be performing tasks most people could not do for themselves. If people want those tasks performed, they’ll have to hire someone who is capable of performing those tasks. You would be selling to a different target market than someone who performs a task that anyone could do for themselves.
You can start a business the soonest using skills you have right now. You would not have to invest any additional time learning or improving those skills.
You could also learn new skills required to start your dream business. Learning new skills can take a significant investment of time. Some skills take years to develop at a level sufficient to use for business. Some skills, such as professions, take years of training and apprenticeship.
Skills that take a long time to develop create a barrier to entry. That barrier to entry prevents a lot of people from jumping into business using those skills. Anyone who wants to start a business using those skills will have to invest a lot of time and effort developing those skills before they can go into business. That provides some protection from competition to people who have those skills.
Try searching online for existing businesses that use the skills you’ve developed throughout your life. Try searching for synonyms to your skills, previous job titles, and hobbies. While searching in your own city shows your potential competition, you don’t need to limit your search to your own city. For generating ideas, search worldwide. Visit different business’ websites and examine the goods and services they are selling using the skill sets you have. Learn how they are marketing those goods and services. You might find a great idea and become the first business of that type to start in your city.
A service business can be started at a lower cost than starting a business selling goods. A service business doesn’t have to deal with the hassles of managing inventory. Nor does a service business need retail space to display inventory to customers. A service business needs only the tools or equipment necessary to perform the service.
Many service businesses don’t require customers to come to your place of business. That means you don’t need to rent expensive retail space or office space. You can use a home office, or even do your business paperwork at your kitchen table. Many service businesses take customer calls and then the entrepreneurs go to the customers’ place of business or home to perform the services.
Because of the significantly lower costs, a large portion of new businesses are home-based service businesses. A home-based service business is the first type of business started by many entrepreneurs. Some ambitious entrepreneurs use the profit generated from their home-based service business to launch a larger business.
Take a look at all of the assets you currently own. Could any of those assets be used to start a business? Starting a business using the assets you have might not be starting your dream business. But it could help you take the first step of getting into business for yourself. You’ll be your own boss and generate profits that could be reinvested into another business. You’ll be able to start a business using equipment you already have much quicker because you don’t need to save up money to buy expensive business assets—you already have everything you need.
If you have a vehicle, you could offer delivery services. If you have a kitchen and cooking tools, you could offer simple catering services or sell baked goods to retail stores. If you have construction tools, you could operate a number of different construction businesses.
If you have specific services in mind, you could search online to find new ways you could perform the services using the equipment you already have. You might find you already have 80% of the equipment you need, or you could buy cheap attachments and accessories that allow you to use the equipment you already have to perform the necessary work. Lowering the amount of money you need to save up to buy equipment to start your own business means you could get into business for yourself faster.
Get business ideas by looking through business directories. Browse through business directories for your city. Look at the categories. Which categories interest you? You could start a business in any category of interest to you. Browse within the categories to see how different businesses specialize.
Determine whether you have the necessary skills to start any of those businesses. If not, could you easily obtain the skills you need? Could you learn online or through books?
Also determine whether you have the necessary tools to start any of those businesses. You can get to work starting the business today if you already have all of the equipment.
Do you see any businesses that could be started with very little equipment?
Once you’ve found a type of businesses that seems like a possibility for you, visit several of those business’ websites. Use those businesses’ websites to learn about that type of business. Try to get an idea of how they operate and how they market their goods and services to their customers. What can you learn about their company policies through their websites? What type of accessory goods and services do they offer? What type of tools and equipment do they use? Who are their customers? Do you see any areas you could improve their businesses?
You can also explore business directories for other cities. You might find a number of business ideas that are popular in other cities which don’t yet exist in your city. Being the first entrepreneur to open a popular new type of business in any city is a great position to be in. You’ll be able to capture all of the customers who want that good or service because they have nowhere else to go. A large portion of those customers will remain your loyal customers even after competitors eventually move into your city.
While not everyone’s dream business, multilevel marketing opportunities give you an option to start your own business with a proven business system, an already developed product, and a pre-established marketing strategy. Multilevel marketing businesses could be a good opportunity if you want to get into business for yourself but aren’t sure what you want to do. Especially if you have limited time to devote to a business. Most multilevel marketing businesses can be operated part-time during your free time.
Typically, in a multilevel marketing business, you’ll be ordering goods through the person who introduced you to the business and selling those goods to your friends and family. You would then try to get your friends and family to order goods through you to sell to their personal network. It’s called multilevel marketing because you buy goods through a person at the level above you, and sell goods to other people at the level below you.
You make some profit by selling goods to your friends and family. But the real profits are made when you get other people ordering goods through you to sell to their personal networks. The more people you get selling products ordered through you, the more money you make. You want to get as many levels of people reselling goods below you as possible.
You might already have several friends involved in multilevel marketing businesses. The business opportunities include selling candles, kitchen tools, spices, personal care products, make up, and health supplements. Just about any retail good has a multilevel marketing opportunity where people can sell it using home-based businesses.
The success of any multilevel marketing business as a whole depends upon it being as easy as possible to continue recruiting new people. As such, multilevel marketing businesses are very easy to set up. Anyone can quickly start those businesses. Typically, they require very little skill or investment of capital. That makes it very easy for you to recruit new people to get into business at the level below you, which increases your profits, and the profits of everyone at the levels above you.
Multilevel marketing businesses are a potential business idea for some people who are uncertain which type of business they want to start. They also work for people with no knowledge of how to run a business. Multilevel marketing businesses provide all of the support people need to get started. They’ll walk you through the process step-by-step.
Multilevel marketing can work great for some people. Other people would never consider a multilevel marketing business because they are not truly an entrepreneur founding their own idea. They are instead an incorporated salesperson for the larger multilevel marketing organization. For some people, that doesn’t provide the same pride of ownership as founding your own business from scratch.
Franchises share some of the advantages of multilevel marketing businesses. Franchises are set up for people who want to start their own business, but don’t have their own idea, or don’t want to start a business from scratch. A franchise also has the advantage of being a proven business system. By opening a franchise business, you open a replica of a business that has already proven to be successful in other locations. That means the franchise business has a good chance—but not a guarantee—of being successful in your market as well.
The franchise also gives you all of the business operating procedures you’ll need to maximize your chance of success running that business. The franchise will guide you through the entire process including selecting a location, managing construction or renovations, buying equipment, hiring and training staff, and putting in place the business policies to manage the business day-to-day.
