14 Business Tips Nobody Told Me About

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What you’ll find below is a bunch of stuff I learned after I started my own business. Had I know this stuff before I started, I’d be in better shape. Your results may vary. A lot of the tone below is like “YOU SHOULD!” Go ahead and give yourself a pass to do the exact opposite. I’m just getting started…

Test the effect of responsiveness in key areas of your business.

I’ve found that the need to respond to an email inquiry reduces by about 25% for every day that I let it sit in my inbox. If I let my email account go for 5 days, I can delete almost everything in it.

In the case of custom quotes, I’ve found that the chances I score deals behaves similarly. If you have a business that relies on quotes, try turning them around in less than 30 minutes and measure the effects. In some cases, I’ve found the effects to be so profound that I began working in extra margin to cover for the mistakes I’d make. Even though I was less compeftitive on price, I increased my close rate and overall profitability.

I’ve also found a similar effect when people owe me money and with our accounts receivables ledger. I’d say the chances of somebody paying their bills probably decreases by 25% after every 4 week period.

I’m pulling these numbers out of the air. They’ll be different for every business. I’d recommend you play around with this and develop your own rules of thumb.

People are going to be annoyed with you.

I know I piss a lot of you off. I’m sure I occasionally leave conversations and people are like “that guy was a douche.”

If you’ve made a difference in your community, or just made a stack of cash, you are probably pissing a lot of people off. That’s because you’re in the game. You can’t build a road without paving some meadow. You can’t build a team without firing some people. You can’t write a blog without driving people nuts, and you can’t have a point of view without miffing those with the opposite.

Your business, if it’s gonna pay you, will effect a lot of people’s lives– hopefully for the better. In the process of making the world a better place, you are gonna piss people off.

Get used to it.

Once you’ve got your bills covered, start risking your time (not your cash).

When I get my bases covered with a new stream of revenue, I put people or a process in place, and then I start exploring new ideas. At first it was SEO. Then it was traveling and meeting people. Then it became writing and podcasting.

Business owners often feel they need to stick around to hold down the fort. Instead of risking their time, they risk their cash. That often ends badly. Proof of concept is all on you, dear entrepreneur. That’s why Ian is cold calling customers for our new product lines. That’s why I’m starting new blogs. You can’t buy passion and insight.

The #1 example of this muck-up I see? Hiring big money sales “ringers.” Don’t do it.

Employees help you work less.

The promise of employees has always been that you’d have more hassles. More headaches. More to manage. My experience has been the opposite.

The first 24 months after your first invoice will be tough.

Your business doesn’t start when you put up a website, a blog post, or an advertisement against your content. Your business starts when you issue an invoice. Get there as fast as possible. From the moment you issue that first invoice, it’s very possible you’ll feel like it’ll be impossible to make a living from your shitty little product line or fleet of websites.

For months during our first 2 years I was scouting out other opportunities. No way, I thought, were we ever going to make any money. In business, 24 months isn’t a lot of time. But in my mind, when I was working all day long and stressing out about bills, it was tough to keep that in perspective.

I think the best defense against burning out in this case is not minding being broke and sticking to your mission. (In my case that was to run my own company). Minding being broke is probably the #1 reason people pack up the tent and get a job.

Networking is a multiplier.

If you’ve got nothing (0), there is no multiplier that helps. Even meeting Donald Trump won’t lead to anything if you don’t have a business under your belt. We often talk about the concept of ‘getting to the table.’ The path to the table is paved with the work, and the way to consistently get invited there is through the work. The most surefire way to have a great network is to do great work. So ditch the networking events, and stay in and build something people want to hear about over a few cocktails.

It’s not an interesting source of income until you can hire somebody to develop it.

