Entrepreneur

Book Review: Ready, Fire, Aim – Zero to $100 Million in No Time Flat

Posted by 12 March, 2009 (8) Comment

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Ready, Fire, Aim is a book about taking your business to the next level by Michael Masterson (pen name). I had my doubts about this book prior to reading it. I have subscribed to and read many different articles from the same publisher who published this book and they usually provided carrots of information to entice you to subscribe to an newsletter or to buy some other product. I’m happy to report that this book in no way does this.

Through Michael’s writing, you can see how passionate he is about business. This is his criteria when considering whether to take a job, or in this case, whether to start a business.

Demanding the Best from Your Job

1. What you do

2. Where you do it

3. With whom you do it

4. When you work and when you don’t

There are five areas that a business must be very good at to achieve desirable results.

1. Coming up with new and useful product ideas

2. Selling those products profitably

3. Managing processes and procedures efficiently

4. Finding great employees to do work

5. Getting people, procedures, products, and promotions going

Four Stages of Business Development

Once you have a business up and going, according to Michael Masterson there are four stages of development that have their own problems, challenges, and opportunities:

Stage One: Infancy – zero to $1 million in revenue

Main Problem: You don’t really know what you are doing

Main Challenge: Making the first profitable sale

Main Opportunity: Continuing to sell until you have achieved a minimum critical mass of customers.

Stage Two: Childhood – $1 million to $10 million

Main Problem: You are only breaking even or may even be losing money.

Main Challenge: Creating additional, profitable products quickly.

Main Opportunity: Becoming a business of innovation, increasing cashflow, and becoming profitable.

Additional Skill Needed: Coming up with a constant stream of new and potentially tipping-point ideas.

Stage Three: Adolescense – $10 million to $50 million in Revenue

Main Problem: Your systems are strained, and customers are noticing.

Main Challenge: Turning the chaos into order.

Main Opportunity: Learning how to establish useful protocols and manage processes and procedures.

Additional Skill Needed: Running your business with just three or four simple management reports.

Stage Four: Adulthood – $50 million to $100 million in Revenue and Beyond

Main Problem: Sales slow down and may even stall.

Main Challenge: Becoming entrepreneurial again.

Main Opportunity: Getting the business to run itself.

One of the most important points from this book for you:

Without sales, it is very hard to sustain an ongoing business.

Although this is may seem like common sense to some, this is an important point to remember. There are a lot of important functions of a business such as product development, customer service, accounting, operations, and marketing, but nothing beats marketing. Ditch the idea of leasing an office space and purchasing furniture and focus on selling your product.

I really enjoyed this quote:

Don’t go out and sign a lease. Rental contracts are like marriage licenses. They feel good when you are heady in love, but after reality sets in they may feel expensive and restricting.

I think one of the most important features of the book is what Michael calls the Optimum Selling Strategy or OSS. While these may seem like common sense guidelines, I think you’d be surprised at how many people don’t ask themselves these questions:

1. Where are you going to find your customers?

– Michael suggests imitating the competition, initially.

2. What products will you sell them first?

3. How much will you charge for it?

4. How will you convince them to buy it?

Once you’ve determined your OSS and you’ve gotten the ball rolling, ask these questions to optimize your OSS:

1. What other products can we sell?

2. How can we make the offer more enticing?

3. How can we make the advertising copy more compelling?

4. What other media should we test?

Another nugget that Michael gives is that you should not play the cheap game. Cheap price means to the customer that the quality is also cheap. If you want to have a lower priced item to attract customers, surround it with more expensive items to give it perceived value.

In regards to other products that you may introduce in the future, Michael explains that you should make sure you remain only one step removed from your original product or something that you know well. The further away you get from your original product or what you are familiar with, the less likely you are to succeed. This makes perfect sense to me and will certainly help me narrow potential business ideas in the future. Michael isn’t saying that starting a new business in a market that you are unfamiliar with won’t work or succeed, but your chances for success are proportional to your experience in that market.

What is meant by “Ready, Fire, Aim”?