The franchise will also provide support if you have any questions or run into problems. Some franchises have thousands of locations throughout the world. Throughout the course of operating the business, many of the franchise owners have run into problems. The business owners or experts at the franchise company headquarters have already solved those problems. By opening a franchise location, you have access to the solutions developed by the experts and other business owners. That means you won’t need to solve as many of your own problems. When you run into a problem, there is a good chance another franchise owner has already encountered that problem and solved it. The franchise gives you access to the solutions that have proven to be effective. Large franchises also have experts you can call for help solving problems. That eliminates a lot of trial and error and improves your chance of success.
Typically, to get your franchise business up and running, you need only invest your money and follow the clearly defined steps. The franchise guides you through the process. That significantly reduces the risk of starting a new business. Following a clearly defined system also makes the process more straightforward and less stressful.
In exchange for opening a copy of someone else’s business, having all of the business systems you need in place, getting support as needed, and receiving the benefit of their brand recognition and goodwill, you pay a franchise fee to the headquarters of the franchise company.
Many fast food restaurants, restaurant chains, and retail stores are franchises. Franchises are not limited to retail. There are franchise opportunities available for just about any kind of good or service company.
Franchises vary in the amount of startup capital required to open a franchise location. A high-end restaurant chain could require over $1 million in startup capital, while a small home-based business franchise could require less than $1,000 to start. If you’re interested in opening a franchise, search for franchise opportunities with the type of business you’re interested in starting, then refine the matches to those which meet your budget.
Different franchises have different potential to generate a profit and also have different franchise fees business owners are required to pay. For instance, if you’re interested in opening a franchise restaurant, there could be hundreds available in your country to chose from. Shop around. Some franchises require large fees upfront and a percentage of the profits every month. Many also charge separate fees for things like national TV advertising campaigns. Many franchises also have requirements potential business owners must meet before being approved as a franchise owner. The requirements range from a specific minimum net worth, to specific experience, to willingness to work in the franchise instead of simply hiring employees to do all of the work.
The terms of each franchise agreement also vary. Different franchise agreements have different restrictions and obligations for running a franchise location. Be sure you’re willing to comply with all of the requirements of opening a franchise location before you decide to get started.
You can browse franchise opportunities online, in books, and in magazines. There are magazines dedicated solely to franchise opportunities. Those magazines review different franchise opportunities and include large lists of opportunities in the back pages.
Before you commit to opening any sort of franchise, always do your research to make sure it seems like a legitimate and valuable business opportunity. Be sure you’re getting something of value for the franchise fees. Also be sure the franchise is a proven business system. Otherwise, you’re not going to be any further ahead than starting a business on your own from scratch.
A good way to evaluate a franchise is to visit a franchise location and see what the business is actually like up and running. If you’re looking at opening the first franchise location in your city, you’ll have to travel to another city to visit an example of the franchise up and running. Most franchise websites allow you to find all of their locations. Travel to cities that have several different franchise businesses you would like to evaluate. That helps you get the most benefit from your travel expenses because you can evaluate several different businesses by travelling to only one city.
You can also get business ideas by looking at what’s trending online. There are many websites that use different methods to determine which topics are trending online. For instance, some monitor the most popular search phrases, while others monitor what’s being shared on social media. You can look for things that are trending in a specific region or worldwide.
Once you have a list of things that are trending, you can look for ways to start a business and take advantage of those trends. Follow the process outlined above where you look at the skills, equipment, and startup capital you already possess. Determine which trends would be quick and easy for you to take advantage of using what you already have.
Some trends last; others fade quickly. It can be difficult to predict which trends will be around next year and which will disappear by next month. As such, you need to take advantage of trends quickly, and manage your risk by not over investing in a trend that could quickly disappear.
You might also choose to look for business ideas within industries where there is not much competition in your city. Look through business directories and find business categories where there are currently no, or very few, businesses of a specific type of operating in your city. Doing so could provide an opportunity to be the first business of a certain type operating in your city. You might also find it easier to start a business where you’ll have only 2 competitors in your city instead of one where you’ll have 20 competitors.
This research is valuable even if you already know exactly which type of business you would like to start. Use this research to determine how much competition you’ll have and to identify your direct competitors.
Starting your own business can be one of the most rewarding experiences in your life. It could also be one of the biggest sources of stress in your life. Taking the time to develop your business plan in advance improves your chance of success. Creating a business plan allows you to evaluate your new business idea and helps you work through the steps of starting your own business.
It’s not possible to know in advance everything you’ll need to learn to start your business. Even experienced entrepreneurs are still learning. But taking the time to develop an understanding of the basics of a few fundamental skills can help keep your business running smoothly. Reading books and browsing online to learn the skills listed as important in this book should give you a great head start.
It’s also important to address any problems with your business as soon as they come up. Don’t push problems aside and let them fester. Take care of problems before they get worse and strain your business.
While planning ahead and ensuring you’re properly prepared are important, it’s also important to get out there and get started as an entrepreneur. Beware of the risk of over planning. You can always find something else you need to learn and think of another potential problem you need to solve before getting started. It’s also easy to find reasons why the timing isn’t right. If you get paralyzed in the planning stage, you’ll never end up starting your own business. You’ll be stuck in your current situation working for someone else.
The timing will never be perfect and you’ll never be completely prepared for any possible problem. You have to recognize when you’re at the point where you’re likely to succeed. That’s the time to get started. Taking the first step will make the second step, and each following step, much easier. Once you get started, it won’t seem like such an overwhelming process. You’ll recognize it’s only a series of easily manageable steps. You’ll find, out of necessity, you’re learning much quicker once you get started.
Once you see your business growing in front of you, you’ll be motivated to continue moving forward faster.
At first, you’ll likely be a lot busier running your own business than you were working as an employee. But you’ll probably also find yourself much more satisfied with your work. You’re creating something bigger than yourself. Something you can be proud of. Instead of working for someone else’s dreams, you’ll be making decisions and realizing your own dreams.
Knowing you are responsible for your own success while working for yourself is an amazing feeling. I wish you success and happiness as you take the leap and become an entrepreneur.
The following is a bonus chapter from my bestselling book, 48 Ways to Control People: How to Leverage the Way the World Works for Your Own Gain. That book is volume 1 in the highly acclaimed two-volume series, How to Leverage the Way the World Works for Your Own Gain.
If you put someone in an awkward and indirectly intimidating—not directly intimidating—situation, they’ll be too dumbfounded to escape the situation. Accordingly, they will comply with your requests so they can be released from the awkward and indirectly intimidating interaction. The indirect intimidation allows you to deny any coercion took place. Since there were no overt threats, the extortion can easily be disguised as an innocent interaction with the other person. Despite being able to deny the extortion, the extent to which you can coerce others using this technique can be significant.
