How to waste time and money playing entrepreneur

[oldkevx]

Here I am, two years in "playing" entrepreneur and frankly failing. I want to share exactly how to waste money/time so you can avoid the pitfalls that I succumbed to:

Here's what you should do to guarantee wasting two years and money. I've quantified both elements for you

• Form an Llc before you have paying customers $500 + 4 hours
• Hire someone on elance to conduct industry research: $450 + 2 hours
• Build a killer website: $2,000 + 2 weeks of tuning
• Design and order business cards: $50 + 2 hours
• Order checks $100 + 1 hour
• Order envelopes $75 + 1 hour
• Buy (and laboriously research) tax accounting app $200 + 8 hours
• Open a bank account $0 + 2 hours
• Get an EIN $25 + 1 hour
• Hire an accountant to do taxes $250 + 4 hours
• Get a merchant account $0 + 1 hour
• Get a really cool stamp for depositing checks
• Buy some BS courses $500 + 2 weeks
• Download tons of free content and consume it in the car, at night and any other downtime $0 + 6 months

Total time wasted: Over 6 months
Total money wasted: $4,150

What if I would have invested all of this time and money in doing just one simple thing that actually moved the needle vs. made me feel like I was running a business?

Game over...I just killed the inner wanna be. Time to take action. I hope I saved someone else some time and/or money.

K

 

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[The-J]

I did the same exact shit a few years ago. I thought I was hot shit, I had a business, a business bank account, a business debit card, a LinkedIn profile that said I ran a business...

...no paying customers, and when I tried to sell what I had, nobody wanted it. No market need.

Waste of time, waste of a couple grand. But it was a good lesson to learn for only a couple grand.

Hopefully other people won't have to learn this the hard way.

 

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[MJ DeMarco]

Liked. Stickied. Golded. Rep transferred.

Thank you for sharing your story. It's easy for us to post our triumphs (just look at any FB newsfeed) but very rarely do we hear about the failures and the lessons learned. Thank you.

 

[Michael Raphael]

So true. This happens a lot to people that come to me wanting to start their business. Best advice, actually find a need and test it on a dummy site. Do your own market research & proof of concepts. Literally, you can make $10,000 by spending a couple hundred dollars in Adwords, and a week of your time.

Great post, hope it motivates others to think like a real business and not pretend to act like one!

 

[biophase]

Here's a quick action list of a new business that I started last week. These actions are alot more "potentially money making" than the OP's list.

Someone told me of a need
Ordered sample from China, decent but I want my own design
Hired someone on fiver to design a similar one (charged me $40)
Found a manufacturer in the USA (quoted me $45 to make one)
* Send him the design file
* He makes it and ships it to Amazon FBA for me
* Mo Money Mo Money Mo Money

* - These parts have not happened yet because the $45 quote was too high, so I am redesigning it myself, trying to get it down to $30, will sell on Amazon for $80.

 

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[Nadia]

The crucial bit people miss out on is that UNLESS someone is paying you for your service, you aren't in business. It may just be ONE person but that ONE person believes in your service to pay you and then from there, you slowly start to build.

I don't even have a proper logo and many other things that people deem are important but I have paying clients.

Works for me.

 

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[RazorCut]

I always started businesses on a shoe string (I guess the American term is Boot Strap) and reinvested the money as it came in. I'd only buy the software, business cards, etc. etc. as and when it became necessary preferring to spend the profits on new stock lines that would earn more money rather than on stuff that just added to the overhead.

Buy (and laboriously research) tax accounting app $200 + 8 hours

Why would you do that when you have little to no sales? When I started out everything went into an Excel spreadsheet. These days you don't even need to buy that as Google Sheets is available for free.

In fact you can start a whole business on literally no money at all. Create an eBook, build a WordPress/WooCommerce Web Site. Use PayPal as a payment processor. Pretty much zero overhead. Wow the world really is your oyster.

 

[ddall]

The Lean Start Up - Eric Ries
Ready, Fire, Aim, - Michael Masterson
Two books (among many) that espouse the MVP (minimum viable product) and do/ learn|fail /iterate approach to building a business.

