Is Crowdfunding Better than Peer-to-Peer Lending?


 

Both Crowdfunding and Peer-to-Peer Lending are great new ways to raise money for your business. Below I explain the differences, and some of the advantages and disadvantages of each. I end by determining which is better.

Peer-to-Peer Lending

Peer-to-Peer (or P2P) Lending is one person lending money to another person at a pre-defined interest rate. It's basically debt capital without the bank or traditional "middle man."

The benefit of P2P Lending is that 1) the interest rates are typically lower, and 2) the likelihood of getting the loan is greater than the likelihood of getting a traditional bank loan.

There are several popular websites that connect borrowers and lenders directly. The biggest two are:

  • Prosper.com
  • LendingClub.com


The downside of P2P lending is that you need to repay the loan and that there are limits to how much you can raise (generally only $25K at a time).
 
Crowdfunding

Crowdfunding is raising money from the "crowd" or general population. In Crowdfunding, you don't need to repay the amount raised. Rather, you give rewards (usually the product you want to develop) or equity to those who fund you.

The most established rewards-based Crowdfunding websites are:

  • Kickstarter is the largest Crowdfunding site. The downside of Kickstarter is that not every project is accepted and they charge a success fee of 8% in the event you get funding.

  • IndieGoGo is another very large Crowdfunding platform. It has more creative (e.g., film, music) projects than some of the other sites.


On the equity side, Crowdfunding if still relatively new. Crowdfunder is one of the leaders in the equity based Crowdfunding market now. We will see how it grows and other sites pop-up as non-accredited investors enter the market.

So, Which is Better?

I prefer Crowdfunding over Peer to Peer Lending because of the potential to raise more money through a larger group of people, and not having to pay the money back. I also like that all the people who crowdfund you 1) are potential future customers, and 2) can spread the word about your business.

However, the two funding sources are NOT mutually exclusive, so definitely consider using BOTH Crowdfunding and Peer to Peer Lending, since both are great forms of funding.

 

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The 10 Quickest Ways to Improve Your Website


 

Regardless of how good your current website it, I'm confident it can be better. In fact, on my website, I'm constantly testing new ideas to improve it. I test different colors, different headlines, different pictures, and so on. And each time, I learn ways to improve.

Below I summarize the 10 key aspects of your website that you should review and improve over time.

1. Look and Feel

The look and feel of your website is much more important than you might realize. Because when visitors go to your site, it's critical that their first impression is positive.

Think for a minute about who your customers are and what they are seeking. Then cater to them. For example, the look and feel of Porsche's website is extremely cool and elegant. Conversely, the look and feel of the Ben & Jerry's website is much more animated and fun (right now it's showing cows drinking on the beach).

Both websites do a great job of conveying the image in which they want customers to view them. Make sure that the look and feel of your website does the same.

2. Copywriting

I'm sure following situation happens to you (since it happens to me all the time): I go to a company's website, I read the homepage, and I still don't know what the company does.

So, I end up going to the "About Us" page to read more and to try to decipher what it is that the company does.

Importantly, I'm the exception. Few other visitors will invest the time to figure out what your company does. Rather, if they don't immediately "get it" and you don't immediately show them how you will benefit them, they'll leave and be gone forever.

A quick tip here is to use compelling headlines. For example, if your website sold tires, a great headline would be: "See Our Selection Of Over 500 Brands of Tires at the Guaranteed Lowest Prices." This is pretty much what all customers are looking for (selection and best price), so this headline lets visitors quickly know what the company does and that they are in the right place.

3. Navigation

I'm sure your website has many pages, and it's your job to make it as simple as possible for your visitors to find the pages they want.

Navigation should be done on a top and/or left navigation bar, using links at the bottom of your website AND within the body text of all pages of your site.

4. Accessibility

More and more people are using devices other than computers (particularly mobile phones and tablets) to access websites. Make sure your website is accessible from all of these devices or you will unwittingly be turning away new customers.

5. Quality Content

Website visitors have come to expect that your website will include quality content or information. For example, if your website has articles, they shouldn't be "fluff" - they need to include actionable advice that shows visitors that you know more than they do.

And clearly, having typos and grammatical errors will also turn off site visitors and prospective customers.

Think about the information you need to convey to customers to better solve their needs and differentiate from the competition. While some of this information is compelling verbiage about your company, more of it should be information that's truly helpful to customers and makes them feel they made the right choice by visiting your website.

6. Amount of Content

The amount of content you include on your website is important for two reasons.

The first is that the more content you have on your website, the more preference search engines like Google will give your site when ranking it for desired keywords.

The second is that if customers are considering doing business with your company, they will want to learn more and more about it. Having a 5 or 10 page website clearly won't allow you to do this (you can start with a small website, but you need to add to it over time).

7. Interactivity

Having a blog on your website helps solve both your website's need for amounts of content (#6) and interactivity (#7).

