Entrepreneurship, The Only Way I Know How

How to get more referrals

2009-09-08T14:05:00Z

More referrals mean more business. It is that simple. There are many traditional approaches to getting more referrals, and they work. In fact, at the end of this article you will see my three favorite blogs posts on referral basics. But there is one approach, no one has shared before until... drum roll... now!

The technique is called if-would. Instead of following the traditional pattern of asking for referrals AFTER you provide a service or product to a client, you must ask BEFORE. Sounds a little crazy at first, but when you position it with an if-would, it completely makes sense. Here is exactly what you ask of your customer:

"We are grateful you will be using our product/service. If we prove to be exceptional, would you refer us to three of your contacts?"

This little magical question works wonders for a few reasons. The first thing is that it is easy for your customer to commit to. The second thing is you now have provided them the time to think who to refer you to and how. And the final, little hidden bonus, is you have staged yourself to get feedback on your product or service.

After your deliver your product/service you now say to the customer:

"When we started you said you would refer me to three of your contacts, if I delivered exceptional service. May I have their contact information now?"

Here is how it plays out. Since your customer has given you their word earlier, it is highly likely they will deliver the referrals when you ask. There is a psychology going on here, and to keep it short - just know people, in general, will behave consistently with what they say out loud.

If the customer does not give the referrals, they are telling you loud and clear that your service was not exceptional. At this point you have a bigger issue on your hand then getting a referral, you need to fix a customer service situation.

Try it with your next five customers, and I all but guarantee you get 15 referrals... that is unless your service sucks.

The key to a profitable & predictable business

2009-09-05T14:01:00Z

This weekend I was enjoying some Margaritas with my friend Chris. He is one of the greatest entrepreneurs I know (and I know many, many entrepreneurs). You have never seen him in the news or on the front of a magazine, and that's because he wants it that way.

Chris's company throws off a 37.6% net profit, every month. And when I say net, I mean NET. This is the money left over AFTER all business expenses, all salaries (including his), after depreciation, after interest and after taxes. Oh yeah, and I forgot to mention his company does over $1M... every quarter. Just in case you haven't had your coffee yet, that is $4M a year business, with a net profit of $1,400,000 every year. Like clockwork.

With enough Margarita's Chris grabbed my arm, and with a slight slur (Margarita's will do that to you), told me the "secret' to his success: Recurring Monthly Fees.

Recurring monthly fees are the secret to predictable, profitable businesses. It works for Chris, and it works for me. Now, you need to do the same.

It doesn't matter if you sell a service or a product; there is a way to implement a Recurring Monthly Fee immediately. And, when done right it will benefit BOTH you and your customer. Here are some examples:

1. Offer a monthly, all included, maintenance service - The customer wins because they can budget for costs, and don't need to worry about any problems; big or small. You win, because you make money no matter if there are problems or not, and you are motivated to make sure there are no problems.

2. Start an "of-the-month" club - Do you sell a perishable or consumable product? Well start an "of-the-month" club. Cigar-of-the-month, wine-of-the-month, facial cream-of-the-month, condom-of-the-month, massage-of-the-month; the list is endless. The Recurring Monthly Fees can be endless too.

3. Extended Warranties - Have a product or service that is a one time sale? You can convert it into a recurring model by offering an extended warranty.

Recurring fees are so effective for running a healthy business, because it results in a predictable income stream. With a predictable income you can adjust your costs accordingly and position yourself for profits month in, month out.

Chris's final words drive it home:

"I start the first of every month, in the black. Any additional income during the other 30 days, and there is always some, is simple the icing on top!"

Now you have two things to do. First, implement Recurring Monthly Fees in your business. Then when you are done, pour yourself a Margarita.

Blending - The New Way To Innovate

2009-08-08T20:51:00Z

Entrepreneurs are natural innovators, but even the most forward-thinking people sometimes need a little nudge to help open their mind to new possibilities for growth.

One of the best ways to think outside of the box is to start asking “what if” questions. Here’s a “what if” question I’ve been kicking around lately: What if we took two disparate businesses and blended them to make something new? I’m not talking about merging or partnering with another company; I’m talking about blending business methodologies from two (or more) industries to create a new business, or dramatically improve an existing business.

A classic example of this is Commerce Bank. Founded by Vernon Hill in 1973, Commerce Bank blended two industries: fast-food restaurants and banking. The owner of a fast-food restaurant franchise, Vernon Hill’s bright idea was to bring the convenience and perks of fast food to banking.

For example, fast-food restaurants are open every day, and start early and close late; Hill implemented extended hours at Commerce Bank and kept the doors open seven days a week. No other bank had done this before.

Hill blended other systems from his fast-food franchise when he launched his blended business. He installed a “Penny Arcade” coin counting machine in his lobby, which had the same effect as video games in family restaurants. Kids could count money and win a prize, and the adults loved it too.

One of my favorite examples of Hill’s blending genius is when you use the drive thru window at Commerce Bank you get a treat for your dog, just like the toy in a kid’s meal. It is any wonder people call it “McBank?” By blending two industries Hill created the fastest growing bank ever.

Commerce Bank grew from one to more than 400 locations and sold for $8.5 billion in 2007. See what a little game of “what if” can spark?

What if you blended your business with hallmarks from another industry? Start thinking WAY outside of the box, looking at winning concepts from industries that may seem to have nothing to do with your business. (Of course you do have something in common with business in ALL industries: customers.) You never know—you just might make billions.

Consider yourself nudged.

The Entrepreneurs Moment

2009-07-21T14:06:00Z

You've had the moment. I am sure of it. That fleeting thought of a great idea. Or that momentary dream of being your own boss. And maybe, just maybe, you are having the moment right now. I mean, why else would you be reading this.

If that's true, I have a job here and I need to move quickly. You see, most people (maybe all people) have the entrepreneurial inspired moment but then quickly sink back into "reality." They let "logic" set in and go back to the "safety" of a job. I mean, what could be safer than working for someone else and letting them determine when you get promoted, if you should get promoted, or if you are even needed any more.

But there is something bigger at play. It's the WHY. Why are you doing what you are currently doing? If you are working for someone else, the question is why? Are you doing it because it brings happiness to your every day? Or are you doing it for the money?

If you are like most of the world, you are working your butt off. You are working to save as much money as possible, so that one day (often after that magic age of 65) you have enough money to retire and enjoy doing the things that makes you happy. Well, I am here to tell you that is backwards. Instead of working yourself to near death so that you can be happy one day, try this: Get happy now!

And how do you get happy now? You become your own boss and do what you have always wanted to do. Always wanted to scuba dive year round, start an instructional school. Love watching CSI and Bones? Start your own personal investigation firm. Love fashion? Start a business to finally show people how not to dress like a Wal-Mart super shopper.

Here's the deal, chiefy. I can't guarantee your success. I don't know if you have what it takes. And I can't even promise that you will want to be an entrepreneur for the rest of your life. But, I can promise this... I have never seen someone's gut steer them wrong. Maybe it won't bring you to riches, but if you follow your heart it will bring you to happiness. And after all, aren't we just accumulating riches so that we can get to the happiness part?