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Here is a little video update on the tutoring business launch. I’ve been doing all sorts of things to promote it. We’ve got enough tutors signed up in four cities now and I’ve been doing SEO, pay per click, contacting academic advisors, etc. Making progress slowly but surely…
Most people who want to start their own business don’t have a ton of money laying around and it’s probably one the most common questions I get emailed about: How can I get started without a lot of cash?
Well I’ve put together a list below of the best ideas I’ve heard and personally used. I hope you find it useful!
The three basic strategies to starting a business without much money are:
1. Don’t rent an office! - work from home. Or better yet work from the best free office with locations everywhere: Starbucks. If you need to meet with a client and are worried about seeming small time without an office, don’t be. Just meet them at a restaurant for a lunch meeting. This is what people with the nicest offices do anyway.
2. Don’t hire any employees! - do it all yourself until you have some $ coming in the door.
3. Don’t hire lawyers, technical people, graphic designers, or assistants (see below)
4. Get a free lawyer and legal advice from the mentors at Score.org
5. Find a website with a similar legal document and modify it to your needs
6. An LLC is probably the best business structure, but don’t worry about incorporating until you’re earning money, just do a sole proprietorship, you can always incorporate later (you can get it setup with the IRS in just a few minutes by calling them at 800-829-4933)
7. Learn how to do your own financial statements for your business in Excel instead of hiring a CPA or bookkeeper (again you can do this after you’re making money)
8. Take a Quickbooks class at your local community college
9. Don’t pay a premium for a top end domain name, there are plenty of good ones left
10. Test out your ideas by writing to a blog, you’ll get feedback on what people like and don’t like
11. Get a free business website at www.wordpress.com. It won’t be your own domain (it will be something like yourbusiness.wordpress.com) but…
12. When you’re ready to have your own domain, get a hosting plan (new domain included) at 1and1 for $4.99/month, and install wordpress on your own server (instructions)
13. Get a professional website design for free with a wordpress theme that you can install with a few clicks (no programming knowledge needed)
Read the rest of this entry »
People tell me their business ideas all the time. They usually want to start a restaurant, or sell something they made, or give their advice as a consultant or coach.
But those businesses don’t scale. The only way people get rich is by developing a product or service that can help a LOT of people, not just a few.
If each person that you help requires your personal time then there’s only so many you can help, and you probably won’t get rich doing it. (Even if you don’t care about getting rich and just want to help people, helping individuals is still an inefficient use of your time, more on this later.)
Sure you can make quite a bit of money in the right job working hourly. Doctors and lawyers get a high hourly wage. But they still have to help each person individually which is why they can never be as rich as someone like Bill Gates who has a scaleable business. His software gets written once, and then distributed to millions of people with very little additional effort for each person who is helped. Bill Gates makes money from his software while he sleeps, whereas doctors and lawyers still have to keep putting in the hours to get paid.
Scaleable businesses require much more work up front, but once they are off and running they require little or no additional time per person. That’s power because once your business system is in place, your time is still “preserved” for you to work on your next business idea and help even more people.
Compare each of the following. Which one scales better?
Even if you don’t care about making money and just want to help people, I’d still argue that you need a system that scales. You can do the same kind of comparison for non-profit work…
It might give you a warm fuzzy feeling to help an individual, but in general I think you’re setting the bar too low when you do that and selling yourself short. Spend your time on something that will really have an impact.
Making a scaleable business is not easy (otherwise everyone would do it).
While working hourly, you can see a paycheck in as little as a few days or weeks. It’s dependable. But while building a scaleable business, you can see zero return for months or years (or maybe never). All the work is up front.
It’s the old linear vs. exponential growth. That’s why most people don’t get rich. They don’t want to put the time in up front to see the big payoff down the road.
The next time you have a business idea, try to think about how it will scale and if it could ever really help a TON of people. If not, is it really worth pursuing?
Hey Folks,
Well the website has launched and you can go check it out here CollegeStudentTutors.com
I’m going to show you a few more cool features that went into it, the results of some user testing, and what the next steps are to get my first sale.
Making a UI to Input “Availability”
One of the things I knew from running an existing tutoring business is how hard it was to match people’s availability. If I was going to automate the matching process I had to spend some serious time thinking about it.