I love the metaphor of ‘conversations’ for business. If your ebook business, or other ‘passive income’ generating site/application, etc doesn’t have somebody interacting with market forces, making adjustments, launching tweaks, putting out new content etc, your income will slowly die. Yeah that sounds right. I think I can say that again. Your income will die. That’s why the ‘passive’ income holy grail for me is finding online businesses that make enough cash flow to put somebody in charge of them. The good news is that somebody smart, flexible, and passionate about online business might only cost you $1000 bucks a month.

Don’t start a software company if you don’t develop software.

Make an exception at your own risk.

Way back in 2007, I read “Getting Real” by the guys at 37 Signals and thought I’ve got a great software idea. 20K+ later I had a huge bundle of shit software and a not-so-happy investor. I was a competent manufacturer trying to start a software company. Worse, I didn’t even have the basic sense to start learning the software language my entire company would be founded on. I was smart enough to not throw any more good money after bad. After the 20K debacle, I closed up shop and started a manufacturing business.

Your accountant does not know about offshore entities.

If you haven’t talked to an accountant lately, you should. It’s cheaper than you think (couple hundred bucks a month) and it’s a wonderful exercise to talk to a third party about your finances.

Unfortunately for us traveling types, your local accountant probably won’t know anything about opportunities to start offshore companies or trusts. They’ll probably even dissuade you from seeking international diversification. My accountant is a really smart guy, but basically clams up when I ask a simple question like “should I be working to develop some of these business entities in other countries?”

A few reasons seem clear: 1) they’d lose any business clients take offshore and 2) they could get themselves in hot water by suggesting stuff that violates rules. One of the key roles of your accountant is to ensure your financial reporting complies with the law. Since there is still a lot of legal overlap and grey area when you start to consider overseas incoproations, international diversification is more about interpretation and creativity than reporting and compliance.

If your local accountant knows nothing about offshore stuff, who does? In my experience, pretty much only people who have offshore stuff going on themselves. That’s a relatively small group of people who aren’t exactly available regularly for free consulting. My advice is to experiment with this stuff and have some fun with it. It’s a lot of fun and as long as you never hide a source of income from the IRS (which is a crime), you aren’t putting your business at risk.

Your logo does not matter.

Back in the day Ian and I used to run off and get a logo developed the moment we had a new business concept. Now we even have a full time designer to indulge our logo dalliances. Having sweet logos is cool, but I can assure you, it doesn’t fucking matter. Also, you can change your logo anytime. Nobody cares.

Money is a bad for motivation, but great for measuring and setting perspectives.

You might have heard that when you offer cash as a reward for intellectual tasks, performance decreases. It’s also good taste for entrepreneurs to say “I don’t care about the money.” I think that’s the right instinct. Although Ian and I are aggressive and consistent about setting clear revenue goals, it isn’t really the money that drives us day to day. Charging for stuff is probably the best way to figure out if people care about what you are doing, but it’s no reason to wake up in the morning.

This week we set a revenue goal for 2012. The number helps our organization measure overall health, impact, and growth– but the primary impact is in expanding our perpectives. If last year I wrote as a person who runs a million dollar business, what would it look like to write as somebody who is doubling that? How does such a person think differently? If I’m the sales manager in such an organization, what do my responsibilities look like this year if the total volume of orders doubles?

Cash behaves like water.

The reason they call cash “liquid” is that it’ll seep out the cracks. Business money doesn’t work like the money in your wallet. It flows around from customers, employees, services– you name it. If you want to keep cash in your business, you’ll need to define exactly how it’s going to be earned. I still don’t really understand this stuff. I know this though– if you don’t define how much cash you plan to have at the end of the month, chances are, it’ll find it’s way into some crack (or “investment”) you didn’t know about.

Buy an Apple computer. It won’t take you long to learn the software.

Unless you are neck deep in HUGE excel spreadsheets or playing some massive online multi-player game thing (you aren’t), you should get a Mac. Try one of those slick Macbook airs. Both the OS and hardware are significantly better than the PC experience. You spent a huge percentage of your waking hours on a computer, and you should stop messing around with subpar stuff. You’ll learn mac software in less than an hour.

