Avoid “slow” people

One of the biggest obstacles to success in startups are slow people. People who always makes things overly complex. People who make quick stuff take an eternity just for the sake of making it slow.

Avoid those people.

When you are a startup entrepreneur you have limited things of everything. Including time. You can’t afford doing business with partners, vendors etc who can’t work fast and according to plan. Fire them fast and find new ones. People who know stuff shall be done fast, not slow.

The reason many people take an eternity to accomplish stuff is because they are perfectionists. Well, here is the newsflash for you: It doesn’t have to be perfect. A perfect product will bankrupt your business. You want to create a product that you can improve over time. You want a way to make more money as you go along. If the product is perfect when you sell it the first time, then the game is over.

Look at Microsoft. You can’t convince me that they have made any product perfect from the get-go. Windows? A bad product from the get-go, but that was it’s intent. You make a bad product and then ask the customers to add what they think is needed to make it better. Then you deliver and charge more money. That is how a businessman thinks.

Perfectionists are seldom successful businesspeople. Because they don’t think like businesspeople in the first place. With me? Think business, think add-ons. Think “NO PERFECTION”.

What is on your agenda?

It doesn’t matter if we are talking about personal or business matters. The only way to score is by knowing what you are scoring for. What is your agenda? If you can’t answer this simple question, it doesn’t matter how hard you work, because you aren’t really sure why you are even working in the first place.

So once again: What is your agenda? What are you scoring for?

Example:

You want to earn $10. What is your agenda in this case? To collect $10, right? Obviously:). So then what would be your aim? The easiest path to collecting those $10, right? With me? List all the easiest ways to collect those $10, that’s it. This aim has nothing to do with saving the earth. Just about collecting those damn dollars in your pocket. Doesn’t matter in what way you do it, but the easiest and fastest way is the most prefered, isn’t?

Many entrepreneurs start out with an ideal. They are more concerned with saving the world than actually making money. Hence they should start a foundation, not a company. A company exists to make money, a foundation for spending money on changing the world for the better (hopefully).

OK, another aim:

We want to have sex. What is our aim? Getting sex in the easiest and fastest way possible. It doesn’t matter a bit if we get romance so dating is out of the question. The easiest and fastest way to get some is by calling a call girl or visit a whore house, right? You want sex, you are not interest in ethics here. You just want to empty the hormones somewhere, preferably with a beauty, but it’s not a primairy aim. As long as the opposite person is willing and of normal appearance, then we are on the right track to reach our primairy aim.

This is the way you need to think to survive in business and in life. Especially if you want to be amongst the top perfomers. You need to be single minded. Screw the rest.

Create a couple of millions if you don’t have them!

If you are broke and you need a couple of millions for a new business idea you have, then I have news for you.

Find someone looking for finance, secure a guaranteed deal and an exclusive deal and sell the exclusive deal forward to real investors (with cash) for 30% less than you got through negotiation.

Example:

Business ABC is looking for $10 Million for business expansion. You see this and you decide to email the company saying something like this “I want to finance the whole amount of $10 Million. Let me sign an LOI (Letter of Intent) and let us then negotiate about a guaranteed return year 5″.

Not every company will say yes to this. But some will. In this case the company says yes.

So you sign an LOI that takes up the whole capital raising time the company has agreed upon (hence making this deal exclusively yours. You shut everyone out. Important). When that is done you ask the company to give you a guaranteed return of 20% annually, accumulated over 5 years (hence paying you your initial capital back + 100% in capital gains year 5). The company thinks that projection is realistic so they agree to this.

So you shake hands on this. But before you ask them to draft an investment agreement you ask them wait a week so you can arrange the financing needed to secure the deal (sometimes investors need to borrow money from the bank to secure a deal like this. In this case it would make sense to pay say 5-6% annually on $10 Million if you had a guaranteed return year 5 of 100% plus initial capital back).

During that week you go out and start looking for investors using the company ABC’s prospectus as presentation material including the deal you have secured for them.

This is what you say to investors “I have a deal here that requires $10 Million and it pays an accumulated interest of 20% annually over 5 years. Essentially giving you your initial back + 100% capital gains in year 5. All guaranteed by the current owners and the Board of Directors.

I have an exclusive hold on this whole deal and I am willing to give you the opportunity to buy me out at a price of $14 Million essentially giving you a chance of making a 60% return over 5 years (12% ever year)”.

As you see: I create a deal that gives company ABC the money they need, give the investors a guaranteed deal they most likely want (who doesn’t?) AND I recieve $4 Million myself for just passing along the ball to the investors who will work the legals with company ABC themselfs.

These $4 Million is money I can use to start my business.