The title of the book, Ready, Fire, Aim is definitely a catchy title and is probably a big reason I picked the book up from the library. There’s a lot to be said with this technique in building a business and can be applied throughout your life. The “ready, fire, aim” approach comes from the premise that some planning is involved, but before you spend hours upon hours of work on a business plan, you should make sure someone actually wants to buy your product. You can have the coolest widget in the world, but if people aren’t willing to buy it, there isn’t much of a reason to pursue it, is there?

Ready, Fire, Aim gives you the ability to come up with a short plan (basically your OSS) and then try it out! If it works, great! If it doesn’t, move on and try something else. The aim of Ready, Fire, Aim is to accelerate failure to figure out what works. In shortening the amount of time spent on planning, you are able to try many ideas quickly and at a low cost. Both of these benefits are music to my ears! Once you do find an idea that works, Michael suggests that you work on and improve that product. Don’t fix something unless it isn’t broken!

Throughout the book, Michael mentions many of the luxuries that he has such as how much money he made from a job or client or how clients pay for him to fly around the world. This is mentioned early and late in the book, but not at length. This usually signals a red flag for me, but despite that, I really enjoyed this book and would recommend it to anyone with an entrepreneurial pulse. In fact, I’m definitely going to be adding his other books to my queue!

I give this book a 4.6 out of 5 stars.

Photo by: B. Sandman

Other Reviews of the Book You May Enjoy

Review Ready, Fire, Aim @ The Simple Dollar
Book Review: Michael Masterson’s “Ready, Fire, Aim” @ Today’s Financial News
Michael Masterson’s Blog

Other Posts You May Enjoy

What Time Do You Wake Up?
What Did The New Obama Speech About His Budget Mean to You?
Are Real Estate Guru’s Worth the Money?
Book Review: The Art of The Start
Interview: Professional Blogger

Categories : Book Review,Entrepreneur Tags : , ,

Are Real Estate Guru’s Worth the Money?

Posted by 26 February, 2009 (10) Comment

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Have you ever thought about getting into real estate investing?

I know everyone has seen those late night infomercials about how you can buy property for “no money down, etc.” While attending a larger real estate seminars it’s it’s hard not to get excited. You have all of these self-proclaimed “guru’s” running around making all sorts of “money” while most Americans are struggling to pay the bills. I’m not one that is interested in doing what other people do. In fact, I generally try to avoid the herd mentality all together. However, similar to when you are bidding on an item on Ebay and you are excited about getting a “deal”, a real estate investing seminar can draw many people to purchase a real estate guru’s CD and tapes. Usually towards the end of the real estate guru’s allowed time, he or she will announce some special offer to the first X number of people. This isn’t what gets me and many others. It’s the fact that when he or she announces this “special” deal, people are literally RUNNING to the table to drop $1000 or more. Looking back on it, it sounds absolutely crazy that a person could get caught up in this, but the real estate guru’s are very good at what they do, selling.

Why do you need a real estate investing mentor?

There are two ways to learn, you can either go out and make the mistakes yourself, or you can learn from someone else’s successes and failures.

“There are no secrets to success. It is the result of preparation, hard work, and learning from failure.” – Colin Powell

Perhaps I am not as patient as others, but I would much rather lean on another person’s knowledge when tackling a new field. This will enable you to get a jump start on the learning curve. This could potentially shave YEARS off your goals not to mention potentially avoiding many of the expensive pitfalls involved in real estate investing. Still not convinced you need a mentor for real estate investing? At the very least, be in close contact with a good Realtor and a good real estate attorney to make sure you are not breaking any laws.

Here are some common sense “rules” I personally use when going to a real estate seminar or meeting so I don’t buy something I shouldn’t buy?

1. If it sounds too good to be true, it usually is the case.

2. If they talk about how much money they have and the cars they own, definitely walk away.

3. If people talk about how easy it is, run. In my opinion, real estate is not complex, it’s a numbers game like many things in life, but it’s not easy. It takes hard work.

4. Whenever someone is trying to sell me something, I ask myself these questions:

a. How are they making money? What’s in it for them?

b. Ask them, “if I knew what you knew, would I buy your product?”

c. Ask them, “if I buy your product, knowing what you know, am I soon going to regret this purchase?”

