TSH 21: How to create an online empire in 5 steps
Dec 11, 2023Reading time 2 mins 30 seconds.
Most new businesses fail.
However, when you get it right, it can change your life forever, and successful business owners are just like you - they all start somewhere, and many of them posses a certain bunch of attributes.
I've started multiple businesses, and I've coached hundreds of businesses. Over the years, there are 5 things that have stood out to me, when it comes to having the 'secret sauce'.
I've summed those five things up below.
1. Don’t just have an idea, have a better idea
Ideas are a dime a dozen. We’ve all had them, we’ve all heard them. I’ll be frank, too many businesses launch with sub-par ideas.
My wife calls me brutal, because I’m not afraid to tell people that their idea won’t work, especially my friends. You see, my job is to make you money, and that includes stopping you from losing money, and that job starts with my first conversation.
If I had a dollar for every time I heard “all the good ideas are taken”, I'd have a lot of dollars. Nobody is asking you to create a new idea - those are ‘needle in a haystack' businesses. You don’t necessarily need to have an original idea, you just need a better idea.
The questions you need to ask yourself, are:
- What problem does your problem solve?
- How is your product better than your competitors?
I understand how hard that can be - but that’s why more than 50% of new businesses fail. On the flip side, if you nail it, you build a defensible business.
2. Learn the trade
I wouldn’t take the stand to defend a thief in court. Nor would I file my own tax return. I know where the timing belt is in my car, but that doesn’t make me a mechanic. My point is, too many people want to make money in ecommerce without understanding the business behind it.
If you can’t tell me the answers to the following questions, then you need to go back to square one, and work a little harder.
- What is your gross profit margin?
- What is your AOV?
- What is your conversion rate?
- What is your net profit?
Too many people are focused on one metric - sales. Let me tell you, sales is the sum of a few parts done well, profit and cash is the sum of many parts done greatly.
There are no shortcuts - you’ve chosen ecommerce as a profession, whether you like it or not, you’re not just in fashion, you’re not just in beauty, you’re not just in sporting goods - you’re in ecommerce, so it’s time to learn the trade.
This is basically the reason I built my online course. I saw too many business owners investing good money after bad, when they fundamentally don’t know how to grow their business, or increase profits.
By the way, you can check out my course here.
3. Commit
Sounds easy right? It is. It’s just that a lot of people don’t do it.
What if I fail? What if nobody follows me on socials? What will my friends think?
Who cares? That’s the risk you take. How can you expect your customers to be loyal to your brand, and to be your advocates if you won’t do it yourself?
The fact is, you might fail. You might struggle. You will have self doubt. Entrepreneurs will feel that and do it anyway.
If you gamble on yourself, you might just hit the jackpot, but I guarantee one thing; you miss 100% of the shots you don’t take.
4. Focus on the product, not the advertising
This comes back to point 1 - having a better idea.
Many brands are unprofitable because they spend too much money on ads. A reminder on how to set your ad budget here.
Advertising is important, but what comes before great advertising is a great product. Let me give you a quick anecdote;
One of my clients was using the same paid media agency as Louis Vuitton, but was getting a ROAS of 1.5 x (ROAS is return on ad spend, basically the same as ROI within an advertising platform). Now, 1.5 is not a good ROAS, and they couldn’t understand why this amazing agency was delivering such poor results, using the exact same strategy they use with Louis Vuitton.
The problem is you.
If you find yourself frequently bouncing around agencies, you’re more than likely the problem. Not you personally, of course, I mean that you’re bringing something sub-par to the table, and often that’s your product. It might be OK, but let’s go back to point 1 - I don’t want OK - I want great.
So what makes your product or idea great?
5. Be disciplined
There’s a couple of things to remember here. Nothing good comes easy, it’s going to hurt, you’re going to lose heart, you’re going to have self doubt - but keep putting one foot in front of the next, and you can make it!
I’m reminded of one of my clients who slept on his warehouse floor, and couldn’t afford Uber Eats - now he’s making $21m a year with a 21% net profit.
Personally I am a testimony to this as well. I didn’t do well at school, nor did I want to. However at a certain point I flicked a switch and decided that I wanted to be the best in the world at what I did. I said yes to every opportunity, and I delivered when I said I would.
I stayed up late, and I got up early, and the one thing that always follows hard work is results. I have a best selling book, with another on the way, I own multiple businesses, and I earn more than I ever thought I would when I was in school.
Starting your own business is no different. Get up, do the work, hustle. I have a five day rule: If I can do something for five days in a row, it becomes a habit. Let’s say you dedicate five days in a row to getting up early to train, or taking my course, or building your website - you will break the back of it. If you try once, or twice then give up, you will not succeed.
Remember, ideas are one thing - execution is a different beast, and those that can do the hard work and execute on their intentions, have been proven to be successful. Entrepreneurship is no different to being a great athlete - do the work, the results will follow.
Until next week,
Paul
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