With regards to amount of content, adding a daily or weekly blog post entry will allow your website to constantly grow in size. This will boost your website's search rankings and give you more keyword opportunities to rank on (since each blog post might rank for certain keyword search terms).

With regards to interactivity, having a blog allows customers and prospective customers to interact with you. It gives you the opportunity to solicit feedback, which provides quick and easy market research.

Your blog also gives you a voice. Here's why this is important. People prefer to buy from people and not faceless companies. While your main website can have a professional, corporate look and feel, your blog gives your customers a look into your personality, and can encourage rapport and sales.

8. Prove that You are Worthy

Your website must prove that you are a worthy company, since many of your visitors may have never heard about you or your company, and there is a natural skepticism consumers have against companies they find online.

Unfortunately, overcoming this skepticism is not as easy as simply stating "we are great." Rather, you need to prove that you are worthy.

You can accomplish this by including any or all of the following on your website:

  • Media mentions (in which media your company has been featured)
  • Credibility logos (e.g., a logo of the Better Business Bureau with a link to your BBB rating)
  • Client logos, names, testimonials and/or case studies showing you have performed quality work
  • Industry associations and groups to which you belong
  • Certifications you and/or members of your team hold


9. Have Multiple Calls to Action


Even though all of us have grown accustomed to going online to find new products and services to buy, the way each of us likes to buy is different.

Some of us like to buy online. Others like to fill out an online contact form. Others like to call a toll free number. And so on.

It is your job to ensure you have multiple ways in which visitors can contact you to learn more about buying your products or services.

Also, if customers may not be ready to buy now, include calls to action to download free reports or other items to satisfy their initial needs; these items should require them to give you their contact information for further marketing.

10. Effective Page Layout

The final key attribute of your website is the layout of your pages.

The key here is to ensure visitors have to think as little as possible. The idea layout influences visitors to take the desired actions. For example, if the goal of one of your web pages is to get the visitor to give you their email address, having the email box near the top of the page, with a clear headline above it in a big font, will yield much better results than the same email box on the bottom left corner of the page with a small headline.

Consider using a heat map program that can show you exactly how visitors are interacting with your website; what they are looking at, what they are clicking on, etc.  As you can imagine, this information enables you to make significant improvements to your site.

From reading these 10 key website elements, ideally you will have identified at least a few improvements you can make right away. Also, please realize that improving your website is an ongoing process. You should always be trying and testing new ideas, so your website keeps getting better and better.

 

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The 10 Common Characteristics Of Empire Builders


 

Are you an Empire Builder?

How do you gauge yourself and your business?  Do have the potential to turn your business into an empire? You may not know it yet, but you may just be the person to create the next business empire.

Empire builders are ordinary people who perform extraordinary tasks. There are certain traits and actions that distinguish these outstanding individuals from others. By learning certain skills and adopting successful actions you can set your business growth to super-size.

10 Characteristics of Empire Builders

If you have painstakingly built your business from scratch to where it is now, assuming it is growing steadily, you should not be surprised that you possess some characteristics in common with empire builders. Here are the 10 common characteristics.

1. Sacrifice & Hard Work.
Empire builders are willing and ready to make sacrifices to be successful. Running a business is quite different from simply joining your workmates at a desk job; it involves hard work. 

2. Passion.
Empire builders are passionate about what they do. They put in extra effort to achieve their goals. Being passionate about what you do usually means that you are having fun doing it. The journey should be just as rewarding as the destination.

3. See Opportunities.
Do you see opportunities where others see obstacles? Another trait of empire builders is that they see an opportunity where others see barriers. Many people think that to be successful you need to come up with an idea that nobody has thought of before. Many successful empires have been built without innovative ideas, just the will to do the same thing others are doing but in different way. Or they dare to tackle a problem others are afraid to tackle.

4. Highly Motivated. Empire builders are highly motivated people. They don't let their determination cool off due to defeats. If they don't succeed at first, they simply try again and again.  They use failure as a motivation rather than an obstacle.

5. Disciplined. Another important characteristic of empire builders is discipline. Empire builders are focused on their goals. They do not let distractions derail them from achieving their objectives. They have clear steps that they take every day to bring them closer to their goals.

6. Open Mindedness. Open mindedness is a vital characteristic of empire builders. These are individuals that are ever open to new ideas and new ways of doing things. They get inspiration from different sources and focus it on achieving their goals.

7. Team Builders. They are skilled networkers who build strong contacts needed for success. Nobody ever succeeds alone; rather, success requires team building. Empire builders have persuasion skills that enable them to convince people to work for them even when their ideas may seem crazy.

8. Decision-Makers. Empire builders have good decision-making abilities. Sometimes people may wait for the right time to do something but empire builders launch their projects and then make the necessary corrections later. Decision-making is vital and in many cases, not making a decision is as bad as making a wrong decision.

