How to Get Your Business to the “Next Level”

Issue #2059

WEALTHY: Accelerating your business growth: from zero to $100 million (Michael Masterson)
HEALTHY: 5 time-saving strategies for quicker workouts (Craig Ballantyne)
WISE: Oliver Wendell Holmes on making progress

ALSO IN THIS ISSUE:

Do you suffer from Sophisticated Writer’s Conceit? (Suzanne Richardson)
Keep needy employers and clients at bay (Bob Bly)
It’s Good to Know… about the "Encyclopedia of Life"
Add "moribund" to your vocabulary

== Highly Recommended ==

The Only Three Ways to Grow a Business

Did you know that there are only three ways to grow a business?

1. Increase the number of customers.
2. Increase the average transaction value.
3. Increase the frequency of repurchase.

Find a way to maximize each one, and your business will experience an astonishing rate of growth.

In his "9 Pillars of Business Growth" program, acclaimed consultant Jay Abraham outlines hundreds of proven, frequently unrecognized, and almost totally underutilized ways to grow these three key areas of your business. If you own a business (or would like to), be sure to take a look at Jay’s program.

- Patrick Coffey

"The great thing in the world is not so much where we stand, as in what direction we are moving."

Oliver Wendell Holmes

How to Get Your Business to the "Next Level"

By Michael Masterson

This past April, 30 experienced businesspeople joined me in the Palm Beach Ritz-Carlton Hotel for five days of intensive business-building discussions. Although they had each achieved a great deal, all of their situations were different. Some were beginning new ventures. Many were growing modest-sized companies. And some had well-established $10 million to $25 million enterprises.

To make matters more challenging, their businesses ranged from professional services to publishing to manufacturing… even to restaurants. To make this retreat work for everyone in the time allotted, I had to come up with a format and an agenda that would address their similarities as well as their differences.

I asked myself, "What is it that every entrepreneur and/or businessperson wants – regardless of the industry they’re in?"

The answer was obvious: to get to the next level.

If you look at how businesses develop over time, either from your own experience (as I did) or by looking at industry statistics, you will see that there are basically four stages of growth.

Starting Out – taking your business from an idea to actively generating reasonable cash flow. The parameters I established for this stage: revenues between zero and $1 million.
The Fast-Growth Stage – taking your business from the $1 million level (at which there is usually little or no profit) to a level where it is making about $1 million to $2 million a year in profits. The parameters of this stage: revenues between $1 million and $10 million.
The Adolescent Stage – taking your business over the $10 million threshold to a substantially solid business where profits can be in the $2 million to $5 million range. The parameters of this stage: revenues between $10 million and $25 million.
The Maturation Stage – taking your business from $25 million to $100 million (which I’ve done twice) or to $200 million (which I did two years ago) or even to $300 million (which I expect to see this year).

At the beginning of the retreat, I theorized that every stage of entrepreneurial development has its own unique characteristics, its own challenges, and its own opportunities – if you know how to seize them.

In preparing for that presentation, I mentioned my theory to Rich Schefren, a colleague and a font of good business ideas. Rich agreed wholeheartedly with me, and suggested that I expand my theory to include the fact that each stage also has its own unique pitfalls – unseen potholes that unwary entrepreneurs often stumble into.

Rich was right. And the more I thought about this theory, the more sensible it seemed.

When I looked back on the hundreds of growing businesses I have been involved with, it did seem that they had similar problems and opportunities that depended as much on the stage of growth they were in as anything else.

After charting the growth of six companies I’ve mentored in recent years, I noticed that once one of these businesses hit the $1 million revenue mark, it took, on average, less than six years to hit the next level of $10 million in sales. To get from $10 million to $25 million took another five to 10 years. And getting from $25 million to $100 million and beyond happened gradually over another 10 to 15 years.

But I also discovered something interesting: The path from zero to $1 million in revenues was very different for each of the six companies. It took as little as one year (in ETR’s case) to as many as five.

What was going on? How was it that some of these businesses reached the critical mark so quickly, while others took longer? Was it accidental? Or were there lessons to be learned?

