So according to the talking heads we’re living in something called a “gig economy” I’m not entirely sure what that means but apparently it has something to do with people’s jobs being of a much more temporary nature. Where you work for a contract then once it’s up you move on to the next job, sort of like a contract killer but probably not as fun. Because of this incomes are not nearly as stable as they once were.
Combine this with corporate America becoming more and more dominated by crazy political correctness, petty office politics, and HR ladies (fun right?), all of this has strangely led to people questing if they want to be a wage slave for the rest of their life or perhaps that there is something better out there. Perhaps the grass is in fact greener on the other side.
This has led to a rise in people starting their own businesses or at least having an interesting in starting their own business, even as a side income. Of course this has also led to every teenager in his mamma’s basement renting lambos and becoming the next “give me money and I’ll teach you how to make money” guru (but that’s a topic for another time). Because of this I wanted to write a basic no nonsense guide for anyone looking to start their own business (that’s actually profitable) without breaking the bank and having to sell the kids into slavery.
The 7 Steps To A Profitable Business
First off let me say that these steps didn’t come from me, they came from a man much smarter than I, named Lyman Wood in his book What A Way To Live & Make A Living. Lyman was a very smart entrepreneur who went into business selling lucky rabbit’s feet back during the depression (when people were short on luck) however the United States Postal Service wasn’t exactly keen on Lyman making money from selling people “hocus pocus” and shut down his operation. So Lyman being the intelligent entrepreneur he was instead started selling little books of prayer (with a bonus rabbits foot) for a higher price.
See with the books of prayer Lyman’s operation was now protected by the First Amendment (I guess that was easier then starting a rabbit’s foot’s religion). Lyman eventually went on to start a tiller company and became very rich and lived a very happy life out in the country. And in his book he shares his no nonsense steps to seeing if your business idea is worth a damn and testing it before throwing real money into it.
Here are the 7 steps…
- Find a product that you think you can sell.
- Test it with a small ad. If that works try to reach a larger audience.
- Work in your home until you’re sure the business is succeeding.
- Don’t give up your job.
- Sell for cash in advance, only growing as fast the business generates its own capital.
- Don’t borrow, sell stock, or enter hastily into partnerships.
- Keep complete records, particularly on advertising.
How To Apply The Steps Yourself
As you can see, pretty no-nonsense and prudent steps. Even though these steps were used in the 1930’s and on to build Lyman’s businesses they still apply today. So let’s run through them and how to apply them to current markets and situations. I’m going to have to sort of run through these because I don’t have the space to go into detail here.
So pick a product that you think you can sell. Let me start by saying don’t start by thinking about the things that you’re good at. Yeah I know that’s what every dumb entrepreneurial “find your bliss” book says but it’s B.S., the first thing you need to do is look at what the market desires and then see where your interests and talents fit in. Be realistic, yeah I get with the web pretty much any niche can be somewhat profitable but do you really want to round up the 100 underwater basket weaving enthusiasts in the world to try to make your living off of?
Next test it with an ad. Lyman (and I) run something called a lead generation ad. A lead generation ad is where you run an ad for information about your product or service as opposed to outright selling your product or service. In the long run this is much more effective and gives you a list of prospects you can follow up on and convert into buyers (or who may be converted into buyers by reading the information you send). A free report (that also functions as a sales letter) or a book works great for this.
Three and four are pretty self-explanatory. Don’t quit your day job and don’t run out and start renting office space. Cash in advance simply means use the profit generated from the business to fuel the growth of the business. Don’t take out loans or invest your own money (other than a couple hundred or so to get the first add out and do some testing, just don’t throw in thousands).
I think six is self-explanatory as well. And then with seven what this means is to do something called direct response advertising. I don’t have time to go into the nitty gritty details of that here but will give a brief breakdown as best I can. Simply put this means that you track how your ads are performing and hold them all accountable. For example you put Ad A into Magazine Y and your ROI was 110%, you put Ad B into Magazine Z and your ROI was 40%. And so on and so forth. Meticulously track your ads and what they’re bringing back. Kill the ones that aren’t positive, increase the ones that are.
It’s unlikely you’ll become a millionaire from this. Unless of course you take my ultra secret coaching program for 3 easy payments of 999$ (just kidding). But it will set you on the right path to testing a couple of ideas that you have and seeing if there’s anything there. Done the right way you can end up with an enjoyable business that can supplement or even replace your “real” job. Also it’s always nice having extra financial stability. So there you have it, how to start a profitable business without breaking the bank, just like it says in the title.