Homeless people use this technique very effectively. They know, if they just sit quietly on the sidewalk meekly holding out a hat, most people walk right past them. If they call out, “Spare change please,” they can get a few people to stop and donate money. If they can single out people from the crowd and talk to them directly, even more people will donate some money. But the real money is made when they use this technique. Not only do they get more donations, the average value of each donation goes up significantly.
Here’s how homeless people use this technique: They take advantage of someone who is separated from the crowd and stopped somewhere waiting. For instance, someone waiting at a street corner for a traffic light to change so they can walk across the street, or someone waiting at a public transit stop. The homeless people approach those people while they are waiting and ask them for spare change. When those people see a rough looking homeless person standing in front of them, and feel like they have nowhere to go because they are stuck there waiting, they will often comply with the homeless person’s request for a donation. They give him what he wants just to get rid of him so they can end the awkward and slightly intimidating interaction. Those same people, had they saw that homeless person sitting on the sidewalk, would have walked right past him without donating any money. But now, they feel forced into giving him a donation just to end the awkward and slightly intimidating interaction. They pay him so they can escape the awkward and indirectly intimidating situation.
The homeless people are not robbing those people. So those people cannot claim they have been extorted. After all, those people could have easily said no or walked away. But their mind was already set on waiting there until an event took place, such as the traffic light changing or public transit arriving. Thus, once this rough looking homeless person confronts them, they feel trapped and intimidated. So they pay him to get rid of him.
When you look at what happened from a psychological point of view, it’s easy to see these people have been intimidated and extorted into giving a donation. But when you describe what took place, a humble—but rough looking—homeless approached someone and simply asked for a donation, it’s hard to claim any sort of extortion took place. It’s easy to make the argument the people could have simply said no, as there was no threat of force. It’s also easy to make the argument the people could have simply walked away as the homeless person was not restraining them or blocking them from leaving. Yet, psychologically, the people feel trapped and intimidated. They feel intimidated even though they could’ve said no or walked away at any time.
Those two parallel realities of the situation are what makes this technique so effective. You can use this technique to coerce what you want out of people without being accused of extortion.
Many people in positions of power take advantage of this technique as well. But they do so in a slightly different way. The psychological effects, however, are the same. People in positions of power ask their staff for personal favours, for instance, asking subordinates for a ride from work to pick up their personal vehicle at the shop. The employees feel they cannot refuse their boss; even though their boss has no authority over them to ask for personal favours outside of work.
Many new employees fall victim to another version of this technique when it’s applied by their coworkers. New employees, wanting to make a good first impression, feel like they can’t say no. They don’t want to create a bad first impression by denying others help or refusing others’ requests. Many people take advantage of this and offload many of their most unpleasant chores on the new employees, and the new employees feel like they are not able to say no. This happens with requests from their peers—people who have no authority to assign the new employees new duties.
The new employees could easily refuse, but they don’t because they don’t want to create a bad first impression. This also happens with requests outside of work duties, such as managing a work social club or other volunteer positions. People even take advantage of the new employees for personal favours, such as asking the new employees to donate to causes they support or to join groups they are a part of. People know the new employees feel they can’t say no during their first few weeks on the job.
When someone is new to any group, and trying to make a good first impression with the rest of the group, that’s your chance to offload your worst chores. You can finally unload the chores someone stuck you with during your first week.
This technique is so effective because, if you were to look at a transcript of what was actually said, you’ll see only a polite request for a favour. However, there is a lot going on below the surface. There are significant psychological effects in play. The people feel as if they cannot refuse. They are forced into doing something they would not have volunteered to do. Find ways you can put people into these types of situations and you can get almost anything you want from them.
The following is a bonus chapter from my bestselling book, 45 More Ways to Control People: How to Leverage the Way the World Works for Your Own Gain. That book is volume 2 in the highly acclaimed two-volume series, How to Leverage the Way the World Works for Your Own Gain.
Most first world countries have a ridiculous number of laws in place which protect people from themselves. These laws are in addition to the laws which protect the rest of humanity from the few bad people. These are laws which try to protect the 80% from their own poor decisions. These laws were set up by the 1% to protect the 80% like a parent setting up rules to protect a child from dangers the child is not capable of properly evaluating.
For example, most first world countries have several laws regarding safety equipment. Not only safety equipment that protects the public from the actions of others, but safety equipment that specifically protects the individual wearing the equipment. Things like seatbelts, helmets, fall protection harnesses, and hearing protection. We also have a number of laws which attempt to protect people from very damaging and highly addictive hard drugs. We are interfering with natural selection for the greater good. These laws are necessary as a consequence of a few aspects of human psychology.
First, the 80% will enthusiastically agree to suffer very serious long-term consequences in exchange for small short-term gains or pleasures. Laws are set up not only to protect the 80% from making those poor choices, but also to protect taxpayers from the burden of saving those people once they’ve suffered the long-term consequences; consequences they’ve incurred to receive short-term gains or pleasures.
The first problem is, most people are too short-sighted. They’re not able to properly weigh future consequences. Something way off in the future seems very small and much less severe than it really is. Most people have trouble understanding the full extent of things that are far off in the future.
There’s also a second—and perhaps more important—aspect of human psychology at play here. When people take high-risk actions, there is often two separate elements of chance in play. First, the short-term gains or pleasures are 100% certain. Second, the future pain or negative consequences are not 100% certain. The 80% knows, if they take a risky action, they are guaranteed to gain the short-term benefits or pleasures, but it’s not guaranteed they’re going to have to pay the price later down the road.
This is where the 80%’s lack of rationality betrays them once again. They have the, it’s not going to happen to me attitude. The majority of the 80% believes they are going to be included in the lucky few who do not suffer the long-term consequences of their risky actions. Even if the statistics are high, such as 90% of people will face the consequences of their actions, people will focus entirely on that 10% chance they will not have to face the consequences. They are certain they will be in that 10%.
Laziness and procrastination also come into play. Especially for things like safety equipment. If people’s safety equipment is on the other side of the job site, and they just have to make one quick cut, or just climb a scaffolding for one quick minute, or just dispense 1 ounce of a chemical, they think there’s no need to walk all the way across the job site to get the proper safety equipment. They don’t want to go through all the trouble of putting on safety equipment to perform only 30 seconds of work. After all, fetching and putting on the safety equipment would take several times as long as the task they’re going to perform wearing the equipment. That laziness, combined with their, it won’t happen to me attitude is the cause of many workplace accidents.
All people focus on is the benefit they receive now, or the hassle they can avoid now. People always push problems into the future. They procrastinate any way they can. They can avoid the hassle of safety equipment now, and any problems they might incur would have to be suffered in the future. Future problems carry much less weight than current benefits. There is also, of course, the chance that no future problems will arise, which makes the risk-to-reward ratio appear even more favourable.
