The Most Important Wealth-Building Element of Building Your Business
Archives: Daily Issues
Issue #2008
- WEALTHY: Is your business running you? (Larry Fredericks)
- HEALTHY: Lose fat by eating fat? (Dr. Al Sears)
- WISE: Michael Gerber on building a business
ALSO IN THIS ISSUE:
- Get your friends and colleagues to make money for you (Yanik Silver)
- Dessert in a bottle (Michael Masterson)
- It’s Fun to Know… about fueling up in Myanmar
- Add "vertiginous" to your vocabulary
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
"If they don’t fail outright, most businesses fail to fully achieve their potential. That’s because the person who owns the business doesn’t truly know how to build a company that works without him or her… which is the key."
Michael Gerber
The Most Important Wealth-Building Element of Building Your Business
By Larry Fredericks
Reggie T. desperately wanted to start his own business, but his financial obligations made it impossible for him to quit his job and go without a salary until he could grow a business into profitability. And with his demanding hours as a low-level manager in a retail store, he just couldn’t find any time to start a business on the side.
To say that he was frustrated is an understatement.
Then Reggie got laid off from his job. At first, he panicked, but the layoff gave him the perfect opportunity to take the plunge and start his own business.
Reggie’s hobby was martial arts. Not only was he a black belt in Tae Kwon Do, he was a good instructor. And he realized that this gave him what Michael Masterson calls a "financially valuable skill" – a skill that other people will pay for. As a result, he was able to use his expertise and teaching ability to build a small business giving martial arts lessons.
All this happened five years ago – and Reggie thought his future looked great. He was doing something he enjoyed, and he was working for himself instead of someone else.
But here’s the problem: Reggie now finds himself in almost the same predicament he was in as a retail manager. He’s working long, arduous hours, and is barely making a living.
Yes, teaching martial arts is more fun than managing a stock crew and cashiers – but because he hasn’t been able to get ahead financially, Reggie’s business feels like a ball and chain holding him down. He spends so much time keeping it going that he has no time to develop another stream of income.
Here is Reggie’s critical mistake: He built a business that is solely dependent upon him. Without him, the business will fall apart. That’s a big burden for anyone to carry. If you develop this kind of operation, you don’t really have a business. All you’ve done is given yourself a job.
Reggie sold his lessons by focusing on his personal credentials. And his students loved the way he taught. When he brought in an instructor-trainee to ease his workload, attendance dropped. So Reggie decided to bring in an expensive, highly qualified instructor.
At first, attendance remained steady and Reggie thought he’d finally found an answer that would allow him to expand. But then he ran into another problem. His new instructor built a strong loyalty with the students he taught, and decided to start his own school … taking a lot of Reggie’s students with him.
If you want to become wealthy as an entrepreneur, you must build a business that allows other people to fill your shoes. This is true of any business, not only a service business like Reggie’s. In other words, as Michael Masterson said in ETR #1050, "If you want to be able to control your own time – to come to work when you wish, leave when the whim to do so hits you, and take long, worry-free vacations – you must become replaceable."
So… how can you build a business that will work with other people running the show? Here are some ideas:
1. Try to base your business on a service that is not dependent on your personal skills.
It’s a lot easier to grow a business if the nature of the service you’re providing makes it possible for you to hire other people to take care of your customers as well as you could.
For example, if you have a lawn-service business, your customers probably won’t care who mows the lawn so long as it’s done right. But if you’re a life coach or a masseuse, they will likely have a strong personal attachment to you, and it will be difficult to get them to accept an employee instead.
2. Groom your customers to expect that someone else may render the service in the future.
Now, I’m not saying you can’t be successful in a business where personal interaction is a big part of the service. However, you’ll need to plan ahead if you intend to start transferring your workload to an employee down the road.
If, from the beginning, you plant the seed that you have an associate who may sometimes provide your service, it won’t be a surprise when you gradually replace yourself with him. It helps to build customer confidence in your replacement before you make the actual change by talking about how talented he is.
3. Make it difficult for employees to steal your customers.
I’m not a lawyer, so I’m not offering legal advice here. But one way I successfully prevented employees from stealing my customers was to have them sign a "non-
compete" agreement when I hired them.
