MBA2540 Q&A Wednesday: How Do I Make My First $1 in Business? - The $100 MBA Show

Summary

The $100 MBA Show: MBA2540 Q&A Wednesday — How Do I Make My First $1 in Business?

Release Date: October 30, 2024
Host: Omar Zenhom

Introduction

In Episode MBA2540 of The $100 MBA Show, host Omar Zenhom addresses a fundamental question posed by a listener named Ken: "How do I make my first dollar in my business?" Omar draws upon his extensive 20+ years of entrepreneurial experience to provide actionable strategies for aspiring entrepreneurs aiming to achieve their initial sale and, consequently, pave the way towards financial independence.

The Significance of the First Dollar

Omar opens the discussion by reminiscing about his own experience of making his first dollar outside of a paycheck:

Omar Zenhom [00:02]: "I remember when I made that first sale, it was like this epiphany. Wow, I can make money outside of a paycheck. I can become financially free outside of my job."

He emphasizes the emotional and psychological impact of this milestone, highlighting it as a symbol of autonomy and freedom.

Understanding Business Failure Rates

Omar provides context by citing statistics on small business failures:

Omar Zenhom [01:10]: "More than 20% of small businesses fail in the first year. Many businesses just don't make it because they never get off the ground. They never get that first sale."

This underscores the critical importance of securing that initial sale to ensure business survival and growth.

Step 1: Focus on Selling, Not Building

Omar advises entrepreneurs to prioritize sales over product development:

Omar Zenhom [02:15]: "Start selling before you build because you want to make sure you create something valuable. The only way to do that is to actually transact to talk to your customers."

He contrasts the entrepreneurial mindset with that of artists, emphasizing profitability and customer needs over perfection.

Key Takeaways:

Prioritize sales conversations to understand customer willingness to pay.
Iterate products based on real customer feedback and transactions.

Real-World Example: Avoiding the "Perfect Product" Trap

Omar shares a personal anecdote to illustrate the pitfalls of overemphasizing product perfection:

Omar Zenhom [04:50]: "I was at a conference... an attendee shared a business idea for a scheduling app for cleaners. He had been thinking about it for over a year but hadn't built it. I advised him to start offering the service manually using tools like Google Calendar to validate the concept and secure paying customers before developing the app."

Lesson:

Utilize minimal viable solutions to address customer problems and validate business ideas before investing in full-scale product development.

Step 2: Validate Your Idea by Getting Paid

Omar emphasizes the importance of financial validation:

Omar Zenhom [06:30]: "Get people to buy what you're trying to sell them, even if it's not created yet. Money talks."

He references his own experience with Webinar Ninja, where he secured 250 pre-sales before launching the product, demonstrating the viability of pre-selling.

Key Strategies:

Use platforms like Kickstarter to gather pre-orders.
Secure deposits or payments to demonstrate customer interest and fund product development.

Step 3: Leverage Your Existing Skills

Omar advises entrepreneurs to capitalize on their current expertise:

Omar Zenhom [08:15]: "Leverage the skills you already have. What expertise or experience do you possess that others find valuable?"

He shares his journey of offering website-building services based on his own skills, leading to his first sale.

Action Steps:

List your top three skills.
Brainstorm how to offer these skills as services or products.
Reach out to your network to market these offerings.

Step 4: Offer a Low-Risk Proposition

To lower barriers for initial customers, Omar suggests creating low-cost offers:

Omar Zenhom [10:10]: "Offer a low-cost service, a one-time digital product, or a short-term coaching session. Lower the risk for your customers to encourage them to say yes."

He recounts how he successfully sold online courses by initially offering them at a lower price point, making it easier for customers to commit.

Recommended Actions:

Develop a low-cost offer that provides immediate value, such as an ebook, short course, or consultation.
Promote these offers through social media, email lists, or direct outreach.

Step 5: Take Immediate Action and Avoid Overthinking

Omar cautions against overplanning and urges immediate execution:

Omar Zenhom [14:00]: "Don't overthink it. Take action now. Execution beats planning every single time."

He likens business action to driving a car—skills are honed through practice, not just theory.

Practical Steps:

Set a deadline to make your first sale.
Break down tasks needed to achieve this goal.
Hold yourself accountable by sharing your commitment with others.

Omar emphasizes that business is a numbers game; the more interactions you have, the higher the chances of making sales.

Embracing Imperfection and Continuous Improvement

Omar concludes by reinforcing the importance of consistent action and iterative improvement:

Omar Zenhom [17:45]: "Execution beats planning every single time. Get comfortable with taking imperfect action, leaning into it, and just iterating as you go."

He draws a parallel to basketball, where continuous play and adjustment lead to mastery, highlighting that business success similarly requires persistent effort and adaptability.

