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Have you ever found yourself working hard, day after day, doing the same thing and getting by, but not really knowing where you’re going?
It’s easy to do in business—especially if you don’t have a plan. Growth doesn’t happen automatically and what might feel like progress could actually be wandering around in circles if you don’t have any direction.
One sentence. That’s what Matt says you should be able to condense the purpose of your business down to. Can you tell people what you do in a sentence? What is your mission statement?
You need to know what separates you from the competition. What is your unique selling proposition (USP)?
Matt talks about his very first business. He tells the story of his family’s snow cone business and how he got started with selling.
I ask him whether you should make growth or hiring a goal and how to know the right time to hire.
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Write Down Your Business Idea
- 05:38 Sean: Matt, when you wake up, do you start a business before your morning coffee or after?
- 05:43 Matt: Usually after the coffee is when all the magic happens.
- 05:52 Sean: So for someone coming from the last episode, having validated their idea, how do they go about creating a business plan? What’s the first step?
- 06:02 Matt: First you want to write down you business idea, but try to do that in one sentence. Ideally you should be able to describe for someone else in one sentence what it is you do. For example Sean, when I first met you, you were “the hand-lettering guy.” Once you get that on paper, write down your mission statement. Again, you want to try to keep that to one sentence as well. Business people and potential investors are not going to want to read a 4,000 pixel tall page of content. Keep it short and sweet.
- 07:10 Sean: I used to be a letterer, but now, it’s hard to tell people in a single sentence what I do with all the things I have going on. So here’s a trick I used to condense it: I was at a meet-up and someone asked me “What do you do?” and I said, “Do you have 20 minutes?” So we sat down and I spent about 20 minutes telling him everything. Now here is the key, after telling him all of that I asked, “Okay, now imagine someone comes and sits next to you and asks you what Sean does for a living. What is your answer to them?” He wasn’t as emotionally wrapped up in all of the details of what I do, so he answered and said, “Well, it sounds like you’ve had success in client work, products, and teaching, and now you want to help other people do the same.” Telling someone else the full story and then having them tell it back to you is a great way to condense it, because they don’t care about all of the details. They’re just going to give you the gist of it. He was right, I want to help people make a living with what they’re passionate about.
Set Short, Medium, and Long-Term Goals
- 09:07 Matt: So we’ve written everything down. We’ve got our idea, our mission statement, and our vision. The next thing you need to have is goals. What are your goals for this business? You want to have short, medium, and long-term goals. Of course when you put a plan together, it may not go exactly the way you expect it to, but you want to have a ballpark idea. Your short term goals are going to be things you’d like to accomplish within a year. You’ve got to be realistic with these goals. We want to hustle, but we don’t want to overdo it. We don’t want to kill ourselves. Typically people will write down ten. Most will actually accomplish about five or seven. The real hustlers will get about ten.
- 10:19 Sean: Now, you said that a year is a short amount of time. If you’re calling one year “short,” what’s long?
- 10:29 Matt: Long would be considered between six and ten years.
- 10:32 Sean: You have six year goals?
- 10:34 Matt: Yes, I do.
- 10:36 Sean: Why do you recommend these goals, specifically the lengths?
- 10:43 Matt: It helps you stay motivated and also helps you to prioritize different things. You get excited when you’re starting a business and it’s easy to overcommit yourself in that excitement. It’s good to have many goals, but you’ve got to sort them out and classify them by different lengths. This way you can focus on the shorter-term goals and make focused progress. If you are seeking investors, it looks really attractive to be consistently hitting your short term milestones. When they see how well you’re managing your goals, they’re going to feel like you’re more reliable and be more willing to invest.
- 12:25 Sean: At the point when you’ve hit some of your shorter term goals, do you look up to see where you are in the context of your longer-term goals? If you’re not taking on investors, do you still recommend these goal lengths for someone who’s bootstrapping?
- 12:51 Matt: I would absolutely recommend those lengths to someone who is bootstrapping. Ultimately, I’m not setting these goals for an investor, I’m setting them for me. I’m focused on what we can realistically accomplish. A short-term goal is within one year. A medium goal is somewhere between one and three years. I generally try to have already broken even by the end of the first year, but that’s not always realistic for every type of business.