There is both availability in terms of time and location. Plus the added challenge of being compensated for driving time, which some tutors want.
The simplest solution is just to make a generic text field where people can write in anything they want for their availability. This is not the best answer, because you will get an inconsistent look to the site and your customers are then forced to understand and compare all sorts of different things that sort of mean the same thing. Its also unclear from this how detailed people should get.
Here is an example of generic inputs you can get from a text field which all mean pretty much the same thing:
“I am available Monday Wednesday and Friday after 3PM and Tuesday and Thursday After 5PM”
“WEEKDAYS AFTER 4″
“Mon/Wed/Fri afternoons Tues/Thurs after 5″
“MWF after three o’clock I am availabe and T/TH in the evening”
This just deals with time, not driving or compensation, plus you get the problem of spelling errors, etc. It makes the site less usable.
Another option is to put in a full blown calendar system sort of like Outlook or Google Calendar which allows people to mark blocks of time. This is a lot of code and testing, and more importantly its probably overkill for such simple scheduling needs.
In the end I found something that worked for me, and it wasn’t overly complicated.
Time
For scheduling I made two drop down menus. The first drop down shows days, and the second shows time. The choices force the results to be consistent and gives them some flexibility in how detailed they want to get. It also doesn’t let them get TOO detailed. This is good and intentional.
I’ve been working like mad man lately on this new business website, and its coming along really nicely.
Something I’ve been thinking about a lot is “how can you build trust on a website?”
People have an inherent distrust of any service they see online, due to the number of the scams out there, and just shoddy companies.
Online is very different than the real world. In the real world when we meet someone we can get a “gut feeling” about them (ever heard that 93% of communication is non-verbal?) based on their body language, tone, rate of speaking etc. We make instant snap judgments whether we know it or not about whether we like and trust someone or something.
But in the online world, we are blind. We have nothing to go on except some words on a page, and human beings weren’t built to trust based on such limited information.
So here are some ideas I came up with to help built trust with prospective customers on yours website:
1. Show that other people trust you
It’s human nature to look and see how other people are acting (and copy it) any time we aren’t sure how to act. This is hard wired into us by nature. You see everyone else in your gang of primitive humans running away from something scary in the woods, well you better start running too. Those who didn’t, never lived long enough to become our ancestors.
So what does this mean online? If you can prove that other people trust you, it will give you instant credibility. Typically people do this with testimonials, but another great way is to let customers write reviews (Amazon is the king of this by the way). In my case, I’m letting customers write reviews of the tutors they used.
Hey Folks,
I’ve been hard at work on a new business idea which I’ll be unveiling here over the next few weeks to you on this blog as I track the launch, new features, marketing efforts, and of course the results.
I am following my own philosophy that I teach: when you come across a new business idea, find the cheapest and fastest way to test it and just get SOMETHING out there which people can see and give you feedback on. This is far better than what most people do which is either (1) have a great idea and think about it so long you never take any action on it or (2) spend way too much time and money on something that eventually turns out to not work. If this doesn’t work, I’m going to find out quickly and have lost very little other than my time.
Total investment to launch this business:
$102.00 - 12 months of web hosting
$8.88 - one domain name
About 80 hours of my time.
The Idea
As many of you know I’ve owned a tutoring business for 4 years now. The way it works currently is that people fill out the form on my website requesting a tutor, then someone like myself or someone who works for me calls them back and sets them up with a tutor. Typically, 3-4 phone calls and emails are involved with each new person who signs up from the time they first sign up to the time they are matched with a tutor and earning money.
One of the harder parts about growing the business is finding good people to match students with tutors. People who will approach it with as much enthusiasm as I do (hard to find, since to them it is a job and to me its my own business). And I can’t just do it all on my own, because that is being “self-employed”, not a true “business owner” who can disappear and the company continues to grow.
So anyway, a friend of mine came up with the idea. Yes you read that right, I didn’t even come up with this idea myself, remember that one of the keys to coming up with great business ideas is just to be around other people who have good ideas. (In case you’re wondering, we structured an agreement so that he’ll be compensated if it works.)
The idea is to let people browse tutor profiles on the website and pick their own tutors. All the tutors are college students at prestigious universities. Clients can view lots of information to help them make a decision (the tutor’s major, GPA, feedback and reviews from other clients, picture, resume, location, etc).
