We all know there are certain actions, habits, and behaviors that we should be doing each day to be a successful entrepreneur. I’ve read countless blogs, listened to hundreds of podcasts, and observed my mentors on the subject. I know that to be a successful and productive entrepreneur, I should be and need to be reading one great business book a month, exercise daily, drink water, wake up before 6 am, check emails before 7 am, eat healthy, find a mentor, plan your day, set goals, save money….and I completely agree with every single TO DO.
Action vs Inaction: Find Your Tribe
Your Tribe! Yes, you heard right homie! You’ve got a tribe, and they’re just waiting to love on you. This is one of the things I most love about being a business man right now! Without this built in “support system” I don’t think I’d be having as much fun.
Wait, wait, I know what your thinking. But how do I get with this so called Tribe of mine? Well, you can start by figuring out who whey might be and more importantly what you could say to them. I know it sounds a little confusing but stick with me here. Once we get this under wraps we can figure out where they hang out!
Tribeswomen (and men, too!)
Here’s the thing. We’re all in pursuit of communication. Whether we admit it or not, most people you walk by on the street each day are raring for some posi-vibes; they just forgot how to do it. Or they’re overthinking it. We’re human. We crave interaction. We seek out communities of like-minded individuals. They make us feel comfy. Feeling comfy is good!
Also people really do have more fun when they’re talking about something they’re interested in. Add in a second homie who also gets stoked about the same/similar subject, and... Voila! Tribe of Two! Say it again, TRIBE OF TWO!
Danger! Watch Yourself! Danger! Show Me What Your Working With!
Now that you’ve gotten a tribe of two, the rest is easy right? All you have to do is turn up the effort and implement a system, or two. This is the spot that sometimes gets sticky. You start saying to yourself well if I could talk about “blah blah blah" to this type of person, then I could talk about “gah gah gah” to these people, and then I’ll have four people in my tribe right? Well…..not exactly.
Reason being those four people actually belong to two Different Segments of your Tribe. Their dialects are a little different. This is where having a firm grasp of segmentation comes in handy. I know it seems like it makes sense; that they really have many commonalities tying them together but really they don’t. What’s more, the further you get into your Tribe Build the more apparent this will become.
Let Me Just Segment This Right Here...
It’s not that those two other Tribesman aren't valuable, it’s just that you’re putting the cart before the horse. The best advice I can give when you start to take Action vs Inaction in regards to building your Tribe is to stay focused on the first segment of your Tribe until you know them inside and out; to the moon and back. Then and only then, can you bring into focus the next segment of your Tribe. And then apply that same laser focus. Now rinse and repeat. Look at you, you’re a market segmentation ninja with robust tribe growth. Huzzah!
Who Dat | Potential Clients, Influencers and Fans Oh My!
Why the deep dive on understanding each segment? The thing about Tribes is that they aren’t necessarily filled with people who’ll be buying your product tomorrow. A good tribe is made up of all different types of people in many different stages of the “sales funnel.” Heck, sometimes they’ll never even make it into your sales funnel but that doesn’t mean they can’t play a critical role in your community; and perhaps more importantly helping your leads find their way through the funnel.
When it comes to filling and hybridizing your sales funnel, both Influencers and fans will play as critical a role as the people lining up to buy your products or hire your services! Why? Because people like to have their ideas vetted by their peers, friends, family and influencers. It’s called peer pressure; which has a negative connotation (thanks McGruff) so instead we’ll call it peer influence.
Peer influence is the reason we hire advisors and wedding planners. Bring our friends clothes shopping and ask Mom and Dad for their advice. When we have others helping us confirm we’re making a good decision we feel better about that decision. Mmm hmm, thanks Mom.
Feeling comfy is good: Don’t worry about the “Other Guy.”
There’s a million people out there and some of them, quite frankly, only want you! Feels good right? See here’s the thing, that old adage that competition is good? Well, it turns out that’s actually quite true. You see when it comes to making purchasing decisions, and when I say purchasing I don’t necessarily just mean a dollar transaction, having options is GOOD!
Without options your potential Tribe will have nothing to compare you against. Nothing to show them exactly Why your company/offering/product/nursery rhyme is better (read different [read unique]) than the other options.
When we choose a tv show from the guide, we’re “buying into” one option over another. When you choose one way to drive to work over another, you're “buying into” that path to work. Why? For one very simple reason. You prefer it. Easy, right? I know, crazy.
So here's the rub. The same thing is true of similar “products” in your industry too. Wether you’re selling Inspirational Speaking, E-Books or high performing Landing Pages, some segment of that potential Tribe is going to like you better than everyone else just because you are you.