- 13:35 Sean: Would you feel comfortable giving an example of a one year and a three year goal with a specific business that you have? You could use the snow cone example. Tell people who don’t know what you mean when you say “snow cone.”
- 14:02 Matt: We live in Texas, with 120 degree weather. You have to have some ice and if you can throw some flavoring in there with sugar, we’re jumping up and down. When we first started the snow cone business, I was a 10 year old little punk just running around. We didn’t know how to have a business plan, but we had an idea of some goals we could set. We gave ourselves a realistic one year goal. We had a total of 3 trailers of which only one was renovated. We said we wanted to have at least two trailers going within one year which meant we needed to renovate one trailer and find a location for it. That also meant that we needed more space to get more supplies and we needed more employees. Financially, you want to have a realistic goal about what you’ll be making. Like I said, we push our businesses, so our goal was to turn a $30,000 profit within the first year. For a three year goal we were wanting to triple the first year. We were looking at making $90,000 by our third year. For our three year goals, we were also looking at expanding, getting more locations, more customers, and ultimately boosting our income.
- 16:31 Sean: The reason you want to have this is because as you’re going, it’s really easy to get caught up in the day-to-day things that need to be done and to forget to think about how you can make your business grow.
Having large goals helps to keep you focused on growth.
- 16:57 Matt: It really helps because a lot of times you can get discouraged. In our first year we had a lot of things go wrong because we weren’t familiar with all of the moving parts. We had an A/C unit go out and trouble figuring out things with employees and contracts. Within that first year we had to work out a lot of bugs. When we got to the next year, we had better structure in place.
- 17:43 Sean: When someone is starting out with a business plan and they’re anticipating growing, do you think they should have a goal of hiring employees or should they have a goal of growing which may eventually necessitate bringing on employees? Should the goal be to bring someone on and if so, do you need to have smaller goals before that, like getting enough revenue to meet payroll and that kind of thing?
- 18:27 Matt: I love that question and it can be answered so many different ways. It depends on whether or not your business needs other people to get it going. It’s a myth, because most businesses can start as a one person operation. It’s not going to be as complex or robust as you want it to be, but you can definitely start it with one person.
- 19:12 Sean: Do you think people should start like that and focus on growing before they think about bringing people on?
- 19:20 Matt: Start it by yourself and build some capital. As you track your expenses and cash flow, you’ll be able to see how much extra money you have to work with for growth. You’ll be able to see whether or not you’ll be able to consistently pay someone. You don’t want to hire someone if you’re not able to consistently make payroll. Determine if you can take on a part-time or full-time employee and if you’re doing really well, maybe you can take on several full-time employees. Then, you want to start thinking about how you can start to detach yourself from it. The reason this is important is because you want to be the brain behind your business and not the hands. You don’t want to be the muscle forever because you’ll eventually get worn out.
Provide a Unique Offer
- 20:49 Sean: Zooming back out on creating a business plan. Can you speak to the unique offer you want to make?
- 21:07 Matt: So you’ve thrown your goals up on the whiteboard, now you want to ask “What makes my business unique?” What is it you’re offering that distinguishes you from your competitors?
- 21:26 Sean: Cory, let’s say someone wants to hire you for video. Matt, actually really wants to hire you for video, for real. Why should he hire you and not some other guy’s brother who does video?
- 22:06 Matt: Can I answer for him? Maybe this isn’t his answer, but this is why I’d want to hire Cory. I know that Sean’s standard for everything is high, so I know that anyone he hires operates at that standard. Sean’s not just going to hire anyone, so obviously Cory must be pretty good, otherwise he wouldn’t be here.
- 22:41 Cory: So my answer should be “You should hire me because Sean’s standards are so high.”
- 22:50 Sean: That’s a good word put in for you, but you don’t have to base it on someone else. You can say your standards are so high. You’re going to focus on the details, maybe even produce music for it if you need to. You’re not just here to get a job done, you’re here to tell their story.
