Thomas Green here with Ethical Marketing Service. I am continuing my business questions, so I’m going to get started.
What are the top mistakes that small businesses make?
Often scaling is difficult, hiring too late or too soon, and a lot of it is to do with cash flow, not knowing what’s coming in and what’s going out on a regular basis and where they are day-to-day, month-to-month. And also, the emphasis on sales. Most businesses don’t have enough emphasis on sales, that’s why a lot of businesses go out of business – a lot of new businesses anyway. It’s something along the lines of half of the businesses that are started fail in the first – I think it’s two years. And then of those, after five years it’s something like 90% of them are gone. If you just take those two principles and you said okay, sales is no longer a problem for you, so acquiring customers is no longer a problem, and you’re aware of the money situation day-to-day and you’re handling it well, the percentage of businesses that would actually fail, if those two issues were taken care of, is significantly less than what it currently is. So yes, cash flow and managing it and being able to ensure that you have enough money for certain things and being able to predict when certain things are going out and coming in, invoicing, paying, and then also an emphasis on getting new business.
At 35, how could I start again and become wealthy?
Realistically, anyone can start again at 35. It is slightly dependent on your skills, so if I had to start again right now, I’m pretty sure I’d be fine. We need to define wealthy. What does wealthy mean to you? Presumably, like I’ve said in previous videos, I’m going to go with what most people quote/unquote think is wealthy. So, it would be, let’s say, tens of millions in cash, so, you know, not assets, actual cash in the bank. Most people would consider that to be wealthy. I suppose I could rephrase the question in order to give you an answer which is, could you start a business at 35, a successful business, which would make you wealthy? And the answer is, yes. But in order to determine whether or not you could start a successful business is down to your characteristics, your drive, your skills, your determination and your perseverance. Those are the things which I’d consider. Some people have family responsibilities and, it’s more difficult for them to start again, especially at that particular age. What I would do in that instance is, if you’re, let’s say, in employment or you’re thinking of going from one business to another – meaning you’ve started a business but you want to start again – what my business partner and I did was we had a certain amount of money saved up so that if the business, when we started the business, made no money at all, we were able to keep going for a certain amount of time. So, that’s one thing that I would recommend that you do, is that you put everything you have into it, meaning time, effort, perseverance, and you treat it as though you don’t have that safety net, but if it is the case that you have to use it then it’s there for a certain period of time.
How long do founders wait to take a salary when launching a start-up?
I don’t know what the statistics are on that if there are, in fact, any statistics that are available. I think the question is, how long should I wait before I take a salary as a start-up? If you’re an owner of a business I think you should take a salary, but the salary you take is in relationship to the size of the business. So, if it’s a start-up – and it’s dependent on if you’ve had any capital injected into that start-up – but if it’s a large amount then obviously you can take a reasonable salary. If it’s none or if it’s a small amount then you should attempt to take a small salary. What most business owners declare as a salary is the minimum amount that you can take, and so I would recommend doing that. The problem with not actually taking a salary as an owner or a founder is that the business looks like it’s performing better than it is because you’re working for free. You’re probably the person that cares the most about that business and you’re not being paid anything. So, as quick as possible you should take some form of salary, even if it’s small.
What is the biggest business secret in the world?
I actually had a look over these questions before I put them in. For my last couple of podcasts or videos I was just doing it on the fly and I didn’t really know what was going to come up during them. But this one’s in there because of the emphasis I want to place on the fact that there are no secrets. There is no biggest business secret in the world. Earl Nightingale had something that he did which was called The Strangest Secret and it was in relationship to setting goals. And the reason he called it The Strangest Secret was because of the amount of people who actually took action on doing it and also how powerful it is to do that. So, he’s essentially saying it might as well be a secret because of how powerful it is. But the term secret in business has been used historically and has been more popular on the internet because of the reach of it and because of the marketing side of things. You need to understand that if anyone’s trying to sell you a secret then it’s not a secret. It’s often the case that information isn’t new, it’s just recycled. I have learnt a lot of these principles that I’m sharing with you from someone else. This isn’t new from me. I might have my own take on things, which I hope is valuable, but at the same time there are very few secrets and I would encourage you to stop looking for secrets and rely on yourself. What’s going to make your business better is you being better. Jim Rohn said, “In order to do better, you need to be better. Don’t wish it was easier, wish you were better.” And that is what I want to encourage you to do. Stop looking for secrets. It’s all in the hard work. It’s all in the education and application, so it’s up to you and don’t allow anyone to tell you that there’s a secret that you can get from them because it’s probably not true.
