Latest / Masterminds Podcast / Everyone Says Start a Business... But Here’s What They Don’t Tell You - Masterminds Podcast EP10

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Everyone Says Start a Business... But Here’s What They Don’t Tell You - Masterminds Podcast EP10 · Masterminds Podcast

• 0:00
  SPEAKER_00: Everywhere on the internet, every guru is telling you that the only way to achieve success, the only way to build true wealth is to start your own business.
• 0:09
  SPEAKER_00: Ownership, ownership, ownership.
• 0:10
  SPEAKER_00: But nobody is telling you how.
• 0:12
  SPEAKER_00: I don't have time for theory.
• 0:13
  SPEAKER_00: I'm all about the practicals because when you watch the Masterminds podcast, we should take you one step closer to becoming a mastermind.
• 0:21
  SPEAKER_00: So today I'm going to take you through the nine steps to build a business without becoming broke.
• 0:28
  SPEAKER_00: Step one, get a job or keep your job.
• 0:32
  SPEAKER_00: Now, this advice is coming from me who started a business in what I can call privileged settings.
• 0:39
  SPEAKER_00: You know, I started Lynx when I was 17 and I was living at home with my mom.
• 0:44
  SPEAKER_00: So I didn't have to pay for rent, I didn't have to pay my bills, didn't have to buy food to eat.
• 0:50
  SPEAKER_00: My mom took care of all of that while I took the risk of starting my business.
• 0:54
  SPEAKER_00: And after about three to four months of starting the business and things were starting to grow, she took a loan with her salary to help me to continue running the business.
• 1:05
  SPEAKER_00: So I can say I am a privileged person because I had my mom's support.
• 1:10
  SPEAKER_00: Now, for most people, you don't have that backup.
• 1:14
  SPEAKER_00: Most people, if you are starting a business, entrepreneurship is really, really hard.
• 1:19
  SPEAKER_00: You're going to have a lot of days where there's no money coming in, a lot of days where the business feels like nothing is working out for you.
• 1:27
  SPEAKER_00: So you need to have a support system.
• 1:30
  SPEAKER_00: And that support system is a job.
• 1:33
  SPEAKER_00: Now, there are two ways in which you benefit from having a job.
• 1:36
  SPEAKER_00: The first one is that your job will give you the funds for you to survive, and you can also put some of those funds away to keep funding your business over time because you will need money as the business goes along.
• 1:49
  SPEAKER_00: Before you start to make money, you will need some money to be able to expand, test new ideas and everything.
• 1:55
  SPEAKER_00: Having a job gives you that.
• 1:57
  SPEAKER_00: And the second thing, which comes to how to select a job, the second thing is mentorship.
• 2:05
  SPEAKER_00: The best type of job to get for someone who wants to start a business is get a job where you can be as close to the business owner as possible.
• 2:13
  SPEAKER_00: So not a job that has too many employees where you are so low in the ranks that you don't actually get to learn.
• 2:20
  SPEAKER_00: Because if your goal is to start your business, you need to learn from the people who have done it and are succeeding.
• 2:26
  SPEAKER_00: So find a good job where you can actually have conversations.
• 2:29
  SPEAKER_00: You can study how the business owner or the people at the top solve some of the very difficult challenges that they face, and that will teach you and guide you for when you have to face those same challenges.
• 2:41
  SPEAKER_00: So don't believe the hype.
• 2:43
  SPEAKER_00: Keep your job, get a job, and that's how you start a business.
• 2:48
  SPEAKER_00: The second step: you have to decide if you want to be an entrepreneur or a businessman.
• 2:54
  SPEAKER_00: So let me give you the difference between an entrepreneur and a businessman.
• 2:58
  SPEAKER_00: So an entrepreneur is somebody who is looking to solve a problem with a unique skill set or a unique idea or viewpoint that they have.
• 3:07
  SPEAKER_00: An entrepreneur identifies that the world needs this and I can give them a solution.
• 3:13
  SPEAKER_00: So entrepreneurship in the long run is actually very, very rewarding, but it's very difficult to achieve because you need to invent, you need to innovate, you need to create a system that doesn't previously exist.
• 3:27
  SPEAKER_00: Whereas being a businessman is about taking a template, taking a business which already exists and has proven to be successful, and creating your own version.
