I shot this quick video to share what I believe are the most important lessons from Gary V’s new book, Crushing It!
It Seems That Everyone Wants To Start An Online Business These Days – And With Good Reason!
The flexible, low-overhead model of an online business is appealing for so many of us looking for something more from our careers than just a paycheck.
So, what can you do to make sure that you have the best chance at success with your new venture?
Well, I’m sure you’ve heard the old Abraham Lincoln quote about chopping down a tree:
If I had eight hours to chop down a tree, I’d spend six hours sharpening my ax.
Old Abe was a smart guy, wasn’t he?
Well, we think starting a business is a lot like chopping down a tree:
Spend a little time ‘sharpening your ax’ in the beginning, and it will pay off big time in the end.
We’ve found that ‘sharpening your ax’ means to spend some quality time thinking through the business you want to start, so that you make sure the business is one you are really excited about starting, and that you have a thoughtful plan of attack.
These 12 questions will help you start an online business you love.
Don’t worry, this isn’t some stuffy business plan exercise where we are going to ask you to product a 90 page document that you’ll never look at again.
After starting many businesses ourselves, and working with thousands of entrepreneurs over the last ten years, we’ve come up with 12 simple (but powerful!) questions that will help you get off to a good start with your online business.
Spend some time answering these thoughtfully, and you’re ahead of 90% of people that jump into business (and fail) without much thought as to how they’ll build a business that they’ll love and is successful.
Then, if you’d like, grab our free guide ‘7 Secrets to Designing a Business That Gives You Ultimate Lifestyle Flexibility’ at the end of this post to help you plan your new business to be a fit for the lifestyle you want to create.
Ok, let’s get to it!
Question #1: Why do you want to start an online business in the first place?
You really need to think through this one really carefully!
It’s our experience that people start businesses for four reasons:
- Passion – these people are in love with their craft, idea, or product and want to spend all of their time and energy on
- Money – these people want to make more money, easier money, or some combination of the two.
- Freedom – these are the people who can’t stand another day of being told what, when, and how to do their jobs. Or, they just want to be able to live anywhere, travel anywhere, and work when they want.
- Purpose – these are people with an idea that they believe is so important and world-changing, that the idea is almost more important than themselves. They MUST do everything they can to make it a reality.
Now, the reality is that you may want to start a business due to a combination of these reasons, but it’s critical that you rank them in terms of importance to you and the life you want to create for yourself.
For example, if you could make $1 million per year, but you had to work 120 hour weeks at an oil field in Siberia, would you do it?
Some people will answer “Of course! I’d do ANYTHING for $1 million!!!”
Clearly, money is their priority.
For me, the answer would be “NO WAY!”.
Freedom and Passion are much more important to me than money, and I know from experience that I can actually have the money without sacrificing the other two.
So think carefully on this one, think long term, and be honest with yourself. This will be a major driver of business decisions for you moving forward.
Question #2: Does this business model support the lifestyle you want?
Once you’ve answered Question #1, you really need to evaluate if the business you are considering starting will match up to your priorities determined in Question #1.
Otherwise you’ll build a business that will make you completely miserable…which is miserable! And trust me, I know MANY entrepreneurs who have done this exact thing.
Things that are of particular importance for entrepreneurs, that can vary dramatically from business to business are:
- Freedom of time
- Freedom of location
- Earnings potential
- Customer interaction requirements
- Employee requirements
- Legal/regulatory environment
To use an extreme, but common, example:
DON’T start a restaurant if you want freedom of time and location!
So many restaurant owners are totally miserable.
All businesses have varying degrees of freedom, income potential, etc. – it’s important to think them through carefully.
Do you want clients that you get to know personally, becoming a part of their lives?
Or do you want to sell widgets online to people that will never know who you are?
Are you ok working 9-5, or do you want total flexibility?
Do you need to take care of kids or elderly family members
during the day?
Does the business you’re considering match the lifestyle #2 you desire?]
Question #3: Are you building a business for shareholders, customers, or yourself?
There are BIG differences between the three!
