In Chapter One, we explored the Three Most Important Characteristics that you need to have in order to allow yourself to be Successful. In Chapter Two, we explored the Three Most Important Character Traits that you need in order to be able to work for Your Success. In Chapter Three, we worked on identifying Your Dream – the overall picture of how you ideally see enjoying your life.
In Chapter Four we quantified your Dream by identifying your current net cash requirements.
Then you created Your Reward Goals, defined Your Positive Affirmations, and determined Your Net cash requirements for the next 5 years based on your current Net cash requirements plus the additional cost of your Reward Goals.
As you can see, you are inching our way closer developing a course of action to provide you with the income that you need to have in order to live your Dream.
Our next challenge is to determine what you can do to earn the amount of money that you desire.
The FIRST step is to remember this:
Axiom Number Sixteen – THE AMOUNT OF MONEY AVAILABLE TO BE EARNED TRULY IS UNLIMITED!
We all know people who have made a LOT of money in their lifetimes. We’ve seen their stories on TV. We’ve read about them. We may even know some of them personally. Ask yourself this question: Did they earn the money they earned because they are so much SMARTER than you are? Is it the case that they can earn big money, but you can’t?
I’m not talking about Athletes or Movie Stars; I’m talking about people in Business. There’s no doubt that some of them are more talented in a particular field than you or I will ever hope to be. But there is a UNIVERSAL TRUTH that you need to know in your heart. And knowing this truth will make it MUCH EASIER for you to understand and believe that you have the SAME CHANCE AS ANYONE of earning however much money you want to earn!
The Universal Truth I am talking about is simply this:
Axiom Number Seventeen – ALL BUSINESS IS THE SAME
That’s the beauty of Business. And the reason why I can help to guide you toward Your Own Dreams. I’ve been fortunate to be Successful in Business for many, many years. In addition, I’ve had the opportunity to help many others in their business ventures. I’ve been fortunate to be involved in many different types of businesses. It’s been the best education a person can ever receive. You can read books forever, but there is NO substitute for experience.
There is NO Business whose Goal is not to ultimately do ONE THING, and this ONE THING is what I spoke of at the very beginning on My Site Presentation. Do you know what this one thing is?
GENERATE PROFIT!
It doesn’t matter WHAT type of Business. From a Mom-and-Pop Grocery Store, to General Motors, the purpose of the Business is to GENERATE PROFIT.
I recently had a conversation with a friend who was seeking advice regarding starting out in Business. He said to me “Rob, what’s the Secret to being Successful in Business?”
My shortest answer was as simple as his question: Build a Business that will generate THE PROFIT THAT YOU DESIRE and make sure that ALL OF YOUR ACTIONS ARE CONSISTENT WITH YOUR ULTIMATE GOAL, which is to GENERATE THOSE PROFITS.
The importance of this answer should not be lost. We will talk about several different kinds of Businesses, their potential for Profit Generation, cash requirements, etc. But once you have arrived at the decision of what your Business will be, every decision you make, all of the effort you put in, and everything you do, must be consistent with your ultimate goal of generating the proper income.
Before we talk about some specific types of businesses, let’s talk about the basic Key Elements of All Businesses, so you can more clearly appreciate how similar every Business is.
Axiom Number Eighteen–TEN KEY ELEMENTS OF ALL BUSINESSES
Key Element Number One – PROSPECTIVE CUSTOMERS
No matter what kind of Business you run, you will never have a Customer if you don’t first have a Prospect. The number of Prospects that are interested in a particular product or service that you want to offer will in large part determine the amount of Profit that you will generate. There are of course numerous other factors that we will discuss in detail, but first and foremost, there must be Prospects for your Business or you will never have a Customer!
Key Element Number Two – REACHABLE PROSPECTS
Your Prospects must be somewhere where it is COST EFFECTIVE to reach them. Cost effectiveness is dependent on the amount of Profit that you generate from each Sale. But no matter what kind of Business, if it is not cost effective to attract your Prospects, the Business will not generate Profit, which is its purpose!