- 23:26 Matt: If I didn’t know Sean and I didn’t know Cory, I’d want to look at his work. If I saw the quality in his work and his pricing was reasonable, he’d be my guy.
- 24:15 Sean: So someone needs to think about what they have, what they can give to the client, and what their product does that some other product doesn’t.
Everyone isn’t going to love your idea just because you think it’s the best.
You have to be able to explain to your customer why it’s the best.
- 24:36 Sean: The most recent thing I’ve been working on is my course at ValueBasedPricing.com. I just finished creating a guide, 7 Value Discovering Questions to Ask Your Client, that I’m giving away for people who subscribe there. There are other people out there talking about Value-Based Pricing, and basically, what I’m offering is attention to detail. What I’m also offering is a tool that takes all eight factors that go into discovering that value-based price. You can plug in all of those variables and it will give you an accurate Value-Based Price that you can use with your client. It doesn’t figure out everything for you, but it does make your job a lot easier. That’s what we’re offering that makes us unique. We’re giving people a tool in addition to the high quality videos we’re producing for the course. Additionally, it’s coming from a source they trust, which is me. Even if I was giving people the exact same content as someone else, the fact that it’s coming from me, a source they trust, means something.
Your unique offering can include the brand you’ve built because you’ve developed trust with people.
- 27:21 Matt: Thank you for sharing that. That’s a perfect example of something that there is a niche for, your unique twist, how it’s different from your competitors, and how that will put you on the top.
- 27:32 Sean: Don’t discount your voice. Even if your product doesn’t have a lot of unique features, the fact that it’s your voice can mean something if you have an audience. I pride myself in my ability to break down complex systems and explain it well to people. I think that ability, in and of itself, is unique value I offer to people because, maybe one of my competitors understands Value-Based Pricing, but either the way they are explaining it or the medium they’re using to present it isn’t as easy to understand for people. The medium, in addition to the quality that I’m offering, is unique. I encourage you to look at it from different angles. It’s not always about the different features.
- 28:22 Matt: Another point I want to make is that you need to keep your idea simple. Don’t get complex and try to explain everything about it. Obviously you want to have features and understand the details of your business for yourself, but you want to keep it simple for other people. They’re not going to commit a bunch of time to understanding the complexity of your business idea. Give people something simple they can grab ahold of.
- 28:56 Sean: If people are having a really hard time distilling that down, would you say they may need to take a serious look at how complex their business is?
- 29:17 Matt: Definitely. It’s okay to have details, but sometimes for your own benefit you’ve got to force yourself to zoom out and focus on a more simplistic version of your business.
- 29:50 Sean: Can you speak a little to perception and marketing?
- 29:55 Matt: You want to make sure that people are going to think your unique business idea is something valid. It’s not about validating the entire business plan, but making sure that your audience is in alignment with your unique offering.
- 30:57 Sean: Does marketing come before demand?
- 31:06 Matt: Demand should be first and marketing comes after that. Typically, in the business plans that I accept, we always look for demand before we talk about marketing. I ask, “Is there even demand for this? Because if there’s not, let’s not waste our time here.” The next question I ask is “Is there competition?” You want to do your research and make sure there’s some competition out there.
- 31:56 Sean: Some people are afraid of competition. They’re saying things like, “Someone else is already doing the same thing as me. They were here before me. They’ve been doing it longer. What if they take all of my customers?”
- 32:18 Matt: When you’re playing basketball and you’re down 10 points, do you just pack up and walk off the court? Do you say, “Okay guys, let’s call it quits and go to CiCi’s Pizza?” Just because there’s competition, are you really going to walk off the court? No, you’re going to pull it together, make a plan with your team, and execute and hopefully beat those guys.
- 33:13 Sean: If you don’t have someone to play against, you’re just a team alone in a gym with no audience—there’s no game going on.
- 33:23 Matt: And you’re not making any money off of those ticket sales.
No one will buy tickets to watch you shoot baskets by yourself.
You’ve got to have competition.