If you are building a business for shareholders, then you have a legal and moral obligation to do with the business what will return the best returns to those shareholders.
You can’t turn the business into your personal piggy bank when you have shareholders that have invested their money into your business with expectation of return…that’s how people go to jail!
So think very carefully before you raise money for your business.
When you do, you are now working for them and their returns.
If you are building a business for customers, then responding to their needs becomes your number 1 priority.
Now, don’t get me wrong, every business must respond to customers’ needs to some degree, or they won’t be in business long.
But are you going to let them drive your decisions about the business, or are you going to establish ground rules for your business that won’t change for customer needs?
Believe it or not, you can establish rules about how your business will and will not operate that are 100% focused on the lifestyle you want, and still build a very nice, profitable business!
If you focus on building the business for yourself…for your needs and desires…then you will of course make some sacrifices. You likely should not raise money from investors.
And you will likely turn some customers away.
But at the end of the day, you’ll be left with a business that is yours.
But that’s not realistic for some businesses. For example, going back to Question #1 – you will likely need to raise outside money if you are starting a ‘Change the World’ business.
‘Change the World’ businesses tend to have some major development that is necessary and will take a lot of money to accomplish.
Is that what you are committed to? Or is lifestyle more important?
Question #4: What can you do to make your business unique?
Every business needs to be unique in some way in order for it to really thrive. If not, why would customers choose to buy from you over the competition?
Now, please don’t get me wrong…I’m NOT telling you that you have to invent something or create some new business model the world has ever seen.
In fact, I would advise against that in almost all cases.
But your business does need to have something that makes it stand out, more convenient, or more valuable to your customers.
I think a great example of how subtle this can be, but still be incredibly effective, is Southwest Airlines.
In terms of profitability, they have completely dominated the airline industry in the U.S. for the past couple of decades.
Why? They are running an airline just like every other airline. They buy the same airplanes, etc.
What makes them stand out and crush the competition are little things that everyone could theoretically copy, but nobody has been able to:
- Their sense of humor
- Their ability to get people on planes fast because they don’t assign seats (that means more on time arrivals and departures)
- Not charging for bags while everyone else is
They didn’t invent anything patent-protected, and yet they are very recognizably different from their competition, and it pays!
How can you make your business unique?
Question #5: Who will you start your business with?
Will you partner with someone to start your business?
Why, or why not?
There are very good reasons to have a business partner, but it doesn’t work for everyone.
I personally LOVE working with business partners. I feed off of their energy, and they compliment my talents with their own.
But most new business owners run into trouble when they take on a partner in their business.
Because they bring them on for the wrong reasons – just because they’re friends, family, etc.
Eventually, it becomes clear that they made a mistake and that they don’t actually add any value to the business.
That’s when things get tense, and often times expensive.
So how do you find a business partner that’s a good fit?
Here are some good questions to ask:
- Are you missing some skills that will be very hard to hire (instead of partner)?
- Does the person you are considering partnering with have proven experience in the role you are looking for them to fill?
- Will you be able to keep personal and business separate in the partnership you are considering?
- What are the daily responsibilities you are expecting this person to handle at the business? Do they expect the same?
If you can’t answer a resounding YES, to all of these questions, DON’T partner. At least not with the person you are currently considering.
Question #6: Who is your ideal target customer?
Most new business owners mess this up by giving a broad, general answer, thinking that it’s better to be able to identify a great, big potential customer base.
As an example, if I were starting an online store selling football jerseys, I could say that my target customer is ‘men who like football’.
That would give me about a gazillion potential customers, which sounds great.
But the IDEAL target customer is more like ‘men aged 18-27 that are rabid fans of football, watch every game, go to at least two live games each season, and that identify a particular player as their idol’.
That narrows my potential list of customers way down, but I’ve now got a much, much better idea of the person I’m trying to market to.
Being able to identify your true IDEAL customer avatar is critical when trying to get your marketing messaging and targeting right, which is incredibly important to get sales started fast and cost-efficiently.
Question #7: How will you get customers?
You will most likely be the person responsible for generating sales at your business for some time.