The facts given above are not even the most ridiculous part of this phenomenon. The most ridiculous part is, while the 80% are so inclined to risk very severe consequences to make something easier or more pleasurable for themselves in the short-term, they are not willing to take risks to make things drastically better for themselves in the long term.
Taking a risk, such as stepping out in front of the crowd to start a business, or asking a beautiful person out on a date, terrifies people who would willingly risk their lives to save 60 seconds of effort required to put on a safety device.
To understand this, you can apply all of the above facts in reverse.
First, the benefits are long-term. Long-term benefits are much less enticing than short-term benefits. Long-term benefits are harder to visualize and understand. Long-term benefits appear smaller than they are because they are far off into the future.
Second, the future benefits are uncertain. There’s a chance the business would fail or the beautiful person would reject them and there would be zero future benefits. Even if the odds of success are 90%, and the odds of failure are 10%, people have a terrible fear they’ll find themselves included in the 10% that fails. Now, when it comes to good luck, they are also of the opinion, it’s not going to happen to me. They believe they will not be one of the people who finds success.
Laziness and procrastination also come into play. To receive long-term benefits, people would have to put in hard work and effort upfront. They would have to overcome their fears and put in the work necessary to get the desired results. It’s much easier for them to keep the status quo; to simply walk right past that beautiful person or avoid all the effort and stress of starting a new business. Laziness thwarts these people once again.
Once this has been clearly laid out, it’s easy to see why the 80% seem to have the worst ‘luck.’ They make extremely poor choices. They make many choices loaded with a high probability of negative consequences in the future, but very few choices loaded with a high probability of positive benefits in the future. Once the future arrives, they have to pay for all of their poor choices. Everyone has to pay the piper. Moreover, since they were too afraid to take risks for their own gain, they don’t have any benefits coming their way to offset the consequences of their poor choices.
Remember these facts when you’re making your own decisions. Don’t take unnecessary risks and you won’t face unnecessary negative consequences. But do take risks that can make your life much better in the future.
How to use this knowledge to your advantage when controlling other people is described in detail in the section titled, “Make People Enthusiastically Accept Severe Negative Consequences.”
The following is a bonus chapter from my bestselling book, 45 More Ways to Control People: How to Leverage the Way the World Works for Your Own Gain. That book is volume 2 in the highly acclaimed two-volume series, How to Leverage the Way the World Works for Your Own Gain.
Before reading this section, be sure to read the section titled, “Take Advantage of People’s Inability to Properly Weigh Consequences.” That background information is essential to understanding this technique.
If you want to persuade someone to do something, front-load all of the benefits in the agreement. Arrange the agreement so that people will be certain to experience 100% of the benefits instantly, but won’t face any of the negative aspects of the agreement until far off into the future. People won’t be able to properly weigh future negative consequences against present benefits. If the benefits and negative consequences are equal, the current benefits will seem much larger than the future consequences. You can also use this illusion to stack up many negative consequences far off into the future, making them appear shrunken in size. Negative consequences far off into the future will easily appear to be offset by benefits experienced instantly upon agreement, which appear magnified in size.
As you can see, to convince people to take some sort of action, you should frame your request in a way that places 99% of the emphasis on the short-term gains they will experience right now. Instant gratification is king. Be sure to emphasize all of the ways people will gain instant pleasure by agreeing with you. Include the negative aspects of the agreement, incurred in the future, only in the fine print.
Instant gratification is everything. The 80% hardly care about gains they’ll receive way off into the future. They are only concerned with what they can enjoy right now. Keep this in mind when trying to persuade them. Future gains, no matter how great, have hardly any motivational value. How do we counteract this?
You must find ways to move the gains forward. If the gains can’t be moved forward, you must develop new gains that can be experienced instantly and include those instant gains in the deal. Even if you have to increase the selling price to include new short-term gains, people’s focus on the short-term gains will blind them to the price increase.
If you want people to do something unpleasant for the long-term, lock them into a commitment with a very enticing benefit they get to experience upfront. Offer bonus incentives which can be enjoyed right now in exchange for signing up for a long-term contract. Entice them with something they get to enjoy before they have to fulfil their end of the agreement. Give them instant gratification for agreeing to do what you want them to do.
You can make the agreement even more enticing by pushing their end of the agreement even farther into the future. That makes their end of the bargain seem smaller and less painful. The further you can move their obligations into the future, the larger you can make those obligations. Pushing negative consequences into the future creates the illusion the consequences are smaller than they really are. The 80% are not able to properly weigh consequences that are far off into the future.
You can make the agreement even more enticing by adding an element of chance to their obligations. You can get an even higher level of agreement by offering the possibility the 80% could partially, or entirely, escape their obligations. For instance, offering a 2% chance their obligations will be greatly reduced or completely eliminated. People severely overestimate their chance of being included in the lucky 2% who will be released from their obligations.
Remember, benefits lose their lustre as they are moved off into the future, and consequences lose their sting as they are moved off into the future; particularly when dealing with the 80%. Also remember, people severely overestimate their chance of being in the minority who win benefits and avoid consequences.
Consider the following example of these principles: A much larger portion of the world’s population than you might expect would probably accept $1 billion today in exchange for being killed a year from today so that a wealthy person in need of organ transplants could harvest their organs. You might even have caught yourself thinking, would a year be enough time to spend all of that money? People would justify their choice to take the money and be killed as sacrificing themselves for a noble cause—dying so that someone else could live. People often hide the real reason they’re doing something behind a publicly expressed reason that sounds good.
As much as people would like to sound noble, the money is the real reason they are doing it. Consider this: Would those people prefer to be killed in one year and save 50 people for $50, or to save one rich person for $1 billion?
If you extended the time to death from one year to five years, you would get an even larger proportion of the world’s population accepting the deal. The exact same consequence, further away, loses some of its sting.
You could further increase the number of people willing to accept the agreement by including an element of chance in the bargain. For example, if you change the terms of the agreement to include a miniscule chance, say 1%, that the billionaire could be cured by other medical means and not need the organs. Most people will severely overestimate the probability they will realize that 1% chance and not have to give their life. The 1% chance will be overpowering. People will drastically overvalue it. They don’t consider death is still a near certainty. Instead, they’re overly optimistic about their chance of survival.
The thing you might find most surprising is, you’re likely to get a higher proportion of young people accepting the offer than old people. Young people with significantly more than five years left in their natural lifespan. The reason for this is, young people, on average, are significantly more prone to accept long-term consequences to receive short-term gains. Young people take many more risks and are primarily focused on the present. They’re much more susceptible to the lure of instant gratification.
