Steven said that it was not enough that I made money. I had to learn to do four things.
They were the Four Steps:
1. Earning it
2. Spending it
3. Saving it
4. Investing it
He even said that I needed to build an asset that would generate income and then myself first. To do that he said I would have to create a spending plan called a "Budget." He said that this budget needed:
1. A Financial Floor -- Absolute amount one needs to live
2. An Income Target -- Amount of money one is reaching for
3. A Projected Budget - A budget that takes into account both Financial Floor and Income Target. This number came from the averaging of Income for the past 4 months
So I learned to plan every month. Initially, I found myself not reaching all of my goals but eventually I learned to do it each and every month. I made sure my planning included enough buffers for my mistakes and put in extra efforts to reach my Income Targets.
It was not easy but it was worth every bit I put into it. Each month I learned to save and put money away and I found myself feeling more and more secure as my savings, reserves and buffers increased. I struggled to protect my savings from my desires, from spending it on frivolous things. My savings turned into cash reserves, buffers, retirement and insurance over time.
As I worked my way through, I would remind myself of the fabled four levels he told me about.
This is what he said.
Business Growth IS By Accumulation
Contrary to popular opinion, businesses are built from accumulation over time in a steady, step by step fashion. Consistency, like doing three things per day everyday, will do more for business and its results than doing it in a sprint fashion.
Little things cause big breakdowns. Responsibility/Caring produces results.
Then he shared with me about the Four Stages.
Look for the rest of this story in our next issue!
As a small business owner, you're constantly looking for ways to remind customers and prospects about your products and services. Whether you're a sole proprietor spending $1,000 a year on advertising or an owner of a retail chain spending $25,000 a month or more, getting your money's worth is vital. Whatever you're spending on advertising, you're spending too much--if you don't have a marketing strategy to support it.
While advertising tends to be the most discussed marketing method, there are dozens of other ways to promote your business. And the most effective strategy is to use several marketing tools at once. While every company will have a different mixture of methods, they should all include these six: business identity, online marketing, direct mail marketing, charitable/community giving, association membership, and public relations.
Never dismiss a marketing idea out-of-hand, just because you think it will be too expensive. Many small businesses don't even consider color printing, for example, because it has the reputation for being too expensive. But today, those costs are considerably lower than ever before.
Never embrace an inexpensive marketing idea just because the price is right. Spending even a small amount of money on a marketing method that doesn't highlight you or your company, promote your product or service, and target your audience, is money misspent. Advertising in an obscure publication that doesn't address your audience is a waste, however small the price.
Invest a portion of your marketing dollars in a concept you think might work for you, but have never tried. That's the only way to discover new and effective marketing methods to add to your plan. If you've been wondering if a larger magazine ad, a more sophisticated Web site or a direct mail catalogue might be beneficial, choose one idea and give it a try… but only after you've done your homework and are sure this is where your customer is most likely to be receptive to your message!
The following are strategies you should incorporate into your marketing plan:
Review all of your promotional materials from business cards, letterhead and envelopes to menus, matches and shopping bags. Consider updating or changing your identity to better capture the essence of your business. If you haven't had a makeover in the last five to 10 years, it's probably time for a new look. Keep in mind--this is not a do-it-yourself project. Your company's branding is the cornerstone of all your marketing. Work with a graphic designer to develop a memorable logo and then be sure to include it on all your promotional pieces including advertisements, Web pages and direct mail pieces.
Register your company domain name. Even if you're not quite ready for e-commerce, you must be online. That means having your own e-mail address and a one-page Web site. Marketing is all about communication, and the Internet has proven itself to be the latest and greatest communication tool of all time. But you do not need to spend a fortune on a Web site. Start out small with one or two pages. Once you've experimented with the Web, you'll be prepared to expand it with the appropriate information--not just bells and whistles--to make your site meaningful.
Direct Mail Marketing.
Stay in touch with your clients on a regular basis, at least four times a year. Don't miss out on repeat business by ignoring your current customer base. Many point-of-sale systems are capable of accepting the name, address and phone number of a customer at the time of sale. Add to this database the vital statistics on serious prospects, vendors and sources of referral. Then plan to contact them through letters, tip sheets, postcards, newsletters, thank you notes, holiday cards or other informative, humorous or timely, soft-sell mailers.
