Introduction to the Automated Philosophy

Links From The Show:

• The 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich by Timothy Ferris
• Volusion
• Shipwire
• Fulfillment By Amazon
• Rich Dad Poor Dad
• Jing
• 35% off Yahoo! Merchant Solutions packages + no setup fee (save $50)
  

Transcript:

Welcome to Automate My Small Business where we show you how to set up and run your own automated business on the cheap. So get ready to take back your life and add a little spice. It’s time to build something automated.

BRANDON: Welcome to episode no. 1. My name is Brandon Kennington. I’m an entrepreneur.

MATT: And I’m Matt and I’m also an entrepreneur.

BRANDON: We’re here to talk to you about signing up and running an automated business and we’re hope to stay on track with this podcast and kind of stick to that in future episodes. But before we get started, let’s meet one of our hosts. Matt, what have you been doing these days?

MATT: Well, I’ve been building systems to automate my businesses. That’s some of the stuff we want to share. Particularly this week, I’ve just hired a new editor for a content website I have. So I no longer have to read the copy that my people in India and the Philippines have been writing. So now I just sit back and, you know, read the articles when they come out.

BRANDON: Nice. So how do you do that? How do you train them?

MATT: I have a little Wiki that I built for some of the key things for them to look for when they’re writing the articles and then along with the editors the things that I want them to look at. I spend some time talking with them, in creating some videos also using Jing.

BRANDON: Yeah. You’ve been the master of video training. You’ve been with a large, I won’t to say the name, a large corporation for many years working with Indian programmers and you’ve been using video tutorials for quite a lot of them, right?

MATT: Yeah. I just figured if I’m going to have it say once eventually I’m going to have to say it again so I might as well record it and put it somewhere that I can just send it to someone if they ever have that question.

BRANDON: Right. So just to give our listeners that little insight as to who we are, Matt you actually have a full time job but you choose to be an entrepreneur on the side, right?

MATT: Temporarily. Eventually, I’d like my on the side jobs to take over for my full time job.

BRANDON: Right. And I’ve always been an advocate of anybody here who wants to become an entrepreneur. If anybody ever asked me, I always say it’s great idea to continue your full time job while you work on your business part time until you can see the cash flows to help you get away from the nine to five and maybe eventually just full time with your businesses.

MATT: And it’s been interesting for me because having a full time job has forced me to automate everything. Because I can’t spend another eight hours in the night working on my other projects. So I have to find ways to outsource, automate or just eliminate the things I don’t need to do.

BRANDON: Right. Yeah. And that’s a good point, you know. You’re forcing yourself to not get bogged down in the minutia of operating a business because you don’t have time to. If you have a full time job that consumes a lot of your time and automating your business as we’re going to be talking about is kind of a critical stuff. Yeah, I’m a big fan of the Rich Dad Poor Dad series, The 4-Hour Workweek book, one of the books that changed my life. The Rich Dad Poor Dad series kind of talks about this little bit about, you know, the four different types of people. There is the employee, the self employed, the business owner and the investor and he kind of put these into quadrants, the E, the S, the B and the I. It’d be interesting to kind of talk about a little bit about that. But before I do, I’ll give you a little bit of insight about myself. I also have worked in the corporate worlds for many years. However, I’ve always wanted to get into entrepreneur work and be a business owner of my own. It wasn’t until I read that book, The 4-Hour Workweek by Timothy Ferriss, which gave me kind of an outline of what is possible, I should say, you know. His methods of outsourcing and minimizing cost through unique technologies internet. A lot of things that we’ll probably cover in our own podcast but that was definitely a life changer.

MATT: You know, it’s interesting working for a big corporation. I’ve seen a lot of things being outsourced from them and I never really thought until I start doing this on my own that, you know, one person businesses can outsource stuff. So that was really revolutionary for me.

BRANDON: Yes. Great eye opening to know that you know what you hear from the news about how, you know, Hewlett Packard is outsourced their 20,000 person customer support housed in India or some place like that wherein you know those same opportunity is available to one-person shops or one person businesses.

MATT: I think what’s really interesting about your business is that you’re key competitor has something like forty employees and it’s just you and you can scale much better than they can.