Just look how late in life people start saving for retirement. You can’t use increased earning power as you age as an excuse for this behaviour. That argument is severely flawed. Most people don’t start saving for retirement until at least 10 years into their working lives.
Consider the following example: A person starts their working life working for $25,000 per year. Then, over the course of a decade, they slowly work their way up to a salary of $50,000 per year. After that decade, they might begin saving for retirement. Coincidentally, they have more earning power at that time. However, a young professional might start their working life earning $50,000 per year right out of university. They have the same earning power as the person who spent a decade working their way up to that level. The young professional, however, is unlikely to immediately start saving for retirement—even though they obviously have the earning power to do so. The young professional will also wait until they have been working for over a decade before they start saving for retirement. Earning power is irrelevant.
You might also try to argue the young professional needs to buy a house and a car and incur other start of adult life expenses. Those arguments are also invalid. The young professional could easily have chosen to live the lifestyle of the person making $25,000 per year and save the excess for retirement. But, hardly any young people are ever willing to sacrifice short-term benefits to receive benefits way off into the future. They want a nicer new car, a bigger new home, exotic vacations, fancy electronics, and other forms of pleasure right now. A more comfortable retirement is much too far off into the future to have any weight in their decision process.
If you want people to make sacrifices, or take risks to make their future better, you have to provide some sort of incentive upfront to make them take action. Future benefits hold hardly any motivational power. You have to give them instant gratification in exchange for making the sacrifice or taking the risk.
If what you want people to agree to do has no instant benefits, you could include new instant benefits by inflating the price of whatever you’re offering to include the cost of the benefits you give people upfront. Most people will enthusiastically pay more for instant gratification.
Purchasing this course in the at-home format is thousands of dollars cheaper than attending the seminar.
00 Welcome to the Communication Fundamentals Course 1
00.01 The At-Home Version of This Course 2
00.01.01 You’ll Never Again Fear Social Interaction 4
00.01.02 Your Life Could Have Been so Different Today 4
00.01.03 New Opportunities Will Become Available to You 6
00.01.04 Learn the Communication Mistakes You’ve Been Making 7
00.01.05 The Results You’ll Get 8
00.01.06 Who This Course Is for 11
00.01.07 Why You Need to Complete This Course 13
00.01.08 In Today’s World, Everyone Is Connected 14
00.01.09 What You’ll Learn 15
00.01.10 The Modules Work Together Synergistically 17
00.01.11 You’ve Decided You Are Not Going to Be Average 18
00.01.12 You’ve Decided You Are Not Going to Fail 19
00.01.13 You’ve Decided You Are Very Serious about Improving Yourself 19
00.01.14 You’ve Decided You Are Going to Change Your Life 20
00.01.15 Your Confidence Will Skyrocket 21
00.01.16 Learn How Successful People Operate 22
00.01.17 You Are Who You Hang out with – Attract the Best 23
00.01.18 Your Existing Relationships Will Be Much Stronger 24
00.01.19 The Best Communication Secrets Will Be Revealed 25
00.01.20 Why You Need to Get Started Right Now 26
01 Overcoming the Fear of Approaching New People 28
01.01 Make the First Move or Lose out 29
01.01.01 The Invisible Barrier 29
01.01.02 Approach Who You Want to Approach or Lose out 34
01.01.03 Your Reasons for Approaching Other People 36
01.02 How Fear Works in Your Mind and Body 38
01.02.01 We Have a Strong Negative Bias 40
01.02.02 What Is Fear 41
01.03 How You’re Making the Problem Worse 43
01.03.01 Imaginary Vicious Cycle 43
01.03.02 Real Vicious Cycle 44
01.03.03 We Fear Lack of Control 46
01.04 More Ways You’re Making the Problem Worse 51
01.04.01 You’re the Only One Who Knows 51
01.04.02 You’re Much Harder on Yourself than Other People Are 53
01.04.03 People Are Nice Because They Don’t Want to Embarrass Themselves 54
01.05 What’s Holding You Back 58
01.05.01 Identify Your False Beliefs 58
01.05.02 Imagine the Worst That Could Happen 59
01.06 How to Use Fear so It Works for You Instead of against You 64
01.06.01 Your Fear Response Changes Your Body 64
01.06.02 Fear Versus Excitement 67
01.07 The Most Important Secret about Approaching New People 69
01.07.01 The Middle Ground between Perfect and Failure 69
01.07.02 Before and after 72
01.07.03 Our Negativity Bias Is at It Again 75
01.08 How Successful People Are Different 79
01.08.01 Action Eliminates Fear 79
01.08.02 Fear Disappears 80
01.09 What Successful People Do 84
01.09.01 Overcoming Fear Is Not Automatic 84
01.09.02 Reverse Your Thinking 84
01.09.03 How to Completely Forget about Feeling Nervous 87
01.10 More Things You Can Do Right Now 90
01.10.01 Eliminate Unjustified Fears That Are Holding You Back 90
01.10.02 Define What You’re Really Afraid of 91
01.10.03 Realize You Can’t Predict Everything 92
01.10.04 Realize You Can’t Control Everything 94
01.10.05 See Fear As a Guide 95
01.11 If Your Fear Is Much Worse Than Normal, Do These 8 Things 97
01.11.01 Getting Started Overcoming Your Fear of Approaching New People 99
01.11.02 Step One 100
01.11.03 Step Two 100
01.11.04 Step Three 102
01.11.05 Step Four 103
01.11.06 Step Five 104
01.11.07 Step Six 105
01.11.08 Step Seven 106
01.11.09 Step Eight 111
01.11.10 You Are Now Ready to Go for It 113
02 Small Talk, Flirting, and Networking 115
02.01 The Importance of Small Talk 116
02.01.01 Small Talk Versus Serious Discussions 116
02.01.02 Hating Small Talk 118
02.01.03 Small Talk Is Essential to Starting and Building Relationships 118
02.01.04 Using Small Talk to Assess People 119
02.01.05 Examples You Can Use 120
02.02 Start a Conversation – Opening Lines 121
02.02.01 Anything Is Better Than Silence 121
02.02.02 People Will Make Whatever You Said Work 122
02.02.03 Introductions 124
02.02.04 The Formula for Opening Lines 128
02.02.05 The Event 131
02.02.06 Common Interests of People at the Event 134
02.02.07 The Venue 136
02.02.08 The Theme of the Event 137
02.02.09 The Entertainment 137
02.02.10 Other People at the Event 138
02.02.11 The Food 139
