Recession And Your Business

During recessions, depressions and economic crises, some of the biggest fortunes have been built. (In fact, if you consider that fact that basically everyone is doing worse than they did a year ago now, and than you look at the world’s 7 richest people, you find that their net worth actually skyrocketed in 2008).

But it’s not only that the rich get richer. Actually, the people with the right business mindset get richer.

And one thing all of them share is that they understood: This situation is temporarily. The crisis is temporarily. Yes, there might be a couple of hard years, but after that, things are gonna get better, people are gonna spend more money again, people are gonna buy houses and invest again. A crisis is just a temporary condition.

Many of the big companies in the world like IBM got big during a recession, because they acted differently from most other companies. Most companies start cutting budgets when a recession looms. They stop marketing, they cut research & development budgets. They save money in every corner. The belt tightened faster.

But those companies that come out of a recession as a winner are those that do exactly the opposite: companies that put their money in RnD, marketing and hiring great people. Because if you think about it: it’s a lot cheaper to advertise during a recession. Publishers are desperate for advertisers and willing to discount.

All the products that are low quality get’s swiped away. Because when everybody has a lot of money to spend, you can get through with delivering mediocre quality. But if money is tight, they really want to experience that they got value for their money, and if they don’t, they’re not gonna come back to you and might even refund the products.

If you’re a small business owner, then there are three things you should do:

a reality check: face the situation as it is. Don’t go into a “think positive and everything is gonna be fine, I can manifest success” mode. If the numbers tell you it’s gonna get ugly, be prepared for it, not surprised when it strikes. Look at things that you don’t feel comfortably looking at. Face reality brutally. Don’t put a soft rosy cocoon around yourself.

Diversify
Create multiple streams of income and don’t just rely on one product, one advertisement, on one customer only. Because if that one leg breaks, there’s nothing left for you. So if you sell an ebook where you are selling to stamp collectors, then you want to get out a second ebook that you sell to coin collectors and another one to watch collectors and so on. Diversify.

Downtime
Use your downtime, make the best use of it. This is when you don’t have work, when you don’t have things to do because you don’t have clients, no business to take care of. Use this time to educate yourself. Use this time to prepare yourself when things get going again. Remember: the crisis will pass, it’s just a temporarily state. (That doesn’t mean that everything will be fine and rosy, but if you prepare yourself for the moment people start spending money again, you can get back into business very fast). Example: research a new niche. Learn about marketing. Learn about how to find the best freelancers to do technical work for you. Use downtime to aquire skills of value to you and your business. Because this time is cheaper than if you are busy and successful already, because when you are busy, taking time to study will be “more expensive” because you lose revenue if you don’t take care of business. But if you don’t have something to do anyway, then your time is “cheap”, and you should use cheap time to improve yourself.

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See, many people who are worth $50 per per hour are actually spending lots of time every week on stuff that they could pay somebody $3 per hour for.

I recently talked with a friend who wanted me to help him upload pictures to a Joomla site, and my response was: Dude, I love to help you, and the best way I can think of to help you is by telling you: pay somebody to do it for you!

He was the third day into uploading pictures on that freaking Joomla site, this was the state he was in when he came to me, his eyes were red, his fingers almost swollen from all the mouseclicking (ok, I’m going a little over the top, but you get my point)… And he told me: “No, I can use the money for better stuff.” Now, this friend is not stupid, but something about that was not so smart… because I know when he worked on his other business (selling financial services) he could make a couple of Benjamins a day just like that. And here he was, telling me: “No, I can use the money for better stuff. I’d much rather spend a week doing stuff that I could outsource for $3/hour than making a couple of Benjamins in a day.” Funny thing is, even after I pointed it out, he did not agree with me. Anyway, I told him I’m gonna outsource it for him, paying out of my own pocket – and that’s when he all of the sudden decided that outsourcing wasn’t so bad and he actually did it himself.

Funny, right?

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Ok…

My eyes are GLUED to “Integration Marketing”, but this one’s so good that I wanted to share it:

Why do most businesses fail? Because they feel compelled to keep on trying different approaches instead of simply scaling what already works.

(Source: “Integration Marketing”, by Mark Joyner, ebook Version, p.29)

If you don’t see how powerful this simple thing is, you’re probably not running a business.

(Anyway, it only really makes sense when you read it in context. So head over and get your free copy.)

PS: I’m not even using my affiliate link. No time to fumble around with that now, just wanna get back to reading, this is how good this stuff is.

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I just read Fooled by Randomness by Nassim Nicholas Taleb.

He talks about how he smiles when he see’s traders watching their share prices in real-time on their smartphones.

Because he knows: you’re brain can’t process the noise that comes with keeping an eye on real-time data.

Yes, the world is happening in real-time-data, but your brain can’t cope with real-time data.

You are much better of when you reflect on “bigger chunks” of information. If you have too high of an information intake frequency, you’ll just burn out.

That’s why it’s a lot better to read the New Yorker on Mondays than the WSJ every day. (to put it in his words)

Now think about the world of Internet Marketing: Many internet marketers try to keep up with SO MUCH STUFF!

