Category: New Business Development

An aspiring singer
told me yesterday
that after having a child,
he needed money
and decided to quit the music business
to “get a real job.”

Ummm… singing IS a real job.
Plenty of singers make good livings.

That he didn’t considered it a ‘real job’
told me
he hadn’t been taking singing seriously.
He had treated it as a hobby,
as fun,
goofing around
and not applying himself to his ‘dream.’

Listen to the words you use.
They are a great indicator
of whether or not
you’re taking your business seriously.

BTW… if buddies aren’t taking
your business or dream seriously,
your word usage may be the reason why.

Running your own business
can be very lonely,
especially in the early years.

Every task, every responsibility
is yours.
Even if you outsource,
you are the person responsible
for managing that resource.

As Yaro shares

“It’s a one-person show for a long time,
filling every spare hour outside of work
on your little internet business
until it’s big enough to justify
quitting your job
and going full time entrepreneur.
Once it reaches true sustainability
you can finally bring on help and
you gain back some time freedom in exchange
(or more money, or both).”

That is why networking with other entrepreneurs
can be the difference
between success and failure,
not only because you benefit
from their experience and skill
but also because you benefit
from their companionship.

Take some time
out of your busy schedule
to meet with fellow entrepreneurs

As the kiddies go back to school,
we should also consider
taking a course, a seminar,
learning a new skill,
expanding our knowledge base.

Yes, I post something similar
every year.

Why?

Because we can’t use skills
we don’t know exist.
We don’t know what we don’t know
and contrary to myth,
what we don’t know
CAN hurt us
(or at least slow down our success).

These are exciting times.
The world is changing quickly.
We must change too.

Learn something new.
Go back to school.

A buddy is lending $100,000
to a loved one.
He told me
he doesn’t want to draft up a contract
around this loan
because he ‘feels funny’
and he doesn’t want the loved one to think
he doesn’t trust her.

Contracts have nothing to do
with trust.
If you don’t trust someone,
you shouldn’t deal with them.
Period.
Enforcing the terms of a contract
with an unethical person
is almost impossible
and very, very costly.

Contracts are about
outlining the terms of the transaction,
ensuring everyone is on the same page.
This eliminates misunderstandings
and benefits both parties.

If you explain this to the other party
and the other party pushes back,
wishing no contract,
you should ask yourself why.

An intelligent buyer
tries to make
the non-compete clause
(the clause stating
that the seller will not open a similar business)
as broad as possible.

An intelligent seller
tries to make this clause
(if she can’t eliminate it completely)
as narrow as possible.

This narrowing is, of course, easier
if your next business is already started.

For example:
A buyer was interested
in a buddy’s cover design business.
The original non-compete clause
stated that my buddy wasn’t to have
any dealings with the publishing industry.

She already had a stock photography business
and publishers/cover design firms
were her biggest clients.
She pushed back.

The buyer saw that the stock photography business
wasn’t harming the sales of the cover design business
and she had no problem
narrowing the clause to cover design only.

The biggest concern of the buyer
is that the seller will steal customers.
Prove that the customers are different
(for example:
Sci Fi readers have different review sites
than paranormal readers)
and the buyer is more likely to narrow
the non-compete clause.

When a business is sold,
the intelligent buyer
puts in some sort of non-compete clause.
The seller can’t open
a similar business
in a similar geographical area
for a certain amount of time
after the sale.

Like price,
this clause can be
an emotional stumbling block
for many business owners
so it is often beneficial to think of solutions
before offers are made.

For writers,
dealing with this clause is easy
(we utilize the same tactic
we use to deal with
the right of first refusal clause
found in most publishing contracts).
We write in another genre.
Instead of writing paranormal erotic romances,
we write sci-fi erotic romances.

We can use many of the same skills
and we can benefit from our experience,
ramping up our businesses quickly,
yet we’re not directly ‘competing.’

Of course,
if we don’t sell our companies,
this alternative business
can be a great business to expand into.

What business would you build
if you had to exit your current business?

Yesterday,
we talked about how
we should always be open to selling.

But how do we know
an offer is worth considering?

We compare the $ offer
to the price of our business.
We need to know this price NOW
(updated regularly).

Why now?

Because when we get an offer,
the knee-jerk reaction is
“If he’s offering this price,
the business must be worth much more.”

Not necessarily.
Buyers overpay for businesses
all of the time
and knowing our price
allows us to cut out this emotion.

I start pricing at
the resale cost of the assets
plus 10 year accumulated discounted cash flow.
Then I tweak for any special considerations.

Know the price of your business
NOW.
Be ready for that offer.

When I mentioned to a buddy
that one of the reasons
I write under a pen name
is because I can easily sell that pen name
(and yes,
pen names are sold
all of the time
– writers build businesses
and businesses can be sold),
that buddy said
“I’d NEVER sell my pen name”.

That’s bullshit
and I called her on it.

I asked her
if she’d sell
if someone offered her a million dollars.
She pushed back with
“But I love writing.”
My reply was
“Then write under a new pen name.”
(i.e. build another business)

Her ‘never’ became ‘yes.’

Selling should always be a possibility.
Design your business
so you can sell
if the price is right.

There are readers who read short works
(short stories and novellas),
there are readers who read long works
(novels),
and there are a small group
of readers who read both.

Under one pen name,
I write short stories and novellas
exclusively.
As this pen name grows
in popularity,
I get more and more pressure
from the novel reading group
to write longer.

If only I’d add more world-building,
more description,
more love scenes,
the story would be perfect

… for them.

But I’m not writing for them.
I’m very clear about
the readers I’m writing for.
That market is big enough
for me to focus on
and be profitable.

Be very careful
when you’re asked to change your product.
Ensure that the folks asking
ARE your target market.

One of the best experiences I had
during my recent Alaskan cruise
was visiting the Hammer Museum
in Haines.

Yes, a Hammer Museum.
The entrance fee was $3
but the experience was priceless.

I didn’t have a passion for hammers.
Heck, before visiting the museum,
I didn’t even know
there was more than one kind of hammer.
(The Hammer Museum has thousands)

But I was immediately swept up
in the owners’ passion for hammers.
Each hammer was carefully displayed,
with a card sharing its (often humorous) history.
Many hammers had copies of the patents.

There were hammers all over the world
including a hammer that was used
to build the pyramids in Giza.

I felt the love of hammers
and by the end of the tour,
I shared that love.
I’ll never look at hammers the same way again.

Passion sells.
Remember that
when you talk about your own products.

BTW…
The Hammer Museum will soon expand
into Mallets and Nails
which the owners are as passionate about.