02.02.12 The Host 140
02.02.13 Travel to the Location 140
02.02.14 The Honoree or Beneficiary 141
02.02.15 Event Speakers and Their Topics 142
02.02.16 Anything You Can Both See 143
02.02.17 News Events of the Day 145
02.02.18 Other Things You Have in Common 146
02.03 Keep a Conversation Going – Part I – Skills and Techniques 148
02.03.01 The Key to Keeping a Conversation Going 148
02.03.02 Always Give Other People Expandable Topics 151
02.03.03 When You Don’t Know What to Say Next 155
02.03.04 Talk about Subjects of Interest to Other People 159
02.03.05 Learn about Other People 160
02.03.06 Accept Everything 164
02.03.07 Special Interest Websites and Magazines 166
02.03.08 When People Introduce a New Word into Your Conversation 168
02.03.09 How to Change the Subject to Your Interests Using Transitions 170
02.03.10 The Boomerang Question 172
02.03.11 Anything Happening in the Room 173
02.03.12 Things You Have in Common with People 175
02.03.13 Good Questions 176
02.03.14 Other People’s Day so Far 179
02.03.15 Make a Game of Guessing Others’ Situations 180
02.03.16 Going from Specific to General or from General to Specific 181
02.04 Keep a Conversation Going – Part II – Topics of Conversation 183
02.04.01 Read up on the News 183
02.04.02 Don’t Try to Fake Knowledge 186
02.04.03 Learn the Right Questions to Ask for Each Topic 187
02.04.04 Personal Details about Other People 188
02.04.05 Listing Their Favourites in Various Categories 191
02.04.06 Work or School 192
02.04.07 Entertainment 193
02.04.08 Sports 194
02.04.09 Vacations – Past and Future 195
02.04.10 If You Could… 196
02.04.11 The Best Way to Improve Anything 197
02.04.12 What’s Your Opinion on… 197
02.04.13 Organizations and Causes They Support 197
02.04.14 What Has Changed with People You’ve Met before 198
02.05 The Best Ways to Suggest a Follow-Up Meeting or Second Date 199
02.05.01 Finding Good Follow-Up Events on the Spot 202
02.05.02 Discussing Entertainment News and Future Events 203
02.05.03 Be As Specific As You Can 204
02.05.04 Suggest Going to One of Your Favourite Places Discussed Earlier 205
02.05.05 Suggest They Show You Their Favourite Places 206
02.05.06 Suggest They Teach You an Activity They like 206
02.05.07 Challenge Them at an Activity You Both like 207
02.05.08 Suggest You Teach Them an Activity You like 208
02.05.09 Make an Effort to Meet up at the Next Event 209
02.05.10 Suggest You Work on Something Together 209
02.05.11 Suggest You Investigate Something Together 210
02.05.12 Suggest Trying Something New Together 211
02.05.13 Suggest You Work on Improving a Skill Together 211
02.05.14 Go to a Place Neither of You Have Been before 212
02.05.15 Suggest They Help You with Something or You Help Them with Something 213
02.05.16 Staying in Contact 214
02.06 Ending a Conversation 216
02.06.01 What Not to Say 216
02.06.02 What to Say 217
03 Always Have Something to Say 220
03.01 Introduction: Rules of the Communication Game 221
03.01.01 Popular People 222
03.01.02 They’re Not Actually That Smooth 223
03.01.03 The Perfect Quotable Response 224
03.01.04 People Expect the Conversation to Flow Naturally 225
03.01.05 Everyone Can Recognize Communication Mistakes 225
03.01.06 Everyone Meets People Who Are Not Skilled Communicators 226
03.01.07 A Barrier between You 227
03.02 Make the Right Impression 228
03.02.01 The Desire to Look Good Can Make You Nervous 228
03.02.02 To Be Confident, You Need a System You Can Trust 232
03.03 The Secret to Speaking to New People 234
03.03.01 Think Back to the Last Time You Heard Someone Speak 234
03.03.02 The Way You Felt 236
03.03.03 Different Expectation Levels 237
03.03.04 How Different Forms of Communication Rank 239
03.03.05 The Expectation of Quality for You when Approaching New People 241
03.03.06 Meeting Expectations Is Good, Exceeding Them Is Exceptional 244
03.04 Speaking to New People Effortlessly 246
03.04.01 Lessons from Improv Theatre 246
03.04.02 The Amateur 247
03.04.03 You Don’t Need to Apologize 249
03.04.04 Your Current Impromptu Speaking Skill Level 252
03.05 Confidence Boosting Cheats 254
03.05.01 Impromptu Speaking Doesn’t Have To Be Impromptu 254
03.05.02 Know Your Audience and What They Want to Learn Ahead of Time 256
03.05.03 Preparing Stock Bits of Information 258
03.05.04 Prepare, but Don’t Memorize 258
03.06 How to Always Be an Interesting Conversationalist 260
03.06.01 Be an Optimist 260
03.06.02 Don’t Be the Average Boring Person 261
03.06.03 Being a VIP 263
03.06.04 Important People 268
03.06.05 Talk about Current Events 270
03.06.06 Successful People Take Care of Themselves 270
03.06.07 VIPs Know It’s Important to Refresh 272
03.06.08 Take Time Out Of Your Busy Schedule for Other People 273
03.06.09 An Important Reminder 274
03.07 Accomplishing Your Relationship Goals 276
03.08 The Pareto Principle (80/20 Rule) Applies to Relationships 279
03.08.01 Trying to Please Everyone 282
03.09 How to Respond to… 287
03.09.01 People Who Brag 287
03.09.02 Deception 289
03.09.03 The Politician’s Answer 291
03.09.04 Topics You Don’t Want to Talk about 294
03.10 How to Approach Others to Start a Conversation 297
03.10.01 Who to Approach 297
03.10.02 Groups to Approach 299
03.10.03 How to Join a Group 301
03.10.04 Join the Conversation When You Join the Group 303
03.11 How to Practice Without Other People 305
03.11.01 All Skills Require Practice 305
03.11.02 Three Weeks Is Often Enough 306
03.11.03 Your Improvements Will Be Obvious and Encouraging 307
04 Building Rapport and Using Proper Manners 310
04.01 Good Conversation Habits That Make a Great Impression 311
04.01.01 Be Positive 311
04.01.02 Give Compliments 312
04.01.03 Make Other People Feel Important 313
04.01.04 Always Assume the Best of Other People 314
04.01.05 Own Blame and Share Credit 316
04.01.06 Dressing for the Event 318
04.01.07 A Friend Can Say Good Things about You to Others 319
04.01.08 Get into the Right State of Mind 321
04.01.09 Remember One Detail about People the Next Time You See Them 322
04.01.10 Making People Comfortable Helps You Forget You’re Nervous 324
04.01.11 Soften Your Opinion 325
04.01.12 Remembering Names 326
04.01.13 Communicating Using Technology Versus in Person 328
04.01.14 Where to Practice Your Communication Skills 330
04.01.15 Have Good Responses Prepared for the Obvious Questions 331
04.01.16 Be Excited to Meet People 333
04.01.17 Involve Everyone 335
04.01.18 Focus on the People You’re with 337
04.01.19 Think: “What If the President Said That?” 339
04.01.20 Let Other People Save Face 342