5. A friend of mine is susceptible to the selling techniques used by many of the real estate guru’s so he simply leaves his check book and credit cards at home. The funny part about him is that he’s been a full time real estate investor for over 30 years. He knows the in’s and out’s of real estate and has been retired from his job for over three decades, yet he is still tempted to buy.

6. If the real estate guru paints a picture of all sunshine and no pitfalls, run. There are a ton of ways to make money, but I’ve never seen a way to make money that doesn’t involve risk. Speaking of risk, Stock market, anyone?

7. If you are serious about real estate investing, don’t invest money in a national guru that lives 1500 miles away. Invest in someone that lives in your town. Only they will know the intricacies of your market. For instance, my wife and I signed up with a local real estate investing guru from Dallas. Dallas is 40 miles away from Fort Worth (where we live). This guru has heard of the different areas of the Fort Worth area, but wasn’t familiar enough with the area to know that the City of Fort Worth is investing a lot of money in an area known as the Fairmont Historical District. The guru also didn’t know of Fort Worth’s plans to build an “Uptown” area making North Fort Worth a nice long term real estate investment.

8. Ask for a list of people and their phone numbers that the real estate investing guru has helped so you can check their references. If they are indeed as good as they say they are, then they shouldn’t have a problem giving you references of people they have helped succeed. A local real estate investing club, we recently joined, has pictures of their members on the wall with the numbers from their first deal.

9. Get everything in writing! We had a local real estate investing guru who we decided to be mentored by. Everything went really well from the beginning. We checked his references and everyone had nothing but high regards for the individual. However, part of the agreement was that we would partner with the guru on a few deals. We spent many evenings learning from the guru. We were pumped and happy we found him! However, when it came time to actually start doing the deals, the guru changed his mind and decided that he was too busy to work with us on deals.

10. Make sure they have an office. This rule isn’t necessarily a deal breaker for me, but I think it’s something you should be cognizant about. In my opinion, it would be optimal if the real estate investing guru you hire has an office somewhere. It’s always nice to track people if they decide they aren’t going to return your phone call.

11. Instead of straight compensation, structure the mentor being paid based on your performance. Unfortunately, there are a lot of factors that go into whether a person becomes a successful real estate investor. For some people, they are “fence sitters” and will never pull the trigger. I’m not going to pretend to have the answer, but it would be nice if the real estate investing guru was paid based on the performance of the student. For instance, it would be nice if a student agreed to buy their investment houses through the guru or some similar arrangement in exchange for being mentored. The only problem for the guru is that a large percentage of people, while interested in real estate investing, will never do a deal. This certainly puts the real estate investing guru with a big heart in a predicament, but it won’t take very many of those students who never do a deal to not mentor anyone else unless they are paying a large sum of money.

Lastly, if you are doing to invest money in a real estate investing guru, please take the time to read John T Reed’s reviews of the various gurus. He has become pretty famous in the real estate investing community through his reviews of gurus, the books he has written, and the newsletter he publishes.

Have you ever invested money in a real estate investing guru? What were your experiences? Have you done any real estate deals?

Photo by: Woodley Wonder Works

Outside Resources:

Guru’s – A great take on real estate guru’s by Mr. Cheap over at Four Pillars.

http://www.creonline.com/ – This website has an extensive list of articles and a really active forum for questions.
http://www.biggerpockets.com/ – A really large community of real estate investors. I’ve found the forums to be really useful.

Other Posts:

Interview: FairRepair.com
Interview: Professional Blogger
Case Study: My Adventures in Forex Trading (Update: 2/16)
The TED Spread and What It Means to You
Book Review: The One Minute Entrepreneur

Categories : Alternative Income,Entrepreneur,Real Estate Investing Tags :

Case Study: My Adventures in Forex Trading (Update: 2/16)

Posted by 16 February, 2009 (23) Comment

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Here is a link to the first post regarding my adventures in Forex Trading. I’m pretty happy with the progress I’ve made over the last month. I probably spend an average of 5-10 hour per week talking with my mentor Mindy while simultaneously trading and watching the market.

