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We’ve got an EPIC series lined up for you.
Over the course of the next 3 episodes, we’re going to help you make your first $1,000.
Today, we’re kicking things off by helping you find your business idea. Now, you may be wondering why you have to have a business idea if you just want to make $1,000.
Well, I have news for you: if you make $1,000, you have a business. If you don’t believe me, just ask the government—because they’re going to tax you like a business if you make $1,000.
It turns out, the first steps to making your first $1,000 are the same steps to building a business. That starts with finding your business idea.
In this episode we talk about the difference between a passion business and a cash flow business, and how getting good at something and making money from it can actually lead to becoming passionate about something.
Highlights, Takeaways, Quick Wins
- You need to think like a business if you want to make $1,000.
- The first step to getting $1,000 is to recognize that it’s not a lot of money.
- The closer you get to house-on-fire problems, the easier it will be to make money.
- Make sure you know someone who is already making money doing what you plan to do.
- If there are no competitors for what you want to do, that’s a problem.
- Don’t try to create new markets. Capitalize on an existing one.
- Don’t go play the lottery, build something sustainable.
- Keep your eyes open and look for problems around you that you can solve.
- People pay for time—if you want to make money, find ways you can save people time.
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- 04:11 Sean: Matt is coming at this topic from the offline business perspective while I’m coming at it from an online business.
- 05:02 Matt: When I first started my business, I asked myself if I wanted to have a business I love and enjoy—that’s a passion business—or do I want to start a business for cashflow? Even though I don’t like it, it makes money. When I was younger, I wanted a franchise Subway restaurant because I was passionate about that then. It’s really important in the beginning to define where you want to get. You have to put yourself in check. Are you working a full-time job and you’re wanting to pursue a passion business on the side? That situation would be good for The Overlap Technique.
Passion vs. Cashflow Businesses
- 06:17 In that case, and if you’re wanting to make your first $1,000, it’s really important to decide if it’s a passion business or it’s for cashflow. If you have a full-time job backing your expenses, then you can pursue a passion business. When I first started as a kid, I didn’t have the luxury of a full-time job that was paying my expenses, so I started a cashflow business. It’s something I didn’t really like but it made money right off the bat. From my experience, a passion business is more of a long-term profit strategy where with cashflow businesses, you can usually make money in the first year.
- 07:11 Sean: Some people might be wondering at this point, “I just wanted to make an extra $1,000.” Anywhere you can make $1,000 is really the start of a business. It doesn’t have to be something you do for the rest of your life.
You need to think like a business if you want to make $1,000.
- 07:33 Matt is saying you can try to do something you love and make money from it or you can focus on a cashflow business, which makes money but isn’t necessarily what you love to do. In July I’m writing my three books, The Primary Book Set—Overlap, Curate, and Reciprocity. Overlap is the book about The Overlap Technique, which is getting from a soul-sucking day job to pursuing your passion and having that support you.
- 08:12 Kyle Adams, the designer here at seanwes, has been working on the book cover designs and Overlap has two intersecting squares on the cover, one is the day job and one is the passion, and in the middle there’s a section where they overlap. You may not enjoy your day job, but it gives you financial stability. You enjoy your passion but, especially in the beginning, you’re not making money from it.
- 08:55 You want this intersection where you start with the day job. Some of it you don’t like, but it gives you the money so you can do your passion, which you like but doesn’t make you money. There’s an area in the middle where you’re doing what you love and making money. Eventually, that becomes everything you focus on, but in the beginning it’s not easy to get to that point.
- 09:23 Matt: I know you want to hear what we have to say about making your first $1,000, but I think you have to go back to your foundation. Before you even think about $1, let alone $1,000, you need to ask yourself what you’re going toward. If you’re truly wanting to make something sustainable and long-term, you have to choose between the two. If you’re in the position to do a passion business, it doesn’t mean you can’t do a cashflow business afterwards or during that.
Does Passion Inhibit Earning?
- 10:20 Sean: Scott asks, “Does passion inhibit earning? Is a passion business more work to get to profitability?”