Your niche isn’t a niche. It’s a freakin’ industry.

That thing you are calling a niche? It’s not a niche. It’s too big. It’s vague. It’s general. It won’t work.

Here’s the format:

[The specific problem I solve.] [The unique point of view I solve it from.]

That’s it!

Talk soon,

Dan

PS, if you’d like to get on my private mailing list just put your email address in to the form:

Published on 01.18.12
  • AccentJim

    Great insights – thanks, Dan!  I’m feeling a little unclear on one element: Risk time, not cash.  Specifically I’m thrown a bit by “Business owners often feel they need to stick around to hold down the fort. Instead of risking their time, they risk their cash.”  Are you saying that the mistake is managing your business and using the cash to experiment in a new area?  Is your point that it’s better to set up the successful business to be run by others and then put your time into something else for another stream of income (and/or pursuit of bliss)?  Thanks.

  • http://www.facebook.com/lornali Lorna Li

    I would love to just use a Mac, but I find that a lot of Internet Marketing software built for PC only : – ( 

    I am looking at the awful possibility I will have to schlep 2 laptops to Bali. Ugh…

  • http://wagefreedom.com/ Tom

    “That’s why the ‘passive’ income holy grail for me is finding online
    businesses that make enough cash flow to put somebody in charge of them.”
    — as distinct from businesses that put cash into my account each month w/out anyone needing a clue as to the way it should/has to adapt to a dynamic universe.
    I think those are called ‘dreams’.
    The trick is systems that make it passive FOR ME. Huge difference in where I aim. Thanks for that– I’m slow!!

    ‘It’s not an interesting source of income until you can hire somebody to develop it.’ — deceptively simple aphorism for the age of the micropreneur Dan. Excellence.

  • http://www.paulovsk.com/ Paulo R. Ribeiro

    Great! Really good

  • http://awebsitedesigner.com.au Dan Norris

    This is a great post well done, but I’m very keen to prove you wrong on the software one!!

  • http://www.livinginthailand.net/ Neale

    “pack up the tent” you keep talking about tents, in one of your podcasts I remember hearing something like “if you need to live in a tent in your mothers yard to succeed” just do it. 
    What was funny I was thinking of doing exactly that “not cause of the money” because my mother has a beautiful place in the country with no spare room. 

    I like the liquid money analogy makes total sense..

  • http://www.tropicalmba.com Dan

    Yeah who knows where that is coming from!? It’s been years since I’ve stayed in a tent….:)

  • http://www.tropicalmba.com Dan

    Yeah man, I totally hope you do. Your concept is the shit.

  • http://www.tropicalmba.com Dan

    Thank you sir! 

  • http://www.tropicalmba.com Dan

    haha thanks Tom. I don’t want to be in the business of killing people’s dreams! :D Let’s hang! 

  • http://www.tropicalmba.com Dan

    oh no…… what software! ? oh no…. yeah, i mean PC isn’t that bad that I’d carry two. also you know MACs are pretty good at running windows right? i’ve had friends, who were committed to outlook and their old .pst files, so they ran windows on their new mac devices for a new months until they could get everything switched over. went off without hitch.

  • http://www.tropicalmba.com Dan

    Jim,
    Thats exactly it, I wish you wrote it and not me! It’s a common temptation, one that I’m prone to as well, to try in “buy-in” new cash flows rather than developing them with your own time. These investments often fail. I think it’s better business and more fun to risk your time with new stuff and put your cash flow to work on defined revenue streams. D

  • http://www.adsenseflippers.com Joseph Magnotti

    Love this, especially the “people will be annoyed with you” bit.  So true.  Success drives some people to terrible  jealousy which is quite maddening when it’s your friends.  

    The “cash behaves like water” point is interesting too.  We use monthly reports with summaries by project to see where out money is going.  Very important if your company is involved in multiple ventures.

