Category Archives for "Business"
Entrepreneurial land is a crazy world with a myriad of occurrences.
I remembered reading Steve Jobs biography and Tim Ferris’s 4 Hour Work Week and instantly decided I was going to drop out of accounting school (which I hated and wasn’t good at) to start a business.
I tinkled around with a website and wrote blog articles for a year straight before giving up and heading back to University to complete my Diploma. That’s at 22 years of age. I can’t imagine that I spent an entire year alone, writing articles like this one, not making any revenue.
That’s how I started.
Entrepreneurship and the Corporate World
It’s amazing to see new start up founders or new entrepreneurs make similar mistakes as I did. The ones I personally of presently have left a corporate job or are sick of the current one and took a nose dive into business.
Suddenly without a framework or a superior directing you to work, you’re left on your own and one can find yourself not allocating the right things to do in your day.
It’s arguable easier when you have a manager or friends alongside you guiding you and telling you what to do. It’s much harder when you’re alone and have no one really holding you accountable.
In the world of entrepreneurship, business degrees and previous work experience don’t mean anything.
Enter The Wantrapreneur Land
1 year of inaction was enough to convince me that I wasn’t going to be able to do it alone. The next rational thing to do was to get help right, learn from someone.
You then enter the seminar, course buying/ selling land by hungry gurus waiting to snatch cash out of your pocket.
I spent the next couple of years playing around with grey hat SEO strategies (Google my name + SEO review) and you’ll see an honest review on the SEO industry in Singapore. That review almost cost me a law suit but it’s well worth it.
I eventually got my first couple of paying clients from a dating consulting site I built using grey hat SEO strategies (that I disagree with up till today due to it’s lack of a long term scalability).
I took the money and reinvested into other business programs such as Zero To Launch that eventually landed me a marketing job at DrWealth.Com.
I was testing out Facebook Ads during my full time employment on the dating consulting company and its potential for scalability. Admittedly, I was overconfident in it and made a risky move of quitting my job before a steady proven model was in place. Even though I managed to scramble back up in arguable a short period of time, it was quite a painful process.
That’s another story for another day.
Talk is Cheap, Let Behavior Speak
I used to partake in a mastermind where I stressed that the most important thing in business is net margins and free cash flow. One should be allocating time and capital in right way in business to produce net margins and free cash flow.
I experienced a couple of negative feedbacks ranging from saying I was too profit driven.
Needless to say I stopped attending. Not merely because of the negative feedback but I also fundamentally disagreed with many of their ideas. I also felt most of them aren’t really entrepreneurs and not treating business seriously enough. You add in a couple of last minute cancellations and showing up late, I was finished.
Sometimes I hear a business owner with a 6–7 men team is super proud to have hit ‘5 figures a month’ in their business and are looking to ‘scale their team.’
Quick Math tells you that they are bull shitting themselves (or you).
10K in revenue to feed a team of 6 is barely enough. You do the Math, assuming you net 70% (which is giving you WAY TOO much leeway), that’s a net margin of $7000 to be split amongst a team of 6. That’s around $1.2k per person.
This is why I never believed in a big team and always preferring working alone, or only with the truly skilled and dedicated.
Revenue, Profits and Cash flow
These days I can’t stress enough that free cash flow is the most important to any business (or any Facebook Advertising campaign), followed by net profit and then revenue.
In the crazy world of business, whilst everyone else is posturing, the best thing to do is to keep a grounded profile and let revenue and profits do the talking.
I’ve met business owners who are funded and backed by investors that are almost always posturing or attempting to build an image that they are mega successful.
Thanks to the mini Charlie Munger on my shoulder (stealing a line from Kevin O Leary), I fundamentally know that paper valuations, financial projections and posturing mean nothing.
I kept my overheads super low by operating out of a furniture showroom owned by my Uncle for the first 5–6 years whilst getting my hands wet in business.
I hedged my risks by working for a couple of companies from SMEs to start ups whilst attending University and see where I fit in the business world.