What are businesses for women?
I had a question in my last podcast about age, and I think I have the same answer for this particular one. Any business that a man can do a woman can do and vice versa. There’s no business that’s excluded for women and the market doesn’t care about your gender. If you’re a successful person then you’ll be rewarded by the market – or at least you’re more likely to be rewarded by the market – and if you’re an unsuccessful person then most likely your business will fail. It doesn’t care about gender. Now, there are, let’s say, a small percentage of the market – or a small percentage of people – who may discriminate based on gender. If you have someone who says I don’t want to do business with you because you’re a woman – I would expect that to be the vast minority of people – but if that’s the case, then you just move on from that person. There’s plenty of business out there and also if that’s the type of person that is theoretically going to be your customer, you want to filter out those people anyway. Believe it or not, you don’t have to do business with everyone, so if someone holds that opinion then count yourself lucky that you don’t have to do business with that person. Business doesn’t care about gender, so if you’re a woman you can do any business that a man can do.
How do I start a new business with no experience?
It is perfectly possible to start a business with no experience and much more possible if you have money to do it. And the reason for that is because if you can hire someone with skills – essentially your job as a business owner is to be the owner of the business, it’s not the doing of the thing. Earlier on I saw a question about a plumber, so if we take plumbing as an example, let’s say I wanted to start a business and it was about plumbing. I know next to nothing about plumbing and so it would be poignant for me, if I wanted to start a plumbing business, I would have no experience. So, the question is, could I start a plumbing business? And the answer is, yes. All I’d need to do is to hire a plumber, pay a salary or perhaps pay a plumber a cut of the job, and all I’d have to do is open my plumbing business and deliver the clients. I’d get the work and then I’d send a plumber out to do the job. Now, it’s important to understand that if I don’t have plumbing experience then I would need to do as much research as possible to determine if that person I’m sending out is actually capable and that’s important. But the reason I use that example is that I know nothing about plumbing and yet I know I could start a plumbing business, and the reason why I’m confident I could do that is because I am very good at marketing. And there’s an old phrase which says that if you’re good at marketing or if you know how to do marketing you can be in any business essentially because you know how to get the client. And that’s a lesson for you to know. So, really the business you’re in is not the thing itself, so it’s not the plumbing, you’re not in the plumbing business. Really, you’re in the business of getting customers and that’s why my emphasis has always been on marketing because that’s, the most important part of it. So, I could go and I could learn how to be a plumber. I could spend all those years of doing all of those things and learn, but basically, without the customer who’s willing to pay me – except for myself, of course, I could do my own plumbing – but apart from that, there’s very little value in knowing it if you don’t have someone who’s willing to pay you for it. So, as a business owner, the skill is acquiring the client, it’s not really in the thing. Now, if you do have some experience that’s better than having no experience, but there are plenty of examples of people who’ve gone into business and they don’t know anything about that field and they’re very successful in it. The only caveat to it is that you need to, like I say, either pay someone a salary if they’re an employee, or it needs to be some sort of cut of the job in order to get them to do it.
I want to quit my job and start my own business. Where should I start?
I alluded to this in one of the previous questions which is, I think you should have a certain amount of months to support yourself if the business doesn’t make any money. I think that’s important just because if you quit your job and you don’t have any support, any savings, that’s going to be quite difficult. Very new businesses fluctuate in their performance because no one knows about you and you don’t have any existing customers. I would start part-time if it’s possible, so I would do all of the things that you have to do in business over a longer period of time whilst you’re working. An example of that might be I’d get my website. I’d know how to do all the skills that you need in your business. I’d consider lining up all the relationships that I need and then when you have all those things sorted and you have a few months – as many months as possible ideally – where if the business doesn’t generate any income then you can keep going for a certain period of time. You can support yourself if the business can’t pay you. And then once you are prepared, ideally, you’ve got some clients or you’ve made some sales. This is sometimes referred to as proof of concept, so have you proven that there’s a need for that business. If there is a demand for you and you’ve got all those other things that I mentioned lined up, then you can go into your job and you can hand in your notice and you can be relatively confident that once you leave that, you can throw your whole self into that and you’re fairly well prepared. It’s unfortunate but a lot of people quit their job and they’re not prepared, meaning they haven’t got all of those things that I talked about, and they have to figure out those things instead of looking for work and basically, there’s no proof that that business works. So, not only are they unprepared but there’s no proof of concept. Those are the things that I would do. Get prepared, have a – sometimes referred to as a – cash buffer, and then you can quit your job with a reasonable degree of confidence that you’re going to be okay for a while. And don’t forget to work your arse off.