I think the biggest surprise for me has been how fast the market can move. The first few weeks of my training occurred during the Christmas and New Years holidays. This time of the year is a quieter as far as Forex trading is concerned and the market wasn’t as active due to many of the large currency traders being on vacation since we are trading the Euro/USD pair.

ACCOUNT SUMMARY
Beginning Balance 15,479.00
Comm Trading Commission 0.00
Rollover Rollover Fee 26.70
PnL Profit/Loss of Trade 1,262.70
Depos Deposit 0.00
Withd Withdrawal 0.00
Option Options Payout 0.00
Comm Options Commission 0.00
AdminFee Administrative fee 0.00
MngFee Management Fee 0.00
PerfFee Performance Fee 0.00
Void Deposit Rollback 0.00
ASPComm ASP Commission 0.00
MargInterest Interest on Usable Margin 0.00
Ending Balance 16,768.40
Floating P/L -2,787.10
Equity 13,981.30
Necessary Margin 300.00
Usable Margin 13,681.30

Above is my account summary for the month. This is a demo account so no actual money is involved. This represents my trading from January 14th to February 15th. The first thing to take note of is my beginning and ending balance. I’ve gained over $1200 or 1200 pips for the month. The rollover fee that you’ll notice in the third line is for any trades that I have executed, but the trade was open after 4 p.m. CST. The bank charges interest for the ability to leverage money and this is represented in the rollover fee. Mindy’s strategy for me is to not hold trades for very long, but I’d much rather hang onto a trade for a little while as opposed to losing money. I do want to point out that while I have gained money in the balance column, if I were to close out my account today and sell my trades, I would still be negative over $1000. I want to make sure I’m not sugar coating my experience. It’s very interesting and I’m making progress, but I would be negative if I were to close out today. Fortunately, there are tactics that Mindy could help me employ if needed – for example if my usable margin (currently at 97.80% as I type this on 2/15) were 80% or lower.

My goal for the next month is to have an equity position that is over $15,000 (my original position).

Have you ever traded Forex? What are your experiences?

Photo by Wili

Other Posts:

The TED Spread and What It Means to You
Book Review: The One Minute Entrepreneur
Interview: FairRepair.com
Carnival of Personal Development – February 2, 2009
Book Review: The How of Happiness

Categories : Alternative Income,Entrepreneur Tags : ,

Interview: FairRepair.com

Posted by 5 February, 2009 (6) Comment

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We were fortunate enough to have Jeffrey tell us about his website, FairRepair.com.

Q: Can you tell us a little about yourself?

A: I grew up in Cleveland, OH and attended The Ohio State University. I
stayed in Columbus after graduating with a Business Degree and I’m
happily married to my wife Debbie and we have 2 boys, Alexander and
Andrew. While in college, the web was just starting to get popular and
I was fortunate enough to work for a local web design firm. Two years
after graduating college I left that design firm to work for myself
and I became a co-owner in a web development consulting firm. During
that time I was approached by a group of very experienced automotive
executives who asked me to become a partner and develop a sophisticated
car repair estimating system aimed at consumers. Having developed
several web applications for the automotive industry I was immediately
excited about the idea and saw a huge opportunity.

Q: How did FairRepair.com start and why did you start it?

A: Being in the automotive industry for 20+ years, friends and relatives
of our CEO would consistently ask him if the cost of repairs for their
vehicle was accurate. In 2004, with the growth of the web, he saw an
opportunity to empower consumers with this information.

Q: What are some of the benefits of using your service?

A: We knew, in order to be respected by consumers and the repair
industry, our estimates had to be accurate and exact. We decided
immediately that we needed to license our data from the most highly
respected source in the automotive repair industry, and we knew that
company was MOTOR Information Systems, a subsidiary of Hearst
Publishing. MOTOR’s OEM Parts and Labor database powers 2 of the
largest dealer management systems in the US as well as many of the
independent repair shops estimating software. A vast majority of
repair shops know the MOTOR brand and respect and base their estimates
on their data. We also license a repair shop database with over 50K
records that contains each shop’s labor rate updated within the last year.
Combining both databases we are able to produce exact pricing for a
repair estimate. A FairRepair.com estimate will show the OEM Part #,
current market price and the actual labor time for that repair. We
then take an average of the labor rates in that vicinity and generate
the estimate. No other competing company licenses the MOTOR database
nor our proprietary repair shop database.