Every week there is some “big launch”, some new breakthrough tactic, some once-in-a-lifetime opportunity, and we’re spinning our heads to keep up with it.

We have an enormously high information intake frequency.

This fucks us up.

Because the chances of success on a long-term basis are much higher on certain investments than on a shortterm basis (meaning: you might invest in certain stuff and win 99% over a one-year period, but by looking at it in one-second intervalls you experience so many more losses  that the win-loss frequency is almost 50/50, but the impact of a loss has a much higher emotional cost than the impact of a win).

So take a step back and get some altitude as Eben Pagan calls it.

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One of my favourite quotes comes from one of the greatest physicists of history:

“The most powerful force in the universe is compound interest”. – Albert Einstein

Compound interest has made many people and institutions very rich. But it has also kept lots of people in poverty. And these were the people who underestimated the power of compound interest. They borrowed money that they then had to pay back – with compound interest.

You need a strategic and determined mindset to get rich. Warren Buffet, the worlds greatest investor, is know to have said that by the age of thirty he will be a millionaire or “jump off the tallest building in Omaha.” I guess he meant what he said, because when he was thirty, he already was a millionaire.

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This is a great article about John Reese’s entrepreneurial struggle. If you don’t know who John Reese is – he is one of the giants of Internet Marketing, making millions and millions of dollars!

Though this article is a bit older already (written in 2003) and his “Marketing Secrets” course isn’t available anymore, it is well worth just reading this article, as you will learn some important lessons from it. If you want more success in your life, read this and apply the knowledge contained.

And here’s John Reese’s Article “Climbing Mount Profit (Starting From The Top)”

I have been an entrepreneur for most of my life. I started my journey as an entrepreneur at age 11. Ironically, it was running a BBS (bulletin board system) with a computer, a 300 baud modem, and a phone line in 1981.

(BBSs essentially became the Internet that we know today.)

It would take me nearly 15 long years of being an entrepreneur before I would really make much money. And by that I mean more than $6,500 in a single YEAR which didn’t happen until almost 15 years later.

I have made every mistake in the book and invented several new ones when it comes to being an entrepreneur.

I was in nearly $100,000 of debt by age 22 — mainly from trying every business possible.

I practically ruined my health by age 25 and it almost killed me.

(I ended up in the emergency room with a body that was so overworked and stressed that it was trying to shutdown.)

BUT… I eventually turned things around. Through hard work, faith, and perseverance. But I won’t kid you, it wasn’t easy.

I did finally start to make a good income. I was finally able to get out of that mountain of debt. And then the best thing of all happened — I was able to learn how to GROW my business.

I was eventually able to make more money in a single month than the entire amount of debt that I had racked up by age 22.

But I was only able to start having success when I learned to grasp a powerful concept that I am about to teach you. I honestly believe that this one concept can change your life, because it changed mine.

No matter what stage you are at with your business, whether you are just getting started and dream of leaving your real job, or whether you are already making good money online, I have an absolutely critical question to ask you…

WHAT THE HECK DO YOU WANT?

Reread that question. Then reread it again. Take your time.

I ask you, “What the heck do you want?”

Since we’re talking primarily about business, I am relating this question to HOW MUCH MONEY DO YOU WANT?

Seriously, how much?

When people used to ask me this question, I used to have a simple answer… “Millions!”

And even, though, that honestly WAS what I wanted, that wasn’t the “right” answer.

The right answer is something SPECIFIC. It doesn’t matter how big the amount is, it matters how specific the figure is. In other words, $5,000,000 if that’s what I really wanted.

But that first “big” figure should be more of your “ultimate dream” and not what you will settle for to be happy and live the lifestyle you’d be perfectly happy with. Take it from me, when I ended up making a lot of money, I quickly realized I didn’t need anywhere close to a large amount to basically do and buy anything I wanted.

So you need to also answer this question…

HOW MUCH WILL MAKE YOU HAPPY?

And don’t get me wrong, I’m not trying to tell you to abandon your dreams of some huge amount of money. You can still grow your business and work towards that, and it certainly can still happen. That’s not what this is about. This is about something much more powerful.

So you need to decide on a figure that will make you happy. Such as an annual income that will allow you to live the life you want without having a real job if you still have a job. Or that next level of lifestyle if you already work for yourself.

Whatever it is you really want, you need to be SPECIFIC about that dollar amount. For me, when I was in debt up to my nostrils, I eventually set that want at $40,000/year for income. I figured if I could just earn $40,000/year I could live a modest life, not be overly depressed about money, and “eventually” pay off my debt.

Setting that goal for me changed my life. Within less than 90 days of setting that realistic and achievable goal, I accomplished it.

Now how on earth did that happen when I spent YEARS trying to make money and was going literally nowhere?

It’s simple.

I learned to climb what I call “Mount Profit” starting from the top.

I wrote down $40,000. I then worked the numbers BACKWARDS to figure out how much I would have to earn per month and then per day in order to achieve that figure. Then I figured out how much my product would have to cost and how many people I would have to sell it to. (Or whatever my business model was.)

