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GOLD! 500th post: Some legendary advice and thoughts

snowbank

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Thought I'd share some things that I see/notice people doing when thinking/talking about business ventures that might be helpful advice for some people here...


The first thing I'd have to say is to do something you enjoy. Too many people try to be followers when they see someone else making money at something. They'll try to jump into markets they don't know about and probably don't enjoy because they see others having success there.(I used to do this a lot) Your thought process shouldn't be, this person is successful, how can I make money like them, it should be what I like doing, how can I find a way to turn this idea/passion of mine into a successful business like this person has done with theirs.

Don't go into business trying to sell X amount of Y to try and make $Z. Too many people go in with the mindset of, "if I can just sell 5,000 of this product I should make $250,000." When you ask about the demand/the market their response is, "well, even if they only buy 1,000 I'll still make $50,000." That's thinking backwards about it. You can't go into a business thinking about what it's going to do for you, you need to first go into it thinking about what it's going to do for the potential customers, and if after your due diligence you decide the demand is there for what you have in mind, then you can figure out your strategy for how you can make these sales. It's at this point after you've done that where you can start crunching numbers to look at the potential of profit for your business venture.

When people want to start a business they often don't know where to start. In my opinion there's only two steps you need:

Step 1: How can you create something of value better than what's out there?

Step 2: When you do that, how can you reach your potential audience?

It's really that simple if you think about it. All the details where people want to think about complex business plans and all that is kind of pointless since if you don't have 1 and 2 you don't know if you have a business yet. Worry about the details later, until then it's just noise.

Due diligence: Most of the times newbies aren't doing due diligence. People who've had success did crazy amounts of due diligence. Plenty of things they did due diligence on they didn't pursue, because after the due diligence they figured out that it wasn't worth pursuing. Oftentimes people just sit around wondering if they should do something without looking into it. By looking into it I don't mean asking a couple people if they should do it. I mean, really digging in and finding out whatever you need to know for you to figure out if it's worth your while. Before I took a 'leave of absence' from entrepreneurism to play poker, and plenty of times during my poker playing, I can remember staying up through the entire night many times trying to learn everything I could about a certain business I was interested in. One example of one way back in the day was candy and vending machines. I remember thinking it might be a good way to get cashflow with very little investment since I didn't have much money at the time, and I think within 1-2 days I'd read almost every single post ever made on candy/vending machines, read articles from authority people in the business, been in contact with a couple big vending/candy people who were willing to spend a few minutes talking to a kid about their business, knew what all sorts of different equipment would cost to get going and who to get it from, why I shouldn't buy new, etc... By the end of a couple days I knew I didn't want to be in the business because it was a ton of work for not the type of money I was aiming for. But without the due diligence I wouldn't have known that. People don't hear of the due diligence on things that don't happen, so when someone starts a company and people see them doing well they think, "man, they're lucky." Often businesses don't end up being worth the time to pursue but if you didn't look into them you'd miss the one where you'd get "lucky" since you decided random ideas weren't worth looking into.

Change your thinking: If you do things the way other people do them, you can only be as good as those people. Think outside the box. Stop thinking a-b-c. A crazy idea is way better than thinking along the same lines as everyone else. Think about it. You've got all sorts of people thinking the same way. Then you've got a few people thinking different and willing to be a little 'out there' with their ideas. Where do you think there's more money to be made?

Ideas: Ideas only mean a little. Implementation is where it's at. I didn't understand that for a long time, but it's real important. I don't talk about a lot of my ideas on the forum, but as anyone who talks to me much off the forums can probably say about me is I love coming up with ideas/thinking of doing things in ways people just aren't doing them that should drastically change the end result. When I was younger I'd have a ton of ideas and just never do anything with them because I didn't know what to do. You need the two to work together, and you can improve both by practice. I didn't know how to implement things because I wasn't practicing implementation with my ideas. I always worked on coming up with crazy ideas and I'd put money up against anyone in an "idea contest", but without ever implementing an idea it's basically worthless. The same with people who know an industry and would know how to implement it/have the contacts or whatever to make it happen. They say, "well, if only i had an idea." Chances are you haven't practiced being creative with ideas. Both ideas, and implementation of ideas are 'practiceable' in my opinion. You're not just going to wake up tomorrow and all the sudden be an "idea guy."

