I've got it pretty darn good. I work only when I want to work. I can work anywhere in the world. I work with only people I like. I do only the kind of work I want to do. And I make a lot of money.

If that isn't the definition of having it good, what is?

I travel about three months out of every year. This past year, I was in England, France, Germany, Belgium, Spain, Nicaragua, and Argentina-not to mention New York, Washington, D.C., San Francisco, and Yellowstone National Park. When I travel, I take my computer with me. I spend half of the day visiting parks, shops, and museums and going to concerts, dance performances, and the theater. I spend the other half working on my computer.

And because my business interests are international, travel is largely first-class and paid for by one of the companies I consult with.

My office is more a grown-up version of a boy's tree house than it is a workplace, complete with a personal gym, jujitsu room, billiard table, movie-screening room, and art studio. It is located 1.1 miles (an eight - minute jog) from my main home, which is in one of America's best cities, on the Atlantic Ocean in South Florida.

I take off early when I want to and come in late anytime I wish. I have eliminated all of the stress that used to characterize most of my workday.

And if I want to, I can do no work at all for six months or a year or forever.

In short, I am living the dream.

The purpose of all of this self-congratulatory talk is to tempt you to heed my advice. The reason I have this great life is due to one thing and one thing only: About 30 years ago, I decided to become an entrepreneur.

The most profitable thing I have ever done in my entire career of building wealth has been to invest in start-up businesses. Last time I checked, the returns I have enjoyed as an investor in small businesses have exceeded 25% per year.

There was a time when people thought they could earn that kind of ROI in the stock market. That was a very stupid and very costly notion.

If you are a great investor, you can make 10-15% in the stock market. But you can make 10 percentage points more than that, on average, by starting and/or funding small businesses that you understand.

Start-up businesses have given me so much-a steady growth of income, a base of wealth that has doubled every three years, the opportunity to get involved in so many other, interesting investments, and a rich and stimulating business life.

Although I sometimes grouse about working too hard, the truth is that I love starting new businesses. It's challenging, but it's also a great deal of fun. And when the business starts to work and the money starts flowing… well, it feels pretty damn good.

Thirty years ago, my track record at starting new businesses was a very mixed bag. But these days, I am usually confident that the businesses will work. This kind of confidence comes from 25 years of accumulated experiences, good and bad, and learning from them.

So if you were to ask me, “What is the absolute fastest way to become rich?” I'd have to answer: by starting a small business.

That's my answer. It doesn't mean it has to be your answer. You may not want to invest the time and energy that it takes to be a successful entrepreneur. You may be too timid. You may be too tired. You may lack the self-confidence to launch your own thing. But I'm hoping I can persuade you to consider this path. Because it is, as I said, the best way to become wealthy.

If investing in your own small business is not for you, then there are still plenty of other recommendations for you. You can look into stock, bond, options, precious metal, and so on. You won't be making 25% per year, but you'll do all right.

But if you are willing to become an entrepreneur-even a part-time entrepreneur-you will be amply rewarded. Not only can you double (or even triple) your money every three years, you can also enjoy the many other benefits of being your own boss:

The freedom to choose your own schedule The power to create your own products The excitement of being fully challenged The knowledge that you are providing an income for your employees.

My friend Anna W. asked me to help her start a business based on her love of music. She'd been looking over her current retirement plan and figured out that if she keeps her present job and continues to increase her responsibility and her income, she will be able to have a comfortable retirement in 14 years (at age 67).

That's not bad. Most people in her age bracket won't do that well.

But if she puts her energy and resources into creating a successful business of her own, she can look forward to a much better return on her “investment.”

Anna is going to start her new business on the side, working evenings and weekends. She's going to find a partner to back her, develop her product, and take it to market. When we went over the numbers, it became clear to Anna that this secondary business-if it is successful (and I'm pretty sure it will be)-will allow her to achieve her retirement goals in five years instead of 14, while she is still relatively young.

At that point, she can do whatever she wants to do with the rest of her life.

That's what a business can do for you.

Think about your own financial situation. Are you okay as you are-or would it be helpful to triple your money every three years?

If you need that kind of way-above-average ROI in your life, you simply have to consider starting your own business. Don't quit your day job. Just get something going on the side. You don't have to invest a ton of money or work endless hours. You can do well starting small.

Here are five proven (and absolutely true, in my experience) secrets of highly successful entrepreneurs that will help turn you into a business-building genius. These are very general principles. I am just touching on them here. In later essays, I'll explain them in detail.

Secret No. 1: Don't Spend Too Much Time Planning

When you are entering a market, you don't know (and couldn't possibly understand) the hidden problems and challenges you will face. You won't understand those problems until you make a few mistakes. And you won't solve them (and go on to making a success of your new business) unless you are capable of changing directions quickly.

Most successful new businesses (probably 90% of them) end up following practices that are different than anticipated. That's why it doesn't pay to spend too much time and money planning. Do a reasonable amount of noodling. Figure out the big strokes and give yourself a bailout option. Then go for it. He who can adapt wins.

Secret No. 2: Don't Spend Too Much Money

The vast majority of business start-ups that succeed do so on limited budgets. Almost none of them have the benefit of venture capital funding.

The great majority of new businesses are hampered (and enhanced) by flying on empty. People involved in businesses that have limited funds must think harder, work harder, and (most importantly) sell harder. Their primary initial effort is to bring in the cash. And that's how it should be. There is only one thing that will surely stop any business in its tracks: a lack of cash flow. Ironically, limited capital usually means a quicker and stronger cash flow.

Secret No. 3: Get Operational Fast

The most common reason for new product/project failures is wasting time getting ready. Between making overlong and expensive business plans, endlessly tinkering with the product, fooling around with focus groups, and second-guessing yourself, it's easy to let a good product/project lose its steam.

Bootstrappers don't mind starting with a copycat idea targeted to a small market. Imitation saves the cost of market research-and the start-up entering a small market is unlikely to face competition from large, established companies.

Secret No. 4: Go for the Quick Cash First

Contrary to what some business books may say, successful entrepreneurs are almost always those who take the fastest route to cash when launching a new venture. They do so because they don't have a choice. (See Secret No. 2.) After the cash starts coming in, they have the time and funds to improve the product, enhance customer service, and refine operations.

Keep in mind that the best-laid plans are often arrogant. You don't know for sure how to best serve the market. When launching a new business or product, figure out how you can get to breakeven fastest. This kind of thinking will force you to pay closer attention to the market. And the market is your master.

Secret No. 5: Forget About the Crack Team; You Are It

Successful entrepreneurs don't hire experts to run their businesses. They figure it out for themselves. When it comes to making your new product/project work, rely on nobody but yourself to make sure it gets done right. It may be stressful and time-consuming to do a lot of extra work, but it will pay in the long run. You will understand the project in an intimate, extremely valuable way.

You should want to learn about how your business works from the bottom up. You should want to know how to buy the products and services you learn. You should want to understand how to hire the best people. And most of all, you should want to understand how to bring in new customers at an acceptable cost. This is the key to every successful start-up.

Having started hundreds of successful small businesses in my career, I am bold enough to think that I understand how the start-up and development process works. I outlined it all in my book Ready, Fire, Aim. In my humble opinion, it is the best book ever written about starting and growing an entrepreneurial business.

In future essays in this series, I will tell you everything I know about building and starting a successful business. That means, as a member of the Wealth Builders Club, you will learn all of the most important things you need to know to avoid costly mistakes and ensure your success as an entrepreneur.