Conclusion

In this episode, Omar Zenhom provides a clear, actionable roadmap for entrepreneurs striving to make their first dollar in business. By focusing on sales, validating ideas through transactions, leveraging existing skills, offering low-risk propositions, and taking immediate action, listeners are equipped with the tools necessary to overcome common entrepreneurial hurdles and set a strong foundation for future success.

Notable Quotes:

Omar Zenhom [00:05]: "Listen, you're an entrepreneur, you're in business here, okay? This is not art where you are trying to create the perfect version of that art."
Omar Zenhom [02:15]: "Start selling before you build because you wanna make sure you create something valuable."
Omar Zenhom [06:30]: "Get people to buy what you're trying to sell them, even if it's not created yet. Money talks."
Omar Zenhom [10:10]: "Offer a low-cost service, a one-time digital product, or a short-term coaching session."
Omar Zenhom [14:00]: "Don't overthink it. Take action now. Execution beats planning every single time."
Omar Zenhom [17:45]: "Execution beats planning every single time. Get comfortable with taking imperfect action."

For more insights and actionable business lessons, subscribe to The $100 MBA Show on 100mba.net and follow their YouTube channel for regular content updates.

Transcript

A (0:01)

Race the rudders. Raise the sails. Race the sails.

B (0:05)

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A (0:08)

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B (0:51)

