The Toilet Paper Entrepreneur PDF

Entrepreneur
The tell-it-like-it-is guide to cleaning up in business,

even if you are at the end of your roll.
^P\
U.S. $24.95 Canada $29.95
"Never started a company before? Struggling with
little or no cash? Have no experience, no baseline
to judge your progress against? Thank God! You've
got a shot at making this work."
So says Mike Michalowicz, author of The Toilet Paper
Entrepreneur, a business book that is so uniquely
useful, so rawand entertaining, it reads like the brainchild
of Steve Jobs and Chris Rock.
The founder of three multimillion-dollar companies
including Obsidian Launch, a company that partners
" entrepreneurs to grow their concepts
into industry leaders, Mike Michalowicz knows what
it really takes to spin your great idea into pure gold.
Whether you're just starting out or have been at
this for years, Mike's "get real" approach to business
is a much-needed swift kick in the pants. In this book,
you'll discover how to:
Increase revenue byas much as 600% usingthe visual
Daily Metrics system.
Identify, build, and exploit your super-strengths-and
attract key colleagues to do the rest-without giving
up equity.
Use the Formula of Five to focus narrowly enough
to dominate a niche but widely enough to generate
substantial revenue.
Master the art of tacking, a fool-proof strategy for
goal manifestation.
Dramatically grow your profits using a method
so simple and effective, you'll wonder why more
businesses aren't doing it.. .yet.
Areyou readyto finally "get offthe pot," wipeawayyour
excuses, and clean up in business? Are you readyto join
the few, the proud, the Toilet Paper Entrepreneurs?
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The Toilet Paper
Entrepreneur
The Toilet Paper
Entrepreneur
The tell-it-like-it-is guide to cleaning up in business,
even ifyou are at the end ofyour roll.
Mike Michalowicz
LAUNCH
OBSIDIAN LAUNCH
Copyright 2008 by Michael J Michalowicz.
All rights reserved.
Published by Obsidian Launch, LLC; Boonton, NewJersey.
No part of this publication may be reproduced, stored in a retrieval system, or
transmitted in any form or by any means, electronic, mechanical, photocopying,
recording, scanning, or otherwise, except as permitted under Section 107 or 108
of the 1976 United States Copyright Act, without the prior written permission of
the publisher, Obsidian Launch. Requests to publisher for permission should be
addressed to the Permissions Department, Obsidian Launch, 239Myrtle Avenue,
Boonton, NJ 07005, or by email at permissions@obsidianlaunch.com.
Limit of Liability/Disclaimer of Warranty: This book contains the opinions and
ideas of itsauthor. It issold withthe understanding thatneither theauthor northe
publisher, through the publication of this book, is engaged in rendering financial,
legal, consulting, investment or other professional advice or services. If the reader
requires such advice orservices, acompetent professional should beconsulted. The
strategies outlined inthis bookmaynot besuitable for every individual, and are not
guaranteed or warranted to produce any particular results. No warranty is made
with respect to the accuracy or completeness of the information contained herein.
Both the author and the publisher specifically disclaim any responsibility for any
liability, loss, or risk, personal or otherwise, which is incurred as a consequence,
directly orindirectly, of theuse and application of any of thecontents of this book.
For information ondiscounts for bulk purchases, please contact Obsidian Launch
at books@obsidianlaunch.com.
Library of Congress Cataloging-in-Publication Data is available.
ISBN-13: 978-0-9818082-0-8
ISBN-10: 0-9818082-0-4
CoverDesign by: Kristina Arellano
BookDesign by:JustYourType.biz
Manufactured in the United States of America
10 987654321
DEDICATION
Krista, Tyler, Adayla, &JakeMichalowicz -
Thanks for supporting me unequivocally and
letting me sleepinafter theall-nighters on this project.
Success is never the result of one-person endeavors.
Never. It takes a team. Thank you team.
Thankyoufrom the bottomof myheart.
Patty Zanelli, Anjanette Harper, Mini Sankara, Matt Maher,
ScottBradley, Stephanie Cavataro, Howard Hirsch, Lauren
Lombardo, Sean Moriarty, Lisa Mason, Mike Maddock, Zach
Smith, andeveryone who helped inmaking this bookgreat
thank youfor taking the stones andmaking a sculpture.
It will never cease to amaze me how much a small, focused,
relentless, passionate group of people can accomplish.
Everyone Weredonefor now,
until the masses beg for another book!
(If you areone of the masses,
please feel free to begfor another book.)
CONTENTS
FOREWORD xi
INTRODUCTION xiii
MY THREE-SHEET STORY xix
PART ONE: BELIEFS 1
CHAPTER 1 - NATURE'S CALLING 4
Answer the Urge 4
Obliterate All the Excuses, Excepttor One 9
One Day Still Hasn't Come 14
Nature vs. Nurture 15
CHAPTER 2 - A LITTLE PEACE ANDQUIET (INYOUR MIND) 17
How To Blow Your Last $20 on Booze and Still Make Millions 19
The Wall of Limiting Beliefs 21
Envy This 24
The Channel of Enabling Beliefs 25
Getting Past Day One 30
Mission I'm Possible 33
CHAPTER 3 - THE FIRE IN YOUR BELLY 36
What To Do? What To Do? 37
What Do You Stand For? 39
Immutable Laws (A Filterfor Everything) 41
The Why Guy Finds His Why 47
PART TWO: THE TPE FOCUS 49
CHAPTER 4 - GETTING DOWN TO BUSINESS 51
Focus Small To Get Big 52
HowTo Drive Dangerously Fast, Safely 54
The Focus Five 56
You Gotta Do Better 59
Your Area of Innovation - Quality, Price or, Convenience 61
Who's Your Ideal Customer? 64
You Are Really, Really Good At Very, Very Little 67
CHAPTER 5 - IT'S ALL ABOUT REGULARITY 71
AJunk Man's $1B Prosperity Plan 72
Create a Prosperity Plan 74
Always BeTacking 81
QuarterlyTacking 83
Every Day, Review Your Metrics 88
Gold Bullion Everywhere 92
It's Just Like Driving to Albuquerque 93
PART THREE: ACTION ...,.97
CHAPTER 6 - ARE YOU READY NOW? 99
"No" Your Way to Success 100
The Top Nine List 102
The Dark Side 104
Haven't Been There, Haven't Done That 105
What You Don't Know Can't Pervert You 107
Burn the Boats 109
CHAPTER 7 - SHIT AND GET OFF THE POT 111
The Secret Behind The Secret 112
Just In Case You Haven't Started Yet, Here's How 113
Action, Lights, Camera 116
Happily Walk Out of a Once-in-a-Lifetime Meeting 117
Act As If, But Only on the Inside 119
The16,107 Steps You (Don't) Needto Take 122
Know When to SayWhen 124
Accountability 125
AGood Night's Rest inthe Hotel Parking Lot 126
PART FOUR: MONEY fi EQUITY . 129
CHAPTER 8 - CLEAN UP ON THREE SHEETS 131
Plenty of Somethin' from a Whole Lot of Nothin' 132
Anythingfor Nothing 133
Sometimes You Need To Borrow 135
Bankers Are Anchors 135
Trade a Paperclip for a House 137
Funds from the Folks 139
Vendors Have Your Money. Borrow It Back! (Plus OtherOptions)... 140
Don't Borrow To Cover Your Mistakes 143
Don't Give Personal Guarantees 144
CHAPTER9 - A GOOD, SOLIDFLOW 146
Applying the PFA Process to Your Business 148
CHAPTER10 - KEEP YOUR BUSINESS TO YOURSELF 153
Partners Without Equity 154
Watch Out for VIPs (Very Inordinately Paid Specialists) 156
Ideas Are Worththe Time Spent on Them 157
Angels and VCs Suck (Kinda) 158
The Right Way To Balance Equity &Partnering 159
It's a Big Deal To Be Small 160
Throw Out the Way It Has Always Been 162
RONUS: THEYOUTH(ANDYOUNGATHEART)
ADVANTAGE 165
Ivy League or County College - SoWhat! 167
Move In withYour Mom (And Other Painful Thoughts) 169
Master Bocce Ball 169
Still inSchool? Graduate Profitably. 170
THE NOT-SO-HIDDEN RONUS SECTION: TOU "THE BIG"
CRAPPER 178
FOREWORD
So everyone told me I had to get some bigwig to
write the foreword to my book. Turns out my book is just a
bit too controversial, a bit too blunt, and may have a slight
amount of bathroom humor - in other words, no foreword.
But FmaToilet Paper Entrepreneur (TPE). I getit done. So I wrote
my own damn foreword, which is acrash course inthe attributes of
theToilet Paper Entrepreneur what you must embody if you are
going tobe one ofthe people who makes it inbusiness.
HerearemyTopEight TPEAttributes:
1. Hie TPE Cultivates a Powerful Foundation of Beliefs - A
TPE knows that success is nearly 100% determined by his
or her beliefs, not education, means, or circumstance.When
TPEs believe they will achieve something and then back it
upwithrelentless, persistent action, it will happen.
2. The TPE Has Passion - A TPE always, unequivocally,
works in his or her field of passion. The passion might not
beobvious or apparent to anoutsider, but it isto theTPE.
3. The TPE Slants Toward Premature Action - A TPE will
take action over sitting still every time. Taking action too
soon may burn them, but inevitably TPEs are rewarded for
taking action tooearly rather thantoolate.
4. The TPE Is Extremely Great at Extremely Little - The
TPE discovers his or her few strengths and exploits the
xii The Toilet Paper Entrepreneur
living hell out of them. Whatever he or she sucks at gets
outsourced.
5. TheTPEUses Ingenuity over Money - Money can belike
a drug temporarily covering up all your problems. Money
allows you todostupid things without painful consequenc
es, hence keeping you stupid. The TPE knows that entre
preneurial mastery is determined byingenuity and a razor-
sharpfocus.
6. The TPE Dominates a Niche - The TPE chooses a market
wherein the competition is weak ordoes not offer the angle
of products, services, andvalues that theTPE can. Then the
TPE dominates that niche.
7. The TPE Marries Long-Term Focus with Short-Term
Action- The TPEknows with absolute certainty where his
or her final destination is but doesn't have a detailed play-
by-play on how to get there. Instead, TPEs take action in
the short term (90 day increments) to make substantial
progress. Then they reevaluate their goals, create plans for
the next 90 days, and execute them.
8. The TPE Is NOT Normal - TPEs are risk takers. They
are a little weird and possibly a litde crazy. They are defi
nitely different. TPEs do not adhere to rules or abide
by social norms. They bust the status quo wide open.
Do you see yourself in this list? If you do, or if you just wish you
could, this bookisgoing to rock yourworld.
INTRODUCTION
The world is moremalleable than you think
and its waiting for you to hammer it into shape"
Bono
I'm tired... tired of the hundreds, if not thousands, of business
books that are all title and no content. Most of those books
should bedistilled to one or two pages ofvaluable content. The
others should be used to wipe your ass.
I cant tell you how many books Fve started poring through and in
minutes found myself "boring" through until I finally gave up. Only
a select few business books are truly great and need to beread cover
to cover.
My goal for The Toilet Paper Entrepreneur is to be different and far
better than the traditional business books and burned-out grad
school rhetoric, from the first word to the last. You 11 find no out
dated concepts in this book and no "optimized entrepreneurial ex
ecution methodologies." This book is straight from the trenches. Fve
put all ofmy effort, experience, and resources into making The Toilet
Paper Entrepreneur one ofthe best. You decide ifit is.
This book is about getting real, dispelling the naysayers and kicking
youin the butt to get up, anddo it.
The less you have of something critical, the more important it
becomes and the more wisely you use it. This is true with every
thing love, food, money, and even (or especially) toilet paper.
xiv TheToilet Paper Entrepreneur
Have you ever been doing your business with your pants hugging
your ankles and, when you are ready to wrap things up, notice that
you are extremely low on toilet paper? Don't deny it! You know ex
actly what I am talking about. Three tattered sheets ofTP hang off
the edge ofthe cardboard roll, mocking you.
This is acrappy position to be in (pun intended). There are only two
or three options. You could call for help, which is WAY too embar
rassing, but is an option. Of course you could do the humbling,
hunched shuffle ofshame and prayyou find aroll somewhere nearby.
That's horrible, but it's an option. The final option, usually the best
option, is tomanage with what you've got. And when you apply your
entrepreneurial mind, you quickly recognize you have more than a
mere three sheets.
Here's the play-by-play. You go with the final option and decide to
manage. Let's be honest: you have a reputation for using more than
three sheets. You gotta see what else you can... wait a minute. Ah
ha!!! Yes! The wastepaper basket! Like amaster gymnast performing a
two-handed straddle over apommel horse, you hold yourself up and
stretch your leg out. Just... far... enough. With your leg quivering
from the strain, you precariously hook your toes over the garbage
pail andstartdragging it in. "Come toMomma. Come toMomma,"
you repeat over and over in your head.
Time to examine your newly found treasure trove: Aused snot-rag.
Good, very good. AQ-tip. Oh, the inhumanity! Useable, ifyou must.
Afew cotton balls. OK, you can work with that. And... dental floss?
No way! You drawthe lineat dental floss. Sowith threesheets ofTP,
afew cotton balls, aused tissue and alitde poking around with aQ-
Tip, youwalk out fresh as a daisy ready to face theworld. Of course,
Introduction xv
you don't reload the toilet paper for the next guy Let him learn the
hard way!
The story doesn't end there. The next time you visit the John, you
check the TP supply immediately. With a ready supply, you tear
through the paper like itis going out of style. Within afew weeks of
"the incident," though, you return to your old ways without afleet
ing thought ofbeing caught short-handed. Sure enough, before long
you get caught again with your pantaloons kissing your ankles and
an empty roll, praying you won't need the dental floss this time.
Do you see the amazing entrepreneurial lessons here? In this most
challenging, most human moment ofall, we demonstrate our infi
nite ability to pull "miracles" out ofthe trash. When we literally have
no option to just get up and walk away, we find away to get the job
done. With three sheets, some wastebasket scraps andpossibly a torn
up cardboard roll, the impossible becomes very possible.
It's awe-inspiring how careful, thoughtful, and innovative we are
when our supplies are scarce. But it's also confounding how quickly
we use andabuse our resources when we perceivably have a lot. The
problem is how our heads work. When we have knowledge ofabun
dance ina specific instance (e.g., a full roll ofTP), we convert this
into a careless perception of perpetual abundance (e.g., an endless
supply ofTP within arms' reach). Hence, we waste what we have.
Even worse, we don't check to make sure it isn't running out. We
just assume itsgoing to be there. We sit down, do our business, and
THEN grab thin air. Damn! Herewegoagain.
Now, what ifevery time you sat down there were only three sheets of
toilet paper left ontheroll? When you always expect scant resources,
you quickly get in the habit of being very careful in your cleanup,
every time. You sure as hell would ensure the garbage basket was in
xvi TheToilet Paper Entrepreneur
your lap before you got rolling. You may even adjust your behaviors
to preserve what you have, possibly making other "stops" before you
got home or eating more rice or something. Your mindset, your fo
cus, and your actions would all change in anticipation ofhaving less
to work- or wipe - with.
Your success is completely determined by your ability to break free
from the one and only approach everyone else is following. Your suc
cess is completely determined by how you use your mind, how you
manage your critical resources, and how decisively you act toachieve
the "impossible" with very few traditional resources. Your success is
completely determined not by giving up and waiting for some extra
rolls, but by going with what you've got. The people who elect to
master this knowledge andexploit it intheir business are thefew, the
proud, theToilet Paper Entrepreneurs!
The Toilet Paper EntrepreneurIs Not for
Common-Thinking People
The Toilet Paper Entrepreneur isnot for thefaint ofheart (orfor those
with an intolerant colon, for that matter). This book is for people
who have adesire to achieve entrepreneurial success, know it's gonna
be tough, and have theguts tostick it out. It's not for thewannabes
and the talkers. This book is NOT for people who are willing to
"try" something newsimply to identify all the "problems" and therby
prove that they were right inthe first place. You know who you are.
And this book is definitely not for people who think asingle book or
aseries ofmaterials can take them from rags toriches.
This book is for people who want tochallenge the status quo. This
book is for people who will take lessons, use them to exploit their
Introduction xvii
strengths, andthen go for it with all they've got. Most importandy,
thisbook is for people who takesole responsibility for theirown suc
cess or failure. Success in business isn't about being right; it's about
being committed. So, do youwant to beright or do youwant to be
successful? I pick success.
Your Success Is Up to You
The safety of alifelong career withalarge company died outlong ago
with one final dying Enron gasp. The security, the fun, and all the
rewards exist in entrepreneurialism. Think aboutit:Youcan't trust or
depend on anyone more than yourself. And I am willing to bet that
youalready have all theskills you need to get started - youprobably
just need a better awareness of what you already have, as well as a
swift kick in the ass. That's my job.
It's time youhear the truth and not some sugarcoated nonsense or
formula for quick success. Launching and building a company is
freaking hard. It is scary, time-consuming, frustrating, and some
times life-draining. And, quite frankly, you might fuck it up and
ruin yourself financially. But financial disaster is unlikely if you
relentlessly commit toyour own success. Ifyou exploit your strengths,
you can create a company that feeds your wallet and your soul, a
company that exhilarates and frees you. If youhave the destination,
this book is the map.
The thing I can't do is travel for you. You must be willing to try
something new, push beyond your perceived limitations, and grow.
The responsibility for your entrepreneurial experience sits squarely
onyour shoulders. The meek may inherit the earth one day, but they
sure as hell won't be entrepreneurs.
xviii The Toilet Paper Entrepreneur
Having beendownthe road of building three companies of my own
from scratch, partnering in thelaunch of manyothers, and research
ing hundreds of other startups, I have discovered commonalities
among successfixl company launches, which I outline in this book.
I'll tell you one thing right off", it sure isn't common thinking. So
ignore what youwere toldin business school, forget whatyouthink
youknowabout startups, and throw out your dad's methodof mon
eymanagement. There isanewgeneration of entrepreneurs, andit is
time for anewmodus operandi.
Areyou ready to get off the pot?
MY THREE-SHEET STORY
Facebook, Google, and YouTube all rocketed to incredible
success faster than youcansay the words "holysheet." They
are worth hundreds of millions, or billions, or hundreds of
billions. The surprising thing is that the founders were all twenty-
somethings when they launched AND made their gazillions. Holy
sheet! Their success is amazing andfor that they get the lion's share
of mediaattention. Theyareheralded as the best of the best and the
foundationof the neweconomy.
My experience was different. Waydifferent. And the main difference
between mystory and those of the "Media Darling Entrepreneurs"
(MDEs) is how we launched and built our businesses, but we'll get
to all of that later. The successes of theToilet Paper Entrepreneurs
are rarely discussed, let alone heralded in the media. Yet it is these
"everyday" entrepreneurs who are slowly butsurely marching along,
creating amazing companies and achieving remarkable results.
Google is not "real" in that it is not a typical experience. However,
its success is achievable for yourown business if you trulybelieve it
(more on that later). But Google should not be seen as the path to
success, simplyas one path.
There are manyother paths traveled bythe likes of the well-known
and the unknown. These are the paths of the TPEs. Some of them
are well-known, such as Bill Hewlett & David Packard, who started
their company with $538 and a garage workshop, ultimately yield
ing today's $100 billion conglomerate; some of them are somewhat
xx The Toilet Paper Entrepreneur
lesser-known entrepreneurs like Brian Scudamore of 1-800-GOT-
JUNK? who took a summer dream and turned it into a junk busi
ness nowapproaching $200 million in revenue. Dave Packard, Bill
Hewlett, and BrianScudamore areallToiletPaperEntrepreneurs. So
am I. And, I expect, so areyou.
I amhere to tell youtheirstories and the stories of others aswell as
the lessons learned. I am here to tell you the real deal of successful
entrepreneurship. It isbloated with failures, drenched withprogress,
marred with mistakes, and peppered with major achievements.
So who am I to talk about this stuff? I am a Toilet Paper Entrepre
neur. Myjourney was a fight in the trenches, but I learned how to
get out andmake it big. Often funny, sometimes a struggle, myen
trepreneurial adventure has been far from glamorous. I even moved
my wife andinfant into a retirement village tosave money - nothin
glamorous there, believe me. Unless you like shuffleboard and funky-
smelling old people.
And I have found myself stranded on the toilet bowl onceor twice.
Fve worked forty-eight hours straight because I had to, sleeping in
clients' conference rooms to save on hotel bills. And as I write this
I'm sitting at a used desk I scavenged to save bucks, even though I
have more thanenough dough to swing a tripto Office Depot.
The odds are thatyour pathwill bemore like mine thanMarkZuck-
erberg's of Facebook. But I want you to know that success can be
achieved following any path. You don't need to have a "full roll" to
walk out winning; you can doit with justthree sheets ofTP. Andno
matter which path you choose, you have todoit with strong beliefs,
absolute focus, and loads of effort.
Here's a quick look at mythree-sheet story vs. theMDEs:
MEDIA DARLING
ENTREPRENEUR
Age 6 - Starts a lawn mowing
business by recruiting teenagers
in the neighborhood. Buys
parents a house.
Age 12- Sits on the board of
major toy company.
Age 18 - Is recruited by top Ivy
League schools but rejects them
to launch a VC-funded company.
Age 19- Masters the management
of a multi-million-dollar
company.
Age 21- Goes public.
Age 24 - Retires.
Age 24 and 1day - Comes out of
retirement. Celebrations ensue.
Age 27 - Has another super
success because everyone
expects it.
Age 30 - Is no longer in the news
because the next 18-year-old
phenom is all over the headlines.
Age 33- Seeks psychiatric help to
"find himself."
Age 36 - Writes book on life
story. Doesn't sell. Goes to work
for a TPE.
My Three-Sheet Story xxi
MIKES "THREE SHEET'
PATH
Age 6 - Still in diapers.
Age 12- Rushed to a major
hospital for eating a toy.
Age 18- Picks a college based
upon the favorable guy-to-girl
ratio. Arrives and is instantly
rejected by the girls.
Age 19 - Masters the inverted
kegtap.
Ages 21 - Goes home.
Age 24 - Drinkstoo many
beers and starts own
company because "any idiot
can do it."
Age 24 and 1day - Launches a
new company, finds out that
any idiot cannot do it. Panic
ensues.
Age 27 - Company succeeds
because there is no
alternative.
Age 30 - Finds his passion,
launches another company,
grows fast and strong.
Age 33- Found himself! Is
living his passion. Businessand
life are great.
Age 36 - Inspires a new breed
of business leaders - the
TPEs. TPEs go on to hire failed
MDEs.
xxii The Toilet Paper Entrepreneur
Sowhat are mysuccesses? I have the list of obligatory accomplish
ments, but more importandy, I have discovered mypassion and am
living it! I love launching startupbusinesses, making themgreat, and
doing it fast. I love the underdog, the unsung hero, the people who
are committed to their goals but maybe aren't given a fair chance. I
love helpingpeople even out the odds, showing themhowto exploit
their naturalstrengths sotheycangoout andkickass. Mylife's voca
tion isall about working hand-in-hand withfirst-time entrepreneurs
to grow their concepts into industry leaders. I love doing this. As
a result, I am extremely happy, making a great living and feel con
stantlyenergized. I have achieved health, wealth, and happiness all at
once. To me, this is my greatest success. What will yours be?
My List ot Obligatory Accomplishments
In case you don't want to Google myass, hereare my resume high
lights:
I startedmyfirst business, a computerintegration company, at twen
ty-four. I sold the company on December 31, 2002, through a pri
vatetransaction. It lives on todayasa thriving company.
On January 1, 2003,1 starteda newcompany. Yes, the verynext day.
That company came into national prominence in three short years
and was subsequently acquired bya large publicfirmin 2006.
I started my third company, Obsidian Launch, in the summer of
2005. The name was different back then, and so was the prelimi
naryconcept. It changedbecause I took time to look introspectively,
discover what I really loved to do, and slowly build the concept
around my interests and life goals. Myearlier companies, whilevery
My Three-Sheet Story xxiil
successful, were built on concepts that were desirable to the market
but didn't exploit my talents andmy passion to their fullest. My lat
est companyhas all that covered, so I'm good.
I have followed the path of the Toilet Paper Entrepreneur, early on
unintentionally and unaware, but over time deliberately and with
stronger focus. Throughout, I have valued my beliefs, discovered and
exploited my strengths, and, most importantly, never stoppedpush
ing ahead, evenduringthe toughest times. The results?
In additionto selling two companies for lots of cash;
I now partner in the launch of a new company approxi
mately every four weeks;
I am a reccurring guest on The BigIdea withDonny Deutsch
and other television programs;
I have received many entrepreneur awards, including the
SBA's Young Entrepreneur of the Year Award;
I havebeen interviewed in many national media outlets;
I have presented at some of this country's most prestigious
universities (and I barely hada B average at Virginia Tech-
go figure);
I am the author of this book and intend to write many
more;
And, most importantly, I continue to quicklygrow revenue
and profits for all my companies!
xxiv The Toilet Paper Entrepreneur
My goal is not to be a braggart here but simply to point out that if
I can do this, so canyou. Also, make sureyou don't mixup getting
media exposure with beinga MediaDarling. Exposure in the media
is a great thing -1 strongly suggest you seekit out, as I do. Beingan
MDE is somethingdifferent than mere exposure; it is more about
the overnight successes who actually do achieve success over night.
MDEs shouldbean exalted group, no question. But theyshouldnot
be perceived as an exclusive group.
You can and will achieve success, too, if you want. Your overnight
success mayjust take time to build. Ultimately you can achieve any
goals you desire, and you can do it all by following the path of the
Toilet Paper Entrepreneur.
Clearly I have not followed the path of the MDE, but most entrepre
neurs don't. You too will most likely launchyour business with three
sheets, awing, anda prayer. Myjobisto helpyouget ridof thewing
and prayerpart. Your job is to succeed on your three sheets.
Let's get started, shallwe?
