Archive for the ‘Business Start-Up’ Category

No Money – No Problem

January 26, 2010

This question from a reader addresses a common concern:

Considering that my calling is going to involve a large pile of cash, how do I balance the principles that you teach about following your calling, and while keeping in mind the principals Dave Ramsey teaches, which include not taking on more debt? (For example, I feel that part of my calling is to build an outdoor roller hockey facility, which will have leagues, community events, and destination for after/year-round school programs. Obviously I will need to purchase a rink, among other things, to get started) – Matt, from North Carolina

No, no, no – you don’t need to “purchase a rink” to get started.  That would be a horrible risk with a brand new business.  Get an agreement with a school to use their parking lot on a Saturday.  You’ll have instant credibility and an audience because of being at the school and you can test your idea.  My oldest son was a bicycle racer for many years.  We organized and attended races all over the country that were set up in downtown business sections, in business office parking lots and rural roads.  The most popular “criterion” races took place on city streets, often right in the middle of a university.  No one would have dreamed of purchasing land for that kind of race.

Frankly, I’ve never had enough money to start a business – but I just went ahead anyway – with whatever resources I had available.  Here are a couple real examples from my past:

  • Auto Appeal – pinstripping.    I ordered the supplies where I had 60 days to pay for them – I ordered about $300 worth of supplies for this business targeted at new car dealers.  I knew the supplies should not be more than 10% of any job.  So that $300 in supplies turned into $3000 in revenue with a $2700 net profit in the first month and I grew the business rapidly with the business profits funding the growth.
  • Telephone Address Book.  I purchased a telephone/address book at a bookstore for $12.96 – still have that receipt.  Then I went to a church and offered to give them 1000 personalize copies of that telephone/address book with their church logo on the front cover.  In exchange, I asked them to give me the names of people they did business with – hotels, restaurants, insurance, etc.  I then gave those businesses the opportunity to highlight their business on the inside front and back covers.  That first project took me four days to complete and netted me $4600 after paying for the 1000 free personalized copies that I gave to the church.
  • Self-publishing 48 Days to the Work You Love.  I did not have a fancy publishing deal when I first started.  Instead, I bought a few three-ring binders at Office Depot, had the inside text copied, recorded a little cassette to stick in the pocket and then sold over 50,000 at $39 each. (total cost $7.50 each)  That’s over $2 million – with start up costs of less than $100.

There are many such success stories I could share. I worked with a gentleman one time who bought an orange grove, using the existing oranges on the trees as his only down payment. Another purchased an old estate house, contracting to sell the antique furniture inside as his

down payment.  Several years ago I bought a house on a Saturday morning, gave the owner $3,000, took over the loan, did some cosmetic improvements, put it back on the market, and sold it for a $21,000 profit. Many of the best ideas today are not capital intensive. They don’t require buildings, employees, and inventory. Fear of failure is a much larger obstacle than the lack of money.

You can go ahead with your outdoor roller hockey business.  Just don’t try to convince yourself that your calling requires you to violate your personal principles.  That’s a compromise you never want to make.

More on No Money – No Problem in No More Mondays, chapter Eleven

Half the size – twice the price

December 14, 2009

On Thanksgiving weekend Joanne and I traveled up to the Amish country in Ohio to visit my dad in his retirement home.  As always, I am amazed at the micro enterprises that cover the back roads of this farming area where I was raised.  At one shop, where I bought some fresh unpastuerized apple cider, we saw a pile of miniature straw bales, about half the size of regular bales.  My brother told me a local Amishman had rebuilt a hay baler to produce the tiny, decorative bales.  While regular sized bales sell for about $2.00, these half sized ones sell for $4.00.  That’s the power of a unique idea. 

 

We also visited the local winery featuring Amish Country Wine.  And we stopped in at Homestead Furniture where we’ve had a couple of beautiful custom pieces designed and made for our home.  There is certainly some amusing irony in the Amish being winemakers and having the latest laser technology.   But the point is they are great about finding unique ideas and building a successful business around them.

If you have an idea, you’ve got to have a well thought out business plan.  The importance of a comprehensive, thoughtful business plan cannot be overemphasized.  Much hinges on it: credit from suppliers, management of your operation and finances, promotion and marketing of your business, and achievement of your goals and objectives.