I am going to share with you all of my secrets, such as:

Why you shouldn't quit your job to start your business The four basic types of business, and which one I think you should be in The myth of the natural-born salesman How to come up with tipping-point ideas The handful of numbers you need to know to run your business How to groom protégés to run your business for you so you can live your dreams.

Take Action Now

If you listen to what I tell you and make it a point to keep yourself informed and educated, I have to believe you will come out a big winner.

There are dozens, if not hundreds, of small businesses you could start this year. With the advent of the Internet market, there is virtually nothing you like to do that can't be turned into a business.

My success rate in business is probably 80-90% these days. The main reason is not that I know so much more than I used to (although I do) but that I'm much more reluctant to get into something I don't understand.

Make yourself a promise to devote a good part of your time this year to creating and/or developing a second stream of income. Allocate learning time every week. Develop a three-page business plan. Make at least one new contact every month-and use that contact to start your business.

No matter what type of side business you decide to start, assign to it a specific financial target each year, and reach that target by figuring out how much you have to accomplish every month to get there. Break those monthly targets down to weekly objectives and the weekly objectives down to daily tasks, just as I've detailed in my book, The Pledge, which I've sent you.

But don't feel overwhelmed. I do not want you to quit your job and risk your life savings. I will show you how you can start slowly, from your home, investing only modest sums, working weekends or at night, and build your little business slowly until you can figure out the best products and how to sell them.

Much of this you can get from reading my latest book, The Reluctant Entrepreneur. So read that, as well. But also read all of the essays in this series, too, since they will contain everything I've learned since writing that book. When that's done-and that should take about a year (maybe less)-you'll be ready to hop onto that 25% train.

I call it being a “Chicken Entrepreneur,” and that will be what our next essay is all about.

To your wealth,

Mark

When Mary Kay Ash retired from her job in 1963, she took her life savings, $5,000, and opened her own business. Boy, did it pay off! Mary Kay Cosmetics is now a billion-dollar company.

Or take Hugh Hefner. He financed Playboy with $8,000 in loans from 45 family members, friends, and other investors. Today, he's a mega-millionaire. (His famous mansion alone appraises at more than $45 million.)

Successful entrepreneurs like Ash and Hefner who risked all their money (and sometimes their family's money) to pursue dreams that others considered foolish get lots of press. And with good reason. Their stories are exciting and inspirational. But they are also misleading.

These risk-taking entrepreneurs are actually the exception. Most business builders succeed by taking a far more conservative approach.

In his book The Leap, Rick Smith uses Bill Gates as an example. Contrary to popular belief, Gates didn't drop out of Harvard, says Smith. He took a leave of absence-and relied on his parents' financial support-while he developed his programming skills and made the contacts that led to Microsoft. If it hadn't worked out, he could have gone back to finish school.

Closer to home for you, India has similar stories. You all know the remarkable story of Dhirubhai Ambani's beginnings with a spice business in a 350 sq ft. room. And now he's a multi-billionaire legend.

But do you know about Denise Huffton from Chennai who founded 'Dream Weaver' with her mother. She got the idea for making biodegradable garments while still at college, and today these products are being widely used for hospital patients. She started with Rs. 500 to buy some cloth and a sewing machine, and today has an annual turnover of 30 lacs, and is expanding overseas.

Flipkart started with an investment of 4 lac rupees and within five years grew into a $100 million-revenue operation. Unicel started in agarage and is now worth Rs. 100 Crores.

Google was a side project of two Stanford grad students. Michael Dell started what would become Dell Inc. in a University of Texas dorm room for just $1,000. Apple's first computers were hand-built in a garage and sold to local computer geeks.

Read the biographies of successful people, and you will discover the truth. Most of them started small and took modest, calculated risks. They were not reckless and brave, as the business magazines would have you believe.

The Only Business Start-up Strategy I Recommend

Yes, starting your own business is the fastest and surest way to grow wealthy. But you don't have to-in fact, you shouldn't-risk everything to claim your slice of the entrepreneurial pie.

I have started dozens of multimillion-dollar businesses. But I have never been willing to “bet the farm” on one.

I want all the benefits that come from owning a business. But I refuse to risk my hard-earned money or time on an unproven idea. I want my cake. And I want to eat it too.

That's why I call myself a “chicken entrepreneur.”

A chicken entrepreneur is somebody who keeps his day job while he gets his ideal career going in the evenings and on weekends. He is an entrepreneur because he is taking the initiative to start his own business. He is chicken because he's not willing to quit his job and lose the income.

I have done my best to promote this concept in all of the business and self-help books I have written, including my most recent book, The Reluctant Entrepreneur. My primary point has always been “You don't have to be a wild and crazy risk taker when starting a business.”

Let me tell you about “Alan Silver.” (I profiled him in my book Seven Years to Seven Figures.) Alan has a multimillion-dollar health supplement business. He does what he wants when he wants. He spends much of the winter skiing from his vacation home in Park City, Utah. And when he's back home in Florida, you can often find him on the golf course after doing a couple of hours of work in the morning.

He started as a chicken entrepreneur.

A friend of his, a newsletter publisher, was starting a publication on natural health. One day he mentioned to Alan, quite casually, that he was looking for someone to sell vitamins to his subscribers.

Alan, who had been selling office supplies for 15 years, stepped up. With his friend's help and mentorship, he started his own company with a very small initial investment. Mostly, he invested his time and energy.

The going was rough at the beginning. He didn't know anything about marketing, supplements, or the health industry. But he was willing to learn. Keeping his sales job while working on the new business meant 10-hour days. But it was worth it.

Within six months, this side business had brought in more than $250,000 in sales. Alan reinvested most of the profits back into the business at first. But soon he was making enough to quit selling office supplies. And within a few years, he was bringing in $10 million annually.

And Alan isn't the only one. These are just some of the people I've personally mentored:

CF built her specialized physical-therapy business from zero to $90,000 in 15 months.

JJF's financial teaching program for children is paying him close to $100,000 per year after less than three years.

WC made $250,000 in less than 18 months-on top of his regular salary-by running a mail- order business I helped him with.

PR built his health-product business to more than $20 million in six years (and became a multimillionaire doing so).

KY's business pays her a very nice salary-plus, she shares $500,000 in profits from a career- counseling program that's less than 10 years old.

It's Definitely Worth a Small Investment of Money and a Large Investment of Time

Having your own business is not the only way to get rich, but it is-far and away-the way that most people do it. Statistically speaking, it is your most likely road to success. It also gives you a chance to eventually become super-rich-to join the $50-million-plus club.

Maybe you think that a small business built from your kitchen table won't amount to much. You'd be wrong. For example, I helped friends start American Writers and Artists Inc. (AWAI) and Early to Rise-now both multimillion-dollar publishing businesses-with less than $10,000 each.

Every business, from your local landscaper to General Electric, started with that first sale.

With each passing year, your business will grow-and that will give you greater cash flow and the potential for a bigger payout when you're ready to retire.

In two or three years, your side business should be big enough to hire you as the CEO. Then, and only then, can you quit your current job.

Once you become CEO, things should really skyrocket. You'll be able to devote all your time and energy to this one single enterprise, and the benefits of all of that concentration will pay off.

But maybe you don't want to be a multimillionaire business owner. Maybe you just want to work for yourself. If you are retired or unemployed, you can choose to do the work-and that way, you'll be both the owner of a microbusiness and its only employee. But you could also get a friend or relative to do the work, pay them a good salary, and still have a good second income.

Either way, you earn a good living, enjoy a great deal of independence, and-if you follow the advice we're going to give you-you can even get rich.