Digging a little deeper, I found that the speed of growth at the "Starting Out" stage was determined by several readily identifiable factors. A big one? How much start-up capital they had.

Looking at Company X (the one that took five years to hit a million in revenues), for example, I could see that its growth was slowed in the beginning because its total initial capitalization was less than $10,000. That sort of budget made it tough to do the most important things new enterprises must do: find a market for their products, acquire and build a customer base, and create more products that they can sell to existing customers.

All of these factors can affect the speed at which your company breaks that $1 million mark:

Finding a Market for Your Products

When entrepreneurs launch a new product, they almost always have great confidence in its desirability. But smart businesspeople know that you should never be the judge of your product’s potential. The trick is to put it in the hands of your customers as quickly as possible and then test their satisfaction scientifically. You do that by asking them to buy the same product again… or to buy an upgraded version of it… or to extend their subscription… or, in some other way, to prove that they are happy with what they paid for.

Acquiring Customers

Once you have a product and a market ready to buy it, you need to concentrate on finding, as quickly as possible, a cost-effective direct-marketing strategy that can attract new customers.

Every business has its own unique customer acquisition strategy,. But when you begin a business on a shoestring – as Company X did – you have to work a little harder to find out what that is. Instead of concentrating on the front end (developing new products to attract new customers), you’ll probably have to start off by making "back-end" deals with other businesses in the same industry to sell your product to their existing customers.

Company X had plenty of good industry contacts, and that helped them find plenty of back-end deals. But the business didn’t take off until it had enough cash flow to become successful at front-end marketing.

Building a Customer Base

To achieve fast growth, start-up businesses should be prepared to reinvest a high percentage of their front-end sales into more front-end marketing. The purpose is to create a sizeable base of first-time buyers. If the base is too small, it makes no sense to invest in the cost of developing and selling back-end products.

In the case of Company X, it took almost three years to hit that critical mass of front-end buyers. They had to get to the point where they could profitably generate at least 3,000 new customers a year before it made sense to invest in new products. It is not a coincidence that they hit that number when their front-end revenues hit a million dollars.

Creating More Products to Sell to Existing Customers

Once you have a good front-end product, a sizeable customer base, and a good direct-marketing strategy in place, you need to work on developing and selling, as quickly as possible, expensive, back-end products to your existing customers.

One More Thing That Can Slow Your Company’s Growth… If You Don’t Know What to Watch Out For

Another important reason that it took Company X five years to hit the million-dollar mark: the product they were selling did not exist when they launched it.

I have made this point in ETR repeatedly over the years: If you want the best chance of success with a new business, don’t begin by selling a product that is the first of its kind in the market. Your "brand-new" may seem amazingly brilliant to you, and you may feel that the moment you get it to the market it will be instantly recognized as the best thing since sliced bread. But the truth is that there is usually a reason your idea isn’t out there already. It’s not because nobody has thought of it before. It is because it’s been thought of and tried, unsuccessfully, over and over again.

Given a choice between being first to the market or second, I would always choose the second spot. In fact, I’d rather take the tenth spot than be the pioneer. You know what they say about pioneers: They have arrows in their backs.

Going to the marketplace with a product that was – or seemed to be – brand-new was a problem for Company X. It took a long time for them to find appropriate customer lists to mail their sales letters to. And were it not for the good contacts the company had in the industry, it’s quite possible that they would have gone out of business before discovering those few but very productive places to advertise.

When I compared Company X’s five-year journey to a million dollars to ETR’s one-year path, the differences stood out immediately.

ETR had unlimited cash, so we did not have to make on-the-come deals with other businesses. Like Company X, we had good industry contacts – but we could go to those contacts with cash and buy ad space. We didn’t have to wait, hat in hand, hoping that a joint-venture slot would open up.
Because ETR had the money to buy ads, we could test various front-end packages and promotions (sales tactics and offers) to discover a few that worked. And when they did work, we had the cash to use them again and again to substantially build our subscriber base.
By finding out, as quickly as possible, what products and promotions we could sell to outside files, ETR was able to hit the magic million-dollar mark in just one year. We risked more than Company X risked by launching this way – but because we were launching established products in an established, familiar market, the risks were modest.