Here’s a free Business Planning Guide – you will see examples and questions to help you develop your idea.  You’ll also see information relative to taxes, insurance and legal issues.  I love to see simple ideas produce unusual success –

If you have an idea you want to turn into income this next year you may want to check out the growing group of 48Days.net Members who are sharing ideas and growing their businesses. There’s no cost to be involved and you can tap into the best braintrust I know of anywhere. 

Now, tell us about your unique business idea – that may defy logic.

Sell or Starve

February 16, 2009

To get a job, you have to sell yourself.  To start a business or run it successfully, you have to sell a product or service – every day.  Gone are the days of “build a better mousetrap and the world will beat a path to your door.”  If you are going to be successful in any way you have to learn to sell, and do it well.

Here are statements I’m hearing from people who have not learned how to sell:

  • “I’ve applied for lots of jobs but no one’s hiring.”
  • “Everywhere I go they tell me I’m over-qualified.”
  • “I’ve got to just stay on unemployment since the economy is so bad.”
  • “No one can afford to engage a career coach right now.”
  • “I’m not expecting any new customers for my landscape business as long as we’re in this recession.”
  • “I’d love to start a business but I don’t have any money.”
  • “I’ve been rejected by 10 publishers – I guess I’m not an author after all.” 
  • “I started a church but it turns out we were in a poor location.”

The cover story in the current issue of Success magazine profiles George Foreman. (Big Business with Big George) Of course we all know George because of his boxing success – or do we?  No, there are lots of boxers, but we know George because he learned how to sell.  He says his athletic ability was less a factor in his success than his selling skills. “If you learn to sell, it’s worth more than a degree,” he says.” It’s worth more than the heavyweight championship of the world. It’s even more important than having a million dollars in the bank. Learn to sell and you’ll never starve.”

Free Ideas — and Free Money?

February 12, 2009

Okay – many of you that I talk to say you are still looking for your great idea.  Some of you have your idea but feel you need a chunk of money to get it off the ground.  Well, here’s a solution for both.  Billionaire Mark Cuban is offering to fund any business that can show a break-even cash flow in 60 days and be profitable in 90.  So – no problem getting any amount of money you need (no minimum – no maximum) – if in fact you have a solid business plan.  The Mark Cuban Stimulus Plan.  And if you still need an idea – no problem.  Seth Godin’s current group of 9 six-month MBA candidates just came up with a list of 999 Business Ideas – free for the taking.  I believe every single one except #789 has merit.  I’m going to study the entire list and find 3-4 to develop myself. 

No more excuses – plenty of ideas and plenty of money.  All you need to do is take action.  If you don’t have a money making business 90 days from now – look in the mirror to identify the roadblocks.

“Successful Failure?”

February 9, 2009

Dan, I would like to hear more of your thoughts on failure.  Since most of us who are trying to live a life with “No More Mondays” are probably going to fail several times, what does a “successful failure” look like?  How much should we risk in pursuit of our dreams?  As you often say, we must not be paralyzed by our fear of failure but I doubt you would suggest that we risk our marriages, health, homes, etc. while seeking to reach our goals.  What do you think is the right balance in this area?  Thanks, Eric

Great question Eric.  And I believe there really are “successful failures” in business.  That is not an oxymoron. Napoleon Hill once said: “Failure seems to be nature’s plan for preparing us for great responsibilities.”

So part of the issue is – Do you want to do something great – in any area?  If you are content with mediocrity in your life, then you will try to protect yourself from any failure.   Just recognize the trade-off.  

But here’s an important distinction:  It’s not just what you do in a job or your business that will identify you as a success or a failure.

  • Not having “date nights” or saying “I love you” daily will put your marriage at risk of failure.
  • Spending 65 hours a week at your job will put your emotional well-being at risk of failure.
  • Eating Twinkies and Big Macs and not exercising will put your health at risk of failure.
  • Financing a car or paying more than the equivalent of one month’s income in cash will put your financial health at risk of failure.
  • Spending less than an hour a day on spiritual and personal development sets you up for the risk of failure.
  • Expecting a company to continue giving you a paycheck puts you at risk of failure.

These are ways people set themselves up for “failure” totally aside from whether they pursue a No More Mondays work option.  The counterpart to this is, if you are successful in all the areas mentioned above, then “failure” in a business venture is not crippling.  It is simply one area in which to readjust and start again.  I’ve heard that Richard Branson will not invest in any company unless the person in charge has failed at least twice.  I’m convinced that had I not had a major failure in business a few years ago – leaving me with a $430,000 loss – that I would have continued with an unrealistic view of my golden touch.  I think I needed that experience to open my eyes – not to make me cynical, but to help me create a more solid business structure going forward.