I think most entrepreneurs create inefficient time sucking busy work when they begin their journey, replacing their old unfruitful habits with equally frivolous activities, however these new actions provide a false sense of accomplishment.

"Hey, I have a logo (I spent two minutes contracting out on fiverr). Now I have a REAL business I can show my friends and family." Yet no sales, no product/service, not even an audience or market.

 

[shane8399]

Good post. But heres a few quick adds.

EIN are free??? http://www.irs.gov/Businesses/Small...n-Employer-Identification-Number-(EIN)-Online

Filing an LLC, at least in Wisconsin, only costs you a little over $100, not $500. But most dont use this, or pay for attorneys out of fear. Call the state if you need help! Be nice and they should help.

Do open a business bank account, and keep track of transactions via excel or spreadsheets, until you can afford Quickbooks Online at a measly 35 a month, and then wonder how the hell you ever survived on shitty spread sheets. (it integrates with your bank accounts, categorizes and remembers transactions, and matches deposits with invoices, it also gives you an opportunity to email your customer list (CRM FUNCTION)).

Worry more about customers then the logistical aspects of your business.

An entrepreneur jumps off the cliff and builds the plane on the way down.

 

[The-J]

Wait, you won't get in legal trouble if you start a business without an EIN and LLC?

No because when you form a LLC you set the date you started doing business. So if you started up a business today (July 14th), got some sales, then decided to get your EIN (which you could get anyway, it's like $25) and form your LLC in September, you can say you started business in July.

 

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[Joe Cassandra]

The last two on your list were big time for me. I would scoff at other people wasting time watching tv, reading 50 shades of grey. I'm thinking: "What lame-O's, I'm bettering myself, I'm better than you. I'll be rich and you'll be poor, blah blah." In the end, sure you may end up with a better outlook, marketing, business skills, but net income differentiation is $0.

Going along with your last point on consuming tons of content, I spent years just creating content hoping to "get a book deal" or "sell coaching" or something like that. Fact is, all the people who you think are doing great from it, are probably not near as well off as you think. It's hard to do it that way. Problem I see nowadays is tons of people want to be coaches. Someone like MJ or Jack who've built million dollar businesses I don't have problems if they start a coaching biz [as they've built a biz themselves]. But so many people want to skip the creating a biz first and go right to coaching [I guess because Oprah did it that way, which is a bit of a stretch].

This forum has thrown me for a loop and seeing the opportunities out there as online business was starting to feel slimy for me, but with stuff @biophase , @Ecom man @JasonR and others are posting, it doesn't have to be that way and it's legit and lucrative at the same time.

Love it!

 

[oldkevx]

Thanks everyone! If I save someone else time or money then it was a solid "investment." @MJ DeMarco, thank you for creating this amazing place for us to all share triumphs,challenges and failures. Onward!

 

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[MJ DeMarco]

Yup, one of the most expensive states.

California is worse. I think theirs is $800 and get this, you have to pay it if your non CALI LLC is a member of a CALI LLC.

For example, DeMarco LLC (an Arizona LLC) owns a 1% interest in Company X, a California LLC. Such an arrangement will have the CA Franchise Tax board coming after you for taxes. And it doesn't even matter if you ever visited the state. Imagine never stepping foot in that blasted state and having those tax vultures coming after you, and yes, they're relentless.

 

[oldkevx]

Update:

My business partner and I just acquired a franchise system with eight profitable units in our metro area. The system can be a 500-700 unit system and we can add on two direct/immediate sources of revenue via e-commerce and supplements. It is a fantastic platform business.

My marketing company is getting closer to just serving brands we have control over.

As I look back at this thread and then look around the new office we moved into two months ago, I can't believe how much hard work is starting to pay off.

We are still lean (4.5 employees) and our overhead is low.

If you are still sitting on the sidelines, take action and play the long game.

While I personally have a long path ahead, I'm starting to see the rewards of the 40+ months of effort.