Based on these two examples – ETR and Company X – I looked at the other four start-up businesses I’ve recently been involved with. And I saw some of the same patterns. Those that reached the million-dollar mark in less than three years had four advantages:

The front-end product wasn’t the first of its kind. It was unique, but it was not a pioneer.
The entrepreneurs launching the business were not outsiders. They knew the industry as insiders.
They had the money they needed to create successful front-end marketing campaigns.
They had ready access to their market – i.e., the ability to market freely to customers that the dominant businesses in their industry were currently marketing to.

If your start-up business meets these criteria, you may be able to see substantial, quick growth in a few short years. If your new venture doesn’t meet these criteria, you can still be successful – but, like Company X, your growth will probably be slower.

Still, when you think about it, even five years to $1 million in revenues ain’t bad.

[Ed. Note: How do Michael Masterson's findings about the elements that contribute to a successful business launch compare to your own experience? Let us know by writing to ReaderFeedback@gmail.com with "Next Level" in the subject line.

Learn how to build your own Internet business at ETR's upcoming 5 Days in July Internet Conference. You'll walk in with nothing - no product, no marketing skills, no technical know-how - and you'll walk out with your own online business. If you even think you might be interested in this opportunity, you must sign-up for the Five Days in July Conference today.]

== Highly Recommended ==

An Attorney’s Secret To Building Wealth

Finally an attorney who actually wants to help you for FREE! If taxes continue to keep you from growing your business at the rate you dream of than you can not afford to miss this FREE teleconference. Sign Up NOW!

ETR Insider Report: Copywriting Is Not About How Well You Write

By Suzanne Richardson

I have something to confess to you: I was an English major. And one thing English majors are good at (whether they like to admit it or not) is overwriting. Words are important to us, and we like to show off how well we can use them.

I’m cognizant it may sound supercilious, but allow me to communicate what transpired…

Last week, I e-mailed the draft of a sales letter I was working on to Michael Masterson. He sent back my elaborate, carefully crafted copy, heavily marked with red ink. He’d reduced it to a few sentences. One original sentence, for example, went from "Now you can procure Michael Masterson’s secret methodology for obviating unnecessary business expenditures" to "Get Michael Masterson’s Top 10 business-expense eliminators."

At the top of the first page, heavily underlined, Michael had scrawled the words, "Write to sell, not impress."

For all of my fellow word lovers out there, this is a lesson that bears repeating. In fact, I’m going to tack that five-word phrase right above my computer so I see it every day.

Obscure literary references, complex metaphors, mythological allusions – all of these have their place in the world of writing. But not in your sales copy.

"Don’t try to impress your prospect with your fancy writing style or your intelligence," says Michael in AWAI’s Accelerated Program for Six-Figure Copywriting program, "Your goal is to force him to take action, not to win the Nobel Prize for literature."

That’s a hard pill to swallow, especially for someone who loves to write and loves the power and complexity of the written word. But your customer doesn’t want to be wowed by your writing skills. He wants to know what your product or service can do for him. So keep the literary acrobatics in check, and turn up the heat on your product’s benefits.

[Ed. Note: For more secrets to writing clear, compelling copy, pick up AWAI's Accelerated Program for Six-Figure Copywriting.]

The No. 1 Exercise Excuse

By Craig Ballantyne

The number one reason people give for not exercising is "lack of time." With work, family, and friends, who has 60 extra minutes to hit the gym? We can blame the aerobics fanatics in the 70s and 80s for this marathon-workout mindset. That’s where we got the idea that if we aren’t doing a full hour of exercise, there really isn’t any point to it.

Recent research has shown otherwise. We now know that, with interval training and strength training, you can boost your fitness, burn fat, and build muscle in only minutes per day.

Here are five ways to get more results in less time:

1. Use a warm-up that works you out. Don’t waste 10 minutes walking on the treadmill. Instead, use a total body circuit of bodyweight exercises as a general warm-up, and then move directly into specific warm-up sets for your first two exercises.