Alert the press to your company's news. Ever wonder how other businesses get their name in the news? They inform the media.
To get your own 15 minutes of fame, identify your company's most newsworthy topics and write a press release for the most interesting and timely item. While there is no guarantee that you'll be included in an article, the rewards of positive news coverage are many. Send your press release--at least two each year--to reporters and editors who cover your industry in your city and neighborhood newspapers, business and trade publications, association newsletters and other pertinent media.
Marketing, unlike advertising, is not a campaign with a well-defined beginning and end. It is a continuous, strategically planned process that includes developing a plan where each marketing technique and every promotional dollar enhances the other. With a well thought out plan of action, you'll be better equipped to determine the appropriate budget for all your marketing methods--including advertising.
Adopt a charity. Good will is good marketing, and cause-related marketing is one of today's hottest marketing methods. Choose a not-for-profit with a natural connection to your business and avoid highly charged political organizations. Offer your services pro bono or donate merchandise to their fund-raising auctions. Run a promotion or special event to benefit their cause. Most charities thank their sponsors publicly, in their newsletters, programs and advertisements. Don't forget to announce your good deeds in your own ads, direct mail and press releases.
Join professional and business organizations that will put you in contact with people outside your industry, who might have a need for your products and services. Become an active member. Attend meetings, participate in special events and join a committee. Personal contact, even in this age of high-tech, is still one of the best ways to market your business. Don't forget to take advantage of all the benefits your association has to offer. Write articles for the local or national newsletter, make a presentation at a monthly meeting or regional conference, be sure you're listed in the association's directory (with a photo, if possible) and link your Web site to theirs.
What business are you in? If you said anything other than "Marketing," we are certain your sales are nowhere near where they could be… or should be. Every self-employed person or business owner is first and foremost a marketer. No matter what you "sell," if you do not see that what is responsible for your very existence is marketing (in whatever form), please call us. We'd love to hear your thoughts.
For centuries marketers have been selling products and services using any channel available. 2000 years ago that was probably a cart with a bell and a sign. With the advent of the printing press came newspapers, flyers, and magazines. Then direct mail, radio, television and blimps in the sky.
For over two hundred years in the United States, marketers have been selling the American public on products and services to make their lives more enjoyable, efficient and effective.
We have never once asked a customer's permission to do that. If we had, we could assume that most of us would not have DVD's televisions, SUV's or be drinking Coke. In fact, it is likely that the United States wouldn't even exist as a world economic leader. We owe much of our success to free and unencumbered commerce, free speech and our ability to compete and innovate. The ability to reach the public through any possible advertising channel has been essential to our growth.
Now we are asking permission. Email is, in reality, permission marketing. No other channel not magazines, television, direct mail or door-to door sales, is involved with this permission concept. Just email. Why not call it email permission marketing?
The problem with permission marketing.
The reality is that the entire reason for the concept of permission marketing is Spam. Period. People obviously do not want their email in boxes over flowing with unwanted emails. So as marketers we have come up with this concept of asking them if we can send them email to sell our products and services to them. Actually, the concept is decades old, for years we have checked boxes on direct mail postcards and forms asking "for more information" or "please contact me", although we have never called that permission marketing.
Since we are marketers we needed a name for this "new" concept in marketing. We coined it "permission marketing", but it is far from that. It is an oxymoron. Like jumbo shrimp. Marketing by its nature is intrusive. Advertising, from billboards to junk mail in general, are intrusive and always will be. No permission needed, yet, except for email.
Email is The number one Internet application in the world, fast becoming one of our primary means of communication. And marketers are stymied, confused and generally uneducated in this new channel.
Opt-in, opt-out, permission marketing, are all new terms. Dozens of people have made lots of money writing books about the subject. But does anyone really know how to use email for marketing?
The first issue is Spam. No one wants unsolicited email, well, practically no one. After all if the "Spam" you get is relevant and of interest to you it will be welcome. If you collect depression glass tea cups and you are sent an unsolicited, no permission email, about a great deal on tea cups you will most likely click through. And be happy and grateful to receive that email. On the other hand, you may receive irrelevant offers from companies that you have given permission to and call that Spam. Since nobody and everybody has defined Spam differently, you can take your pick of definitions.