BRANDON: Yes, that’s true. In fact, I’ve had a few phone calls from my competitors that, you know, threatening almost that I’m growing too fast and that I am …

MATT: You’re cheating.

BRANDON: Yeah. I’m trading on their market share and they have these large, you know, structures that are, you know, bent to pay company and big company budgets and here I am just myself sitting in my office at home in my pajamas taking away their market share. It’s going to find some but yeah, well, to get on a little bit more about that, I do have a product business. It’s a pet product that I have sold online for a little over a year now. It makes a lot more than what I’ve ever made going to nine to five work day or any corporate job I’ve ever had. And yet it gives me the flexibility to, you know, spend time with my kids, kid at the moment. I have another on the way but, you know, my family, my wife, and you know just have flexible hours or even days or weeks if I like. Get a little travel in there some times but by far I enjoy what I do so I spend the time building the business systems and we’ll talk more about that a little bit later- the difference between building the business systems and working within the business. So that’s what I’ve been doing these days so, . . .

MATT: I think one of the keys for me that was really driving me towards this is the ability to work from anywhere so not only automating my businesses but making my businesses has been really key for what I’m trying to do.

BRANDON: Yeah. You like to get out there and do a lot of travel, don’t you?

MATT: Yeah. My wife and I both like going to do extreme travel thing so if I want to work from South America somewhere for a while, I want to be able to do that.

BRANDON: Yeah. That’s very Timothy Ferrissian

MATT: It is Ferrissian.

BRANDON: I’ve seen that on a blog or two. Yeah, but that’s definitely big benefit of building businesses that we’re going to be talking about, the automated business. And you know, this is a revolutionary idea. It’s not new by any means but it definitely is new relative to the history of business and the corporate structure. You know, we’ve seen over history that businesses change in different ways. But when the internet came along, it did have a big impact. Even though the internet has been around for a long while, it is still making large stride in the area of automating businesses and helping provide services that allow one person or two if you have a partner, two people businesses build a worldwide enterprise with just the resources you have at your fingertips. And it’s amazing to see that leverage at the fingertips of all the entrepreneurs that have good ideas. And before wouldn’t have ever been able to have the resources or money to get a large business up and going but in today’s world, it’s so easy to do on a shoestring budget which is your own ideas and your own perseverance and, you know, a little bit tip, a little bit of guts to do this to get out on your own. Hopefully by talking to you guys about this will kind of inspire you a little to tips and do the stocks.

MATT: And this is really for both people that are, you know, train to start out and for people who may already have some sort of business that they want to learn how to automate it and learn how to put some of these techniques in place so that they can, you know, become more productive business and you know, maybe take some time to relax.

BRANDON: Right. Right. Well, Matt, you want to get into some of the meat and potatoes here?

MATT: Yeah, I think we touched one of the key things to begin with which is the lifestyle design, really figuring out the reason that you want to automate your business and what you’re trying to get out of it. Timothy Ferris talks about this. Some of the other podcast out there talk about this. This is really key to figure out kind of what your goals are and you know what you’re priorities are for trying to do this.

BRANDON: Yeah, I think you know, there are thousands of business folks out there that talk about different ways to build businesses. You might have heard one called the Millionaire Next Door. I have to say when I first read that book I was thinking, Oh this is good idea. You know what, now looking back at it, The Millionaire Next Door book is one, you just want to stay away from it. Because it’s principle is save ten percent of each pay check, put it away, compound interest will make you a millionaire if you continue investing for twenty five years at $500 a month or whatever you’ve put away, you know. And that’s all good and well and that’s good, pretty much advise to help save money for your retirement. But that’s not the kind of money we’re talking about making here by way of having to save penny pinch every day just to get your savings.

MATT: I’d much rather make a hundred percent more than save ten percent.

BRANDON: Right. Right. You know what, I had this conversation with my wife all the time, you know. We might say we want to go ahead and do this or buy this or have this and her first gut reaction or immediate reaction would be, we should save up or we should stop spending so much. And my reaction back to her is usually, Well, I don’t see us having to save more, I see that, well I just need to have to put a little bit more time into new idea or get a new web mainstream. I mean, it’s actually as simple as that. I know that I can adjust my earning potential by the amount I spend at putting new ideas in systems in businesses just to get, if I just want to another line of income, I’ll just start a new business.