9. Can Create Or Expand a Market. Empire builders expand the market. Contrary to what many believe, you don't have to launch something completely new to be successful. You can simply get into a business that many have thought of and get your share of the market and grow it.

10. Understand Their Markets. In business, timing can mean the difference between success and failure. Empire builders are capable of predicting the precise time a product will be successful in the market. When Sony launched the walkman, skeptics said people would not be interested in listening to music as they walked. Know the wants and needs of you market.
What Lessons From Empire Builders Can Help You Grow Your Business?

I want you to take a challenge. Pick three characteristics from above and start applying them this week.  Keep practicing until they become second nature; aim for 3 to 4 weeks. Then pick three more. Do that until you cultivate all these characteristics of empire builders. 

Here's your checklist:

  • Don't hesitate to make sacrifices and work hard
  • Follow your passion/enjoy the journey
  • Be open to new opportunities
  • Stay motivated
  • Be disciplined
  • Keep an open mind
  • Build a team that can deliver results
  • Be decisive
  • Realize you don't need to create something completely new
  • Understand/research your market

Let us know how this challenge changes you and your business!


 

How to Develop a Starbucks-Like Brand


 

Your brand is the unique design, sign, symbol, and/or words that create an image or impression of your product(s), service(s) and/or company.

A strong brand differentiates your product or service from your competitors, and is easily recognized by customers in your market.

Think about Starbucks...Their coffee is not the most affordable in the market, but their brand recognition and loyalty is off the charts.  They have a wide-spread reputation for delicious, strong coffee that many people refuse to do without. 

Disney is global mega brand.  Show a child a black round circle with two round black ears and the screams of "Mickey, Mickey!" will leave you temporarily deaf.  Not only is the image recognizable, but it's is associated with fun and happiness. 

Developing a strong brand is important and can dramatically impact your success. Below are three surefire strategies you can use.

1. Create a New Product and Constantly Innovate it

Apple's introduction of the iPhone is a classic example of this strategy. While cell phones had been in the market for years, Apple introduced a new sleek design and took the cell phone into the realm of smart phones.  Instead of just phone and camera, Apple popularized having music on your phone and later led in the development and release of mobile applications This strategy caused Nokia's market share to drop precipitously. 

Not only did Apple innovate with the initial introduction of the iPhone, but the company keeps the product fresh by releasing updated models every 2 years or so.

Puma is also adapting this method by constantly introducing new sports products to the market. The company does this to continue building its reputation as the most desirable sport lifestyle brand.

By creating a new, unique product and constantly updating it, you will build a strong brand. And you will stay top-of-mind for customers since they will always be curious as to what they can expect from you next.

2.  Using a New Campaign To Change a Brand's Image

As second branding strategy is to use a new marketing campaign to change your brand image. One example of this is the Dove soap campaign introducing "Real Beauty" in 2011. The concept is that women have real beauty and Dove can help them realize it.

This type of campaign can also be called "rebranding." You use an old product, repackage it, and possibly change its logo too. Your purpose is to change the product's identity and reputation in the view of consumers.

You can also use rebranding to overcome a period of poor publicity. For instance, if your company has been involved in public malpractice litigation, rebranding can help you get rid of negative connotations that may be hurting your sales.

Rebranding can be a powerful tool in helping you differentiate your product from competitors. Think of special stitching and serial numbers high-end purse manufacturers use to differentiate their products from cheaper knock-offs.  When you make your product distinguishable, you can gain more customers.

Lastly, when your product has been in the market for a long time, curiosity and interest from customers may lessen. Rebranding can help you regain excitement in the market place and recapture market share. Intrigued customers want to try whatever is new in your product.

3. Advertise While Keeping Up with the Brand Value and Promise


Being seen on television and other advertising channels can do wonders for most products and services. Sometimes, despite being more expensive than other brands, consumers still buy products with which they are more familiar. This is true of the brand Tide. There are laundry detergents that are less expensive, but many customers still buy Tide.  Because they hear about Tide frequently, it is top of mind when consumers are shopping.

Still, Tide has to keep up with its promise of being a great laundry detergent.  If consumers experienced poor results, they wouldn't buy Tide again despite millions of dollars of advertising.  The product must do what your advertising said it would. 

It is also important to make sure your advertising, whether local or national, is reaching your target audience.  Remember the Chrysler Pacifica?  Its okay if you don't; they don't even make the Pacifica minivan anymore.

In 2004, despite warnings from their advertising consultants, Chrysler contracted Celine Dion for $10 million to promote the new Pacifica.  The campaign was a disaster.  The Pacifica appealed to young professionals, yet Celine Dion resonated with an older age group.  The result?  Nothing.  Flat sales with millions of dollars out the driver's window.  Know your target market!

Applying the Strategies


While many of the examples I used are from well known large companies, any business owner, even a one person operation can use the strategies listed above.

And importantly, you don't have to spend a fortune on this. With social media tools like YouTube, Instagram and Facebook, you can create videos and photos that can spread your brand message quickly, inexpensively and with amazing effectiveness.

