KLE 112: How To Beat The Odds
“A 10% chance is pretty unlikely, but everyone knows that a one-in-a-million chance is a sure thing!” [Anon.]
Finding – or starting – a business that grows at 50%+ every single year, compounded, is a pretty rare thing … yet, that’s exactly what you need to do if you chose business as your Growth Vehicle (KLE68).
If you don’t start the business – and, make it reach these growth rates – you won’t reach your Number. It’s as simple as that!
So, it would make sense to try and find a business that can grow exponentially, right?
For example, there have been scientific studies that show that the odds of mega-success (the type of success that you need) in, say, retail food businesses (e.g. sandwich shops) are 840 times smaller than starting, say, a computer business.
So, how do you choose a business that meets (or beats) the odds?
You don’t!
As we saw in the case of Bryant, who went on to take Peter’s little sandwich shop and turn it into Potbelly’s, becoming a billionaire in just 10 years (KLE111):
It’s not the business that you buy (or start) that’s important, but what you do with it that counts.
You see:
YOUR odds of succeeding in any business venture are exactly 50/50 … either you WILL or you WON’T succeed!
And, whether you succeed or not, will largely depend on one thing:
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Whether your business can scale or not.
By scaling, I mean, can you grow sales (and profits) year over year … exponentially?
Ways to do this include: taking your business online to remove all barriers to growth; opening more locations; opening in other cities, states, or even countries.
Can you: franchise; build a multi-level marketing sales force; or, find joint ventures to help you expand?
Even though the TYPE of business doesn’t really matter, almost all of the business ideas that most of my past students run by me (feel free to do the same, if you have a brilliant idea for a business to start or buy) seem to have one – I feel – major flaw:
They (almost) all rely on the fruits of your personal labor.
And, it’s easy to understand why: you have a skill – perhaps learned on your job or via a hobby – and you naturally want to apply that to a business …
For example, you start making some cute little cuddly toys for your kids, then friends, then the school fete, and before you know it … you’re in the Cute Cuddly Toy Business!
Even though you are in the business of making PRODUCTS (i.e. Cute Cuddly Toys), you are really in the SERVICE business, because it is all tied to YOUR ability to keep making Cute Cuddly Toys.
The problem is that these businesses are hard to expand past … well … YOU.
And, any business based on Y O U is actually just another J O B.
Sure, you can expand by hiring people to do what you do, but then:
– Will you be able to find / train sufficient people to manage growth?
– Will you be happy with their quality?
– Will you be able to manage people (they get sick; ‘forget’ to turn up; have temper-tantrums; etc.; etc.)?
– Will YOU be around (will you get sick; have family conflicts; etc.; etc.)?
There is a simple solution:
Turn these service-based businesses into product-based businesses; here’s how:
1. Start with your service-based business, but keep it small – and, start it part time, if you can – as you will probably shut it down pretty soon
2. Video yourself doing what it is that you do (including how you buy/sell/make) … every step, sequentially … and, explain what you are doing as you go along
=> you are creating a series of short instructional videos
3. Write down the same steps that you followed in the videos … every step, sequentially … and, explain what you are doing as you go along
=> you are creating a series of short instructional manuals
4. Write down a list of materials required and places to get them
=> you are creating a Buyer’s Directory
5. Package the lot up!
=> you are creating an eCourse in [insert part-time business of choice]
6. Buy a web-site-building package such as Bebiz and/or Site Build It! and sell your course (and/or materials required to make [insert part-time business of choice]) online!
=> you are creating an internet-based business
Just add SEO, Google Adwords, some clever social marketing, and you should generate some meaningful income!
Can you see what you have done?
You have turned your ongoing personal labor (i.e. making the Cute Cuddly Toys) into once-off personal labor (i.e. developing a course on how to make/sell Cute Cuddly Toys), and then selling those toys online.
Once the course is complete and the web-site is set up, you can outsource most of the manual work of the business (fulfilling/shipping orders) to someone else when you get too big (or too sick) to fulfill them yourself.
Not to mention, you can make a lot more money than actually making the cute, cuddly toys and selling them at flea markets; for example this guy turned his hobby of wire-sculpture jewellery-making into a $600k per year online instructional/supply business.
Unfortunately, this type of business is unlikely to get you to Your Number, on its own, and is best tied in with a real-estate or stock investment strategy.
So, if you are into cute cuddly toys, you will still need to either buy ar start a REAL business – one that you can expand in an almost unlimited fashion.
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Before you do that, you should ask some key questions that I will provide in the next KLE.