MATT: One of things that’s really key to that is that you’ve just disconnected a amount of time you spend on the amount of money you make so when you want to make more money, it’s not Oh I need to spend an extra twenty hours a week and then I’m not going get any time to spend with my kids. It’s really setting up another system that’s going to run itself.

BRANDON: Right. Right. And you know the time spent in building a business system or an automated business is time well spent because that time that you spend in building that system is then to build a system that will repeat itself again and again without you having to work at it within it. And if you’re a doctor, or a lawyer, or designer, you know, you’re time usually is directly linked to the amount of money you make. In many cases, it is what you make because you’re billing your clients in some cases where, you know, where you might look for $60 an hour, $10 an hour or $400 an hour or if you’re my lawyers, expensive bill come in but yes those are the types of jobs that are you kind of lock yourself in from the beginning. But that doesn’t mean you can’t build businesses around those careers that leverage that time and you’ve seen this with lawyers and paralegal or doctors using their nurses and staff. Yes, there is a limit from time to time which you can make because you are the business but, you know, if you expand your mind a little bit and say, Well, alright. Let’s say I am directly linked to my time with the money that I make from my time, how can I unlinked that? How can I make a business that actually takes that and multiply it. One of my favorite acronyms is SLAM, Simplified Leverage Accelerate and Multiply. If you can figure out any one of those words to do within your business. Let’s say, you already have a business and you’re looking to automate that business, you know, if you can simplify, leverage or accelerate or multiply any part of your business, you’re on the right track and I think if you utilize that ideas and technologies we’re going to be talking about in the fine podcasts you’re going to be able to do more then.

MATT: I think especially for people who are in businesses that kind of threatened by outsourcing right now. I know we’ve both used accountants who are overseas or other places, I think that’s kind of businesses going to the outsource model. But if you’re in the position now there’s a lot of people there who are uncomfortable with doing that yet. So if you’re an accountant and you could outsource some of your own work to people in Sri Lanka or India or somewhere like that and you managed the work as it comes back, you can then bill your clients for the amount of hours that they spent. Now you may three or more people over there doing three or four times as much work and that’s just more money that you’re going to make.

BRANDON: Exactly right. And you know you might say to yourself, Well then that requires a more management. I have to manage those people. Well you know, you can outsource that too. In fact, I’ve hired about three VAs to write articles for me in my website to help market my website and they rewrite the articles and I got to the point where I was having to manage them and their time and make sure they’re working on whatever they need to work on. So I said, Well how do I outsource that? Well, I hired a manager to manage those people. So now I have somebody in Switzerland who manages somebody in Bangladesh, India and the Philippines writing articles and doing back links and link exchanging on the web and it works out great. I check in with them once a week or every two weeks and he’s a hard worker and does a good job for managing the VAs. So there’s no limit really to what we can do here with the automation, leveraging of our time.

MATT: And I think building an automated business doesn’t necessarily mean that it’s automated right out of the gate. There’s going to be things that you’re doing manually, you’re doing yourself but as long as you have a vision about how you’re going to outsource that at some point, I think that’s the key thing.

BRANDON: Yeah, I think that’s a really important point you just brought is that just because we say this is automated business that doesn’t mean you’re not doing it from day one. In fact, day one if you’re bootstrapping you’re business because you have no money to put into or no resources to put into other than your sweat and accretive. And not only is that essential as an entrepreneur to do that but it’s also to critical to know what the steps are to take so when the time comes to outsource that portion of the business that you can simply give a training video or even go visit them if they’re local. You have to be able to train the people how to do what you’re doing effectively and the best way to do that is to know by you doing that from the fore.

MATT: Exactly.

BRANDON: The important part of that you know from the beginning that eventually your business can be completely automated and you should be taking steps everyday to make that happen.