Key Element Number Three – SALES CONVERSION RATIO
Once a Prospect is attracted, the ratio of the conversion of that Prospect to become a CUSTOMER is a Critical percentage regardless of the Business. If it takes 100 Prospects to make a Sale, for example, and it costs $1 per Prospect for advertising costs, it cost $100 in advertising costs for every 1 out of 100 Prospects that becomes a paying customer.
If the Profit on the item that the Business is selling is $500, then the $100 “lead cost” is an acceptable cost. If however, the Profit on the item is only $100, then the entire Profit was neutralized by the cost of acquiring the customer, before any overhead or operating expenses. This means that this Business will fail to generate Profit after all expenses, which is obviously the opposite of the desired outcome.
Key Element Number Four – ACCEPTABLE SALES COSTS
Advertising costs + Sales costs = Acquisition costs. Whatever the Sales costs, the total of the Marketing or Advertising costs, plus the total of the Sales costs, must be at an acceptable percentage of the gross Profit. If the Acquisition costs exceed the Generated Profit, the Business will obviously fail.
Key Element Number Five – COST OF GOODS
This is an obvious one, but part of the equation. If the Sales Price is not sufficient to exceed the cost of goods, then obviously the Business will fail.
There are however, four additional considerations in this area: Spiraling costs, spoilage or breakage, employee theft, and correctly identifying the cost of the goods, taking into consideration labor, shipping, and all costs associated with the cost of producing or procuring that product or service.
Key Element Number Six – OPERATIONAL OVERHEAD
Regardless of the type of Business, there are costs associated with the Operation of the Business and the delivery, service, and collection for products or services rendered. The costs must be controlled so that the Operation runs efficiently.
The cost of the Operation Expenses must be such that the cost of acquiring the customer, plus the cost of the goods to fill the customer’s order, plus the Operation Expenses, are less than the amount of Gross Sales so that the Desired Profit is generated.
Key Element Number Seven – BAD DEBTS
There will be a certain amount of money that doesn’t get collected for products or services rendered. There must be an allowance for bad debt in the Operating expenses. As with all expenses, it must be within acceptable parameters.
Key Element Number Eight – ACCURATE RECORDS
The ONLY way any Business can ever know where they stand is to have accurate records and reports for all aspects of the Business. These include Marketing Reports, Sales Reports, Cost of Goods Reports, Reports for All pertinent aspects of the Operation, Accounting Reports, Projections based on earnings, Future Plans, and of Course, both a Solid Marketing Plan, and a Sound Business Plan.
Key Element Number Nine – MARKET ANALYSIS
No matter what the Business, a quarterly analysis of the Market for that Businesses products and or services is critical to keep up with changes in the market place, competition, or other factors. No Business can be expected to operate Independently of the Market Place.
Key Element Number 10 – Expansion, Duplication, Liquidation
Everything that begins, ends. It’s a fact of life here on Earth. And so it is with Businesses. Knowing when to expand, when to duplicate, when to sell out and when to liquidate are all essential in bringing closure to any Business.
As you can see, ALL Businesses must generate a sufficient amount of Gross Profit in relation to its acquisition costs, cost of goods, and operating expenses, such that the Net Profit is equal to or greater than the amount called for in the Business Plan. All Businesses face similar challenges, and it is up to you, the Businessman, to Rise to the Challenges that face you.
BY THE END OF THIS COURSE, YOU WILL BE PREPARED FOR BUSINESS!
Remember this:
Axiom Number Nineteen: A BUSINESSMAN IS A PROBLEM SOLVER.
From the day you open your Business, to the day you sell or liquidate, you are a Problem Solver. Problems will consistently occur. This is the nature of Business. The worst thing a Businessman can do is to be bent out of shape because things are not running smoothly all the time. Here’s another one of my sayings:
“ If it was easy, ANYONE could do it!”
Well, anyone CAN SUCCEED as long as they have ALL of the following:
- A Positive Self-Image
- The Character Traits that are most important,
- Quantifying their Dreams,
- Defining their Goals
- Creating urgency by Dating those Goals,
- Understanding of the nature of Business and
- Understanding what is expected of themselves.
And of course, to realize that they are about to become innovative, clear thinking, confident PROBLEM SOLVERS. It’s like the kiss of death to go into Business expecting no problems. From experience, No problems equal No Business!