By keeping the contract reasonable, it was enforceable. For example, a court probably wouldn’t uphold an agreement that your employee could never start his own business in the same field as yours. But if the agreement prevents him from starting his own business within 10 square miles of your location for two years after leaving you, that could work. And two years is long enough for any loyalty your customers may have with him to evaporate.
I was advised by my lawyer that one of the elements a contract must have in order to be enforceable is "consideration." For example, if John signs a contract to clean Debbie’s house every week for 10 years without being paid, that agreement is likely unenforceable because John is not receiving any consideration in return for his work. And consideration doesn’t necessarily have to be monetary. I always worded my agreements in a way that made it clear the employee was making the agreement in exchange for the training he was getting. According to my lawyer, the training I provided qualified as consideration.
If you don’t feel confident writing your own non-compete agreement, I definitely recommend hiring a lawyer to do it. The small amount of money you invest in doing it could eventually save your business.
I like service businesses because they often require little capital and can be started on a part-time basis. But be sure to lay the groundwork so you end up with a real business that can expand (and even be sold)… instead of just another job.
[Ed. Note: Larry Fredericks has owned and operated over half a dozen highly successful small businesses. Learn where to find a "goldmine" of investors for your business - and the step-by-step process to attract them - in his "Street Smart Business" program.]
Weird Science?
How the Hedge Funds Make a Killing
While the markets were getting crushed in 2001-2002 the Prosperity Quest Fund returned more than 1,500% to its investors. The Turnberry Capital Partners Fund has returned well over 5,000%.
People often wonder how the most successful hedge funds make their money. Rest assured… they might use a variety of strategies to maximize return and minimize risk, but they are not magicians and there is no weird science. Keep reading and I will show you how to emulate the best practices of the world’s top hedge funds with a very simple financial tool.
3 Ways to Make Your Product Launch a Mega-Success
By Yanik Silver
If you want a big, monster payday for your new product, you’ve got to create an event. Think about the way such things as the next blockbuster summer movie or the next (and last) Harry Potter book are heralded in advance.
In my last article for ETR, I told you how to set up an "early-bird" list to amp up your customers’ anticipation of your next product. Here are three more of the strategies I used to make over $193,000 in 24 hours on my "Underground Online Seminar" tapes.
Secret #1: Secure Partners’ Participation
I rarely "hit up" my network of friends and business associates to promote my products – so when I asked for help with this promotion, most of them were willing. The idea is to "start digging your well before you are thirsty" – which means building relationships with influential people in your industry. And that includes your competitors. There’s no reason not to consider them to be potential promotion partners.
Secret #2: Spoon-Feed Your Partners
Yes, some of your promotion partners will take the time to write up their own endorsements for your product – but most would rather have a pre-made "fill-in-the-blanks" e-mail or letter to send. So make it turnkey easy for them. That’s why I provided my partners with content in the form of video clips from my seminar that they could release to their subscribers. This got even more people on our early-bird list.
Secret #3: Get People Buying
To make sure the people on our early-bird list were really excited about the release of the tapes, we reminded them about it the day before and also one hour before release time. I even added a special time-limited bonus that expired after 4:00 p.m. on the first day of the launch. That gave people one more incentive to order right away.
The result? $193,000 in 24 hours.
[Ed. Note: Yanik Silver, an expert on creating money-making websites, reveals one of the most profitable "hidden" Internet income opportunities around in the Secrets of Easy Internet Money program. Check out his simple, fill-in-the-blanks sales letter designed to sell any product or service here.]
The Atkins Diet Is a Good Start
By Al Sears, MD
Four years after his death, Dr. Robert Atkins has been proven right yet again. As Jon Herring explained in his recent article "Low-Carb, High-Carb, Low-Fat… Which Is Best?" results from a Stanford University study show that Atkins dieters lost an average of 10 pounds versus just 3.5 pounds for The Zone dieters. What’s more, women on the Atkins diet ended the year with higher HDL (good cholesterol) and lower blood pressure.