MATT: You know I think we both had examples within our product businesses so I had a piece of my product that I needed to manually install just because I couldn’t afford to buy two or three hundred at a time but once I have that piece automated, I can you know have the people in China to build the rest of the device. Put that piece in and then you know I can order three hundred at a time. You know when I couldn’t afford that, that was important for me to do on my own.

BRANDON: Alright. So let’s get into some of the details what we worked with and how we do it and how business runs. Just to give our listeners a future glimpse of what it would look like as a successfully automated business running on a thumb. I could start off with myself. The business I built was a product that I design myself as a background in engineering. I did design a dog product that could be manufactured for a very low cost and I have that manufactured here in the states. Although eventually I might get that up overseas when the volume to the point where I can do that. But I have that manufactured here in the States. I have a fulfillment company that those parts are delivered to. That fulfillment company watches my website to see which orders come in and what they are. That fulfillment company packs, assemble and ship those boxes out to the customers directly without me knowing that it’s even going on. And if for whatever reason the customer needs to call, they call an 800 number, that I have a virtual number that is linked to our customer service, in this case, is actually the same company with the fulfillment house but that could be different. In fact I’m going to be moving that into Canada here shortly. And those calls get routed to the customer service who then can answer them depending on what number they choose. Press 1 for sales if they have questions about the product. Press 2 for support, if they want to know about returning the product, things of that sort. 3 for business, inquiries or business partnerships, things of that sort that really lead set up. I got music on hold, you know, sounds like a large business when the customer calls in. All this is done virtually through internet services I pay I think $9 a month from my phone line that does all these. Because it’s an 800 number I think I pay a little bit more. I think it’s about $25 for an 800 number and I have a larger minute bucket that I upgrade to. But starting off it turned out it was about $9 to get started a month for that. My fulfillment house is about I think $3.50 per shipment. Matt, do you remember if those are two hundred or a hundred fifty set up charge? Was it around that?

MATT: A two hundred and fifty, yeah, I think $250 a month charge.

BRANDON: Right. I think that’s right.

MATT: So I mean there’s a wider range of fulfillment companies you can use and you obviously use one that gives you a little bit more customized ability.

BRANDON: Right.

MATT: But with my product, it’s really kind of a stick-it in a box or ship-it sort of thing.

BRANDON: Uh-hmm.

MATT: So I use another company that’s really a commodity fulfillment house and there’s no, you know, monthly charges that much. So it basically it comes about $3 a shipment. So it’s really easy to do. I just ship them twenty five for fifty products but I could ship them as little as three and they’ll just ship them out whenever an order comes in to my shopping cart. You can use Amazon with their service as well . They’ll ship out your stuff out of the same Amazon warehouses if you ordered something off Amazon.com. You can take advantage of these huge fulfillment systems. They’re very cheap. You can have multiment fulfillment houses so if you want a place that sends out your product from the US and from the UK and from Canada, you can do that. You can have a global distribution system for twenty box a month.

BRANDON: Exactly. And you know you might say to yourself, Well, you know, in order to build a website to showcase these products and have people come to do it is going to cost all the money and thousands of dollars of developer time and that’s not true either. As I think both of us know Volusion, the great shopping cart tool. There is plenty of other alternative. In fact, hundreds of them. Matt and I have both used Volusion. I used Yahoo Shopping Cart for a while, that went well. I don’t like the per transaction fee so I switched to Volusion, which has no transaction fees.

MATT: Yeah. Yahoo goes pretty well at the beginning but once you start sell on a fair amount of your product, they take a big cut. I think you’re paying a couple of thousand dollars a month in commission fee which is …

BRANDON: Yeah. I was. I got over a thousand dollars a month in transaction fees those thinking I got to get some something out there… I try to switch to Volusion which has zero transaction fees.

MATT: There’s also a couple open source products out there that are free. You do have to have some place to host them but you can get hosting pretty cheaply and you know that’s also an option if you’re a little bit more technical or have someone on your staff that is technical and can do that for you.

BRANDON: You know but the thing is these services and shopping carts usually come with templates that make it really easy to get something off and going. Within a weekend if you have a little bit of html knowledge…

MATT: Yeah, my website was one of the default templates just with customized text and my one lame graphic in Photoshop.