Chicken entrepreneurs who start microbusinesses do it because they want to give up the routine of commuting to a 9-5 job and take on the fun of managing and growing their own little service enterprises. They can make decent money working on their own-often as much as they'd earn elsewhere as an employee -and they can choose their own hours, customers, work clothes, etc.

But some of them find that there's also a way to make a microbusiness into a gold mine. Basically, here's how you do it…

After investing a few years as the main employee of your microbusiness, you hire someone to replace you and pay him roughly 50-60% of what you were making. Now, instead of earning, say, 20 lac rupees per year, you'll earn about 10 lacs - but you'll be working only 10 hours per week.

By adding other people to your pool… selling franchises, as it were… you can double, triple, or even quadruple your take-home pay without appreciably increasing your workload.

So you can turn a small amount of money into a lot.

However, it's going to require a large investment of time. You will essentially be working two jobs, dedicating 50 hours or more to your day job, plus another 20 hours or more to your business. But it's worth it.

For one thing, there is tremendous satisfaction in charting your own course and seeing it through. And when you begin to employ other people, and you will, you create wealth not just for yourself but for them, as well.

Are You Ready?

Right now, you're an employee, working for someone else. You have the security of a job with a predictable salary and benefits. But you want more. You want to be an entrepreneur, but you're afraid. You're not a risk taker.

That's what this How to Start a Million-Dollar Business for $25,000 series is all about. I'm going to teach you how to be a chicken entrepreneur-how to get from employee to employer without quitting your job, risking your life savings, and rolling the dice.

You should now be ready to take your first step. In the coming essays, we are going to move at a pretty fast pace. The motivation shouldn't come from me; it needs to be in you for you to take the next step.

It's your vision and action that will start you on the road to entrepreneurship. Are you ready?

Best, Mark

In my first How to Start a Million-Dollar Business essay, I told you that one of the fastest ways to become rich was to start your own business. Then I told you that if you wanted to start a business, you needed to be a “chicken entrepreneur.” What does that mean? It means you need to start small while you hold your current job.

In these first few essays, I'm laying the groundwork that will take your business from a relative success to a true million-dollar business. Beginning with the next few essays, you are going to have to stretch yourself and make some very serious decisions. You'll also need a map to know which way to go.

These are the principles that people have paid me thousands of dollars, and even relocated across the country, to learn. So, please, take them to heart if you are considering starting a business.

Whatever type of business you intend to start-whether it's landscaping or selling landscapes-all businesses fall into one of four categories:

Retail Service Wholesale Manufacturing.

You could call this an oversimplification, but the world of business does fall into these four categories. Each has its own pluses and minuses.

What About Retail?

Retail is usually the first thing most people think of when they think of business. They think of restaurants and supermarkets, bookstores and movie theaters. The retail business often seems fun and easy. For that reason, it is very attractive. But the reality of working in the retail sector is usually very different.

There are several distinguishing features of retail that set it apart from the other business sectors in terms of how you might enjoy (or detest) the work experience:

Generally speaking, the retail business requires you to be in one place for regular periods of time. It does not allow for a great deal of flexibility in terms of hours or travel.

Being in the retail business in a serious way (serious enough to make a good living from it) means tethering yourself to a ball and chain. The ball is the store. The chain is your obligation to keep it running properly.

The most common problem retailers have is finding good people to sell the product and protect their merchandise. Finding, training, and managing retail workers is not something that can be done here and there on a hit-or-miss basis.

The retail business is heavily dependent on location. If the city you are in decides to do six months' worth of roadwork right in front of your store, you may go bankrupt waiting for them to finish. Your customers can find somewhere else to go, but you can't. You're chained to that location.

While this is going on, you still have to pay all of your bills, including rent, utilities, and employee expenses. You can boost sales with good marketing and sales strategies in the retail business (just as you can with any business), but you can't work miracles. The lion's share of your success will depend on walk-by traffic.

It's tough to get rich with retail. You can make a living, maybe even a good living, and you can enjoy yourself. But you can't get rich. The only retailers who are rich have thousands of retail operations. But they are not retailers themselves; they are marketers of retail operations. There is a big difference.

So if you (a) don't really like to spend time talking to people, (b) like to travel a lot, and © want to get super- rich, retail is probably a bad choice.

The Service Industry

The service industry, too, is something that quickly comes to mind when we think about business. Maybe you can start a call center. Or maybe you can hire a bunch of electricians and have them work for you.

How much you can make depends on what service you provide. But the services that seem the most fun or glamorous usually pay the least. Why? Because of supply and demand. Plenty of bright people vying for a limited number of good positions.

Service businesses include everything from blue-collar hole digging… to middle-level technical work… to white-collar executive work… and, finally, the professions.

Yes, accountants and lawyers are service providers. So are plastic surgeons, speechwriters, and most entertainers. I include entertainers in this category, because they share the essential characteristic of the service sector: At the end of the day, they are charging for their time.

Ask people who are undecided about a career what kind of work they want to do. You'll often hear “something that involves working with people.”

And that's what is good about the service business. You will, indeed, spend most of your time interacting with people.

Much of that time will be a lot of fun, in which your affability and social skills will come in handy. But some of that time will be stressful. Some of it will be downright disagreeable.

No matter how much of a “people person” you may be, it's hard to enjoy yourself when some rich slob screams at you because he isn't happy with the color of the trampoline your event-planning service provided for his five-year-old's birthday party.

The lower ranks of the service sector are replete with high-stress, low-paying jobs. And the upper echelons don't pay as well as you might think in India. The average docor, for example, makes only about 10 lac rupees, so does the average lawyer.

As you can see, I'm not too hot on service-sector businesses. It seems to me that they offer a layer of fun and/or glamour but deliver lots of stressful hours at relatively modest pay.

Service is a great entry-level business opportunity, because it's an easy industry to get into. If you make up your mind to do a great (not just good) job at a fair or cheaper-than-average rate, meet your deadlines, and keep your promises, you'll find yourself climbing to the top of the ladder in no time flat.

As your business grows, you can gradually increase your fees. If you work hard to find good workers and offer them the chance to develop in their own right, your business will grow. Eventually, you won't be doing any of the actual service work yourself. You'll just develop new client relationships and renew old ones.

Of course, the problem with the service industry goes hand in hand with its main advantage. It's so easy to get into that you will have lots of competition as your business grows. That competition will squeeze your prices, making profits tough to get and salaries low. This is especially true of the glamorous service industries such as travel and anything to do with the media.

The Wholesale Business

Wholesale is a pretty good business, although it takes a while to develop.

[“Wholesale” relates to the sale of goods in large quantities, as for resale by a retailer.]

Today, the opportunity for wholesale is in China and Indonesia. Those countries can make anything made in western countries, at a fraction of the cost.

But getting good, inexpensive products is only the beginning.

The tough part of wholesale is developing a customer list of retailers. And, unfortunately, your customers will eventually figure out that they can probably cut you out and buy directly from the manufacturer.

The secret is to develop unique products that others cannot duplicate. You won't be able to do this right off the bat. But over time, it's the way to go.

Once you've developed your unique product, you'll need to sell it to retailers. This will involve going to trade shows, which can be expensive and time-consuming.

The top trade shows, for example, can cost thousands of rupees to attend. You will spend a lot of time talking with retailers and displaying your product, and you may end up with no cash-just a pile of orders to fill later.