3
o
Beliefs
"God didn't havetime to make a nobody only
a somebody Ibelieve that each of us has God-given
talents within us waiting to be broughtto fruition"
- Mary Kay Ash
The Toilet Paper Entrepreneur
A
t the start of my presentations I use the oldJackCanfield
demonstration, the one with the $100 bill. It goes some
thing likethis:
I start out by asking, "Who here wants to be a multi-millionaire?"
A room full of hands go up. "Who here IS a multi-millionaire?"
The hands go down. "Who wants to have a positive impact on this
world?" Hands go up. "Who has accomplished it?" Hands godown.
"Whowants to beknown for thegood they did?" Hands up. "Who
has achieved this?" Hands down.
After I explain to theattendees that these are all inspiring aspirations
but are truly unattainable in this one moment, I fish through my
pocket, pull out a $100 bill andhold it up. I say, "This issomething
we can all see and talk about. Who wants this $100 bill?" All the
hands goup. I ask again, "Whowants the$100bill?" Thehands stay
up, accompanied by strange looks. The third time I ask, I get the
same response. Often it takes four or five times before one person
sheepishly gets out of his chair, walks over and cautiously takes the
$100 bill from myhand. Therest of the audience looks stupefied.
When the $100 guyreturns to his seat, we go through an explora
tion of our beliefs. Even though all raised their hands saying they
wanted the money, their beliefs prevented them from taking it. The
beliefs arealways the same: "It's a trick;" "It's embarrassing;" "You'll
just takeit back;" "Someone else deserves it." These powerful limit
ing beliefs keep everyone's butt stuckto the seat, even though each
wants the $100.
But that one person, maybe out of pure frustration, elected to
change his beliefs. "Fm goingto go for it." "What's the worst that
Part One: Beliefs 3
canhappen?" "Sowhat if it isatrick, at least it will be over." "Maybe
I can just take it." "Maybe it's not atrick. I'm going for it, now!"
The only thing betweenthe audience and that $100 bill is air. There
is nothing else, yet the forces of theirbeliefs are so powerfulthat they
are literally immobilized. I wonder how many $100 bills and other
opportunities they regularly miss out on because of fear.
Imagine yourselfat that presentation. I bet you would have raised
your hand like everyone else, stating you wanted or planned to be a
millionaire. But like everyone else, I bet you wouldn't have grabbed
the money from me. If you aren't going to get out of your seat to take
a$100bill, what in theworld makes youthink youwill do anything
to make $100 mil? You won't.
Youcan't do anything if youdon't have the beliefs to backit up. And
don't try to fool yourselfand say it will be different when the stakes
are higher and that then you would do whatever it takes to make
millions. If you can't get yourself to grab the first $100 toward your
millions when it isliterally waved in yourface, what makesyou think
youwill behave anydifferently in business? If you are going to suc
ceed, you need to destroy your limiting beliefs and create enabling
beliefs.
About forty-five minutes into my presentation I do awrap-up that
ties back to the opening demonstration. I tell the attendees I can
prove that they all have in fact changed theirbeliefs. I reach backinto
my pocket and hold up another $100 bill. Before I can say a word
everyone makes amaddash toward me, andin aninstantthe money
is gone. That's the power of anenabling belief. Your entrepreneurial
success depends on it.
CHAPTER 1 - NATURE'S GALLING
"To succeed, we must first believe that we can"
- Michael Korda
Two great warriors are about to fight. One of the warriors
volunteered because of his undying love for his country;
the otherwas simply paidhandsomely to fight. Which one
would you bet on?
Always bet on the individual who is serving his calling, not the guy
whoisdoing it forthemoney. It istheperson whoisserving hispur
pose andfulfilling his heart's desire who will see his business through
the good times andthebad. Those that are following theirpathwill
relentlessly march forward duringthe upsand downs, even asothers
give up to pursue something else. They will be there when the paid
guys walk away. Ifyou trytoget rich bydoing thenext big thing, but
it isn't your passion, the competitor who really is passionate about
it will eat you up and spit youout. Passion begets persistence. And
persistence begets success.
Answer the Urge
For you to launch a dominant business, you must first find what
you thirst for. This took me years to discover. When I started out
I had this beliefthat entrepreneurs shoulddo what they know, not
what theywant. I knew computers and liked working on them, so
I launched a business related to that. But I didn't love computers. It
Chapter 1: Nature's Calling
TPE TIP
The Business - While not the best form of legal
protection, Sole Proprietorship is a cheap way of
getting started, since there are no setup costs. There
are fees associated with setting up an S-Corp, C-Corp
and limited liability corporation (LLC). Of course, as you
make money you will need to paytaxes just likeanyone
else, and you will want to incorporate down the road.
Consult with an accountant (not one you pay for, but
one who is a qualified expert from a local college) on
next steps. An LLC is often the most economical and
effective wayto go.
was my vocation, not my passion. My first two businesses were suc
cessful, but not because I was passionate about technology. I didn't
eat, sleep, and breathe tech.
But I loved entrepreneurialism. I could talk about business all day,
read every magazine, attendevery seminar, and still mythirst would
not be quenched. It tookmea few years to figure out what was sit
ting right under my nose the entire time: That I loved launching
businesses. OnceI came to the realization that it is the birthing and
maturing of a business that I love, I knew the path myfuture would
follow.
It doesn't have to take years to discover what really gets you jazzed.
The key isto reflect andtake thetime now, rather than figure it out
through trial and error.
6 The Toilet Paper Entrepreneur
What wouldyouvolunteer to do simply because of your love for it?
What activities bring you the most happiness, energy and satisfac
tion? What makes you lose trackof time, complete tasks almost ef
fortlessly, and comeout even moreenergized? When you are talking
with friends, what is the one subject you canjust go on and on and
on about, until they are rolling their eyes? Answer these questions
and you've found your heart's desire. And when you have found
your insatiable thirst, your passion, you will have taken the most
important stepto launching a company that will excel.
Perhaps you've hadafleeting thought ofstarting a business, or maybe
you are on fire with ideas and ready to jump in full swing. Either
way, you need to get started bystopping. No, that's not a typo. The
best response to a waterfall of what-if dreams is a deep, thought-
provoking breath. Asuccessful launch is more about you and your
beliefs than anything else. Committing to a business without inti
mately knowing yourself is a fool's dream. Going"all-in" on a bad
handisa stupidmove, andsoisjumping feet-first into business with
out knowing the cards you're holding.
Togetstarted at launching your company or to clean up a mediocre
start, you must begin by discovering yourself. You need to under
stand andacknowledge your heart's desire, your mindset, andbeliefs.
You need to lead with introspective thought. You need to learn all
about what you're all about.
Just for a minute, if there were no limits to what is possible, what
would you envision your entrepreneurial company providing you?
The first thing that pops into almost everyone's mind is financial
independence. I agree. I totally agree. But there is more, isn't there?
What if building your business made you feel emotionally satisfied,
totally happy? Whatifyour business made a difference? What ifyou
Chapter 1: Nature's Calling 7
wokeup every morningexcited to work? What if people loved your
company? What if the world heralded what you did and happily
consumedwhat you had to offer?
Owninga business is NOT about working your ass offfor the sake
of trying to squeeze out a living. It is NOT about making tons of
money at the expense of losing tons of life. It ISabout maximizing
life, bettering your life and the lives of others, which, not so ironi
cally, fattens your purse.
The greatest example of work-your-ass-off business ownership came
from the quintessential entrepreneur himself, Sam Walton, founder
ofWal-Mart. Walton started a company based upon a simple dream
and went on to become one of the richest men in the world. The les
son? "I blew it." Those are thewords Walton reportedly voiced from
his deathbed. By his own measures he was a failure - a billionaire
who barely knew his youngest child and was married to a woman
who stayed with him for reasons short ofafulfilling relationship.
What final words would you like to utter? I hope they are words
steeped with feelings of contentment, words that say that youlived
life to the fullest, pushed beyond your limits, and built a company
that you are proud of bothfor how much it accomplished and for
how much it made.
If this is the type of success youwant, you can have it. It all starts
and endswith you. It doesn't start withwhere the market is headed.
It doesn't start with the latest and greatest trends. It doesn't even
start with what you believe the customers want. Your business starts
with you.
Yesterday's financially-fat companies were able to market their way
out of a crap product. If they ran enough late-night television ads
and made big, albeit false, claims in the magazines, theywere guar
anteed tons of customers. Disappointed customers, but customers
nonetheless.
That wasthen and this is now. Today's successful businesses aregrow
ingbecause they are truly great. They are providing unmatched ser
vices andproducts, andtheword isgetting out, virally. Nolonger can
youcount on a marketing budget alone to bringloads of customers.
Today you need to provide unmatched services and products. The
marketing isdone virally- at summer barbeques, inInternet forums,
andon perpetual blogs. It's that simple. Andfor you to provide the
best that you imaginably can, it needs to come from bothyour head
and your heart. When your company comes from your soul, when
your company isall about you, it becomes a formidable force.
Years ago a major corporation invited me to speak to a group of
about forty marketing specialists that sold aninsurance product and
were trying to break into the small business market. They wanted
to learn howto "speak" to the entrepreneur. The presentation was
scheduled to start at 9 a.m., but we couldn't get started until 9:20
because everyone waslate.
I started byasking them who woke upthat morning excited to come
to work. The few who raised their hands clearly did it for political
posturing, not out of sincerity. Then I asked who loved their jobso
much that they came in an hour early to work, not because they
hadto but because they wanted to. All of them scoffed at me. I then
explained that for this meeting I had arrived at 7 a.m., just to make
sure I found the building andwas ready to go. I thenhad breakfast
next door and walkedin twentyminutes earlyto set up.
TPE TIP
Web Presence - Every business needs a web presence,
right? Absolutely. But that doesn't mean you need
a website. Those are two very different things. You
can establish a web presence by using Facebook.com,
MySpace.com, Squidoo.com or a million other social
sites.Spreadthe wordabout whatyouaredoingthrough
these social sites and set up free email. Supplement
your social networking site witha free blogat Blogspot.
com. That's more than enough to get some business
rolling in.
In this one example I have explained the difference between an en
trepreneur driven by passion and someone who just has ajob. When
we love what we do, we do it toour heart's content, and we naturally
excel. I arrived at thepresentation early not because I needed to but
because I wanted to. I love entrepreneurialism, and the opportunity
todiscuss it drives me tobe ready toroll, day and night.
Obliterate All the Excuses, Except tor One
"Excuses are like assholes. Everyone has one, and they allstink." I don't
knowwho came up with this quotation, but I have afeeling I would
really like the guy. Excuses are a great mechanism toapply logic to
our fears. They are simply the machinations we go through todefend
ourinner fears. I have heard and experienced them all. And they are
all B.S. All, that is, except one, but I'll save that one for last.
The economy is not strong enough to start a business- Everyone
is experiencing the same economy as you are, so you are on equal
footing. If the economy is in a recession, buyers may slow down
their activity, but competitors will also fall by the wayside. Aweak
economy is like a forest fire; it kills offmany of the plants, but the
seeds that take hold now have the most room to grow as the forest
comes backto life. Aweak economy is oftenthe best time to start.
Entrepreneurship isveryrisky- Anything thatyou go intowithout
preparation and knowledge is risky. So go in prepared! The funny
thing is, you are already mosdy prepared and don't even know it. If
you listen toyour inner emotion, your calling, you will naturally be
led down apath where you already have strengths. You probably have
mastered many ofthecritical learning steps, andyou'll pick upall the
newstufflikea sponge.
Ajob withabigcompany isfor more secure - Tell that tothe folks
who got fired from Enron, Arthur Anderson, Bear Sterns, or any of
theother hundreds oflarge companies that have collapsed or down
sized. When you work for someone else, you can befired at whim.
If hescrews up, you pay. When you work for yourself, you can't get
fired, and the only limit to your success is you.
Fmtoooldto start acompany - So what are you going todoabout
it? Wait until you are younger? There is notime like thepresent. Life
has yet tooffer arewind oraredo. Don't live with regrets. Get started
now, regardless of your age. The self-discovery process you will go
through creating your new company is well worth it. Plus, you can
leave a little inheritance to the next generation.
I amtooyoung to start acompany - What?!?! Didyou know that
you could legally start and incorporate your own business at any age?
You can literally start your own company before you can legally work
for someone else. One of myfriends, Cameron Johnson, started his
first business at age seven and incorporated his first company by age
twelve. Why don't you be the first to start a business at age six? No
matter how old or how young you are, start today!
I won't makeenough money- Arecent study by the National As
sociation ofColleges and Employers (NACE) stated that the average
starting salary for an Accounting major is $46,292. Not bad. Ifyou
took that job and received an annual raise of 10% each year for the
next ten years, youd be making $120,069. Not bad at all. Nowif
you start your own company, your salary the first year will average
$50,000 according to World Wide Learn. Not bad either. Ifyou run
your company well and you elect togive yourself a 25% raise every
year (I give myself an average of a 50% raise every year), on your
tenth anniversary you will be earning $465,661. Now that's sweet!
I don't have the proper education - Ifyou feel you need acollege
degree to succeed, you are sorely mistaken. I've met with Ph.D.s
from Harvard and dropouts from high school; their entrepreneurial
successes were directly tied totheir beliefs, desire, passion, and thirst
to learn through the school ofhard knocks. Your scholastic pedigree
has basically noinfluence onyour success. None!
Idon't have enough moneytostart - That sgreat! Ifyou had enough
money to "properly" launch your company, I would fear you might
go bankrupt. The fact that you have no money (or very litde) simply
means you need toapply your head right from the get go. There is a
reason they say necessity is the mother ofinvention. Money covers
up problems and weaknesses. Without money, you've got to bring
your A-game every day. Lack offunds forces you to optimize every
where andgrow theright way.
Thecompetition istoostrong My mother always told me thatno
two people are alike. She was right. Ifyou think thecompetition can
do abetter job than you ever can, then you aren't properly positioned
toexploit your strengths. Find an angle toapply your strengths, your
innate talents, and your passion inaway thatnoone else is doing, or
no one else is doingwell.
No onewill buy my product or service - Good thing you caught
that now, but it's not an excuse not to launch a company. It simply
means you need toreinvestigate what you want todoand determine
anew way ofdelivering it so that you can build a customer base.
I amnot ready -1 agree; you're not. You never will be. This excuse is
simply acombination ofall the others. When I ask people why they
think they're not ready, they resort tosome semblance ofone ofthe
other excuses listed. They areall nonsense. Go time is now!
I amsure you can thinkof many other creative excuses not to start
a business. You need toput these rationalizations aside, look ahead,
andtake action now. We rarely regret thethings we didin life when
we have followed our passion and taken risks. Too often, though, we
regret the things we didn't do. Ifyour heart is calling you to take ac
tion, don't use any one ofthese excuses tosquash your desire.
There is one reason not to start a business. Don't start a business
if your reason is simply to get rich quick. Greed is not becoming
and does not have lasting results. No matter when you are presented
with barrels full ofmoney, you DOpay for them. Even ifyou collect
your money prior to any effort, like a lottery winner, for example,
nature still has anuncanny way ofmaking you earn it. Ifyou're lucky,
your windfall may be earned through the rapid mastery of a new
financial discipline. Butall toooften theearning comes in the form
of despair, disaster, and bankruptcy.
Just look at what happens tosome big lottery winners - it isn't pretty.
Jack Whittacker sure wished he'd torn his lotto ticket up. ATPE, he
had plugged away for years, building a construction company that
grossed $16 milliona year. But afterJackwon $315 million, his life
became total hell. He lost friends, family, and had four hundred legal
claims against him. I'm not trying to talk doom and gloom here; I
amjust trying to point out that getting rich quick rarely happens, is
not satisfying, and in somecases has disastrous results.
Quick money is very alluring. It is rare to meet someone who isn't
dying towin the lottery or receive some windfall ofcash. Most peo
ple, ofcourse, never get adime wishing for abig payout. It is ashame
that the majority ofus waste even asecond oflife hoping something
will be handed tous instead ofusing ourtalents andpassion tomake
it ourselves.
Moneyis an amplifier of habits. If you have bad habits and receive
lots of money, you will simply repeat your bad habits more often. If
your habits are good, it will amplify those good behaviors. Money al
lows us to be more ofwho we already are. So we better have astrong
mindset and have established good habits before we get gobs ofmon
ey. When you have achieved a strong, focused, happy mind and are
executing on good habits, money will come easily. Andmoney will
build more money. And good habits will grow. Happiness, too. That
is thehealthy way to get rich.
Launch acompany toget rich right, not toget rich quick. It works.
TPE TIP
Product Sales - You don't need an ecommerce site when
eBay hasalready createdonefor you. While not free, this
isa really inexpensive way of gettingyour products into
the hands of consumers. And you don't have to auction
off product; youcanset upaneBay store where yousell
things at fixed prices. There are alsoa number of niche
auction sites out there, so start searching!
One Day Still Hasn't Come
If I only hada nickel for every time I heard anaspiring entrepreneur
say, "One day." One day I will launch a company. One day I will be
this, one day I will do that. Would someone please tell me what the
date is for "one day?" Because it sure as hell isn't posted anywhere on
my calendar!
It is now or never. One day is a dream. One day is a hope that if
everything magically falls into place, success will land in your lap.
So if you are at all serious about launching your first company, put
an actual date on "one day." Isit one month from now, six months,
a year? Tell everyone close toyou the day you will be opening the
doors ofyour new company. Then back-calculate all the things that
you need todo, back totoday, back to this moment right now, and
start taking action. NOW.!! Maybe it is setting up a phone line or
establishing anLLC ortaking aclass. The key is tostart doing it now
and don't stop.
Oh yeah, I almost forgot. Tell your biggest, smelliest, hairiest, zit-
ridden friend that you need him to keep you accountable to your
goal ofstarting your first company. Promise himthat ifyou miss this
goal, you will letyour friends take a picture ofyou kissing his naked
keester and allow it to beposted all over the Internet. If that doesn't
get you in gear, I don't knowwhat will.
Nature vs. Nurture
I find it laughable, the amount of time experts spend debating the
entrepreneurial nature vs. nurture argument. Let's settle this once
and for all: IT'S NATURE. No one can teach you tohave entrepre
neurial passion. You can't learn how to grow a burning, unquench
able desire for business. No one can train your attitude or make you
intelligent. This is all stuff that nature has either given you or hasn't.
You better have the entrepreneurial bug inyou or you'll struggle to
have even amodicum ofsuccess. You can water the soil all you want,
but you won't grow a tree unless there is a seed first. If you have it
naturally, then it can be nurtured into something great.
There is an important thing to note about nature; it doesn't always
present itself at birth or even inthe early years. Sometimes your nat
ural thirst for entrepreneurialism beats out ofyour chest when you're
twenty years old. Other people don't feel it until they are collecting
social security. Me? It took four cold ones at the local bar. Regardless
ofwhen the urge presents itself, when you feel it, go for it. Nature's
calling. Answer it.
TAKE ACTION NOW!
Small steps lead to biggains. At the endof each chapter you'll find
three action steps you can complete in under half an hour. So you
have no excuse!
1. What's your heart's desire? What gets you totally juiced up, so
muchso thatyouthink youcould behappy doing it every day?
Write it down in as much detail as possible, paying attention
to what you really get out of it. Sometimes we think we want
something tangible when really wewant to feel acertain way or
experience something over and over again.
2. Make alist of every single excuse you have used to put off start
ing your business. If you're already operating a business, write
down other little lies youtell yourself that keep you from your
heart's desire.
3. Debunk your list of excuses. Write down every reason whyyour
excuse doesn't ring true. If you're really feeling pumped, convert
your excuse into apositive statement about your abilities.
CHAPTER 3 - A LITTLE PEACE AND
QUIET (IN YOUR MIND)
"My music will go on forever. Maybe it's a fool whosaythat,
but when me know facts me cansayfacts.
Mymusic willgo on forever."
- Bob Marley
belief is the thought behind the thought. Profound!
A A belief is not simply something said with confidence,
althoughthat is partofit. Abelief is not something repeatedly stat
ed, although that can influence it. A belief is not something you
commit to do, albeit it helps. Abelief iswhat your inner emotion is
telling you. Abelief is theinner, unswayable knowledge ofwhat you
know to be true. It's that constant, ever-present conversation that is
going on in your head.
Here is the problem. You are constantly lying to yourself through
your words andthoughts, and sometimes you even temporarily per
suade yourself, butit doesn't last for long. Until you start recognizing
and managing that inner, indescribable emotion, you are not going
to make sustained progress.
Aclassic example is someone who is trying tolose weight. You know
the people I amtalking about: they go on a quick-fix diet andlose
lots ofweight, only togain it back plus some months later. They fail
at theirgoal oflong-termweight loss because oflimiting beliefs, fleet
ingfocus, andsporadic anddepleting actions. Without a foundation
of enabling beliefs, focus will not be sustained nor actionbe accom
plished. For people to lose weight, they must believe not only that
they can drop the pounds but also that they willdrop the pounds.
They needto viscerally know that a healthy bodyinvolves a lifelong
life-style change and believe theymust live that way. Weight loss is
more about what goes on in your head than anything else. Actually,
anyaccomplishment ismore aboutyourbeliefs than anything else.
Just because you believe something doesn't mean it is actually true.
You might thinkso. Others may not.Who's right? Neither andboth.
See, it doesn't matter if there even is a "real" truth; what matters
is what you believe the truth to be. We are hardwired to behave
in absolute consistency with our ownbeliefs. Our emotions act like
an invisible GPSsystem and move us toward our beliefs every time
without fail.
"I believe I should be a millionaire," you say, "but I'm not, so your
idea is stupid and you're dead wrong." After I stickmy tongue out
at you, I explain that you have already achieved your belief. You
SHOULD be a millionaire, but you aren't because you believe only
that youshould beanddon't believe that youare. Your inevitable re
sponse is, "OK, I believe I AM a millionaire andI amstill not." And
my response is "Liar!!! You don't really believe thatyou are, therefore,
you aren't." Your final comment is, "Of course I don't believe it, be
cause I am not."And because youdon't believe it you aren't.
Until you believe something to beabsolutely true, justas you believe
the sky is blue and the sunmakes light, youwon't be able to realize
it. Sorry, but that's how it works. It's time youstart being extremely
cognizant of your beliefs and using them to achieve your desires.
Chapter 2: ALittle Peace and Quiet(In YourMind) 19
This is not about lying to yourself. That simply doesn't work. It is
about aligning all your beliefs, focus, and action to be consistent
with your desires. When you do this your beliefs will manifest in
money, success, and whatever else you desire. The bad news is that
changing beliefs is hard. But this is the foundational component to
entrepreneurial success, andwithout supportive beliefs youwill not
achieve anydegree of success.
Here's the good news. Beliefs can be changed! To establish a new
belief you will need tohave congruency between your gut and your
head. To get there you first need tounderstand the two types ofbe
liefs that exist, limiting and enabling. Then you need to decide, in
your head, what your new belief is. Finally, you need to allow your
gut to adjust, accept, and commit to the newbelief.
EveryToilet Paper Entrepreneur knows that ifyou want success, you
have to get your beliefs in check. You have to know that you will
succeed, regardless of the challenge in front of you. A consistent,
enabling frame ofmind and the guts toget it done will make all the
difference. Amismatching of mind and gut will stop you dead in
your tracks.
How To Blow Your Last $80 on Booze and Still
Make Millions
Afew months after arriving from England insearch ofthe American
Dream, David Tyreman was down to hislast $20. Just as his former
boss predicted, his business idea - selling antiques toAmericans via
living room parties - had failed. You probably think you know what
David didnext. You're thinking this is astory about howhetook$20
and turned it into millions.
Wrong. David and his business partner blew their last $20 at a bar.
(They are from England, after all.) What the hell, right? Might as
well have a little funwhile you're going down withthe ship. But the
next morning, David realized he had experienced his worst night
mare - total failure - and it wasn't so bad. Nobody died; the earth
didn't openup andswallow himwhole.
So hedecided totryagain. Over the next few months David changed
his business model, targeting retail stores that needed antiques for
merchandise displays. Even though he knew nothing about his in
dustry and hada tough competitor that dominated the market, he
founda way to get hisfirst few clients.
Unlike his competitor, David stored his inventory in a garage, re
cruiting his friends tohelp him deliver the merchandise. Without a
fat bankroll, he built his business using sweat and ingenuity. David
had to think outside the box, which turned out to be exactly what
his clients wanted. He realized retailers were using his antiques for
differentiation, and that he was not in the antique business but the
brand identity business. This realization would make himmillions.
David leveraged his success by transforming his company from
London Antique, a visual merchandising company, to Propaganda,
a branding company that sold antiques and a wide range of items
retailers needed for branding. It was a huge step, but David wasn't
afraid of failure. Andwhen Polo's Ralph Lauren came calling, look
ing for anew branding company, David took the leap. Did he know
how Propaganda would meet the demand? No. Did heworry about
it? Not so much. So what if he failed?
Within just afew years David's company, Propaganda, landed other
huge clients such as Banana Republic, Old Navy, and Nike. After
Chapter 2: ALittle Peace and Quiet (In Your Mind) 21
years of thinking creatively and boldly, Davidhad becomea branding
expert. He later sold his multi-million dollar company and formed
World Famous, a companythat helpspeopleand companies develop
a brand identity - one of the most valuable assets a business has.
Davidtook chances in part because he wasn't afraid of failure. He no
longerbelieved failure was theworstthingthat couldhappento him.
He'd been there and done that, and he knew better. David Tyreman
is a Toilet Paper Entrepreneur.
The Wall of Limiting Beliefs
Business is all about departingfromyour current plateau, point (A),
with the intent of gettingto your nextachievement, point (B). May
beyouwant to start selling your first service offering. Currentlyyour
sales are at $0; that is (A). You want to have your sales at $400,000
bythe endof the year, that's (B). If youhave limitingbeliefs theywill
establish awall. Thewall will block yourprogress and mayeven cause
you to takeother directions that might make thingsworse.
For this example, let's assume youhave limitingbeliefs that include:
1. You have no money and without it you can't market your
product.
2. You have never done this before, so the competition will
easilybeat you.
3. You are too young to be respected by the business commu
nity.
4. No one has ever been able to grow sales that fast in your
industry. It just can't be done.