BRANDON: Right. But you got a logo made by somebody for thirty five bucks or something?

MATT: I think it goes like fifty bucks but it was pretty cheap.

BRANDON: Yeah. So we’re talking full business up and running even though it’s going to be real bare bound, you know, probably $35 to $40 to get set up at with Volusion. I guess there was a set up fee, they have was a couple of hundred bucks. Was it not a hundred and fifty?

MATT: I think that was for a merchant account, yeah.

BRANDON: Right, for the merchant account. You know you’ll have maybe a set up fee with your fulfillment company, maybe not. Did you have set up fee for Shipwire?

MATT: No I didn’t.

BRANDON: So zero dollars for set up fee for Shipwire. Shipwire is a great fulfillment company if you don’t have any sort of assembly requirement.

MATT: Yeah, I’ve been really happy with them.

BRANDON: And then you’re considering Fulfillment By Amazon which we got to talk about this because that they’re just the behemoth.

BRANDON: The reason I decided to go with Shipwire is that they have more in equation with the different shopping carts so I mean with Volusion I wanted something that would automatically read out all orders out of Volusion and just ship them. And Amazon wouldn’t do that automatically so that’s why I have to go with Shipwire.

BRANDON: So if you’re going to do Volusion, you recommend using Shipwire over Fulfillment By Amazon?

MATT: If you’re doing anything other than shipping directly out of Amazon, that’s the only thing Amazon fulfillment is going to fully automate for you. Otherwise you’re going to have to manage symbedding the orders in the Amazon system.

BRANDON: Right.

MATT: Now there might be some other software adware to do that but I just wanted my fulfillment company to do that by default.

BRANDON: Yeah. From you’re experience if you have a Volusion shopping cart, you can use Shipwire for your fulfillment.

MATT: Yeah. I think Shipwire supports something like twenty or thirty different shopping carts.

BRANDON: Right. And including Amazon.

MATT: Including Amazon. Yeah, it’s important Shipwire that we both sell our products in the Amazon. For me Shipwire will monitor both Volusion and Amazon to ship those out.

BRANDON: Right. Well, so we’ve been talking a lot about products here and product businesses. Just because Matt and I both have a product business doesn’t mean that these techniques only apply to product businesses. In fact, Matt, you have another all side business which is completely information, right?

MATT: Right. It’s really an affiliate business more than selling information so we put out free content on the internet and then we are ad supported or affiliate supported. So we’ll link to Amazon, just added some integration with Shopzilla which is kind of a product comparison site so, you know, if I write an article about a certain product, I can put a Shopzilla widget on there that will show the prices at fifteen different store. And so I get money whenever the readers click on that stuff.

BRANDON: Right. So affiliate marketing or affiliate businesses are on the rage right now. They’re becoming very popular or have been for many years but they’ve really become popular because you can make some great money doing the right things, utilizing certain website features and getting traffic to your site through different means and marketing techniques. There’s a few products out there that are information based products that kind of walk you through, how to build affiliate websites, so yeah…

MATT: And you can do anything from like review websites to having a newsletter to your own little blog where you just say, You know I read this great book, and you know link off to Amazon with the 4-Hour Workweek whatever and you’ll get credit whenever they’ll buy it. And I think Amazon’s like anywhere from four to eight percent then here’s other affiliates through like commission junction and click paying kit, some other big affiliate aggregator.

BRANDON: So just to help those who don’t hear the words affiliate, affiliate marketing and click bank and all that very often, Affiliates are basically people who get paid to send traffic or to drum up more business or sales to a site that might be the seller of a product or service of some sort and you’ll be surprise to see how many businesses out there offer affiliate programs. If you click around a little bit on their home page or enter the, you know, in a photo or even in the header sometimes, you might see something like become an affiliate. In fact, my website had that in the footer. It says become an affiliate and if you want to sign up to be an affiliate I pay a commission to those who can get people to come to the website and buy.

