10 Dumb Ways to Start a Business

Issue #2341

• WEALTHY: Get in on the super-fast growth of 3 unexpected countries (Andrew Gordon)
• HEALTHY: The power of one cup of berries (Kelley Herring)
• WISE: W. Clement Stone on failure

ALSO IN THIS ISSUE:

• The best way to take a small business from good to great (Michael Masterson)
• The gremlins hiding in your website (David Cross)
• It’s Good to Know… about the dangers of poppy seed bagels
• Add "bugbear" to your vocabulary

The Last Frontier

By Andrew M. Gordon

To make money on stocks, go where the growth is. Right now, the so-called frontier markets are hogging it. For example, the Kuwait exchange is up 335 percent over the past five years. Nairobi is up 190 percent. And Nepal has more than doubled.

These are the smaller, somewhat-less-developed "emerging-market" countries. They’re still climbing. On the other hand, many bigger emerging-market countries have fallen alongside the U.S. markets.

So how to invest? The ETF that invests most in these markets is the SPDR S&P Emerging Middle East & Africa (GAF) fund. You may think its 56 percent exposure to South Africa invalidates its frontier-markets credentials. Not true. South African companies are increasingly spreading their wings into other parts of Africa. GAF is a nice combination of emerging and frontier markets. Until Vietnam and some of the other frontier-market countries get their own dedicated ETFs, GAF is the best way to leverage their super-fast growth.

[Ed. Note: ETR’s Investment Director, Andrew Gordon, is the editor of INCOME, monthly financial advisory services that uncover stocks with remarkable upside and safety.]

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== Highly Recommended ==

Bring Paradise Into Your Living Room (And Profits Too!)

It’s too bad you couldn’t make it to our Profits in Paradise conference, but the good news is that we’ve gotten it all down on professionally-recorded DVDs. When you bring these recordings into your home, you’ll be in the company of a very special group of experts.

First, they are all at the very top of their respective fields… whether it’s real estate, internet business-building, or under-the-radar financial and investing techniques. And second, they’ve all made a lot of money using the exact strategies they are going to teach you in their presentations.

Their “secrets” are actually proven methods based on years of trial and error and testing in the real world.

Here’s just a taste of what you’ll be receiving on these DVDs…

• Howie Jacobson will reveal the secrets behind Google Ad Words - the fastest and easiest way to make money online…
• You’ll learn how to use Marko Rubel’s little-known investment approach to generate over $1 million a year …
• Buck Rizvi and Brock Felt will show you how to tap into a multi-billion dollar market to create a business you can sell for millions … or pass on to your children…
• And much MUCH more.

When you learn these secrets you’ll be well positioned to take your financial future into your own hands. 

Are you ready to see your wealth-building potential soar?

Good! Because we have an enviable offer for you today…

"So many fail because they don’t get started - they don’t go. They don’t overcome inertia. They don’t begin."

W. Clement Stone

10 Dumb Ways to Start a Business (and Waste a Ton of Money at the Same Time)

By Michael Masterson

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 most recent 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:

1. 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.
2. You can make a single collar and go down to the local flea market or your neighborhood 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 in January of this year:

• 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:

1. As soon as possible, get the product ready to test.
2. 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").
3. 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.

[Ed. Note: There’s a TON of foolish business advice floating around the Internet and in bookstores. You can get proven, time-tested recommendations for starting and growing a business (from someone who’s built dozens of businesses himself) in Michael’s New York Times, Wall Street Journal, and Business Week best-seller Ready, Fire, Aim. Buy it here.]

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== Highly Recommended ==

Your gut started telling you something wasn’t right, didn’t it?

You did your part. You tried out some of the Internet programs, maybe even put up a website or two, but it didn’t happen as expected did it?

And yet, you KNOW a few are getting rich off the Internet by pushing a button. You see them in coffee shops with their backs to the wall, smiling at their laptops. I should know, I’m one of them…

I was about to take the rest of the week off as usual, but something compelled me to grab another coffee and write you this letter. They say writing all your frustrations down eases them. Maybe so, but I just want to be able to sleep soundly tonight… Click to continue

Praise for Ready, Fire, Aim: "The book lays out a blueprint on how to become a business genius."

"Michael’s other books were good. Ready, Fire, Aim, though, is his masterpiece. Really great stuff. I read a little more of it every morning, as part of my psychological revving-up routine.

"In this book, Michael generously shares insights on both his successes and failures, as he’s always done. But the really big breakthrough is that he lays out a blueprint on how to become a business genius for the rest of us. And with head-smacking clarity. 

"Based on what I’ve read in the first three chapters alone, I realize that just about everything - everything - I’ve done lately behind the scenes for the Copywriter’s Roundtable is all wrong. A waste of time. Really.