- 10:33 Matt: It’s not that you’re not going to make money from a business you’re passionate about, but usually something you’re passionate about is bigger and more of a luxury.
- 10:45 Sean: Passion, by the mainstream culture, has gotten overblown. Passion really is important, but it’s important for reasons Steve Jobs pointed out, which is that you’re going to get to a point where it’s no longer fun or easy. You’re going to want to quit and everyone else is saying, “What are you doing?” He says to keep going and push through that. If you aren’t passionate about what you do, you’re not going to be inclined to keep going or keep putting in the effort.
- 11:29 It is more of a long-term thing where you stick it out and invest in it so you can reap the rewards, but I wouldn’t say it has to inhibit earning. It is more long-term, but you can make money, especially something as small as $1,000. $1,000 is a little bit of money. We talk about how a million dollars is not a lot of money and that’s how you need to think.
The first step to getting $1,000 is to recognize that it’s not a lot of money.
- 12:13 You have to first wrap your mind around the fact that it’s not a lot of money. The cashflow business is going to get you money much quicker. If you’re just wanting an extra $1,000 a month, the quickest way to get that is to do the cashflow business. Find the house-on-fire problems that people have (Related: e055 Making Money vs. Saving Money).
- 12:58 Matt: The passion business is something you’ve already been thinking about and you’re excited about. If Sean’s in a group setting and everyone’s talking about what they do, and he’s telling everyone about lettering, what he’s learned about it, and different tools. That’s a passion, not a cashflow business. If you’re feeling like lettering Sean in that example and you’re hyped about it, that’s going toward a passion idea. After you choose that, you have to spend 10,000 hours at it.
- 14:09 Sean: I got 9,000 hours in after five years. But we’re trying to get people to $1,000 in a month right now.
- 14:24 Matt: In that case, you’re going to have to do something that I like to do as a cheat—research. Research the crap out of something and become an expert overnight. You need to research everything about your passion to the point where you’re classified as an expert by your client.
- 14:57 Sean: Let’s say you are an expert—you’re really good at what you do. How do you get that money right now? How do you get that $1,000?
- 15:06 Matt: I don’t think you should jump in just yet. I don’t think you should try to make $1,000 over that month, let’s try and make it in a week. How would you do that? You need to be good and you need to know this business. How do you get there? By researching. I’m always researching my competition. I look at three big companies and three small businesses that are all doing what I want to do.
- 15:38 Sean: You’re talking about companies doing what you’re doing and making money. A lot of people know someone doing what they do, but do you know anyone doing what you do and making money?
If there is no competition in what you want to do, then there’s a problem.
- 15:53 Matt: Don’t think that you’ve found some gold mine. This is 2016 and there aren’t many gold mines that have gone unturned already. If there’s competition, you’re safe and if it’s a saturated market, don’t worry because you can beat them.
- 16:16 Sean: The passion business works if you can do work in an area where you’ve seen other people doing the same kind of work and actually make money. If you’re doing a passion business and don’t see that, I wouldn’t recommend trying to create an industry.
- 16:34 Matt: You could, but you’re probably not going to have the backing to make a profit, or the $1,000 we’re trying to make. I don’t copy what my competition does, I just want to know how they’re advertising, how much they’re charging their clients, how they’re getting their clients, and how they’re portraying their service or product to get that customer to buy it. You don’t want to just put your product on a platform and hope someone buys it, you need to figure out how the customers are responding to those companies. Once you’ve done that, you’re on your way.
- 17:19 Sean: Conner says, “There’s no competition in what I’m doing. I’m pretty sure I’ll be a year ahead of any competitor.” Conner, are you making money at what you’re doing? If there’s no competition, I find it very unlikely that he’s making money at what he’s doing.
- 17:38 Matt: There are different trends that you could be one of the first ones for.
- 17:47 Sean: You could be, but trying to be a cutting edge, first-to-market person is a luxury. It’s risky and it’s playing the lottery. Right now, we’re not recommending going out and gambling because you might make $1,000. That’s true, you might, but let’s do a sure thing.