So focus on building your brand, because the right brand will bring in tons of new customers and dramatically increase the value of your company.

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10 Tips to Rank At the Top of Google


 

It's a given these days that your business needs a website. And, if your website ranks at the top of the search engines for the right keywords, it could mean a ton of new customers and revenue for your business.

SEO or Search Engine Optimizing is the process of getting your website to rank as high as possible on your most important keywords. And when focusing on SEO, you should pay most attention to Google (rather than Yahoo or Bing, etc.) as Google currently has a 68% market share of all searches done in the United States.

And when optimizing, keep the following ten SEO tips in mind.

1. Social Media Optimization Helps SEO
 
Social media (e.g., Facebook, Twitter) can provide you with website traffic. It also impacts your rank in Google. Specifically, Google's ranking algorithm decides on your brand's social media value through the number of likes in Facebook, the comments and shares it gets, the number of Twitter followers, the number of tweets that states your brand or has your web link, and the number of people you have in your Google circles. So don't ignore social media.

2. Content Is Still King

 
The key here is for you to establish yourself as an expert in your niche by providing relevant and fresh information to your readers. You can also invite guest bloggers or hire content writers that can give your site vital information about your industry. The search engines are keen on whether your site provides quality information.
 
3. Do Guest Posting Properly
 
While guest posting (i.e., getting other experts to post their articles on your website) can be a great source information, be careful with backlinks.  Backlinks are links from one site to another. Make sure you only link to high-integrity websites and blogs.  So, if your guest poster wants to link to a "sketchy" website in their article, don't let them.

4. Diversifying Can Protect You


With Google Panda and Penguin penalizing websites for shady SEO techniques, one of the best things you can do is to diversify your SEO techniques. Consistently update your site with fresh and winning content while using diversified anchor texts and links. "Real" is the word here, real content and real links are rewarded by search engines.

5. Location-Based Searched Results Can Take You Higher


Search activities based on location boost your ranking as well. Location-based meta tags and descriptions can do wonders to your page rankings. How you are positioned in Google places can also help drive traffic to your website.  This can be critical to your business if your sales depend on local customers.

6. On-Page Optimization Never Gets Out Of Style

Proper keyword selection, research, and testing are crucial in doing your on-page SEO. Tags and internal links should be done appropriately. As mentioned earlier, your content is the most determining factors in improving your rank.  They key is to produce high quality content that appeals to your customer.

7. Videos And Infographics Are Cool Ways To Do SEO


Videos and infographics engage customers. So they stay longer and consume your content. As mentioned before, this is what the search engines want.

Also, videos, when posted on other sites (like YouTube) can drive traffic to your website (e.g., in the description under your video).

Finally, if your videos and infographics are good enough, other sites will link to them on your site, which will drive traffic and boost your rankings.

8. Press Releases Make The Town Talks About You


Well written press releases can build your brand and generate a lot of new links to your website and thus boost your rankings.  There are many online sites that allow you to publish your press releases (the better ones do charge fees). 

9. Usability And Significance Add Power

Ask yourself whether your site is providing your audience answers to their needs. Is your site offering quality information to web searchers and clients? Like any brand, establishing your brand's quality is recognized by search engines.  Solving customers' problems makes your website more relevant.

10. Build And Maintain Strong Relationships


Your clients are your most important concern. Be creative and sincere in dealing with your clients and you will start building your brand empire. Have them experience your product and services in a personal way and you will find that making sales is easier and simpler with a strong following. 

While search engine optimization is very important to driving traffic, always prioritize your brand.  And create high-quality content.  Old-school SEO experts may want to convince you to have hundreds of low quality articles proliferated around the web to boost your rankings.  The new Google algorithms and market attitudes will punish this behavior. 

In short, keep the quality of your content high and always pay attention to the needs of your customers, and your search engine rankings should continue to rise.

 

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- How to encourage repeat purchases, so you maximize the lifetime value of each new customer

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Zig's Simple Technique for Building a Great Company


 

If you're not familiar with Zig Ziglar, he was a well-known author, master salesman, and motivational speaker. Unfortunately Zig passed away last November. I apologize for taking so long to honor him with this essay, in which I tell my favorite Zig Ziglar story.

In Zig's early years as a salesman, he visited peoples' homes, making presentations to sell them high-quality cookware.

He had a competent assistant at the time who helped him keep track of appointments and handled administrative duties. One week, however, Zig realized he had two appointments scheduled for the same time. Not waiting to cancel any appointments he asked his assistant to cover one of the appointments for him.

She was terrified.  She did not want to do it and he wasn't going to make her!

Being the consummate salesman that he was, Zig eventually got her to calm down.  Then he assured her that she knew the presentation as well as he did, and that she would do great.  After he solemnly promised to never ask her to do a presentation again, she agreed to cover the appointment just that one time. 