Variance: You'll have variance being an entrepreneur; get used to it. If you had a weighted coin and you'd win more than half the times you flipped, and someone offered to flip you for money for as long as you wanted, you'd never stop flipping the coin, and you'd end up being very rich. The thing with being an entrepreneur, some people take one or two "flips" and give up because the first couple didn't go the way they wanted. Go in understanding the variance, and you'll be mentally prepared. The funny thing in the game of entrepreneurism is the more you flip the coin, the more weighted the coin becomes in your favor since you're learning as you play.

A lot of people get gun shy about pulling the trigger on deals that could end up being very profitable for them because of the variance involved. A lot of people don't break it down logically because they become emotionally involved.

Example:

Person A says, "I can invest $20,000 and if it goes well I'll make $100,000, but if it doesn't I'll lose $20,000. $20,000 is a lot."

Person B, who understands equity realizes that they only have to be successful over 20% of the time to have the deal be profitable, and that a lot of times if it doesn't work out like they had hoped, oftentimes they'll return some of their initial investment anyways." So if they did their due diligence and thought they'd be successful 50% of the time, they'd pull the trigger since they know their equity in the deal is at least a $30,000 profit. Person A would have never got that far because they were thinking emotionally and not logically.

If they pull the trigger on this deal and lose, they lose $20,000. If they pull the trigger on the next deal like this, and succeed, they make $100,000. They've made $60,000($30k/deal) because they were willing to "risk" it. If you just break down the numbers it's really not risky, just math.

Start up money/cashflow: You don't need a bunch of start up capital to start a business. Be creative. With the ease of starting something on the internet, "needing" a bunch of money is crazy talk. For the people who want to start cashflow businesses, I don't know how people could ever consider saving up a $30,000 downpayment for 1 house so they can hopefully have $200/month in cashflow, where on the internet with $300 you could create the same $200/month cashflow.(You could also make $20,000/month) I didn't know much about internet businesses and still have lots to learn, but if I could go backwards I'd have started a bunch of internet businesses by now because you can try ideas with barely any risk, and the potential is insane. The potential for a house is maybe you can charge an extra $25 on rent next year. Ceiling is insanely low. Get into things with high ceilings, and realize that a requirement for doing so isn't high start up funds.

Time is money: Don't spend a bunch of energy trying to program a $300 site if you're not a programmer. Outsource it. By the time you programmed it you could have been testing 3 or 4 of your ideas. Ideas and your ability to market your ideas are how you make the money. Why do you buy your furniture from the store? Why didn't you just make it yourself and save money? I know that's an extreme example, because obviously the answer is it'd take you a long time to make it yourself where you could have been doing things that would have been more beneficial for you and someone else can do it better. Start to view your business ventures the same way.


This wasn't in any specific order just wrote things as they came to mind. Just some advice I thought might be helpful.
 

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Runum

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Re: 500th post: advice and thoughts

Good stuff Snowbank. ++++speed
 

kwerner

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Re: 500th post: advice and thoughts

Awesome thread Snowbank!

This is exactly what I needed to hear. Thanks for sharing!

Rep+++

:fastlane:
 

rzach41

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Re: 500th post: advice and thoughts

Bump for a fantastic post by snowbank! :eusa_clap:

rep++
 

MJ DeMarco

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Re: 500th post: advice and thoughts

A double bump ... usually such a long post will have me disagreeing with some parts of it. But not here. All of it well written and a fantastic explanation of Fastlane concepts.

Speed+
 

kwerner

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Re: 500th post: advice and thoughts

Bump. This should be in the "Legendary Threads" under the sub-topic "Getting Started".
 

ZDS

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Re: 500th post: advice and thoughts

Excellent, I was looking for this after you mentioned it the other day. Maybe we can talk about it enough to get another 500 posts out of SnowBank!
 