I’m also totally convinced that someone who commits suicide upon losing a job or business had neglected excellence and success in the more important areas of life.  Having rich deposits in relationships, spiritual well-being, health and social connections act as a buffer in carrying you through any temporary business failure.  Whether you have a job, volunteer your time or start the next Microsoft – none of these alone will determine the success of your life. 

So here’s what I recommend for risking in a No More Mondays work option:

  • Take responsibility for where you are – whether good or bad.
  • Continue making deposits of success in the physical, spiritual, personal development, and relationship areas of your life.
  • Pursue work that engages your passions as well as your abilities.
  • Weigh the financial requirements very carefully.  Personally, I have seven different areas of revenue generation in my small business.  That way if one “fails” it’s not devastating. 
  • Recognize that a temporary financial loss does not need to be the end of your business venture. It’s probably just a wake-up call, helping you to readjust for bigger successes in the future. Make the adjustment and know that you are now closer to ultimate success.

So Eric, recognize that many people “risk failure in their marriages, health, homes, etc.” while desperately trying to hang on to a “real job.”  Identifying your passion, creating a careful plan of action, and moving into a No More Mondays work venture may be the very thing to reduce risk and increase your opportunity for true success.  Thanks for asking.

*************************************************************************************

“Far better is it to dare mighty things, to win glorious triumphs,

even though checkered by failure…than to rank with those poor

spirits who neither enjoy much nor suffer much, because they live

in a gray twilight that knows not victory nor defeat.”

                                      Theodore Roosevelt

Seth Godin on why you should be the best

February 8, 2009

Most of you know my admiration for the business wisdom of Seth Godin.  His latest book, Tribes, talks about the power of small groups who believe in a common cause and have a way to communicate.  Much of what we do at 48Days.net is built around that concept.  We want you to be passionate about your area of interest and then connect with a few other people with that same passion.

This week Seth is at the TED conference in California.  TED (Technology, Entertainment, Design) is an invitation-only event where the world’s leading thinkers and doers gather to find inspiration.

Here’s a video interview Seth did two days ago at TED.  He explains why we all need a tribe, and why if you’re going to do something, you need to be the very best.  Whatever you do, don’t be mediocre by trying to appeal to everyone in the world. 

He also gives a very interesting explanation for why he is not on Twitter.  It’s a twelve minute video – and worth every minute if you’re serious about making your impact on the world.

No Way — Hyundai!

January 18, 2009

Here’s another ridiculous “bail-out” offer.  Hyundai has announced they will allow a customer to buy a new car and then return their Hyundai vehicle if they experience “an involuntary loss of income”, i.e., lose their job within 12 months of purchasing one of their ten new vehicles.

Just a few details.  Hyundai will absorb up to $7500 in negative equity for buyers who walk away from their loans.  Let’s see – the MSRP on a basic Sonata sedan is $24,050.  So if a year from now you turn that baby back in, they may decide it’s worth only $12,050 – which is about what a year old Sonata is selling for now.  If you had paid $2000 in payments during that year, and they absorb the $7500 “negative equity,” you would still owe $2500.  And now you have no car and bad credit.

I’ve got a better idea:

  • 1. Pay cash for your car.
  • 2. Start your own business. Be like Hugh Jackman’s character in Australia“No one hires me, no one fires me.”

Here’s a 1998 Mercury Mystique I purchased recently to help one of Joanne’s young friends who is just making a new start.  It’s flawless inside and out – cold air, great mechanical records.  I paid $800 and then another $330 for new tires.

                               catherines-car-21

Why would a person put themselves in a position of double jeopardy:  a job that may not last and a car where you know you owe more than it’s worth from day one.  There are better options.

What is your “donut hole?”

December 27, 2008

Joanne and I were in Chicago this last week.  On a bitter cold morning we planned to have breakfast at the famous Lou Mitchell’s restaurant.  After walking several blocks, fighting the cold, we finally found this place, started as a family restaurant in 1923.  One day in 1958, someone decided to give out donut holes to the people waiting in line to get in.  The response was such that they have never stopped.  Now 50 years later that is still their magic formula.  Trust me, the place is nothing fancy – it’s in an unattractive part of town, in the bottom of an old office building, and they cram you in long tables where you’ll be rubbing shoulders with people you’ve never met before.  But the magic continues – while other restaurants with big names are struggling, you always have to wait in line at Lou Mitchell’s. 