Discouraging as it may seem, this is where you have the potential to make the big money. You could possibly take orders worth tens of thousands of rupees. (Remember, though, that you won't see the cash upfront. You'll receive payment for those orders over a long period of time.)

My Favorite Type of Business

My favorite type of business is what I'm calling “manufacturing.” And in that general category, I include all sorts of things that you would not normally consider. I include, for example, publishing and the selling of natural products, nutritional products, and so on.

Manufacturing, to me, is any industry in which you create the product and sell it directly to the end user.

I love this type of business… It gives you complete control over the entire selling process-from inventing the product to closing the sale and even going back to the customer for more sales.

In this age of the Internet and globalization, manufacturing is a great business to be in. To create your product, you can use anyone the world over. And you can sell to the entire world, too.

So if you don't know what you want to do but want to get wealthy while you figure things out, get into a business like manufacturing.

Action Step: It's time to take some action and decide what type of million-dollar business you will build. As I've said, I favor manufacturing, and I'm going to explain more in future essays.

For now, re-read what I told you about each type of business. Then decide which one you'll pursue. Finally, start making a list of all of your ideas. It's time to take action-and that's exactly what we will talk about in our next essay.

Best, Mark

You're anxious to launch that business you've been thinking about for years. So what should you do first? Here's just a short list of advice I've found in the mainstream business press:

Check with your municipality to find out what permits you will need in order to operate a venture like yours.

Hire a lawyer to set up the legal structure for your business. Have him file all necessary documents with your local and state governments.

Find a great office space and fill it with furniture.

Protect yourself by registering your business name, logo, and slogan.

Print hundreds of business cards and brochures and hand them out at business functions and meetings.

Buy business insurance and “talk to an accountant” to make sure you're not missing anything.

Get a toll-free phone number (to give the impression that your business is much bigger than it really is).

Does that feel right to you?

I hope not.

None of these legal, accounting, and operational issues are critical to your success. Handling all of them perfectly will not get your business off the ground.

By spending time and money on such issues, you delay doing the most important thing: finding out if you can sell your products at a profit.

Every business has two primary objectives: creating desirable products and selling them. Everything else is secondary.

The best way to get a new business started is to figure out how to test the validity of the business idea as quickly and as cheaply as possible. In other words, you have to figure out how to sell your products before your time, money, and patience run out.

I cannot count how many new businesses I've seen fail because the entrepreneur did not understand this.

When you are starting out, don't worry about getting everything perfect. There will be time for that later. Spend 80% of your time and money on testing your idea in the marketplace. For most businesses, there are many ways to do that without spending a fortune.

I talk in depth about this approach in my book Ready, Fire, Aim.

Want to start a business selling diamond-studded collars for kitty cats? Fine. There are two ways to go about it:

You can spend most of your time and money designing and manufacturing a line of such collars-and only then start to think about how you can sell them.

You can make a dozen collars and go down to your local flea market or neighborhood pet shop and see if you can sell them.

Most people start businesses the first way. That's why most businesses fail.

But with the Ready, Fire, Aim approach, you devote 80% of your initial resources to discovering what I call your Optimal Selling Strategy (OSS) -the best way to acquire customers in a manner that creates cash flow.

Cash flow is the lifeblood of a new business. With cash coming in, you will be able to rent an office, buy office furniture, hire a lawyer and an accountant, expand your marketing efforts, and keep coming up with new and better products.

With cash coming in the door every day, you won't have to worry about the problems that always arise in the natural course of business. You will be able to handle them as you go, devoting 20% of your time and money to getting them right.

Ready, Fire, Aim doesn't mean you are willing to be sloppy. Nor does it mean you are willing to sell second-rate products to your customers. On the contrary, Ready, Fire, Aim is the only truly practical way to keep your business growing.

Here, in a nutshell, is what I mean by Ready, Fire, Aim…

Ready: Get your product ready. Make it good enough to sell. Don't worry about making it perfect. There will be time enough for that later.

Fire: Start selling it. Sell it every way you can. Test different offers. Test different ad copy. Test different media. Keep testing until you discover a selling strategy that works-your OSS.

Aim: Expand your customer base by focusing on your OSS. As your customer base grows, develop business procedures to accommodate that growth. Hire the best people you can to manage parts of your business and free up your time to test other products and services that you think your customers will buy.

Testing is a very important part of the Ready, Fire, Aim process.

When we say we have “a great new product idea,” what do we really mean? When I say it, I mean that I have a strong feeling that the product will sell well-that it will be a commercial success.

But the truth is, I have only a hunch about how well that idea will do. Experience has taught me that my hunches are often right… but not always. If I spend too much time and energy on ideas based on conjecture, what happens if my assumptions don't pan out?

What happens is that it leaves me with nothing-no money or materials or energy-to start over again. The essence of entrepreneurship is the ability to try and fail and then try again. You can't do that if you blow your wad the first time you try.

So here's what I do when I think I have a great business idea: I figure out how I can test that idea as quickly and as cheaply as possible.

Once I know that my idea has “legs,” I can roll out a sales program. And once a successful sales program is under way, I can refine and improve the product. The truth is, I cannot perfect a product in isolation. I used to think I could, but experience has taught me the arrogance of that kind of thinking.

To get your products from good to great, you need feedback from your customers. The best customer feedback comes not from surveys or focus groups but from marketing results. You find out what your customers want to buy by selling to them. This keeps you in the Ready, Fire, Aim loop.

If I had to pick one thing that has been most responsible for the success I've had in launching businesses, I'd have to say it was this Ready, Fire, Aim mentality.

It's something I believe in strongly. That's why I wince when I read the kind of “expert” start-up advice I cited at the beginning of this essay.

Action Step: For details on this approach, read my book, Ready, Fire, Aim. To better the chances of having your business succeed, get familiar with this important process.

Best, Mark

How to “Aim” Your New Business

Mark Ford, Founder, Common Sense Publishing Last month, I gave you my ready-fire-aim strategy for starting a new business. I said that for every entrepreneur who fails because of lack of preparation, nine never succeed because of too much of the same.

In my view, the most important thing you can do to ensure your success is to spend 80% of your time, money, and thinking power on marketing in the first stage of your company's development. What you are trying to discover is what I call the “optimum selling strategy”- i.e., the most cost-effective way of bringing in qualified new customers.

The strategy, in short, is this:

Ready: Find out as much as you possibly can about the marketing side of the industry you want to enter. If possible, get a job as an apprentice or intern in marketing.

Fire: Start the business and focus on discovering the optimum selling strategy. Don't worry about anything else until you've done that.

Aim: After you are generating cash flow from sales, you can begin to aim your company. Then, and only then, should you do all of the smaller stuff, such as administrative, accounting, legal, office, and other issues.

But aiming is also about refining the product or service you are selling. One of the side effects of employing a ready-fire-aim strategy is that you will have made your first product without the benefit of exhaustive market studies. That's okay, because most market studies aren't worth the paper they are written on.

The truth is you will never know exactly how your product should look and feel and work until you begin to get feedback from your customers-particularly, from your best customers. Then, and only then, can you make the necessary adjustments, augmentations, and refinements.

This is what happened when we started the Palm Beach Wealth Builders Club. It began when I got a letter from a PBL subscriber who said that, as much as he liked the investment advice in PBL, he didn't have the $20,000 in cash he needed to invest safely in that program. So we created a club for subscribers who were “not yet wealthy.”

The original concept of the club was strong, and club members offered positive feedback from the beginning. But if you've been a member for any length of time, you know how many new programs, services, and reports we've added to it since the beginning.