From day one, I didn’t really buy the idea of a grand business idea and focused on skillsets such as SEO, copywriting, basic web design, sales and Facebook Ads (most recently) so I’m confident on how to acquire clients in almost any industry.
Grounded Strategies, Tactics and Growth
There are many mistakes I made as an entrepreneur through the years.
Firstly, it’s not honing my bullshit meter. Some of the programs I bought didn’t align with my core values and I kind of hate the fact that I wasn’t smart enough to detect the bullshit behind them.
I’m not against purchasing programs from coaches and have unfortunately paid more than $18000 of my own money in coaching and courses, of which some I didn’t apply (due to moral ethical issues and some effectiveness reasons).
I regretted taking advice and looking up to the wrong people. One of them being a CEO of a multi million dollar start up. The 2–3 months of time and effort into capital raising (as he proposed) could have been invested back into growing the business. That’s a tough lesson learned.
However, as all mistakes made, we all become a little less wrong in our process. I’m a lot sharper than I was when I started out, and we’ll see how growing a dating consulting company in Singapore plays out.
Three months ago, I helped two music outfits at one go: to help them market their vocal coaching classes.
One of them paid me 1900 SGD to consult him. He didn’t complain about the quality of leads I generated for him through Facebook Advertising OR that he was ‘wasting time’ on following up not he leads and took my advice on making ‘godfather’ offers. Since then, he has 20X-ed his investment so far.
Here is his testimonial:
How much do you think the system I built for him is worth today compared to the 1.9k initial investment?
10k? 20K? 100k exponentially?
The second individual demanded I made the performance base. I did it for FREE. (Read: Huge ego, wanted to prove I was the best in the industry. Double read: Will never make the same mistake again)
He wanted NO follow-up, super qualified leads and ignored my advice to sure his sales team knew how to make ‘godfather offers’. Even before the campaign started, he complained that people liked ‘abusing free trials’ and it’s NOT going to work. This was even when he was running Google ads (which supposedly have higher ‘buyers intent’)
He broke even on his advertising spent in the first month. He then quit going into the second.
You may think I am going to make a comparison on ATTITUDE here but I am not. I am going to make a point on commitment.
What if the second individual followed up on the process?
He broke even in the first month, now, let’s go into the second month:
The question is, can you keep micro adjusting and pivoting till you get it right?
No, the ULTIMATE question is this, ARE YOU going to keep micro adjusting until you get it right?
Now, let’s imagine 6 months in, he gets this system right, just like the first individual.
How much do you think this system she’ll end up with be worth to her business? She has a team of 3–4 vocal coaches all hungry for business.
1000000SGD if replicated across multiple musical instruments?
In the second project, I generated laser targeted leads with an income qualifier asking the prospect how much he or she is willing to spend on their service or product. Even despite that, they aren’t able to make the sale.
There are many variables from tech issues to website development in successful marketing campaign. You need TWO hands to clap. The fortune is in the follow up. Lastly, I want you to ask any salesperson on how much ‘time they wasted’ on unqualified prospects. It’s a numbers and statistics game. However, when you COMMIT to building out your client acquisition system, the numbers will eventually play out and you’ll get your 1 million dollar acquisition system, that helps you generate predictable and reliable profits.
I have since attended hundreds of networking sessions, spoke to wantrepreneurs (once being one myself) and established business owners alike. Up till today, I haven’t used a SINGLE piece of knowledge from my business classes from business school. I have come to a conclusion, not everyone understands entrepreneurship and knows what they are talking about when it comes to business. Not even business professors with pHDs to their names.
Here are the 4 entrepreneurs I usually come across.
I started a dating consulting company thinking that all my client want to hear about was my smartness about human psychology. That’s because that’s what I cared about. It wasn’t what my customers cared about. They cared about their needs and desires, not MY course curriculum.
In start up events, I meet ‘idea’ people (some times highly educated with some Ivy League degree) to their names and they’ll fancily come up with an idea. The Uber or Airbnb of anything.
They’ve never built a single website, rarely done any sales in their life and they think that their SINGLE idea is going to change the world.