• 3:39
  SPEAKER_00: So entrepreneurship is about solving a problem, but a businessman is about profit.
• 3:44
  SPEAKER_00: So for the person who wants to be able to make it quickly, have something that they know they will succeed at and be making a profit, you can take the businessman route.
• 3:55
  SPEAKER_00: But if you are looking for something which is going to reshape the industry, something that's going to set yourself apart and create a legacy, then it's entrepreneurship.
• 4:04
  SPEAKER_00: So right from the beginning, you need to choose which path is meant for you because not everybody is meant to be an entrepreneur.
• 4:12
  SPEAKER_00: It's perfectly okay to build a business based on a model that already exists.
• 4:19
  SPEAKER_00: Now, the third step, find your icky guy.
• 4:22
  SPEAKER_00: I believe you've heard me talk about this before.
• 4:24
  SPEAKER_00: You need to find that one thing which fits in four circles something you love to do, something you are good at, something the world needs, and something you can get paid for.
• 4:38
  SPEAKER_00: Now, running a business, I can tell you confidently, is one of the most painful things you will ever have to do.
• 4:46
  SPEAKER_00: It gets very difficult, it gets very draining, and so many days you will ask yourself, why am I still going?
• 4:54
  SPEAKER_00: Why don't I just quit?
• 4:56
  SPEAKER_00: Why don't I just stop?
• 4:58
  SPEAKER_00: If you don't find something that fits in these four circles, you won't have the energy or the courage to keep going.
• 5:05
  SPEAKER_00: But when you are working on something that you can actually love what you're doing, you actually feel good because you are contributing to the world, you are getting a good enough pay for it, and you are good at it.
• 5:17
  SPEAKER_00: That is something that you can do for the rest of your life.
• 5:20
  SPEAKER_00: And entrepreneurship is not an easy journey.
• 5:23
  SPEAKER_00: Running a business is not an easy journey.
• 5:26
  SPEAKER_00: So you need to take time, you need to look internally and externally to find that industry that you want to fit in.
• 5:34
  SPEAKER_00: And it's also not just about fitting in an industry, it's also about what role can you play in that industry.
• 5:42
  SPEAKER_00: I was watching the CEO for Spotify, who was talking about the fact that he loved music.
• 5:48
  SPEAKER_00: He played guitar, he did a little music, but he was looking at the music industry and he saw how the music industry was suffering.
• 5:55
  SPEAKER_00: And he thought, maybe instead of just being a musician, what can I offer to the music industry that it really needs?
• 6:03
  SPEAKER_00: And he found a solution, which was Spotify, that solved piracy problems, solved distribution problems, and through that he's built a multi-billion dollar company.
• 6:15
  SPEAKER_00: So sometimes, even when you find your industry, it doesn't necessarily mean you have to follow what everybody else is going to do.
• 6:23
  SPEAKER_00: Take me, for instance.
• 6:25
  SPEAKER_00: I started my business because I loved music, but I didn't become just a musician.
• 6:30
  SPEAKER_00: I opened a studio, opened a record label, and then I kept opening more and more businesses in that same circle because I realized that I had something unique that I could bring to the industry instead of just doing the normal, I want to sing, I want to sing.
• 6:46
  SPEAKER_00: Every industry has the same.
• 6:48
  SPEAKER_00: Somebody wants to be a farmer.
• 6:50
  SPEAKER_00: Yes, you're interested in the farming industry.
• 6:53
  SPEAKER_00: Maybe you may not be the best farmer possible, but you could set up distribution for people who are farmers.
• 6:59
  SPEAKER_00: You could set up a way of marketing farmers.
• 7:02
  SPEAKER_00: So maybe you're good with tech.
• 7:04
  SPEAKER_00: So you could decide to build an app where people can directly purchase farm produce.
• 7:09
  SPEAKER_00: You market it to the farmers, you market it to the everyday person who's looking to buy this.
• 7:14
  SPEAKER_00: So when you decide on industry, it doesn't just mean enter with the same job that everybody has.
• 7:21
  SPEAKER_00: Find what uniquely you can offer to the industry.
• 7:25
  SPEAKER_00: And then you will create your icky guy.
• 7:27
  SPEAKER_00: Now the fourth step, test your idea in a small way.