In other words, we launched the club as soon as we felt “ready,” knowing we were going to be “aiming” it as time passed.

The following essay explains how this concept worked for someone who started a retail business. I enjoyed it. I hope you do too.

Best,

Mark

The Shopkeeper Whose Customers Told Him What Business He Was In By Iris Bell

Editor's Note: Iris Bell is a writer and graphic designer in New York City.

Paco opened his general store on the main street of Brooklyn Heights in New York City without a preconceived idea of what his shop would feature.

When I visited it for the first time in 1967, he was selling everything from socks to toothpaste, to greeting cards. Its name, MiniMax, would work with whatever he decided to sell.

If the socks had sold well, he might have tried bedroom slippers next and could have ended up with a shoe store. If the toothpaste had sold better, MiniMax might have been a drugstore and pharmacy.

But what his customers bought most were the greeting cards. When I first saw his shop, he had a sale to get rid of all the general merchandise. He'd set about expanding the greeting card area and over time tried out everything related to cards he could think of.

He brought in some boxed luxury chocolates. They did well, so soon he gave over a section of his store to them. Then he tried ice cream cakes and regular cakes. Those, too, were a success.

He put out a few decorative candles, and when they sold quickly, he created one of the largest selections of them in the city. He offered some stuffed animals. They sold well, and he added more, from many manufacturers.

Taking Risks in the Search for More Business

This was the MiniMax pattern of changing and growing that continued for decades. Most other shopkeepers would have decided they'd found a formula that worked and stopped experimenting with other kinds of merchandise.

Paco was always trying something new in a portion of his shop. Anything that didn't work made a quiet, quick exit. I can't remember the things that didn't make it. There were many, and they gave Paco the information he needed. He wasn't afraid of those as failures; he was just searching for what his customers wanted.

Paperback books appeared, grew to fill almost a third of the store, and then disappeared in favor of other merchandise.

His shop became the place to visit for invitations, napkins, etc., if you were giving a party. Paco featured every holiday season with special merchandise. For Christmas, he contacted craftspeople in the area and had them make ornaments just for his store. For collectors of ornaments, MiniMax was worth a trip from any place.

Card Shop to Gift Shop

Paco began selling a few gift items, and soon he offered a wide selection. There were items such as candy dishes, clocks, salt and pepper shakers, pen holders, and wine glasses. The shop was small, and he knew there was a limit to the number of items he could display.

A Unique Display Plan

He developed a new type of gift shop display that allowed him to offer hundreds of items yet not look crowded. His method was to put out only one of each item. All of the backup stock was in the basement. Another effect of this was that each item looked special, rather than being one of dozens just like it in a group.

He'd recently come from Cuba and had many younger nieces, nephews, and cousins who'd come here, too. He hired lots of them as clerks.

When a customer wanted a particular item, he or she would tell a clerk, who'd run downstairs and return with the item in a box. The clerk would open the box, inviting the customer to inspect it.

Paco grouped these items in the display area by color… all of the silver and crystal items together… next to the black and white items… next to the red items, etc.

Even though Paco had filled the shop with hundreds of items, they looked elegant in their artistic arrangements. Paco offered far more items than other gift shops, without the shop looking crowded.

Using a Prestigious Name

Paco was selling the top greeting card line, Hallmark. He had a giant sign made for his storefront, featuring both Hallmark and MiniMax. When the Hallmark salesman visited, he told Paco that Hallmark allowed only the few Hallmark- owned shops to use the name on the sign and that he must take down the sign.

MiniMax was a top seller of Hallmark cards, but that didn't give him the right to use the Hallmark name. Paco explained that he was sure featuring the Hallmark name on his sign helped him sell his high volume of cards.

Paco worked out a deal with the Hallmark corporation. Paco could keep the Hallmark name on his sign. In exchange, he'd welcome the groups of card shop owners Hallmark would fly to him from all over the U.S. He'd show them his method of displaying one of each gift item.

To this day, all Hallmark shops display their Christmas ornaments this way. They feature one of each, with the stock of boxed ornaments tucked away.

Ever­Changing Store Layout

The shop layout at MiniMax was always changing, as Paco tried merchandise in different parts of the store, tried out different kinds of shelf systems, removed walls, etc.

More Businesses

When the shop next door became available, he rented it and opened a bakery specializing in birthday cakes and fine desserts. In time, he added a restaurant to the bakery in that space.

Then he turned a storage room in the back of the restaurant into a festive space he rented for both children's and grownups' parties.

Next, he created a glass-enclosed sidewalk cafe with a popular weekend brunch.

He filled the cafe with flourishing hanging plants. And in the back of the restaurant, Paco placed a piano for live entertainment in the evenings.

What would happen next… Would he begin selling potted plants and end up opening a flower shop… Would he add more musical performers and move into offering concerts?

Then Stillness

Something even more unexpected happened… He sold the shop to a cousin. The cousin obviously wanted to play it safe and didn't change a thing from that moment on. MiniMax froze just as Paco left it. There were no new products, no new display counters, no new thinking.

The shop's heart and brain were gone, and of course, the business began to shrink. First, the restaurant and bakery closed. Later, the gift shop shrank, and the cousin sublet some of its space to other retailers selling cell phones and such.

Watching the stillness settle over MiniMax was another way to appreciate the creativity of Paco, to be reminded of how unique MiniMax had been. The customers never again had a chance to “vote” on new products. And now it's gone.

Other Businesses in the MiniMax Model

In the years since watching MiniMax flower, I've enjoyed watching the growth of a few other stores that weren't wedded to being any one type of business. These are two of my favorites.

ABC Carpet in Manhattan had been a carpet store for three generations. The fourth generation was a young woman who enjoyed shopping for unique decorative household items when she vacationed around the world.

Her father suggested that on her next trip, instead of buying one of an item, she buy multiples of it. He gave her a sales table on one of the eight floors of carpets.

I first visited ABC Carpet a few years after that. By then, two whole floors were already selling only the daughter's unique decorative household items… not a carpet in sight.

Slowly, the daughter's merchandise took over the store until today, when only one floor sells carpets. Other parts have been rented to many houseware companies.

The shop has been renamed ABC Carpet & Home. ABC Carpet & Home's main floor once had a gourmet grocery, and at another time, there was a large area selling potted plants, but those are both gone. That's part of the correction that comes with this type of risk.

Now part of the main floor has a stationer, jewelers, women's accessory shops, a bakery, and three restaurants, plus ever-changing shops on the balcony.

ABC Carpet & Home is alive and changing. The daughter married a man recognized as one of the greatest retailers of our time. They divorced, and he has a shop in L.A.

Who'd have expected that an old-line carpet store would become the place to buy freshly made bread?

Eli Zabar's E.A.T. was a gourmet grocery store on Madison at 72nd Street in New York City. Ralph Lauren bought the building, and E.A.T. moved further up Madison, discovering a long-forgotten brick oven in its space. E.A.T.began baking some of the finest breads, then added a restaurant.

When the shop next door became available, Eli Zabar opened a children's gift and toy store there.

Going further uptown, he opened the Vinegar Factory grocery with a restaurant and a splendid florist.

At the west end of that block, he has a bakery, supplying bread to more than 1,000 shops and restaurants. He uses heat from the bakery to grow vegetables and herbs on the roof year-round.

Like MiniMax, all of his shops are continually changing, with different product mixes and different decor. Eli Zabar is giving his customers the chance to “vote” on his tastes in many areas.

Who'd have expected that a shop once known for importing exotic cheeses would now also be the place to buy sweet stuffed animals and children's furniture?