Nowlet's lookat each of these beliefs and howtheycanderail entre
preneurial dreams:
1. You Can't Market Products without Money - I've seen
people squash great ideas for products simplybecause they
think they don't have enough money to market them. Or
worse, they put less time and money into making a great
product in order to reserve funds for marketing, which re
sults in a mediocre product backed by inadequate market
ing. Asure prescription for disaster. If a product is great, it
will market itself. Believe that your marketing can be done
for free or cheaply (it can). As the product sells, cash will
become available to further pushsales.
2. The Competition Will Beat Your Inexperienced Ass -
Again, a belief like this almost always results in inaction.
Even worse, peoplespendtime and moneytrying to gainan
education and examinehow the competition operates. But
instead of gaining an upper hand, all they have is knowl
edge of howthe competition did it ten or twentyyears ago.
Schools are always behind, and if you rely on traditional
education alone you'll always be behind, too. Believe that
inexperience is an asset, allowing you to think outside the
box in ways your competitioncan't evenimagine.
3. No One Will Take You Seriously - Believing you're too
young to get respect from the business community can be
paralyzing, soyouwait for the perfect time to start - which
never, ever comes. The proof is in the pudding. The earlier
you start, the faster you will gainexperience, and the faster
you will succeed. Besides, the Internet allows you to act like
a big business, even if you're conducting business in your
underwear. You're never too young to become an entrepre
neur - you don't even need a driver's license to launch your
first company!
4. Your Idea Is Impossible Because it's Never Been Done -
So many people are trapped by the belief that something
can't be done just because no one else has done it before.
Again, the immediateresult is inaction. And the end result
is watching someone else achieve your "impossible" idea.
Every invention, every business, every greatideahad to have
a first time. If no one has ever done what you want to do,
be excited! You have the advantage, because youwill be the
first to pull it off.
Do you see how, before you even get started, your limiting beliefs
have built a wall so high and so strong your progress from (A) is
immediately blocked and pushes youin a newdirection? It is impos
sible to achieve (B).
I call these limiting beliefs "TheWall." The Wall is insurmountable
and is more powerful than anyphysical barrier couldever be. There
isno methodof knocking it down or destroying it other than to van
quishTheWall bycreating a channel of enabling beliefs.
"Butwaita minute! If I believe that I need money to starta company,
and then I get moneythat will clearly knock down The Wall, I can
destroy TheWall without changing mybeliefs,"
Not true. Access to money has not knocked down The Wall; it has
actually made TheWall bigger and stronger. You have not changed
your beliefthat you can't start a business without money. You actu-
ally proved to yourself that you needed money. The Wall of "can't
start without money" is madetemporarily irrelevant since you have
money for now. But thebeliefisstill there, larger thanever. The next
time you are in asituation that youbelieve requires money you don't
have, your limiting beliefwill stop you in your tracks. Navigating
around your limiting beliefs doesn't knock The Wall down; it makes
it higher.
TPE TIP
Service Sales - Use Elance.com, Guru.com or other
freelance websites to quickly land projects that fit your
capabilities and desires. This will cost a few bucks, but
it is another inexpensive way to get started without
putting money into a website.
Envy This
Envy. Until recently, I didn't appreciate how damaging envy was to
my own progress. And as my envy of others diminished, my own
entrepreneurial progress pickedup with evenmore momentum.
I usedto see successful people who clearly were ahead of me, and I
would acknowledge their success outwardly. Inside, though, I was
telling myself that they were probably unhappy pricks, that they
were silver spooned and undeserving of what they had. A million
other thoughts would cross my mind, mentally knocking people
down well belowme, which made me feel good, at least for awhile.
But the next time I saw a successful person my envy would be even
greater, and I would repeat the process.
Chapter 2: ALittle Peaceand Quiet (In Your Mind) 85
Then I had an epiphany. When I envy someone, I amjust building
more limiting beliefs. I am actually increasing the size of TheWall
that I amputting in front of myown success. When weenvy some
one else, what we are saying is that they have achieved something
that we should have, but we didn't (and can't), so screwthem. They
have something that no onedeserves, sotheycangoeat crap. Either
way, wearesaying wecan't have what the other person has. That is a
HUGE limitingbelief.
Envy of others builds an insurmountable wall to our own success.
Instead of envy, trulyapplaud those people. Aspire to belikethemin
the aspect that you formerly envied. Thank them for having blazed
the path before you and making your path to success much easier.
Ask them how they did it, what they did. You may be surprised at
howmuch theyhelpyou.
You must confrontlimitingbeliefs head-on and change them. That is
the onlywayto dissolve TheWall. You must convert the beliefs that
blocknewbeliefs that helpyou, beliefs that create The Channel.
The Channel of Enabling Beliefs
To be a successful entrepreneur, you need to train your mind and
your heart to have enabling beliefs. Just aswhenyou have an offday
and comebackharder and strongerthe next day, your enablingbeliefs
have created a path that moves you forward toward your goals, even
though thingswent awry. I call this beliefconduit "TheChannel."
What if wechangeour beliefs fromthe previous example? Let's create
the new beliefs set:
1. You have no money, which enables you to focus your inge
nuityand your energy to market your product better than
any competitor.
2. You have never done this before, allowing you to come up
with outside-the-box, unheard-of ideas that will destroy
your competition.
3. You are young andprofessional which commands huge re
spect in the business community.
4. No onehas discovered a fast-growth method in your indus
try, andsoyour innovative talent will accelerate yourgrowth
and put youwell in front of the pack.
Byrevising the beliefs that built TheWall, you not onlyremove the
limitations, youactually create The Channel. Through The Channel
your momentum is pushed forward. Even if you get bumped off
track your enabling beliefs keep you moving forward.
Hereare mybest tips for creating a channel of enabling beliefs:
Realize Nothing's Impossible - When you say and believe some
thing is impossible, youset up a giant roadblock to success. Today,
if I told youthat teleporting is possible, youwouldlaughat me. If I
toldyouflight was possible youwouldsayof course it is.Anymoron
knows that. But the same statement about flight made in the 1800s
made people laugh andsay, "impossible." Right here, rightnow, stop
saying something is impossible. There is always a way, and you need
to seek it out. I can'twait until the first teleporter is inventedsoI can
say, "I told ya so!" Nothing is impossible.
Chapter 2: ALittle Peace and Quiet(In YourMind) 27
Ask Better Questions - We have all heard the statement, "There is
no such thing as a stupid question!" Wrong! I am here to tell you
there are stupid questions, and they are everywhere. People ask me
the same lame-ass questions over and over. One of my favorites is,
"How do I get an investor to give me money?" As if investors are
likeMom and Dad, and theywant me to help them come up with a
convincing story that will get thema newcar, or whatever else they
feel entitled to having. Stop asking stupid questions. Ask a better
question. Be the first to ask, "How would I SHOW an investor a
200% ASSUREDreturn on her money?" Or, "How could I SHOW
an investor how we could both come out as winners?" Better ques
tions get better answers.
Watch Someone ElseDoing It - Somanytimes, if wejust opened
our eyes, wewouldseethat someoneisalready doingwhat wethought
impossible. We just need to applyit to ourselves. The Wright broth
ers just needed to look at a bird to seethe possibility of flight. Then
they asked a great question: "Howcanwe usewhat we knowfrom a
bird to makea contraptionthat will allow people to fly?" If someone
or somethingelse is already doingit, it sureain't impossible.
Ask How - I once thought photographic memory was something
a few weirdos were born with, but was impossible for the common
folk suchasmyself to learn. I even sawademoinwhicha guymemo
rized a detailed list of fifty things in order. I thought he was a freak.
Then I asked him how he does it and he actually told me. Man! It
waseasy once I understoodit. I tried it, and holysmokes, now/can
memorize a useless list of fifty things. I amnowthe freak. Moveover
CrissAngel, I am now the mind-freak! Mind-freak!
Do It Yourself - Until you prove something to yourself, you will
never believe it. Sometimes the proof is in the puddin. Challenge
yourself andtrysomething that is contrary to your limiting beliefs.
Don't try it to prove yourself right; instead, try it with the absolute
commitmentto prove yourselfwrong. When youactually achieve it,
youwill have achieved a new enabling belief. Being wrong never felt
so right!
Take Baby Steps - If you need to make a 180-degree change in
yourbeliefs, youhave to startchanging onedegree at a time. Put the
majority ofyourenergy intomaking thefirst little change. Onceit is
accomplished, congratulate yourself for being onedegree closer, and
thengofor the next one. Don't tryto tackle everything at once; ad
dress it one small baby stepat a time. TPEs knowtheir millions are
madebygrabbing the first $100 and then the next.
View the Glass as Half Full - When faced with anysituation, you
needto focus on finding onlythe benefits. In some situations, there
may be very few benefits and many, many problems. Focusing on
the problems will yield nothing. You need to exploit the benefits that
you can find, even if they are few andfar between. Even if your glass
has onlyonedropof milk in it, there isstill something to drink. Or,
if just onesheet hangs from the roll, youcan still wipe... youget the
picture.
Write and Research - Often, many people say they know some
thing, and when you askthemhowtheyknow, they respond, "I just
know." It is an easy, lazy way to buildTheWall of limitingbeliefs.
When you have a belief that is preventing strong progress, write it
down. Then research the hell out of it. The informationyou findwill
often destroy your belief and get you into The Channel of strong
momentum.
Chapter 2: ALittle Peace andQuiet (In Your Mind) 29
When It's Over, Move On (The French Toast Incident) - Just
because something happened inthe past doesn't mean it will happen
again. What I'm about to share with you is corny, but embarrassingly
true. Until I was eighteen years old, I avoided eating French toast like
theplague. I knew thatFrench toast would make me sick because, at
the age ofsix, I ate French toast and got horribly sick minutes later.
I threw upfor days. I mean, it was a vom-fest. Putting one andone
together, I knew that French toast was the culprit. I vowed in that
moment never to eat it again.
Then it happened. At age eighteen I was placed inthe horrible posi
tion ofeither starving todeath oreating theonly thing left - French-
fucking-toast. Witha quivering lip and tengallons ofAunt Jemima,
I dug in. It was delicious. Surprise, no puking! Years later my mother
told me that when I was six and puked for days I had the flu. It
wasn't the French toast after all. So just because it happened once
before doesn't mean it will happen again. Don't let twelve years goby
without eating Frenchtoast.
When it comes to entrepreneurial success youhave to know that it
is absolutely, unquestionably, hugely important to defeat or change
your limiting beliefs. Onlyonce you have The Channel of enabling
beliefs canyou even begin to march forward andbuild your desires.
TPE TIP
More Product/Service Sales - If you don't want to
spend a penny, useCraig's List to get the wordout. Listing
products or services costs you squat.
30 TheToilet Paper Entrepreneur
Betting Past Day One
Knocking down your Wall and building your Channel is big, pow
erful stuff. But how do you hold fast to your beliefs past that first
inspiring day? The truth is, you'll have to work on building your
Channel daily in order to make it stick. Here are afew tips to help
you maintain your TPE mindset:
GowithYour Gut, NotYour Logic
Your beliefs are your core emotional responses; they are NOTbased
on logic. Inother words, your beliefs are the thoughts behind your
thoughts. Ifyou are saying out loud, "I will succeed," but your gut
is saying, "You can't, cause you suck," your gut will win out, and
you will suck. I cannot overemphasize the importance ofthis. We all
achieve what we believe deep down inside - this ain't hocus-pocus,
this is the science of how humans operate. Be very mindful of the
thoughts behind your thoughts... your gut.
Join the Right Mob
Changing your beliefs doesn't typically happen with a snap of the
fingers. But one very effective method for changing your beliefs is to
identify the people already achieving what you want and entrench
yourself in their group. If you measure the common traits of your
five closest acquaintances, you are equal to that. Choose the people
you hang out with based upon what you want to be. Absorb every
thing you can from them and learn at every opportunity. Take them
out to dinner, attend network events with them, and just plain ol'
spend time with them.
And here's my advice about staying grounded in your beliefs as you
launch your business:
Chapter 2: ALittle Peace andQuiet (In Your Mind) 31
ShareYour Thoughts
You wouldn't believe howmany people approach mesaying they have
the next billion dollar idea, but are afraid to share it with me or any
one else infear oftheidea being stolen. Ultimately, thethoughts fade
away, and another inspired moment is lost. Share your ideas with
trusted individuals, just don't give away your "secret ingredients" if
you can avoid it. Sharing your ideas strengthens your belief inthem,
andsoon you will beacting onthat strength tosupport your ideas.
Know that responses to your ideas are free and often worth about
that much. But if you share your thoughts with"been-there done-
thats," the collective feedback maybe invaluable. As you share your
ideas, your beliefs will grow, and people will start holding you ac
countable. The upward spiral begins.
Ignore or Adore
Don't ignore the naysayers if they are your prospective clients or
trustedindividuals who have already triedwhat you plan to do. Do
ignore them if they are just trying tostand inyour way or are speak
ing from a vantage point of ignorance. The best feedback is from
people who have already done what you are doing.
I can't tell you how many people have told me not to start a busi
ness and that entrepreneurialism is assured failure; of course, none
of these naysayers has any experience to back up those opinions.
WhenI speak withsuccessful entrepreneurs, theirresponse isthepo
lar opposite. They freely share the paths they have already blazed in
launching a company. Always adore thepeople who have been there
and done that; the others are to be ignored.
Grow a Pair
That's right, damn it. At some point every business will have a dark
day, month or, God forbid, an entire year. You are going tostruggle
for awhile. Even thebig guys struggled. Gary Erickson, thefounder
ofClifBar, maker oforganic energy and nutrition foods, hadto live
in a garage, work a day job, and stay up all night making product.
Early entrepreneurial success is defined by surviving, not thriving. Set
outwith the beliefs, focus, and actions togrow rapidly and strongly,
knowing that initially it is all about just getting up off the ground.
Seriously, Grow a Pair
The worst thing is to never even try in the first place. Sadly, most
people don't. Most people sitonthe sidelines and letopportunity af
ter opportunity goby. Whata damn shame it would beto have your
last words be, "I never even tried." Listen up, Tiger, you may fail and
you may suck, butyou will only know ifyou try. Gary didn't give up
when his equipment kept breaking down dueto the thickness of his
ClifBar mixture. He overcame seemingly insurmountable obstacles
to launch what is now one of the most successful and revered Ameri
canhealth food companies.
Early entrepreneurial success is often defined bysurvival. But mybet
is that once you get started, youwill naturally get your feet under
you andnot justsurvive but thrive. So find thatfooting, startaconfi
dentwalk, andthenrunawinning entrepreneurial marathon. Worst
case? You don't learn, don't grow, andyou fail; don't worry, another
Toilet Paper Entrepreneur who did succeed will have a job waiting
for you. The greatest failure is never to have tried at all. Seriously,
growa pair and go for it.
Chapter 2: ALittlePeace and Quiet (In Your Mind) 33
TPE TIP
Better Affirmations: Standing up and making a
statement, or an affirmation, saying, "My business is
great" will probably not convince you that it is. And
the thought under the thought will be the opposite.
Use this trick: Put the words "She thinks" or "He thinks"
before your claims. For example, "Hethinks my business
is great." This affirmation will naturally work, since
your mind is configured to make it true. If someone
else believes something positive about us, we naturally
believe and build in that direction! This is some twisted
mind screwing, but it sure as hell works. Give it a try.
(This workson picking up members of the opposite sex,
too, at least so I am told. I am a happily married man -
or, should I say, "My wife thinks I am a happily married
man")
Mission Vm Possible
Manypeople say something isimpossible because it hasnt been done
before. I'mgonna get a little Anthony Robbins on younow. If you
lookat the wordimpossible, it canactually be split into twowords
"I'm" and "Possible." From now on, whenever someone says some
thingis impossible, hear theword as, "I'mPossible." As in, I'mpos
sible and will achieve whatever I believe.
Before the Wright brothers, people thought it was impossible to fly,
and it was. Then the plane was invented, and nowflight is possible.
34 The ToiletPaper Entrepreneur
Ifthe Wright brothers had listened tothe people who said it was im
possible for humans tofly, we might not have planes today. Progress
often involves beating the odds and doing the impossible.
Today we look at flight and know that ofcourse it is possible. Its a
no-brainer. The reason youand I believe that is that whenwewere
born, flight already existed; its all we know. For many people the
Internet is the same way. Of course it is possible, it exists, it works,
it's great. If you rewind history to before Al Goreinvented the Net,
the thought ofinstantaneously exchanging aletter with anyone any
where inthe world was crazy. Today, you are mocked for using postal
mail instead of email. Even email isgetting stale; it isthe new snail-
mail. IM-ing is the way togo. All things are impossible things before
they exist.
What s impossible today? Seek out people saying something is im
possible; theyareoftenventing afrustration. TPEsknowthat behind
every frustration is a new product or service, and behind every im
possibility there isa goldmine of business opportunities.
Isit "impossible" togetgood food at your college? Isit "impossible"
to get through security at theairport? Isit "impossible" to teleport?
Isit impossible to ?Make whatever is"impossible" today
your business. Makeit possible.
TAKE ACTION NOW!
Before you move on to the next chapter, take half an hour to com
plete the following three exercises. Otherwise, its all concept and no
application. You need to know your beliefs backwards andforwards -
they are the foundation of your success.
1. Expose yourWall. Make a list of all of your limiting beliefs,
no matter howsillythey sound. If you're stumped, useyour
list of excuses asa jumpingoffplace.
2. See your Channel. Write down your enabling beliefs, those
certainties that help you take chances and ponder greatness.
Stumped again? Think about your accomplishments. Howdid
you get there? What did you know for sure that helped you
achieve?
3. Knock down your Wall; build up your Channel. This is really
just a beginning, because you will continue to uncover both
limiting and enabling beliefs as you go through life. For now,
debunk those beliefs with affirmative statements, and make a
planto act onyourenabling beliefs, new andold.
CHAPTER 3 - THE FIRE IN
YOUR RELLY
"Catch a mana fish andyou cansell it to him. Teach a manto fish
andyou ruin a wonderful business opportunity."
- Karl Marx
Thefoundation to anyTPEs success is listening to and fol
lowing her heart, traveling where it insists she go. Your
heart is simply the map to your company's destiny; your
head is the navigation system.
When nature sends a rumble through your stomach, you move
quickly and deliberately to the bathroom. When you arrive, you
spenda few moments preparing for the workat hand. This is your
mind navigating the situation.
What is the chance of interruptions? Prettyhigh? Not good. Does
the door lock? Shit! It doesn't! Son-of-a-bitch, the door doesn't even
close completely. Time's ticking; gottamove faster, gotta think. How
about wedging the magazine rackand some bath towels behind the
door to slowdown any unexpected guests? You must prevent being
caughtmid-maneuver. Now, with the door addressed, is thereproper
ventilation to take care of any"periphery" issues? Most importantly,
is there adequate noise to cover up any unexpected music? Maybe
it's smart to do a few practice runs clearing your throat, just in case
there's a need for cover-up sounds.
Chapter 3: The Fire in Your Belly 37
All systems checked. Time to get to work. Oh crap! You forgot to
check for aroll of TP. Sure enough, amere three dangling sheets are
waving in the breeze. You're caught again with your shorts around
your heels. But you're aToilet Paper Entrepreneur. This oneiseasy to
navigate. Time to start limbering up your leg.
What To Do? What To Do?
Dosomething thatyouwant todobecause youlove it, are passionate
about it, and because it has a positive impact. Whoopty-doo! Very
freakin noble, right? Doingwhat you love is a great starting point,
but that won't necessarily bring home the bacon. I could spend
months talking about high-performance cars because I love them,
ampassionate about them, and theyare exhilarating. But unless I can
make acomfortable living at it, it is just anexpensive hobby.
Passion is the starting point. There is no question about it. If you
aren't passionate about your vocation, youwill have areal toughtime
sustaining astart up, let alone living through the dark days. And if
you aren't passionate about what you do, someone else who is pas
sionate about it is going to kick your ass into next Sunday.
Your long-term success requires a growing number of customers,
consistent cash flow, and your ability to outmaneuver the competi
tion every step of the way. Before you dive in with your heart, first
divein with your head andmakesure you can say aresounding YES
to eachone of these questions:
1. Can you make significant money doing this? Meaning, is
it realistic that this business will bringin enough bacon for
youto cover all your expenses ANDstash ALOTaway into
savings?
2. Can you make money consistently? Meaning, is it realistic
that this new venture will yield a regular, predictable, and
growing flow of cash intothe company?
3. Canthis venture bestarted with little or no money?
4. Do you want this venture to bean entrepreneur instead of
a freelancer? If you want to be a freelancer, you are simply
an employee without a boss. Afreelancer focuses on master
ingthecraft, while anentrepreneur focuses on building the
systems that support the craft.
5. Do you want to consume this product/service desperately,
but can't find it? If you do, you ARE thefocus group.
6. Do you knowpeople who aren't friends and have the same
interests as you? Do they also really want this product/ser
viceand they can't find it either?
7. Is this business consistent with your values? For example,
frugal types would bebetter offstarting the next Old Navy
rather than the next Polo.
8. Are people polarized on your concept? Meaning, do some
people think it is a great idea and others think it stinks?
Polarizing people is a major key to success because it brings
recognition from both sides. The side that hates you talks
about it, and the side that loves you defends you. See how
polarizing concepts get both sides talking about your busi
ness?
9. Isyour business a one-shot, make-or-break deal, or canit be
flexible and change as it grows? You may not get it perfect
ly right on the first go and maydiscover newthings about
yourself. A little flexibility in the business offering can go a
long way.
Building yourbusiness on a foundation of passion isclearly the most
important part of sustained entrepreneurial success, but passion
alonewon't makeyousuccessful. Backing it up with positive answers
to all of thesefundamental market-demand questions increases your
chances for success tenfold.
With passion and potential on your side, it's time to back themup
with conviction, a set of Immutable Laws that form the backbone of
your company.
TPE TIP
Business Cards - You don't need them to get started,
and when you become a big shot you won't want to
hand them out. So skip buyingthem for now and instead
collect other people's cards when you meet them. Send
contacts a follow-up email, and let your signature act
as a virtual business card with all your contact info and
linksto your website, blog, or social network pages.
What Do You Stand For?
There is a business, located right outside Sydney, Australia, called
Gorgeous Things. Its Founder, Lesley-Ann Trow, struggledfor years
with her company. While she had always made enough money to
live, she never really prospered, and she never really felt energized
about her vocation. Entrepreneurialism, for her, was a kind of tunnel
that seemed to have no lightat the end.
It all changed in a moment when she recognized that her personal
values were regularly being compromised, downplayed, or ignored in
order to deliver what the customer wanted. Her wow moment came
when she conceded that the constant challenge to her values was a
result of her own activities and beliefs.
She immediately took action, and her business changed radically.
Lesley-Ann identified her own five Immutable Laws that she had
always had but never really acknowledged, let alone documented.
Shewrote down everything shestood forandeverything shedid not.
Thenshechanged her business.
Everything in the company hadto complywithher Immutable Laws
or it was removed. If a product was not consistent with her values,
even though it was a bigseller, it was removed. If a vendor did not
share values, even though it was an inexpensive source of product,
the relationship ended. She no longer tried to sell products, elect
ing insteadto share stories about her Immutable Laws and howher
products supported thesevalues.
Business started to increase exponentially. Old products that were
consistent with her Immutable Laws started to sell like never be
fore. Aredesigned website that spoke entirely to her values nowdrew
over fifty times the amount of traffic it previously had. Consumers
sharing the same Immutable Laws came back more frequently and
bought more. Most importandy, she is now happy, very happy. In
Lesley-Anns own words, "Having your own companythat mirrors
your personal value system is just likehaving a soul mate. I couldnt
imagine anythingbetter." Her business is out of the tunnel, and the
sun is shining brightly.
Immutable Laws (A Filter for Everything)
I valueand believe in go-givers. If someone wants to take, take, take
from me, I push them away as fast as you can say, "Blood sucking,
life drainingbastard." But if someone genuinely isout to helpothers,
to help her common man, I applaudher and want to associate with
her. I, too, go out of my wayto help others. When someone tries to
take advantage of me, watch out, it is totallyinconsistent with my
beliefs and I will be pissed. I thrive in making, building, and partici
pating in clear win-win situations because that is my internal rule.
We all have our own mix of unique internal rules we abide by. It is
these values that we constantly adhere to, deviating fromthemwith
rare exception, that I call our Immutable Laws. When we do deviate
from them for some reason, our emotions punch us dead center in
the face and remindushowbadit isto compromise our owninternal
laws. Likethe long armof the law, every time we breakour own laws
our conscience catches us and punishes us. To be successful as an
entrepreneur, you must abide by your own Immutable Laws.
Your values say a lot about who you are, which in turn says a lot
about the type of business you will create. You must ensureabsolute
consistency between yourvalues andyourbusiness. If everything you
do in yourcompany isconsistent withyourvalues, youwill behappy
and always inspired to work.
But Immutable Laws are far more than the sources of your inspira
tion and emotional satisfaction; theyare the filters for every consid
eration in your business. Who should you hire? What should you
sell? How should your customer service function? What vendors
shouldyou workwith? Who are the customers you want to service?
Anyquestion you have about your business must pass through the
filter of your Immutable Laws. If theydon't match, don't do it.
The Immutable Laws are the spine of your business. If your spine
gets out of alignment, your ability to progress will be greatly com
promised, and your company will be hunched over, limping along
instead ofstriding forward. Ifyoubreak yourspine, youwill bepara
lyzed, and your company will fail to survive. Your job, TP Entrepre
neur, is to be the chiropractor for your business. You must keepyour
company's spine in perfect alignment byensuring that every part of
the companybody is consistent with your Immutable Laws.
Nowthat you knowhowabsolutely critical theyare, it is time to dis
cover your ownImmutable Laws. Thegoodnews is that you already
knowthem. The bad news is that theystill existat an emotional level
and not as conscious thought. To find them, you need to reflect on
your past and consider every situation that pissed you off and every
situation that made you feel happy. What is the common thread in
the situations that upset you? What were the reasons behindthe rea
sons you got pissed? Which values were compromised?
Asksimilarquestions about the situationsthat havemadeyou happy.