I saw that some customers expressed gratitude for the gesture but refused the donut holes.  Others took one and occasionally someone would eat two while waiting.  I would guess that this little magic costs them less than $.05 per customer.  But the intrigue of that one little difference seems to drive business success that others dream of.

What’s the “donut hole” in your business?  I loved seeing Lou Mitchell’s because several years ago we added 48 peppermint candies to all package orders going out of 48Days.com.  I intended to use that as a 30-day promotion.  However, the response was so amazing we have never discontinued it.  People notice – we tell them to eat one a day and expect to enter a new season of life on the 49th day.  In a business where 10-12% returns are expected, ours are non-existent. 

As you can see, your unique selling proposition (USP) doesn’t have to be rocket science, high tech or expensive.  But if you have a product or service to offer, what could you do to remarkably set you apart from the competition?  Or as my friend Seth Godin wrote, what could you do to have a  Purple Cow in a world of brown cows?

Go Ahead — Make More Mistakes

December 11, 2008

I hear from so many people who regret decisions they have made, whether that is in choosing a career, buying a house they could not afford or investing in GM stock.  But what should we do with our “mistakes.”  Is there really any other way to learn how to do the right things and ultimately find the success we are seeking?

Most of you want to be entrepreneurs.  Here’s what Robert Kiyosaki (Rich Dad Poor Dad) has to say about “bad luck.”  He says, “Making mistakes and becoming smarter is the job of an entrepreneur; not making mistakes is the job of an employee.” 

So if you want to avoid making mistakes, just keep your job as an employee.  If you want to join the exciting ranks of entrepreneurs who are living out their passions and making extraordinary income, then step up to the plate and make more mistakes.

Here are some other well-known comments about making mistakes:

“Would you like me to give you a formula for success? It’s quite simple, really. Double your rate of failure. You are thinking of failure as the enemy of success. But it isn’t as all. You can be discouraged by failure — or you can learn from it. So go ahead and make mistakes. Make all you can. Because, remember that’s where you will find success.”  
— Thomas J. Watson, Sr. founder and former CEO of IBM

“A life spent making mistakes is not only more honorable, but more useful than a life spent doing nothing.” – George Bernard Shaw (1856-1950)

“He who never made a mistake never made a discovery.” – Samuel Smiles

“While one person hesitates because he feels inferior, the other is busy making mistakes and becoming superior.” – Henry C. Link

“I’ve missed more than 9,000 shots in my career. I’ve lost almost 300 games. 26 times, I’ve been trusted to take the game winning shot and missed. I’ve failed over and over and over again in my life. And that is why I succeed.”  Michael Jordan

The secret of making mistakes isn’t to avoid ever making one again – it’s to recognize that making a mistake is not fatal!  They are necessary stepping stones on your path to success.

Vending — an easy $15-20K a year?

November 23, 2008

Here’s an honest question from a 48 Days reader:

I have come across an opportunity to buy 100 bubble gum machines (4 tall spiral and many double headed) for $17k. They bring in around 15k-20k a year.  I have never bought anything like this, can you please give any advicbubble-gum-machinee you may have and if this is a good investment and what other questions I should ask the seller.  Thank you so much..I didn’t know who else to turn to.

Michelle,

I commend you on thinking about a business of your own.  However, getting these machines at a good price is the easy part.  The ONLY thing that matters is whether you can get them set up in good locations.  Believe me, the machines don’t “bring in around 15k-20k a year.”  They bring in zero unless you have them in killer locations.

Don’t even think about buying any machines until you’ve talked with 20 places where you could potentially put them.  You’re going to find that you cannot put them in most retail or franchise locations.  Any hospital or university will already have a contract in place for all their vending machines.  That means then that you’re looking at Mom and Pop small businesses – where it’s questionable if they have enough traffic to make it work.  Don’t do anything until you secure 10 agreements to place the machines.  Once you’ve done your work on that end you’ll have a lot better sense of what the vending business is all about.    

I love the vending business – many of my most profitable products are essentially “electronic vending” — but  you have to do your homework to make it work.