• 7:31
  SPEAKER_00: One of the big mistakes that a lot of entrepreneurs, a lot of early business owners make is you have a great idea, but that idea is only great in your head.
• 7:41
  SPEAKER_00: You don't know if this idea is actually going to work.
• 7:44
  SPEAKER_00: And then they just jump in gung-ho, spend all their money.
• 7:48
  SPEAKER_00: Maybe, oh, I have an idea that I'm going to rent out sofas, going to rent out sofas for people who want to, you know, move into a new place or this or that.
• 7:57
  SPEAKER_00: And then they, as soon as they get this idea, they take all their money and they go and buy 20 sofas and say that people are going to come and rent.
• 8:05
  SPEAKER_00: Three months in, six months in, you start to realize that, okay, I guess people don't actually want to rent sofas that they're going to use in their house.
• 8:13
  SPEAKER_00: You need to find a way to test out your idea in a small way.
• 8:18
  SPEAKER_00: Whatever the idea is, talk to strangers, create a small version of it.
• 8:22
  SPEAKER_00: Let's say the business idea I just gave you of renting sofas.
• 8:25
  SPEAKER_00: Ask people, oh, would you want to rent my sofa for a day?
• 8:29
  SPEAKER_00: Put out an ad on Facebook and say sofa rentals and see if people are actually interested, if your idea is viable.
• 8:38
  SPEAKER_00: So you test out your idea in a small way.
• 8:41
  SPEAKER_00: Now, doing that shows you two things.
• 8:44
  SPEAKER_00: The first one is that either yes, your idea is great and you can jump in, but even with that, maybe the people you are targeting are wrong.
• 8:54
  SPEAKER_00: Let's go back to the sofa idea.
• 8:56
  SPEAKER_00: Maybe it's not homeowners who are looking for sofas to rent, but maybe Airbnb people could be looking for rental so that they don't need to spend money on furnishing their place.
• 9:07
  SPEAKER_00: They can only rent it when somebody is coming over.
• 9:09
  SPEAKER_00: Maybe it could be people who are looking for a short-term stay, like one month.
• 9:13
  SPEAKER_00: You could find that you were targeting the wrong type of people, even though your idea itself was good.
• 9:20
  SPEAKER_00: Or it can also show you that the idea isn't a good one.
• 9:25
  SPEAKER_00: Maybe you have that need, but others don't have that need.
• 9:29
  SPEAKER_00: And that will prevent you from starting a business that's going to fail and spending all your money and your time on an idea that wouldn't have worked.
• 9:38
  SPEAKER_00: So test your idea in a small way.
• 9:41
  SPEAKER_00: Step five: learn, learn, and learn.
• 9:46
  SPEAKER_00: You need to be obsessed with whatever you say you are about to do.
• 9:51
  SPEAKER_00: The person who succeeds in something is the one who is actually knowledgeable about it.
• 9:57
  SPEAKER_00: If you say you want to become a cameraman, you need to know every single thing about cameras.
• 10:04
  SPEAKER_00: If you say you want to become a boxer, you need to go and watch as many Muhammad Ali fights as you can.
• 10:10
  SPEAKER_00: You need to go and learn about boxing.
• 10:13
  SPEAKER_00: You need to also practice it.
• 10:15
  SPEAKER_00: Now you have to have an 80-20 learning rule, which means that you spend 20% of your time learning and 80% of your time implementing what you have learned.
• 10:27
  SPEAKER_00: Because we all know taking action is how you actually learn.
• 10:31
  SPEAKER_00: Reading a book is good, but trying what you read in the book will help you shape it so that you really grasp the context.
• 10:39
  SPEAKER_00: So please, you have to learn.
• 10:42
  SPEAKER_00: You have to become an expert in whatever business you say you are starting.
• 10:47
  SPEAKER_00: That's why you did your research and chose that business.
• 10:51
  SPEAKER_00: Become obsessed with it.
• 10:53
  SPEAKER_00: Learn, learn, and learn.
• 10:56
  SPEAKER_00: Step six.
• 10:57
  SPEAKER_00: Now, in step one, you got a job.
• 10:59
  SPEAKER_00: In step six, you start your business as a side hustle.
