You can start a business with nothing in your pocket as long as you have the guts and the purpose to earn money for yourself and for others. Carlos Orjuela from Mexico asks Ken Courtright how to start a business with little or no money at all. Ken suggests that getting investors is the most feasible way to start any business, and that you can do so by listening to what investors want. He advises Carlos that he can greatly capitalize on what he already has which is his skills on being a bilingual marketing expert, because starting a business is not just about looking for money but also understanding how to raise that money.
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Listen to the podcast here:
How To Start A Biz
This episode is part three of a three-part series of me answering questions that came in on email, people displaying their current business challenge and what would I do if I had that challenge. This next one comes from Carlos Orjuela from Mexico. He says, “I wonder if you can guide us on how to start a business when there is no or close to nothing in relation to money to invest. How do you start a business with nothing and/or what is the best strategy to get investors for our projects?” I’m going to hit both of those. First, how do you start a business with little or no money? Number one is you don’t get good. You get done. You start. Dig into episode six and go hardcore into that Guaranteed Growth model. It’s an accomplishment model. I don’t have time to go deep into it on this episode. When you read episode six twice, you develop a personal accomplishment model and attack. You do not stop until. The other option is you can do what Federal Express did in the 1980s. You can have your clients or customers fund your business. You may or may not know the famous Federal Express story.
In the ‘80s, Fred Smith ran a commercial that said, “When it positively has to be there overnight.” That commercial was laser targeted at the CEOs of the biggest companies in the world because these were the companies that needed packages overnight, guaranteed. They called up FedEx. FedEx sales reps told them, “To work with us, you have to commit and prepay for a one year contract with us.” All these companies prepaid FedEx. That commercial was run in order to raise tens of millions of dollars. Even though it did give him tens of millions and he was able to buy nine Falcon jets, he came up short and had to borrow a tremendous amount of money to finish. The proof of concept was there. He ran the commercial. People bought it. Because people paid him for a product that was not yet even invented, he was able to get a loan. My hardcore recommendation is as follows. I would jump into episode six, which talks about specifically using meetups. You do meetups until you sell X amount of marketing packages, X amount of clients or coaches. The bottom line with an accomplishment model is you do something until. I’ll give you some examples.
Carlos is a bilingual marketing expert. He could run Facebook ads, which are next to nothing, to a landing page. He can do those until he has, say, three clients. Those three clients prepay or pay monthly. Now he can parley those three payments into a larger Facebook ad campaign and get ten to fifteen clients. If he pinches 50% of that money, he could parlay that into a year’s worth of clients. Carlos could do an email campaign. Who would he email? He can look at who currently is looking for bilingual marketing help. That could be businesses that have bilingual clients. If he could go to the library and the library uses Reference USA, which is free, you have now a national registry for free that you can export all phone numbers, email addresses and business owners’ name. They have a Spanish and/or a bilingual category. It’s done by SIC codes. Carlos can do an email campaign until he has X amount of clients. He can pick up the phone and dial until he has X amount of clients.
Pick an accomplishment model and do it until you have the results you want. Click To TweetI got back from Bucharest. Most of our marketing department is now in an office in Bucharest, Romania. My wife and I flew out there to see it. The last time we were out there, there were only five employees. Now they’re close to 50. We wanted to do some team building and touch people basically. I couldn’t believe it. When we landed, Paul, our friend, picked us up at the airport. Driving us to the center of Bucharest, I said, “Look at all these office buildings. All the lights are on. Everybody is still working.” He goes, “This is Bucharest. We came out of communism several years ago. Everybody, if they want to keep their job, works from 9:00 AM until sometimes 9:00, 10:00, 11:00 PM otherwise, there’s somebody right in line to take their place.” It reminded me how soft we are in America, how little work habit and work ethic we have in America. Nowadays’ entrepreneurs, successful, hard-charging and driven people, are still head to the wall, grinding out and cranking until the job is done. My recommendation to Carlos is to get started. Pick an accomplishment model and do it until you have the results you want. Don’t stop until you have the results you want.
What’s the best strategy to get investors? I only want to hit this on a high philosophical and psychological level. You’ve got to know what investors are listening to. What radio station are they tuned into? WIIFM, What’s In It For Me? Why would I invest in you? Why would I put money in your company? When you put a package together for an investor, the number is 47%. An investor wants to see an average or an aggregate of a 47% return on his money. He is not expecting your return to be 47%. What an investor knows is, “I’m going to lose on 60% to 70% of these deals. I’m going to lose all my money. I want to hit a home run one out of ten or two out of ten times. I’m hoping that if I invest in ten people, my total aggregate investment is going to give me about a 47% return. He’s going to triple, quadruple his money on some. He’s going to hit a home run. $1,000 might turn into $1 million. Here’s the deal. Whenever you’re looking for an investor, you want to present a huge upside in his language. You also want to present a low downside.
You need to mention, “There is a chance this isn’t going to work. However, if this doesn’t work, my contingency plan to you is if I lose all of your money, I commit to you. I’m going to start another business. I commit to you 2% to 5% of the gross sales of my next business or my next job until your seed money is paid back. You have my word. I will guarantee this.” As soon as you say something like that, not only are you going to have his attention and probably get money from that person. They’re going to probably communicate with you on a different level and start talking to you as a business owner. They might want to even get into your plan and help your business plan better because now you’re talking like a real business owner, a real human being with a heart.
You’re not just looking for money. It’s all in the process and setup. It’s in the fact that you seek to understand before you’re understood. Most people that want money from an investor just want to be understood. “Here’s my plan. Here’s why it’s going to work. Here’s what I got. It’s awesome.” The people that want to get money from an investor want to first seek to understand, “What do they want? What do they need?” It’s much more important to most investors that they don’t lose their seed capital than it is to get a huge return. You want to speak to them in that way. Carlos, I hope this helps. For everybody else reading, I hope everybody could pull a nugget or two out of it. If you’d like me to throw some feedback on a business challenge you currently have, feel free to email me at Ken@IncomeStore.com.
Important Links:
- Guaranteed Growth – Previous Ep
- Ken@IncomeStore.com – Ken’s email
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