A lot of people simply define Spam as email they don't want, permission or no permission. Period. As we said earlier if you want the offer, or information then it is not Spam to you, even if it is unsolicited. So where does that leave us as marketers?
First of all lets do a reality check. One, we are marketers. Two, we sell things to people. Three, we annoy a lot of people with our sales and marketing programs. Four, if we did not do what we do - our economy would not exist.
Second of all lets try to understand and work with this new and effective medium. Since we know people are sensitive about their email, lets go ahead and use opt-in tactics. But we need to go beyond that, beyond the Spam and the permission. Basically, if you send relevant email to people to who want it you will not have a problem. The problem is determining who is interested in your product or service and how to reach them thorough email. Unlike direct mail where you can rent lists of left handed redheaded soccer players, email does not have that degree of targeting available. Eventually maybe. In the meantime the most important thing you can do is to build your own list in-house. Offer a newsletter, and send your customers and prospects information of relevant value, not just pitches for your product. Give them a way to opt out, and a way to reply to you. If you use a list broker to send email, be very careful about the selection of the list, the source of the list and the company who will send your program out. The most important word in email is: relevant.
Eventually, this will sort itself out. The government will probably pass laws against Spam and the Spammers will move offshore and still send you more Spam. We will pay for these laws with higher taxes, and restricted e-commerce for US companies. ISP's will block email even when it is legitimate, and create some havoc in the electronic communication arena. As marketers we will have no shortage of books, lectures, events and seminars about this subject from the "experts" that know everything.
In the meantime, email presents an exciting and unprecedented opportunity for marketers. We would be interested in your opinions, and views on this new arena.
You have our permission to email us.
You’ve got the greatest business idea in the world, but can barely make enough money to keep a roof over your head, let alone invest big money into your business idea.
Excuses, excuses, I have heard them all.
"It is faster if I just do it myself."
"I'm afraid that I will forget to tell them something important."
"No one does it better than me."
"I don't know what to delegate."
"I can't afford to hire anyone."
"I'm too critical of other people's work."
"If I give up control over everything, things will start to fall through the cracks."
Sound familiar? You know that in order to grow your business, you need to grow your team. Yet as Small Business Owners there is something within us that fights against help. It's almost like there is some right of passage in being able to "do it all" ourselves. But the reality is, you cannot "do it all" and focus on your strengths without stretching yourself in too many directions.
Delegation is about handing over authority. For many Small Business Owners, that concept is just plain scary. You never know what will happen when you are giving up control. But the good news is, it doesn't have to be scary. You have more control than you think. It is difficult for a skilled Assistant, Employee or Virtual Assistant to be unsuccessful when you have clearly defined what is to be done and what the outcome should be.
The key to controlling delegation is to establish what the tasks are, how they should be completed and what the final outcome looks like BEFORE you assign the task to someone.
No more excuses. Here are 6 steps with specific actions you can take to develop your what, how and final outcome to get you on the road to delegating effectively.
#1 What to Give Away and What to Keep
First think about your strengths. What are you directly contributing to the business that is making it successful? Those are the things you should keep. Those tasks that are outside of your expertise or those that could easily be performed by others are the first things to give away.
One of my clients "Sue" is in the insurance industry. Sue found that she was spending a lot of precious time checking in with clients. She wanted to be in contact with her entire client list, but didn't want to spend extra time with clients that did not need her at the moment.
Sue decided to delegate her client "keep in touch" calls to an assistant. Now, her assistant makes the initial client call. If she finds the client has a question or is interested in more information, their name is added to a follow up list. Sue then calls the people on the list. Sue is only talking to those clients who really need her time. However, all of her clients are happy because they are contacted on a regular basis.
Make a list of everything you do on a daily, weekly or monthly basis. Go through the list and determine what is essential for you to keep and what can be given away.
#2 Create a Plan
Wouldn't it be nice if the perfect mind reader appeared out of nowhere and immediately accomplished all we ever dreamed of with no questions, learning curve, or confusion? Well there are two ways to make that happen.
1. Go to an antique mall and rub lamps until you get lucky and find a Genie who is willing to grant you three wishes.
2. Plan out exactly what needs to be accomplished and HOW you want that done.
In order for delegation to be effective, you have to be able to share with someone exactly what it is that you want him/her to do. Maybe, "no one does it better than you" because no one truly understands what you want done.