What’s so hard about starting a business?
The reason it’s so hard is because you’re new, meaning no one necessarily knows about you, and you need to be able to essentially take a salary as a business owner when there isn’t one. So, when you’re creating your business, you’re essentially creating income for yourself because if you just take an income as an employee, they’ve already done that for you. So, they’ve got all the clients and they’re giving you money that those clients are giving them. Whereas if you’re starting in business there’s nothing. There’s essentially an empty bank account unless you’re putting money into it. The actual delivery of a product or service is not that difficult unless you’re innovating something extremely complex. Actually starting a business basically, you’ve got an empty bank account, and then it’s up to you to go out and find those clients, generate that business, in order to give you the salary that you would have had in a job. But the interesting thing is even if you were to go out and let’s say you got some sales if you had an online business or you’ve got someone to pay you for the service, often that’s not enough so you need multiple clients. And there’s absolutely no guarantee that a) it’s actually going to go well, so it might go wrong and then you have to give the money back. Or b) they may just be a one-time client in which case you just have to go and do it all over again. I suppose a summary to the question is, you have to get people in the market to voluntarily give you money instead of just doing it once as an employee. People want their money, people need their money, so you have to add so much value that they’re willing to give you their money voluntarily, and you’re new and no one knows about you.
How do I start a business in a field that I don’t have much knowledge about? Is it possible to do this without going to school?
The second part of the question is an easy one. Yes, it is possible to do this without going to school, but it may be beneficial to do some sort of course. It depends on you. I don’t find going to school or academia to be particularly helpful. I prefer to learn by doing and I’ve learnt a lot on the internet as opposed to traditional courses, but that’s up to you. The first part, how do I start a business in a field that I don’t have much knowledge about? I’ve already touched on that a little bit. If you don’t have much knowledge about it, it depends on whether you want to do the deliverables or not. If you do want to be the person who’s providing that product or service, either creating a product or delivering that service, then you need to know about it. And if you don’t have a preference about whether or not you’re the person to provide that service or create that product, then you just need someone else to do it for you. And again, I mentioned that you either need to pay someone a salary as an employee or you need to pay someone a fee if they’re a sole trader.
What is the most powerful business quote for you?
I’ve already said it once today and maybe it’s not the most powerful one but it’s the one which has stuck with me the longest and I think it’s certainly one of the most powerful quotes. It is Jim Rohn and it’s:
“If you want to do better you need to be better. Don’t wish it was easier, wish you were better.”
It’s simple but there’s a lot of learning that you can take from that in the sense that I already had a question about, you know, what’s the biggest secret? Well, it’s up to you. I once heard – I think it was at Oxford Union – Alan Sugar being asked, what can you tell me, what’s the biggest thing about business or what’s the secret about business, something like that, and he said it’s up to you. Unless you have a rich uncle that’s willing to support you and do it for you then it’s all going to be down to you, and I know that doesn’t help, but that’s the truth. If you want to make a success of your business, it’s down to you and no one else. I think that human beings have a tendency to want to be rescued in some form or they want someone to come along and make things easier for them. And the more you can realise that that person’s never going to come and it’s all down to you, then the better because either you’re going to knuckle down, work hard and make a success of yourself, or if you realise that and you don’t want to go through that hard work and determination then you can get a job because there are advantages to being an employee. You don’t have to deal with all that.
How can I get a start-up loan for a small business?
This is going to be anecdotal. I like to give my answers to you based on experience as much as I can, but I have always found business lending to be unappealing, meaning it’s much like personal loans but it’s worse. I already mentioned the number of businesses that go out of business is very, very high and so basically, business lending is only for businesses that can easily afford it. If you’re an existing business which has been trading for a while and your numbers look good then, you know, maybe business lending is okay for you, you’ll get one. But if you’re a start-up then the way I would answer the question directly is, how can I get a start-up loan? I would do it personally. If you can get a personal loan and lend it to your business that’s what I’d do but, I mean, you’re at a disadvantage because starting up a business is difficult enough and then you’re adding a loan on top of it. It may be necessary but as much as you can avoid that then I would, but if you’re convinced about getting a loan I would do it personally because business loans are difficult to get for a start-up.
