As an entrepreneur, you can either pay yourself or your business first. The lines are often blurred. Many business owners work at home, drive around and take calls on the road. How many of those expenses we categorize as personal are actually business expenses? A lot of them.
I see many business owners make mistakes of buying lavish homes and expensive cars. Much of this stuff is often bought on credit. Anything bought on credit is not truly an asset unless it has appreciated in value or you have paid enough down fast enough to where it has some liquidity if sold.
It often makes sense to buy your house on credit if you have a family, but you should not be overzealous. A car that costs $2,000 and one that costs $200,000 both serve the same purpose: to get your from point A to B. The only reason to get a nicer car is if you have some sort of brand to live up to.
For example, many people would not trust a lawyer that pulls up in Saul Goodman’s yellow beater. A lawyer should have a car that represents them well. Still, you don’t need to spent a shit ton of money to gain respect. Your product and service should do the talking.
The Beginning of Your Company & During Hard Times
If at all possible, you should work for free and reinvest back into your company both during hard times and especially at the beginning. The more money you put back into quality employees, contractors, marketing and product development, the bigger your company will be in the long term.
Many new business owners will take money from their company at the first hint of profit and positive cash flow. This is a big mistake. You should reward yourself for your hard work but it needs to be strategic. The more you can feed and diversify your investments, the better things will be when your company hits inevitable downturn. You should always hedge any investment, especially those that aren’t that liquid.
Think about what you really need – food, somewhere to live and good people. I’m not asking you to be a minimalist, instead be strategic with your expenses and how you pay yourself. Its better to take a small side job such as Uber or Lyft than to rob your business of all its cash as soon as it comes in.
I highly recommend you watch the below video “How The Economic Machine Works” and order the book Principles by Ray Dalio.
The more successful you get, the more the people around you want something from you. Some of these people may have good intentions. It is important to be able to properly filter through the “opportunities” these people throw at you. At the end of the day you can only do so much. There is only so much time in a day. You really need to pick your battles.
Be Selective & Not Too Opportunistic
In my early 20s, i was extremely opportunistic and most people will tell you that i still am. There is one thing that changed about me though – Now i am extremely selective and ask the hard questions before i just jump into a new venture or project. I treat my time like a good investor treats their money – Every dollar counts. I am also no longer afraid to leave a venture or kill a part of it, if i believe it is on the wrong track. I am no longer blind to continually re-upping on a bad investment.
As an entrepreneur, it is very easy to find yourself in a predicament where you have too much going on. You start to ask questions like – “How the fuck did this happen? I had one thing, it got a bit of success and now i am involved in 7 things.”
At age 19 i was working 18 hours a day on one single business with a very straightforward product line. All day i would focus on marketing, selling and fulfilling that single product line to the point where we began to dominate the industry and to this day still dominate it. Then after a while me and my partner decided to split that single focused company into 2, because of branding issues. It was the right call but things began to get harder. I felt like a mini Elon Musk. I was dealing with 2 companies now. One company was still fairly simple but the other one was a beast that needed to be tamed and simplified.
More Is Not Always Better
Its very simplistic to think that the more companies you have the better off you will be. Most of us are building these organizations from the ground up, with no investor(s). After all, adding investors to the mix just makes things more of a pain in the ass anyway. Better to have full control.
If you are building anything from the ground up, it takes time. Time is more valuable than money because you can never get it back. Money is a renewable resource and there are plenty of ways to get it back if you lose it.
Before you enter into any new venture you should ask yourself these 2 questions:
- How much time / money will i be spending on this new venture?
- What will be my role in this new venture?
If you already have too much going on, be honest about how much you can contribute to this new venture. Most of the time you must say no. Sometimes you will be in a position to say yes.
Investing with Money vs Investing with Time
There are two ways to invest in a business.. Money and Time.
Investing with Time
An example of investing with time is where you are primarily doing all the heavy lifting of the business. You can not become very successful without an initial extreme investment of time. Even if you have money, you will have time take the time to learn an industry inside and out to delegate the tasks. One does not need to be passionate about something to spend time on it but it REALLY HELPS.
This is why you need to ask yourself those 2 vital questions above. You can not jump from one company you are already spending a lot of time in to another one which requires even more time. Your time ends up getting divided.
Tips for Investing with your Time:
- Know your industry inside and out.
- Know your top competitors inside and out.
- Work as much as you possibly can, the more time you spend working the faster your company will grow.
- Eliminate distractions, only be focusing on this one business.
- When you begin to make a little money, re-invest it back into the business.. not another company.
- As you keep re-investing money back in your business, find ways to delegate tasks by either hiring employees, developing software or hiring contractors. Do not half ass this. Anyone will take your money!
Investing with Money
Investing with money means most tasks will be handled by another partner or contractor. You may have heard of the saying “Success Breeds Success”. Its true. Once you spend the time to get one business successful you can either choose to spend time or money to get the next one successful, depending on how much you have of each. At this point you will know more about business as well, you will be sharper and better prepared.