"Pat" is in the interior decorating industry. At first glance, the instructions left by Pat's former assistant seemed pretty clear. However, when Pat gave her new assistant a copy of those instructions she was met with questions, confusion and the deliverables were not what she wanted. On the surface the instructions seemed clear, but in reality about 80% of the steps were missing. Using flowcharts, Pat and I sat down and documented the specific details from start to finish. When we were done, we had a visual blueprint of her process that included: filenames, printing instructions, and every detail down to how to stack the paperwork. Now the new assistant has everything at her fingertips and Pat has exactly what she wants waiting for her at the door; no headache, no learning curve, no questions. And of course if this assistant moves on, the details can be passed on to the replacement.
Create your processes. Determine what the final outcome should be and create the specific, detailed steps needed to get there. Give those steps along with any applicable files, forms and checklists to the person helping you.
#3 Results and Accountability
To determine what the end result should be, start at the end. Picture what you want to be holding when those final deliverables are handed to you. Then communicate those expectations. All expectations HAVE to be reasonable, clear and measurable. For example, "complete a minimum of 30 sales call per week" as opposed to "complete sales calls".
Accountability is not a bad word. There have to consequences if the results you need are not being met. If the quotas, goals or results you need are not being achieved it is you and your business that suffer.
Create specific goals, quotas or outcomes that need to be accomplished. Communicate those expectations. Have consequences for results not being accomplished.
We'll cover the other 3 steps in our next issue.
Glamorous locations, death threats and big money deals. Neil McIntosh reports on the battle for control of your inbox.
Golden beaches, palm tree-lined streets, manicured golf courses and giant motor yachts moored at the marinas: Boca Raton in Florida is a millionaire's paradise. It's also the spam capital of the world.
"The amount of spammers resident in Boca Raton is incredible," says Steve Linford, a London-based catcher of the unwanted emails that deluge almost every inbox in the world. "There are really only 150 spammers doing 90% of all the spam we get in the US and Europe... at least 40 of them are in Boca Raton."
Nobody knows for sure why so much junk email flows out of the town. It might be down to Florida's relaxed laws on spamming. Some also suspect they are sent on behalf of the state's notorious criminal community - spam and crime, especially fraud, are closely linked. Or the locals might simply be following the lead offered by their governor, Jeb Bush, whose re-election campaign last year was accused of spamming.
Whatever the reason, Linford is glad of the physical distance between him and some of the world's most prolific junk emailers. As the head of a volunteer spam-stopping campaign called Spamhaus, which claims to protect more than 100m email inboxes around the world, he's at the front line of the anti-spam effort.
Linford and his mostly US-based team compile the Spamhaus Block List (SBL): a list of known spammers' IP addresses (the address allocated to every computer connected to the net). The SBL is provided free to internet service providers around the world, and is effective at blocking known sources of spam.
As a result, he's not a popular man down in Boca Raton.
"We get a lot of death threats," says Linford, in a matter-of-fact way. "At least two or three a month. Spammers actually phone here to say 'we're going to cut your throat'," he adds, with a chuckle.
Linford has never suffered anything more than these threats - other than "near continuous" cyber assaults on his servers. But they do indicate that spamming is becoming a serious business, on which serious amounts of money are riding.
Indeed, if you have had the feeling recently that the amount of spam in your inbox was getting much, much worse, your instincts are quite correct. In 2001, junk email accounted for only 8% of all email. Last year, it was 40%. That amounts, according to researchers at IDC, to 870bn spam messages in one year - in North America alone.
Spam continues to grow at a rapid rate: in January last year, Brightmail, a spam-fighting company, counted 2.7m spam attacks on the internet (one spam attack can mean many million individual spam messages being sent out). Last month, that number had climbed to more than 6m. IDC, perhaps conservatively, predicts the number of spams sent in North America will top 1bn this year.
But if indications on the sheer volume of spam turn out to be correct, we tend to be wrong about the kinds of spam we get.
With their lurid subject lines and graphic content, we tend to assume most spam is sexual. Yet around 82% of spam has nothing to do with porn sites or sex, according to Brightmail.