Don’t go play the lottery, build something sustainable.
- 18:18 Sean: Conner says, “Not a lot right now, but I have an audience.” Substitute your own thing here, but when I was doing hand lettering, what wouldn’t make me money is sitting around and drawing—not thinking about how it was going to make money. You have to think about what people want. What are other people doing that’s similar to me and making money? An example would be if I had become a t-shirt designer. I could find people who want to sell t-shirts with hand lettering on them and I could do commission work for them. Maybe I could sell my own t-shirts.
- 19:14 That’s another way to make money, but the margins are low. If you want this to be sustainable, you’ve got to do a minimum run of 50 to 100, which is going to cost you $1,000 or $2,000. When you sell those, you can’t do 100% profit margin. The market just won’t sustain it. Maybe you’ve got 40% to 60% profit margin, but then you actually have to sell the shirts in volume. If you’ve got an audience, like Conner, you might do alright. If you’ve got 40,000 YouTube subscribers, you can sell 200 shirts. You can make your money back and that’s the $1,000.
- 19:54 That’s not an easy route to go. You have to have the volume, the upfront capital, and you have to do all the shipping and fulfillment. We’re assuming here that you’re sitting around and not paying yourself—that’s not accounting for the value of your time. I wouldn’t recommend going that route. Something more direct would be doing commission work for clients or doing that work for anyone who wants that kind of skill.
- 20:20 Matt: Whenever I’m starting a new business, I try to figure out how every other company is advertising and divide them into free and paid. Then, I can start figuring out which ways of advertising I can do. That’s how you can figure out how to make money from a similar product to theirs.
Finding a Cashflow Business Idea
- 20:49 Sean: Let’s move on to the cashflow business. How do you find your idea with a cashflow business? We’re focusing on business here. We know you want to make that extra $1,000, but you have to think like a business. You have the choice: you can go $1,000 deep and quit or you can keep going. Either way, the first steps are identical to making a business.
- 21:14 Matt: Even if it’s just a temporary thing.
- 21:17 Sean: You see the neighbor walking their dog and they’re on a phone or iPad. Maybe they’re busy and that’s an opportunity. Ask if you can walk their dog every so often for a certain amount of money. Open your second set of eyelids and look for problems in the world. Even that is the start of a business. The advice we would give to someone starting a dog walking business is the same advice to make that $1,000.
- 21:52 Matt: When I was a kid living at my parent’s house, I had a lawn mowing route during the summer and when I went back to school, I sold that route to one of the neighbors. I made money that summer and then I sold the business to someone else and made a big chunk of cash. It might be short-term, but you’re still playing in the business world.
- 22:33 Sean: If you make $1,000, you do have to report it to the government. The minimum is $600 now I think. You’re a business according to the government if you make $1,000. Start thinking of it that way and that’s how you’re going to get the money.
- 23:16 Matt: If you came to me asking for cashflow ideas, I wouldn’t give you a list because I would be doing you a disservice. If you’re picking a cashflow business, you have to think of what the market wants, not what you want. If you want to do something you want to do, that’s a passion business.
- 23:42 Sean: There’s different routes. You can always pursue what you’re passionate about and then hopefully someday find a way to make money—it’s not guaranteed—or you can pursue the cashflow business where you start with the money. It’s a possibility you could get so good at that thing that you didn’t enjoy in the beginning, the fact that you’re good and it makes money brings out the passion in you.
- 24:11 Matt: You can be passionate about your cashflow business. You might ask, “Why do you I have to go find something that the market demands?” Sean talked recently about the house-on-fire problems. I’m telling everyone now that they need to have a house-on-fire business. If you’re looking at what kind of cashflow business you can start, think of a house-on-fire business.
- 25:12 Sean: Let me clarify what a house-on-fire problem is. If your house is on fire, are you just going to sit around and finish the latest episode of Game of Thrones? No! You have to fix that problem. You’re going to hire someone to fix that problem for you.
The closer you get to house-on-fire problems, the easier it will be to make money.