As a consumer, if no one is willing to complete the repair work on
their vehicle for the estimate that we or any of our competitors
generate, where’s the value? FairRepair.com is proud to have repair
shops nationwide who not only agree to honor a customer’s
FairRepair.com estimate, they have also agreed to rebate back to the
customer the purchase price of our estimate. Repair shops are finding
that our service and their decision to honor our estimates is
generating them business. Just last week, PepBoys, which has 500+ repair
shops nationwide, agreed to honor and rebate back to the customer the
purchase price of a FairRepair.com estimate. Given their nationwide
footprint and the number of independent repair shops who’ve made the
same commitment to us, we’re able to provide to a majority of
customers a repair shop within 10 miles who will honor our estimate.

Q: Why should someone use your service versus Driverside.com or
Repairpal.com?

A: FairRepair.com is proud of our relationship with MOTOR Information
Systems and because of them, our customers and repair shops know and
respect where our Parts & Labor Repair originated from when generating
their estimate. FairRepair.com provides estimates that are exact, we do not use ranges to generate an estimate. Providing an estimate with ranges or guesses leads to customers being overcharged and it’s clear a FairRepair.com estimate eliminates this problem. We have a nationwide
database of repair shops who will honor our estimate when presented to
them and many of these repair shops have agreed to rebate back to our
mutual customer the cost of our estimate, essentially making our service free.

Q: There are a ton of different cars, different models, and different years. That seems like a ton of data. Is your website able to give an estimate on all mechanical repairs?

A: The Parts & Labor data that we license does allow us to give an estimate for any mechanical repair however we don’t intend to be everything to everyone. Some repairs are just too complicated to be accurate without an inspection from a certified mechanic, for example the rebuilding of an engine. That being said, we know what the 100 most popular repairs are and it is our initial goal to have 100% of those repairs available for every vehicle from 1984 on. Our system is not there yet, although we are adding new repairs to our system regularly.

Q: What future plans do you have for FairRepair.com?

A: We are developing a repair shop review/rater system so that our customers can make a more knowledgeable decision as to where they should take their vehicle for repairs. We are also developing a reverse auction system that would allow repair shops to bid on our customers estimates.

Q: Is there anything you’d like to add?

A: We have been asked in the past if we have any monetary relationship
with the repair shops in our database and the answer is no. We are completely independent. It is free to add a repair shop to our directory whether a repair shop just wants to be listed or they agree to rebate back to the customer their purchase price. FairRepair.com does not receive any kickbacks from repair shops if our customer decides to use their services.
FairRepair.com greatly appreciates the opportunity to inform your readers of our service, I invite them to use our service the next time their vehicle needs a repair.

Photo by: Stevo Arnold

Other Posts:

Carnival of Personal Development – February 2, 2009
Book Review: The How of Happiness
Interview: Financial Independence Through Dividends and Thrift
Interview: The Franchise King
Are the Companies You Do Business With Green?

Categories : Entrepreneur,Frugality Tags : ,

Interview: Financial Independence Through Dividends and Thrift

Posted by 26 January, 2009 (13) Comment

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This is an interview with William Spetrino. He is financially independent through through investing in dividends, being smart with his money, and doing right by others. You can read more about him on his Squidoo page or his blog.

Question: Can you tell us a little about yourself?

Answer: In college I was an accountant who graduated at the bottom of my class. In finance we learned the efficient market theory which meant throwing darts was as important as analyzing stocks. In 1987 I was first introduced to Warren Buffett and tried to read as much as I could. In the absence of the internet gathering information was not easy. What you are able to learn now in a month it took me over 10 years to learn. In 1988 I started with sports memorabilia but the problem is most of profits went to pay for living expenses. DON’T quit your job until you have at least 1 year of living expenses. In 1993 I finally got started with 7000 dollars and it all took off from there and was a slow steady grind until 1998 when I realized the internet’s vast amount of information was able to speed up my learning process.