That’s the beautiful thing about the autonomy that the interwebz has provided. We’re now allowed to choose between a wide variety of options for EVERYTHING and there are people out there waiting to choose us...just because we’re us. Let it sit....
Always and Forever. In good times and in bad. Refill that funnel, now your acting Rad.
Alright, I know I've hit you with a lot. But I've saved the absolute best news for last. When your message and work match what you're excited about, the above Tribe building campaign will, after putting in requisite work, begin to feel effortless. Before long segmenting and understanding your Tribe will be as easy as pie. Don't believe me? Ask my Tribe.
Follow Me on Twitter @PatrickRife
Lean, Mean Cash Flow Machine: Startup On A Shoestring - Part 3 of 6
REVENUE IS VANITY. MARGIN IS SANITY. CASH IS KING!
Truer words have never been spoken. My Dad, a lifelong entrepreneur used to kick around the above phrase like it was going out of style (and my guess is that he probably still does, I just don’t see him every day to hear it!) Heck, he even had signs made with these affirmations written in big, bold letters.
As I blaze my own entrepreneurial trail, I want to slip in a quick "thanks" to my Old Man. He is my mentor and sounding board, and without him I don't think my path would have been the same.
My third tip in 5 Tips To Starting A Business On A Shoestring Budget is: “Turn your company into a lean, mean cash flow machine.”
So back to it...
Revenue is vanity. Margin is sanity. Cash is king!
Revenue, without cash flow, is simply that: vanity. Although so many people in the business world measure success in terms of revenue, you would be remiss to think simply more revenue translates to more cash. What if you sold $100 worth of straw? Sounds good right? Not if it cost you $110! Context is key!
Profit margin can be deceiving, too. Say this time you sold $100 worth of sticks, and now your cost is only $50. A 50% profit margin! Awesome, right!? Well, sort of…but what happens if your customer waits to pay you for 6 months? That means that there is still no money (read: CASH) to pay the bills!
Cash is king. Cash is king! CASH IS KING!
Cash flow is the reality of your business. On the simplest level, cash flow is the movement of money coming into your business less the money going out of your business. It is a more dynamic measurable than the other two because it factors in the timing of the movement of the money.
This time, you sold $100 worth of bricks, with a cost of $50. You then negotiated terms with your "brick guy" to pay him in 30 days. Meanwhile, you deliver the bricks to your customer, who pays upon receipt. Now you have $100 cash in hand, with 30 days left to pay your $50 invoice. Now go sell more bricks, continue to bring in cash faster than it goes out, and create more and more runway for your business. Soon enough you'll have enough runway to take off!
Companies that cash flow positive on a regular basis have the capacity to reinvest and spark growth. Companies that don’t, can’t.
Now it’s time for you to get lean.
If you’re truly launching your startup on a shoestring budget, you need to prioritize. Big time.
What is important? Where do you make your money? What is your focus? Are you focused on the right thing?
Asking yourself these questions will help you to avoid “spinning your wheels”. If you can be clear and concise about your goals, you’ll be surprised how clear and concise your decisions, and thus, actions will become thereafter.
A lack of focus typically ends with a lack of accomplishment. Without a plan, money will get wasted on the wrong things. So spend effectively and efficiently.
It goes without saying (hopefully) that cushy leather chairs, waterfront views, and a company leased Mercedes are out of the question (for now)!
Your team needs to be lean, too.
At the early stages, find people with multiple skills who can wear various hats. Find an office manager with graphic design skills, an assistant who has a bookkeeping background, or a manager who happens to double as the office handy man. You get the point. Utilize any and all skill sets!
There is a time that this will change and specialization will be key, but agility and flexibility within your team is key in the beginning.
And don’t forget to be mean!
You don’t actually have to be “mean” like a bully, haha. Think: Tenacious and Persistent.
Make sure that your company can sustain a high level of effort and production to drive sales and execute work. But a lot of startups fail to put the same emphasis on collecting money owed. This is where cash flow comes back into play.
If you can’t collect the cash to pay your bills and reinvest for growth, you will fail.
At the end of the day, if you sell a lot, execute a lot, and put more money into your business than it spends on a regular basis, you’ll be just fine.
Don’t forget though, it’s all about timing!
DOWNLOAD THE STARTUP ON A SHOESTRING
Please let me know your thoughts in the comments section below. Thanks!
This article, Lean, Mean Cash Flow Machine is part three of my six part Startup On A Shoestring series.
Part one, 5 Tips To Starting A Business On A Shoestring Budget can be found HERE.
Part six, The Startup Scene Is The New Wild West. Be A Gunslinger can be found HERE.
For more tips, follow Nicolas China on Twitter @Nico_C7.