Karen, an ETR reader from Santa Monica, wrote to ask what I thought about “the chance of a lifetime” she’d just been offered.
“My next-door-neighbor, who is a very successful businesswoman, has offered to advise me in setting up a consulting business in an area in which I have a lot of experience and knowledge – going green,” writes Karen. “Her advice is consistent with what you say in ETR, such as to focus on finding clients before you do anything else.”
She continues, “I don’t rub shoulders with the type of people who would hire me at the rates my neighbor is suggesting I charge. She has a few people she will talk to for me, but what should I be doing right now to ensure the best chance of success? I am working on writing articles for a blog or e-mail newsletter, designing a business card, and putting together a loose structure for the business. My neighbor has even offered to loan me money to place an ad in the paper, which is a risk that makes me uneasy but that I’m willing to take.
“Can you give me some idea as to what I should focus on first, second, and third? And do you have any suggestions as to the best low-budget way to find customers?
“I am so grateful for any advice you can give me. If it wasn’t for ETR, I don’t think I would have even recognized what a great opportunity this is, so thank you for the newsletter as well!”
It’s funny how many letters I get that ask questions I’ve already answered, in detail, in one of the business books I’ve published.
Maybe it’s not funny. Maybe it’s sad. Why don’t ETR readers read those books before asking their questions?
It can’t be the money. You can buy my books for about 20 bucks apiece online at Amazon or Barnes & Noble. Twenty dollars. What a deal! When I work as a consultant, my minimum fee is a million bucks. Hmm.
In any case, I’m going to answer Karen’s question briefly. The steps I’m going to recommend can work for almost anyone who wants to start a business. But I will politely suggest that if you’re in Karen’s situation, you can get a longer and more detailed answer by reading Ready, Fire, Aim and checking the ETR Archives for past articles on how to start a business.
Step 1. Figure out what you are going to sell.
- Personal consulting?
- E-mail consulting?
- An information product?
- A hard product?
There are advantages and disadvantages involved in each choice. Talk to your consultant friend. Read my book. Read past ETR articles. Make a decision.
Step 2. Figure out how you are going to sell it.
- By Internet?
- By phone?
- By personal sales presentations?
- By direct mail?
Pick the method that gives you the best chance of being successful right away. You don’t have any capital now, so you need cash flow. Each of the above marketing channels has its own unique personality. Select the one that makes most sense for you – again, relying on my book and information you’ll find in past ETR articles. Then learn everything you can about how to market that way.
Step 3. Set up a series of small marketing efforts to test your idea about how you are going to sell your product.
Don’t make any big commitments – either financial or time-wise. Do as many tests as you can in the shortest amount of time possible spending only what you need to spend. Again, you can get lots of good information about test marketing from my book and past ETR articles.
When you find a test that works, roll it out aggressively. You can find out how that is done in my book and past ETR articles.
As far as your neighbor is concerned, you are right to be cautious. Why is she doing this? Is she a nice woman? Or does she have some ulterior motive? If she’s a nice person, does she know how to market? It may be tough for you to say because you are not a marketing expert yourself.
Tell her that you really appreciate her offer and want to take her up on it, but you would like to do everything properly. Tell her that if she helps you, she must be compensated. Ask her exactly how she wants to be compensated. Obviously, you can’t afford to pay her cash. But if she is really trying to help you, she’ll take a percentage of your profits. That’s more than fair.
Suggest a three- to six-month contract that is renewable at your sole discretion. Don’t agree to give your neighbor ownership in anything until after that contract has expired and you have enough experience to decide if you want her to be your partner. If she does come through, she will be worth her weight in gold. When I work on a percentage basis, my consulting fee is four percent of gross revenues. If she’s the great person we are hoping she is, she should be happy with that.
This is, I realize, a very general outline. You will have to read my book and some past ETR articles to fill in the blanks. If you do that and things start moving along, then I suggest you invest in one of ETR’s Internet or direct-mail marketing programs when you get to the point where you need to start marketing. Your neighbor’s offer to help fund you might come into play then. Be sure, when you write up your short-term contract with her, that you are not required to pay her back if the business doesn’t move forward for any reason.
That’s a start. Let us know how you do.[Ed. Note: Deciding to start an Internet business is the hard part. Putting it together is easier than you may think. ETR’s team of Internet marketing experts can help you create a fully functioning online business in just 5 days. Learn more here.] [Ed. Note: Mark Morgan Ford was the creator of Early To Rise. In 2011, Mark retired from ETR and now writes the Palm Beach Letter. His advice, in our opinion, continues to get better and better with every essay, particularly in the controversial ones we have shared today. We encourage you to read everything you can that has been written by Mark.]