 

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[theag]

I am in business for just under 6 months now and have 2000+ customers.

I still dont have a logo or business cards.

 

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[oldkevx]

This is a fun thread to look back at.

Almost two years ago I had my FTE. I opened a marketing consultancy because it was the quickest way to take back part of my life.

We flailed as generalists for the first year. We listened to the market. We assessed how we could create value for the market and developed two products that have transformed us from an agency into something I can't put a label on.

For those who don't know, I co-founded a global franchise brand. In the haste to make money with the company I started, I didn't think about how valuable and unique my journey had been in the corporate world.

With my company we have filled the gap between the franchise consultants who come in, spout off advice, then leave. We know what needs to be done and we do it for the 2-3 companies we partner with each year.

For the companies we partner with we structure our agreements so that we have a 7-10 year royalty from the new entity they form to franchise or license.

We've helped a financial services company expand from one location to 36 and a health company go from one location to eight.

This weekend I couldn't help but smile at the residual income hitting my Stripe account and email from these efforts.

We are creating our own dividend paying mutual fund of royalty streams by solving an expensive problem for our customers. They are happy to pay us because the systems we built them take their lives and businesses to another level. No one else is offering our methodology and the tech we have built to make the process fun and lucrative for our customers.

The other product we launched this month is unlike anything we have seen in the market as well. 12 companies flocked to it in our first 30 days. I'll share more on it in a year after our hypothesis is fully proven.

I'm wrapping up "Unscripted " tonight and wanted to bounce in and share my gratitude for this forum.

I don't come by often because it has been heads down execution.

Sorry for the brevity, doing this on my phone is suboptimal.




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[oldkevx]

You can change that.

I did.

Don't give up. It's worth it. Life is too short to do anything else.


Sent from my iPhone using Tapatalk

Quick update:

This thread is three years old.

I've grown a lot since starting it. Here's a quick breakdown of wins and losses:

Wins
1) My company is a little over two years old and it is now starting to create residual income from multiple sources.

These sources were some of the most laborious to build and were far from passive.

The best one generated $4200 last month and required a few hours of nurturing. I've applied my experience in franchising to structure 7-10 year royalty deals with a few businesses.

2) The company is still lean in terms of headcount (3 FTE including myself and two dedicated contractors). We've somewhat smoothed out the lumpy revenues while keeping fixed costs manageable.

3) I've personally grown a lot. If I were to average out my hourly pay over the past two years it would be disappointing. The fact is, I don't care. Building a system requires delayed gratification.

Losses

1) Our son starts kindergarten on Wednesday and when I started this journey I envisioned my wife being able to quit her job (if she wanted to) by his first day of school. That's not happening and I feel a sense of failure and guilt.

I'm a blessed guy whose wife is supportive and also knows that building something remarkable takes time.

I'm now process driven vs. goal driven. That mindset shift has helped me get our of my own way and keep moving the chains.

Without this forum I'd probably still be a prisoner at my job. Now I'm utterly unemployable and have burned the ships.

 

[RazorCut]

Don't beat yourself up Kev, you broke even and the time was well spent as a valuable lesson learnt. All in all not a bad result mate.

Sharing it here means that hopefully others will benefit from your hard learnt wisdom too.

 

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[liquidglass]

I think you gained a very cheap (free since you broke even) education and it was better than anything you could learned at a college you dumped 100k and 4 years into.

thanks for sharing bud, now that you know, you'll do it better.

 

[oldkevx]

So, progress update. Today I:

Assembled the 6 brightest and driven professionals I know. We looked at the problems we despise and problems we perceive in markets.

We identified 7 potential fastlane businesses and are short listing the top 3 to go and do the unthinkable to the Kev I killed...talk to customers and ask for presales.

The team consists of diamonds I have collected along my journey over the past 15 years. I opened with the 5 commandments and made all ideas adhere to them.

Surprisingly every idea is not only fastlane, but they are all relatively untapped markets. Go big, fail fast (if necessary), learn and try again. I will share progress on the transformation from playing business to creating value, solving problems for people and building enterprise value on another thread.