When I reviewed much of the information that was available today on the Internet, one of the Major things that was Obviously missing was a detailed discussion of everything that we discussed up until now. Specifically when it comes to Generating Profits, there’s a big difference between just telling you what to do, and EDUCATING you as to what makes a first makes a PERSON Successful, and THEN what makes a BUSINESS Successful.
We have discussed what it takes personally to be SUCCESSFUL, and now we are discussing what it takes for a BUSINESS to be SUCCESSFUL.
Business has existed long before the Internet ever even became a thought. Those who had the right outlook, the traits we discussed, and the guts to forge ahead, became rich beyond their wildest dreams. It doesn’t matter if it’s hundreds of years ago, or hundreds of years in the future. It doesn’t matter what Business it is. And it doesn’t matter if it is an Internet Business or not. The 10 Key Elements will continue to be the same.
A SUCCESSFUL BUSINESS WILL GENERATE PROFIT.
It’s just that simple.
Therefore, before learning the specifics of exactly what to do to build an Internet Business, first and foremost you should understand the concepts of running a Successful Business.
A lot of the books that are available today tell you to do this and that and the other. But without a CLEAR UNDERSTANDING of the NATURE OF BUSINESS, you’re setting yourself up for failure. Why? Because when the going gets tough, without a conversation and focus on everything we discussed up until now, you may very well not have any idea of what to do if its not working the way you expected it to work. You may not know what to do, panic, and quit.
That’s the LAST THING I WANT YOU TO DO! Because when you give up, you’re giving up on YOUR DREAM.
Axiom Number Twenty – YOU ARE ENTITLED TO YOUR DREAM!
And NOBODY is going to take it away from you, INCLUDING YOU!
The Attitude that you need to have by the time you finish this Course and get started with Your Business is that you “OWN” your Business. In other words, you don’t fear it, you’re not worried about it, and you’re not “hoping” its going to work out.
You’re going to be CONFIDENT that you:
- Belong in Business,
- Know what you’re doing,
- Understand what makes Businesses successful,
- Are prepared to make the necessary adjustments and
- Solve the problems that arise to make your business Generate the Desired Profit
So often, people go into Business without having any idea what they are doing, the fail, they decide it’s not for them, and they spend the rest of their lives watching others Succeed and feeling inadequate. That’s NOT going to happen to YOU!
KNOWLEDGE BUILDS CONFIDENCE. With this in mind, let’s take a look at a Business example so we can better understand what makes them work.
Okay, let’s have some fun! See if by the following description, you can guess the TYPE of Business that is described.
First, we need to identify the Potential Customer that has the need for this product or service and determine where and how to best REACH that Potential Customer.
Then we need to decide what our Marketing Plan will be. Will we advertise on the radio, television, newspaper, and/or magazines?
Will we send out mailers, or flyers, or should we send out canvassers or use telemarketing?
Once we get the attention of our Prospect, what next?
Should we send a salesperson out to their place or invite the Prospect to our place? How do we train our sales people?
If additional employees are required, how do we go about hiring them, what benefits do we offer and what are our alternatives?
Once the Prospect becomes a Customer, how do we get paid?
Do we offer financing? Do we take credit cards? How do we protect ourselves against bad debt?
What is the best way of storing, making our product available, and delivering the product to the Customer in an expedient and satisfactory manner?
How do we follow up with this Customer so they know we appreciate their Business?
What type of encouragement do we offer for the Customer to refer his friends to us?
What method of resell do we have to continue to sell related products to this Customer?
What is the best way of tracking our Business in all pertinent areas?
Okay, so now that I have described The Setting up of This Business, my question is:
What type of Business is it that I just described?
Think…
IF YOU GUESSED ANY BUSINESS, CONGRATULATIONS !!!!!!!!
What I described could have been a flower shop, a car lot, a homebuilder, a dating service, or an INTERNET BUSINESS.
THE 10 BASIC PRINCIPLES OF ALL BUSINESSES ARE THE SAME!
The reason why I am making this point SO CLEAR is because there are advantages and disadvantages of every Business. Some have more potential for generating Income, but the offset may be a huge budget to start out with or a lot of employees to maintain the level of sales and service. Some may have less of a potential to generate Income but may be much easier to manage. As we discuss different Business choices, which are the prelude to developing YOUR BUSINESS, its important for you to not think of an Internet Business as anything other than what it is. Simply, a Business.