It was EASY. It was very simple MATH. There was no more guesswork. There were no more mysteries. I knew exactly what I had to do to get what I WANTED. So I got to work and got it. And it happened very quickly because I had FOCUS on what I had to do.

I believe the #1 problem that entrepreneurs have is that they have no FOCUS on what they really WANT. They simply think, “I want to make a lot of money.”

Well, I’ve got news for you, if you think that way, you’re DOOMED and you might not even realize it yet. NO ONE just goes out and makes some mysterious amount of money from their efforts.

And no one makes a million without making one dollar first. Write that down.

In order to accomplish whatever amount it is that you want, you must have a specific dollar figure in mind. You must then work the “math” and process backwards to create a plan to accomplish that goal.

You must work that process back to the smallest incremental action step of your path to achieve what you want.

Have you ever heard…

“The journey of a thousand miles must begin with a single step.”

Well, business is the same way. The journey to a million dollars, or even $100,000/year, must begin with a single dollar.

In order to accomplish that single dollar, you must put a ‘system’ in place to earn that dollar. But if I told you all you had to do is earn one dollar to be incredibly rich, you’d quickly and easily figure out how to do it.

Do you realize that if you can figure out how to make $1 of profit that you are 90% of the way to making $100,000/year and beyond? All you have to do is REPEAT the process of what it took to make that $1 of profit. It’s called scalability.

Did you know that Mount Everest is exactly 29,035 feet high?

Well, you might not know that, but I can guarantee you that anyone that attempts to climb Mount Everest knows that. And they know that before they take one tiny step up the mountain.

That 29,035 feet must be the dollar amount that you want to earn. You must have a very SPECIFIC amount in mind for the next financial goal you wish to accomplish. And set that goal as a realistic figure so it is easily reached. You can always revise your goals as you go. That’s why I stated earlier that the ultimate lifestyle you want is a lot cheaper than you realize.

So stop falling into the trap that you are just “working as hard as you can” and however much money you make will be the result.

I am trying to tell you… THAT’S THE KISS OF DEATH.

That’s the best way to keep from making money, if any.

You need to learn to THINK of everything you want backwards. Reverse engineer what you want. Visualize what you want and “see” what the path is to get back to where you are now.

Then start walking down the path towards what you want. And do it one small step at a time. Because the only way to get from here to there is many small steps. There is no other way, so why waste your time doing anything else.

With Internet Marketing, it at all starts with one Web Site visitor. Then one opt-in subscriber. Then finally one order. Not 100 orders, not 10,000 subscribers, not 1,000,000 visitors. ONE of each.

So stop making all of this HARDER than it really is. Start getting ONE MORE of each of everything you want and then SCALE that to achieve your SPECIFIC goals.

You CAN climb your “Mount Profit” no matter how high it is for you. But remember to plan your climb by knowing EXACTLY how high that mountain is before you start your climb. You stand a much better chance of reaching the top if you aren’t just climbing in the dark.

—————————————–
John Reese is an Internet Marketing pioneer that has been actively marketing online since 1990. John has sold millions of dollars worth of products and services online and his network of Web Sites have received over 1.4 BILLION Web Site visitors since their inception. You can learn more about John, his home study courses, and subscribe to his free ezine by visiting:

http://www.marketingsecrets.com

(c)2003 MarketingSecrets.com. All rights reserved.

Article Source: http://EzineArticles.com/?expert=John_Reese

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Rich people understand profitability. That’s why their rich. They know how to invest some of their resources (time, energy, money, real estate or other assets) in a way that gives them the biggest possible return.

Warren Buffet who is arguably the most savvy investor alive makes his decision on what stocks to invest in mainly after evaluating opportunity costs. Opportunity costs are the values of what is foregone in order to have something else.

Yes, you may put your money into a portofolio that gives a 4.7% return. However, if there’s another portfolio that’s just as save with a 5.1% return, you’re actually not making 4.7% but loosing 0.4%. Now this is enormously oversimplified, but you get the picture.

Another more common case of the power of profitability is simple things like doing the dishes, washing laundy, buying groceries. Do you do all these things yourself? Well, if you get paid 50$ per hour then every time you buy groceries you’re loosing $40 – cause you could just pay somebody $10/hour for buying your groceries and spend that time earning $50. This is common sense, and you should apply it to your life.

Are you getting the most monetary value out of the things you do for any OTHER reason than pleasure? Sometimes when I introduce people to this concept they react negative. They say I only care about money, I’m obsessed about it. And I always tell them that’s not true: I want to spend as much time of my life doing purely pleasurable things, spending time with the people I love and care about. That’s why I allocate my time organize my life in a way that allows me to do just that. If I’d be obsessed about money, I’d find somebody whom I’d pay only $5 per hour to do the groceries and spend the “free time” I now share with friends and family to make more money. And in fact, the people who complain about me being obsessed by money are often people who are stressed out and feel they don’t get what they deserve, that they’re being paid unfair. And I think that’s just a flaw in their thinking: they’re paying themselves unfair! I know to some people with a strong work ethic it seems high-society-like to have someone buy your groceries, but I’d rather put an hour of work in (which I enjoy just about as much as buying groceries) and get $40 for it that I later can use for pleasure-activies.

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