- 25:41 When you’re further away from a house-on-fire problem, they could take it or leave it. You’re fighting an uphill battle to make money in a cashflow business. An example of an online house-on-fire problem would be if my server crashed and my host said they don’t do data recovery.
- 26:19 Cory: I’m a filmmaker, so let’s say I lost all my footage.
- 26:22 Matt: You would build something that would solve that problem. That’s what a house-on-fire problem means. An example of a physical house-on-fire problem would be like one of those companies that does fire and water restoration. If someone’s sink explodes with water everywhere, they’re not just going to keep watching their tv show, they’re going to Google “24-hour water explosion help.”
- 27:34 Sean: Don’t get stuck in the metaphors here. What is the thing for you? How close can you get to a house-on-fire problem? That’s going to make it easier. What problems will people actually pay to make go away? What problems are they currently paying to solve? Find those and don’t guess.
- 28:11 Matt: You could like doing your cashflow business, but you also have to relate to your cashflow business. You can’t just 100% go after a business just because it’s doing well and in demand. That would work for a little while, but eventually you’re just going to get burned out. I know a guy who puts in sprinkler systems and he hates it, but he makes millions of dollars. Now he’s finally starting to do other things he likes. You have to be able to relate it and you have to know something about it.
- 28:58 Sean: Conner says, “I have to selfishly disagree with what Matt says. He’s right, but I know I’m in the right for creating a market since I’m in a very small niche and my topic happens to be popular at the moment.” That means a bunch of other people are in the space.
If something is popular you’re not creating the market, you’re capitalizing on it.
- 29:21 You’re probably not the only one who’s working on what you’re working on. That’s a good thing; go after it. If you see something exploding in popularity, that’s an opportunity. Creating a market is coming out with an iPad in 2010—that wasn’t a thing. The tablets out there at that point were crap and Apple created the tablet market.
- 29:42 I’m not saying they invented the tablet. Apple made tablets a thing. They created the market that exists around tables as it does today. Apple is Apple. You’re probably not Apple. If you are Apple, that’s fine and you can be an anomaly. We’re talking about the tried and true method for 99% of other people. You may be able to go create a market, we’re simply not recommending that you go play the lottery.
- 30:12 Matt: I think at a certain point you have the flexibility to go do that and be the pioneer in some industry, but we’re talking to the other 99% of people. This is not for everyone; this is for people who want to make their first $1,000 or an extra $1,000.
Convenience Has a Price on It
- 30:38 Sean: Definitely check out the next two parts in this series on keeping the money coming in and getting customers, but I want to get really practical here. You’ve got to find a business idea. Keep a notepad with you or use the notes app on your phone. Bring a physical notebook if you’re more likely to use that than your phone because you can feel it and remember. Open your second set of eyelids to look at the world trying to find problems. Observe.
- 31:51 What are the problems you see or hear about? Take notes everywhere you go. There are so many opportunities, the reason you don’t see them is because you’re not opening your eyes to them. They are all around. You can make this $1,000 right away. Walk outside of your house and you’ll probably see dirty cars, lawns that aren’t mowed, windows that aren’t washed, dogs that aren’t walked, leaves in driveways, and weeds in flower beds.
- 32:30 Matt: If you’re new to the cashflow business idea, look at everything everywhere you go. Listen to what people have to say. If you walk into a grocery store, a mall, or WalMart, always be listening to what people say about convenience. Convenience has a price on it. We live in a world where everyone wants convenience. When was in Lowe’s the other day, I overheard a frazzled lady talking about wishing she could have her groceries delivered to her because she didn’t have time to go to the store.
- 33:37 My employees were listening to this too and they looked at me and said, “Don’t even think about it! We’re here for lumber.” That’s how you should be thinking. Have a notepad or use your phone to write down notes everywhere you go. Even if you go into a mall and see a shop with a lot of demand, write it down. That doesn’t mean you have to open the next Apple, but if there’s a demand for that, find something that’s going to be a much smaller investment and see if there’s a target market for it.
