1. Find a need in the marketplace.
Create a product or service to supply that demand.
Ensure it’s both scalable (big market) and doesn’t depend on your own time to deliver it.
For example, if you’re essentially selling your own time, it’s more a job than a business and can’t be scaled.
In contrast, if you’re selling something downloadable or it’s a SaaS (software as a service), it’s virtually infinitely scalable, subject only to limitations of market size.
Always focus on the customer, and continually improve.
2. Create a sales funnel.
When a lead comes into your business, there should be a clear, measurable path they follow towards the sale.
Selling online makes this easier as all the data you need to improve the process is readily available.
Examine the data every step along the way and continually test improvements (including the initial lead acquisition).
3. Reduce your customer acquisition costs while maximizing customer revenues.
You want to get to the point where it costs less to acquire a customer than the value that customer represents to your business. In other words, you profit each time you acquire a customer.
You then scale up whichever channel is delivering that for you (i.e. invest more into it), and seek new channels to do the same with.
This not only provides you with increasingly healthy revenues as the business grows, but also a multiple of that when you come to sell. You should always think about the exit, otherwise it’s more of an income generator than a wealth creator.
That’s a broad overview, and obviously it’s simpler said than done.
But the potential for making money is far greater than say;
- Working your way up in a job: you can end up on a good income, but there’s no asset at the end you can sell.
- Investing: with most investments, you’d be lucky to see a double digit percentage return, and it’s risky as you have little control. Contrast that with say a 400% ROI on a marketing channel for your business.
- Gambling: if you want to make money gambling, then you own the casino not play in it.
All in all, running a business is the way to go.
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