These shops all seem sensible now because they exist, but they follow no historic pattern. Each grew from a series of experiments by a shop owner.

Each shop offered the public a chance to buy from a unique mix of products and got a big “yes” in their cash registers for most of the items. Every visit promises surprises, because no one can predict what they might offer next.

Copyright 2012 Iris Bell

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Editor's Note:

When starting a business due-diligence is essential. That's the aiming process, so you know which direction to head in.

But where many businesses falter is keeping up with diligence after the business is launched.

Our context is changing rapidly, the market is fluid, and technology often becomes outdated before you've even had the chance to 'update your status'.

When I was taking a class on entrepreneurship, a professor at the University of Pennsylvania once told us about a product he developed: an image search technology where big brands paid him big bucks to search the Internet for unauthorized use of their logos, and take legal action.

When Google Image Search was launched, suddenly his product was completely obsolete, because brands could now do what they were paying him to do, for free.

He would have had to shut down overnight. But he did not. Because he had his finger on the pulse, he knew what was going on in the market, and had developed various related services to keep himself valuable and ahead of the curve.

So keep your ear tuned to what's going on around you. If you think 'okay I have a product now, it's fine as it is, let's just try to sell it', your product will stagnate over time.

Whether its greeting cards, cameras (Kodak couldn't keep up with the digital age and now they are out of business) or social media (remember Orkut? Completely wiped out) if you're not moving ahead, then you will fall behind.

You need to keep changing, developing, innovating, to keep pace. The world keeps moving, and you must too.

To your entrepreneurial journey,

Anisa Virji Managing Editor, Wealth Builders Club

We've covered a lot of ground so far in our “How to Start a Million-Dollar Business for $25,000” series. In the first few essays, we discussed the benefits and challenges of entrepreneurship, how to ease into it without too much risk, and the four main types of businesses.

Recently, I told you about my “Ready, Fire, Aim” concept- the importance of getting your business up and running, rather than wasting too much time trying to make everything perfect.

Today's essay is about your business idea and a common mistake many would-be entrepreneurs make.

The Importance of the Idea

It's hard to say which comes first-the desire to be an entrepreneur or the germ of an idea for a business. Obviously, you need both.

The idea can come from anywhere. It can be the result of an experience you faced in the marketplace, or it can be something to do with a hobby or passion you have. And the two sides of the initial decision of what business to get into are this:

First, you need to know a lot about the subject. When I say a lot, I mean you should be able to write a book about it. If not at first, then at least before you start investing in it.

Second-and this is more important than you might think-you need to be interested in it. You are going to be married to this idea. You are going to be sacrificing time and investing resources into it. If the whole concept does not keenly and seriously absorb you, you won't last long. You won't be able to maintain the momentum it takes to go through the process of developing and running a multimillion-dollar business.

But if the idea excites you and you want to know everything you can about it, you'll be ready to dig in and put your time and money into it. You'll enjoy the process and, even more, you'll be gratified when your business serves a need in the market.

Now, let me stop right here and do a little balloon bursting.

If you've been scanning the entrepreneur news for long, you may be on the “do what you love” bandwagon. I'm all for having a passion for what you do, but only to a point. “Doing what you love” can be a big mistake, unless you keep it within certain guidelines.

Let me give you some caveats on deciding what your business will be…

Separating Your Passion From the Reality of the Marketplace

I can't stress this point enough. You might think the world will beat a path to your door to buy your product, especially since there's nothing else like it in the marketplace. You've got visions of selling your wares like hotcakes and watching the money roll in. No one's ever heard of your breakthrough idea, but once they do, they'll have to have it, right?

Not necessarily. If you're filling a true gap in the market, it might be true. But if your product doesn't already exist, there might be a good reason for it… no demand.

You must realize that if there is no demand for your product, you won't have any buyers. Entrepreneurship is not a case of “build it and they will come.” No matter how passionate you are about your idea, the market, not you, decides what sells.

A prime example is the online grocery business that was called Webvan. Owner Louis Borders was already a successful entrepreneur (Borders bookstores), so he was able to attract a lot of startup capital. And because he was so sure of his idea, he spent it all on a distribution system of warehouses and delivery trucks. Then reality set in.

People weren't as quick to change their shopping habits as Borders thought they would be. He had banked on the idea that people would choose convenience over time spent going to the grocery. And that they would pay not only full retail price but also a delivery charge.

That wasn't the case. If Borders had tested the market, he would have found that people like to shop for specials when they go grocery shopping. They also go to the market several times per week, because they often don't plan meals in advance.

One big delivery order at a premium price doesn't meet the customer's need. And then there's the fact that most people like to squeeze their own tomatoes before buying them…

Borders built it, but they didn't come. And with the profit margin in the grocery business being razor thin (he didn't have the power of volume buying on his side), the business tanked. When it closed, 2,000 people lost their jobs.

As you can imagine, Borders has had a hard time living down this spectacular failure. It's easy to say in hindsight that he should have known better. But if you're ever going to learn from someone else's mistakes, this is a good one. It really drives home the point that you need to build your business slowly to minimize risk.

You need to determine exactly what works-and what doesn't-before you blow all your capital. You need to make sure there's a place in the market-not just in your own mind-for your passion.

The Conceit of Outside Knowledge

One of the most common mistakes made when choosing a business venture is thinking you know things you don't.

For instance, you might enjoy dining out. You eat at restaurants several times per week. In fact, you've dined at some of the finest eateries in the world on your travels. It seems only natural that your passion for great dining experiences and all the time you've spent in restaurants would lead to opening a restaurant of your own…

The problem with this thinking is that you are going on “outside knowledge.” Your experience, vast though it may be, has been as a customer, not as a business manager or owner. Your experience feels deep and certain. But it isn't. It's specious. And rather conceited.

I am not immune to this mistake myself. I once partnered in a restaurant because I had the hubris to think that my own dining history qualified me to run one. And a colleague, George, an architectural designer, almost helped me make it worse.

Like me, George thought he knew the restaurant business because he had spent many years frequenting fine dining establishments. When I gave George a tour of my place, he suggested doubling the size of the kitchen. My partners and I were keen on the idea because we also thought the kitchen was too small.

Fortunately, I got a couple of expert opinions. I hired two friends who had been running restaurants for years to do an analysis. Imagine my shock when their report showed that the present kitchen was fully capable of handling three times the traffic we expected to have!

As proof, the report included a diagram of how to better organize the kitchen space. The map showed where every sink, stove, storage unit, and cooking pan should go. It boggled my mind because it was so counterintuitive to me. I'd based my own ideas on kitchens I knew-household kitchens.

But that's not how an industrial kitchen works. A restaurant kitchen equipped to produce 200 meals in three hours is a very different thing. It's not a family space; it's an assembly line. And it needs to be set up like one.

That's a classic example of the conceit of outside knowledge, which is why I am no longer in the restaurant business. Just think of how many people have jumped into business simply because they think they understand something they do not.

Typical businesses that fail due to this mistake include:

Restaurants Travel agencies Vacation tour operations Bed-and-breakfast enterprises Art galleries Gift shops Antique stores Bookstores Coffee shops Sports-related businesses.

If you're tempted to start a business in a field you have never worked in, be aware that much of what you do in the beginning will likely be wrong. Ask yourself if you have the resources-human, capital, and emotional-to push the business forward after you suffer from your mistakes.

Thanks for all of the work you're doing and sharing your knowledge with others. Club member RS.