"If you have any interest at all in launching any kind of business, from selling trinkets to becoming a master copywriter to building a billion-dollar corporation, you should read this book." 

John Forde

Direct-mail copywriter

Copywriter’s Roundtable (jackforde.com) 

Make Way for Life Happens

By David Cross

The horse had escaped. And she was chasing the baby goats around the field. And the dogs just ate the bucket of chicken eggs. And I was trying to change a diaper. Then, when I got out into our pasture, I discovered that the water in the sheep’s trough had frozen overnight, and they were bleating and looking forlornly at the ice.

Ten minutes later, everything had calmed down. Crises averted, I returned to my computer and what I had been working on. Just before all hell broke loose, I’d succeeded at the seemingly impossible task of finding a string of connecting flights between the U.S. and three European countries for a business trip I am making this summer.

I was at the "click to book" point.

[click]…

"We are sorry but your session has timed-out due to inactivity."

"Inactivity! What the…?"

Twenty minutes later, I finally managed to get the entire trip booked. That frustrating little incident got me thinking about how websites so often let down their visitors - and what more you can, and should, be doing for your own customers.

Life happens - and it often gets in the way. But how many websites actually take that fact into consideration? For instance, why don’t website forms with a time restriction offer the user the ability to save what they’ve already entered if they’re unexpectedly called away before they’re done?

Or how about another bugbear of mine: Only after you’ve completed a website’s form does it tell you that your phone number should be formatted in a certain way or that your password "must contain a minimum of eight letters and numbers, one of which must be a capital letter." Or that you must not enter your credit card number with any spaces. Er… um… but mine HAS a space in it.

Take a look at your own website right now. Look at it through your customers’ eyes. And see if any of these little gremlins are lurking - places where you or your programmer made an assumption about what your customers should already know. And then vanquish those hidden problems forever.

[Ed. Note: David Cross is Senior Internet Consultant for Agora Inc. There’s a lot you may not know about building an Internet business. David has the answers - and he’ll be sharing them with an exclusive group of business builders at ETR’s 5 Days in July conference. If you have the slightest interest in creating a fully functioning Internet business in one week, sign up for our hotlist right here.]

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Pick a Pint to Reduce Inflammation

By Kelley Herring

A few weeks ago, I told you how fiber can help slash CRP - a marker of inflammation and a predictor of future heart disease and diabetes. Now new research shows that enjoying juicy, delicious strawberries can do the same thing.

In the Women’s Health Study, researchers examined the relationship between eating strawberries and the risk of cardiovascular disease and CRP. They found that women who ate two or more servings of strawberries per week had a 14 percent lower risk of elevated CRP (3 mg/L or higher) than women who ate none.

Remember, strawberries are one of the crops most contaminated by pesticides, so be sure the ones you eat are organic. Just one cup of fresh or frozen organic strawberries - tossed on a salad, whirled into a smoothie, or enjoyed fresh from the carton - will give you those two inflammation-slashing servings.

[Ed. Note: Eating strawberries to improve your health? Can’t get much easier than that! Kelley Herring - founder and CEO of Healing Gourmet (www.healinggourmet.com) - writes about other simple lifestyle choices that can improve your health in ETR’s free natural health e-letter. Learn more here.]

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It’s Good to Know: The Dangers of Poppy Seed Bagels

If your new employer requires you to take a drug test, you’d better not eat any bagels or other baked goods with poppy seeds for breakfast that day. As few as three of the tiny seeds have been known to trigger positive results for opiates (which include heroin and morphine). If you forget, don’t worry. You’ll be able to request an additional test to clear your name.

(Source: Why Do Men Have Nipples?)

== Highly Recommended ==

Give Yourself a Nice Pay Raise — and a Three Day Weekend, Every Weekend

By the end of this week, you can give yourself a pay raise. (How does an extra $20/hr sound?) And schedule a few days’ vacation while you’re at it!

After a month or two, how about another raise… to $2,000 a week.

It’s happening everywhere. Ordinary people — including folks who never finished school — starting their own businesses… and making side incomes in the neighborhood of $40,000… $60,000… even $100,000 or more a year.

They’re living the American Dream. Now it’s time for you to start living it too. Click here to continue…

- Charlie Byrne

Word to the Wise: Bugbear

A "bugbear" (BUG-bare) is a persistent problem or source of annoyance.

Example (as used by David Cross today): "Or how about another bugbear of mine: Only after you’ve completed a website’s form does it tell you that your phone number should be formatted in a certain way or that your password ‘must contain a minimum of eight letters and numbers, one of which must be a capital letter.’"

Copyright ETR, LLC, 2008