• 11:04
  SPEAKER_00: So, as I said from the beginning, as your business goes along, you will need to keep funding it and you will need to survive while you build your business.
• 11:13
  SPEAKER_00: You can't do this without any income.
• 11:15
  SPEAKER_00: So you start your business as a side hustle.
• 11:18
  SPEAKER_00: Now, as a rule, you owe your nine to five to your employer.
• 11:22
  SPEAKER_00: But that gives you an extra 16 hours in the day.
• 11:26
  SPEAKER_00: Let's even say you want to be 100% healthy and sleep eight hours a day.
• 11:32
  SPEAKER_00: You now have eight more hours every single day that you can spend that time building your side hustle.
• 11:40
  SPEAKER_00: Or you could spend that time watching movies on Netflix and spend that time going out with friends and spend that time playing in the yard, whatever you decide to do.
• 11:50
  SPEAKER_00: But just know whatever you spend those eight hours on is what you are deciding for your future.
• 11:57
  SPEAKER_00: So if I were you and you want to be a businessman, you want to be an entrepreneur, eight hours to your employer, eight hours to sleep and rest, eight hours on your business.
• 12:11
  SPEAKER_00: You have to be dedicated because you don't have much time.
• 12:15
  SPEAKER_00: So any opportunity you get, you are acting, you are being deliberate, you are steadying, you are growing your business.
• 12:23
  SPEAKER_00: Start it as a side hustle.
• 12:25
  SPEAKER_00: Step seven: grow your business.
• 12:28
  SPEAKER_00: Now it's a very different thing from starting a business to growing a business.
• 12:33
  SPEAKER_00: Having a great idea, starting, having one or two, three clients is much easier than building the business into something profitable.
• 12:42
  SPEAKER_00: Now, growth takes discipline, consistency.
• 12:46
  SPEAKER_00: You need to keep reinvesting the money that you make.
• 12:50
  SPEAKER_00: Don't just say I started a business, hey, I've gotten three sales.
• 12:53
  SPEAKER_00: I'm going to the club with the money.
• 12:55
  SPEAKER_00: No, you need to keep reinvesting.
• 12:56
  SPEAKER_00: You need to keep analyzing your business.
• 12:59
  SPEAKER_00: What did I do to get these three sales?
• 13:01
  SPEAKER_00: What am I doing right?
• 13:02
  SPEAKER_00: What am I not doing right?
• 13:04
  SPEAKER_00: How do I improve my marketing?
• 13:06
  SPEAKER_00: How do I improve my products?
• 13:08
  SPEAKER_00: You need to spend time growing your business.
• 13:13
  SPEAKER_00: Be very, very focused on that.
• 13:15
  SPEAKER_00: Step eight.
• 13:16
  SPEAKER_00: Hire help before hiring yourself.
• 13:20
  SPEAKER_00: Now I know one of the most tempting things for a lot of people who start side hustles, one thing most of them do and they fail is as soon as their side hustle starts to make some good money, they quit their job and say, I'm going full-time into my business.
• 13:35
  SPEAKER_00: Big mistake.
• 13:37
  SPEAKER_00: For two reasons.
• 13:38
  SPEAKER_00: The long-term goal of starting a business is to be a business owner, not to be self-employed.
• 13:46
  SPEAKER_00: If you join your company at the time when you are making only enough to pay maybe just one person or two people, you have now become self-employed.
• 13:57
  SPEAKER_00: Which means you are spending all your time on the business instead of growing the business.
• 14:03
  SPEAKER_00: You need to be able to bring people in right from the beginning.
• 14:07
  SPEAKER_00: So when you start to gather some profits, you start to see some success in the business, instead of hiring yourself as an employee, hire other people who are going to do the job that you need done to keep the business going.
• 14:21
  SPEAKER_00: Hire a manager, hire a PR consultant, hire an assistant, a finance person.
• 14:27
  SPEAKER_00: Keep growing the business because your business needs to be making enough money to pay people to keep going.
• 14:34
  SPEAKER_00: Or if you quit your job and you go and work there, now you become the only employee and you start to drain the business finances and you are not able to grow the business the way it's able to grow.
• 14:46
  SPEAKER_00: And within a few years, your business will either collapse or reach its peak and never maximize what it could have been from the beginning.