Sometimes you need to do unconventional, though legal, deals to get money to start you dream business venture. Sometimes you need to think bigger and go bigger in the beginning in order to go small later. Does that even sound sane:)? I don’t know, but I do know this works. I do this from time to time when I lack capital and that happens sometimes when your capital is tied up and you can’t get capital the conventional way (through banks or your own capital stash).

The E-Myth Revisited by Michael Gerber

I am reading Michael Gerbers book “The E-Myth Revisited” right now.

Michael is very much a proponent for systematizing businesses and I am very much a proponent for that one too.

The whole idea is to build systems inside your business so that everything works the exact same way all the time no matter what. A system that the most ordinary and even low-intelligent people could manage with one hand if they wanted too.

Michael Gerber brings up one obvious point: that their exists more ordinary people than extraordinary people. So he advises you to think “how can I create a business that could be run by teenagers” more or less. Like McDonalds.

So say you have a book store. How could you systematize that store? Well, first of all you could create a nice and cozy image (bookstore decoration) where people can relax. Then you could create a system for how people handling book sales acts and how they should appear (corporate dress necessary, preferably a good looking face with an obligated smile and a standard welcome and good buy phrase etc). You could create a book inventory system so people could find a prefered book genre in milliseconds by just putting up signs  pointing at specific genre areas.

You could create so much that is uniquely your bookstore and what your bookstore  brand stands for. When you have created this “pilot” you could then sell franchise packages of this “pilot” and hand along an operations manual for the franchisee to just follow from A to Z so that the franchisee can then  have the exact kind of bookstore you have and have the exact same results you have in your location.

I find the whole franchisee and licensee model excellent and smart. Why aren’t more entrepreneurs using it?

Also, why would anyone in their right mind want to do things on freehand when they could create routine systems that kicks in everytime certain scenarios happens? I am not a rigid kind of guy, but even I see the relieving idea of this thing. I should actually do this more often myself.

The Money Illusion!

Everyday millions of people go to work. Everyday millions of entrepreneurs work their butt of to build their companies.

Why? Because for them, money is as real as their own lifes.

The missing piece in the equation, something they have all missed to ponder on in their haste, is that money is just an illusion. Nothing else.

Tell me: How do you define money?

Before Nixon money was money, but today money is not money, it is a currency. Something that has a value because of it’s relation to other currencies. A scale game more or less.

But let us move away a little bit from money AND currency. Because these two words can be deceptive if you are in business. As a businessman/entrepreneur you cannot sell yourself to believe in money. To believe in the currency bills you hold in your hand. Those bills are only one way to survive in this world.

The really sharp minds out there knows that you can use many things as currency. You can use a nasty detail about someone else as currency, you can use hard assets as machinery as currency, you can use secret information as a really hot currency etc.

If you are to succeed as an entrepreneur these days, you need to become much more sophisticated and drop the illusions you have that the dollar bill is the only way to move forward and make things happen. The dollar bill is only one tool of many. Not the ONLY ONE.

The dollar bill is only real and the most accepted because we make it so. We believe it should be so and so hence everything evolves around keeping that illusion real.

Play tough on both sides!

Play tough on both sides of the business equation.

One side is the supplier and partner side, the other is the customer side.

By playing tough I mean, play as though you are the boss and that your rules are to be followed everytime. Never play by others rules. Don’t be afraid of alienating suupliers and customers if they do not follow the rules you have setup to do business with you.

I have experienced this time and time again in my own ventures (7 years worth of whole-time entrepreneurial experience), that suppliers will use you if they see a possibility to do so. Customers have the same bad behaviour. If they can scam you and get you to lose money in order for them to gain, they will do it. And why shouldn’t they? I would (hey, I am no saint).

I am now telling you: Play hard, play tough, watch your interests. People who can’t or will not play by your rules are out (see Dan Kennedys NO B.S. book series to get a better understanding about this). Just fire them.

I can’t tell you exactly how many times I have wanted to rip my fucking hair of because of utterly stupid and scamming idiots who want to take advantage of me and actually have been too.

Take my advice, please:

1) Setup a very detailed  filtering process. Setup rules of conduct for suppliers, partners and customers to follow. If they don’t follow suite find new ones.

2) Pay as little as possible for suppliers services/products (though ask for high quality) and charge exorbant prices from customers and only serve those who understands the procedure. Those who actually appreciate your services/products. You only need a couple of returning customers and not 1000 of irritating “know-it-all”.

Don’t be afraid to be who you are and take pride in it. Don’t you dare to feel guilty to demand the price you want. If you feel guilty, slap your own face and wake up and tell yourself that if you need to justify your price to anyone, then kick those people in the ass and never let them approach you anymore. The same goes with suppliers who will not lower prices to suit you and your agenda. Kick those in the face and tell them of and ban them from ever doing business with you anymore, unless they convert and act smart (that is: doing things your way).