Now, that’s not to say that an Internet Business doesn’t have its advantages. There are some significant advantages to having an Internet Business, as opposed to a Conventional Business. And we will discuss these. But the ONE THING that needs to be CLEAR is that the Foundation for Your Success, as it specifically relates to this Chapter, is for you to have an understanding of the Key Elements of Business. Having an understanding that these Ten Key Elements apply to an Internet Business just as they apply to ANY OTHER BUSINESS, whether it be 100 years ago or 100 years from now, is critical information that is a vital part of Your Success.
Once you understand the Tools that are required, how to set up YOUR BUSINESS, and how to apply the KEY ELEMENTS to your Business, you will be well on YOUR WAY TO SUCCESS!
CHAPTER FIVE REVIEW:
In this Chapter we learned Three Important Axioms:
Axiom Number Sixteen – THE AMOUNT OF MONEY AVAILABLE TO BE EARNED TRULY IS UNLIMITED!
It takes THREE THINGS to earn however much money you desire. It takes SELF-CONFIDENCE. It takes KNOWLEDGE. And it takes RELENTLESS PURSUIT. Once you BELIEVE YOU CAN, You know WHAT TO DO, and You are willing to WORK For it, ABSOLUTELY NOTHING CAN STOP YOU!
Axiom Number Seventeen – ALL BUSINESS IS THE SAME
There is NO Business whose Goal is not to ultimately do ONE THING, and this ONE THING is what I spoke of at the very beginning on My Site Presentation.
And that ONE THING is: TO GENERATE PROFIT!
Axiom Number Eighteen–TEN KEY ELEMENTS OF ALL BUSINESSES
By understanding this concept, and by understanding the Ten Key Elements of Business, you should now have more Confidence as you move forward. The Internet is not an “alien being” that needs to be feared. It is simply a new technology and as such an Excellent Opportunity to build a Business and to generate profits.
In this Chapter we discussed that the amount of money available to be earned
today is UNLIMITED, and that the common thread of ANY BUSINESS is to GENERATE PROFIT.
We also discussed the 10 KEY ELEMENTS OF BUSINESS:
Prospects
You cannot have a customer until you have a Prospect
Reachable Prospects
If your Target Market is not easily reachable, the costs involved in gaining the attention of your potential customer may be cost prohibitive based on how much Profit per Sale you generate.
Sales Conversion Ratio
Once you have the attention of a Prospect, closing the Sale with an acceptable percentage as it relates to your advertising cost is a Critical Element of the Success of your Business.
Sales Costs
The entire Sales Cost needs to be a percentage of the Profit generated by the Sale such as to allow for the Cost of Advertising, the Cost of Goods, and the Cost of the Operating Expenses and still generate the Desired Profit.
Cost of Goods
The Cost of Goods must be monitored to be sure that they remain consistent as they relate to the Sales Price. Sales Price adjustments in this area are common.
Operational Overhead
This includes All of the Expenses of providing delivery, service and collection to the customer as well as all Expenses other than Acquisition Costs and Cost of Goods.
Bad Debts
An allowance needs to be made for products or services rendered for which payment is not received. This amount needs to be monitored and controlled. In general, a bad debt allowance will range anywhere from 2% to 5% of the Gross Sales Amount.
Accurate Records
This includes all reports so every area of Your Business can be monitored, and adjustments made in critical areas to maximize your Profit generation.
Market Analysis
A quarterly review of trends in the Market place is critical to be able to adjust for changes in the market, for competition, for the economy, or for other factors.
Expansion, Duplication and Liquidation
Always keeping in mind GENERATING PROFITS, there may be a time to Expand your Business, or perhaps a time Duplicate Your Efforts. We will talk about the different way to do this in a later Chapter, as well as planning for Your Future, when to liquidate your ownership interest in the business, etc.
We finalized this Chapter with a discussion of the fact that:
KNOWLEDGE BUILDS CONFIDENCE
And that by understanding the Key Elements of Business, you will be much more able to SUCCEED because you will be more prepared and have a better understanding of the tasks before you.