04.02 Bad Habits That Kill Conversations and Push People Away 346
04.02.01 One-Upping 346
04.02.02 Talking about Yourself 348
04.02.03 Bragging 350
04.02.04 Overusing Clichés 351
04.02.05 Complaining 352
04.02.06 Blaming 355
04.02.07 Interrupting 356
04.02.08 Being a Know-It-All 357
04.02.09 Offering Unsolicited Advice 360
04.02.10 Working the Room at a Social Event 361
04.02.11 Asking for Free Professional Advice 363
04.02.12 Gossiping 365
04.02.13 Using a Cell Phone 366
04.02.14 Making Jokes at the Expense of Others 369
04.02.15 Telling Inappropriate Jokes 372
04.02.16 Trying to Teach People a Lesson 374
04.02.17 Talking about Your Interests That No One Else Cares about 375
04.02.18 Sharing Too Much Personal Information 376
04.02.19 Asking Others to Share Too Much Personal Information 379
04.02.20 Arguing 380
04.02.21 Having to Be Right or Get the Last Word 382
04.03 Building Rapport and Developing a Relationship 384
04.03.01 Mirror Their Emotion 384
04.03.02 Use Quotes to Bond 386
04.03.03 Make Yourselves into a Group 387
04.03.04 Give Insider Information to Make Yourselves into a Group 389
04.03.05 Accept Other People’s Point of View 390
04.03.06 Assume the Best of Other People 391
04.03.07 Use the Same Vocabulary as Other People 393
04.03.08 Make People Feel Comfortable 396
04.04 A Quick and Easy Way to Be Popular 398
04.04.01 What Was Your First Interaction with Them like? 399
04.04.02 What Is Every Interaction with Them like? 400
04.04.03 What Do They Do That Makes You like Them? 400
05 Alpha Person Behaviours and Body Language 403
05.01 The Importance of Nonverbal Communication 404
05.01.01 Your First Impression Is Made from across the Room 404
05.01.02 Your Body Language Tells People How to Treat You 407
05.01.03 You Can Be Anyone You Want to Be 409
05.01.04 The Alpha Person Is Attractive to Everyone 410
05.01.05 Alpha People Are Very Important to Our Society 411
05.02 The 61 Alpha Person Characteristics and Behaviours 415
05.02.01 Keep Your Head up 415
05.02.02 Never Cross Your Body Parts 415
05.02.03 Claim More Space 416
05.02.04 Don’t Use Shields 416
05.02.05 Never Fidget 417
05.02.06 Always Look Relaxed 417
05.02.07 Ignore Distractions 418
05.02.08 Never Jump to Attention 418
05.02.09 Move Slowly, Calmly, and Deliberately 419
05.02.10 Be Rock Solid and Composed at All Times 419
05.02.11 Always Go First 420
05.02.12 Always Be in Front 420
05.02.13 Lead by Example 421
05.02.14 Always Take the High Road 421
05.02.15 Don’t Fear Judgment 422
05.02.16 Have a Firm and Confident Handshake 422
05.02.17 Don’t Fear Touching Other People to Express Yourself 422
05.02.18 Don’t Cringe When Others Touch You 423
05.02.19 Be Dependable 423
05.02.20 Stand up for Your Friends While They’re under Fire 423
05.02.21 Never Stab Anyone in the Back 424
05.02.22 Always Tell the Truth 424
05.02.23 Be Direct 425
05.02.24 Take a Stand and Make Your Opinions Known 425
05.02.25 Defend Your Ideas and Beliefs 426
05.02.26 Be Humble 426
05.02.27 Don’t Seek the Approval of Others 427
05.02.28 Make Sure Others Know You Always Finish the Fight 427
05.02.29 Be Comfortable Holding Eye Contact 428
05.02.30 Walk Tall 428
05.02.31 Walk like a Healthy Warrior 429
05.02.32 Always Keep Your Hands Out Of Your Pockets 429
05.02.33 Be Well-Groomed 430
05.02.34 Be Optimistic 430
05.02.35 Never Fear Failure 430
05.02.36 Never Get Embarrassed 431
05.02.37 Disclose Your Own Mistakes 432
05.02.38 Accept Responsibility for Your Actions 432
05.02.39 Be Upfront about Your Faults 433
05.02.40 Don’t Complain about Trivial Things or Things That Can’t Be Changed 433
05.02.41 Talk about Solutions — Not Shortcomings 434
05.02.42 Don’t Criticize Others 434
05.02.43 Never Make Fun of Others 434
05.02.44 Never Intentionally Embarrass Others 435
05.02.45 Treat Everyone with Respect 435
05.02.46 Help Others When You Can 435
05.02.47 Be Generous with Your Time, Skills, and Resources 436
05.02.48 Do Nice Things for Others 436
05.02.49 Always Be Comfortable 436
05.02.50 Have Exceptional Social Skills 437
05.02.51 Be Decisive 437
05.02.52 Take Action 438
05.02.53 Don’t Fear Responsibility 438
05.02.54 Don’t Be Afraid to Say No 438
05.02.55 Don’t Let Other Alpha People Intimidate You 439
05.02.56 Take Risks 439
05.02.57 Ask for What You Want 439
05.02.58 Approach Anyone You Want 440
05.02.59 Be Responsible for Your Own Life 440
05.02.60 Be Confident — Not Cocky 440
05.02.61 Speak on Your Own Terms 441
05.03 Nonverbal Communication Can Make or Break You 442
05.03.01 Eye Contact 443
05.03.02 Smile 444
05.03.03 Posture 445
05.03.04 Open Posture 447
05.03.05 Fidgeting 450
05.03.06 Their Body Language 451
05.03.07 Adapt to Other People 453
05.04 Traditional Body Language Books 455
05.04.01 What Most Body Language Books Teach You 455
05.04.02 Don’t Waste Time Learning Individual Gestures 456
05.05 Trying to Use Traditional Body Language Books Backwards 458
05.05.01 The Intended Users of Traditional Body Language Books 458
05.05.02 Interviews and Interrogations 460
05.05.03 Out of Sync Gestures 461
05.05.04 False Expectations about Using Traditional Body Language Books Backwards 462
05.05.05 Why Body Language Books Work without Everyone Reading Them 463
05.06 The Significance of Body Language 465
05.06.01 An Example of the Significance of Body Language 465
05.06.02 Your Body Language Speaks First 467
05.06.03 People Use Mental Shortcuts to Make Life Easier 468
05.06.04 Mental Shortcuts Used with Body Language 470
05.07 Body Language Can Make You a Leader 473
05.07.01 They Might Not Even Realize They’re Doing It 473
05.07.02 Body Language Identifies the Real Leaders—Not Who Has the Title 475
05.07.03 Subconscious Assessments Affect Conscious Opinions 476
05.08 How to Instantly Demonstrate You’re a Leader 478
05.08.01 How to Tap into Your Subconscious 479
05.08.02 Your Subconscious Mind Is Accurate and Perfectly Timed 483
05.08.03 Examples of the Power of Your Own Belief 484
05.08.04 When It Counts 487
05.09 Exercises to Demonstrate You’re a Leader 489
05.09.01 Unleashing Your Subconscious Mind 489
05.09.02 Imagine You’ve Already Accomplished What You Want to Accomplish 491
05.09.03 Imagine You’re Onstage Winning an Award 492
05.09.04 Imagine Everyone Knows You for What You Want to Be Known for 493
05.09.05 Imagine You’re a Celebrity 494
05.09.06 Imagining What Other People Have Felt 495
05.09.07 Making It Work 496
05.09.08 Imagining As If Determines Your Body Language 497
05.10 Conclusion 499
Purchasing this course in the at-home format is thousands of dollars cheaper than attending the seminar.