Zig recounts that at the end of the evening, she was convinced she had fumbled half the presentation. But, to her surprise and delight, the clients ordered quite a bit of cookware.  Most surprising, is that when she got over her nerves, she found she rather enjoyed the experience. 

His timid and sales-panicked assistant evolved into a top notch salesperson, was his right hand partner for many years, and years later (with his delighted consent) became a highly-sought out and respected sales trainer for a leading cosmetic company.

Zig shared this story to show human potential.  He puts all the praise on her and generously applauds her for her accomplishments.  While I am inspired by her transformation, I want to focus on his role in her transformation because I believe that was Zig's greatest gift to the business world.  Yes, his sales training is worth bars of gold, but ultimately what really made him a success was his ability to develop others.

He could have made millions as a star salesperson.  He could have kept his philosophy, his techniques, and his secrets to success all to himself.  Instead, he made hundreds of millions by sincerely applying himself to improving everyone around him who was willing to listen.

Zig Ziglar was a true leader.

Yes, he sold books, and videos, made speeches, and made money, but he invested in people.  He believed that the success of a company was largely dependent on the quality of their sales force, and the quality of their sales force was solely dependent on how much that force really cared about helping people.

And, a sales force isn't going to care about helping anyone if they don't feel that their company cares about them. 

Zig could have benched his assistant, sent her right back to her phone and typewriter after she covered that one appointment.  Instead, he nurtured her potential and encouraged her to continue developing her sales skills.  Now think about this, how much more money did Zig make by having her on his team at her full potential instead of at her lowest potential? 

How much more money will your company generate if you make the time to develop your team to their full potential? Beyond just money, how much loyalty will you cultivate? Will you feel more confident about your future success when you have a top-notch team you can trust?  How many talented people will want to work for you when the word gets out about your leadership?

Yes, it takes time and energy, yet Zig demonstrated over and over that when you invest in helping someone be the best version of themselves possible, the rewards, material and otherwise, greatly outweigh the sacrifice.

Zig Ziglar died in November of 2012.  He left behind dozens of books, thousands of hours of video and audio, and most of all, he left behind millions of grateful professionals whose lives were touched and even changed by the empowering lessons he left behind.  His message that you could accomplish more in life and in business through caring and investing in the success of others is a timeless gem that lives on.

As he once said, "You can have everything in life you want, if you will just help other people get what they want."

Rest in peace Zig.  We'll miss you. And for all of you listening, develop your employees and customers, and everyone around you, to their full potential, and you will achieve incredible success!

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5 Techniques to Scare Competitors Out of the Market


 

On many levels, competition is good.

For example, when you start a business, you want there to be competition. Since if there was no competition, there may not be a market or customers who want to buy what you are selling.

And once in business, competition is generally good since it forces your company to get better. It forces you to better satisfy customers (or they will choose your competitors) and it forces you to become more efficient (so you reap more profits even if you have offer more competitive pricing).

Now, while competition does provide these advantages, you clearly want to have less competition, and you'd like for fewer new competitors to enter the market. In doing so, you'll enjoy more of a monopoly in your market, which means more customers and more profits.

The best way to knock competitors out of your market and discourage new entrants is to build "business assets" that your competitors don't have. (I define "business assets" as resources you build now that will give you and your company future economic value.)

Here are five examples of business assets you can build:

1. Customers: Most mobile phone companies offer 2 year service contracts that all new customers must sign (and face penalties if they leave before the two years are up). This essentially "locks up" customers making it harder for new entrants (or existing entrants) to come in the market and take their customers. Customer agreements and contracts are one of the most powerful business assets you can build.

2. Systems: Most franchise organizations (e.g., Subway, McDonalds, etc.) have made significant investments in systems in areas such as taking orders, producing products, handling customer complaints, etc. These systems make it easier and less expensive to hire and train employees and better service customers. This makes it harder for others to compete against them. Likewise, I know many companies who have built customized software systems that allow them to perform faster, cheaper, and more consistently than their competitors.

3. PPE (Plant, Property and Equipment): When I was a teenager, I made a lot of money shoveling snow. I used that money to buy a snow blowing machine. Equipped with the snow blowing machine, I was able to remove snow ten times faster than my competitors. This allowed me to dominate my local market.

4. Product or Service Variations: A local pizza shop promotes itself as having 36 varieties of pizza. Offering this large variety makes it harder for new pizza companies to enter the market. Because a new company would have a very hard time creating 36 varieties from the start, it would be harder for them to satisfy customers.

5. Exclusive Partnerships: Creating exclusive partnerships could be a key business asset that gives you competitive advantage. For example, if you create exclusive partnerships with top organizations in your industry, they would only work with you and not your competitors. For example, let's say you and a competitor both serve the senior market. But you have an exclusive relationship with the AARP whereby they only promote you, and not your competitors. With 37 million senior members, your AARP relationship would give you considerable advantage.