What werethe common threadsin situationswhereyou werehappy?
What are the real core reasons you were happy? What is it about
those situations that naturally made you happy every time? What
values of yours wereelevated during those situations?
Somecommonvalues manyentrepreneurs discover and useto set the
stages for their companies include:
Risk-Taking
Independence
Honesty
Leadership
Teamwork
Helping
Security
Trustworthiness
Artistic Creativity
This list is good but not nearly goodenough. It's BORING! Would
you want to work for a company that had sterile values like that?
These filters arewaytoo broad, theydon't makeclear visuals in your
head and they areway too lame. If theyare not evoking strongvis
ceral emotionin you, you needto dig deeper, much deeper, to find
your own Immutable Laws.
Once you define your values, document them in a way that sings
withyour soul. Don't write them to complywith what your mother
likes, or what youthink customers want to hear, or what your lawyer
friend said is most professional. If you water them down, you will
only hurt yourself, and over time your emotions will rise up and
punch you in the face again. Your Immutable Laws need to raise the
hair on the backof your neckevery timeyou readthem, every time
you speakthem and every time you hear them.
TPE TIP
Meeting Rooms - Nothing's better or cheaper for
meetings than a nice hotel lobby. Find a few in your
area with quiet, comfortable sitting areas and a power
outlet to plug in your laptop. Small business incubators
often have free or low-cost meeting space for start-up
businesses, or you may be able to rent a library meeting
room for next to nothing. And if you have an accountant
or attorney that you have used, why not ask himfor his
conference room?
Since you are still reading this book, you are clearly the edgy type
and would likely be as bored by the prior values as you are excited
by these:
No Dry Humping - This is a value of Hedgehog Leather-
works, a TPE company that never "dryhumps" its custom
erswith spam, sales literature, or coldcalls.
Blood Money - The TPE company Action Figure Wom
an treats its money as if it were blood, buildinga constant
"blood reserve" so that if there is ever an emergency, it can
survive. My company uses this Immutable Law, too, with
our own spin.
Positivity or Death! - A value of my mentor, Howard
Hirsch, this ImmutableLawis about choosingto work only
with people with a positive attitude. Howard once ran a
help wanted ad that read, "Experience irrelevant. Positive
outlook on life mandatory," and the right candidates with
the right values applied for the job. Howard Hirsch, un
equivocally, is aToilet Paper Entrepreneur.
Dive on the Grenade - This Immutable Law is about cul
tivating a company wherein everyone supports each other.
When there is a problem, the person closest to it, be it the
President or an intern, is expected to jump on the problem
and fix it.
No Dicks Allowed - This is one of my values. Life is too
short to deal with people who arecurt, rude, or just out for
number one. In plainEnglish - life's too short for dicks.
Just Like Butta - This is a value from Roof Deck Solutions,
LLC, a company that installs high-end outdoor patios for
apartments in New York City. Every project they are en
gaged in involves extremely complicated logistics. In order
to keep the customers worry-free, the projects must run as
smoothly as butter. So, Roof Deck Solutions only works
with vendors and only hires employees who thrive under
extreme pressure and share in the value of having things run
"just like butta."
GiveTo Give- Another value of my company, this Immu
table Law is about giving for the joyof giving without ex
pectinganythingin return. Likewise, we work hard for the
joyof working hard. Oddly enough, it all comes backto us
anyway.
Good Enough Ain't Good Enough - Another Hedgehog
Leatherworks value statingthat every product and customer
experience must be great. Not good but great. This Immu-
table Law hangs on the wall in their St. Louis workshop,
reminding everyone that each product must be perfect.
Turn the Turtles - Matt Kuttler, the President of ReStocklt,
articulated this Immutable Law. Anytime a customer is
struggling with a problem or question, the team at Re
Stocklt jumps into action to get things right. Just as with
a turtle on its back, a little effort will get the customer on
her feet again and moving forward. Matt Kuttler is a Toilet
Paper Entrepreneur.
We DO Know Jack! - Another carryover value from my
former company, this Immutable Law is about knowing the
customerinsideand out. Weroutinelyreceived techsupport
calls, and our teamwas required to knowthe answer - and
the customer, sometimes named "Jack," - extremelywell.
Now we're cooking with gas! These Immutable Laws speak to me
and awaken a strong curiosity about what they mean. Theyspeakas
clearly to what theyareas to what theyaren't. Theyabsolutely make
vivid, clearpicturesin myhead (don'taskme about the "Dry Hump
ing" one). And theywill absolutely resonate with a select fewpeople
and be rejected by many. That's what youwant.
The most manageable number of Immutable Laws is three to five.
While technicallyyou can have tens or hundreds, that many are way
too detailedand too hard to remember. Boilthem down to your core
values, the essence of what you believe.
Once you identify your handful of Immutable Laws, focus on your
gut emotional response to those words. When a value has a strong
emotional tie to you, it is a critical value and a perfect Immutable
Law. If you don't feel it, ditch the law.
"But I want to have values that everyone can understand," you say.
Wrong! Watering down your core values is a mistake. Listen, not
everyone will share your values, nor should they. The world would
be a boring place if they did. Some people do share your values;
thoseare the peoplewhomyouwant to reach. Theywill be your best
colleagues, your best vendors, and your best customers. Be true to
yourself, and the right people and opportunities will filter to you.
Consistent application of your Immutable Laws will build a healthy
company, and you will be happy. Guaranteed.
The Why Guy Finds His Why
In the fall of 2005, Simon Sinek hit rock bottom. He felt like a fail
ure and was intimidated by everyone he met. Simon cravedthe feel
ingof success morethan anything else. He didn't knowexactly what
was missing, simplythat something was missing.
Simonstartedto lookto the people andcompanies that inspiredhim,
fascinated by how these companies inspired others. Steve Jobs and
Apple. Richard Branson. Martin Luther King, Jr. It was in studying
these people and companies that Simon made an amazing discovery.
It didn't matter what they did; what mattered was that they knew
why they did what theydid. Simon set out to know unequivocally
why he did what he did.
After looking back over his whole life, Simon saw a pattern to his
success. He realized that he felt the most successful when he was
most inspired and when he inspired those around him. Simon had
discovered his calling, his purpose.
Today Simon Sinek is the leading authority for entrepreneurs who
seek their purpose, for those who want to discover their Why. His
business and his life are far from rock bottom. In fact, he's felt more
successful and enjoyed moresuccess every daysince he discovered his
Why. SimonSinekis aToilet Paper Entrepreneur.
Your ideal customers will be attracted to your business because it
speaks to them. Theyshare the values of your business; they want
what it stands for; theybuytheWhy. Your company is a reflection of
you. Serving yourlife's purpose ensures thesuccess ofyourcompany.
AsSimonSineksays, "You must live and serve your Why."
TAKE ACTION NOW!
PartTwo is but a page away, but ifyoudon't stopand complete these
three exercises now you'll miss out on somethingcrucial. And no,
I'm not just saying that.
1. What do you stand for? What standards do you uphold in
your personal life? What do you expect from yourself and
othersin your life? In what aspects of your lifedo youwaffle
a bit?What arethe areas where youwill not movea muscle?
Do you need to loosen up or havemore conviction?
2 Your set of Immutable Laws is the backbone of your company.
Building on your own values and ethics, what are the Immu
table Laws of your company? Howdo these Immutable Laws
benefit you, yourstaff, yourinvestors, andyour customers?
3. What's yourWhy? Whyare youanentrepreneur? Whydidyou
choose your specific industry? Why, Why, Why? Keep asking
until youget to the heart of the matter.
I
o
The TPE Focus
"Columbus didn'thave a business plan
when he discovered America."
- Mary Kay Ash
A huge portion of this book is devoted to the entrepreneur
ial mindset, but quite frankly it's not nearly enough. As
Henry Ford said, "Ifyou think you can or can't, you are
right." Ifyou are going tosucceed as anentrepreneur, you must have
enabling beliefs. You must thinkyoucan.
From the previous section you should know how nature's calling you,
where your passion is, and have an established mindset toensure you
reach your goals. But there is much more tobeing aToilet Paper En
trepreneur. Nowyoumust have a maniacal focus. All your attention
must be on the job at hand.
When theTP Entrepreneur feels nature's call, that telltale rumblein
thestomach, she doesn't waste time devising an elaborate plan, and
she definitely doesn't wait it out until the ideal conditions present
themselves. Instead, she proceeds with absolute focus. She analyzes
the severity of the erupting opportunity and outlines the major ac
tions she needs to take.
For example, she determines how much time she has before she goes
into emergency mode. She identifies the nearest clean and quiet
"workspace" andchecks to make sure it isadequately stocked before
getting down to business. The TP Entrepreneur is always ready to
manage when challenges come up, as they inevitably do.
Launchingand growing a successful business utilizes the samedisci
pline. Elaborate business plans are useless for directing your business.
They inevitably become dust-collectors, or, if you're resourceful, toi
let paper. Annual goals andfive-year projections aren't worth squat,
either. What separates thesuccesses from thesloppy disasters allboils
down to a few concise, extremely effective plans coupled with deci
sive action. Whichoutcome are yougunning for?
CHAPTER 4 - GETTING DOWN
TO BUSINESS
"Make everything as simple as possible, but not simpler."
- Albert Einstein
Howcome we have all heard the phrase, "less is more," yet
still behave as if more is more? So many aspiring entre
preneurs believe that the broader the variety of products
and services theyoffer, the moresuccessful theywill be. The problem
with this is that the moreyoudo, the less effective you are at anyone
thing. The less likely you are to be exploiting your strengths. The
less likely you are to be exceptional. Broad strokes are for ordinary
folks.
A tight focus allows you to quickly determine if the path you are
following is bearing anyfruit or not. Since the path is narrow, when
you hit a problemor a roadblock you will catch it right away. With
this knowledge, you can adjust speedily and often with fewconse
quences.
Bill Hewlett and David Packardtook focus to heart, but only after a
fewyears of initial startup struggle. On January 1, 1939, they kicked
off their partnership with a $538 investment and a beat-up drill
press. At first, the company was generally unfocused and workedon
a varietyof electronic and agricultural products.
52
Hewlett-Packard hit itsstride in theearly 1940s with spiked market
demand for an HP invention called the Model 200A audio oscilla
tor. Theinvention introduced a level of quality the market hadnever
seen before and was at a price point that couldn't betouched bythe
competition. And because they focused tightly on the Model 200A,
Bill and David were able to determine how to use technology from
light bulbs to make and sell a far more reliable product for a quarter
of thecompetitor's price. The result of HP's razor-sharp focus? Pos
sibly thelongest-selling simple electronic design in history.
Fast-forward a mere decade and revenues were well into the millions
(and that's 1950s money). Hewlett-Packard was a huge success for
a couple of guys who used a coin toss to determine the company
name. When Dave Packard won the toss, he had the option to se
lect between Hewlett-Packard and Packard-Hewlett. He went with
Hewlett-Packard. David Packard and Bill Hewlett are Toilet Paper
Entrepreneurs.
Focus Small To Get Big
Name a company that launchedto superstardom without a narrow
focus. Can't thinkofone? That's because it's never happened. Look at
Microsoft: it skyrocketed to success on DOS, a simple program that
made a computer more functional. Today it is a different animal,
making software, video game systems, and computer hardware. But
when it took off, it was due to its focus on DOS.
Google launched on a search engine. Now look at all the crap it
does. Intel did it on processors. Cirque du Soldi did it on circus
acrobats. Ford did it on the Model T. Procter & Gamble struggled
with candles and then launched whenit focused on soap. I challenge
Chapter 4: Getting Down to Business 53
you to find any company that grew exponentially by selling a large,
varying mix ofofferings from the get-go. Only after they saturated
themarket withtheirfocus did they introduce a mixed offering, but
I can't thinkof onecompany that launched that way.
Wal-Mart, too, had an absolute focus in its offering. It was lots of
stuff, but all at cheap prices. Everything it carried had to be abso
lutely the cheapest price anywhere orthey did notcarry it.The lesson
here is that your focus does not need to be on one product, per se,
but it needs to be on one consistent method of being way different
fromeveryone else.
It seems common sense would dictate that, the more products and
services a business canoffer to awider variety of consumers, the more
revenue it could generate - the proverbial "one-stop shop." If you
can locka customerinto one service, shewill likely buy more things
from you because she trusts you. The only problem is that the more
you do, the harder it is to maintain quality. The old saying goes,
"Jack of all trades and master of none." My version goes, "Jackass
of all trades OR master of one." Jackass is appropriate, since that's
what your customers will think ofyou when you trytobeeverything
to everyone. No focus and your products, your services, and your
customers suffer.
To be a market leader, your company must excel in one laser-
beam-focused area. Be better than anyone else, and continue to fo
cus on improvement in that area, or you will beleft behind. As you
examine your business, can you imagine how less variety inwhat you
offer will result in greater ability to dowhat you do well? If so, it is
time tostart doing less. Ifyou can't see your business improving with
greater focus, congratulations: you must already be the world leader
in your area of expertise.
B4 The Toilet PaperEntrepreneur
Aword ofcaution: Avoid burning your foot with amagnifying glass.
Itf'ing hurts! Focus, like many things in life, is adouble-edged sword.
When applied appropriately, focus will result in rewards beyond your
imagination. Conversely, focusing onthe wrong thing will result ina
dangerous downward spiral. You are doomed ifyou focus onthe rea
sons for your problems as opposed tofocusing onaresolution. Focus
on achieving success and exploiting strengths rather than avoiding
problems and resolving weaknesses. Focus on the wrong thing, and
you get burned.
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offers freevirtual meeting software. The best part is that
you don't need to install it onanything; it runs right off
the Net. No untimely computer crashes! Yeah!!!
How To Drive Dangerously Fast, Safely
The power offocus may be best explained through an experience I
had driving a powerful car ridiculously fast. For a second, imagine
theTVsubtitle scrolling by: Donot trythis at home. Closed course.
Very unprofessional driver...
I had the good fortune ofbeing trained atSkip Barber's racing school,
where they taught me how to navigate a hairpin-turn track driving
a 550+ horsepower Dodge Viper. Back then they trained people to
race those beasts - now they train on lowly 325HPPorsche 911s.
What they taught me at Skip Barber was all about focus. Inorder to
navigate the course at top speeds, I was trained to focus exclusively
on the next turnwhile thecar was still piloting thecurrent one. The
trainers taught me tofocus onwhere I wanted togo, notwhere I was,
since my peripheral vision was already taking care ofthat. To go the
fastest, I was trained to continually focus on the next turn. Not the
current one, nothing beyond thenext one, justthe next turn.
I also learned what to do shouldtheViperstart spinningout. Again,
it was all about focus. I had to focus on where I wanted the car to go
andnot focus on thewall I was trying to avoid. Sure enough, during
my first spin I panicked, looked straight at the wall I was heading
into, andsteered right toward it. But after a few spins andsome po
tentially expensive near-misses, I learned tofocus onwhere I wanted
togo. When times were at their worst - meaning a crash was immi
nent - a successful outcomewas achieved solely bymy intense focus
on where I wanted to be, not on what was currently happening.
The same is true for your business. Narrow your focus on the best
products and services you have to offer. Make those few things
extraordinary. Focus on and exploit your strengths. Look at where
your business is headed, not where it is at this moment. Is your busi
ness in a spin? Give yourattention to where youwant to go, not to
what you are trying to avoid. There is noquestion about it - you get
what you focus on, either good or bad. Concentrate on where you
want to be, and your chances of successfully getting there are far
greater than ifyou focus onwhat you are trying toavoid.
56 The Toilet PaperEntrepreneur
The Focus Five
Can you be too narrowly focused? Absolutely! Let's say your passion
is in making delicious, fresh pizza and delivering it in fifteen min
utes, guaranteed. You could advertise tothe entire world ifyou like,
but it would be nearly impossible (remember, nothing's impossible)
to launch a business delivering fresh pizza in fifteen minutes to any
location in the world.
So what is the right thing to do? Narrow your focus. You could pick
an area that you can easily deliver pizza to in fifteen minutes. The
problem may be that there are ten competitors in the same area, all
with great pizza and loyal customers. Getting a foothold would be
difficult.
Whatifyou focused really tightly so as toensure amarket? You could
service only the second floor ofresidents in the ParkAvenue Building.
With a tight and specific customer base you could quickly enhance
your services to cater to these customers, destroying every competi
torwith abroader market. For instance, you could install adedicated
pizza phonein every apartment on the second floor, or hand deliver
a pizza sample every day. You could do a million things that your
competition would not have the resources to match. Atighter focus
would allowyou tooverwhelm the competition inservice, customer
intimacy, and speed.
There is one glaring problem, though. You won't make crap for aliv
ing. The focus in our example is way too narrow. While you could
out-service other pizza places, you wouldn't have enough prospects
to keep business rolling. That is, unless you are selling your pizzas
for $10Keach. When you focus too narrowly, it becomes difficult to
generate a sustainable income.
The Focus Five is a strategy I developed that allows you to focus
narrowly enough to dominate a niche, yet broadly enough to make
substantial revenue. The goal of The Focus Five is to find the sweet
spot for as little direct competition as possible with thegreatest mar
ket potential. To find the sweet spot, you need to keep narrowing
your focus until you have the confidence and research tosupport an
achievement of $5M dollars in annual revenue within five years of
being in business with less than five direct competitors.
Use the following equations to evaluate the trade-offs and find the
balance in your business focus:
1. NARROWER FOCUS = INCREASED ABILITY TO BETHE BEST
AND
2. NARROWER FOCUS = REDUCED COMPETITION
BUT
3. NARROWER FOCUS =SMALLER CUSTOMER BASE
PLUS
4. NARROWER FOCUS = LOWER POTENTIAL REVENUE
AND ALSO
5. NARROWER FOCUS = SLOWER GROWTH
The idea behind The Focus Five is that you need to beaware of the
gains AND losses that anarrowfocus provides. Looking at the equa
tions, for example, you'll notice that, as you focus more narrowly,
youwill increase your ability to be the best and reduce the number
of direct competitors. You will also have a smaller customer base,
less potential for earning revenue, and, ultimately, your business will
grow at a slower pace.
Ifyou can't realistically achieve $5M inthe next five years, your focus
isway toonarrow to grow a scalable business. Without theability to
achieve at least $5M in revenue, you will spend your efforts in the
day-to-day operations ofyour business, doing work and/orservicing
customers. What youwantisa business that ispositioned to scale to
thepoint where you are managing people and constantly improving
internal systems - notworking toserve customers. You wantto build
a business that you arecontinually working on, not in.
The other variable is competition. If there are five or more direct
competitors already operating inyour niche, you will beinfor aseri
ous fight. But if there are only a few competitors (or none), you can
gain a foothold much faster.
When you hone inonaniche that is narrow, but nottoo narrow, and
when you use the $5M marker as a goal, you position your business
so that it is safe from big players that can, but don't, buy into the
market. Acompany grossing $5M ayear is small potatoes compared
tothe giants ofindustry. The giants will wait until you have mastered
your business and dominated your niche before they make an offer to
buy your company. And that, my friends, is a happy, happy day.
Maybe your aspirations are different. You may aspire tomake $1Min
five years, which will change the formula tosucceed. (Hint: it makes
it easier.) Or you may have other numbers. The important thing isto
find the balance of focus withpotential to achieve your goals.
If you are going to err on one side or the other, it is far better to
blunder on the side of being too focused. You can always broaden
Chapter 4: Getting Downto Business 59
what you do without losing your current customers. The other way
around doesn't work so well.
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You Gotta Do Better
Conventional wisdom indicates that people are motivated bythe de
sire to increase pleasure and the need to avoid pain. I think that is
too complicated. The fact is, everyone is out to feel better, and the
sole purpose of your business should be to make the customer feel
better. That's it, game over. All the bullcrap aside, feeling better is all
that matters.
An entrepreneur launches a business that makes someone else feel
better. The Toilet Paper Entrepreneur ensures that heis always bet
ter at providing "better" than any ofhis competitors. Here are some
"better" examples:
1. An insurance provider makes its clients feel better because
theyfeel there is a safety net. Ahh, yesy less worries = feels
better.
2. A client selects a vendor because she feels he is nicer, more
trustworthy, better looking, smarter, morecourteous, or any
of a million variables. The net effect is that the client feels
betterworking withthisvendor, and sheselected him based
on that feeling.
3. A doctor makes you feel better. At least she is supposed to,
and when she doesn't, you are less desirous of maintaining
the relationship and vow to go elsewhere. But it is time-
consuming to go elsewhere, andthat doesn't make you feel
better, soyoustay withyour lousy doctor because that does
feel better.
4. We put others down because it puts us up. We feel better,
temporarily.
5. Ataxman does NOT make you feel better. Soyou seek out
an accountant or H&R Block, and that makes you feel bet
ter. Not much better, but better nonetheless. Until you get
the bill.
6. A garbage man takes our rotting garbage away. We feel
better.
7. You go to a restaurant andorder your favorite hamburger.
You feel better. They serve it undercooked. Not good. So
you consider complaining and asking for a new one. That
would make youfeel better. Butyoufear the cook will spit
a phlegm bomb dead center on your patty. That would be
horrible. Sochewing down on raw meatandnot saying any
thing makes you feel better - its gross, butyou avoided con
frontation, soyou're feelin fine.
8. Even this stinkin' bookwas purchased in order to feel better.
You will only keep reading if it continues to makeyou feel
better. If the book doesn't make you feel better, you put it
down and stop reading. Again, you feel better.
To launch and maintain a successful business, you need to always
make your clients feel better than your competitor does. Always.
Your Area of Innovation - Quality, Price, or
Convenience
If therecan be onlyone thing, what are yougoing to be knownfor?
Inevitably, to lead an industry - or even to have a single sale for that
matter - you need to be better, faster, or cheaper. You need to have
a unique, desirable attribute that no one else offers. This attribute
will always be a perceived differentiator of quality, price, or conve
nience.
Where in your business can you offer quality, convenience, or price
that is far better than the competition? Once you find it, pickjust
one and stickwith it for the life of the company. HINT: You must
pickthe category that fits seamlessly withyour beliefs and your Im
mutable Laws. Thendo everything in yourpower to be the best at it
and always, ALWAYS improve on it.
By selecting your keydifferentiator, youhave determined your Area
ofInnovation - theway toconsistently ensure you're theone making
your customer feel better. Customers will return to you again and
again in search of that feeling.
If you are Wal-Mart, your Area of Innovation is Price. To contin
ue to dominate the industry, Wal-Mart must have an unrelenting
focus on providing the best price. If it gets off the Price track, it's
in trouble. Could you imagine Wal-Mart offering, for example, a
convenient movie rental service that couldcompetewith Blockbust
er and Netflix without offering an amazing price advantage? Oh,
wait a second; Wal-Mart did do that, and it FAILED MISERABLY.
Wal-Mart's movie download service launched in Februaryof 2007,
and byDecemberof that sameyearit was toast, a total failure caused
byWal-Mart's focus on Convenience rather than Price.
Wal-Mart has grown explosively because it is all about the lowest
Price first; everything else, including Quality and Convenience,
comes second. Even the mighty Wal-Mart couldfail if the company
loses focus and compromises Price in an effort to improve another
Area of Innovation. Of course, if it increases Quality while first en
suringit leads on Price, it wins.
McDonald'sleads on Convenience. The daythey start offering burg
ers that are cooked to order (Quality), they are in trouble, because
youwill have to waitlonger andConvenience will be compromised.
But if theycanknock out a cooked-to-order burger faster than they
prepare their current burgers, then they really have awin. Howwould
you likeyours, in five seconds flat?
Mercedes leads on Quality. Can you imagine Mercedes coming
out with a competitor to the Toyota Corolla? It would lose, so it
doesn't.
Dick'sLast Resort restaurant in South Carolina alsoleadson Quality,
but it sure isn't thequality ofthefood. Instead, it istheQualityof the
experience. Thewaitstaff insult guests, mock their food orders, and
force themto wear goofy hats. It's definitely not for people without
a goodsense of self-deprecating humor. But if you like that type of
atmosphere, Dick's is the highest Quality experience you can find
anywhere. How many restaurants regularly get five-star ratings on
service and atmosphere when their waiters inevitably say, "Is that all
you are goingto give me as a tip, you cheapbastard?"
TheArea of Innovation is where you need to put all of your energy
and inventiveness. If your company leads on quality, for example,
you need to constantlyfocus on howto improve quality. Shouldyou
ever ignore or compromise qualityin an effort to save money or re
duceprice point or make things more convenient or for any reason,
you're screwed. The consumer, who has been buying on quality, will
notice to immediately, feel compromised, and typically leave or start
the search for an alternative.
Encyclopedia Britannica had a miserable collapse, particularly since
it was a beloved American icon. Believe it or not, those giant books
were once considered a convenient wayto find information. Britan-
nica's Area of Innovation was Convenience, even going so far as to
sell door-to-door anddeliver right toyour living room. Butwhen the
customers could benefit from improved Convenience bygetting their
encyclopedias on CDRom, Britannica justkept printing books.
Britannica failed to staytrue to, and continually raise the bar in, its
Area of Innovation. The company was quickly surpassed byMicro
soft's Encarta CDRom, which was later made obsolete byWikipedia,
all in the name of the same Area of Innovation: Convenience. Wiki
pediaraised the bar sohighon Convenience (instantaneous and un
limited information) that Encarta didn't have a chance. It also raised
thebar ridiculously high onPrice (free) and Quality (itis aliving file
and constantly updates and improves). I can'twait to see who kicks
Wiki's ass. And trust me, someone will. Maybe it will beyou.
What is yourArea of Innovation? Is it in keeping with your Immu
table Laws, yourinternal rules? Does it ringtrue?
Commit to leading in Quality, Price, or Convenience, and makesure
you pick just one to focus your attention on. Stay in the ballpark
with the other two areas, but never, ever, compromise your Areaof
Innovation in an effort to excel in all three. When you diligently
and consistently work to raise the bar in your Area of Innovation,
effectively competing with yourself, you stayout of your competi
tion's reach.
Who's Your Ideal Customer?