In spite of the persecution Atkins faced during his life, he correctly diagnosed the cause of our modern obesity epidemic: Americans are not getting fat because they are consuming too many calories; they are getting fat from eating too many carbs.
But Atkins didn’t get everything right. Though he realized that fat doesn’t make you fat, he didn’t discriminate between "good" fats and "bad" fats. "Bad" fats, like artificial trans-fats, clog your arteries and boost your risk of heart attack. And an excess of omega-6 fats causes inflammation that leads to arthritis, heart disease, and cancer.
"Good" fats, like omega-3s, build up your HDL (good cholesterol) and lower triglycerides (blood fats). And I’ve seen remarkable results in my heart patients after giving them cod liver oil – one of the most reliable sources of omega-3s.
Cod liver oil also plays an important role in fat loss, which Atkins missed. Cod liver oil improves your body’s response to glucose (blood sugar) and heightens your sensitivity to insulin. It’s been used for years to treat diabetes… with promising results.
Controlling your blood sugar and lowering your insulin is the key to losing fat and keeping it off. That’s why I tell my patients to take five grams of cod liver oil daily.
[Ed. Note: Lose fat and keep it off with cod liver oil. Dr. Sears prescribes it so much that he is now importing his own from the cold waters of Norway. It's completely free of mercury. Get yours HERE.]
Living Rich: Starting Your Wine Collection, Part 5 – Fortified and Sweet Wines
By Michael Masterson
Fortified wines are wines that have been supplemented with alcohol, brandy, or another spirit, during or after fermentation, to make them stronger. Kept in barrel or bottle under proper conditions, they can be stored for very long periods – years, and even decades.
Sherry is produced in southern Spain. Port and Madeira are of Portuguese descent. You need one bottle of each – a good Port, a good Sherry, and a good Madeira.
Here are a few specific fortified wines to consider. These recommendations have a Wine Spectator ranking of 85 or above. (Price estimates come from local and online stores and Wine Spectator.)
- Fonseca Porto Bin No. 27 ($20)
- Broadbent 5 Year Madeira ($23)
- Domecq Fino Jerez La Ina ($12)
Most Americans don’t drink sweet white wines, but that’s because most Americans are very provincial about wine. Get a bottle or two of a good Sauterne (since you are only buying a bottle or two, you can splurge) and serve it with the richest food, like foie gras (unbelievable!) or with – or as – dessert.
Both of the following Sauternes have a Wine Spectator ranking of 92 or above. (Price estimates come from local and online stores and Wine Spectator.)
- Chateau La Tour Blanche Sauternes 2003 ($30)
- Chateau d’Arche Sauternes 2003 ($20)
[Ed. Note: For more about starting your own wine collection, read Michael's article "A Start Up Collection for New Wine Collectors."
And learn how you can be part of an exclusive group of 25 to 50 ambitious businesspeople that Michael will be leading through an elite 5-day program that can help you dramatically increase the profitability of your business here.]
It’s Fun to Know: Fueling Up in Myanmar
The rulers of Myanmar (which used to be Burma) decreed in 2005 that every vehicle in the country run on locally sourced compressed natural gas instead of pricey imported petroleum products. The result, according to a report in the Washington Post, has been frequent 10-hour waits for a chance at a 30-minute fueling session at the pump. This has given rise to a new occupation: paid gas line place holder.
The IRS Only Wants One Thing – Everything You Own…
So wouldn’t you like to tell your boss – and all the others…
‘Get Your Stinkin’ Hand Out Of My Wallet!’
If you’re serious about getting out from under the 9 to 5 daily grind, I’d like to introduce you to a man who’s been helping people…
He’ll tell you exactly what to do… so you can tell all of them to shove it!
- Patrick Coffey
Word to the Wise: Vertiginous
"Vertiginous" (ver-TIJ-uh-nus) – from the Latin for "to turn" – describes something that makes you dizzy.
Example (as used by Clive James in a New York Times review of two books about Leni Riefenstahl – Leni, by Steven Bach and Leni Riefenstahl: A Life, by Jurgen Trimborn): "There was no peak, however vertiginous, that she could not sprint to the top of wearing very few clothes."
[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.]
Michael Masterson
Copyright ETR, LLC, 2007
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