    I think you can substitute a good bookkeeper for an accountant.  Cheaper and they will actually do the work of tracking payables and receivables.   But talking to an accountant once a year, especially when you first start up is important.Still not sure about the Mac, though. The only way I will really know for sure is by taking the plunge.  I just wish I could rent one for a week instead of dropping $1000 or more to find out I didn’t like it.  Plus my entire setup is PC based, so I am worried about compatibility.

  • http://www.surviveprogress.com/ Collin

    I’ve kinda been coming to that conclusion about logos as well. Glad to see someone else thinks the same way!

  • Justin Miramontes

    Same here, but I’m never switching to a mac. I don’t see how I could possibly be any more efficient. I flyyyyy on my PC. Don’t see a point in switching other than having a sexier looking, lighter laptop. pazz

  • Justin Miramontes

    Reading the logo tip reminded me to look at our logos on our stores. It’s been a while since I’ve even taken a look at those things! And I made them! lol. They really don’t matter all that much… I’d say get them somewhere halfway decent and spend your time stressing about similar, but more important, things like content structure.

  • AccentJim

    Thanks for the clarification, Dan!  I think better with my time than I do my money anyway, so this is a great way to look at it.

  • http://awebsitedesigner.com.au Dan Norris

    I have to be honest I just switched to Mac and while I do love my mac and I definitely won’t go back I really don’t know if I’m more productive. I really had the shortcuts and the moving between words in a sentence etc down pat on the PC, the little control arrows and control selects etc. It’s all a bit delicate on the mac. I’m getting used to it but I couldn’t honestly say I’m more productive. Then again it is sh*tloads faster so perhaps I’m saving time on opening programs and booting etc. 

  • http://damianthompson.com Damian Thompson

    I “feel” the logo advice as I am doing that right now. I remember my dot-com logo in 2000 cost me upwards of $10,000 with color studies and other ridiculousness. I spent $100 on my new logo and it will suit me fine as I can always change it later, living in a digital world means not wasting money on printed business materials.

  • http://www.tropicalmba.com Dan

    word! your logo looks good by the way. i dig it.

  • http://www.tropicalmba.com Dan

    ! :D

  • http://www.tropicalmba.com Dan

    agreed there, you’ve got a much better financial brain than me so the bookkeeper thing makes sense for sure. i was worried about compatibility too but i haven’t had any issues. the primary issues for my friends who switched over was outlook…

  • http://www.tropicalmba.com Dan

    for me i’ve saved time on total downtime as well. last year, with a relatively new PC, i was down about 8 days with viruses and OS issues. so far 0 days with the mac. 

  • http://www.hustletoparadise.com/ Harrison

    I was actually at an art museum that displayed popular company graphic logos, “Before & After”. Some of the before were definitely better, other afters were better, and some, well … both just sucked. If well-known companies change their logos, then yea, definitely logos don’t matter. Definitely agree with that!

  • http://www.expatcfo.com/ Cpa Andrew

    Dude, you totally stole my thunder… I was typing almost the same exact blog post when yours popped up in my reader :-)

    Very well done, I cant agree more with your points. So many people have pie in the sky ideas of the way business works.

    Being a CPA, I just want to echo that talking to a good CPA is key. And yes, what most of them consider “off-shore” advice is just sad. If they don’t want to talk about off-shore stuff, they are scared and in denial!

    As an offshore entrepreneur, what is the most valuable thing your accountant ever told you? And what would your “ideal” CPA to support your lifestyle business look like? I’m looking to expand our ExPat business into this kind of niche…
    http://www.cpaandrew.com

  • http://www.tropicalmba.com Dan

    word! 

  • http://www.tropicalmba.com Dan

    haha sorry Andrew!! :) i think there is a ton ton ton ton of room here for great content. it’s really tough to say, so far the most useful thing has been anecdotes of similar entrepreneurs and what they’ve done… i can draw lessons from the stuff they’ve done based on how similar I see our operations to be. 