There's no better foundation than building on what you know. You might be drawn to the rush of something new and exciting, but your chances of success decrease with every step you take away from what you're familiar with.

If you want to be a successful entrepreneur, I say go for it. But do your homework and build on what you know.

Next Steps

To improve your chances of success, I want you to ask yourself the following questions. And be honest. It's better to discover that your business may not be right for you, or the market, earlier, rather than later.

Is my business idea something I truly love? Can I spend 15 hours per day working on it? For the next 20 years?

What demand is my idea meeting in the marketplace? Am I sure someone else hasn't already had this idea? If they have, are they making money at it? If not, why? How will my idea be different from theirs?

What evidence do I have that anyone will actually spend money to buy my product or service? (Remember, just because you think you have a great idea doesn't mean anyone else will.)

Do I actually know the business I'm considering? (As was my case in my story above, just because you eat at nice restaurants doesn't mean you're able to run a nice restaurant.)

I hope you won't rush your answers. Going through this process has helped me every time. I'm certain it will help you too.

Best, Mark

Today, we pick back up with our “How to Start a Million-Dollar Business for $25,000” series. As you know, starting businesses or investing in people who are starting businesses is the primary reason for my wealth today.

If you want to become wealthy in seven years or less, you have to seriously consider starting a business.

In our last few essays, we covered the four main types of business, the importance of getting your business up and running (rather than trying to get it perfect), and, most recently, a common mistake many first-time entrepreneurs make: choosing a business that you think you know about when you don't.

I made this mistake personally. I partnered in opening a restaurant because I had the hubris to think that my own dining history qualified me to run one.

Today, we're going to keep going in our series, discussing “selling.”

Just about anyone can start a business. But there's an important caveat - and it jumped to mind when I got an email from Lynn, who wants advice on starting a newsletter. She writes:

I've worn many hats, juggled them off and on in my years as mother, grandmother, realtor, concessionaire, and artist retailer/wholesaler. Love, divorce, custody issues, death, inheritance, bankruptcy, accidents, health issues, friendship, betrayal.

I've either been through it or carried someone through it.

What I seem to do best is calm nerves and give good advice, to the point

where it often interferes with other endeavors. I've seriously thought about copywriting/ Internet ideas, but I'm wary of selling things.

It seems that, among family and friends, at least, I am the oracle of issues, the witchy­woman matriarch with the final answer. The trendy term “life coach” isn't quite it. I want to be like an email comforter. A listener of last resort. A sounding board.

It's the only thing I think I'm really quite good at. Could this be a business?

Yes, it could be a business. But not if you are leery of selling.

Business is selling. You can't make money unless you sell something. As Robert Louis Stevenson said, “I find it useful to remember, everyone lives by selling something.” So the first thing Lynn needs to determine is what it is she is going to sell. People will pay for comfort… but not if it's billed as comfort. Think about what therapists do. They charge pretty good money to give people comforting advice.

Yes, there are some who deliver discomfort, but they don't stay in business very long. People pay money to have their therapists make them feel good. If you've ever been in therapy with a good therapist, you already know that.

I've been reading every email coming my way from Wealth Builders Club, especially the ones relating to How to Start a Million­Dollar Business for $25,000. Being a member of the club is a real lifeline! . Club member EF. But if therapists said that they were in the business of comforting their clients, no one would take them seriously. And no one would pay them lots of money for this advice.

Rather than advertising what they are really selling, therapists advertise their methodology (Freudian, behaviorist, etc.). Or they sell the type of “problems” they deal with (addiction, various disorders, etc.).

Since Lynn isn't a trained psychotherapist, she can't honestly advertise those sorts of things. So she will have to come up with her own ideas about why people get themselves into trouble and how they can find solutions.

These ideas will eventually form into a unified whole. This unified whole is what we call an “intellectual franchise.” That's what Lynn needs to develop. And then she needs to test it and see if it sells.

Remember, starting a business and making it a success is not just a matter of having a good idea. The idea has to be one that people will be happy to pay money for.

So if you are in Lynn's position - looking to turn your idea into a profitable business - you have to become okay with selling.

How do you develop the skill of selling when you are “wary” of selling, as Lynn puts it?

The first step is to understand that there are really two kinds of selling:

Pushing people (to buy things they don't want)

Helping people (to select those things they do want to buy).

Pushy salespeople - the telemarketer who calls while you're eating dinner, the broker who calls on the weekend with a “hot deal,” the proverbial used - car salesman - love persuading you to do what you don't want to do.

Such salespeople see selling as a kind of battle. They bully and beat you into submission. It's an ego game, and your acquiescence - even if you really do want the product - indicates submission.

Such salespeople should be tarred and feathered, run out of town, dunked, and pilloried.

They are the same people who delight in not letting you merge in traffic and cutting ahead of you in the supermarket line.

Helpful salespeople are actually more common than their obnoxious cousins.

If you understand that the job of a salesperson is to solve a customer's problem or help him meet a need, selling won't seem so odious to you.

Let's say your prospect's main concern is the future of his marriage. What you would do, in this case, is ask him questions and find out, in as much detail as you can, what his worries are. You're then in a great position to address each concern to explain how your product (in Lynn's case, her advice) can give him effective solutions.

By driving home the benefits of your product that the prospect cares about, you make a strong sales presentation. You are telling him exactly what he wants to hear.

Remember - your prospect wants to be sold. As long as you help him understand how your product can help him achieve his desires or solve his problems, he will be prejudiced in your favor. You lose your prospect when you start talking about other things - product features that he doesn't really care about.

So don't sell him. Help him. Begin by finding out what he wants and needs. And then (if and only if you can really help him), make the strongest, most specific case you can. Convince him that with your help he'll achieve his desires and solve his problems.

Once you've figured out how to sell your product and have gotten over your distaste of selling, you need to start testing… preferably on the Internet. Don't spend a lot of money building your business or idea before you know it works. Keep testing until you find some way to position the product that catches on.

And then, to grow your business, you will have to produce lots of products that tie into your initial business idea. And you'll need to send lots of sales letters to convince people to buy them.

Does this sound like something you can do? If so, you are on your way!

Your Optimum Selling Strategy

You should know by now that selling is not optional for your business; it's essential.

When your business is just an idea, it is impossible to know with certainty what specific selling strategy will work best.

Should you advertise on local radio programs? What about television? Should you buy space ads in local newspapers? How about Internet strategies such as pay-per-click advertising or search engine optimization?

These are questions you may be asking right now.

To determine the optimum selling strategy for your business, you need to answer four questions:

Where are you going to find your customers?

What product will you sell them first?

How much will you charge for it?

How will you convince them to buy it?

Four answers to four questions - very simple, or so it seems. There is a catch, though: You need to answer all four, not just some of them.

Question #1: The first question every entrepreneur must ask is a question of location: “Where will I find my customers?”

My best advice will not stir or inspire you. It may even disappoint you. But it is my best advice: Do what everyone else is doing. I am a big believer in originality, but when it comes to answering most of the basic questions about selling your product (the four questions listed above), the best answer will always be this: Imitate the norm.

So how do you find out where successful companies in your industry are sourcing customers?

It's relatively easy. Start by looking in all the likely places. If you were selling shoes, for example, tour the shoe shops, go to the bookstore and browse all the fashion magazines, and watch style-related shows on TV. Search online to see what websites, articles, or blogs you come across. When you do each, take note of the advertisers.

The best ad locations for your competitors will probably be the best locations for you too.

Question #2: What product do you sell them first?

After figuring out where your customers are, selecting the right product to sell them is next. Starting with a single product in mind is usually a big mistake.

