Recession? What recession?
In the fifteen years I’ve been developing web sites and applications I’ve never seen more business than in 2009. It’s been a banner year for my businesses (probably because the recession has created thousands, if not millions of new entrepreneurs with nothing to lose now), and I know I’m not the only one who’s had such a year. But, even at the end of this great year I’ve been refocusing my efforts.
I run a few profitable online companies now, which I’m very proud of. But the great part about working on Perfect Space is that I get to see and help tons of people move their ideas into reality. One of the most entertaining and fulfilling parts of consulting at the early stages of business development is coming up with ways to make money for the company.
Many times the founders of these great projects have been working on their business plans for months or years. But when they come to us for their development, much of the time we’re able to find new revenue streams or methods for them. That’s the fun of having such a varied client base.
I believe in entrepreneurship, obviously, but I continue to see one of two things when I talk to the average corporate worker.
1. The Great Idea Without A Business Model, Attached to a Fragile Ego
I’ve heard the saying that there are a million great ideas. I when it comes to creating a money making business I have to disagree. I’ve seen tons of “great ideas” that make absolutely no money at all. I’ve worked on many of them myself.
The problem isn’t an idea that turns out not to be able to make money. The problem is when there is a fragile ego attached to it.
Listen, if you have a “great idea” and want advice, don’t be hurt when someone tells you it won’t work. If you think they’re wrong, that’s fine. Prove them wrong. But don’t get all bent out of shape and take those comments personally. Take the criticism, ask why the person thinks that way, and use whatever they say as a metric to measure against.
For example, if someone tells you your idea sucks because nobody will buy it, find the people who will. Ask them to buy it. Get them to give you money. End of conversation.
If you can’t do that, then perhaps the person was right. And whether they are right or wrong about your idea doesn’t mean the person doesn’t like you, thinks you’re an idiot, or anything else like that. I’ve had plenty of ideas that sucked. But I had to prove that to myself and not hate my friends and family who didn’t believe in the idea (notice, I didn’t say they didn’t believe in me).
So, first thing’s first. Stop attaching your ideas to your value as a person. You are valuable. Your abilities and the way you think is valuable. How you treat others is valuable (by being genuine and trustworthy). Your ideas on what makes a viable business might not be valuable… yet. But keep trying and you’ll get there. Keep asking questions. Learn, try, make mistakes, learn what made those actions mistakes, and then try again.
Failure leads to success. Success without prior failure is called luck.
2. The Big Idea Syndrome
I’m going to give it to you straight. Please stop looking for the million dollar idea. Going big usually means you need to go to the masses. If you haven’t done that before (since I’m talking to the typical corporate worker, I’m assuming you haven’t yet), stop trying. Unless you’re the corporate marketing director for a major retail Fortune 500, you probably don’t know what the masses want.
What you do know, though, is what pains you on a regular basis. If you stop trying to solve everyone else’s problems, and starting figuring out how to solve your own, you’ll probably come up with an invention, solution or service which would resonate with other people who have the same problem. The obvious next questions is, How many people have this same problem? That’s your market. It’s probably a niche market, but that’s fine. Focus on it.
Here’s the last tidbit to keep you running. Once you’ve found that niche, it’s probably going to depress you to think about how small the total potential is of that market (especially after you consider regional or other limitations). But here’s the thing I want you to think about. It’s not a question of how much can you make. It’s a question of how little.
When you think about it, you know you’re not going to make a fortune in your first day of operations. You know it’ll take time. So, instead of thinking about the potential, think about what it takes to make your idea viable in the real world. How little can you make and still work on the business?
Let’s do the math and see how thinking little eventually gets you to win big.
We’ll assume you have a $20 product or service that nets $10 of profit for each sale. For a retail product, that’s a hefty profit margin. For a service, it’s probably a bit low. So, just go with me here and use this as an average. Now, how many customers do you need per month for it to pay for your minimum number?
$10 profit x 500 customers per month = $5000
$5000 is a decent wage, especially if you’re not in a major metropolitan city and don’t have the high cost of living. But I know some of you are looking at the number of customers you need and thinking it’s a lot. Now you’re thinking realistically.
Now, the rest of the game is figuring out how to get to that magic number. My favorite way to do that right now personally is by creating a valuable website which creates residual income. That way, when you get that first customer, they count for the next month too. Retail or one-time sales are difficult because you have to keep finding new prospects, leads, and customers each month. I’d rather sell the service once and then figure out how to keep them for the next month. That’s why SaaS is such a hot topic right now. Anyone can do it with an investment of about $10-20k and some highly targeted marketing. And, if you change the variables in the equation (higher profit or revenue, or lower minimum monthly needed), the less difficult it becomes.
That’s it folks. There’s really not much more than that. The purpose of this article is to not only motivate you, but get you thinking realistically. Sure, you can shoot high. In fact, I’d encourage you to shoot for $10k/mo as your goal. But starting with something you can do and knowing what your first goal needs to be makes it something you can attain. It’s not impossible.
Now get out there and get something built which makes this world a better place to live in.