2. Use strength-training supersets (two exercises back to back, without rest). Choose two exercises for different muscle groups – preferably completely opposite movements. For example, choose a push-up and a pull-up. That way, one muscle group rests while the other works… and you cut the rest time you need between sets.

3. Pair dumbbell and bodyweight exercises in your supersets. For instance, you could do squats while holding dumbbells. This saves you time at home (you won’t need to change the dumbbell weight between exercises) and in the gym (you won’t need to fight for two sets of dumbbells).

4. Limit isolation exercises (such as bicep curls and tricep press-downs) in favor of multi-muscle exercises (such as squats, pulls, pushes, and rows). In addition, don’t spend more than 10 minutes per week on abdominal exercises. They just aren’t worth your time.

5. Finish your workouts with interval training, not a long aerobic session. Recent research shows that you can lose more weight with interval exercises, and intervals take half as much time as traditional cardio.

[Ed. Note: Craig Ballantyne is an expert consultant for Men's Health magazine. If you're looking to burn fat, build muscle, and quickly step into the body you have always wanted with just three workouts each week, check out Craig's fat-loss system, Turbulence Training for Fat Loss.]

Instant Stress Reducer: Get an Unlisted Phone Number

By Bob Bly

Few things are as intrusive as work-related phone calls received at home. If you are bothered by too many such calls from subordinates or supervisors, consider getting an unlisted number. If company policy dictates that people at work must have access to your home number, you might want to buy an answering machine or let your cellphone go to voicemail after work hours. That way, you can monitor incoming calls without picking up the phone.

[Ed. Note: Master copywriter and best-selling author Bob Bly is the editor of ETR's Direct Marketing Masters Edition, a program to help you start your own successful direct-mail business. Sign up for Bob's e-zine, The Direct Response Letter.]

It’s Good to Know: The "Encyclopedia of Life"

Scientists around the world are collaborating on the "Encyclopedia of Life," an online collection of information about Earth’s 1.8 million species. The encyclopedia, which will have its own website, is expected to fill 300 million pages and will feature text, pictures, maps, videos, sounds, and links to scientific papers and journals. The effort will take about 10 years.

(Source: Associated Press)

== Highly Recommended ==

How I Went from Working in the Sub- Sub-Basement of a Bank in Minneapolis… to Living on a Small Island in Maine in the House of My Dreams!

Money in the bank, the house you’ve always wanted, and the freedom to enjoy it all. That is the “American Dream”!

Can you still achieve it?

Absolutely… The best way left for you to achieve that dream is by starting your own business.

But how do you get started? What do you do?

We hear questions like these daily. So here is what we did. We’ve done all the hard work for you.

We’ve researched hundreds of the best businesses out there and we report on only the best. The ones that make real money and are the easiest to start.

We’ve done all the hard work. All you have to do is connect the dots. Ask yourself what you like to do and how much money you want to make.

It couldn’t be any easier. Click here to read on…

- Patrick Coffey

Word to the Wise: Moribund

Someone or something that’s "moribund" (MOR-uh-bund) – from the Latin for "to die" – is dying or at the point of death.

Example (as used by Kathryn Harrison in The Binding Chair): "Perhaps this explained his solicitousness, his tender careful moist gaze, as if she were moribund."

[Ed. Note: Become a more persuasive writer and speaker ... build your self-confidence and intellect ... increase your attractiveness to others ... just by spending 10 VERY enjoyable minutes a day with ETR's new Words to the Wise CD Library.]

How to Get Your Business to the “Next Level”

The Only Three Ways to Grow a Business

How to Get Your Business to the "Next Level"

An Attorney’s Secret To Building Wealth

ETR Insider Report: Copywriting Is Not About How Well You Write

The No. 1 Exercise Excuse

Instant Stress Reducer: Get an Unlisted Phone Number

It’s Good to Know: The "Encyclopedia of Life"

How I Went from Working in the Sub- Sub-Basement of a Bank in Minneapolis… to Living on a Small Island in Maine in the House of My Dreams!

Word to the Wise: Moribund

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