- 33:38 Matt: You can also learn from your competition, especially if you’re new to your industry. Your competition is always going to be thinking of ways they can offer a unique spin and that also helps you. I’m not saying that you want to put all of your focus on your competition, but you do want to ensure there is competition because it shows you there’s a market for what you’re offering. I was telling you earlier Sean, there was a house I was bidding on and it had 45 other offers on it. So what does that tell me? Obviously, this house is a gold mine. That’s the way I like to think of it. That’s really encouraging to me. Other people are saying, “That’s really depressing. You’re probably not going to get it.” Maybe I won’t get that house, but it tells me that I’m looking at the right kind of houses.
- 34:36 Sean: For someone to buy your product, they’re probably going to need to be exposed to it multiple times (Related: e153 The Magic of 7)”. Maybe they saw your product on your website, found it in a search, or read about it in a review—these are little seeds planted along they way.
- 35:14 If your target customer comes to you, they’ve probably been exposed to other offerings. If they haven’t and you’re the first, you’re probably not going to close the deal. You might get lucky, but if it’s just you in a specific market, you’re the one who has to put those seven tokens in until this person is ready to go. Maybe a customer has read a competitors blog or been to their website, but by the time they get to you, you’re their seventh interaction and they’re ready to buy.
Your competition is actually helping you because they’re priming your customers.
- 36:18 Matt: That’s where your unique offer comes in. Your competition primes the customer, then they come to your page and see the unique twist you’ve got to your product, and that causes them to want to buy it from you.
- 36:32 Sean: People don’t give that unique selling point enough weight because they feel like it’s not very significant, but once a customer is primed, that one little hook could be the thing that sells them on you.
- 36:46 Matt: In all of my businesses, we’ll usually throw in something free, or we’ll give a little discount. The customer will really appreciate that and even though it costs us some money, it will hook the customer long term. You’ve got to keep in mind how the small investments you make in your customers now can bring you large returns later.
Online & Offline Marketing
- 37:40 Sean: How does marketing play into the business plan that you create?
- 37:55 Matt: I don’t like to get too deep into the marketing because it’s constantly changing. You have to set a marketing plan and adjust it as you go. Let your goals drive your marketing plan. If you plan too far out you may miss out on the newer, more effective marketing techniques that surface along the way.
- 38:39 Sean: Start out with something simple, don’t worry about having it all mapped out in the beginning. Even if you have it mapped out, it’s going to change. It’s an iterative process.
- 39:07 Matt: When you’re going through your business plan, don’t hurt yourself by making it complex. Make it as simple as possible and write it down. As you go you might add more to it and things are going to change, but you want to start with some guidelines to follow that will give you direction. Make a simple marketing plan that you think will work for you.
- 39:37 Sean: Back to the snow cone business: you’re just starting a snow cone business. What does that look like for the person who is coming up with the business plan for the snow cone business? What is the simplified version of a marketing plan for that?
- 40:06 Matt: People have actually told me to, “Just open the windows and stand by the cash register, you’re good to go.” That’s like saying “I’m going to drop my net into the ocean and the fish are going to swim right in.” I’m sorry. It’s not going to happen. One of our locations was set in front of a grocery store and we had a ton of traffic coming through, but just because you have a lot of traffic coming through doesn’t mean you’re going to get a lot of business. Fortunately back when we did it, people didn’t have cell phones, so you didn’t have to worry about people looking down at their screens the whole time. Now we have a strategy where one of the snow cone trucks makes distracting sounds to get people to look up from their phone. You don’t want to just have the visual, you want to have the audio.
- 41:30 Back in the day we put some signs out with balloons and this worked for us because we had the traffic there. Another one of our strategies was to put one of our “pretty people” out their with a tray giving out samples. That brought a ton of people, especially families. We also made sure our signs were very colorful and had a large inflatable penguin holding a snow cone. The little kids would flock to the penguin and they would make their parents buy the snow cone.
- 42:48 Sean: That’s interesting! The person who is going to buy isn’t necessarily the person you’re trying to attract. The penguin is for the kid, it’s not for the parent. You want to reach the person who has leverage on the person who actually has the wallet.