In fact, one-third of email fits under the much less salacious category of "products" - cheap ink cartridges and the like. Twenty-four percent are financial offers - "low-cost loans", credit card offers and more. Scams make up just 5%, although these - like the sexual emails - attract a disproportionate amount of attention.
In the background, spammers and spam-fighters are slugging it out in an attempt to gain control of the email medium. And, like rat catchers in the days of the plague, this is a very good time to be in the anti-spam business.
In a windowless room in an anonymous San Francisco office block, a handful of young men in T-shirts and jeans watch an array of monitors. The room is nicknamed "the Bloc", and these men are the spam-catchers for Brightmail. They are monitoring millions of "decoy" email addresses - the traps into which unwitting spammers fall.
Brightmail's technology takes advantage of the way spam finds new recipients. "One of their techniques is simply intelligent guessing," says the company's chief executive, Enrique Salem. "They do what is called a dictionary attack, where they will grab a dictionary of names - common first names, common last names - and combine them. They test all these names until they find one. It's a brute-force thing - they have computers and they don't mind working all night."
So Brightmail has a network of millions of email addresses, based at the internet service providers it serves. When a spammer makes a guess at an address, and sends spam to one of these Brightmail traps, the message comes back to the Bloc. There, it is automatically compared to messages arriving at other Brightmail addresses and, if they spot a spam attack under way, the message goes out: block this message, it is spam.
It's an effective means of stopping the rogue emails: in December, they checked 40bn messages and found 16bn were spam. But spammers are aware of the techniques being used to catch them, and they are adapting.
"Spam is changing every day," says Salem. "I can show you some examples where, to the human eye, the mails look identical, but the spammers will embed hidden text in the message which you can't see. So when the filters try to look at that, they can't catch it." It is a constant game of technological cat and mouse.
It is also a very profitable game for Brightmail - the company sells its spam-sifting services for $5-$15 per user per year to companies who want to lighten their employees' inboxes. Revenues at the privately held company are said to have doubled last year, and Salem says he expects the start-up to become profitable this spring.
Some legislators are keen to add legal weight to the fight. In this country, the most frequently heard voice is that of Derek Wyatt, chairman of the House of Commons all party internet group. He advocates forcing internet service providers (ISPs) through licensing to take steps to block spam before it arrives in inboxes.
"From a legislative point of view, the best way to do it would be to charge the ISPs a license fee," he says. "They wouldn't like that. Why wouldn't they like that? Because they would have to become accountable."
The MP wants Ofcom, the new communications regulator, to take responsibility for licensing internet service providers - and fine those who fail to meet agreed standards.
"They should say 'you sign up for this, and if you don't do this, here are the fines'," he says. "If, after two years, spam goes to 45% or 61% [of all email] - the whole world will be jammed."
Wyatt is now working to set up a "shadow select committee" to look into the growing crisis of spam. Stephen Timms, minister of state for e-commerce and competitiveness, has already agreed to appear before the cross-party committee, which is likely to convene within the next three weeks.
Wyatt's views on regulation are controversial - the big ISPs insist they are not responsible for spam, which often comes through unprotected mail servers or hijacked machines.
Meanwhile, an increasing number of ISPs are looking to technology to help them: employing systems to cut down on the amount of spam their customers receive.
In the UK, BT Openworld launched a Brightmail-powered anti-spam service as a free optional extra for its customers in November. Already, more than 30% of those customers who use the company's email system have signed up.
"It's the fastest take-up of any opt-in service we've ever done," says Neil Scoresby, BT Openworld's consumer portal head. A similar service for "pay as you go" users, priced at around £1 a month, is likely to launch in April.
In the United States, meanwhile, there appear to be more concerted attempts to stem the flow of spam. After years of procrastination, Congress may soon pass legislation aimed at attacking the problem in the US.
Previous attempts have been thwarted by, among other things, concerted lobbying by the powerful Direct Marketing Association. However, the association has recently performed a u-turn and says it will now lobby for anti-spam laws.
In Europe, legislation is already in place: the EU's data protection initiative will mean that by the end of this year, commercial bulk emailers based in Europe will only be able to email those people who have specifically opted in to their mailing list.