 

[jpmartin]

@oldkevx - great post, great lessons. In short: Easy to start a COMPANY, difficult to start a BUSINESS. Focus on the latter, then the former.

 

[Journey2Million$]

I think the main thing you need in business is the ability to sell, market, get customers. That's the biggest key. You can make more money with good sales ability and a mediocre or poor quality product than you can with a great product and poor sales ability. In the beginning I was totally clueless. I had no idea what makes a t-shirt design good, I didn't understand the customers, and I didn't know how to sell t-shirts. But I just had faith. I never gave up and I kept going until I learned all these things. Failure was not an option. When I finally started getting steady, reliable sales, I quit my job and it was one of the happiest days of my life. I was finally free from having to work in a job. It was always one of my dreams to simply not have to work for other people anymore, because I really hate that.

 

[shane8399]

I pay $250 for accountant all day. I had a job, multiple houses, and a business.

What one needs to assess is, for $250, and 1 hour of my time, they are done, or 10 hours of my time to figure it all out, file it all myself, and hold the liability of the filing! Whats your time and liability worth? Pay the $250. Cant afford the $250? Your business model and or income needs reevaluation.

 

[oldkevx]

@RazorCut, yep, I wasted time and money. I guess I was afraid to talk to customers. I had one paying customer $4k and came out even financially, the time...gone forever!

 

[goodguude]

Two days into this forum and I find this thread, wow.

Just incorporated my first business - a LLC - equivalent in my country. - costs: about $300
logo - $20
business cards - $25
webhosting for a year - $40

Sums up to around $385.

I kind of feel like an idiot now. But I'll make the best out of it, no matter what.
Thanks for opening my eyes. I need to become a lot more efficient.

Good night.

 

[oldkevx]

I'm your doppleganger x 10.

You can change that.

I did.

Don't give up. It's worth it. Life is too short to do anything else.


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[jon.a]

Thanks everyone! If I save someone else time or money then it was a solid "investment." @MJ DeMarco, thank you for creating this amazing place for us to all share triumphs,challenges and failures. Onward!

You're off to a great start.

 

[oldkevx]

Good post. But heres a few quick adds.

An entrepreneur jumps off the cliff and builds the plane on the way down.

Boom! My mindset shifted and this is an awesome analogy!

 

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[Milkanic]

Hire someone on elance to conduct industry research: $450 + 2 hours
Buy some BS courses $500 + 2 weeks
Download tons of free content and consume it in the car, at night and any other downtime $0 + 6 months

Don't really think any of these are a waste of time/money. Fail forward.

 

[Andy Black]

Here I am, two years in "playing" entrepreneur and frankly failing. I want to share exactly how to waste money/time so you can avoid the pitfalls that I succumbed to:

Here's what you should do to guarantee wasting two years and money. I've quantified both elements for you

• Form an Llc before you have paying customers $500 + 4 hours
• Hire someone on elance to conduct industry research: $450 + 2 hours
• Build a killer website: $2,000 + 2 weeks of tuning
• Design and order business cards: $50 + 2 hours
• Order checks $100 + 1 hour
• Order envelopes $75 + 1 hour
• Buy (and laboriously research) tax accounting app $200 + 8 hours
• Open a bank account $0 + 2 hours
• Get an EIN $25 + 1 hour
• Hire an accountant to do taxes $250 + 4 hours
• Get a merchant account $0 + 1 hour
• Get a really cool stamp for depositing checks
• Buy some BS courses $500 + 2 weeks
• Download tons of free content and consume it in the car, at night and any other downtime $0 + 6 months

Total time wasted: Over 6 months
Total money wasted: $4,150

What if I would have invested all of this time and money in doing just one simple thing that actually moved the needle vs. made me feel like I was running a business?

Game over...I just killed the inner wanna be. Time to take action. I hope I saved someone else some time and/or money.

K

Awesome post, lesson, and turnaround! Looking forward to watching you build your plane on the way down. Rep man.