• 14:54
  SPEAKER_00: So hire help before hiring yourself.
• 14:57
  SPEAKER_00: Now the final step, number nine, quit only when you are fully ready.
• 15:04
  SPEAKER_00: Now, before you quit your job, you need to set a quitting number.
• 15:08
  SPEAKER_00: You know, you have to have in your mind, or you should have calculated logically to see where your business is going to reach so that it can still handle the business day-to-day operations, handle all the salaries and the staffing, and to be able to make enough profits for you to live your life at the same level that you were already living it.
• 15:29
  SPEAKER_00: Because as you're about to cut your income by quitting your job, are you going to drop your lifestyle or are you going to be able to maintain it?
• 15:38
  SPEAKER_00: So your business should not just be profitable, but it should be profitable enough to handle these key things.
• 15:45
  SPEAKER_00: When you reach this quitting number, then you know it's time to focus on my business and growing my business.
• 15:53
  SPEAKER_00: These are the nine steps to building a business without going broke.
• 15:58
  SPEAKER_00: Now, let me throw in one last bonus for anyone thinking about starting a business.
• 16:03
  SPEAKER_00: There are three business types that you could start: a product business, a service business, or a service product business.
• 16:13
  SPEAKER_00: Now, let me explain.
• 16:15
  SPEAKER_00: So a service business means that you are offering a skill, a service for people.
• 16:21
  SPEAKER_00: And that means you are offering your time.
• 16:24
  SPEAKER_00: Now, the problem with the service businesses, they can be very, very profitable.
• 16:29
  SPEAKER_00: However, they are not very, very scalable.
• 16:32
  SPEAKER_00: Because what happens is you are offering time and you cannot invent time.
• 16:37
  SPEAKER_00: So anytime you need to scale a business or grow the business, you need to employ more people who can offer that same service.
• 16:46
  SPEAKER_00: Let's say you are an interior designer, or let's say you are a painter, you can only paint one house at a time.
• 16:53
  SPEAKER_00: So when your business grows and you now need to paint 10 houses at the same time, you need to have 10 employees who can paint the houses.
• 17:03
  SPEAKER_00: So service businesses are very profitable, but scaling them becomes a bit harder because you can't increase your profit margin.
• 17:12
  SPEAKER_00: The second type of business is a product business.
• 17:15
  SPEAKER_00: Now, product businesses are very, very competitive because getting a product to stand out in the market is really difficult.
• 17:23
  SPEAKER_00: But when it's cracked, it is easily scalable.
• 17:26
  SPEAKER_00: Because the effort it takes in creating more products is not as difficult as the effort it takes in offering the same service over and over again.
• 17:35
  SPEAKER_00: Because if I can produce 10 of the product, once I produce a thousand of the product, it's not changing how much time I am offering.
• 17:44
  SPEAKER_00: If I am selling mics, I can sell 10 mics in a day, or I can sell a thousand mics in a day.
• 17:53
  SPEAKER_00: So now I'm managing to multiply without having to look for more time.
• 17:58
  SPEAKER_00: So product businesses become even more scalable, but it's difficult to crack.
• 18:05
  SPEAKER_00: The third type of business is called the service product business.
• 18:10
  SPEAKER_00: Now, this just means you are now offering services as a product.
• 18:16
  SPEAKER_00: Let me explain that.
• 18:17
  SPEAKER_00: I know it sounds a bit tricky.
• 18:18
  SPEAKER_00: So to offer a service as a product means that your company does not actually provide the service, your company facilitates for others to provide that service.
• 18:30
  SPEAKER_00: An example is Airbnb, Uber, Amazon.
• 18:36
  SPEAKER_00: Now, these types of businesses allow people who are skilled to be able to sign up in their business and they offer those services to other people who are looking for that service.
• 18:50
  SPEAKER_00: Bold food.
• 18:53
  SPEAKER_00: Spotify, Amazon Music, Netflix.
• 18:59
  SPEAKER_00: So they are offering you a service, but they offer you the service as a product, which means they can scale up as much as they want because they can offer you a thousand services in a day without having to increase the number of people who are doing those services.
• 19:14
  SPEAKER_00: Because other people will do it for them.
• 19:17
  SPEAKER_00: These are three types of businesses that you can create and build real wealth.