You are deep into the book now, and this is the first time that we
aregoing to start really digging into identifying your customer. Tra
ditional business training and common logic say that this is your
starting point of launching a company. They couldn't be more dead
wrong. Startinga company is all about serving your needs, your be
liefs, and your values first. By this point you should have a strong
knowledge of yourself and a clear vision for what youwant. (Thatis,
if you followed the action steps at the end of eachchapter!) You are
now readyto identifyyour ideal customer.
Market demographics, trend analyses, and other statistical measures
are important, but they onlyscratch the surface. They surely don't
position you to launch successfully. Aswith everything else in busi
ness, youneedto start byknowing your destination first. In this case,
you need to define your customer sowell that youcan pickhim or
her out of a crowded roomof thousands of people.
Paul Scheiter can picka perfect customer out of a crowd in seconds
flat. Thefounder of Hedgehog Leatherworks, theleading provider of
leather survival products (talkabout a tight niche!), Paul defined his
ideal customer early on in his business and experienced phenomenal
growth just byknowing his customers like the back ofhis hand.
After launchinghis companyfromhis college dorm room, Paul soon
realized that his sporadicsales were comingfroma wide mix of cus
tomers. Some were in the military, some were hunters, others were
survivalists, a few were collectors, and still more were totally unde
fined. Paul knewhe couldn't possibly cater to somanydifferent types
of customers, so he compiled a list of one hundred adjectives and
descriptive phrases that defined his perfect customer. He identified
his customers' values - specifically those he held in common with
them - as well as how they looked, acted, and reacted. Paul even
knew his customers' favorite movies.
With these details documented, Paul simply kept his eyes open, and
whenever he noticed someone that fit his description of an ideal
Hedgehog Leatherworks customer, he struck up a dialogue with
them. Sure enough, knowing exactly what he was looking for, Paul
quicklymet many peoplewith similar interests and values, a fewof
whom were very influential people within his niche. These people
became hisfriends, made introductions, andbrought in more people
with similar interests and values.
Paul's business took off and has grown explosively ever since. With
in twoyears of his launch, Hedgehog Leatherworks is recognized as
the world leader in high-end performance leather sheaths. Paul has
a loyal customer base that floods him with unsolicited testimonials
and thank-you notes. Handling all of his testimonials has actually
become a challenge for Paul. Now that's a problem to aspire to,
wouldn't yousay? Paul Scheiter isaToilet Paper Entrepreneur.
You, too, need to knowyour customer with this level of detail be
cause, simplyput, it makes it much easier to locate, market to, and
then sell to them. Consider the tickler questions below when defin
ing your ideal customer. The goal here is to start broad, and then
systematically funnel down to the exact customer who will most
appreciate, connect with, and benefit fromwhat you plan to offer.
Trust me, your ideal customer will share in your Immutable Laws,
tremendously value your Area of Innovation, and be a ravingfan of
your product or service.
This list of questions is far from complete and is simply a starting
point. You needto askan exhaustive series of questions. You will have
completed the task of identifying an ideal customer when you are
ableto walkthrough a crowd and identify him by the wayhe looks,
behaves, talks, smells, etc. If everyone in a crowdisyour potential cus
tomer you arewaytoo broad. But if one out of one thousand isclearly
an ideal customer, you mayhave foundyour perfect niche.
Where do they liveand why?
What do they cherish? Why?
What do they hate? Why?
What is their favorite TV show? Why?
Do they evenwatchTV?Why not?
What would they not be caught dead doing?
What is the most important part of their dailyroutine?
Do they own a car, and if so, what is the make and model?
If theyown a car, howaggressively do theydrive it?
What pisses themoffover and over again about your indus
try?
Aretheymarried or single? Are theygay or straight?
Howold arethey? Howolddo theylook? Howold do they
act?
Know your prospects better than anyof your competitors and you
will have aneasier time finding them. When they become customers,
you will beable to relate to them better. They will come toyou easily
and stayhappily.
As afinal thought, recognize that by knowing one group so well, you
will not know other groups at all. You may actually upset some peo
ple. This is OK. It is actually desirable. You want to polarize people.
You want clients who love you and others who don't. If you get the
love/hate reaction, you know you are on to something, since your
focus is causing exclusion and discomfort with some. Better yet, the
people who love you now will have a reason to defend you, further
entrenching their adoration because you share a common "enemy."
Serve a narrow niche and facilitate growth byexclusion!
You Are Really, Really Good at Very, Very Little
Manyentrepreneurs get in the habit of saying, "I can do it" to ev
eryone and everything. I call this the "I Can" syndrome. While it is
true you can do many things, you suck at most of them. All of us
arenaturally talentedat onlya few things and aremediocre or bad at
everything else. Entrepreneurial mastery requires that youlearnwhat
your strengths are (few as they maybe) and exploit them to the full
est. All the other areas, where youarenot strong, needto be handled
by other peoplewho are super-talented in those areas.
I recognize that this is easier said than done. During the early stages
of launching your company, you do, in fact, need to do everything.
In addition to stretching every penny you have, you also need to
learn the requirements of your business. Over time, as you start to
generate cash flow, youneed to introduce other experts. As youcan
afford it, bringon extraordinary staff and/orservices that canreplace
you in the areas that consume a majority of your time and where
your talents are weakest. Forexample, if youhave poor attentionto
detail, which most entrepreneurs do, youwill probably want to hire
an excellent part-time bookkeeper. Maybe contract with a personal
assistant service to help withscheduling andsmall tasks.
Discover the areas where you are naturally talented. This requires
stepping away from the moment and looking at your abilities and
experience objectively. Consider your answers to these questions to
discover your strengths:
1. What doyoudo that youlookforward to? If youconsistent
lyenjoy doing something, it may beoneof yourstrengths.
2. What activity do you push off to do last? When you rou
tinely avoid a certain task, there's a good chance it may be
one of your weaknesses.
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3. In what area do you pick up knowledge very easily? If you
catch on to something quickly, its probably one of your
strengths.
4. In what areas do you struggle? These are almost definitely
weaknesses.
5. What activities give yousatisfaction, a sense of worth, and
just make you feel good? These are probably strengths.
6. When a mere three sheets are dangling, what is your in
stinctive approach? Do youjoke yourway out, do youwork
with atypical resources, doyou scream for help, doyou dive
into theshower, or doyou say, "Screw it" andjuststand up
andwalk out? The way you handle crises is also oneofyour
strengths.
In every situation in life our natural tendency is to lean toward our
strengths. But this is typically at a subconscious level. Often we let
our logic redirect our course, and do what is not natural. We actually
hamper ourselves bytrying to improve our weaknesses because our
mind is telling us this is what we must do. Listen to your internal
guidance, your emotions; if it feels good, if it feels natural, if it feels
right, it almost definitely is. Your emotions consistently point you
toward your strengths. Buildon them.
Know that you have a "super strength" that no one else will ever
match: You care more about your business than anyone else. Your
company is your baby- your mission and your passion. For some
of your colleagues it mayjust bea job. They mayadmireand respect
you, but at the endof the dayit maystilljust bea job. You alonehave
the responsibility of ensuring everyone and everything arewell cared
for and moving forward.
TAKE ACTION NOW!
These next action steps are huge. Unbelievably huge. Hugeand cru
cial to yoursuccess. You may even need some extra timeto complete
them, and your answers may change as you discover more about
yourself andyourbusiness. Justdiginandsee whatyoucanget done
in halfan hour. If youve got more time, byall means, workit out.
1. Flip back to thesection onThe Focus Five andread it again.
Figure out your Focus Five, working theequation until you
come up witha niche you can dominate but in which you
stillearnat least $5Mannually afterno morethan five years
in business. Do not skipthis step!
2. Building onyour Immutable Laws, choose one Area ofInnova
tion. Consider all of theoptions before youcommit.
3. How well do you know your ideal customer? Write a list of
characteristics that describe your ideal customer in detail, right
down to hisor her underwear. Gowithyourgut and try not to
judge your list. You might be surprised at how many attributes
youcancome upwithright offthe bat.
CHAPTER 5 - IT'S ALL ABOUT
REGULARITY
"Winning is not a sometime thing. You don't winonce ina while,
you don't do things right once ina while, you do themright all the
time. Winning is a habit Unfortunately so is losing."
- Vincent Lombardi
Howmanytimes have youheard about the importance of a
detailed business plan? Make sure youhave tenyears of fi-
nancials. Make sure you can make $100M dollars captur
ing only 0.1% ofthe potential market. Make sure you have astrong
management team with a strong track record. Make sure you can
show clearly where your customers will be coming from and why.
Everyone tries to tell you that you need a winning business plan if
youever hope to go anywhere withyour business. Well, I'm hereto
tell youthat a business planisa total waste of time.
Almost every business plan I have ever seen includes excruciating,
eye-bleeding detail, discusses irrelevant experience, and is supported
by afantasy "management dream team" willing towork without pay
for six months. But that's understandable, becausewithin six months
the hypothetical projections show that everyone will be making mil
lion-dollar salaries. Yeah, right.
Once a company is upandrunning, thebusiness plan rarely, if ever,
receives a second glance - let alone an update. Instead, it ends up
collecting dust on the shelf. What a waste! All of that time, effort,
and money spent developing a work offiction that winds up in the
recycling bin. Even if you choose to squander your money on busi
ness planning software in an effort to streamline the process, you'll
still end up with a totallyuseless document.
Threedocumentswilllaunchyour business faster and better than any
business plan. With thesepowerful documents, your growthwill be
limitedonlybyyour beliefs and focus. Trash your business plan right
now, because I'm about to teachyouthe powerof three sheets (docu
ments): Your Prosperity Plan, QuarterlyPlan, and DailyMetrics.
Don't believe youcanplana successful business using just threedoc
uments? Read the Declaration of Independence, a one-page docu
ment that launched a powerful, free nation and inspired the entire
world.
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A Junk Man's $1B Prosperity Plan
Junkisn't the most glamorous business in theworld. Would yoube
lieve that in the summer of 1998, some guywas daydreaming about
howhe couldchange the world bybeing a junk man? Well it's true,
and his name is Brian Scudamore of 1-800-GOT-JUNK? based out
ofVancouver, BC.
Chapter 5: It's AllAbout Regularity 73
The idea came to himwhile fishing onesummer day. As thoughts of
his life drifted through his mind, Brian reviewed his past tenyears of
entrepreneurialism. He had built a small rubbish removal businessin
the past decade, and it was generating a respectable but small $1M
plus in annual revenues. Respectable, but not satisfying. That's when
it hit him.
Brian dropped his pole andbegan writing down his expectations of
himself and his company. Not mere wishes orhopeful thoughts, but
a real vision of his future. He started writing a "Painted Picture,"
as he came to name it, describing what the future of his company
would be like. The document contained grand statements, "unre
alistic" goals, and unheard-of expectations. But the document was
extremely real to Brian. Every timehe read the document, his heart
beat faster and his emotions soared. He kept on improving it and
improving it. Withina dayhe hadprepared a document that was so
compelling tohim, so true to his hardwired purpose inlife, he just
knew this hadto become his reality.
Like the Declaration of Independence, Brian's document contained
ideal statements that rang true with him. He made commitments
that were outrageous toothers, just like the small group ofmen that
declared the rag-tag United States army would defeat the military
juggernautof England.
When Brian returned from his weekend trip to the cabin, he had
his "Painted Picture," his Prosperity Plan, in hand. He set to action
immediately, and slowly but surely hired only those few people who
believed inthe same vision; the nonbelievers went their own way.
Fast-forward five years. Brian's company, 1-800-GOT-JUNK?, went
from $1M in annual revenue to $100M in annual revenue. That is
not a typo; $100M in revenue. His newest tweak to his Prosperity
Plan has him doing $1B in annual revenue by2014. I have a good
feeling it's gonna happen. He absolutely believes it is. Brian Scu-
damore is aToilet PaperEntrepreneur.
Create a Prosperity Plan
A Prosperity Plan is the overarching, never-changing (but often
tweaked) document that describes what your companyis all about.
It is your written commitment toyour company goals andthestan
dards youwill abide byto achieve them.
The Prosperity Plan replaces the most powerful part of a business
plan, the section that often gets ignored; it establishes the foundation
of beliefs for your company and generates excitement. But business
plans get shelved and then forgotten. Because your Prosperity Plan
is accessible to you at all times, it reenergizes you. It affirms your
beliefs. It realigns youwithyour vision.
Writing a Prosperity Plan is thevery first step in starting your com
pany. Creating this document comes before you legally form and
register your business, even before you name your company. Your
Prosperity Plan details your vision for your company. It defines ev
erything you and your business are about, everything you and your
business stand for. How can you have a good company name, a
strong marketing message, oraccomplish anything with consistency
without knowing where you are headed? You can't. That's why the
Prosperity Plan isthefirst order of business.
The formation ofyour company is all about you. This issoimportant
to understand! It is sodifferent from what wearetaught that I need
to say this again. Your company is first, foremost, and exclusively
ALL ABOUTYOU. Your customers are critical, but theyaresecond
to yourwants, because if you're not happy, theywon't be either. Your
company depends on effective colleagues, but they won't perform
well if you are a miserable SOB. The Prosperity Plan must be all
about you and what you envision tobe the best, happiest, most per
fect scenario for YOU.
The Prosperity Plan must be visceral. It must touch you at an emo
tional level, but it doesn't need to touch outsiders at an emotional
level. The Prosperity Plan for my company is powerful; it speaks to
my emotions, and I believe init emphatically. When you read it you
may feel that it is lame. You might not be moved by it. It might not
even make sense toyou. That's cool, because you are you. What mat
ters most is how I feel about my Plan and that I believe init tomy
core. Now of course, if you read thedocument andalso believe in it,
I want to speak with you. We might make great colleagues.
The Prosperity Plan is also your statement to the world about your
beliefs and how you plan to stay true to them. Some people will
reject it, most people will disregard it, but some will be drawn to it.
The people who are drawn to your Plan are the clients, colleagues,
investors, and vendors with which you will be able to build great
things.
Here are the key elements ofavisceral, motivating Prosperity Plan:
Life Mission - What is your life's purpose? Not your company mis
sion, but your LIFE mission. One informs the other, so as we dis
cussed in Part One, figure out what your heart screams for you to
do first. Then figure out how that mission can be played out in a
profitable business. If you relentlessly commit to doing what you
love, your businesswill be a force to be reckonedwith.
As you discover your life's mission youwill probably find your tag
line, the shortphrase that defines yourpurpose. Yourcompanyname
may come to you then, too. The key to discovering these compo
nents isthat theymust always resonate strongly with you; don't wor
ry about anyone oranything else at this phase.
Defining your Life Mission is not an easy exercise. Actually, most of
us go through life never discovering it, let alone thinking about it.
Here is how you do it. First, you must believe you have aLife Mis
sion (albeit you may have adifferent name for it) and that you will
discover it. Second, you need to seek it out. Some effective actions
you can take:
1. Think about and document your life from the day you
were born until today. What were your happiest moments?
Why? Would you like tohave those feelings and experiences
again?
2. Write alist of adjectives that you would like people to use
when describing you.
3. Ask your friends to tell you one thing you are absolutely the
best at.
4. Write your own eulogy. What stamp would you like toleave
on the world?
5. Put apicture of yourself onthe cover of your favorite maga
zine. What magazine is it? Why? What is the title placed
above youon the cover? Why?
6. If youcouldbea guest or host of anyTVshowin the world,
whichone would it be? Why? What wouldyou talkabout?
7. Who arethe ten people youadmire most? Why?
8. Write a listof 100 things that you enjoy doing or would like
to incorporate into your life.
9. What upsets you the most about the world? Do you have
ideas about how to make it better? How would you feel if
youwere doing that?
10. What have you always wanted to door experience?
Destiny - Once you know your life's mission, you need to identify
your Destiny. This is the "Painted Picture" that Brian Scudamore
wrote onthat day hewas fishing, or the vision document that many
business minds talk about. The name you give it is irrelevant. The
fact that you have a crystal-clear image ofwhat your company will
be is the critical part. Pick a date in the future when you see your
company achieving its most notable successes. In my case, I picked
ten years out fromthe dayI wrote it.
Think ofyour Destiny as your ultimate goals and those ofyour com
pany. Very often they are linked. Write them in as much detail as
possible, including how your life will be different when you reach
your Destiny. How will you know you've arrived at your goals? How
will youmeasure yoursuccess? Willit bein terms of revenue or brand
recognition or market domination orsomething else entirely?
Your Destiny MUST be absolutely 100% believable toYOU. Ifyou
write lofty ideas, unrealistic claims, and unachievable targets inyour
Destiny, you WILL still achieve themif you truly believe them to
your inner core. But if youwrite lofty ideas, unrealistic claims, and
unachievable targets andbelieve themto belofty, unrealistic, and un
achievable, you don't have a chance. Go backto the drawing board
and redo your Destiny until youbelieve it to your inner core. Don't
worry about how you are going to get there; I will show you the
method in a moment. Simply ensure that the thought behind the
thought believes it's possible, or better yet, probable. It must behit
ting at your emotional core. You've got tofeel it. It must bevisceral.
TPE TIP
E-Commerce - Tieyour business into PayPal. Thesystem
is simple and it works, but they do charge a small
percentage for transactions. If you want to gothe free
route, check out ZenCart. It works,but it'smore complex
than PayPal and not as recognizable.
Areaof Innovation - As wediscussed in the previous chapter, your
company can lead inonly one Area ofInnovation: Quality, Price, or
Convenience. Pick the category that intrinsically feels right. Then
dig deep into that category and define exactly how you are going to
be remarkably different than the competition. What is thearea where
you just can't be touched? What specifically do customers rave about
when they talk about you? This is your Area ofInnovation, and you
must commit toleading inthis area for thelife ofyour business.
Ifyou're just launching your business, choose an Area ofInnovation
that plays to your strengths. For example, if you've got a fantastic
product idea that will surpass the competition by leaps and bounds,
you might choose Quality as your Area of Innovation. Or if you
know you have the negotiating skills to keep costs down, you might
choosePriceas your Areaof Innovation.
Immutable Laws - You have certain hardwired beliefs that can't,
won't, andshouldn't bechanged. These beliefs are something we are
all bornwith, and theycontinue to intensify over time. Not all of us
share the same beliefs, and some of us have polar opposite beliefs.
When recording the Immutable Laws for your company, they must
be YOUR personal values, not awatered down version ofwhat you
think others will want to hear.
For example, I believe that in order to get the best out of people I
must first give them my best. I always say that commitment begets
commitment. Loyalty begets loyalty. And I believe it. Occasionally I
have been burned, but the vast majority ofthetime I have not. That's
why my values include "GiveTo Give" and "No Dicks Allowed!"
I have friends who believe someone must show them loyalty first in
order for them to reciprocate. Only when they have seen ferocious
loyalty do they give the same inreturn. They have been burned inthe
past with this philosophy, but the vast majority of times they have
not. Their values include "YouGotta Earn It!" and "Prove It."
So who's right? Both! And it doesn't matter. All that matters is that
you truly believe your own Immutable Laws and that they are truly
consistent with your nature.
Lookbackon your life, askfriends, and do the exercises outlined in
finding your Life Mission. Find your values. I guarantee you have
been exercising them all your life already. Document your Immu
table Laws as the rules your company will always abide by, no matter
what, every timeand at every moment.
Remember, this is not about "should," this is about what is mean
ingful to you. Soeven if people are telling youthat your Immutable
Laws areimpossible to adhere to or silly or useless, hangtight. When
things gethairy or business booms or both, you'll realize howimpor
tant thoseLaws are. Immutable Laws willkeep youon track; youcan
draw strength from them in times ofcrisis anduse themto help you
make decisions fast.
Community - Finally, at this stage westart talking about someone
else besides you! Well, not really. The community is the people you
are serving. You will bedelivering something to them that is 100%
consistent withYOUR Life Mission, is 100% moving YOUtoward
YOUR Destiny, is extraordinary because ofYOUR Area of Innova
tion, and is consistent with YOURvalues. Well, shit, who better to
consume this thing than you and people just like you and people
whowant to be likeyou? Exactly!
Hands down, you are most capable ofconnecting with people who
share the same values as you and/or aspire to belike youand/or as
pire tobe somewhat like you. Now that you know all about you and
your wants, what people make up the community that has the wants
and needs you can satisfy? These are the people you need tospeak to,
sell to, and service.
Remember, your Prosperity Plan does not have to berealistic byto
day's standards. In fact, it absolutely should NOT be realistic ac
cording towhat we know tobe true today. Nobody believed a man
would walk on the moon; it seemed impossible, the stuffof science
fiction or fairy tales. And yet a man didwalk onthemoon. So think
and dream big, and don't let concerns about how you will pull it off
influence your Prosperity Plan.
Chapter 5: It's All About Regularity 81
Nowgo write your own Prosperity Plan. Share it with as many peo
ple as possible so that you are forced into accountability. Keep it
close by and review it every week. While you may constantly tweak
it, the intent of the Prosperity Planwill never change. Checkout the
Toilet Paper Entrepreneur website (www.ToiletPaperEntrepreneur.
com) to download a copyof myProsperity Plan, whichyou can use
as a template to createyour own.
Here's onefinal tip about your Prosperity Plan: youknow you've got
it when reading it makes you cry. Yes, you. Your life's mission, your
Destiny, all of it should make you blubber like a baby. I don't care
howbadass you are, discovering your authentic passion is an emo
tional experience. You have NOT completed this exercise until you
break down andcry. I'mnot kidding. I got a little choked up there.
Always Be Tacking
The first time I went sailing I was taught a lesson that was so im
portant andapplied somuch to business that I jumped offthe boat,
swam ashore, andstarted writing it down. The boatfloated away into
the rocks. I had to paya lot to repair that boat, soyou better freakin
learn from this, too!
When sailing a boat, a sailor needs to knowwhere he is in relation to
his destination. He has to knowwhichwaythe wind is blowingand
knowthat it will occasionally change. Finally, he has to periodically
look for obstacles that lay in his path, like other boats, landmasses,
the Loch Ness Monster, and such.
With these few bitsof crucial information, he uses a technique called
tacking to navigate as quickly as possible tohisdestination. He knows
that he will not follow a straight line; the changing winds alone will
not allow for that. Instead, he will travel in a zigzag-like pattern.
By tacking, the sailor travels a shortdistance, maximizing the winds
andavoiding hazards. He thenanalyzes where he isin relationship to
his destination, adjusts thesails, redirects the boat andcontinues the
zag part ofhis travels. After another short distance heagain evaluates
his relationship to the destination and adjusts. Through a regular
reevaluation of his current location and the constant destination, he
routinely adjusts his actions to redirect the boat toward the destina
tion. The sailor knows that he won't travel a direct line, but by tack
inghe will promptly arrive at his destination regardless of the way
thewinds blow and regardless of the obstacles in front of him.
You will make the greatest progress in yourbusiness bytacking. The
best tacking method for business is using a Quarterly Plan, which
I will explain shortly. For now, just know that tacking is essential.
Pay attention and navigate only in short segments, readjusting to
the final destination onlyperiodically. Don't make me waste all that
boat-repair moneyfor nothing.
TPE TIP
Networking Groups - Instead of paying to join a local
networking group or traveling to networking events,
consider doingit online. Forums are agreat starting point.
Also consider participatinginblogsor starting your own.
If you want to do the hybrid of virtual reality meets
good or fashioned networking, check out Meetup.com
and Linkedln.com. Be a consistent presence and source
of participation; these are the folks that stand out and
get the business.
Quarterly Tacking
With your Prosperity Plan in the can, you now have a big red X
showing where you are on the map that is your company's journey,
and you know exactly where you need togo and the guidelines you
will adhere toinyour travels. Itstime toputyour budding enterprise
out onthe big, blue ocean and sail toward your destination. As your
company travels the rough seas ofcommerce, the winds will change,
obstacles will appear, and you will run into enemy ships. The strategy
is to navigate the waters safely while making swift progress to your
destination. The strategy to use is tacking.
By tacking your business, your intention is to travel only a short
distance as best as you can inthe direction ofthe goal. The Quarterly
Plan is a one-page, detailed description ofwhat your business must
accomplish inthe next ninety days tocover the most ground toward
its Destiny. It documents the three most important, overarching
goals that must be accomplished in the next quarter. You do know
what aquarter is, right? If not, lookit up.
The art of proper tacking is to harmonize both speed and distance.
Traveling at warp speed in the opposite direction of your destina
tion is of no value; neither is pointing your ship dead on target but
standing still. You need to consider every goal carefully and employ
abalance of distance, speed, and direction.
Here's the breakdown of the Quarterly Plan process:
1. Even if you are well into the current quarter, write a Quar
terly Plan to see youto theendof the quarter.
2. Two to three weeks before thequarter end, commit your full
efforts totie upany loose ends and ensure the completion of
the current Quarterly Plan.
3. With this quarters goals complete, review your Prosperity
Plan in detail to see where you are in regards to your Des
tiny.
4. Only after you have confirmed where you are at this mo
ment and reviewed your destination do youwrite the plan
for next quarter.
5. Complete this process a few weeks before the start of the
next quarter. Repeat the process every quarter. Congratula
tions! You are tacking yourbusiness.
Theelements of aQuarterly Plan are simple yet powerful. Theideal
is to commit to the two or three biggest goals that you can realisti-
cally completethis quarter that willsignificantly advance you toward
your Prosperity Plans Destiny.
Here are the components of The QuarterlyPlan:
1. Overarching Goal - WritedownOverarching Goalsfor the
quarter. These are the overall goals you intend to complete
before the end of the quarter, those that get you closer to
your Destiny. The goals are not tasks; throughout the quar
ter there will be many tasks related to the accomplishment
of Overarching Goals. Generally, youwill have three Over
archingGoals every quarter, such as revenue increases, reor
ganization, or improvedemployee morale.
2. Overarching Goal Description - Clarifyyour goals by de
scribing each one using a few sentences. Again, this is not a
list of tasks; it issimply a full description of what needs to be
accomplished in the next ninetydays. Anycolleague at your
office must be able to read the description and knowexactly
what needs to be accomplished.
