It’s becoming more and more obvious to all of us that job security is a thing of the past.
Many of us will need to rely on ourselves, and our own ingenuity and hard work, for our financial well being.
Even so called “guaranteed” pensions, government jobs with lifetime security… it’s all smoke and mirrors.
Just ask today’s pensioners how far those “inflation adjusted” dollars are going.
We know more and more of us are thinking the same way, because we’re being peppered with questions around starting your own business.
How to do it.
What to do.
When to start.
We’re not naive enough to believe we have all the answers.
There are courses, books and universities filled with classes on business building.
But because we’ve been running our own business for a while now, we feel we can share some real world thinking and not a load of theory.
So at the risk of offending many… here goes.
Your great business idea that you’ve shared with friends over the last few years at every dinner party and backyard BBQ ….
The idea that you’re so excited about, well…
Yup, it’s pure crap.
Sorry to burst your bubble.
Someone else has already thought of the same thing, no matter how cool and unique you think it is.
And they’re already trying to run with it.
I used to sit around for hours when I was in the 9-5 world, sharing my cool business ideas with my colleagues.
I got excited about them. Dreamed of them.
Even got frustrated at my 9-5 gig more and more because I thought I was smarter than the role I was in – and I wasn’t using my full potential.
In an attempt to try and offer a little guidance that has helped us over the years, here’s what we’d like to share…
Don’t spend too much time figuring out WHAT to do.
Spend more time figuring out HOW to do it.
Stick with us for a minute.
I know of two real-life dentists in Mississauga, Ontario.
One is doing very well, exceptionally well in fact.
The other is struggling. I mean, he’s paying his bills but he’s not getting ahead.
The first dentist, whether he realizes it or not, has a process he has used to bring in a boat load of new business.
The second, doesn’t understand how to get the phone to ring.
The value isn’t in becoming a dentist.
The real business value is understanding how to get people through the door.
I know of a very successful professional recruiter.
He built an entire business out of recruiting and went on to sell it. He was even listed in Profit Magazine as one of Canada’s fastest growing companies or something like that.
He then started a second business which is growing to be larger than the first.
He didn’t come up with the idea of “recruiting” as a business. He just understood how to get the phone to ring.
We also know of a very successful contractor who quit his 9-5 job to “go out on his own”.
His skills are no better than the next contractor.
I mean, he’s good, but he’s no Picaso or anything.
He’s doing extremely well while tons of other contractors suffer.
He’s figured out where to place ads to get his phone to ring constantly.
Here’s the bottom line…
The process of generating new business, new clients, and new sales, is much more important than a good idea.
When you see a successful chiropractor, car dealer, dentist, realtor, mortgage broker, lawyer, sales professional; forget what they do and focus on HOW they are doing it.
How are they getting new business?
How are they getting the phone to ring?
How are they generating new leads?
The money, and your financial success, lies there. Ideas are a dime a dozen.
Now, let’s take it one step further and break this down into a formula.
Let’s say you are a master a creating the most amazing blue jeans in the world.
You love doing it and your friends tell you that J-Lo and Ryan Seacrest will soon be wearing your stuff.
So you decide to setup shop, either online or in a physical store. Doesn’t matter.
Step #1: How much money does it cost you to get someone through the store or onto your website?
You’ll only know this magical number if you track your advertising. For now, forget the social media nonsense. From our experience, social media is used to add personality and build rapport AFTER someone has raised their hand and expressed interest in you. In the vast majority of cases it’s not used to generate new leads on a consistent basis.
Step #2: How much does it cost you to get a sale (and create a new customer)?
So how many people need to come through your store or onto your website for you to make a sale. 10? 100? What is it?
Step #3: What is the lifetime value of that new customer?
Do your customers come back once a month and buy again? Once a year?
Let’s break this down…
If you run a Google Adwords campaign to that costs $1,000 to get 100 new leads to your website, it’s costing you $10/lead.
And if it’s taking 10 new visitors to get someone to actually buy your $300 designer jeans, those 100 leads are turning into 10 actual sales.
So that $1,000 in advertising is getting you 10 sales at $300 or $3,000 gross revenue.
If the average new customer comes back and buys one more pair from you a year, your average annual value of those 10 new customers is $6000 (gross).
Now you know to spend $1,000 in advertising to return $6,000 in revenues.
Of course, there’s inventory to pay for and tons of other overhead costs, but you’re developing a process here.
So let us ask you a question?
What’s more important in the above, your idea of brand new killer designer jeans?
Or the understanding of how to get the sale?
As a great mentor of ours shared with us many times, all the money is in the IMPLEMENTATION.
Spend more time on HOW to make sales and less time on WHAT a great idea you have.
Until next time… Your Life! Your Terms!