How will you get sales? Where will you find your customers?
You don’t need to have a detailed plan at this point, but you should at least have a general idea of what it’s going to take.
There are huge differences in sales models from one business to another, which will require different investment of time, energy, money and skills on your part.
Will you get customers from:
- Facebook ads
- Selling over the phone
- Selling from webinars
- Working with affiliates
- Content marketing
- Advertising via direct mail, radio, newspaper or television
- Speaking at live events
There can be big differences in approach and budget to each of these sales models, so you want to be really clear about which path you plan to pursue.
Some key things to consider:
- How are the best competitors in your industry getting customers?
- Do you have sales experience that would suggest you should go in one direction or the other?
- Do you have the budget to do advertising?
- Do you have the personality to do phone or in-person sales yourself?
Question #8: What resources do you need to get started?
The beautiful thing about starting an online business is that it can be done with very little investment.
But they DO require SOME investment! A big mistake I see many new entrepreneurs make is not having a thoughtful, realistic plan for just how much it will take.
Yes, setting up a website or ecommerce store can be done for a few hundred dollars, or even less.
But what about…
- Additional marketing, operations, and accounting tools to help you run your business?
- An advertising budget?
- Cash for outside vendors and services to help you where you need it?
- A budget for training to acquire the skills and knowledge you need?
- Your living expenses until the business is paying you well…which could be years from now?
Sorry, I don’t mean to rain on the ‘start a business for nothing and you’ll be rich tomorrow’ online marketing crowd…that’s such a sweet dream.
But if you’re like me, you’ll want a more realistic expectation of the resources that are necessary so you can budget for them.
There is nothing worse than running out of cash before you even get a chance to really get started due to poor planning!
Question #9: Can you build this business part time to start?
You very likely want to hang onto your job before you take the full-time entrepreneurship leap! It makes great sense to hang onto a paycheck for as long as possible.
Is it realistic to start the business you have in mind part time?
Can you start the business you are considering at night?
On the weekends?
Or does it require you to “be there” 8 hours of the day?
One important thing to consider when answering this question:
DO NOT start a business competitive to your employer while you are still working there! This can get you into a heap of expensive legal trouble.
Question #10: Is this something you’d still enjoy 10 years from now?
Building a business can take years before you see the success you are looking for.
For that reason, I always plan on being involved in the business for 10 years, and ask myself if I’ll still be enthusiastic about the business by then.
Of course, you can never really know, but you should believe today that you’ll still be excited about your business 10 years from now, or you probably shouldn’t start it.
If you think a job is bad, think about having a business that you no longer enjoy! A job you can quit…a business gets completely intertwined with the rest of your life.
If you don’t think it will still be fun 10 years from now, don’t start it today!
Question #11: How can you test your idea fast?
Starting your business should be seen as running small, fast ‘experiments’ to determine if your business is viable, rather than act of going ‘all in’, as is commonly characterized in startup lore!
There is no need to mortgage your house to fund the business, if you can run a simple $1,000 advertising test first!
Brainstorm low cost and low risk ways to test a ‘minimum viable product’ to get real feedback from the marketplace before you invest too much money:
- Do people want/like your product?
- Will they pay what you need them to for your product?
- Can you affordably attract your customers?
- Is your ideal customer really the one you originally thought?
Once you have data from your initial tests, make adjustments and test again.
Lather. Rinse. Repeat. 🙂
Performing these little tests will give you real market-based information to help inform your decisions, and therefore dramatically reduce your risk.
Going back to our restaurant example, instead of mortgaging your home to open the restaurant, you could first test your recipes with a food cart, or a temporary kiosk in the mall.
Every business can be tested, and every business should.
Question #12: Is there a proven model you can follow?
Don’t reinvent the wheel!
Following somebody else’s proven model is one of the easiest ways to ensure success.
That may mean buying a franchise, licensing a model, buying a how-to course, or just finding an experienced mentor to help you.
Regardless, look for proof of success and carefully model what it is they are doing.
But please note that I used the word ‘model’, not ‘copy’!