What I want you to consider now is how you can build business assets that "unlevel the playing field." How can you make it so that nobody wants to compete against you?

  • Can you lock-up customers with agreements and contracts?

  • Can you build new systems to make your company more effective and efficient?

  • Can you make investments in plant, property and equipment that allow you to cut costs or increase output?

  • Can you develop new product and/or service options that better serve customer needs?

  • Can you form exclusive partnerships to help you gain new customers that your competitors can't?

Importantly, whatever answers you come up with, realize that building these business assets will take time. Often times they may take as much as a year (or even longer). And also realize that short-term profits may go down when you are building them. For example, in the AARP example above, forging such a relationship could take 6-months, during which you invest lots of time and generate no incremental revenue.

But, once the asset is built, you may profit (and profit big) for years.

So make sure to properly plan and prioritize the development of your business assets, even though they often have less short-term benefits than other activities (such as setting up a new advertising campaign).

Set a long-term goal for when you want the assets built. And make sure that you build time into your daily, weekly and monthly schedules to move the development forward. Doing so will dramatically improve your revenues and profits, and at the dismay of your competitors who will be forced to go elsewhere.

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If you want to build a $10 million+ company, you must focus on building Value. And to build Value, you need to follow a specific formula.

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As you watch the video, you’ll see the important schematic below:

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7 Ways to Outsmart Your Competition


 

7 Ways to Outsmart Your Competition

"Knowledge is power." This is a well known saying commonly attributed to Sir Francis Bacon, who was an English philosopher, statesman, scientist and author.

In business, knowledge certainly is power. For example, if you knew where your market was heading, you would have a massive leg up on your competition.

So, how can you gain more knowledge to outsmart your competition? Here are 7 ways.

1. Learn from your customers.
Marketing consultant Jay Abraham once said, "your customers are geniuses; they know exactly what they want."

Because your customers know what they want, speak to them. And don't just speak to your current customers, but speak to your competitors' customers too. Learn to listen deeply to your customers and to ask probing questions. And when you hear consistent feedback (and not just one customer saying something), take action.

2. Learn from your competitors.
Watch your competitors closely and learn from them. What do they seem to be doing well, and how can you better emulate them in this respect? What are they doing poorly that you can capitalize on?

Importantly, don't just copy your competitors until you know that what they are doing works. For example, if a competitor starts offering a 25% off discount for new customers, don't copy them right away. Rather, wait and see what happens. If the competitor stops offering the discount quickly, then the promotion probably didn't work. Conversely, if the competitor is still offering the discount 6 months later, it probably did work. Only copy the competitor's "winners."

Also try to figure out what competitors are saying about you. And, if criticism from a competitor gets back to you, don't become defense or dismiss it casually. Rather, engage critically with it. The criticism may prove to be quite helpful. A competitor may be aware of your weaknesses in a way a friend or customer cannot be. So don't disregard negative feedback, but rather consider it carefully, and take corrective action as appropriate. 

3. Learn from your employees.
Oftentimes your employees have a lot more information than you do. They are the ones who are interacting with customers, and they are the ones that are building your products and providing your services.

Speak to your employees and get their feedback, ideas and suggestions. As an example, nearly all new innovation at Toyota comes from front-line employees. Encourage your employees to come up with ideas and give you feedback. They may also alert you to changes in the marketplace and customer behavior that you need to understand in order to adapt.

4. Learn from your community.
This is particularly true for local businesses. Find out what is going on in your community. For example, if your community is heavily involved in recycling, or if the local high school football team just won a championship, then you need to know about it since these are things your community cares about. Importantly, leverage this information. In these two examples, you could offer a sale related to the football team's victory. Or post signs explaining how your business recycles. These actions would position you as part of the community and cause customers to flock to your business.

5. Learn from coaches and consultants.
The right coach and/or consultant will have lots of knowledge that you don't. They will have worked with other business owners and "been there, done that" - that is, they will have seen challenges and overcome them already. Because you won't have to "reinvent the wheel," these paid experts can allow you to make the right decisions, avoid mistakes, and grow more quickly. Plus, paid experts can give your business a reality check and keep you focused and accountable.

6. Learn from mentors.
The right mentor serves a similar function as a paid coach and/or consultant in that they have experience, expertise and connections that allow you to avoid mistakes and grow your business more quickly. The challenge is finding the right mentor, and setting up the appropriate structure to get ongoing feedback (this naturally happens when you pay a coach or consultant).

7. Learn from other business owners. In previous articles, I have mentioned the massive power of mastermind groups. Mastermind groups are groups of business owners who work together to grow everyone's business. Mastermind groups are incredibly powerful since other members of the group will have already overcome the challenges you face, and thus can give you the answers you need.

Likewise, in many cases, skills and knowledge that have taken other business owners months or years to learn can be transferred to you in minutes. So, you gain massive knowledge quickly, and gain a support group that all shares the common goal of building a great company.