MATT: And it’s really a win-win situation so both as being an affiliate, it’s great because you know I don’t have to have my own product. I don’t have to worry about shipping it. I don’t have to worry about supporting it after someone buys it. I just have to make good recommendations and you know make good content and then I get paid for that and then on the product side, the more sales people I can basically have on referring people to me, the more money I’m going to make. So if I can get twenty or thirty affiliates that are all referring people to me, that’s going to sell more of my product and I’m really happy about that.

BRANDON: Right. In fact, I have one affiliate that works for me, if you want to call it working for me. They’re completely independent. But she is an affiliate for the website that I sell the dog product for and I send her checks for about a thousand dollars. One a little, I think she broke a thousand dollars last month, is getting about $1200 in affiliate commissions so if you can find affiliate businesses like that like my own or others, Amazon has a great affiliate program, you can make a lot of money to find the right niches to advertise and market.

MATT: Yes and so that basically affiliate. Some where related to that is just the plain information product. You can build a rider on your little ebook and then sell that online. And the good thing about information products is that shipping is really just allowing someone to download the product. There’s no kind of a fixed cost for each product to sell, right, you know. For your dog product, it may cause x number of dollars so some percentage of your over all profit goes to paying for the actual materials. In a digital or information product, that percentage is 0 or .01. So the more you sell, you know that’s just shear profit once you’re done building the product.

BRANDON: Right. So in summary we’ve got a product business which sells products usually using the fulfillment house to get them out to customers. We have an affiliate business which you really being the marketer and you know how to use the internet to market well and to get the word out and drive traffic to a site and you get a commission and then you have an information product which is different type of business altogether where you’re still driving traffic to your own site and then selling a digital product that can be reproducible for zero cost. And because of that zero cost, you can be very profitable. And last but not least, you can have a service product where it’s a service or monthly subscriptions service.

MATT: Like an accountant or something like that, right?

BRANDON: Right. Or your, you know, software business that has a subscription service.

MATT: That brings up a good prime, I mean, I would actually classify the membership sites and the subscription stuff as not a cellulate product but just a way of selling things.

BRANDON: Right.

MATT: You know, if you sell someone a product once and then they go away and you never hear from them again, you’re probably not getting as much from them as you could.

BRANDON: Right.

MATT: Right. So if you sell them on a subscription for every month or every year, they end up re-upping to keep your product, that’s become very profitable.

BRANDON: Exactly. Now, Matt and I may have debates about which is best and which is bad business to be in. I’d have to say it’s kind of up to you to find what your into or what kind of business makes you feel successful in the way that you go about doing it.

MATT: Yeah, I mean, my response to it was, Okay I’m going to build one of each of these and see which one does best.

BRANDON: Exactly. Good point. Why stop at one? Might as well do all four types.

MATT: As you get motivated, I mean, you can play around with different types of businesses or expand the same business in the multiple different areas.

BRANDON: Yeah, the fun part about doing this with becoming a serial entrepreneur is that once you get it and know how to start and run this small little automated business, it’s fun to continue starting them and building them, starting them and building them, starting them and building them back. It’s probably the most fun.

MATT: It’s really a learning experience like I have a thirst for information so you know having to build a business about whatever and maybe a field that I don’t really know a lot before, it’s so interestingly to find out all that information, you know, what this industry is all about, just all kinds of stuff.

BRANDON: You learn so much from building businesses of any type that it’s just worth doing at that shear point is that if you really want to be an entrepreneur. You know what, there is a good debate as to whether you go to MBA school or just start one, you know. Because I feel like I learned ten times more information about building businesses by just building one.

MATT: You learn to swim in the water.

BRANDON: Yeah, than I do within whatever than going to some you know high 0:30:50 school and a lot less money on that.

MATT: Actually you got paid to learn all that.

BRANDON: Yeah, you got paid. Exactly. You know that brings up a good point about the cost of building businesses. There was a time, in fact, it wasn’t more than ten years ago you know where the dot com era where in order to build a business plan you have to have millions of dollars behind you, appointments with VCs everyday and a very small chance of ever even getting to land one to fund the business that you need. You know, that’s not the case anymore. That might be the case for certain types of business and there definitely are a number of businesses that require that especially the ones where you go on IPO and meet a certain size of market share before it ever makes the first dollar revenue. Google is a good example that yes you can be a billionaire by going that route. But that’s not what we’re talking about here. We’re not talking about making billions with .001 percent chance of getting that done. We’re talking about increasing those odds to eighty, ninety percent chance of being successful and making a million dollars, not a billion dollars.