Tips for Investing with Money:
- Know your industry inside and out
- Know your top competitors inside and out
- Make sure your partners / contractors are 100% time invested in making the company grow. After all, you will be funding it.
- Have a simple dashboard to measure the success of the business. You shouldn’t have to put time into this, should happen automatically.
- You need to know the industry because you may have to jump in and put time in to fix things if it becomes available.
So please, never ever ever forget those two questions i wrote earlier (put them below again).
- How much time /money will i be spending on this new venture?
- What will be my role in this new venture?
If you choose to ignore the simple questions, you might find yourself in a position where your success is leaking uncontrollably to every damn thing you decided to jump in to. Of course, you have to be wary of material possessions too 🙂
Running a company can be incredibly rewarding. Let’s be honest though, it is not some fairy tale. It’s incredibly hard and requires a lot of grind as well as constant out of the box thinking. In order to be successful, you have to want to do things that other people just aren’t willing to do. You have to create simple systems for extremely hard tasks.
In the case of Elon Musk, you have to sell people on the idea of living on Mars (SpaceX) or the vision of not using gas to fuel your automobile (TESLA). For some of us the visions are a little bit easier to sell and the path seems cleaner.
But the path is never clean. The journey of starting something worthwhile isn’t as simple as flipping a switch. It isn’t something you can do in 4 hours a week. You can get results, but you should not expect to create something that will enrich peoples lives by laying on a beach not working 300+ days out of the year.
Uptime and Downtime
When you are not eating glass (starting and running a business you hope to have massive success), you should take at least some downtime. If you have made a run in your business, maybe take a few weeks off. In the summer of 2014 I went to Europe for 6 weeks. It was a rewarding in many different ways that have nothing to do with business. If you aren’t having success, you do not deserve to reward yourself. Humans respond to either pleasure or pain. If you are rewarding yourself before you are successful or have made a good run it can cause massive problems in just about every area of your life. Have you ever trained a dog? Well, we work a lot like that – don’t give yourself any rewards unless you have done the trick!
“Don’t analyze, don’t spreadsheet…”
This will be short and sweet.
I get a natural high when other people around me succeed and take action (except my competition). This is primarily why I am writing this post…for you.
Every day people tell me ideas. Some of them are about business and some of them are personal (about women, relationships, etc). I love hearing what direction people are going in. That’s what I love.
What I hate is when people aren’t taking any action to get there. If you never take any action you will never get any feedback AND if you don’t get any feedback you will never learn which direction is correct. You need to be willing to fall flat on your face and put your ideas on the line. You need to be like the caveman running into the tree over and over again to get an apple down only to find out that your cave buddy can lift you up to get one. No joke.
It’s important to take action, get rejected and feel depressed so you can come back to center. You need that feedback. Without that feedback you will be dependent on someone else taking action for you (your boss, professor, etc). You need to be a Ninja, be smart and take massive action to KILL IT!
What About Reading?
Reading books will not help you unless you are taking the information and crunching it into actions to get results. I read the Primal Blueprint last year but I would have never lost 30 pounds if I hadn’t completely changed my eating habits.
“You Are Your Own Driving Engine and You Are Your Own Break”
Your ideas alone are worthless. Take Action or Fuck Off.
Disclaimer: I am a huge fan of Google and own online businesses that have been helped greatly by Google over the years. This post is only focused on the integration of Google+ within the search results and why I believe it is the wrong direction. Even though I believe it’s the wrong direction I am already actively integrating Google+ into all of my marketing and I recommend you do the same. I have already seen a boost… This post is mostly from a users perspective, not a SEO’s.
There is a key principle in the marketing world: Where the people are, the marketers go. If the people aren’t there than there’s no point to advertise anything. There’s nothing in it for businesses.
On a highway with cars, you’ll see billboards. Where people are searching things online, you’ll see ads. When people are flying, you’ll see magazine or cabin advertisements. When kids eat at McDonald’s, you’ll see toys for movies coming out. When people are watching TV shows, you’ll see commercials. When people are on facebook, you’ll see business fan pages and ads.
Active. Active. Active. – Where people are active, businesses will work their marketing in.
Google+ doesn’t understand this. The slogan for their social network should be: Where the marketers are, the people go. Only that isn’t the way the world works. As a business, you don’t put billboards up and not have a road where people are actively driving. Or partner with a restaurant that hardly get’s any foot traffic.
Google+ is trying to merge a search engine where people search the most personal things and a social network that is kind of, well, lame. Google’s goal isn’t to make the world a more open and connected place like facebook, it’s to generate more personal search results. Well, guess what?
It doesn’t fucking work. At All.
Sorry for the language kids, but let’s be honest. If people aren’t active on Google+ (which they aren’t) than why force businesses to work this into their marketing strategies. It’s backwards. Completely fucking backwards.