Yay. Free your team from expense reports today. Switch your business to ramp.com foreign. Hey, everybody. Welcome back to the $100 MBA Show. I'm your host, Omar Zenholm, and welcome to another Q and A Wednesday episode where we answer a question from one of you, one of our listeners, one of our community members, one of our viewers on YouTube. Today's question is from Ken. And Ken asks, how do I make my first dollar, my first sale in my business? Listen, I remember the first time I made my first dollar outside of my paycheck. I was side hustling, building businesses on the side. I remember when I made that first sale, it was like this epiphany. Wow, I can make money outside of a paycheck. I can become financially free outside of my job. And it's a great moment. And I want everybody who's on this podcast listening on YouTube, wherever you're consuming this show right now, I want you to experience that because it's an incredible feeling because it's a feeling of autonomy, of freedom. And I'm gonna show you how to do it in today's lesson. But before that, did you know that more than 20% of small businesses fail in the first year? That's According to the U.S. bureau of Labor Statistics. Many businesses just don't make it. And it's because they never get off the ground. They never get that first sale. They never actually get any traction. And today we're gonna change that. We're gonna make sure that you get that first sale as soon as possible, make that first dollar, because it's the first step that are gonna lead you to financial freedom through your business. So let's start with the first step. The first step is focusing on selling and not building. So many entrepreneurs, I know the first thing they think about is creating an app, creating a product, creating a service, getting all the details in order, and then start selling it. No, you need to start selling before you build because you Wanna make sure you create something valuable. And the only way to do that is to actually transact to talk to your customers. And you actually have to have that sales conversation. So understand what they're willing to pay for. Here's the truth. You're an entrepreneur, you're in business here, okay? This is not art where you are trying to create the perfect version of that art, of that painting, of whatever. This is business where it's all about making a profit, making money, okay? And in order for you to make money, you need to be able to understand what people are willing to pay for. So you need to think about, how can I make my first sale and now how to make my perfect product. Because the perfect product will come, right? It will eventually it get better and better and better. But that only happens when you iterate. And that iteration involves a sales conversation, a sales transaction where the customer buys something from you, pays money for it, has skin in the game, and then gives you feedback and tells you, I want this to be better, I want this to change. And you make those improvements and you sell more. You get the point. So your first step should be, how do I sell this thing before? How do I perfect this product? I can't tell you how many times I've seen entrepreneurs fall into this trap of trying to perfect their product before selling. I'll give you a prime example. I was at an event, I was at a conference I was speaking at, and I was at one of the mixers at the event. We're sitting, we're having drinks, I'm enjoying the company around me of all the great attendees. And I'm having a conversation with one of the attendees and he shares with me of this business idea he has of this app he wants to build for cleaners. It's a scheduling app so cleaners can show their availability and their clients can book time on this scheduling app for the cleaners. And it sounds like a pretty good idea. And I asked him how long you've been working on it? And he said, I've been thinking about it for over a year, but I haven't really done much with it. And my advice to him immediately was like, why don't you just sell it to your cleaner right now, the cleaner that you have, that you work with, that you're a client of. He's like, well, I have to create this app. It's gotta be, you know, good looking, it's gotta have good ui. I said, well, not really. You don't need to have the app. You actually just need to solve the problem that the cleaner has, which is a way for people to book their time. So what's the lowest form, the minimal viable version of that product or service? Well, it's just him being, being basically a secretary, you know, being the middle person between the clients and the cleaner and just literally doing this with Google Calendar, which is free, where you could just tell the cleaner, hey, if you get a client that's interested, just send them my email or send them my WhatsApp and I will book them. I will make sure that I show your availability on your calendar. Solve the problem first. Offer as a service, make sure they're paying for it, okay? Make sure that the actual cleaner is paying for it in this example and then create the app once you know, what are the things you're going to need to build around this service, around this problem? Step two, I hinted, I mentioned it briefly and it's validating your idea by getting paid, okay? It's not enough for you just to say, hey, what do you think of my product or service? Would you buy it? Get them to buy it. Money talks, okay? When people buy things, they are saying that I am willing to part with my hard earned dollar for the opportunity to have a problem solved. Think about anything you bought in the past year, okay? It could be a vacation, it could be a car, it could be a meal, it could be an item of clothing, it could be anything. Think about it. Why did you buy it? Because you thought that the money that you're going to part way with was worth whatever you're going to buy, okay? It was going to solve a pain or an issue or it was going to give you pleasure in some way. That's the bottom line, okay? And that's how you need to think about your first dollar. How do I make a first dollar? Well, I first get people to buy what I'm trying to sell them, okay? Even if it's not created yet. I did this with webinar ninja. 10 years ago I started a software called Webinar Ninja. We recently exited that business and sold the software to Proprofs. And when I started that business, I actually pre sold the software I wanted to validate. People are willing to pay for the solution. And I got 250 sales of that software before I even offered it to the customer. I used that money to actually create a viable product for the customers. Four months later they got it. So this is totally doable. And people do this all the time. By the way, people pre order cars, pre order watches, you know, Rolex. You can't just walk into a Rolex shop and buy Rolex, okay? You have to put your name down and they have to call you on a waiting list. And it's. It's a whole thing, right? And actually a lot of people feel a sense of value by waiting for whatever they bought. There's a whole site based on this called Kickstarter. All right? People have Kickstarter campaigns, people contribute to the Kickstarter and then months later they get the product. So even if you don't have anything created yet, pre sell it. Make sure you grab some cash from somebody, get them to PayPal you, whatever it takes, get them to do a bank transfer, okay? In order for them to say, hey, yes, I want to buy this product or service when it's ready, giving me a deposit on whatever you offer. Step three is to leverage the skills you already have. Now you might be thinking, might be saying to yourself, now, Omar, this sounds great, I love this idea of pre selling. But what do I sell, right? How do I make my first dollar? Well, the easiest way is to leverage the skills you already have. What expertise, what experience did you already have? Let's say, for example, you know how to play the piano. And I'm not saying that you're like a concert musician. I'm not saying that you are professional keyboard player for some of the biggest bands. No, you just know how to play, you know, some common song. Your family taught you how to play the piano when you were young. You know, you know how to play the piano. You know the notes, you know the keys, you know how to do it. Okay? This is a skill most people don't have. Most people don't know how to play the piano. And you are actually just a few steps ahead of people. You could teach people how to play the piano, how to get started. You don't need to be a master at something. You just need to be better than somebody else at something in order for you to teach them how to get to your level. One of the first businesses I started was helping people build their websites. I already had the skillset cause I built my own websites. And I started pretty early on, like back in 2002 when I started creating websites for myself and I started offering this service to my friends and family because I knew my way around creating, you know, the back end, the front end of a website. And I just charged a flat fee to create a website of X amount of pages. And that's how I made my first dollar. I just leveraged a skill That I have. I wasn't a highly skilled developer, right? I could barely create simple websites using WordPress. I'm not even building it from scratch. I'm using a framework. But that was good enough for people that needed websites. Okay? They just need something to put their portfolio on or to sell their products or services with an e commerce store. And I was able to offer it to them. They don't really care how I offered it to them, but I was able to offer to them and they were happy with the product and they paid me for it. So leverage the skills, the experiences you already have. It's the easiest way for you to be able to make your first dollar as an entrepreneur. So here's an action step to implement what I just said. Make a list of your top three skills. This could just literally be something you scribble in a notebook right now. What are three things? Maybe people compliment you on something you've been working on for some time. You want to brainstorm these ideas and offer those skills as a service or product. Okay, Preferably a service, because it's very easy for you to offer and implement. No wait time. Right. Reach out to the people in your network, your friends, your family, the people that you know on social media. Offer them a solution based on those skills. Okay? You can literally just make a post on whatever platform you like, okay. Whether it's, you know, X or Instagram or Facebook or whatever, and say, hey, I'm now offering this offer. I'm offering this solution, this service. If you're interested. DM me, I'm a big believer in momentum. You want to get the ball rolling as easily as possible and get that first sale. And one of the ways to do that is step four. Offer a low risk offer. You want to lower the risk as much as possible for your potential customer, client, especially when you're getting started because you don't have a lot of experience or testimonials yet.