MATT: I mean, you (0:32:05.4) billions of dollars transact over the internet, you could just get a hundred, two hundred thousands worth of that.

BRANDON: Right.

MATT: That’s a very small niche.

BRANDON: Exactly, it’s true. So, you know, if you keep your cost low and you have a plan from the beginning as to not necessarily a detail plan at what you’re going to be doing but plan of action that, Okay I am going to build a business here or turn my business that I already have into a lean, automated business that requires fewer hours in my own time so I can make important decisions at the end of the day and not real demanding…

MATT: not do all the work.

BRANDON: Yeah, the tedious minutia of operations of the work and build something that actually has a system behind it. It turns out you’re better off in terms of the odds at succeeding of taking that route than you’re raising millions of dollars from VC fund and having a tough chance of getting the market share.

MATT: I think that comes to some of the core tenets of kind of our philosophy being that you know, start small fail fast, right? So whatever you’re thinking about doing, just try to do it and if you fail and it’s not viable, you’ll know that pretty fast.

BRANDON: Yeah that’s kind of a greater thing about this is that you can within a couple of hundred bucks you can be able to test the business and see if it flies and know what if it doesn’t buy, it’s not that you’re a failure, it’s the business idea that’s a failure so you move on to the next one.

MATT: And it may not be even be a total failure. It may not fly and you go, Oh it’s because it’s only got one wing.

BRANDON: Right.

MATT: So you learn a lot from that first just trying to do it.

BRANDON: Right.

MATT: I know when I first started the product business it was completely different that how it end up being. I was going to like design and build this product myself. I spent all this time, look again to where I’ll build it, how I build it you know trying to learn about how to build this particular product and then when I just finally tried to build it, I realize that it was going to be far too expensive for me to do it and because of that I went on to some website and found a company in China already made it and I can just buy it from them.

BRANDON: Right. It never ends up being what you think it’s going to be at the beginning.

MATT: Right. So it completely change like what my business is going to be and how I was going to run it. But I didn’t know that until I actually tried to you now, do it.

BRANDON: Yeah, Bryan Tracy calls this the corridor theory where the only way to really know what is at the end of each door is to go down the hallway and open up each door as you go. Without going down the hallway and going for the first door, you really have no way of knowing till you get down there. Yeah, it’s a matter of just starting.

MATT: You know, I’ve talked to a lot of entrepreneurs and even kind of people who have started pretty big businesses now as I’ve worked through my normal job and there’s a common theme that some of the people will say, you know, we started out to do x and very quickly we learn, you know, that it’s much more profitable to do y. You know, we built this thing and the customer say that, Well yeah that’s a great widget but it’s so much more valuable to do this other thing. You should make it do this. And so once you have something out there that people are buying, your customers will tell you what they want. I know you did that with your product. You revise it a whole bunch of times as you are going to the process.

BRANDON: Oh yeah and in fact, I am proud to say I was revising it as I was selling them.

MATT: Well that’s the way you want to do it. I mean, it’s important to get cash flow fast so if you’re trying to build this business and you’re going to work for a year and a half and you’re not going to make any money, you’re business is going to fail. But if you start bringing in money within the first month then it’s a lot easier to keep the business going and growing.

BRANDON: Yeah, I was designing the product as I was selling them in fact I sold that just based on a wood mock up that I built in my garage. Took a picture of it. Put it on a website. Spent maybe a weekend putting some pictures up on website and filling on some text there at the Yahoo store and I couldn’t believe it, all of a sudden I saw an order come in. Yeah, it took three four days for the fifth order to come in but an order came in and I was like thinking, Wow, I just sold one. And then you know a couple more days later, another one came in. And then two and then five. And then ten. And I thought, Wow I got to start produce this a little better than my wood mock up.

MATT: And that was only you spending all your time building it, right? I think that’s where the seeds of the automation came.