Is it worth it to start your own business?
It depends on you. If you are asking that question then I would probably think it’s not worth it for you because I don’t think that’s ever come into my mind, that question, is it worth it? There’s a phrase which says something along the lines of entrepreneurs work 100-hour weeks so they don’t have to work 30, something like that. If you’re going to go into business that has to be you. So, you have to be willing to work extremely long days and, not even be paid for it because, I don’t know, if something goes wrong or it just has to be done and no one else can do it and you can’t pay anyone and therefore the money has to come from somewhere, someone has to pay for your time. And no one’s going to do that if you don’t have a client or you’re very young. So, I would say starting a business isn’t for everyone. I think it’s more fashionable than it ever has been because of the internet, but if you’re not 100% convinced, I would wait until you are because it’s no small thing to start a business. Everyone has doubts but I would go into it with as few doubts as you possibly can.
How do you use social media to promote your business?
There are multiple ways to use social media to promote your business. If you’re at this stage, meaning if you’re asking this question, then I would focus on one media as much as you can and I would get really, really good at that media. And when you have a handle on it and when you have an audience and when you’ve got some experience in either posting or the advertising side of it, you can potentially move on to the next one. What I think most people struggle with around starting to use socials for their business is the number of them. If you start with one then that won’t happen. If we pick one at random – rather than starting on seven different social media platforms and getting totally overwhelmed at having to post to multiple platforms and create content for various different ones, if you start on Facebook, for example, and you really get to use that and get as much benefit as you can for a certain period of time, then you can start introducing other media incrementally. I think some of the quickest ways that you can utilise social media to promote your business are with your existing community, for lack of a better word. I’ve seen local businesses make use of social, especially platforms like Facebook, because it’s people they know. If you’re looking to get started on social and let’s say you’ve got 500 Facebook friends or something, it’s news to them that if you start a business they’d want to know about that and, if you’re actually friends with them maybe they might introduce you to someone or they may have a need themselves. So, that’s how I’d do it.
I am 37 years old. Am I too old to start a business?
No. It depends on your skills and your circumstances somewhat, and if you’d have said you were 57, I would say no. And actually, some of the biggest and best businesses have been started by people at the end of their career. I would get started but, business is not like a professional sport or something, so unless your business is to do with being a professional sportsperson, then I would say no. 37, you’ve still got decades, many decades, of your career left, so that’s an easy one, no.
Which problems do small businesses have?
Small businesses have tons of problems and I have used the analogy of being in business as firefighting, and I don’t think that’s an uncommon perspective to have. Trying to get behind the intention of the question, it sounds to me like what can I sell small businesses? But maybe it’s, I’m attempting to go into business and I’d like to know some of the problems in advance. I’ve alluded to a couple of them and I’ll stick with them, which are cash flow and the ability to get customers. Even mature businesses, I think, still have problems with customer acquisition. So, if you want the biggest problems, they’re those two.
What did it feel like to start your first business?
It’s exhilarating. Ethical Marketing Service, legally speaking, it was my first business but it wasn’t my first venture into business. I’ve done lots of things prior that were variable in their success, but actually when you start a limited company, it’s variety and variety is a human need, you know, we all like to do things which are new, and it’s exciting. Again, I’m trying to get behind the intention of the question. Why would you want to know what it feels like to start your business, your first business? It sounds like you haven’t because if you had you’d already know, so rather than commenting or asking questions like that on the internet, I’d go for it and do the best you can and obviously, if you’re not quite ready yet, you do it anyway and just limit the risk that you have, calculated risks, don’t just fly into things and put a load of money into it. Start small but do start.
What should you do if you want to be an entrepreneur but have no background in business? Should you take a crash course of some kind or perhaps find someone who knows what they’re doing?
It’s sort of, similar to a question that I’ve already had, but I kept it in because of the first part which is, what should you do if you want to be an entrepreneur? And it comes back to something which I’ve said before, which is it’s fashionable to be an entrepreneur at the moment and you really need a better reason than just I want to be an entrepreneur. I mean, I certainly have it where I wouldn’t want to be an employee even if it meant doing undesirable work. I’d still want to work for myself in some form. No background in business – I mean, the good thing about business is that you really only need to learn how to do one thing really well to at least get started. An example of that is when Ethical Marketing Service was first started. Basically, all I focused on and all we did for a long time was Google Ads and we knew how to do Google Ads really well. We branched out and because of the fact that there’s a need for it and we had additional people who could take on those skills, it meant that we could do multiple things. But just because you have no background in business is not a reason to not do it, you just have to do one thing for someone really well. You’re solving a problem for someone.