This is a revolution people: If you don’t act, others will and you will be the one left sucking stinking toes. Bad luck in that case I guess:).

Take care.

Want my assistance/consultation?

If anyone wants my startup assistance and/or business development assistance, then feel free to post your comment here.

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-Describe the matter you want assistance with and why I can help you.

My compensation is always 20% on increased reveneues and/or decreased expenses. If you only want my advise then I charge a $500 upfront fee for that.

I only want to help people with genuin business problems related to business development (revenue increase, expense decrease etc) so please respect that request. Non-serious requests will not be considered.

Thank you in advance.

How to get a bank loan as a startup venture!

There is a way of getting a bank loan as a startup venture. It’s rather simple, but not well known amongst new entrepreneurs.

If you have read Robert Kiyosaki’s books about team building, then you will have read about the importance of insurance.

In this case, the insurance is for the bank. The bank is seldom interested in lending money to startup ventures for one simple reason: The risk is too high.

But if you are smart you will first go to your insurance broker and show him your business plan. If you are ultra smart you will at this meeting show the insurance broker some signed customer agreements as well.

Why go to the insurance broker? Easy: Because he will secure the bank loan so the banker will say yes to you.

Why showing signed customer agreements to the insurance broker? Easy: Because he want to know what kind of risk he is taking. If he can see that you actually have a demand for your product/service then it seems like you have done your homework. The insurance company is not so keen on insuring maverick concepts (understandibly so). There need to be a real commercial demand, otherwise it is just a waste of everyones time.

So, an example of this:

Say you have company X selling a new toy. You already have manufacturers in place. You also have 10 distribution agreements in place. You also have Board of Directors on standby.

In order to bring this company from scratch to commerce you will need $1 million. Obviously you have none of that money, or very little of it. So you need a bank loan.

The problem is:
1) You can’t show a track record of commerce as of yet.
2) Your own credit rating stinks.
3) You have never done business before. This is your first venture ever.
4) You have little to show in terms of a down-payment.

The bank is obviously a little bit concerned about your potential.

So, you go to this middle sized insurance company. You present your business plan to them and also present the pre-signed distribution agreements. The insurance company think you have shown them proof that there is a demand and that you will have cashflow immediately when all the infrastructure, team etc is setup. They agree to insure the banks loan of $1 Million in exchange for a 1-2% premium (based on the total amount, payable every year).

You now go to the bank and present the same business plan to them, including the distribution agreements and the insurance companies written support. The bank has nothing to lose if you default. The insurance company will cover their stake. They agree to fund your venture and you are set to go.

This is a simplified example, but this example is written just so that you understand the thought process. Sometimes it will work out fine. Sometimes you need to shop around a little.

The key question is: How do I cover everyones butts here? That question will get you the money.

The easiest startup path!

If you have capital, then why not just take the easy route?

1) Come up with a business idea and the way to distribute it.

2) Form a corporation.

3) Recruit a talented group of Board Directors.

4) Then let the Board of Directors build the business for you.

Why make things more complex than they have to be? Especially if you can afford this route.

Find the weaknesses and sell expensively

One thing many startup entrepreneurs have used over and over again is the “find the bigger corporations weaknesses and create a solution for it, then use those weaknesses against the big corporation and have them notice it”. Why is this good?

Big corporations, especially big publicly listed companies is owned by big financial institutions (big chunks of these companies at least). These institutions hate losing money. The managers running these companies hate losing their job because they upset these financial institutions.

If you threaten their market position, then of course they want to either crush you or buy you out quickly as possible. Bankruptcy is never an option.

If you avoid getting bankrupted, then you can make serious money. I have never done this myself, but believe me, I have my plots:). I have actually started a plan yesterday.

There is a little telecom company in Sweden with close to nil idea of how bad their marketing is. They have this new home movie system (a little bit like TIVO wannabe in fact). The thing is, they don’t see how easilly I can eliminate them by just giving away the home movie system for free (no matter how expensive this might be upfront it still pays of when you, at the time of the give away, have people sign up on long term membership agreements).

Of course, this company do not know where I can beat them. They seem totally dumbfunded about it.

So this is the plot:

1) Either they take me in and make me revamp their marketing plan and give me 50% of all the turnover above the 2008 year revenue level OR

2) I will start my own company with a slightly different system (to avoid getting IP law problems) and do as I mentioned above. Give away the system for free and also have people sign up on long term agreements and make the money back that way (and then keep making money by renewed agreements).

And if I do choose choice number 2, then this telecom company will either be in need of closing up shop, transform to compete with my startup or buy me out for a rather hefty price. Pretty easy really. Isn’t business lovely:)?