3. Tasks Jot down a sequential list of the macro tasks that
need to be accomplished in order to achieve each specific
Overarching Goal. Each task must be specific enough so
that there is a clear and measurable expectation, yet leave
room for the personexecuting the task to exploit his or her
own strengths in accomplishing it. I strongly recommend
usingS.M.A.R.T. tasks - tasks that areSpecific, Measurable,
Attainable, Responsible, andTime-specific.
S = Specific: The goal must have enough detail so that it be
can be achieved with confidence. Aspecific goal defines the
Who, What, Where, When, and Why.
M = Measurable: The goal must have specific criteria for
measuring progress towardachieving the goal.
A =Attainable: The goal must be realistic. If you dont be
lieve its possible, you wont achieve it. Remember, hard
work IS realistic.
R=Responsible: Define ways to stayon trackwithcomplet
ing the goal.
T =Time: The goal must have a completion date and time.
Without a timeframe, thereis no sense of urgency, no mo
tivation to accomplish it, because the goal will always be
within your time parameters.
4. Target - Set realistic target completion dates for each task
and then ensure that theyare completed in a timely fashion.
Highlight the tasks that have been completed in green, and
review your progress weekly.
5. Lead - Designate a lead person accountable for complet
ing the task. Note two things: first, there can only be one
person accountable. If youmake several people accountable
it will simply result in finger-pointing and he said/she said.
Second, this is the person accountable, not necessarily re
sponsible. There is a major difference. Accountable means
the personat the end where the "buckstops." The lead may
elect to delegate responsibilities in part or in whole to oth
ers, but when the shit hits the fan it's his or her problem,
exclusively.
That's it! Develop a QuarterlyPlan for your top three goals for this
quarter, review it, monitor it, and follow it constantly. When the
quarter ends, these goals will be accomplished, and it is on to the
next, tackingyour wayto your Destiny.
Downloada template copyof the QuarterlyPlan from the Resourc
es section on The Toilet Paper Entrepreneur's website (www.Toilet
PaperEntrepreneur.com).
Obsidian Launch's Quarterly Plan
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Your Quarterly Plan is somethingthat you need to sharewith your
entire company, but unlike the Prosperity Plan, this stays confiden
tial to your companyand is not distributed. There is no need to give
your competitors the details of what you are up to. Hang a copyof
the Quarterly Plan overevery persons desk. As tasks on the plan get
completed on time, highlight them green. If they don't get com
pleted, highlight them red. If theyget completedlate, highlight them
yellow. I mean this literally; have everyone in your office highlight
the taskon his or her copyof the QuarterlyPlan.
How important is this? Critical! Everyone in your entire company
will know exactly what is going on with the Quarterly Plan, and
since theyare the ones marking it up, theyare involved even if they
are not directly involved. No one wants to see red, either, so your
teamwill all be pushingto keep it green!
Asan addedbonus, thehighlighting becomes averysimpleand quick
wayto measure your progress. If you have all greens, you are cruis
ing alongand maywant to set more aggressive goals in the future.
Mostly green with a few yellows is great - you got everything done
and hopefully pushed to make huge strides. Reds area no-no. Either
you are setting unrealistic goals or you are not committed to your
plan. When you see red, you sure as heckbetter get the roadblocks
and problems corrected for next quarter.
And remember to celebrate whenyouve achieved your goals for the
quarter. Rewards do not have to be expensive or evenhaveany mon
etaryvalue. Praise and acknowledgment are always welcome and al
ways free. A nice lunch on you ain't a bad idea either.
Every Day, Review Your Metrics
Now that you know where your destination is, and you have your
vessel tacking to it, you need to monitor the ongoing conditions.
What if you havea tear in a sail, or a bigwave damages your boat and
that starts filling with water? You need to regularly inspect and/or
haveyour crewreport on the conditions of the ship. No one prom
isedit would be smooth sailing!
Daily Metrics are the final component that replaces the lame, tradi
tional business plan. Daily Metrics are the handful of numbers that
instantly identify the health of the company, day in and day out. Is
cashflowtight?The DailyMetrics can identifythat. Are sales trends
TPE TIP
Computers -1 am sure you didn't spend as much time at
the libraryas you should haveduringcollege, so take this
as an opportunity to catch up. Many libraries will give
youfree, unlimitedaccessto computers with high-speed
Internet connectivity. Need more computer time? Look
into college campuses, cybercafes, and friends who will
lend you their offices after hours. And if you are a hot
shot and have your own laptop already, you can hop on
the free Internet access many of these places provide.
Just do us all a favor and stay off the porn, will ya?
strong? The Daily Metrics canidentify that. Is internal productivity
dropping significantly? TheDaily Metrics canidentify that, too.
Building on your Prosperity Planand your QuarterlyPlan, identify
the three to five most critical numbers you can review, every day, to
ensure you are progressing properly. Each Daily Metric must be a
single number and/or gauge and must clearly identify progress to
ward your Prosperity Plan andQuarterly Plan. Themetric, if appro
priate, can have a plus or minus associated with it to identify if it is
an improvement or deteriorationfrom the previous day.
For example, all of our clients have a DailyMetric we call the "Cash
Capacity." We get the number by taking our total current cash on
hand and dividing it by accounts payable and payroll for the next
sixty days. Weknowthat if thenumber ever drops below 1, wearein
a weak cash position. When our Cash Capacity number is between
1 and 3, we are in a healthy position. If our Cash Capacity num-
ber goes above 3, thenwe are in a bloated position, andwe put the
money into interest-bearing accounts or make capital investments.
Every daythisnumber andotherDaily Metrics arecommunicated to
our entirecompany. Every day.
The goal of Daily Metrics is to know your current status as well as to
anticipate howfuture prospects look. For example, a fuel gauge is a
"daily metric" for your car. It indicates the current status (health) of
your car as well as howlongyoucango before you run out of gas.
Your business needs to be monitored the sameway.
There are hundreds of options for your DailyMetrics, and a simple
Yahoo search (yes, I just dissed Google) on the terms "Financial Ra
tios" or "Business Ratios" will give you a hundred more. The key is
to find a simple number that accurately indicates your current busi
ness health and predicts the future for your cash, sales, and inven
tory. Other important aspects that are worthwhile but a bit more
difficult to track are client satisfaction, employee morale, and other
non-tangible aspects of your business.
You don't need to do the obvious here, either. You're goingfor met
rics that indicate current and future health. And you want to make
it as easy as possible to collect the data. For example, with my first
company we tracked the number of times a newcall cameinto our
company the previous day. It didn't matter if it was from a vendor,
client, cold call, or evenif it was a misdial. We simply tracked how
many calls camein a day. Our receptionist had a clicker and would
clickit every time someone called.
Sowhywas that important? Wedetermined that our call volumetied
into our sales, since over time a certain percentage of the calls were
newprospects. Acertain percentage of those prospects became cus-
tomers. And thosecustomers sent us money. Soevery daywewould
report the call number. Over time we learned that a call volume of
3000 calls in a 30-day rolling periodwould result in about $150K
in monthly sales three months later. This became a very powerful
indicator, sincewe could predict our sales three months in advance
simply bythephone ringing. You can imagine thepower ofknowing
what your sales are going to be three months from now- you can
prepare smartly and manage your cash better. That is the power of
metrics.
One note: The Daily Metrics will change over time, andmay change
radically, but typically will not change more thanonce a quarter. As I
said before, theDaily Metrics need to blend yourProsperity Planand
thecurrent Quarterly Plan. When first starting out, you may have all
your focus on sales, so your Daily Metrics relate predominantly to
sales. As yougrow and bring on new colleagues, your Daily Metrics
may shiftto reflect morale or performance factors. Daily Metrics are
meant to reflect the health of the company, and over time you will
want to monitor other parts of the corporate body.
Here is a snapshot of what our Daily Metrics may look like on any
givenday:
Cash
Capacity
3.7
+
Obsidian Launch's Daily Metrics
Partner
Revenue
(Prior Day)
$72.3K
+
Partner
Testimonial
(Prior Day)
24
(Rotting 30)
8
Application
Review
(Prior Day)
2.4 hr
+
The DailyMetrics are the most effective wayof keepingyour finger
on the pulse of your company. Studies have shownthat when there
is an acutefocus on a specific number, the number improves. That's
the power of keeping your finger on the pulse.
(Yes, you can download a sample of this, too, at www.ToiletPaper-
Entrepreneur.com.)
Gold Bullion Everywhere
In the introduction to this book, I mention how emotion is a key
factor in absorbing and retaining information. While powerful, re
membering to use theDaily Metrics as a tool may bechallenging for
you and your staff.
At Lawline, an Internet-based source for Continuing Legal Educa
tion (CLE), the Daily Metrics are in the forefront of the minds of
every employee. Why? Because they have a visual example that hits
them emotionallyeverytime they seeit.
Lawlines President, David Schnurman, came up with the idea to
motivate his staff using a display case full of gold bullion. Each bul
lion bar represents $10Kin annual revenue. As sales accumulate,
newbars are added to the stack. A great concept, but here's the ge
nius of David's idea: every time thecompany sales reach onemillion,
every staffmember ishandeda real, solidgold bar. That's visual! That's
emotional!
Employees pass by the gold-bullion display in Lawlines reception
area several times a day. This keeps themin a near-constant stateof
awareness of the company's daily metric for revenue. Howdoes this
systemtranslate to cold, hard cash? Sinceimplementing this power
ful visual and emotional reminder of the company's Daily Metrics,
Lawline has seena 600% growthin revenue! David attributes a sig
nificant portion of his company's growth to his methodof presenting
his daily metrics. David Schnurman is a Toilet Paper Entrepreneur.
It's Just Like Driving to Albuquerque
Let's say you live in Loco Hills, New Mexico, and want to travel
to the big city of Albuquerque. To get startedyou would probably
figure out exactly where youaregoing in Albuquerque, whetheryou
aretakinga caror bus, howlongit will take, where youwill stay, and
the roadsyou plan to travel to get there.
The planning required for taking a trip is identical to the intention
of the Prosperity Plan. It details thevehicle youwill drive (Life Mis
sion), your destination, and the time you anticipate it will take to
get there (Destiny); the roads you will travel (Area of Innovation),
the rules of the road (Immutable Laws), and with whom you will be
traveling (Community).
Asyouset out fromLoco Hills up goodold US-82, youwill onlybe
able to seeas far as the next turn in front of you. As you travel, 99%
of your time will be spent looking out the windshield and making
decisions to safely, quickly, and legally get to the next turn. This is
identical to the intention of the Quarterly Plan. Just as when driv
ing your car, you need to focus your attention on the road as far as
the next turn, avoiding obstacles, adjusting to problems, and most
of the time just keeping the steering wheel steady and the gas pedal
properlydepressed.
During your travels fromUS-82 all the wayto your destination on
Interstate 40, youregularly take quickpeeks at the fuel gauge, speed
ometer, and other indicators to make sureall things areas expected.
If youstart running lowon gas, youfindthe next exit to fill up. This
is identical to your Daily Metrics, where you constantly check the
fuel, speed, and health of your overall business.
Use the Prosperity Plan, Quarterly Plan, and the DailyMetrics to
constantly grow your company the right way. This method is a mil
lion times more effective than any business plan and is way more
dynamic. It is amazing what you can do with three sheets of paper
and some numbers.
TPE TIP
Research - While you're at the library, check out the
reference desk. Reference librarians know where to find
everything. Best of all, they love a challenge. Don't pay
for research. Do some yourself and get the reference
librarians to help with the rest. Find out where your state
library is located, because there you will find top-notch
research material, including extensive mailing lists and
statistical information.
TAKE ACTION NOW!
If you readthrough this entirechapter, youcan probably guess what
your three actionsteps are. Again, your "three sheets" areliving doc
uments; you can always come backand tweakthem later on.
1. If you haven't finished it yet (or evenstarted it), createyour
Prosperity Plan. Remember, it better make you bawl out
loud or it's not going to sustain you through those lean,
mean, earlydays of launchinga business.
2. Next, bang out a Quarterly Plan. Keep it simple and realistic.
Even if there are only two days left in thequarter, don'twaitfor
the next one. You'll be amazed at howmuch you can get done
just because yousaid youwould.
3. Establish Daily Metrics foryourbusiness. Thinkoutside the box
to come up witha visual example that will keep youmotivated
and on track.
2
i
Action
"One worthwhile task carried to a successful conclusion
is worth half-a-hundred half-finished tasks"
- Malcolm S. Forbes
The strategy has been laid out for you. You appreciate the
criticality of an enabling mindset and have set the wheels in
motion to build it. You have the plans in place and know
exactly whereyou are headed. You knowwhat you need to do in the
next ninety days to get there. Now there is one thing left. It's show
time. It's time to put all of this stuff into action.
Since you are reading this book, I must assume you are perched on
the edge of starting your first business or seeking ways to greatly
improve a companyyou are floundering with. This is a scary time.
Either way, you are facing actions and decisions that you have never
made before.
Even with your newTPE knowledge andTPE tools, the comfort of
your past is powerful and alluring. Thefamiliarity of repeating past
actions, albeit unsuccessful ones, can seem much safer than moving
decisively downan unexplored path.
Until wetakea leap of faith, noneof usknowifwecanfly. But isn'tit
better to leave the repeated failures behindonceand for all and move
decisively toward change, rather thansit on the sidelines wondering
if youcando it? Aren't youtired of seeing others succeed while you
continue a life of mediocrity? And isn't a life of mediocrity, well,
mediocre?
It'syour turn now. It'stimeto boldly stepforward to an amazing life
of entrepreneurship. It'stime to take the leap. But don't worry; I am
not here to pushyou offthe edge. I plan to THROWyou off.
CHAPTER 6 - ARE YOU READY NOW?
"Up, sluggard, and waste not life;
inthe grave will be sleeping enough."
- Benjamin Franklin
First, let medispel agreat myth.There isacommonmisconcep
tion circulating around that says if you don't exit the womb
with entrepreneurial drive then you're done; or at least, you
will never be able to achieve levels that natural-born entrepreneurs
can. WhileI agree that yourdesire ispart of youfrom birth, just be
cause you haven't discovered it in yourselfyet does not mean it's not
there. Your entrepreneurial drive could be somewhere deep inside
you, dormant, waiting for you to findit.
Most peopleget entrepreneurial inspiration in a flash, kind of a "what
if" moment, as it were. Personally, mine came during a drunken stu
por a few years after graduating from college. The point is, it doesn't
matter when it hits you, be it in college, soon thereafter, or when
you're ninetyyears old. What does matter is that you take action. If
youdon't takeaction, your drive may wane for awhile, onlyto come
back years later and bite you in the ass. The Toilet Paper Entrepre
neur knows that when the urge hits, it is go time.
"No" Your Way to Success
Until you close some doors, it's impossible to open others! Great
business growth requires saying "No" way more often than you say
"Yes."
Here's a question for the guys: I don't mean to offend anyone here
(too much), but who are the most desired girls? The ones you can't
have, right? Not the girls who are ho'ing around. You sure as heck
don't want to be in a long-term relationship with one of those loose
chicks. Who knows what (or whom) shewill be doing behind your
back? Plus, you canget some gross diseases that way.
It's probably the same for girls, right? You want a great, non-creepy
guywho isgoing tostick around andbecommitted, not theguy who
is with every girl at the party. I know, I know, some people like the
challenge of "taming" the badboy or the badgirl, but howmany of
those relationships worklongterm? Squat, that's howmany.
Sodo youwant to beknown as theindustry whore, doing anyproj
ect for anybody at anyprice, just because youthinkyouhave to stay
busy to grow? Be selective. Otherwise, you'll get a reputation, and
none of the decent businesses or partners will want to get into bed
with you. Turn away projects that are best suited for someone else
and those that are not in line with the beliefs outlined in your Pros
perityPlan. Start saying "No" to grow.
If you have been shortchanged, ripped off, taken advantage of, un
fairly pressured, squeezed, or even underappreciated bya client, the
problem isyours to fix, not his. You must commit to saying "No" to
all of those crappy clients, bottom-feeding prospects, and unfit op
portunities this year. Seriously, right now, get onyour knees, lookup
to the sky, and swear youwill start saying "No." Don't worry, no one
Chapter 6: Are YouReady Now? 101
is lookingat you. Did you do it? Did you get on your knees? No?!?
Good! You are learning to say"No." But if you did do that little ex
ercise, start this section over. You clearly haven't learned the lesson.
You. Yes, you!
Saying "No" is all about sustaining your absolute focus. If you
haven't grasped this yet, I am going to continue ramming it down
your throat: Your success isentirely contingent upon yourfoundation of
enabling belief, your relentless focus, andyour actions consistent with
those beliefandfocus.
When you arestartingand growing a business, the unimportant stuff
keeps creeping in - the distractions, from reading every email every
second it comes in (and clicking the send/receive button a hundred
time just to check), to constant instant messaging fests, to "working"
on "opportunities" that arenot in your niche, to time-chewing meet
ings that don't help anyone. You need to say"No" to this stuff and
focus on what is important.
Another cool thing about saying "No" to certainpeopleis that they
become hungrier. Theywant what theycan't have. Aclassic example
is alcohol consumptionamongteenagers. It is chicto have what you
are not allowed. So even though booze is illegal to anyone under 21
in the US, teenagers represent a hugeconsumer base for the alcohol
industry. You will find in your own business that certain clientsyou
tell "No" will come backwith a better, more fittingproposition, and
you maysuddenlyfind yourselfhappilysaying "YES."
Today's most successful companies have been influenced more by
what theyhavesaid"No" to than what theyhavesaid"Yes" to. Think
about this for a moment. Allow it to sinkin. If you're nervous about
this, I get it. When you're just starting out in business, it may seem
crazy to say"No" to anyone. How are you supposed to grow your
business if you turn peopleaway?
For two years I served on the board of the Young Entrepreneurs
Organization (nowcalled EO) and was responsible for growing the
membership of our local chapter. Bothyears I won the award for fa
cilitating one of the threefastest-growing chapters in the world (out
of 100). For the ten years prior to that, the chapterhad grown about
0.5%per year. I bumpedthat number up to 75% growthper year.
You knowwhat I did differently than theguybefore me? I said, "No."
I limitedadmission, telling prospective members they had to pass an
approval process to qualify for membership. I rejected everyone the
first time around, and thosewho were eventually accepted couldn't
wait to paythe membership fee. That is the power of saying "No."
TPE TIP
Phone - Use VOIP (Voice Over IP) phones. These phones
connect to your computer or are stand-alone units and
use the Internet to dial out. Skype.com is one of the best
resources and Skype-to-Skypecalls are free.
The Top Nine List
JoeSpano, President of Buy-Rite, Inc., tookhis twenty-five-year-old
stagnant business and increased annual revenue by60% in twoyears
just bysaying "No." What he didwasn't complex; the whole plan fit
on a single poster board. Joe's strategy didn't cost a dime; it simply
required a newmindset.
It all started when Joe recognized that his team was in a constant
scramble to satisfy the needs of its one hundred keyclients, and that
the company's beliefs were compromised. Theywanted to do more,
faster, but with so many priority clients, it just wasn't working. Joe
realized it was impossible to have one hundred key clients. Its like
saying you haveone hundred best friends. Its just not possible.
Joe and his colleagues took action immediately, developing a cus
tomer ranking strategy founded on three simple questions:
1. Is the customer already a significant annual revenue-pro
ducer or, if not, does thecustomer have a realistic potential
to become one?
2. Will thecustomer commit toscheduled andfrequent com
munications with Buy-Rite to discuss its needs?
3. Does the addition of this customer to the key list signifi
cantly improve the overall synergy ofthe entire group?
With thislistof three vital questions, Joe's team sorted andidentified
its list of one hundred key clients and culled it down to nine. The
Top Nine was posted above every desk in every office, from the re
ceptionist stothe CEO's. Buy-Rite then committed, with no excep
tion, to do everything possible to say "Yes" to all requests from the
Top Nine.
More importantly, it said "No" to every other customer every time
that customer's needs were not one hundred percent consistent with
the needs of the Top Nine. InJoes words, "We essentially built our
business around the needs of nine customers, not everyone's needs.
We became truly SPECIFICcustomer driven. All other customers
were simply extensions of these TopNine. If they did not like that,
welost themandwewere prepared to accept that."
Within one month of implementing the newstrategy, Buy-Rite re
placed one of the Top Nine, and it wasn't just any company. It was
Wal-Mart. Yes, the biggest retailer in the world was removed from
Buy-Rite's Top Nine client list because it did not pass requirement
number two (communication).
By saying "No" to the majority and "Yes" to a small minority, Buy-
Rite experienced skyrocketing revenue growth. Butthat's not all. The
benefits to theTop Nine were so effective, they trickled down to the
other clients, who also bought more, driving a 10%increase in rev
enue from that client sector.
By far the most impressive benefit was the bottom line. This new
mindset resulted in a profit increase of 250%. That is a lot of cold
hard cash. With a new mindset, business boomed. It really, really
boomed. Joe's once-sluggish company achieved sales of $19M only
twoyears after implementing theTop Nine strategy. It was on pace
for $25M insales during the third year, when Buy-Rite was snapped
upbyaninvestment group seeking fast-growth companies.
All that success from saying "No." Joe Spano isaToilet Paper Entre
preneur.
The Dark Side
Experience is nature's way ofteaching us the results toexpect when
we behave in a certain way. When it comes to manyof life's situa
tions, experience is an invaluable asset. Think about grabbing ascald
ing hot iron. Do it once, orobserve someone else doing it, and your
Chapter 6: Are You Ready Now? 105
experience will clearly remind younever to do it again. That's a good
thing. But experience has a darkside, too. Weanticipate results based
on our experience when, in fact, the same results maynever happen
again. Whileour experience indicates a danger, there maybeno dan
gerat all. Experience stopped mefrom eating French toast for over a
decade! Experience maystop you before you start.
Adangerof havingprior business experience is that it maycloudyour
vision and cause you to use outdated strategies when what's really
needed isanewapproach. Like alemming, youfollowyourexperience
and rigid business fundamentals right offtheledge to yourdeath.
Things are changing soquickly inbusiness that ifyouare adhering to
experiences from a mere five years ago, theworld has already passed
youbyand lapped youa few times. Entrepreneurs who master and
adhere to core business/life principles, such as treat others the way
you would like to be treated, succeed because they make decisions
based on their value systems, not the almighty dollar or "expert"
opinion. Those entrepreneurs who adhere to life principles AND
constantly adapt to elusive business dynamics experience enormous,
lastingsuccess.
Never started a company before? Walking into it with no precon
ceived notions? No baseline to judge your progress against? Thank
God! You've got a shot at making this work.
Haven't Been There, Haven't Done That
Ifyou actually knew everything that would be expected and required
of you to start your own business, you might actually be smart
enough not to do it. That would be a shame.
Imagine if the Founding Fathers of the UnitedStates thought about
every variable and plannedout every detail of the American Revolu
tion. If theyhad thought it through, theysurely wouldhave known
it wasfoolish evento try.
Let's see here, the British have a farlarger army, their forces aremuch
better equipped, they have tons of money, they have tremendous
amounts of war experience, and they are motivated to keep us in
their kingdom. In comparison, wehave no armyat all andwill need
to make one, we don't have uniforms or adequate equipment, not
many people really support the cause, we don't have our own cur
rency, and this will be our first war.
Now let's get into the details. We need to attack the British here,
then run over there and attackthem. We will need to do crazystuff
such as cross frozen rivers, attackthe British on Christmas day, and
use a marginal general (named George) to lead a lot of the battles.
As things move along, we must convince other countries to come
help us fight. If we win, George must become President, not King,
and relinquish a lot of his power to others. And then, when this is
done, we need to make England our key ally going forward. What's
a knock-down, drag out death match among friends?
If they really started to dig intothedetails andfigure out each step,
they would have determined it was a hopeless fight and given up
before it started. That wouldhave beenthe smart thing to do.
Instead of an elaborate plan, the Founding Fathers had a crystal vi
sion anda purpose in theDeclaration of Independence, which they
wrote early in thewar andused to attract thesupport of people who
shared the same values. This document, this final commitment, put
America on the course to kick ass.
The Americans took their cause, step by grueling step, through an
ever-changing, dynamic process. After each win and each loss, their
short-term planwas adjusted to bein alignment with the envisioned
future. Success was due to simple planning, unwavering focus, and
letting the bulletsflyright away.
The impossible become verypossible because the FoundingFathers
weren't bogged downbywhat theydidn't needto know. Theyhadn't
been there and they hadn't done that. Thank God. The learning and
the tweaks and the changes all happened as they moved along. The
only constant was their vision.
TPE TIP
Sales/Marketing Automation - Even if you are a
sales force of one, you can appear to be much more
sophisticated than that. And you can do it for free. Try
ZohoCRM. It offers a free packagewhenyou havethree
usersor less. Could be a perfect way for youto compete
with the big boys.
What You Don't Know Can't Pervert You
This titleisa bit ofastretch. I went for theplay onwords here. When
I use theword pervert inthis context, I mean tostray away from the
propercourse. Got it? Good. Nowwork withme, youpervert.
Not too long ago my father planned to tile his kitchen. Overall, it
was a relatively simple project, minus a couple corner turns. The
planning stage went from a few hours toa few days. Then his engi-
neer mind went into overdrive, and the detailed investigation went
on for weeks. He wanted to make sure that every element was ad
dressed and even set up a mock layout using the actual tile in his
dining room.
Every day the planning became more and more intricate. One
small problem would be resolved, but it would cause two more mi
cro adjustments. Those adjustments would yield the need for more
change.
Finally, the day came to install the tile. So guess what happened?
Right! The tile didn't fit. The corners were not calculated correctly,
and he had to pull up the tile and do it again. But this time he ex
ecuted abasic plan and an ultimate goal, not adetailed step-by-step
action guide.
When I asked him about the failed project, my father taught me a
lesson I will never forget. "I over-thought it," hesaid. Then hecalled
me a nosey bastard. He experienced the result of over-processing
something, of thinking too much about it. It was in this iiber-plan-
ning that he "discovered" umpteen paths that perverted him from
achieving the original goal.