WestCoast

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Re: 500th post: advice and thoughts

this is an epically good post, I'm sorry I missed it when it was originally put up.
 

Forbes

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Re: 500th post: advice and thoughts

++ speed

This should be made into a sticky.

I specially liked the "change your way of thinking" part. The richest men made their fortunes thinking "crazy" and using unconventional business methods.
 

MJ DeMarco

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Re: 500th post: advice and thoughts

Thread stickied.
 

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MJ DeMarco

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I've changed the thread title to reflect its legendary status.
 

aptohosting

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A double bump ... usually such a long post will have me disagreeing with some parts of it. But not here. All of it well written and a fantastic explanation of Fastlane concepts.

Speed+
You agree with this??

The first thing I'd have to say is to do something you enjoy.
 
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MJ DeMarco

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You agree with this??
Depends -- I interpreted this as enjoyment is in the eye of the beholder and how I look at it, it is a generalized concept. I enjoy controlling my financial destiny which makes the journey enjoyable, even though I might not like every aspect of it. I enjoy not having a boss. I enjoy not having my financial plan put into the power of Hope and Time. I enjoy marketing -- but do I enjoy churning out long hours of copy? Not necessarily. Do I like arguing with Google/Facebook about what ads get approved and which do not? Not really. You have to enjoy the entrepreneurial process (and the pursuit of whatever your goals/dreams are) -- I believe if you truly feel your dream is alive, and reachable, the process becomes enjoyable -- if it isn't, then it will be an uphill battle.
 

911Carrera

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Great post except for one thing. Doesn't doing what you enjoy go against the mindset of this board? I thought it was was do what others need and that it's not about yourself, it's about the consumer. Once you have enough money, you can follow your passion?

What is passion anyway? If your passion is in a certain field and you care about it more than making money then why not just get a job in the field and call it day?
 
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heidiswan

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I like to listen to people that really think outside the box. Lot of good points in this post. Which made me think of this. As I was surfing the web I came across this page and I found an interesting way of looking at financing. This guy has a different perspective of generating passive income from real estate than most people out there. It opened my eyes as to how to generate passive income from real estate. The link takes you straight to the training without having to opt in. Discover the Truth About Wealth - Free Training Videos P.1 - The Wealthy Code
 

David Rees

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Great post except for one thing. Doesn't doing what you enjoy go against the mindset of this board?
Great post lots of good points but i was thinking exactly the same thing as above.
 

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InMotion

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Great post except for one thing. Doesn't doing what you enjoy go against the mindset of this board?
IMHO, I think it is a delicate mesh of the two. Market wants and needs plus what you enjoy enough to take advantage of opportunities there. If your not interested in an opportunity chances are you wont follow through with it or have the drive to see it through. Some people enjoy allocating capital and some people enjoy feeding people; I think its what gets you going plus what the market is seeking, not necessarily in that order.
 
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snowbank

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I wrote this post about 4 years ago- I'm working on a more in depth one for a blog post, and could use feedback for a title. My initial title was: The Only Two Things You Need to Start a Cash Cow

Not sure if that gets what I need across.

Any ideas on a better title?

Also, any questions/more details about anything in the post you'd want expanded on?
 

wade1mil

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2 Simple Steps That Are The Difference Between Being Broke And Being Rich!
The Two Steps Every Successful Entrepreneur Must Follow!
The Two Steps You Must Take To Make It BIG In Business!
You'll Never Succeed Unless You Follow These Two Simple Steps!
You'll Keep Failing Unless You Follow These Two Simple Steps!
 

BeingChewsie

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The Only Two Things You Need to Start a Cash Cow
I thought this was perfect. I would change the two to 2. People still love lists, and they can't help but read them and who doesn't want a cash cow...and since people are results and convenience oriented...only needing 2 things to start cash cow??...sweeet. I'd leave it just the way it is.

Sue
 

^eagle^

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Step 1: How can you create something of value better than what's out there?

Step 2: When you do that, how can you reach your potential audience?


Think you already wrote it snow bank
 

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