Instead of taking a percentage of each hour of tutoring, which is what I do now, this would be more hands off approach and we’d only charge a flat fee to contact tutors since they’d be doing much of it on their own.
The beauty of this idea is that is scales well (something I talk about in Breaking Free extensively). In other words, the amount of time required on my part to match 10 tutors vs. 10,000 tutors with this model is practically the same because the whole thing is automated through the website. So even though I’d make less per hour of tutoring, it could reach a much wider audience.
Sketching Out Ideas
So I couldn’t sleep one night and decided to sketch out how this website might look. You should ALWAYS design on paper. Designing a website in Photoshop or by coding it as you go is a sure fire way to get a terrible looking site. Here are some early sketches. You can see how things progressed and changed a little bit along the way.
Also, my theory on make good webpages (especially when in the product launch phase here when you just want to get something done quickly and “good enough”) is to find a design you like on another page, and tailor it to your own needs. Don’t copy it outright, but pretty close is fine. No need to reinvent the wheel early on. Can you tell which site I borrowed liberally from? :)
A great post from Seth Godin’s blog:
While you’ve been wishing for the inspiration to start something great, thousands of entrepreneurs have used the prevailing sense of uncertainty to start truly remarkable companies. Lucrative Web businesses, successful tool catalogs, fast-growing PR firms — all have started on a shoestring, and all have been profitable ahead of schedule. The Web is dead, right? Well, try telling that to Meetup.com, a new Web site that helps organize meetings anywhere and on any topic. It has 200,000 registered users — and counting.
Read the rest of the post here.
Also of interest: 37 Signals explains how to start accepting credit cards on your website when you launch a new product.
Here is a great 20 minute talk on weaning the US off oil. Particularly intriguing is the idea that this could actually be hugely profitable (not government mandated). Entrepreneurs in this sector will make a killing off of energy innovations in the next ten to twenty years.
P.S. If you aren’t watching all of the TED talks, you’re missing out.
This is the final part of my series on 6 Ways To Generate Passive Income.
Today we will discuss the final (and I think best) way to generate passive income. As I stated in the first article:
The way I evaluate any claim behind a method of building wealth or generating passive income is this: how many people can I find who have used this method to accomplish what I’m trying to do?
One of the best things I ever learned about success is to simply find successful people and model what they are doing, while ignoring the advice that unsuccessful people give you.
Is real estate a reliable way to generate passive income? Lets see…
CNN says that “Forty-six percent of those surveyed [millionaires] own investment real estate”.
Economics Edge says that the “real estate industry has produced the largest number of self-made multi-millionaires”.
Best selling author Brian Tracy did the research and says that 74% of millionaires are those who started their own business (included in this is real estate, but its unclear what percent).
(Interesting sidebar: less than 1% of millionaires consist of those who made their money in show business, sports, music, writing, inventions, or the lottery combined.)
So clearly real estate is a popular means of acquiring wealth. Many others have used it successfully. And investment real estate by its very nature is passive income.
I’m sure you can validate this for yourself by thinking of the wealthiest people you know or have personally met at some point in your life. Chances are they either (1) own a business, (2) own quite a bit of real estate, or (3) both.
Let’s look at the pros and cons…
This is part 3 of my series on generating passive income.
So far we’ve looked at how Blogging is a good idea, but doesn’t generate passive income. How eBooks and information products have been wildly successful for some, but are overall not a reliable way of generating passive income (the success rate is low). And today we’re going to briefly cover three other common passive income generating ideas.
Virtual Real Estate
Just as in “real” real estate where there is a limited supply of dirt that appreciates in value, there is a limited supply of domain names on the internet which are also increasing in value.
Virtual real estate is the concept of buying up domain names either to monetize them today or because you believe they will increase in value. Some people like John Reese seem to think that this is going to make a whole bunch of millionaires in the coming years. And it certainly has already created a handful of them, like Kevin Ham who has a portfolio of domains worth over $300 million.
Of course, the first complaint you will hear is that all the good domain names are taken! Some have taken a unique approach, like Russell Horowitz who focused on “local” domain names (instead of sunglasses.com he is buying houstonsunglasses.com or newyorksunglasses.com) or Craig Lovik who bought domains with common misspellings in them.
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