The technology industry's big guns are taking aim at the spammers as well. America Online revealed last week it was blocking around 750m spams a day; it said it would be introducing more sophisticated spam-countering measures later this year, and toughening its stance on spammers who use its network. Microsoft also announced it intends to bring a series of lawsuits against spammers it accuses of raiding its Hotmail service for email addresses.
Spamhaus's Linford remains skeptical, however, that changes in the law will do much to change the spammers' behavior, or that they will even turn up for the court hearings if caught. "These people are fraudsters to start with," he says. "The number one rule about any spammer is that they are chronic liars.
"They'll tell you immediately that you opted in [to their mailing list]. And they'll swear blind that they didn't do it. They lie from morning to night. So even death threats we take to be the normal spammer thing, although the top 5% to 10% of spammers have criminal records for pretty bad things... money laundering, drugs trafficking, theft, violence, all sorts of things."
It is a fight that, for Linford and his fellow volunteers, seems to have taken on moral tones: good versus evil, right versus wrong. And it looks likely to continue for some time yet. But, as he says, it is one he feels the anti-spammers must win.
"How many companies would like even just to send out one email each if spamming were allowed?" he asks. "If you can imagine how many small businesses would like to spam everybody in the world - and work out how many there are in the UK and North America - and then imagine each of them sending you just one spam per year. How many spams would you get each day? This is the problem - spam cannot scale."
Comments to firstname.lastname@example.org
Entrepreneur: What exactly is a marketing plan, and how does it differ from a business plan?
A business plan projects business volume, the costs of doing business, cash flow needs and possible expansion needs for additional staff and square footage. The purpose of a business plan is to provide you with realistic projections and their accompanying budgets to serve as milestones and touch points, letting you know how your business is doing day to day, week to week, month to month and year to year.
It's common for business owners to have a five-year business plan that projects profits and losses, cash infusion needs, growth and expansion, and tax implications over a period of 60 months. An extremely valuable benefit of having a business plan is the ability to ask your bookkeeper, "How are we trending year-to-date compared to last year?" The bookkeeper might answer, "We're currently ahead of last year's numbers by 22 percent, but that's only 3 percent ahead of plan."
If you have an intelligent business plan and are constantly aware of how your business is performing compared to your plan, your banker will love you. Consequently, you'll find it much easier to borrow the money you need. Sadly, many entrepreneurs manage their businesses by the seat of the pants. Can you really blame a banker who won't buy into a business owner's enthusiasm and good intentions when that business owner can't explain mathematically what he or she hopes to make happen? It was the Cheshire Cat of Alice in Wonderland who said, "When you don't know where you're going, any road will get you there." A business plan is merely a financial roadmap that lets you plan the journey of your business over time.
Your marketing plan, on the other hand, tells you how you plan to attract customers. But businesses with a five-year business plan will often have only a 30-day marketing plan. This is probably because banks don't ever ask to see your marketing plan. But a marketing plan is required if you want your business to become a household name.
The creation of a marketing plan begins with two pieces of information and one question. The first piece of information required is the annual ad budget. "How much can we afford to invest in advertising, even if it doesn't immediately seem to be working?" The second piece if information required is your brand essence. "Why would anyone choose to do business with us versus our competition? What unmet need do we fill? What is our message to the customer?" The remaining question to be answered, then, is this: "What is the highest and best use of our ad dollars?"
Tragically, most advertisers think, "I'll just experiment until something starts working, and then I'll just keep doing that until it quits working." This is why most business owners wander the desert of frustration thinking, "Advertising is a rip-off."
The simple truth is that the type of ad that pays off immediately will work less and less well the longer you keep running it. And the ad that will make customers think of you immediately when they need what you sell (true branding) usually doesn't begin showing any encouraging results for at least 13 weeks. These are the ads that will work better and better the longer you keep running them. But most advertisers will cancel these ads after only eight or nine weeks.
The thing to remember when developing your marketing plan is that you're not looking for what works. Every type of advertising "works" to one degree or another. What you're looking for is the best long-term use of your ad budget. Then you have to develop an advertising message within your marketing plan. The questions you're trying to answer are these: "What do we need to say to the customer and how often do we need to say it? And which media will give us the most efficient long-term access to the same customers over and over?" Your goal is to reach the largest number of people with the greatest amount of repetition that your budget will allow.
So plan your marketing and stick to your plan. It's the secret to making your business plan work.