BRANDON: I was actually building the product in my garage. Talk about a garage business, right? Yeah, I was building a product in my garage and

MATT: Just in time manufacturing.

: Almost late manufacturing to be honest. There’s a few angry customer because I wasn’t able to build one fast enough. I had it to them a week later or something. You know, a customer seems to be understanding to a point. They can tell, I don’t know why, but they could tell I was a very, very small business not doing much of anything. I mean, you could tell by looking at the website. When I just threw it up there, I spend very little time on it. But it was really to test the market to see if it’s something to pursue further. And I think that’s kind of the bottom line we’re trying to say here is that you know, test the market and don’t be afraid to just get it up there and see what happens.

MATT: I mean, you could even do it laterally than way you did it, right? I mean Ferris talks about just creating an ad words campaign and seeing the people click on it.

BRANDON: True.

MATT: Put a survey from survey mock on the other side of that click and say you know fill out this form. What kind of product do you want? Even if only five percent of the people filled that out, they’ll tell you exactly what they want.

BRANDON: Right. And you can get a quick idea or a good sense of what the demand is.

MATT: And they’ll tell you if it’s a dumb idea too.

BRANDON: Yeah, they will. It’s amazing how much information you can get from people in the internet if you just ask. So if you take that route you have very little to lose. I guess you might be saying to yourself, Well you don’t want to tarnish your brand right from the beginning or you don’t want to give the business a bad name. You know what, if it was really that bad, you can start a new brand or a new business on a different website, if it really went that horribly wrong but it really won’t. You know, the customers that I have at the very beginning seem to be very understanding and I have very few returns believe it or not. And it’s surprising you know when you put it out there, if it’s a product people want, they’ll say they want it. And you’ll say, Well, it only has, you know, three legs and they’ll say, Well it’s okay. How about I got ten bucks off of it or something? You know, they’re very forgiving is I guess what I’m saying.

MATT: Especially when you give them money back.

BRANDON: Yeah that’s true and I did give a lot of money back since I started, you know, but I had it built into my margin so it’s okay but… So I read a blog the other day the difference about a self employed business owner and an entrepreneur business owner and the real big difference there is, you know, if you were self employed, you’re business is your job. And that is a lot different than having and owning a business that runs it’s self. We’ve talked a little bit about that already but I wanted to kind of make that a bullet point.

MATT: Yeah I mean that is as we kind of wrap up, I think as a self employed business owner like you mention, you really focus on spending your time to keep that business running as oppose to spending your time to grow that business and make it bring in more revenue for you. So you’re really not going to get any more revenue than you’re currently getting if you’re focused completely on just keeping it running.

BRANDON: Exactly.

MATT: Right. So we talked earlier about making ten percent more or a hundred percent more to be that millionaire. Well, you’re not going to do that if you’re just trying to keep the business running. You’re going to spend all your time, you know, managing people and doing the actual work yourself and getting paid the same that you’re getting paid today.

BRANDON: Yeah, you don’t want to be running the business. You want to be owning the business. I mean a lot of people spend their whole careers thinking they want to be the boss. I don’t want to be the boss. I’d rather not manage people, to be honest. I’d rather own the business where there’s a boss put in place that manages the people on the business if necessary. Yeah, it’s big difference and change in mindset.

MATT: Yeah, especially if from coming like from the corporate world, the people that you see there in charge are the boss and they do that kind of work and you know they’re not the people that are sitting out on the beach. Those are the investors, you never see them.

BRANDON: Right. Well, that kind of wets your appetite a little bit of what we’ll be talking about in future podcast so stay tuned and we’ll be bringing you a lot more detailed information about different tools that we use and we’ll be talking about different services that we use.

MATT: We’re going to more depth about the different business models and ways for automating those.

BRANDON: And I think you guys might like a lot of it and get a lot out of it so hope you enjoy it. We’ll talk to you next time.

You’ve been listening to Automate My Small Business. We hope you enjoyed this episode. To get a list of the links we’ve just talked about or download more episodes and How To videos, go to automatemysmallbusiness.com. Thanks for being with us and catch us next time on Automate My Small Business Podcast.