The 4-Step Process To Profitable Businesses
Last year, I ran a course for a small group of ForeverJobless subscribers to calculate the potential success, and potential profit of their ideas. Many of you have read my Millionaire’s Math post on EV(expected value). The course was designed to help people avoid wasting time or money on a bad idea, and if it was a good idea, calculate the EV of the idea(the potential profit) before they started. I have a 4 step framework I use that I’ll share with you below.
I’ve decided I’m going to open this up to you this month, and have turned the course into an incubator. So, instead of just providing videos on how to go through the process to see if you have a valuable idea, and how to calculate the EV on that idea to predict profits, I’m actually going to create a private community where ForeverJobless Incubator members will be able to post their ideas and get feedback directly from me, as well as other members. Most courses I see focus on having people launch a product or service. That’s NOT a good goal. Most people in those courses rush out an idea, most of them fail, and the course is over. The end. They “successfully” launched, which was the goal. But their project was not successful, so they need to launch a new idea, and they still need help. I designed the Incubator so that you could take new ideas through as many times as you needed. You aren’t rushed to push out an idea quickly, as that leads to bad decisions. You take your ideas through the Incubator at your own pace, until you have one that’s worth launching. I’ve successfully used this framework many times myself, and I include case studies in the Incubator where you can see the exact process I used for the ideas, and my EV calculations.
In How To Get Lucky in E-Commerce, you may remember example #4 where in my due diligence phase I uncovered what the issue was with the product, and how to solve it. This led me to starting a successful business that eventually led to a $68,000 sale. In the Incubator I share what the actual product was, as well as the exact calculations I used to determine the business would be a success, BEFORE I launched it.
How did I know when to do due diligence?
Like I mentioned I have a framework I use to calculate the potential profit of my ideas, and it’s a 4-step process that helps me not only to avoid getting into a bad opportunity, but to make sure I don’t launch anything unless the EV is equal to, or greater than my desired profit goal.
Most people launch ideas that either won’t work and could have easily been predicted ahead of time, or ideas that may work, but even if successful won’t hit the profit goals of what they’d like to make.
If you want to make $5,000/month, and you launch something with an EV of $2,000/month, even if you “succeed” with the idea, you fail, since you won’t reach your desired income. Succeeding at something that doesn’t help you reach your goal, only eats up time and keeps you away from working on something that would help you reach your goal.
If you’re like the majority of people, you may just be guessing about whether or not your idea will work, and then launching an idea that you probably should have passed on. Or, you might be sitting on the sidelines forever with your idea, because you don’t want to fail, and don’t have a framework to follow to know if your idea will work or not.
Today I wanted to share the 4-step process that I use, so you can have a framework for deciding which of your ideas are worth launching:
1. Do you have a valuable idea?
Most people do not truly solve this before they jump in. They go straight to marketing.
“Wait, I thought marketing was important?!”
Marketing is extremely important. The problem is, almost everyone I come across attempts to figure out marketing before they’re ready to. All they’re really doing is wasting time since they usually haven’t solved what’s important first.
There is no point in knowing how to reach a market if you don’t have something worth reaching them with. This leads to wasting a lot of time and money.
2. Can you reach your market?
If you have a great offering but can’t reach your audience, you’re not going to be very successful.
If you had the best food in the world, but no one knew your restaurant existed, you’re probably going to go out of business. The same applies to any business you want to launch. If you solved step #1, you’re way ahead of most other people, but you still need to solve the marketing for it if you want a profitable business.
3. Due Diligence
This is where you find out anything/everything you can about competitive offerings, and the market. You want to verify that your initial assumptions about your offering are correct, as well as your ability to reach your market. This is also where you’ll start gathering the information needed to to be able to calculate your EV.
4. What is your expected value?
This is where you figure out what your expected profit is before launching your business.
You should not attempt to launch a business without knowing what your EV is. Would you dive into a pool if you didn’t know how much water was in it? Of course not! You risk your safety. You shouldn’t launch a business without knowing how much potential profit is in the idea either. You risk losing lots of time and money.
You may be thinking:
“What if I don’t know how to reach my market?”
“What if I don’t even have an idea?”
“What if I don’t know the one thing to focus on? My time is limited and there’s too much to do.”
These are all common problems people run into.
Fear of failure or anxiety are some of the main reasons why you may not be launching your idea, despite your desire to have a successful business. They often lead to being in the same spot, year after year.
With the new year having just started up, it’s time to eliminate the obstacles that are holding you back from launching a successful business.
In the next few days I’m going to send you another email that will help eliminate some of the obstacles you may be dealing with, so that you can finally get a profitable business off the ground in 2015.
I’ll also share a short case study to give an example of how I made $68,000 from my 4-step process.
First, please post a comment below and let me know which step you’re on. What would help you get past that step and launch your business?
Or if you have a business, but it’s not going 100% like you want it to, is it possible you didn’t completely solve one or more of the steps? If so, leave a comment below and let me know which ones you are most worried about, and what help you’d like regarding those steps.
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