- 34:28 Sean: People pay for time. We all pay for time. Think about your habits and the Amazon Prime membership you have. We used to wait three to five days for things to ship. Now we have Amazon Prime and it comes in two days and it’s free and now we have Amazon Prime Now, where it comes in two to four hours. You can pay a little more and get it in an hour. Look at Uber! Come pick me up for a nice rate and I want it on an app. I don’t want to have to search for a taxi number. Starbucks is doing delivery now and Chick-Fil-A has an app where you can order ahead of time so you don’t have to wait. More and more we are paying for time—watch the market.
People pay for time.
If you want to make money, find ways you can save people time.
- 35:59 Cory: In the Community chat there was some confusion on the house-on-fire thing, so I said it’s not to be taken as you should start a flood preventing business or compete against actual firefighters. It’s about starting a business in a place where there’s a need and it can be applied to your passion business as well.
- 36:20 You can start a business around something people are already saying they need and come up with a solution they’re wanting or looking for. Do research and meet their needs there. You can also apply this concept to your passion business. People are struggling in your industry and you can help them. Make things that people in your industry are wishing for and wanting. Come up with those solutions for those people.
Look for Problems Around You
- 36:59 Sean: Think of your own industry and people like you. What kind of problems are they experiencing doing similar work and things you’ve solved already that you can help them with? Those are house-on-fire problems. For me, we do live streams and recorded shows. We write epic show notes—you can find every word I’m speaking on this show in the show notes.
- 37:52 This is very time-intensive and we have a lot of processes in place. We streamline a lot of these things. I’ve come up with a lot of systems for creating this. A lot of podcasters would appreciate some kind of process, workflow, or system to follow. How can I create great show notes for my podcasts that can help Search Engine Optimization that’s great for accessibility and future reference?
- 38:31 So many podcasts have this impenetrable audio file so having show notes is a huge convenience. The hidden benefit of show notes that nobody thinks about is the repurposing value. Every idea I’ve ever had has been written down and I can turn it into a course.
- 39:00 I can copy/paste it and expand upon it, then I can shoot and record a course, do a video, or make a followup podcast episode. Imagine if that process was streamlined for you? Imagine if you could do it yourself in under two hours instead of six or seven hours and have it be great? I know how to do that. I could sell that process right there.
- 40:01 Cory: In my industry, as a filmmaker, so many people wonder how they can get a crew together or get people to follow their vision. I have ways to help people save time and not underestimate their project. I’m actually writing some stuff about it now too, but I never thought I could sell it.
- 40:33 Sean: Have you ever run into issues with people you’ve hired or brought onto the team? Have you learned from that and how to prevent it from happening?
- 40:41 Cory: Yes, how to avoid it. That’s valuable.
- 40:49 Matt: We have a customer support person who’s full-time job is to answer any questions that customers have. We have a log with all of the different projects that are going on across the businesses. Employees can put problems in there and I can give solutions, and the customer support person can answer pretty much anything that comes in.
- 42:35 If someone calls and asks, “Why is there a big tarp inside the house?” Customer support can say, “The reason is this. We’re waiting for this thing to dry and we’ll go finish it.” A lot of people in my industry say they lose customers because the customer couldn’t get a hold of them.
- 42:14 Sean: What does it look like for you to solve that problem for them? What would you actually do?
- 42:19 Matt: I could put together a course or video that explains our process—the programs we use, where we find the customer support people, etc. People think they can’t hire a full-time person, but there’s different ways to do this. We use people from agencies from outside the United States so they’re cheaper and allows us to provide 24-hour support since we have people all over the world.
- 42:51 Sean: Let’s come up with one business idea that we can take into part two of this series for finding customers.
- 43:03 Matt: I was telling one of my customers that he needed to start making money on the side and he said he could either do crossfit or messages because those are things he enjoys and he already knows people who would want to do those things. He went with messaging because he already had the message table from when he was a masseuse in college. He went to people’s houses to give the messages because he was all about convenience.
- 43:58 Sean: Stay tuned for part two where we focus on taking this business idea you have and helping you get customers.