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In improving products, think always in terms of benefit: How does this change improve the experience of the buyer? Think also in terms of a unique selling proposition: Is this change something I can talk about in my advertising? Does it convey a benefit that the competition does not have?
If you improve your product carefully and continually, youíll keep it alive much longer . . . and that will make your business thrive.
Rule No. 5: Forget Retail and Glamour Businesses
We can make this section very short. If your idea for a side business involves a retail store or just about any business you think is glamorous (travel and entertainment are the two biggest culprits), save your money.
Retail businesses can succeed, but they are very difficult and very time-consuming, and they almost never provide the ROI you want from them. Travel and entertainment businesses are even worse.
If you are already in one of these businesses, you know what Iím talking about. If you arenít, take my word for it. Youíll be glad you did.
Rule No. 6: Sell First, Tweak Your Product Later
Another very common cause of failed start-up businesses is forgetting that making the first sale is the first job.
Many people go into business with the idea that they should get all the details worked out before they open shop. They get all their plans done (sometimes to the nth degree), rent and equip an office, print business cards and brochures, and then get busy with operational and fulfillment issues before finding out whether they can sell the product.
Good start-up businesses have efficient marketing models (see Rule No. 2), and the only way to find out whether your marketing plans will work is to test them. Testing them doesnít mean marketing studies,
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prospect surveys, or even simulated sales situations. Most of that stuff is a waste of time.
To give your little business its best chance of succeeding, you have to find a way to bring in customers profitably before going out of business. There is only one way to do that properly, and thatís to create a great advertising campaign and expose it to your prime audience.
If you employ a direct-marketing-driven marketing program, you wonít have to spend a fortune testing your advertising. You need only target a handful of very strong, very vertical lists (i.e., addresses of buyers who bought products very similar to yours) and a very strong promotion. (Donít be penny-wise with copy. Pay for the best copywriter you can afford.)
By focusing the lionís share of your time, money, and talent on advertising, you can very quickly find out the most important thing you need to know about your new business: how to effectively acquire new customers.
Nothing else you can do in the beginning is as important. And everything else you may feel like doingówith the exception of creating the product, of courseócan probably be done later.
Rule No. 7: Donít Throw Good Money after Bad
If you create a great advertising campaign and it fails, stop everything immediately and regroup.
You may be tempted to throw good money after bad by testing other marketing ideas. You may decide that if you reinvented the product, the next promotion would succeed. Any or all of your postfailure ideas may be valid, but youíll waste a lot of money and undermine your chances of succeeding by keeping the business open while you get set up for a second chance.
When I think back on all the products Iíve launched in my career (and there have been several hundred, at least), I can think of only a handful that started out weak and then gained strength afterward. Most new product launches that begin with a whimper eventually fade and die. Those that begin poorly do even worse.
It is usually only ego that compels you to go forward with a business idea that the market has told you it doesnít like. This mistake, this business hubris, is common not only among new entrepreneurs but also among mature and successful people.
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To make your cut-and-run decision easier, set a stop-loss before the first test. Figure out what kind of return you expect from the advertising campaign and stick to it, even if the results are close.
If you donít expend all your money, time, and patience by pursuing a not-so-good or bad idea, youíll have enough of each to come back with a winning promotion the second time around.
If you follow the program I laid out for you so far, you will be able to retire in 7 to 15 yearsómaybe sooner.
And if your personal wealth-building program includes at least one side business, chances are youíll end up with more money than you really need.
The purpose of this book is to help you develop one or several wealth-building skills and specific financial behaviors, so that getting wealthier becomes almost automatic. Once these skills are mastered and the new habits are acquired, you will get richer with every passing day, even after you have abandoned wealth building as a primary goal. In fact, as an automatic wealth builder, your net worth will continue to increase even if you never spend another moment thinking about money.