Refer back to Question #4…if your business isn’t unique in some way, you will not survive!
That’s It! 12 Questions to Help You Start a Successful Online Business!
You’ve ‘sharpened your ax’!
Just getting clarity on your answers to these 12 questions has dramatically increased your chances of starting a successful online business, whether you realize it yet or not.
As I said earlier, building a business requires hard work and smart work; you are now off to a great start.
Ready to take the next step?
These are the seven ‘levers’ we’ve found to be most important to create a business that you enriches your life, rather than controlling it!
Good Luck and Keep In Touch!
We’d love to keep in touch so we can hear how you are doing with your online business!
How do you build a business that gives your more freedom, time and energy – instead of one that sucks up every waking minute?
That’s a question that has driven me for years.
I love to ski, travel, and have the flexibility to spend time with my kids when they need their dad around most – and I prioritize those things so much that I’m very intentional about building a business that allows for me to do them.
Now, before anybody accuses me of selling false dreams to naive newcomers, I want to make one thing really, really clear:
Building a business requires hard work, no matter what kind of business it is.
So please don’t confuse my excitement with lifestyle businesses with the foolish notion that it’s going to be easy at all times, or that you’ll be able automate every bit of work away – you won’t!
Every business will require hard work at one point or another. If you can’t accept that, don’t get into business.
But that being said, one of the most eye-opening things I’ve discovered in my entrepreneurial journey is that some business models are simply easier and more rewarding than others.
So don’t make this any harder than necessary – pick a business model that has as many advantages as possible to make starting your business a heck of a lot more fun!
We live in unprecedented times…
An entrepreneur today can develop or source products from one of thousands of manufacturers and suppliers, open an online store, and reach a global audience of buyers…all within a week!
Running your new business can be done primarily through software automation. Most remaining manual tasks can be done by specialized outsourcers you contract with from around the world.
And to top it off, you could do this from anywhere in the world, as long as you have access to the Internet.
Sounds like a dream, doesn’t it?
It is…but it’s a dream come true.
More and more entrepreneurs are leveraging the power and reach of today’s amazing technologies to build businesses that allow them to live incredible lifestyles of freedom of time and location.
That’s what this business – LVRG – is all about.
We’ve spent the better part of the last decade learning the secrets to building businesses that give us maximum freedom and lifestyle benefits, and it’s our mission to help 1,000,000 entrepreneurs do the same.
Let’s get started! Here are the seven most important strategies we’ve learned about building an ideal lifestyle business:
1. Choose your business wisely
I’m surprised this one even needs to be said, but my experience tells me it does:
Certain business models allow for much more freedom than others, so you must choose a business model that matches your desired level of freedom!
I have worked with many entrepreneurs that started their business with freedom in mind, but then chose to build a business model that gives them anything but that.
After three years of hard work, they are miserable because they feel like they can’t step away from their work.
The easy-to-grasp example here is the person that opens a restaurant with the conflicting goal of being able to travel the world whenever they’d like.
Sure, there are globetrotting chefs that live a glamorous lifestyle of travel and celebrity parties, but that’s very rare. Most restaurant owners are there at 6am to receive the morning delivery of food, and there at midnight to finish cleaning and close the place down.
Hardly the lifestyle we’re after!
So what are the characteristics of businesses that actually can provide the B.O.L.D. Business™ lifestyle we are after?
Here’s a list of questions we use to evaluate new opportunities:
Does it require direct interaction with people?
Ideal answer: No. Interacting with people is time consuming and often very frustrating! Ideally we’d find a business where people just buy our stuff and go on their way.
Does it require me to be in a specific place?
Ideal answer: No. We love to travel and enjoy flexibility of location. Want to work from the mountains for a few months of the year, then from the beach the other months? It can be done…but not if you are running a restaurant!
Does it require me to work specific hours of the day?
Ideal answer: No. Ideally we can have the flexibility to choose our work hours. This is one of the big reasons why running a business that require direct interaction with people is difficult. Interaction with people usually requires coordinating schedules so meetings happen smack-dab in the middle of other stuff you’d like to be doing!