Here is a little bit of a paradox. Properly executing a process is all
about doing it first, then planning for it. The first time through is
oftenbest served with less planning and more doing. The first time
through is about dynamic adjustment and improvement as you ex
ecute. Only after you've successfully completed the process isit time
to get into the details. Why after? Because now you need to make it
repeatable; you need to ensure that it can bedone to thesame stan
dards the same way every time. It must become measurable. As the
Chapter 6: Are You Ready Now? 109
process isrepeated overandoverby somethingorsomeoneother than
you, your job becomes constant observation and improvement.
Yes, the devil is in the details, but you will have a devil of a time
gettinganythingdone the first go around if you fixate on them. So
when it comesto process, rough-cut aplan for the first job, but don't
try to anticipate the details of unfamiliar territory. Use the experience
tolearn andimprove. Then get intothedetails for thenext goaround
and master a repeatable process.
Anyone know agoodtile guy?
Burn the Boats
This is a story that has been floating around for centuries. True or
not, it holds a powerful lesson.
A young military leader faced a situation that required him to en
sure the success of a critical battle. A loss would have resulted in
the collapse of his military, atragic ending to thewar. The leader's
situation was made worse by that fact that he was facing an oppo
nentwho had himgreatly outnumbered, was positioned defensively
(often the superior position in a fight) and had the advantage of
better equipment.
Unshaken, theleader loaded his soldiers onto ships, sailed to theen
emy's shores and unloaded his soldiers and equipment. He then gave
the order toburn the boats that had just carried them. Addressinghis
men before they set outtobattle, hesaid, "You see the boats going up
in flames? That means the onlyway we can leave this land alive is if
we are victorious! We have no options. We win, orwe perish!"
Theywon.
You must do the same in your entrepreneurial endeavor. You must
cut off all the alternatives and put your entire beinginto the success
of your newcompany. By burningaway anyand all methods of re
treat, youwill focus your mindand bodyon moving forward. Thisis
essential to a successful launch. Go burn your boats. That is, unless
your business is selling boats.
TAKE ACTION NOW!
Compared to the last two sets of action steps, these three exercises
will be a breeze! I'm gonna saytwentyminutes, tops.
1. Thinkabout times in your life when yousaid "Yes" and re
ally should have said "No." Howwould your life bedifferent
todayif youhad gone withyour gut?
2. Identify your key customers, the people and businesses that
make up most of your revenue and also make you feel good
about doing business with them. How could you structure your
business in a way that would allow you to say "No" to those
people and businesses who are not key customers orwho donot
fitwithyour Prosperity Plan?
3. How has inexperience been an asset in your life and in your
business? Howhasit beena liability?
CHAPTER 7 - SHIT AND
GET OFF THE POT
"You see, inlife, lots ofpeople knowwhatto do,
but fewpeople actually do whatthey know.
Knowing is not enough! You must takeaction"
- Anthony Robbins
Whenit comes to action there is only one lesson. Start
now. There really isn't much else to say. Start now!
Start now! Start now! (Yes, I am stomping around like
a brattygirl right now.)
Many people talk a big game ofbusiness and entrepreneurialism but
continue their routine ofuninspired existence, never taking the leap.
This is what separates the men from the boys andthewomen from
the girls. You have totake action. You have torevel inthe possibility
of failure, since it is the springboard to success. The only true fail
ure is never to have tried, and those who refuse to tryare just plain
stupid.
Colin Powell once shared knowledge we can all benefit from, a for
mula todetermine when totake action. Simply put, heuses ametric
called P=40to70, where Pstands for the probability ofsuccess and
the numbers indicate the percentage ofinformation acquired so far.
Once 40% to 70% of the knowledge is collected and probability of
success is at least 40%, you are at the decision point of action. Go
with your gut and then takeimmediate action.
Thismeans that youshouldalways have enoughinformationto sup
port your theories, but if yousit around waiting for all the informa
tion and the probability of success to be 100%, it will be too late.
The Secret Behind The Secret
Have you seen the movie The Secret* The documentary where they
present the hermetic law of attraction? Great movie! If you haven't
seen it yet, drop this book right now andgogetit.
I believe that the lawof attraction exists and works, but damn it, they
missed ontheaction component. I wonder how many people saton
their couch expecting money, love, and fame but never lifted afinger
to get it. Those are surely some very disappointed people. Sure, ifyou
focus onsomething you will inevitably see it. The problem is you've
got to grab it, mold it, leverage it, use it, and make it happen.
Hereisthesecret behind The Secret Whenyoutrulywant something
and are passionate about it, the work that you must do to achieve
what you want is often fun, energizing, and/or easy. When you are
doing what you love todo and are pursuing what you want, the ac
tions are obvious. Getting started is often the most difficult part.
Once you have the beliefs and the focus, the final ingredient is ac
tion. Don't worry about making mistakes. Infact, the more mistakes
you make, the more progress you are making. Just don't repeat the
same mistakes. Of course, you are making progress with each suc
cess as well. The only way to not make progress is to sit still and do
nothing. So gleefully accept your mistakes and learn from them. Cel
ebrate your successes and learn toachieve them more easily the next
time. Mistakes are good, successes are great, andidleness isa sin.
Chapter 7: Shit and Get Offthe Pot 113
TPE TIP
Staff - Some retired folks want to work just to have
somewhere to go. You may be surprised by how many
people want to volunteer just to stay busy and have
some fun. Ask around. I bet you Mom, Dad, and Uncle
Billy wouldn't mind pitching in a little. Or recruit some
eager internsto helpyouout. During the summer, college
students sign up with University of Dreams to intern in
industries they aspire to work in when they graduate.
Check it out.
Just in Case You Haven't Started Yet, Here's How
Its not enough to simply say that you should take action; you actu
ally need to do it. Even if your actions are not greatly productive at
first, at least you are doing something. Yapping about your ideas and
dreams doesn't count; get offyour ass and get moving. Here are afew
tricks to get you started:
Capture Your ActionItems - As the ideas or thoughts ofwhat you
needto do cross your mind, write themdown on a list. There iscom
fort in knowing you have a record of what needs to be done. That
alone can help you focus and start taking action.
Prioritize - Alot of things you need to do are small, quick items,
but they can swallow up time just by wasting an eternity winding up
anddown from them. Prioritize alist oftheimportant stuff first and
grouptogether the smaller stuffto bedone in one shot later. Or bet
ter yet, havesomeone else do the smaller stuff.
Eliminate Duplicates - Sometimes I have prioritized my lists only
to realize that several tasks have onlyslight variations. If I finddupli
cates, I blendtheworktogether andstart banging away. Doyouhave
tasks with certain actions in common? Do them in one shot.
If it OnlyTakes Two, Do- Sometimes tasks are sosimple andquick
that the time you would take to get them recorded and prioritized
would take longer than justdoing them inthefirst place. Ifyou have
tasks that clearly can becompleted in under two minutes, do them
right away. Dont waste any time trying tomanage these things.
Eliminate Time-Wasters - Some tasks just aren't worth it. Scratch
them offyour list and forget about them. Don't delegate them to
someone else either, and waste her time. If it's a waste of time, it's a
waste of time.
Concentrate Your Thoughts - Instead of clouding your mind with
rambling thoughts, stop for a moment and focus on one thing.
Think about it repeatedly and then tear into it. This isn't as hard as it
sounds. Ever hear a tune andcant get it out ofyour head? Itsbecause
you listened tothe song closelywhen you heard it, repeated it inyour
head, and it became an overwhelming focus.
Turn Off the Email - This was one of my biggest problems. Even
though I set my email tocheck once every three hours, I caught my
self clicking send/receive every ten seconds. Check email only twice
a day - around lunch andagain at theendof day. In between, turn
it off. Make it inaccessible. You will get a lot more work done that
way. I do.
Chapter 7: Shit and Get Off the Pot 115
Delegate - Whenever possible give the work youarenot great at to
someone else who is great at it. This does not mean giving up your
accountability for the work; it just means you assign someone else
the responsibility of completing the task. You still need to check on
theprogress, butyou don't need todoit ormicromanage it. Delegate
everything youcan, abdicate nothing.
Commit to Someone Else - When the task at hand needs to be
delivered to a third party, it will get your butt in gear. So tie your
tasks into deliverables. When other people depend onyou, you will
deliver. Commit toadeadline and backtrack tothe actions you must
complete to meet your commitment. Then take them. The pressure
ofhaving someone else depending on you will definitely keep you
moving forward.
Make it Manageable - Some tasks are way too big to be done in a
single sitting oreven inashort time frame. These big tasks need tobe
broken down into bite-sized pieces that can be accomplished quickly.
It is much easier to take action when you can see a step through to
completion, take a break if needed, and then move on to the next. I
once asked a brain surgeon how difficult herwork was. She said that
anyone could perform brain surgery because it is an extremely simple
process. The only challenge is getting each ofthe five hundred simple
steps done completely andin theright order.
Take aBreak - Once you are in the groove, taking action and get
ting stuff done, realize that you will get tired at some point. You'll
start drifting off-focus, and your productivity will wane. That's OK.
It's actually more than OK. It's your signal totake a break. So doit,
take a break.
Goin Spurts - Many people perform better by working in shorter
segments, taking abreak from the action, and then starting up again.
Tryit. Go into a taskwith the promise that youwill both takebreaks
as needed and get right backto it whenbreak time is over.
RewardYourself - When I finish a task, I love to put a line through
it on mylist. When I lookat the list I see all the stuffI have done.
It feels great to complete somuch. Sometimes I buymyself a treat.
Whatever works foryou, do it. Make sure youreward yourself.
Make Failure VERY Painful - You won't grab an iron if you know
it is going toburn the living crap out ofyou. You will also complete
a task if failure to do so results in the same scalding burn. Since I
don't suggest you motivate yourself with the threat ofphysical pain,
money can be a great motivator. Give a $100 bill to a friend and
tell him it's his tokeep ifyou don't complete the task at hand. You'll
complete the task! And, like any true friend, he will have already
spent the money by the time you're finished.
Stop Your Bitching, Bitch - At some point, enough is enough. If
you still aren't taking any action, you should just be embarrassedwith
yourself. Look inthe mirror, acknowledge you have been a pathetic
loser to this point, and stop thebullshit now, bitch. Getyour ass in
gear and starting doing it. Yes, that's right, I called you abitch.
Action, Lights, Camera
Fred DeLuca, founder of Subway, builtoneof theworld's mostsuc
cessful restaurant chains, which by2004 had achieved over $5 bil
lion in saleswith 15,000 restaurants in 76 countries. To have success
like that you better go in with a plan, right? Not if you are Fred
DeLuca.
With a $1,000investment, Fred opened his inaugural storein 1965.
When the first customer walked in the door to buy a sub sandwich,
Fred realized he didn't know how to make it. That's right; he opened
his first sandwich shop, greeted his first customer, and didn't even
plan how to make a sandwich. What he did do was take action de
spite improper and incomplete preparation. The result, in his case,
was five big bills.
I am not suggesting youlaunch your business blindly. As you have
learned, you need acomplete understanding ofyour beliefs andyour
focus. You need tohave agood idea ofwhat you are doing and how
you plan to do it. But you also know that you can't be 100% pre
pared for everything, norshould you be. Ifyou work hard andwork
smart, the actions you take will more than compensate for any poor
planning.
Don't wait for the lights tobe on and the cameras tostart rolling. It
might be too late then. Oh yeah, did I mention that Fred DeLuca
was seventeen years old when he started Subway? Fred DeLuca is a
Toilet Paper Entrepreneur. You can be one, too. Take action. Start
now!
Happily Walk Out ota Once-in-a-Lifetime Meeting
Once a year a group of leading business thinkers, world-renowned
business authors and cream-of-the-crop, cutting-edge entrepreneurs
from all over the world gather at MIT in Boston for five, fourteen-
plus-hour days of intense learning and idea exchange. The "Birth
ing ofGiants" group, also jokingly referred to as "The Gathering of
Egos," is extremely difficult tojoin, and the cost is not cheap. Ifyou
are lucky enough toparticipate, you better bring your Agame, and it
goes without saying that youdon'tleave before it'sover. That isunless
you're BarrettErsek of HappyLawn.
Thefirst full day's session isalways extremely intense. It kicks offwith
mind-blowing concepts, over-the-edge experiences, horrible crash-
and-burnstories and amazing try-and-fly stories. Everyone hangs on
the edge of hisseat, jotting notes as fast as possible, laptops clicking
away. You don't dare take a premature break for the bathroom; there
is too much powerful information being shared. It's better to have
youreyeballs floating thanto leave the room.
Forty-five minutes in androlling, Barrett Ersek jumped up in front
ofthe group ofabout seventy people and said, "I gotta go!" Another
member shouted out thethoughts of thegroup, "Good for you, the
bathroom is down the hallway. Now shut up." Everyone's focus re
turned to the discussion at hand.
"No, you don't get it. I gotta go. I just figured out a key strategy for
my business. I gotta go now and get towork onit," Barret explained.
Anormal group would tell him hewas crazy, how much these meet
ings cost, and what awaste ofmoney itwas toleave. Everyone knows
you can do it next week. But this is not a normal group. Instead,
Barrett got a standing ovation. He left, bought a dictation machine
at a local store, and drove from Boston to Philadelphia, dictating his
ideas theentire way. He started on his project that night. Talk about
taking action now! That ishow you doit.
Sowhat was the idea? What if he couldget a proposal to a customer
in minutes, not days, without the needto ever go onsite?
Let meexplain. Barrett's company is in thelawn care industry, com
peting against franchises such as ChemLawn. The challenge in the
industry is in the proposal stage. If someone wants an estimate for
lawn care, vendors like Barrett first dispatch a lawn care specialist
to measure the property and examine the landscape. A lot of time
and money goes into preparing an estimate, and if you do get the
contract it takes two or three lawn treatments to recoup the cost of
preparing the estimate.
At that non-ideal, crazy moment Barrett had an ideathat was amaz
ing. He wondered if he could use satellite images, like the ones in
Google Maps, to measure the properties and review the landscapes
without ever going onsite. This idea may have crossed other people's
minds, but Barrett didwhat many never do. He tookaction imme
diately.
With new, patent-pending technology, Barrett's company increased
sales by$10M in a little over two years, a feat that hadtaken Barrett
and his team seven years to achieve in the past. Costs dropped and
profits were up. Alot. Barrett Ersek is aToilet Paper Entrepreneur.
Action is theonly way tomake progress. Take action now; don't wait
for a convenient time. It can't be overemphasized. Take action now.
Throw this book down right now andtake action!
Act As If, But Only on the Inside
When it comes time to take action, sometimes you don't know how
toact. Maybe you have tomake that big sales call andclose thedeal.
Maybe you are hiring your first employee. What are the actions you
needto take? Howdo youdo it?
Though the execution may be a challenge, the answer is simple. In
short, you need to act internally (in your mind) as ifyou have already
achieved what you want, AND you must act outwardlyin the way
youwouldwant to be treated onceyouarrive at your destination.
This isnot the "actasif" message yousawin Boiler Room. I oncehad
a guy call on meto sell mea phone system I needed. I distinctly re
member the absoluteattitude this schmuckhad. He knewthe proper
answers and was persistent. He was behaving like he had already
achieved hisgoals by"assuming thesale."
Using the old school method of sales, hewas following the ABC's
(Always Be Closing). Hewas using phrases like, "Doyouwant usto
deliver the phone system today or tomorrow?" Even though I had
not ordered thesystem from him, hekept onwith questions like, "I
appreciate your commitment tothis system, would you prefer aone
time payment ormonthly installments?" I thought hewas ajackass,
politely got out of the meeting, and was grateful NOT to have a
phone system from someone like him.
The phone system salesperson was only executing half ofasuccessful
sales strategy, and even that part was screwed up. Yes, hewas techni
cally "acting as if," but he was doing it outwardly through words and
gestures, not inwardly through confidence. When you "act as if" in
your mind, the actions come through as confidence.
The second component tosuccessfully "acting as if" isthatyour out
ward actions need to be consistent withhowyouenvision the ideal
prospect would want those actions to play out. Put yourself in the
shoes oftheperson onthe other side. What would "wow" you? Treat
the other person that way, andthensome.
Never "assume the sale," a horrible strategy from 1950. Instead, pro
ceed with the internal confidence of having already made the sale,
but behave outwardly with the decency of an exceptional human
Chapter ?: Shit and Get Offthe Pot 121
TPE TIP
Business Mentoring - The Service Corps of Retired
Executives (SCORE) maintains a large group of been-
there, done-that business executives who provide
business mentoringtostart upsforfree. They'll match you
with two or three former execs that know your specific
industry, and they are inregular contact with the Small
Business Administration (SBA), so if you are goingfor an
SBA loan, they can help. Manyof these individuals also
have key contacts who may further help your business
grow. Check out Score.orgfor more information.
being. You 11 be able tosleep well at night, and chances are you'll get
the sale.
Here's what "acting as if" definitely is not. It's not lying. Some people
take "acting as if" to an extreme and go on a lying spree. Spewing
lies oftheir greatness and success. That is theworst thing you can do.
When people find you out, and they will, they will lose trust inyou.
Soon you'll have people talking trash about you or your company
behind your back andavoiding you at all costs.
Acting "as if" is all about making a vision for yourself of what you
want to achieve, a clear picture of howthe person you want to be
would actin a certain situation. It's all about being truthful toyour
self andothers about where you are heading andwho you are now.
The 16,107 Steps You (Don't) Need to Take
While looking at mybookshelf bowing under the weight of tons of
business books, I noticed that manyof themhadtitles suchas The 13
Way to Do This, 1,000Tricks To That, and The 7Strategies For What
ever. Howcould theyall be right?
I decided to do some informal research. I went on Amazon to deter
mine the number of actions, in total, that the world's business, per
sonal success, and financial books said we needed to know in order
to successfully start, grow, andmaintain our businesses and our lives.
I lost count at 16,107. Absolutely absurd!
For example, one book claims there are 100Absolutely Unbreakable
Laws to Business Success (Brian Tracy), another book says that there
are 601 Essential Things That Everyone in Business Needs (Barbara
Pachter), and yet another asserts there are28 Sure Fire Strategiesfor
Business andPersonal Success (Tom Leonard & Byron Larson). Or
howabout the bookthat states the 7 Irrefutable Laws That Determine
Business Success (David Eichenbaum)? Yet none of them are identical
to the 16Lessons inthe Law ofSuccess (Napoleon Hill).
So which book isright? Which book doI follow? Howcanthey all be
"unbreakable," "irrefutable," and "essential?"And how the hell am I
going to do 16,107 things without going completely insane? Arrgh!
This is confusing!
It gets even worse when it comes to managing your colleagues at
your newgrowing business. Did youknow there are 1,001 Ways to
Reward Employees (Bob Nelson), yet only 365 Way to Motivate (Di-
anna Podmorojf) them, 151 Ideas to Recognize Them (Ken Lloyd), and
a meager 150Ways to Inspire Them (Donna Deeprose)? Soif youget
the formula mixed up, you may end up trying to motivate yourself
to inspire themto reward no one, and youwon't even be recognized
for your effort. Crap!
Sowhat isthe right answer? Howmanydifferent actions doyouneed
to take to be successful? There is no magic formula, but the number
of actions can easily be in the tens or hundreds of thousands. While
I like to bust the chops of these books, theyall revolve around the
truth of one foundational principle:
Belief +Focus =Apparent Action
Don't get inundated by over-thinking the various steps and process
es. So many people get overwhelmed trying todecide which steps are
the right ones. Quite frankly, even just seven steps tosuccess are still
too many tojuggle at once. Tips and advice serve you best when you
seek them out as relevant issues come upand not before.
Here are the ONLY five things you need to do to succeed in any
thing:
1. Determine what you want.
2. Set an enabling belief.
3. Commit focus and attention toyour goal.
4. Take the most obvious actions toachieve your goal.
5. Monitor your progress, adjusting your actions to realign
with your goal.
So instead ofworrying andpreparing for all thedifferent actions that
mayor may not be requiredof you, set a foundation for action first.
With the right enabling beliefand focus, the required actions will
become apparent. When consulting all of those business and per
sonal growth books, use your gut to identify the actions, ideas, and
solutions to build on what you intuitively knowis true.
Know When to Say When
In 1992, ScottAllen, Founder of TheWindows Experts, thought he
had timing onhis side. The U.S. economy was juststarting to crawl
out of a recession, and the demand for Windows-based computer
networks was about to go through the roof. Scott was steeped in
Windows networking knowledge, carrying expert certifications and
experience that was unmatched. The competition was weak and un
focused duetothequiet times oftherecession. Demand was growing
faster than supply. Opportunity was knocking. Scott jumped on it
and started The Windows Experts.
Within weeks of his launch clients started coming on board. But
many were small clients, and the sporadic demand did not suit a
scalable business. Scott pursued big clients, and when the State of
Texas seemed to have the perfect mix of long-term projects, Scott
dumped his small clients in order towork exclusively with the big
guys. Along with his growing business came a heftier bottom line,
so when, just weeks into thenew projects, theState ofTexas reorga
nized andabruptly cutoffThe Windows Experts andother vendors,
Scott was in trouble.
The loss of his biggest client put a huge damper onScott's business,
and he no longer hadsmall clients to fall back on. With two teens
and a newborn at home, Scott and his wife took a serious look at the
business and their future. Their analysis changed the course of his
business permanently.
Scott and his wife calculated it would take three to six months to
reestablish the business with small clients. They discussed the sacri
fices of startingover, suchas no family time. And they talkedabout
Scott's passion. Did he have enoughdrive to pull the business out of
the hole? Did he want it badlyenough? Considering the numbers,
the sacrifices, and Scott's lack ofsufficient interest in his business, the
choice was obvious. It was time to stop.
AfterScott called it quits, he accepted a full-time position that took
care of hisfinancial needs andallowed himtimeto discover a passion
worth fighting for. A few years later, he found it. Based on his love
of transforming virtual relationships into real relationships, Scott
launched Link to Your World. Today, Scott is one of the leading
authorities on thetopic ofentrepreneurialism, a frequent speaker on
social media, and a fixture on Google's front page for the keyword
"entrepreneur." No easy feat. That is unless you know when to stop
and rediscover your passion. Scott Allen is a Toilet Paper Entrepre
neur.
Accountability
When Toilet Paper Entrepreneurs get down to business, they take
full accountability for their situation andthejobin front of them. It
wastheir responsibility to checkfor a full roll of TP aheadof time. If
there areonlythreesheets left, it'stheir ownfault. Weakerminds will
blame the other guy for not replacing it. The Toilet Paper Entrepre
neur takes responsibility every step of theway.
Where you are today is a direct result of your decisions. You are
accountable for your success, andyou are accountable for your fail
ures. If you are pointing fingers at others, you are simply building a
wall of more limiting beliefs, andyour actions will be stymied. Just
because you were brought up poor or silver-spooned or went to a
crap school or were ignored or picked on or were considered ugly or
prettyor were heldbackor pushed forward does not excuse youfrom
anything. All that stuffis meaningless, except that it brought you to
whereyou are today.
Moving forward is not based upon your past; your future is exclu
sively determined by the decisions you make now, in this moment.
The first decision is to takecomplete and exclusive responsibility for
yoursuccess. Toilet Paper Entrepreneurs accept full and complete ac
countability for their lives, their businesses, and their futures.
A Good Night's Rest in the Hotel Parking Lot
Whenyouare a single mom in your early 30swiththree children to
raise, it is easy to give up on your dreams. Margie Aliprandi could
have donejust that, but instead she held herself completely account
able for her situation and its transformation. Broke, divorced, with
mouths to feed and a heftymortgage, Margie took three steps that
led her to multi-millionaire status. First, she took full ownership
and responsibility for her situation. Then shedocumented a simple
vision - to keep herfamily in theircurrent home- and then shetook
decisive action.
Instead of returning to the "security" of a full-time, low-paying
teaching job, Margie started her own business. She launched her first
TPE TIP
Office Space - Many businesses rent office space that
isn't immediately (or ever) fully occupied. If you have
friends inthis situation, you are inluck. Ifyou don't, see if
you can find a renter who would be willingto offer some
free space in exchange for you cleaning up the office at
the end of every day. Ifshe already has a cleaning service,
find some other service you can perform or a trade you
can make in exchange for free office space. Youmay not
have money, but you do have time.
company doingwhat sheloved, educating people on howto become
financially successful. She was living what she was preaching.
Unable to afford airfare, Margie would drive great distances simply
to meetwith prospects. One meeting alone required a forty-six hour
drive from Salt Lake Cityto Louisville andback. During her travels,
shewould stopat a hotel at night to rest - but she never checked in.
The parking lot served as her room, and her car was her bed. In the
morningshewouldget dressed, put makeup on and curl her hair in
a gas station bathroom. Then shewould head off to a day of meet
ings. With her persistence and action-first attitude, the sales started
coming and coming fast.
Margie took sole responsibility for her success, she maintained ab
solute clarity of her goal, andshe tookevery action necessary to suc
ceed. Shemade her first million byage 35 and has made that many
timesoversince. Margie Aliprandi is aToilet Paper Entrepreneur.
TAKE ACTION NOW!
If you're still not taking the steps necessary to launch your business,
completing the following three tasks will help you get off your ass
once and for all.
1. What excuses are you still nursing? What's holding you
back? Time to bust thosestragglers and get moving. Make
a list of anything and everything that is keeping you from
your goals, and then find a way aroundit. Use the ideas in
the first part of this chapterto helpyou get over, around, or
throughanyobstacles.
2. Act as if. How would you feel, behave, andreact if you already
accomplished all you set outtodo? What type ofpeople would
you surround yourself with? What would your days be like?
Would you make different decisions? Imagine yourself already
there, andthenact asifyouare.
3. Find a trustworthy, ass-kicking friend or colleague andask her
tohelp you stay ontrack. When you're accountable tosomeone,
it's easier to getoffyour ass.
I
o
a
Money & Equity
"Moneyis better thanpoverty
if only for financial reasons"
- Woody Allen
Myphone rangjust minutes ago. Yet another personask
ing me for moneyto launchhis business. Theinevitable
refrain, "I needmoney, I can't get startedwithout it." I
get calls likethisdaily. Theyareawaste of mytime. If youaremaking
similar calls, they are a wasteof your time, too.