- 43:29 Matt: Here’s a great example of this: Gary Vaynerchuk, a social media marketing genius, wanted to get a big client. The gentleman that owned that business he was after was way older and didn’t pay much attention to social media, which is one of Gary’s strategies for getting new clients. So he targeted the man’s grandkids through social media and the grandkids told their grandpa that they needed to check Gary out. Gary was able to get in touch with the owner, they forged a relationship, and he was able to land that account, not by targeting the owner, but by targeting the grandkids. That’s what we would do back then is we would target the kids. We’d also give the parents coupons whether they purchased something from us or not which sweetened the deal a little for them. See how we’re just hashing out different marketing ideas along the way? There’s no complexity to our approach. We were just constantly changing and trying new things.
- 45:53 Sean: Let’s do some marketing brainstorming for my Value-Based Pricing course. I’m not doing any paid marketing. I just finished this huge 3 part series and Cory and I are going to be working on exclusive videos for subscribers that I’ll send them when they’re completed. We’re going to be doing content marketing, but we don’t have any other plans, so I’d like to hear some of your ideas.
- 46:49 Matt: I’m glad you brought that up. This is what I love about our combo because you are a wizard when it comes to online business and I’m really comfortable with a physical customer base.
- 47:22 Sean: How is Matt making millions of dollars, with 30 followers on Twitter and no website? There are a lot of people who are doing really well in the physical space, and that’s what I like about this dynamic because you talk about interacting with people in the physical space.
- 48:01 Matt: That’s not to say I’m not interested in online marketing. I’m starting to explore some of that stuff now. Back in the day I was so comfortable operating in the physical realm and thought, “Why reinvent the wheel here?” Now that I’m starting to mentor people, I want to be able to offer some expertise around online marketing. That’s why I like to follow people like you and Gary Vaynerchuk. While I like to be able to offer physical marketing methods, I really like the online techniques I’ve learned and have even implemented some of them. An example is our carpet cleaning business. We had one of our technicians go through the whole cleaning process and we took video of it and cut it together really nice. We showed it to a realtor and they hired us to clean all of their 20 to 30 houses. Now we’ve given that to all of our technicians to show on an iPad and we’re able to use that as a tool to convert customers. That’s why it’s a good idea to pay attention to what other people are doing, but don’t just do exactly what they’re doing—put your own spin on it.
- 50:54 Sean: Do you have any ideas about how I might market my course?
- 51:23 Matt: Something I would do is engage the older demographic on Facebook. If you have a strong presence on Facebook I would target people who are in business and let them know about Value-Based Pricing. If you don’t have a presence on Facebook you can find some other social networking outlet and engage with people who fit into your target demographic.
- 52:36 Sean: I’m glad you said that. For Learn Lettering, the largest source of traffic is Pinterest. The right person pins it on Pinterest and it blows up. One page that got pinned is getting 25,000 views per month.
- 52:58 Matt: Would you have added Pinterest to your original marketing plan?
- 53:06 Sean: Not really. I pinned stuff there sometimes, but this kinda just happened.
- 53:13 Matt: That’s the best way. You want to try different things, and maybe the right person on whatever platform will share it and then you’ve got a really nice source of traffic to your site.
- 53:33 Sean: Not all of those people are ready to buy immediately, but I’m priming them. That’s where the auto-responder series comes in. I recently just decided that my next course is specifically going to be on email marketing and automation with MailChimp, tying that into using custom integrations with WooCommerce, and Ecommerce 360 data. When people come to the landing page and they’re not ready to buy, they sign up for the newsletter at the bottom to get the free guide and an auto responder series. After they become familiar with the material and start to trust me, eventually they’ll buy. Rather than just push people to buy, I want to prime them. If I send people to something that provides value over time, that’s going to build trust. I’ve heard about people offering a free webinar Facebook—free training around some skill—and at the end of that, they offer the opportunity for the people who are ready for more to buy a course. I’ve heard that converts pretty well so that’s something we’re talking about doing.
- 56:02 Matt: That’s one of the things in the future we’re thinking about implementing.
- 56:17 Sean: Do you do something like that in the physical space? Maybe a free presentation and then up-sell them?