First, you need to have a great product or place with active users AND THAN integrate it into the search engines. Google+ did it backwards. They jumped the gun by launching Google Search Plus Your World without even knowing if Google+ would succeed.
That said, I don’t think Google+ is going anywhere. However, I do think if the social network doesn’t succeed Google will lose a lot of their staple on the consumers who use their search engine. Another start up company / search engine will arise in the next 2-4 years and take Google’s cake if Google+ doesn’t catch on. They have integrated Google+ into their whole product, it’s a huge gamble.
I hate the social networks name too, by the way.
It’s amazing how much we take things for granted as business owners, c-level’s, employees and consumers.
Not too long ago in 2008, the TV was telling me the economy was in shambles and my best friend Derrick worked for GM, which was doing some heavy laying off because of their situation. I was worried for my friend at the time but thankfully his job wasn’t effected or disrupted. During this “horrible economic time” I was embarking on a business adventure and moving to from a small town in Michigan to Las Vegas. I didn’t see failure as an option and you might very well say that me and my business partner were delusional. But, being delusional paid off because A Business is a Beautiful Thing.
Consider the circle of events: A business starts. Hires employees. Offers value with goods and services. Accumulates customers and capital. Pays employees so they can use other businesses goods and services.
I think we often forget about that last part. Let’s just say (without getting into politics) that GM would have went completely under – I’m not talking about bankruptcy under, I’m talking about vanished. Poof. Consider how the surrounding restaurant and bar business would completely cripple around each plant. It would be devastating, but it is the natural course of events for businesses that fall behind.
A Healthy Business Opens the Door for New Businesses
Google Search. Apple’s App Store. Let’s focus on these two.
Google search allows you to put your website in front of millions of users relatively inexpensively using a product they have called AdWords. You can also work at the free version of this which is called Search Engine Optimization. These tools and skill sets allow you to put up a website that offers value and get widely recognized faster than you could ever do otherwise. Google’s business creates a place for your business to prosper – it’s win/win if you have a good skill set.
Like Google, Apple allows you to create an Application for the iPhone, iPad and I believe Mac now if i’m not mistaken. You can sell this App and take 70% off the profit. Not bad. If you can provide value through this App you might just find yourself in a different life situation 🙂
These two companies along with many others create an ecosystem that let other businesses and individuals thrive. It’s a beautiful thing if you really look at it.
Have you came across any business that help you or others succeed by providing tools and services to get your name out?
Is it healthy to have 2 or 3 businesses going on at once? While many people disagree, I think it’s not only healthy – it shows you can create assets for yourself. Maybe it’s because I just got done reading an epic Howard Hughes Biography. Hughes, as crazy and nuts as he was, had multiple things going at once and was worth 1.5 billion when he died (today that would be about 5.9 billion with inflation).
These multiple things were not only his passions (and vices) but also what people cared most about. Back then it was flying, producing the first bloody gangster flicks and displaying the sexual side of women in movies. It was an era when communication was not as easy at it is today, yet he somehow dominated with his playboy manner and exciting flight around the world. What can you take away from Hughes?
You need to know what people want, you need to have your two fingers on the pulse of the world. What excites people? What excites you? How can you create a product that will accommodate that?
The next thing I would say is don’t create something that pleases everyone because it’s impossible. Think about that and let it set in. Just as no unique human can please everyone, no unique business can please everyone. So many people (and businesses) go around and think they can please everyone. This is so far from the truth it makes me sick. It’s the kind of stuff MBA graduates come out thinking. It’s like they don’t have any sense of how a business actually works. They don’t know their potential customers are alive because they never have looked, found, listened or heard their pulse.
So today I am challenging you. Listen to society and people. You’ll be surprised at what you find and where the money really goes. After you know this, creating businesses that will be assets to you in the future is not hard. It’s just a matter if you will actually do it or not.
Tip: Learn how to organize your time and outsource things.
Too often advertisers completely miss the mark when trying to develop a 30 or 60 second commercial. People will not respond to a piece of video that conveys no emotion (or very cheesy emotion). Take that car dealership commercial that numbs your mind every time you see it. How about the one with the lawyer who can get you what’s yours, or the local plumbers try-hard ad that you don’t remember until now.
These video advertisements all share one thing in common. They miss the mark. They don’t make people laugh, think, feel something and most importantly from a marketing perspective: Take Action.
Not having a big advertising budget it no excuse for this:
But yet people don’t learn their lesson and keep blowing massive amounts of money into multiple video ads when the truth is one or two powerful ones that convey emotions could really get people to take action. Do you want your business to look like a tool on TV or be a well-respected, good tool that people will pay top dollar to use?
Classic Examples of Emotion in Advertising
As you begin to watch these video ads ask yourself: What sticks out?
These are just 3 examples of many. The reason putting some sort of emotion in your advertisement matters is because no one will remember your ad if you do not. When a consumer needs your goods or services you need them to remember you. Do you have a favorite advertisement? Post it below.