Knowledge certainly is power. Leverage these seven ways to gain knowledge, and you will be able to outsmart and dominate your competition.

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How to Find Great Outsourced Help Online


 

There are three main benefits I typically derive from outsourcing:

1. Cost savings. I'm often able to pay less for jobs I outsource, particularly if I outsource them to people in lower cost-of-living states or countries.

2. Reduce overhead. Usually I outsource projects that are not full-time or that I am able to easily stop if they aren't working out as planned. This reduces my overhead (and allows me to scale down as needed) since unlike a full-time employee, the outsourced people are not a fixed expense.

3. Supplemental work at night-time hours. When you outsource overseas, it often provides great timing of workflow. For instance, in one company I ran, I would create tasks during the day, give them to my outsourced team in India, and they would be done by the time I arrived in the office the next morning.

However, for outsourcing to work, you need to find the most qualified people to which you outsource.

The key to this is to start by getting the largest pool of qualified outsourced providers to apply for the project you need accomplished. Because you want to have as many people as possible to choose from.

Even if you only hire one, you can go back and contact the same pool of talent for future projects. Consider applicants as being in your "rolodex" of people to call.

To help you do this well, here are some tips to consider when finding and judging outsourced people to complete your projects.

Choose Your Outsourcing Platform

There are many sites in which you can find outsourced providers for the tasks you need done. Among many others, these include Craigslist, ODesk.com, Guru.com, Elance.com and 99designs. Some of these sites focus on certain types of outsourced projects like technology and design, while others allow you to find people for all types of tasks.

The process of posting a project is very similar on each of these sites, but there are also minor differences to get acquainted with as you go -- worry about those later and follow these basic steps.

Create a Clear Project Title

Include the work to be done, on what, and in what industry. For example, "Help Making Ebook" could mean anything from research to writing to editing to cover design. Compare that to "Writing 10,000 Word Real Estate Ebook."  The latter will be more likely to catch the eye of writers and providers with real estate knowledge.

Create a Clear Project Description


This sounds simple enough, but you should try to answer as many possible questions as you can, which means addressing certain areas, like:
 

  • The scope of the project. In the above example, requiring a 10,000-word Ebook to be written vs. 20,000 words would be helpful information for applicants to know. This helps them estimate the time it will take to complete and therefore their bid for the project. If you are paying hourly, it will help prevent misunderstandings later.

  • Software needed. Make sure they at least have Microsoft Word and Excel, if that's what you use. Other software is industry-specific, like Adobe Photoshop among graphic designers.

    You may or may not know what software is needed for things you don't specialize in, but you will soon enough. All other things equal, choose the person who already has the best software for the job, as you'll get better results.

  • Programming languages. Some website projects require that the provider knows certain programming languages besides standard html, such as PHP, AJAX, etc. In these cases, it's better to post "PHP Programmer Needed to..." than just "Programmer." You'll get fewer, but more qualified responses. If you don't know what languages are needed, either ask a friend or do a Google search beforehand, or you could post in the project that you don't know what language is needed, and ask them to make suggestions.

    Ideally, you will want to hire people who can educate you, so this sets the tone right from the beginning. I know some people who post $10 projects for 30 minutes of a programmer's time just to answer their questions and learn simple tips and tricks to quickly do yourself without having to hire someone.

  • Payment amount. First, decide if you want to pay them by the hour, or for the whole project. There are pros and cons to both. If you estimate that something will take 5-8 hours, going hourly is fine. For work that will take longer than that or that has a higher likelihood of uncertainty, I would try a project-basis.

    Sometimes you can't estimate how long something will take-in this case, hire them on an hourly basis for a little while to get started and figure things out. Sometimes applicants will claim that they can't estimate how long it will take, while others can. I would go with people who are able to give you specific information as it shows they have their act together and have done something enough times to know how long it should take.

    Often after working on something for a little while, the way ahead becomes much more clear and they can better estimate the remaining hours from there. Sometimes I will hire 2-3 people on an hourly basis to do parts of the same project, and compare their performance to decide who should finish the whole project themselves.

    Also, you may not have a clue what something will cost, so make your best guess and let the range of proposed prices confirm this assumption or bring you back to reality. It may surprise you by being higher or lower, on average, than you thought.

  • Payment terms. Do not pay more than 50% up front. Rather, you can pay up to 50% up front, but then have milestone payments.

    Also, never pay someone the final amount if there is still work left to be done...you may never see it finished if they take off to chase down new work.

  • Payment methods. Many of the sites listed above will handle the payment. If they don't, choose the one that feels most comfortable for you, or whichever the providers prefer most.


Upload samples of what you need

You can write 5 paragraphs trying to explain the final product, or you can show them something similar you have done before (or someone else's to model yours after).

Most sites will allow you to upload files to show them what they'll be working with or making. You can also insert links in the project description to files, audios, or videos showing or explaining things more vividly.