- 56:28 Matt: When I spoke at UTSA, I gave them some really valuable insight and advice about investing in themselves. That was video taped, and a couple of other professors found out about it. One of the professors shared it with a multi-billionaire. So from that I started getting emails from people asking me to help them invest their money. That was just a free thing that I did with the students where I asked them each to give me a dollar, promised I would invest it, and come back to give them each a return of three dollars. They were pretty skeptical, but when I came back and delivered on that promise, I had their attention and interest. Many of them started really opening up to the idea of investing.
- 59:59 Sean: The moral of that is: you taught. That’s all a webinar is except it’s online. You do that for free, you give people some value, and then you let them know about your offer. Matt, if you had a course on investing, at the end of the presentation you could share that with the audience and maybe 5% of people would buy.
- 1:00:39 Matt: One of the professors who watched the tape of this presentation I did for free, sent me an investor who ended up investing a little more than $200,000 with me. That’s an opportunity that’s priceless. The conversion rate can be huge on giving out free value, and a webinar is a great way to do that.
Asking the Right Questions About Your Customer
- 1:01:32 The customer is something I like to finalize the business plan with. A lot of people want to make apps because they’ve seen people make millions of dollars off of it. You can do that, but you have to answer these questions: “Who, what, where,and why?” First, who is your customer?”
- 1:02:25 Sean: A lot of people don’t think about this. They have this product and think that people are just going to come buy it. Who’s going to buy it? “All the great people, Sean.” No, you’ve got to define this person. That’s the only way you can effectively market to someone.
If you’re so worried about reaching everyone that you’re afraid to go after a specific customer, you’re not going to reach anyone.
- 1:03:04 You’ve got to get specific. Once you’re confident in the person you’re trying to target, you can put out a marketing campaign that’s very pointed. For example, I could do a very general email marketing course for anyone and everyone, but with a very specific focus—Mailchimp, automation, Woo-commerce, email marketing, Ecommerce 360 data, and segmentation—I’m ruling out a lot of people. You don’t use Mailchimp? This isn’t for you. You don’t use Woo-Commerce? This isn’t for you. But for the people that do want this, it’s a no brainer. You don’t need everyone in the world. You don’t need seven billion customers, you need 700 customers. If you keep it too general, you might get seven customers, or 70.
- 1:04:32 Matt: The next question is, “What should the customer expect from you product?” With your course, Sean, you’ve already written down what the customer should expect. You’ve got to answer the question, “What am I going to present to these guys to get them to buy my stuff?” By the time you get to the customer, you want to already be able to answer questions about what the customer is looking for, how your unique offer is going to meet their needs, and what your product is going to be able to do for them. You don’t want to go too long on this, but you want to be equipped with this content. Another question I really like is, “Where is my customer?” For me, the answer is “local.”
- 1:05:37 Sean: I think is speaks not just to geographical location, but also to where they are in their journey. Are they a beginner? Are they an advanced person? Are they freelancers with a little bit of money? Are the freelancers who have never done their first job?
- 1:06:03 Matt: Exactly. You want to bring all of that and put that in a little paragraph so you have your “where.” Finally you’ve got to answer the question, “Why would the customer want to buy this from me?” Sean, why would someone want your Value-Based Pricing course?
- 1:06:52 Sean: I reached a point where I was charging $8,000 for a logo. That sounds really good to a lot of people. Until I found out that $8,000 for a logo was a really good deal. That means that someone got a lot of value out of my services and they would have paid more. I’m wanting to help the people who know they’re creating value for their clients that they should be charging more, but don’t know how to have the conversations with the client or even get to the point where the client is actually thanking them for what they’re charging.
- 1:07:32 How can you charge $20,000 to $50,000 for a logo design project and have the client thank you? For a lot of people it’s a race to the bottom. They want to give their client the lowest rate so they can get the business. How do you get to the point where you’re charging more than everyone else and the client is thanking you? This course is the difference between your next project being $8,000 or $20,000. We give real examples and real case studies. In a sentence, the “why” is this: You should be pricing based on the value you create for your clients, and I’m going to show you how to do it.
- 1:09:02 Matt: A lot of people will take a whole day to figure out their sentence, but you should really just take about an hour. Let it be a little guide that you can adjust and revise along your journey.