Do I have to personally fulfill the product?
Ideal answer: No. Ideally we are selling a product that can be put in a box and shipped, or delivered via email or website. Those things can be automated or easily done by someone else!
Can I automate and outsource the far majority of work?
Ideal answer: Yes. Some businesses have work processes that are very creative, customized, or just hard to turn into a process and hand off to someone else. We avoid those.
Can I reach large, proven markets of people online?
Ideal answer: Yes. Selling to a small market, or a local market, can make it harder for you get away. Big, easily reached markets have the power to bring you a steady flow of customers without a ton of personal effort.
That’s a very helpful list, isn’t it?
If you don’t think carefully before jumping into a business, you are likely to find that you have developed something that doesn’t meet the criteria you are looking for…after it’s too late!
2. Automate everything
The software that is available to help you run your business today is like magic.
Simple software systems have eliminated so much manual work and cost from building and running a business that it almost feels like cheating when you know how to use it to your advantage!
You should consciously work to find how you can automate every possible task you can at your business.
Here are some of the key processes that can be automated, and our favorite resources to get you started:
- Ring Central
Funnel Building/Shopping Cart/eCommerce
Pretty Much All of Your Business Processes!
3. Only use online systems
When it comes to creating a lifestyle business, nothing has done more to make it possible than the Internet.
We live in amazing times, when you can find, communicate with, and sell to just about anyone, anywhere!
We do business with people in almost every country around the world!
To completely leverage the potential of the Internet, you should only use business systems that LIVE on the Internet, and can be accessed anywhere in the world.
Not only does this allow you to operate from anywhere in the world with an internet connection, but it also makes it much easier to integrate your business systems together, and integrate with your various suppliers and vendors.
Doing so means less manual tasks and processes, faster communication, and increased flexibility.
We’d challenge you to find any business system that can’t be done online at this point!
So do yourself a favor and insist that every system in our business is online!
4. Outsource instead of employ
Not everything in every business can be automated (but wouldn’t that be nice?!).
For those things that still need to be done by a living, breathing human being, you should be aggressive about outsourcing everything that doesn’t absolutely, positively need to be done by you.
Ideally not. Employees are expensive, require a lot of hand-holding, and are hard to get rid of once you have them.
You can find outsourced help for every imaginable task, at prices that will shock you.
And more importantly, you can find really, really good talent at prices that will shock you.
We’ve had a team of people working for us in the Philippines for years – each at an average of $500/month – that are an incredibly loyal, hardworking, and talented group of people.
That same quality would cost us 10x or more if hired in the United States.
In addition, when we need specialized work done – videos created, websites built, software developed, t-shirts designed, etc. – we don’t hire employees to do the job!
No…we have a cadre of outsourced resources around the world that can do that kind of work fast, affordably, and at incredibly high quality.
Sometimes for as little as $5 per job!
Here are some of our favorite outsourcing resources. If you’ve never looked into these before to see the vast marketplace of outsourcing options, it will be a real eye-opener:
You can get just about anything done on Fiverr for $5!
5. Empower front-line decision making
If you want to truly have a sense of freedom from your business, you can’t be glued to your email and phone all day long answering basic questions for your team.
You must learn to delegate the “front-line” decision making as effectively as possible.
What do I mean by “front-line”?
I’m referring to all of the decisions that happen on a daily basis at your business that deal with things like customer support, refunds, minor operational changes, etc.
The perfectionist, type A personality in us wants to have input and control over all of those things.
But the freedom-loving, lifestyle entrepreneur wants to give up control of those things – in a smart way – so that we can enjoy our time and work on more valuable things!
So how do you empower your front-line decision makers to make good decisions for your business…especially when they are outsourcers?!
It’s not as hard as it seems.
First, we give everyone on our team three simple guidelines to work from when making a decision. We have them ask the following:
- Is it good for the company?
- Is it good for the customer?
- Are you willing to be held personally accountable for the decision you are about to make?
If they can answer ‘Yes’ to all three of these questions, then they should go ahead and make the decision!