There are five simple steps to creating a product that can launch a business:

Find out what products are currently hot in the market.

Determine if your product idea fits that trend.

If it does, you're set to go. If it doesn't, follow steps 4 and 5.

Come up with me-too versions of several hot products. In essence, a “me-too” version is just a copycat. It's your take, your spin, on the hot product. But it must…

Improve the hot product in some way by adding features or benefits the originals lack.

Question #3: How much should you charge?

For every product, there is an optimal selling price. This is the price at which the selling campaign yields the greatest profits. The price you charge for your product has a major impact on sales - an impact that is third only to the media you use and the appeal of the product itself.

Your instruction is clear and more thorough than anything else I've read. Thank you for sharing your ideas and knowledge. I really enjoy the integrity and passion of your efforts. Keep up the great work. . Club member KK. Choosing the price is fairly easy. You should start-as you did with media and product- by finding out what competitors are doing.

If your competitors' widgets sell for Rs. 500, consider selling yours for 500 too.

Question #4: How will you persuade customers to buy your new product?

This requires more time and subtlety.

Finding out which media will work for you is quick and easy. But the copy platform, the actual sales message, is tougher.

When you are starting your business, you may have a few ideas about how to sell your product-what features and benefits to emphasize and what words to use. But the only way to find the best copy platform is by testing it.

Whenever I work with a client to launch a new product, we test as many new media as we can at two or three different prices. And we use at least two completely different copy platforms.

As always, if you have little experience in crafting winning copy, a financially valuable skill, you can learn how by following the principles set out in the Accelerated Six-Figure program through AWAI. We wrote about copywriting and this great program here.

In short, business is selling. You can't make money unless you sell something. And remember, the idea has to be one that people will be happy to pay money for.

For those of you averse to “selling,” keep my definition of selling in mind - that is, selling is “helping people select things they already want to buy.” It's not harassing people, as telemarketers do. Selling is easier once you adopt the mindset that you're helping people.

After you've accepted that to start a business you're a salesperson, your next step is to determine your optimum selling strategy, as I've outlined above. Do this by answering the four questions I identified. Don't skip any. Give them good thought. Going through this process provides an essential framework for your business.

Take the time to either write or type out your answers. Forcing yourself to do this - rather than just answering them in your mind - requires you to think through your answers more completely. The result is better answers.

Remember, “now” is always the best time to start.

Best, Mark

Entrepreneurship is based on selling. You test the market with a product you think will sell well. If it does, you keep selling. If it doesn't, you try something else.

This approach lent its name to my best-seller: Ready, Fire, Aim. The main idea is that to start and grow a small business you must develop a pragmatic, action-oriented mentality. Rather than spend too much time and money refining theoretical ideas, you develop a prototype quickly and then see if the market will buy it.

As I said in the book, for every business that fails because of poor planning there are a dozen that never get off the ground because of too much planning.

The Ready, Fire, Aim approach obviously doesn't apply to surgical procedures and rocket science. But it will be very useful for 90 percent of the new-business ideas you are likely to come up with.

Want to start a business selling diamond-studded collars for kitty cats? Fine. There are two ways to go about that:

You can spend most of your time and money manufacturing a line of such collars - and only after that is done, start to think about how you can sell it. You can make a single collar and go down to the local flea market or your neighbourhood pet shop and see if you can find a customer for it. Most people start businesses the first way. That's why most businesses fail.

But with the Ready, Fire, Aim approach, you devote 80 percent of your initial resources to discovering an efficient way to sell the product. Once you have done that, you have found the key to successfully market it. With that key in your pocket, you don't have to worry about all the other problems that will arise in the natural course of business. You won't have to worry, because you will be able to create the one thing that can solve almost every business problem: cash flow.

Here, in a nutshell, is what I mean by Ready, Fire, Aim:

Ready: Get your product idea ready. Make it good enough to sell. Don't worry about making it perfect. There will be time enough for that later.

Fire: Start selling it. Sell it every way you can. Test different offers. Test different ad copy. Test different media. Keep testing until you discover something that works. This is your Optimum Selling Strategy (OSS).

Aim: Expand your customer base by focusing on your OSS. As your customer base grows, develop business procedures to accommodate that growth. Hire the best people you can to manage your business. Discover, through “back-end” marketing tests, other products and services that your customers will buy. Use those discoveries to refine and perfect a fast-selling line. As this back-end business flushes cash into your company, invest a good deal of that cash into front-end marketing.

That is the cycle of a successful start-up venture.

Ready, Fire, Aim doesn't mean you are willing to be sloppy. Nor does it mean you are willing to sell second-rate products to your customers.

On the contrary, Ready, Fire, Aim is the only truly practical way to find out what your market really wants from you.

And for a small business, Ready, Fire, Aim is the best way to get from good to great.

Think of it this way:

When we say we have “a great new product idea,” what do we really mean?

When I say that, I mean I have a strong feeling that the product will sell well - that it will be a big, commercial success.

But the truth is, I have only a hunch about how well my idea will do. Experience has taught me that my hunches are often right… but not always. If I spend too much time and energy preparing a business based on a hunch, what happens if the hunch doesn't pan out?

What happens is that I'm left with nothing - no money or materials or energy - to start over again. The essence of entrepreneurship is the ability to try and fail and then try again. You can't do that if you blow your wad the first time you try.

So nowadays when I get the feeling that I have a great idea, I figure out how I can test that idea as quickly and as cheaply as possible.

Once I know the idea has “legs” then I can roll out a sales program. And once a successful sales program is underway, I can refine and improve the product.

The truth is, I can never perfect a product in isolation. I used to think I could, but, once again, experience has taught me the arrogance of that kind of thinking.

To get from good to great, you need the help of superstar employees and, most of all, feedback from your customers. The best customer feedback comes not from surveys or focus groups but from marketing results. Find out what your customers want by selling things to them. This gets you back into the Ready, Fire, Aim loop.

If I had to pick one thing - one characteristic or quality of my work that is most responsible for the success I've had launching businesses - I'd have to say it was this Ready, Fire, Aim approach. It's something I believe in strongly. That's why I wince when I read the start-up advice of so many “experts” who advocate feel-good busywork over selling.

I was hoping that when Ready, Fire, Aim was published we'd see no more foolishness of this type in the business press. But here's just a short list of the misguided (and even ridiculous) advice I've read since my book came out:

Create an instant-impact message that describes the chief benefit of your business. Put it on business cards and brochures, which you should hand out at business functions and meetings. Find a great office space and fill it with furniture. Take a field trip to discover how your product or service will satisfy people's desires. Protect your “great ideas” by registering your business name, logo, and slogan. Create a paper trail - tracking all meeting dates, attendees, and discussions. Consult a lawyer and obtain his or her advice on how to best protect your business and make sure you set up the right legal structure. Check with your municipal authority to make sure “they permit a venture like yours” to work out of the home. Buy business insurance and “talk to an accountant or attorney” to make sure you're not missing anything. Get a toll-free phone number (to give the impression that your business is much bigger than it is). Do these things before you find out whether your product can sell, and your business is practically guaranteed to fail.

Again, here's my advice for starting a business:

As soon as possible, get the product ready to test. Test it as aggressively and creatively as you can. Spend 80 percent of your initial resources discovering the most cost-effective way to make the first sale (your “Optimum Selling Strategy”). Refine and adjust your sales process as market conditions change. At the same time, gradually develop business procedures to service your customers and improve your products according to your customers' buying preferences.