90% of business is sales and marketing. It’s NOT about your damned product OR idea. 99% of business is IMPLEMENTATION. That means DOING IT. That means build websites from ground up, running traffic to it, getting leads, following up and then pitching them a price or product in exchange for CASH.
It’s NOT playing around with pitch decks, coming up with the next ‘Uber’ of anything or writing your NEXT business proposal. I have not wrote a single business proposal in my life.
Thankfully, my first couple of jobs are in sales. It wasn’t in business. If your first business skill set is sales, you have a MUCH higher possibility of succeeding as an entrepreneur. However, sales itself still doesn’t cut it. When you work for huge corporations that have a price point or commission on your products, you are confident in selling.
However, take that huge corporate brand away from you and you’re left to create a brand on your own. Can you sell it? Can you sell YOURSELF? Take away DBS, Prudential, PropNex and all these brands that you can already leverage to sell your products, can you still do it?
Can you SELL when it comes down to YOU, YOUR products, YOUR vision and YOUR services.
I know of people that consider themselves a great salesperson. However, he has never generated a dollar out of his own products and services.
He’s overly concerned about the product. He’s always obsessed about the PRODUCT. You can immediately tell he’s new as entrepreneur. However, he does have the belief that as long as he’s great at sales, he’ll be successful in business. That’s only partially true.
Like I said, as an entrepreneur, your concerns go beyond just sales or your commissions. It becomes a game of free cash flow, marketing budgets, market positioning, scaling, fulfilment, customer service, operations and many more. You’re required to juggle MULTIPLE HATS.
I was exposed to the idea of raising capital only recent by a friend. He successfully raise 1.6m to fund his media company.
Traditionally, I am extremely against the idea of raising money before profitability.
The raising money entrepreneur is highly concerned with financial projections, pitch decks and predictions on market size. (and fancy start up lingo)
Now, I am not saying raising money is evil, however, I’m saying: pay attention to the primary concerns of the CEO/ top management that runs the company. Is their top concern attempting to raise the NEXT ROUND? Is their concern making the numbers look pretty?
The answer almost is always can be found in a singular concept: skin in the game.
Some of the things I look out for:
Then again, I know working capital can accelerate things. This is why I am NOT 100% closed off to the idea of raising capital. The majority of businesses and built on working capital.
Ultimately, as an investor (if I do become on), I am going to looking at the ethics of the entrepreneur himself, and the way he speaks about his business and his primary concerns. There’s a huge difference between presenting fancy numbers VS maximising shareholder’s equity.
This brings me to my next point.
Over the years, I’ve spoken to the ‘idea entrepreneur’, the raise money entrepreneur’, the salesman entrepreneur, and the ground up entrepreneur.
The idea entrepreneur is overly concerned about his idea. The more he’s proud of his idea (the product) the more I know he isn’t seasoned as an entrepreneur.
The sales person is merely over confident in his abilities to succeed in business (or mostly anything).
However, the people I enjoy working with and can resonate with the most are the ground up entrepreneurs.
The ground up entrepreneur’s (eg. the previous company I had the pleasure to work for a short stint for) primary concerns is ALWAYS, free cash flow, advertising budget/ spent, lead generation, sales, closes and NET REVENUE/ NET PROFIT.
The HIGHEST concern of any business should be FREE CASH FLOW. FREE FUCKING CASH FLOW FROM OPERATING ACTIVITIES.
THAT’S IT. PERIOD! FULLSTOP!
95% of the ground up entrepreneur’s TIME AND EFFORTS are spent generating prospects and pitching them their service. It’s NOT trying to raise their next round or make their pitch deck look super attractive. It’s NOT trying to build the next Airbnb of ANYTHING.
They almost always have skin in the game by investing a huge amount of their own dollars alongside their business. Their primary concerns are: expenses, free cashflow, return on investment as opposed to financial projections or raising rounds.
Let’s face it, as a business owner, you’re NOT in the dating advice business. You’re NOT in the Facebook Advertising business. You’re NOT in the music business. You’re NOT in the real estate/ financial consulting/ plumbing/ aircon repair business.
You are in the SALES AND MARKETING BUSINESS. Period.