Module 1 – Overcoming the Fear of Approaching New People
Module 2 – Small Talk, Flirting, and Networking
Module 3 – Always Have Something to Say
Module 4 – Building Rapport and Using Proper Manners
Module 5 – Alpha Person Behaviours and Body Language
Module 6 – Dressing to Reduce Your Flaws and Enhance Your Strengths
Module 7 – Developing Confidence that Shows
Module 8 – Persuading People
Module 9 – Reading the Opposite Sex’s Interest Signals
Module 10 – Conducting Interviews to Extract Important Information
Purchasing this course in the at-home format is thousands of dollars cheaper than attending the seminar.
Someone has to make the first move to start a conversation. Most people fear making the first move; so the onus is on you. People who hesitate are stuck with whoever is willing to approach them—if anyone has the courage to do so.
You’ll learn not only how to conquer the fear of approaching new people, but also how to conquer any other fear holding you back in other areas of your life. You’ll learn how to confidently take risks so you can enjoy future gains in your business, social, and romantic lives.
Fear is responsible for more crushed dreams than any other problem people might encounter. People who don’t take action because they were too afraid never live a life where they’ve accomplished all of their dreams.
Skilled communicators always seem to know exactly what to say next. The skilled communicators’ comments go over well not because they are genius, but because they follow the rules of conversation. That gives people what they are expecting and seems like exactly the right thing to say.
You’ll go through opening lines, entertaining others, building a relationship, arranging a second meeting, then saying goodbye. You’ll know how to respond to any comment or question sent your way.
You’ll find many examples of opening lines you can use to start a conversation and discussion questions you can use to keep a conversation going. But, most importantly, you’ll learn the skills to develop your own opening lines and conversation topics.
Many people struggle with finding the right thing to say. This module helps you eliminate that problem. You’ll learn how to keep new ideas flowing so you can speak easily without awkward silences. Doing so allows you to confidently start and continue a conversation with anyone you chose.
These skills will not only make you an excellent conversationalist, but also make you a great impromptu speaker. Any time someone asks you a question, or asks you to speak about a topic, you’ll be ready to exceed everyone’s expectations. You’ll be armed with everything you need to deliver outstanding presentations with no preparation. You’ll have the tools and strategies necessary to speak impromptu on any topic.
You’ll learn the good communication habits that make others see you as an excellent communicator. Everyone expects others to have these traits. You’ll recognize them as positive character traits possessed by people you admire.
You’ll also learn the bad communication habits that annoy, offend, and bore people. Reviewing the bad habits will help you pinpoint why you dislike many of the people who annoy you. They probably don’t even know they have those bad habits. Their bad communication habits can make it impossible for many people to like them.
Building rapport is essential to moving any business or personal relationship to the next level. You’ll learn several techniques you can use to quickly increase the level of rapport between you and others.
Your nonverbal communication is making your first impression with other people long before your first words to them. When you walk into a room, everyone sees you and receives your nonverbal communication. They use that first impression of you to size you up, decide where you fit into the social hierarchy, and to decide whether or not you might be someone interesting to them for business, personal, or romantic reasons.
If you don’t immediately transmit nonverbal communication that interests other people, they’ll quickly overlook you as just another random person in the room.
The opposite is also true. If you’re communicating nonverbal information that appeals to other people, you will be attracting people from all sides of the room.
Zane Rozzi is a successful entrepreneur. He is also well known in the field of executive development. Zane Rozzi has a large and loyal following as a pickup artist who teaches others the keys to success in attracting the opposite sex. He designed and produced the popular and highly praised Communication Fundamentals course.
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Zane Rozzi is a successful entrepreneur. He is also well known in the field of executive development. Zane Rozzi has a large and loyal following as a pickup artist who teaches others the keys to success in attracting the opposite sex. He designed and produced the popular and highly praised Communication Fundamentals course. I’m a self-made entrepreneur. Many people who are interested in creating their own path to success have asked me how I was able to find success in business. After giving the same advice over and over, I realized there is a real need for this information. I thought it would be great to create a book which tells people what they need to know to get started and realize their dream of becoming an entrepreneur. Despite where I am now, in the beginning, there was nothing glamourous about starting a business. I started with nothing and put in lots of hard work to get to where I am now. I’m not embarrassed to say there were ups and downs and the glamorous lifestyle didn’t come instantly or easily. It takes years to build an empire. But, from where I’m sitting now, I can honestly tell you everything I went through was well worth it. In this book, I’m going to share many of the tips and tricks I used to start from nothing to get to the level I’m at today. There is no other book like this. I wish this information was out there when I first started out. I hope you can use this information to find success too. You know you’re destined for more than working for someone else. You’re way too ambitious to spend your days making a profit for other people. You’re also way too creative to be constrained by the rules and policies of other companies. You know you’re meant to be an entrepreneur. But you have little savings to invest in starting your own business. How to Start a Business from Nothing will help you start your dream business with limited savings.