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business_basics

Jul 26, 2024, 5 min read

  • Start with the skills you already have
    • What problems have you solved in your life
      • Make it faster, make it easier to solve
  • Pick an existing business model (do it faster, do it easier)
  • Replicate what someone has already done, iterate, make it better, make it your own
  • Business is:
    • You are just selling stuff
    • You are just solving a problem and selling stuff to a stranger
  • Set up a business:
    • LLC
    • Bank account
    • Need a way to process payments
  • Promote business:
    • Half of your day will be dedicated to this task (4 hours a day)
    • Reach out to people who you know one on one
    • Make content about the stuff that you do
      • 2 pieces of content per day
    • Cold calls, cold emails, door knocking
    • Run paid ads
      • not the first thing you should do. You want to physically talk to folks so you start to learn who your target customer is. What they like, what words they use.
    • Rule of 100
      • If you do one of the four things above for 100 days, you will succeed. Most people cannot do it.
        • 100 reach outs or 100 minutes creating content or $100 on ads…. Do it everyday for 100 days
  • How to win at business:
    • You have to really get good at something, you get good at something by doing it many times
    • You only learn through doing
    • The hard part is doing the stuff everyday consistently over time
  • Tactics:
    • Offer the thing for free
    • Ask them to buy the next time
    • If they say no, ask them why
    • Fix the issue(s)
    • Ask again for the buy
    • If they say no, ask them why
    • Fix the issue(s)
    • If they still say no, ask for a review and a referral
  • What business owners should be doing?
    • Answer the phone on time
    • Respond to emails when customers ask you questions
    • Actually tell people about your business
    • Try to do a good job
    • Ask them to leave you a review
    • Have exit interviews
    • Reach out to customers every ~2 weeks
    • If they have not commented in your group, reach out to them and do a check in.
    • Have a welcome email and tell them exactly what they need to do and what will happen. Over communicate.

What is a Business

flowchart LR
    A[Inputs] --> B(Efficiencies)
    B --> C(Outputs)
  • In a business the Output is Money
  • The Inputs are the things you do to get people to know about the stuff you sell
  • The Inputs are the things that things that feed the business
  • The Inputs are the things that feed the machine
  • The Inputs are the things that make you money

Problem

Business owners are not clear what the Inputs are.

Said a different way, if no one knows that your business exists… will you make any money? answer: NO

Conclusion: We need to get other people to know your business exists

How do we let people know our business exists?

The short answer is, we get traffic, we advertise, we promote.

The long answer, the rule of 100, see the section above named “Promote business:”

How much content do I need to make?

  • How many activities = 1 customer?

Example:

  • If I post 30 times in a month and I make 5 sales
    • For every 6 posts, I get 1 customer
  • If I wanted to get 25 customers
    • 6*25 = 150, which means I need to do 5 posts a day

How to Determine what your bottleneck is?

flowchart LR
    A[Inputs] --> B(Efficiencies)
    B --> C(Outputs)
  1. Inputs
    1. Let people know you exists
      1. How many of these people can we turn into money?
  2. Efficiencies
    1. You need to sell to them, this is the conversion process
    2. We then have our price, what we are charging people for our services
    3. For reoccurring businesses, we have our churn. How many customers are leaving every month.

Ideal Business

  • Company gets a lot of traffic
  • Converts a high percentage of the customers
  • Charges a high price
  • Gets customers to buy a lot of times

What to look for?

  • If you are not getting enough leads
    • You need to advertise more (are you advertising 4 hours a day?)
  • If you are not getting enough sales
    • You need more traffic
    • You need better conversion
  • If you need to make your customers worth more
    • You need to charge more
    • You need to decrease churn (reoccurring business)
      • Get them to buy more
      • Get them to stay longer

What to do with the bottleneck?

Once you found the step your business is struggling with, spend 4 hours each day solving this problem. Then, identify the next constraint, and spend 4 hours a day fixing that problem.

Why?

You business won’t grow past the constraint. So identify it and fix it!

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