That was pretty easy, wasn’t it?
Now, obviously we don’t give everyone that kind of decision-making capability immediately…they have to earn it over time.
So what do we do in the meantime?
We create rules and processes for almost every scenario that could come up. This requires you to have a good grasp on the processes and numbers of your business.
For example, if someone requests a refund for a product, and the cost of providing that refund is less than $X, we tell our team to immediately provide the refund, knowing that the cost of getting us involved in the decision is way more than the cost of the refund.
Giving your front-line team clear guidelines like this resolves 95% of issues before they ever reach you, freeing up time and energy to focus on other things.
It’s your job to determine the most common front-line issues in your business and create simple guidelines to eliminate them before they reach you.
6. Market & sell online
There is nothing cooler than the first time you wake up to a customer order from someplace on the other side of the world!
Marketing and selling online makes this possible!
By being able to market and sell online, you give yourself the gift of a much, much larger potential customer base, and the ability to reach them at a cost that is unheard of in history.
You can now reach a person on the other side of the planet and get them to raise their hand and say “I’m interested in what you have to offer”, for literally pennies.
That was impossible just ten years ago!
This creates more freedom for you.
If you master marketing and selling online, you’ll never has a shortage of qualified prospects and customers in your sales pipeline, which means more consistent revenue for you.
You also are no longer limited to the potential customers in your own backyard (hometown, city you live in, etc.).
Some businesses would be impossible to make viable if you only sell to the people immediately around you, but become incredibly opportunities when opened up to the entire global market.
This gives you the freedom to develop very focused, niche businesses designed around your passions, while still having a great income potential.
Finally, marketing and selling online can be put on auto-pilot. You don’t need to pick up the phone or meet with people all day long to prospect and sell.
Instead, you can fire up some ads and let them do the work for you, 24 hours a day.
It’s a beautiful thing!
7. Create recurring revenue
The ideal business doesn’t just sell something once to a customer and then say goodbye.
The ideal business creates revenue that comes in multiple times, and ideally very consistently.
There is nothing more liberating than knowing that you have predictable income coming in, month after month!
It takes a lot of hard work to find a new customer, so once you do, you want to make that relationship as lucrative as possible!
In some businesses, this is more difficult than others and you have to get a little creative to generate a recurring relationship, while others are naturally recurring in nature.
Examples of businesses that are naturally recurring:
- Subscriptions to newsletters
- Consumable products like vitamins, dietary supplements, etc.
- Software as a Service
- Fan clubs, membership sites, etc.
- Cell phone and cable subscriptions
These businesses have the benefit of products and services that a customer will naturally buy from over and over again.
But just about any business can be made to have a recurring revenue stream with a little creativity.
You’ve no doubt seen businesses that have taken normally one-off purchases and turned them into recurring revenue models. Here are some examples that we like and can generate some ideas for you:
ClubW.com sells wine on a subscription basis:
Dollar Shave Club sells razors and shaving cream on a subscription basis:
MeUndies.com sells underwear on a subscription basis!
So as you can see, just about any product can be sold in a way that generates recurring revenue – even underwear!
So get creative with your business model:
- Can you add a paid newsletter?
- Can you provide automatic, regular delivery of more of your product?
- Can you sell access to a paid training area?
- Can you offer paid “Members Only” club that provides premium benefits and discounts?
Recurring revenue is quite possibly the best thing you can do for your business, so make this a priority!
Use these 7 strategies to build a business you love!
Building a business is full of challenges…you don’t need to make it any harder on yourself than necessary.
To build your ideal lifestyle business,you need to make smart decisions about your business model to be able to create the lifestyle you are looking for.
As we said earlier, some business models are just easier and more profitable than others – we suggest you go with those!
As Warren Buffett says,
“I don’t look to jump over 7-foot bars; I look around for 1-foot bars that I can step over.”
If even Warren Buffett looks for the easy investment opportunities, don’t you think you should to?!
We hope this guide serves you in making good, profitable business decisions as you work to build your business.
Now go build something!