Question: You have stated you are financially independent. What does that mean to you?

Answer: Financial Independence is knowing that your annual dividend income EXCEEDS your total living expenses. More importantly if you build your dividend machine “properly” the income should double every 6-10 years which should more than keep pace with inflation

Question: I really like the idea of living off of dividends. What got you interested in dividend paying stocks? Also, why dividend paying stocks? Why not real estate or some other avenue that offers cash flow while preserving the capital asset?

Answer: In 1993 I bought the stock that is now Altria when it had its dividend yield of 5.75% and a low PE. That original investment 15 years ago with reinvested dividends will pay me about 60% in 2009 of the original amount invested. That got my attention. And then if you go on my squidoo lens http://www.squidoo.com/Creating-Dividend-machine you will see Jeremy Siegel’s study of the top performing stocks with reinvested dividends. Let me just add I bought Altria more than 10 years before I read his study, but reading it made see the power of it. Siegel also said that 97% of the Dow’s gain since 1900 was because of reinvested dividends and 3% was ‘appreciation”. That made a lot of sense to me. Real estate is something that is capital intensive, you need to involve attorneys, contractors and was the way I thought wealth was to be developed in the 80s and early 90’s. But as time went on I realized that buying stakes in companies like Altria, Coca Cola, Johnson and Johnson when they are PRICED RIGHT is the easiest way to financial independence.

Question: We’ve spoken on the phone a few times and stressed the power of networking. Can you share you experiences in networking and how that has gotten you where you are today?

Answer: Networking is summarized in my book Consume Consume and Consume More which has been sold in over 15 countries and is now starting its second printing. Check out the reviews http://www.atfreeforum.com/billyticketswin/viewtopic.php?t=17&start=0&mforum=billyticketswin. Whats ironic is the 2 people who have helped me along the way were people I tried to sell an insurance policy to. Thankfully BOTH of them remembered my words. If you ever need ANYTHING at all. Please call me. Both people who are opposite as can be helped provide two separate income streams which provided me the finances to build my dividend machine. Listen closely to this story. When I used to tell one of my old mentors that I was more interested in helping others than selling he asked me if I believed in our product and I said sure. He said then well if you aren’t sharing the product WHO are YOU helping? That made me realize that waiters, construction workers and everyone I came in contact with was fair game. However I do it differently. Most people try and “push” one thing. I build a network of “generous”, positive , competent people and then I expose products to them. THEY will decide what they want. Remember No one loves to be “sold” but everyone LOVES to buy.

Question: I know that you are not a broker and can’t offer financial advice, but are there any dividend paying stocks you would suggest people investigate?

Answer: Unlike a broker who has a vested interest in what and how often you buy I will recommend companies that you understand. Pepsi Coca Cola McDonalds Altria Proctor and Gamble etc. The KEY is what PRICE you get the stocks at. In my book which can be ordered at ticketbill@aol.com gives the EXACT formula and filters to tell you WHEN and WHAT to buy.

Question: Is there anything else you’d like to add?

Answer: My book will teach you how to start with NOTHING and achieve financial independence by following each step that is SIMPLY stated. The book is less than 50 pages but is full with MEAT which took me 20 years and over 1000 articles and books worth of reading to amass. There is a case study from almost 4 years ago where I analyzed 5 stocks and the 2 stocks I “recommended” are BOTH up even though the stock market is down drastically in that time span. My blog is at www.billytickets.blogspot.com. Feel free to submit questions an we can see how many we can get to. Peace.

Contact Information:

William Spetrino

E-mail: ticketbill@aol.com

Squidoo Lens: http://www.squidoo.com/Creating-Dividend-machine

Blogs: www.billytickets.blogspot.com

His Forum: http://www.atfreeforum.com

Photo by: Epicharmus

Other Posts:

10 Ways to Become Financially Independent
What Would Happen if More People Were Financially Independent?
10 Reasons Why I Want You to Be Financially Independent
Will Your Ambition Beat You?
What’s the Best Financial Decision You’ve Made?

Categories : Entrepreneur,Financially Independent Tags : , ,