Choose the time period for bidding


You might be given options like 3 days, 5 days, 7 days, 15 days, or 30 days to accept bids. I would lean towards giving a longer time period, unless the urgency of your project means that you don't have as much time to wait.

But basically, the more time that providers have to find and respond to your project, the more qualified applicants you'll have to choose from.

Also, some of the best providers are also the busiest, so by giving a longer time frame to respond you are more likely to catch them when they're available.

This is not an exhaustive list, but covers the most important elements of a good project posting-one that will put you in a position of strength and cut down your odds of a bad experience. Cover these bases and you'll have more people applying than you can sort through.

Which then leads to the final phase: judging your applicants. In judging which applicant(s) to choose for your project, consider:

1) How they responded to your project request: were they articulate? Did their comments and/or questions make sense?

2) Their portfolio: do they have a website which shows their portfolio of work that you can judge? If so, take a close look.

3) Their ratings. On most of the outsourcing sites listed above, past clients will rate the outsourced person's work. I never use someone who hasn't completed at least 20 projects and has a rating of 4 stars or above.

Follow this advice and you can find the right outsourcers to help you grow your business and profits.

 

Suggested Resource: If you don't outsource, you can't compete. The math is simple...if your competitors are outsourcing and only pay $X to complete a task, and you pay $3X, $5X or $10X, your competitors will eat your lunch. You simply must outsource to stay competitive. Outsource the right way using Growthink's Outsourcing Formula. Learn more by clicking here.


 

The 5 Most Common Funding Sources


 

If you want to be successful in business, it is crucial to determine when, where, and how to obtain the funds you need. Whether you need $1,000 or $1 million to start or expand your business, if you can't raise this money, you can't build the business you want.

Before You Look For Funding

Before you look for funding, you need to create your business plan. In addition to explaining your business and your strategy for success, your plan must determine how much money you need and for what it will be used.

Also, it's very important for you to understand the timing of the funding. For example, do you need all the funding now (e.g., to build out a location), or can you receive your funding in stages or "tranches."

The amount of funding you seek will effect the source of funding you approach. For example, if you require $250,000 in funding, angel investors are more applicable then venture capitalists. If you need $5 million, the opposite is true.

While I have identified 41 sources of funding for your business, below are the 5 most common.

The 5 Most Common Types of Funding

1. Funding from Personal Savings

 
Funding from personal savings is the most common type of funding for businesses. The two issues with this type of funding are 1) how much personal savings you have and 2) how much personal savings are you willing to risk.

In many cases, entrepreneurs and business owners prefer OPM, or "other people's money." The four funding sources below are all OPM sources.

2. Debt Financing

Debt financing is a fancy way of saying "loan." In debt financing, the lender (often a bank) gives you funding that you must repay over time with interest.

You must prove to the lender that the likelihood of you paying back the loan is high, and meet any requirements they have (e.g., having collateral in some cases).  With debt financing, you do not need to give up equity. However, once again, you will have to pay back the principal and interest.

3. Friends & Family

A big source of funding for entrepreneurs is friends and family. Friends and family members can provide funding in the form of debt (you must pay it back), equity (they get shares in your company), or even a hybrid (e.g., a royalty whereby they get paid back via a percentage of your sales).

Friends and family are a great source of funding since they generally trust you and are easier to convince than strangers. However, there is the risk of losing their money. And you must consider how your relationship with them might suffer if this happens.

4. Angel Investors

Angel Investors are individuals like friends and family members; you just don't know them (yet).  At present, there are about 250,000 private angel investors in the United States that fund more than 30,000 small businesses each year.

Most of these angel investors are not members of angel groups. Rather they are business owners, executives and/or other successful individuals that have the means and ability to fund deals that are presented to them and which they find interesting.

Networking is a great way to find these angel investors.

5. Venture Capitalists (VCs)


VC funding is a suitable option for businesses that are beyond the startup period, as well as those who need a larger amount of capital for expansion and increasing market share. Venture capitalists are usually more involved with business management, and they play a significant role in setting milestones, targets, and giving advice on how to ensure greater success.

Venture capitalists invest in companies and businesses they believe are likely to go public or be sold for a massive profit in the future. Specifically, they want to fund companies that have the ability to be valued at $100 million or more within five years. They also go through an expensive and lengthy process of deciding on the best business to invest their money. Hence, the approval process usually takes several months.

Bottom Line

As you search for the best funding source for your business, you will discover that some financing options are complicated while others may offer a very small amount.

Choosing an inappropriate type of funding can lead to unfavorable outcomes such as feuds between the lender and business owner, shift of control, waste of resources and other negative consequences.

With this in mind, you should study the benefits and drawbacks of each financing option and select the ideal one that will help you meet your business goals. Because with the right source(s) of money, the sky is the limit for your business.

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As I explain in this video, the key is to start at the bottom and work your way up the Funding Pyramid.

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