  • Peter

    “Stay home and build something”. Love that! How many times have you stood around and listened to some idea that sounded downright goofy or pie in the sky. I’m not saying all are that way but you know.

    BTW, Networking is all about cocktails. If you’ve got game the cocktails help you sell it even better.

  • http://www.expatcfo.com/ Cpa Andrew

    That is really useful to know, thanks for the input!

  • Elijah Murray

    Don’t do it! There are tons of alternatives. Just do the research to figure out what you like best! (This is a comparison of the best options) http://bit.ly/xO9nUQ

  • http://www.facebook.com/profile.php?id=184702085 Matt Lea

    Right about now I would say “Don’t start a software company if you ARE a software developer either” I did that and my OCD tendencies to rewrite every line of code to the aboslute perfection before launch that burns cash like crazy but gives us a great product. I have trouble letting go of the code to the developers so I can get my fat ass out there and sell. Hopefully I can over come this barrier and get this thing moving. Who knows but I will be damned if I am giving up this easy.

  • http://www.facebook.com/profile.php?id=184702085 Matt Lea

    Also Ubuntu OS machines beats Mac 7 days a week

  • http://twitter.com/workingnomad Anthony Page

    I dont agree with the comments about changing to a MAC? You have far more choice with PCs / Android systems.

  • http://www.tropicalmba.com Dan

    haha. cheers man, keep up the good fight :)

  • http://www.tropicalmba.com Dan

    really? i’ve never used it, only guys i know who do seem to spend an awful lot of time talking about their OS! 

  • http://www.tropicalmba.com Dan

    haha, i read an article the other week that said as much. suppose i’m a pro then! :P

  • http://www.tropicalmba.com Dan

    true, i agree with that. options for a tech dunce like me are dangerous!! 

  • Alasdair

    Really enjoyed this post Dan!

  • http://www.tropicalmba.com Dan

    Thanks A– E and I were just admiring an email you sent for KBS! Cheers,

    D

  • http://www.smartincomeinvestments.com/ Brett

    Ha ha ha. I’ve been a software developer for 15 years. Hardly anything I’ve built for a client has made them money. In 99% of cases it’s because the client’s idea was crap. 95% people who approach you have seen a product they like, and want you to copy it.

  • http://www.tropicalmba.com Dan

    oh wow that’s telling!!! 

  • Pingback: 20 Must Read Blog Posts About Entrepreneurship I Wish I’d Written | Pocket Changed()

  • http://marketingwithsergio.com/ Sergio Félix

    Not crazy about the Buy A Mac recommendation (I own one btw) but I really freaking LOVED every other bit.

    I have been going insane lately because I still don’t have a logo but I recently read (or watched, I can’t remember) somebody saying most big sites, just use a damn font for it.

    Thanks for the rest of the tips, building a software while being a manufacturer, did not seemed like a good idea. I have made really similar stupid decisions as well.

    But it’s good to know I’m finally starting to ‘get it’.

  • http://www.tropicalmba.com Dan

    Hey thanks for that Sergio!!! Some guys who know a lot about computers disagree there a lot, for me– a computer half-wit– having a mac really helps. 

    I’m hoping to ‘get it’ someday myself! Good luck….

  • http://www.nocigarmagazine.com/ Sunit D

    Fantastic post and extremely to the point. I also love how you’re so encouraging about trying something new. This is the biggest lesson that I’ve learned from my experiences as a business owner. There’s very little risk in trying new little changes, and so much to gain.

  • http://www.tropicalmba.com Dan

    Thanks for checking out the blog! Appreciate the kind words. 

  • Andy Black

    Thanks guys. I didn’t get that bit either. Makes sense now. :)

  • doyleRiot

    This was awesome. Straight forward. No bullshit. Didn’t repeat what everyone keeps regurgitating.

    Especially the part where people will be annoyed with you.

  • Sherise V Dyk

    No, most software certainly isn’t built for pc only, and it also certainly wasn’t 6 yrs ago. I hope you got a mac by now!

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