I won’t name him, but a well-known marketer said that the way you should evaluate what business to go into should be based on an exercise that goes like this:
If you want to make $150,000 per year, then find something you can sell for $1,000 every other day. 150 sales per year and you’re there.
Or you could find a product that’s $10 and sell 15,000 of them per year. That’s only 1,200 sales per month or about 40 per day, not counting the margins you have to make.
I’m not saying don’t do basic budgeting and forecasting—of course, you’ll do this each month to see where you’re at and make adjustments.
What I am saying is not to base what products or services you offer on this exercise.
Do it based on where you have expertise and passion?
I know a lot of folks who have become doctors, lawyers, and bankers because those professions can make good money. And they make good money but are less fulfilled than those who do stuff they enjoy.
Before you dismiss me as one of those “do what you love and the riches will follow” sorts of people, let me say this.
I know dozens, if not hundreds, of get-rich-quick, motivational speaker-type people. They come to me for help with digital marketing, so I get to see how much money they actually make.
No surprise, most of them can’t even afford $500 a month for some simple FB ads management—ironically, to sell their course on how you can become a millionaire in just 90 days doing X, where X is something faddishly hot right now.
Just because there are a ridiculous number of shysters peddling their wares—as self-proclaimed authors, speakers, and coaches—doesn’t mean there isn’t a legitimate path here for you.
Perhaps the fact that there are so many parasites is evidence that there actually is something here.
Listen to the people who have actually run a business selling products other than how to get rich on the Internet. But don’t let me stop you from buying their stuff if your objective is to get rich teaching other people how to get rich selling courses on how to get rich.
But the reality is that the human mind has a tendency to overestimate how much you can sell and underestimate how much time and effort it will take. After all, if you can generate just $12 per hour in residual income, you’ll make $100,000 per year, right?
Another common top-down lie is this—If we can capture just 1% of the small biz market, then we’ll make $1 billion per year in X industry. Only 1%– that’s all we need to do. I can do that in my sleep.
Rather, start from your knowledge. “Follow your effort”, as Mark Cuban says, is a more reliable indicator than “Follow your passion”.
That’s where you’ll most likely be able to put in the necessary time into something to grow it.
- And growing sales usually means growing an audience.
- And growing your audience means crafting content that hard-core enthusiasts will appreciate and share— videos that if you cut up into one-minute segments to boost on Facebook to the right audience, will create a powerful multiplier.
- And being able to bootstrap your earnings to reinvest in more ads to drive more sales—as opposed to “investing” your time into more Excel spreadsheets to keep dreaming.
Or are you actively quantifying where you have expertise, a network, and some sort of competitive advantage so good that you’re basically cheating?
Because that’s how you’ll win—not because you’ll “hustle” harder than the next guy, who also listens to [insert the name of your favorite motivational speaker].
I left Yahoo! with an unfair advantage knowing most of the people who matter in the digital marketing space plus having inside knowledge of how to drive traffic and revenue.
There are many who are way smarter than me and work harder, but they don’t have an unfair advantage.
You don’t have an unfair advantage?
I’d suggest you get deep in a couple of areas first unless you like blowing money and feeling good listening to Gary Vaynerchuck. He’ll gladly take your money, just like the lottery sells tickets to dreamers who fantasize about Italian sports cars and how they’re helping their local school district.