My analogy is someone in business with an existing business, they have their business but they don’t know how to do Google Ads and therefore they search for an expert in Google Ads and there we are. And that’s what we know how to do. That shouldn’t be a problem that you have no background in business. Should you take a crash course of some kind? I think that would be better than not doing it, and the more you can educate and apply that education is going to be beneficial for you, but it doesn’t have to be in a formal setting. If you’re going to be in business, it’s a learning thing and you never stop. So, don’t think that you’re going to take one course and that’s all you need to do. It’s ongoing, so, you know, I’d say take the course anyway if you can because you’re going to need to learn ongoing.
The last part of it is about perhaps find someone who knows what they’re doing. That sounds like some sort of mentoring to me. I actually think that doing both would be good. If you can find a mentor or a coach or something or someone who has experience that they’re willing to share with you, you’re shortcutting the learning curve. So, if say, for example, someone was about to go into digital marketing and they had no background in it, if they were able to get me as a mentor, they’d be shortcutting all of that information that I have that I learnt and that would be extremely valuable. Yes, I think you should do both of those, but if you don’t do both of them then you still need to learn from somewhere.
What are the reasons that keep people from starting their own business?
Fear is a big one and I actually think in some cases it’s justified fear. While I don’t want to be too much of a downer on this podcast and keep reiterating the fact that the majority of businesses fail, I think that’s the biggest reason. If you knew for sure that your business was going to be a success, then there’d be no reason why you wouldn’t start it. The only reason people don’t start a business of their own, apart from, you know, perhaps the increase in responsibility, is the fact that they’re afraid that it will fail, and it’s a justifiable fear but you’ll never know. You have to be the best possible person you can be and work as hard as you can, and most likely if you do those two things and you’re reasonably smart then you’ll be fine.
How can I find a business mentor?
There would be plenty of business mentors around. There are plenty of people who do business coaching. I think I’d add an additional word into that question which is, how can I find a good business mentor? I would look at it like you look at hiring anyone. You have a particular job that you need doing which is your business mentor. How would you go about hiring a plumber or a window cleaner? You’d look at reviews perhaps, testimonials or references, you’d look at their reputation, you’d look at their cost perhaps, can you afford them? Providing it’s affordable to you, rather than holding off on it, I would hire a few of them and find one which is good for you because although it may be the case that you might find a good business mentor, you might not gel with them and, it’s important that you get along with that person. Yes, I’d split test them.
Is having your own business the only way to become a billionaire?
No, but I would say the majority of billionaires are involved in either business or property. So, another way of becoming a billionaire is property or at least some of that net worth would be to do with property because you need to put it somewhere. The other way to do it, I would say the shortest way to do it, is to marry someone who’s a billionaire and then, you know, you are also one. I would look at the reasons why you want to become a billionaire. I think again, it’s one of those fashionable things. I don’t think there’s anything wrong with wanting to become a billionaire, but I think you’ll find that most billionaires, they’re doing their business because they like to do their business. There are some people who are online talking about the laptop lifestyle and they’re sitting on the beach and, it’s the best thing I ever did creating a business and all this. It’s fake. So, if you think that being a billionaire is going to solve all your problems then it’s probably not the case. You get more problems through becoming a billionaire. First of all, people want to take that from you, both in legal means and in illegal means. You’ll have family members who will want to perhaps take some of that money or, you know, they’re going to want some. You’ll have old friends or distant family members getting in touch with you. It’ll be difficult making friends because you don’t really know whether they’re interested in your friendship or your money. There are all sorts of problems from becoming a billionaire. I’m not saying don’t do it. I’m simply saying that most people when they become a billionaire, it’s not the defining thing which is going to make them happy. Really people become a billionaire because they have worked hard on something, and the way you measure the success of that work is in money. So, the easy example to take on that one is Jeff Bezos. Whether you like him or not, he worked extremely hard on Amazon. Amazon became extremely successful and therefore he became a billionaire.
I think I’m going to conclude there. I hope this has been helpful to you. If you have any questions put them in the comments, and if you need any help with your digital marketing visit us at ethicalmarketingservice.com, and I’ll speak to you soon.