What'sthe point of runninga business if youcan't earna darn good
living fromit?Theendgame ofentrepreneurialismisto makeenough
cointo live an abundant lifestyle and to continue the purposeof your
business. The problem is that so many people get caught up in the
moneyaspect that theyforget everything else that's important.
It is critical that your business makes cash, not that it starts with it.
Millions of wannabe entrepreneurs never make it off the ground be
cause they arewaiting until theyhave enough money. Waiting and
waiting. Enough money never comes. Inevitably their dreams are
suppressed and ultimately fizzle out.
Don't sit aroundlikea bumwaiting for a handout. Learn howa lack
of cash canbenefit yourbusiness starting today. Learn to turn having
less into generating more. Learn howto bringin cash flow through
your business activities, not through begging and borrowing. You
have to be active in the process of creating cash, not waiting and
wondering if it will fall into yourlap.
Conventional wisdom tells us that before we can open for business,
we need to raise the moneyoutlined in a traditional business plan.
I amhere to tell you again that the experts are wrong. As you have
learned, the design of your company is all about YOU, and if you
have survived to thispoint withoutventure capital, sowill your busi
ness. Besides, a lackof resources forces you to use ingenuity, a skill
that will helpyoustayahead of the packfor your entirerun.
CHAPTER 8 - GLEAN UP ON
THREE SHEETS
"Often people attempt to livetheir livesbackwards;
they try to have morethings, or moremoney
in order to do more of what theywant, so theywill be happier"
- Anonymous
Theplanning is over and you have taken action. Your head
and heart are readier than ever. You began this process by
defining your beliefs andgettingin the right entrepreneurial
mindset. Thenyou identified your finish line.You created a Prosper
ity Plan that gives you goose bumps. You're armedwith a Quarterly
Planand the Daily Metrics, which will keep youmoving in the right
direction. Most importantly, youhave backed your beliefs and focus
with committed actions. Thefinal piece of the puzzle is money.
When we have lots of money, our appreciation for it naturally goes
the wayof the full roll of TP; wewipe our ass with no concern for
the next timeweneed it. Whenwe lack money, our appreciation for
it is the same as the last squares of TP. Those few dollar bills only
go so far, and we have a very acute sense of how we need to man
age them. Exploit your lack of money, master cleaning up on just a
few squares. Then, when your cash reserves start growing, store it
away andcontinue to live offonlythefew necessary squares. Go into
every situationwith the minimumamount of cash required to prop
erly navigate it, and you will start building a healthy discipline for
accumulating cash.
Lackof money requires a focus that you don't needwhen you have
funding. When you don't have money, yourthoughts are focused on
ways youcan navigate around that perceived obstacle. If you properly
applyyour focus, youwill usethe lackofmoney as anopportunity to
askbetterquestions. Youwill not focus on the lackbut instead focus
forward on exploiting the resources you do have. You will become
more productive. Youwill innovate. And youwill prosper. Necessity
truly is the mother of invention.
Plenty of Somethin' from a Whole Lot of Nothin'
In Septemberof 1992, Julie Anderson, an unemployed fine art pho
tographer, got abright idea: Why not openup acostume rental shop
and make some moneyon Halloween? Julie loved making costumes
and had a few hanging around from photo shoots. There was just
one problem. Julie had no money for a retail space. In fact, she was
just about broke.
Julie made a deal with a swank hotel to rent a room for just one
month in exchange for promoting the hotel's Halloween bash. Since
shedidn't want people to know shehadonly a fewcostumes, she put
signs up that read "ByAppointment Only" andran anadin the local
weekly. Whenever potential customers called and asked if she had
a specific costume, she would ask for their size and then say, "Yes, I
have that, but it's rented and won't be back until tomorrow."
Yup. You got it. Julie made each costume to order, staying up all
night to finish them before hercustomers came in for their appoint
ments. She scoured thrift stores, dollar stores, and garage sales for
fabric and supplies. With barely any money leftover to eat, her din
ner every night was the free nacho buffet at the hotel's bar during
happy hour.
Chapter 8: Clean Upon Three Sheets 133
Bythe first of November, Julie had dozens of costumes and a nice
stash of cash. Since she loved creating costumes, Julie decided to
openshopyear-round andlaunched TheCostume Salon. Nineyears
later she sold her local business - literally thousands of hand-sewn
costumes made fromfound or discountedmaterials - and opened an
online couture costume rental business (www.costumesalon.com).
Today, Julierents high-end costumes to customers allover the world,
designs costumes for films and big-budget plays and musicals, and
is regularly featured in magazines such as American Dolland Italian
Vogue, And youknowwhat? Julie still uses the same business model.
If shedoesn't have it, shemakes it, oftenusingdiscounted or gently-
used materials. Julie Anderson is a Toilet Paper Entrepreneur.
Anything for Nothing
If I get one more stinking, whining email about how impossible it
is to start a business without any money, I am going to explode.
Money, if usedwisely, willlet youstart faster. But lackof moneywill
not prevent you fromstarting. If youhave the ability to send me an
email,you clearly haveaccess to a computeror cellphone. More than
enough tools to get started. Soif youdon't have money, stopmaking
excuses and find a way.
Throughout this book I've shared some of my tricks to help you
launch and growyour business for little or no cost. (Remember all
of thoseperkylittle text boxes?) There are a millionmore. But you're
probably thinking free office stuff is all well and good, but I can't
start my business until I haveenoughmoneyto bring my product to
market. That is a crock of sheet, if you askme.
While I agree that you may not be able to produce a fully-realized
version of your product design in this very moment, you might be
able to introduce a toned down version of it. Maybe you can start
with one piece of it. Or maybe you can use something else that
already exists and make a simple modification. Or howabout per
forming theservice behind theproduct or for a similar product?
If you still believe you need money, then follow thepathof thepart-
time entrepreneur. Worka job during the dayand slowly buildyour
entrepreneurial endeavor at night, or the other wayaround. There is
always away to achieve, andto doit withlittle or no money. You just
need to believe youcan, focus on problem solving, andthen DO IT!
If at this pointyouare still saying youcan't launch a company with
out money, give up. You arejust toostubbornand stuckin your lim
iting beliefs. Until you dissolve The Wall, you will not successfully
launchanything.
TPE TIP
Office Furniture - Go to office buildings that have
multiple occupants and find out who the landlord or
building management company is- Ask them if any
businesses are planningon moving in or out in the near
future. Then go to these businesses, explain that you
heard they are moving, and ask if they will be leaving
behind or discardingfurniture. Offer to take it off their
hands, with a smile.
Sometimes You Need To Borrow
Bootstrapping is the hardest road to travel, but it greatly increases
your chances of arriving at the castle a very, very wealthy king. I am
a huge believer in surviving on yourown, if youcan. It forces excel
lent discipline, and the rewards aregreater, but that doesn'tmeanyou
should be an idiot.
Starting a company takes guts, persistence, tenacity, and passion, but
stupidity is not part of the formula. You need to have some money
to live. Your job is not to prove to the worldyou can makeit on your
own by becoming homeless. There are times when you might need
to borrowcash. There may be other times you have to work at the
Burger Kingjust to keep cash coming in - but every other waking
hour must be devoted to launching your company, payingbackyour
debts, and driving toward success. Plus you get to eat all those free
fries. Yum.
Thereare a lot of do's and don'tsto debt financing (otherwise known
as borrowing.) The traditional methods don't work well. Surprised?
I didn't think so.
Bankers Are Anchors
Soyou need to borrowa full roll of moneyrather than root through
the proverbial wastepaper basket of nontraditional resources? Fine,
I'm cool with that. But if you're going to borrow, you better ensure
you use the cash to directly grow your fledgling business's bottom
line. Don't use it for anything else. Until you have a belief system
that maximizes what you have (think three sheets of TP here), you
shouldn't borrow a penny. Only when you are able to take a dollar
and stretch it a mile should you take in money to fuel your growth.
The first source of money entrepreneurs traditionally think of is
bankers. That's the old school approach and is probably the last
place you should go. Bankers aren't badpeople; they just don't easily
understand non-traditional business plans and are risk-averse by
nature. Banks arelooking for simple, low-risk investments that offer
consistent return. They like togetinvolved withstufftheythorough
lyunderstand andare highly confident will guarantee them a return.
A newstartup rarely fits the bill.
If youdoendupgoing to a bank, gowithasmall, local one. They are
typically far more aggressive. Ha, ha, that's funny! Aggressive banker.
Right. Know this: Bankers are anchors. Manyentrepreneurs believe
they can only get funding from banks. So when the bank rejects
themor gives themunreasonable, shittyterms, these entrepreneurs
believe that's the end of it. Bankers keep entrepreneurs anchored,
unable to move forward to Plan B.
Soif youshouldn't go to the banks, where should yougo? Thebest
sources of funding are the people who knowyou and knowyour
capabilities. Who knows you better than you?. Nobody! So the first
place to borrow money from is you. Nowdon't cut me off here and
say youdon't have anymoney. You might have morethan youthink.
Consider these options:
eBay - Look through the attic, garage, and every crevice of your
home. From baseball cards to old toys to your collection of slightly
soiled porno mags, somebody wants your crap and will pay good
money for it. See what you've got, post it on eBay and get some
moneyin the door. As the oldsaying kindagoes, "One man's shit is
another man's non-shit."
House - If you own a house, consider refinancing and pullingthe
equityout. If historical trends staytrue, your house will continueto
increase in value over the longterm. Just make sure you can afford
the newpayment, and avoid frequent refinancing, which may cost
you dearlyin the long run.
Car - But what if you don't own a house? You mayhave a car. Did
you knowyou could refinance your car? You can, if you own it. Just
be careful. Sincecars decrease in value over time, borrowing against
them is a financial risk.
401K & IRA - While 40IK, IRA, and other investment-account
moneyis intendedfor retirement, there aresituations in whichyou
can borrow fromyourself penalty-free. Of course you can just take
the money out directly, too, but be aware that you might take a
government-induced penalty and taxbeat-down.
529 Plan- The529plans are intended for college savings but canbe
freed up for other purposes, too. If youhave one, see if you can get
the funds out penalty-free. What better education canyou get than
entrepreneurialism, anyway?
Trade a Paperclip tor a House
If you couldn't squeeze enough money out of yourself, its time to
start looking at alternatives. Most will advise you to continue down
the funding path of the Four Fs: Founder, Family, Friends, and
Fools. Per usual, the pundits arewrong. You are the first "F," Ms. (or
Mr.) Business Founder, and youcanstill get cash or supplies of your
own accord. Before you run out asking for funds fromother sources,
try trading up.
1S8 The Toilet Paper Entrepreneur
Kyle MacDonald proved totheworld that hecould trade oneredpa
perclip for a house. At theendof oneyear he not onlyhadhishouse
but a lot of buzz and a book deal.
The story of One Red Paperclip is true, amazing, and a real eye-
opener. Kyle started offwitha couple basic things (acomputer and a
paper clip), a simple four-sentence Prosperity Plan, and a variant of
a Quarterly Plan, and then backed themup with immediate action.
Foursimple sentences placed on Craig's List, and Kyle was offto the
races. What he accomplished was nothingshort of amazing.
"This one redpaperclip is currently sitting on my desk next to my
computer. I want to tradethis one redpaperclip with you for some
thing bigger or better, maybe a pen, a spoon, or perhaps a boot. If
you promise to make the trade I will comeand visit you, wherever
youare, to trade. I'mgoing to make acontinuous chain of up trades'
until I get a house.'*
With that Kyle was off to the races. All he needed was his natural
talent, a computer, a paper clip, and his time. The red paper clip
was traded for a pen, which after a few trades became a tool box,
and then a generator, which went on to become a snowmobile, and
then a box truck, and after a few more trades became an acting role
in a movie, which resulted in his Destiny. Fourteen trades and one
yearlater Kyle moved into his newhousein the town of Kipling in
Saskatchewan, Canada.
Think about what you haveto offer that is of valueto someone else.
Can you provide training, service, or stuffto someone in exchange
for something you need? Working with limited resources requires
discipline andcommitment andisclearly a "harder" path thansome
one handing you money, but the results can be phenomenal. Shoot,
Chapter 8: Clean Up on Three Sheets 139
if a paperclip can get you a house, just imagine what you could get
for tradingthis book. Maybe you couldhave your own island.
Funds from the Folks
After squeezing money out of yourself, your belongings and your
skills, it may be necessary to tap the second "F", Family. It's time
to raise some cash through Mom, Dad, and your wealthy Uncle
Hecklebert. When it comes to borrowing family money there are
inherent pros and cons. Theupside is that the agreement will prob
ably be quick and will not require lawyers or personal guarantees.
Thedownside is summed up in the word, "probably."
Accepting a loanfroma family member is risky because if your busi
ness goes sour, things can get ugly fast and last an eternity. Think
about all those Thanksgiving dinners where your Uncle Hecklebert
recounted the story of how you screwed him, threw a turkey leg at
you, andstormed out. Nobody needs that. Nobody.
If you are going to ask the folks for some funding there are a few
things to consider. Afamily loan isjustlike any other loan, andyou
need to pay themoney back. Unless, of course, your folks justwrite
youa check, pat youon the back, and tell youto take it. In that case
give thema bighugand kiss, and get your ass to work. But chances
are your family needs money tolive, too, soifyou agree to aloan, use
this little trick to pay it back andsustain a friendly family: Borrow
more than you need!
For example, if you need $5K ask for $8K and use the extra $3K
to start the payback process on time, or even a little early. This af
fords you more time to get on your feet and generate revenue. At
the same time, it shows your family your commitment to paying
the loan back and keeps youin their good graces. As you get in the
payback rhythmit will become habitual and easier to pay, and you
won't feel like a schmuck.
Sometimes even the best plans don't pan out. If you can't pay back
your loan on time or are having any difficulty whatsoever, tell your
family lenders asfar in advance aspossible and workout a newplan
to pay the money back. Communication is the key - and it could
save your Thanksgiving.
TPE TIP
Office Furniture(PartTwo)- Root around inthrift stores
or at garage sales to find used furniture. The American
Cancer Society and other charities have annual garage
sales with countless office items, including supplies
like reams of paper, extension cords, and inkcartridges.
Rememberto go on the last daywhen everything is half-
price.
Vendors Have Your Money. Borrow It Back!
(Plus Other Options)
Maybe the folks arent an option, andyoudon't have a pennyto your
name. There are still plentyof options to consider before you start
selling offpieces of yourbudding company. If youaredoingat least
a little bit of business, you have evenmore options.
Vendor Loans - Contact vendors and tactfully but passionately tell
themyour vision, goals, and financial needs. Theywill have a good
understanding of your market and a great understanding of you -
and maywant to invest in your growth. If theyconsider you a good
client, your vendors maygive youvery favorable terms, loans, or an
equity deal. Chances are if they help you out financially, they are
also goingto makesurethat youarea priorityon their list. That can
help you. As your business grows, your needfor their products and
services will increase as well, and you're not about to switchvendors
after all theyve done for you, are you? Figure out how it can be a
win-win, and present your case. At the very least you mayget better
payment termson existing orders.
Client Loans- Clients arealso a goodsource of funding, but asking
them for money is a little risky. Customers may fear that you are in
financial trouble, and you maylosethem as clients.
Prepaying Clients - A great wayto get money is to offer clients a
prepayment or retaineroption. Askthemto payup front at the time
they placetheir order for someor all of the services and products. If
it is reasonable and fair, offer thema discount for prepaying.
Sell Receivables and POs - Factoring companies willpayyou today
for moneythat is due to you in the future. Do you have some big
invoices outstandingwith clients that would benefityou if they were
collected today, rather than in sixty days? If so, factoring maywork.
Keep in mind, though, factoring companies areout to makea living,
too. Theywill onlytakeon invoices that theyareconfident they can
collect and will takea prettylarge percentage, sometimes paying you
only 75% of the total invoice. Factoring companies offer the same
deal for purchase orders (POs). Soif you really needcash now, once
the client commits to using your company and issues a PO, you can
go to a factoring company and get the coinright away.
Friends - We already discussed how to raise money from yourself
and your family. When it comes to friends, you must treat themjust
like family. Remember, the consequence of a loangonebad can run
muchdeeper than just baddebt. This timeinsteadof a turkeylegbe
ing thrownyour way, it will probably be an emptybeer bottle.
Fools - When it comes to the final "F," Fools, I suggest you never
borrow from them. I think the term "Fools" is thrown around to be
a little cheeky, but they are out there. I dont like to consider this
approach, though, since a fool implies a win-lose scenario. Basically
you are saying you will get the cashyou need from people who are
idiots forlending it to you. Eitherway someone isgoing to lose. And
if your "foolish" lenders lose, it probably wont be pretty for you.
Even if you come out OK, I believe in karma; what comes around
goes around. Taking money from a fool sets you up for paybacks
someday, somehow. AsMr. T says, I pity the foo\
Credit Cards- When I launched my first companyand neededin
ventory for clients, I purchased all of it on credit cards. I was able
to borrowabout $25Kthrough credit cards, evenwith zeroincome
and a marginal credit history. Hereis the trickI used: I signedup for
about ten cards and then signed mywife up for ten more. Between
the two of us we got $25Kof total credit. When I made a purchase
I rolled the balance over to newcards at zerointerest. Everychance
I got I would payoff one card, get the limit raised, and start loading
it up again. I closed the other cards. This is not a clean method and
not great for your credit history. But it isveryeasy to get and helped
me to access money immediately.
Don't Borrow To Cover Your Mistakes
I nearly destroyed my company byborrowing to death. It wasn't the
credit cards; I paid all of those back. It was the bank loans. I bor
rowed $250Kand blew it. One of the biggest mistakes I made was
using the moneyto cover payroll. I gave myself a bloated salary and
paid for employees who weren't needed. Finally, when the money
ran out, I had to face the truth and cut my salary, fire employees,
and get backon track. But I still had a huge amount of debt on my
shoulders.
Thelesson in this storyis that if youare borrowing money to cover
yourownsalary andothers', youclearly have toomuchmoney going
out. At that moment you need to make the hard decision of let
tingpeople go. Chances are youcould be doing just as muchwork,
or even more, with fewer people. Get rid of those folks (and their
salaries) who aren't adding substantially to the bottom line. You are
going to have to fire themat some point, so you might as well do
it now and give them a little severance so they canfind better jobs
elsewhere.
Ifyoucan't afford salaries, consider hiring subcontractors to do some
of thework anemployee would do. You'll save thecost of matching
social security and Medicare payments, andyou'll save on the cost of
employee benefits such as health insurance. Just make sure youissue
1099s at the end of the year for eligible contractors, and take out a
basic Worker's Comp policy to cover them, just in case.
Also, if youare paying yourself a fat salary that the company needs
to borrow to cover, stop! Pay yourself only what the company can
afford andonly pay that after you have taken your profit first! We'll
talk about the Profit First method shortly. For now, just enjoy being
overwhelmed with anticipation.
Don't Give Personal Guarantees
I give in! You tried everything else and it didn't work. Nowit's time
to goto a banker. They better have a good offer or a really hot teller,
otherwise I wish youwouldn't go. But if youdo seek funding from
a bank, and it makes an offer, write it without a personal guarantee
(PG). A PG basically says that if you can't pay the loan back, any
thing that is owned byyou legally goes tothebank. Of course ifyou
are a bank, youwant to reduce your risk as muchaspossible, soyou
sure as hell better get theborrower to sign away his life. Despite this
conflict therecanbe mutualground. Thebankmaynot require a PG
if youcanreduce its risk considerably.
Theeasiest way to eliminate the PGisbylowering the loanamount.
There is an old saying in banking - if you can't pay the bankback
$100, that's your problem. If you can't pay the bankback $100mil-
lion, that's their problem. Other methods may include involving a
co-signer such as a family member or even a key client. Seek a way,
and you mayjust find it.
Chapter 8: Clean Upon Three Sheets 14B
TAKE ACTION NOW!
Building on the tips and strategies included in my book, complete
the following exercises to create a customized list of resources that
could work for your business. This part is really fun and totally ad
dictive. You'll bescavenging withthebest of theTPEs in no time!
1. Make a list of EVERYTHING you need for your business
that you KNOW you can get for free. Then make a list of
everything else you need. Next, use your TPE ingenuity to
come up withways to getTHOSETHINGS for free, too.
2. If you just can't get something for nothing, take your list and
brainstorm ways you could barter for what you need.
3. Ifyou still need stuff or services that will cost money, identify
ways you could get what you need onthe cheap.
CHAPTER 9 - A GOOD, SOLID FLOW
"A penny saved isa pennyearned"
- Benjamin Franklin
Recently I received a notice congratulating me on donating
a gallon ofblood. After some Wikipedia research I learned
that the human body has slightly over a gallon of blood
pumping through it. Clearly, ifI gave agallon ofblood inone sitting
I would be a goner. Shoot, even ifI only donated one-third of my
blood (approximately three pints) inone sitting I might suffer some
tough consequences. But since I donate one pint ofblood at atime,
my body hardly misses it and I can donate as frequently as seven
times ayear and not miss it. Apparently, my donations piled up, and
inavery short time I had given agallon ofblood.
Cash is the lifeblood ofyour business. I think it's hard toargue other
wise. Shouldn't you treat your money like the blood ofyour business?
Just as blood is often required ina medical emergency, a business in
fiscal trouble often requires aninfusion ofcapital.
You never know when a patient will need donated blood, but with
apool ofeasily accessible blood reserves the chance for survival dra
matically increases. Sometimes your business problems are predict
able, and other times they will blindside the hell out ofyou. With a
supply ofeasily accessible cash the chance for business survival dra
maticallyincreases.
Chapter 9: AGood, SolidPlow 147
Do you see the value in regularly "donating" business cash flow to
your reserves? The best system is to take your profit first. What do
I mean bythis? Every time money comes into your business, andI
mean every time, automatically transfer apercentage ofthat money
intoa separate account. Just like a pint of blood, a healthy business
will hardly feel the withdrawal. Infact, ifyou do it first, you'll never
miss it. I like to call this reserve theProfit First Account (PFA).
How much money can be transferred to the PFAwithout threaten
ing the health ofyour business? Most stable companies should be
able to post aprofit of 10% to 25% after all expenses. So start with
a low threshold wherein maybe 5% of every inbound dollar goes
to the PFA. Over time, slowly increase the percentage and monitor
cash flow closely to see ifyour business gets woozy. Don't stow away
too much money too quickly. Just as donating way too much blood
in one sitting is harmful, rapidly draining cash from business opera
tions could cripple or kill your organization. Once you have adjusted
expenses and cash outflow to sustain your PFAwithdrawals, you will
quicklyaccumulatea tremendous cashreserve.
Should tough times come knocking on your door, and they often
do, you will have your PFA to back you up and, ifnecessary, bail you
out. Ofcourse, as your cash reserves grow, they will ultimately be in
excess ofany imaginable rainy-day needs. At that point you should
take portions as an equity distribution. Trust me, it's areal nice way
toreward yourself for running ahealthy business.
Ifyou've never given blood, Istrongly encourage you to do it. There's
no question: it saves lives. Ifyou don't currently donate toyour com
pany's PFA account, I strongly encourage you to start. There's no
question: it saves companies.
Applyingthe PFA Process to Your Business
As with everything else in your business, your Profit First Account
isn't going tohappen unless you take action. Start out slow and easy,
andbuild your way up. Here are thesteps to take:
1. Research financial trends on Yahoo! Finance to determine
what healthy businesses in your industry earn in profit.
Calculate industry profits as a percentage of revenue. For
example, I studied many service/investment companies
and determined that 20% is a healthy profit number and
is achievable among the top performing companies in my
industry. 20% is my Profit First Percentage (PFP).
That being said, 20% may be too much money for ayoung
business. So initially, your company may be best served by
having 5% ofrevenue going to the PFA, adjusting contribu
tions to 8% in thefollowing quarter, and 11% in the next
and so on. Continue to ratchet up the PFA savings slowly
but surely, quarter by quarter, until you are at the optimal
amount determined from your research.
2. Establish your PFA so that it's not easy to transfer money
out of the account.
3. Immediately transfer your PFP from every deposit made as
a result of sales - and I do mean EVERY DEPOSIT - into
your PFA.
4. Use the remaining percentage of money deposited to run
your company and pay your salary.
Chapter 9: A Good, Solid Flow 149
5. Distribute 50% ofthe PFA balance toequity owners (hope
fully just you) on a quarterly basis and leave the remaining
50%in theaccount for backup.
Here are some of the benefits of the PFA:
1. The PFA is always available as a rainy-day fund. But it bet
ter be a serious storm. I mean thunder and lightning, and
stuff.
2. You will adjust spending and build ahealthy business using
the money left over after you withdraw the PFP. You'll prob
ably even earn additional profit on the leftover money.
3. The PFA is asimple monitoring system. Once you have an
established PFA for a year or so, you can watch the trend
ofthe PFA at distribution time. Ifthe PFA is growing, so is
your business. If the PFA is flat or going down, so is your
business.
4. Acompany that shows a consistent or increasing profit
quarter after quarter is much more valuable to aprospective
buyer. And you want this, since when you sell your com
pany is when you make some REAL money.
5. The PFA is away to get big lines ofcredit. The more you
have stashed away, the more lenders are willing to lend.
Good luck trying to get a bank line ofcredit if you don't
have any money. But as your PFA grows and banks know
you have cash, they will gladly offer you lines ofcredit, and
so will others. Consider your line ofcredit as asecond rainy-
day fund.
This PFA plan is simple, and it works, but make sure you avoid the
stumblingblocks:
1. If the money in the PFA is easy to take out, it's tempting
to "borrow" from it andscrew it up. The money MUST be
secure and not easily accessible. To address this, team up
withsomeone whom you trust andwill holdyouaccount
able. Have her co-sign on your PFA account. Set it up so
that your co-signer cannot withdraw money, but both of
you need to sign a check in order for you to take money
out. Similar to how two people must turna key to release a
nuclear missile. Just like that.
2. PFA'ing too much money too fast can be a drain on your
company. Alot of people get too gung-ho about this sys
tem and start taking the goal PFP - not the starting PFP -
immediately and then give up when their company has no
money for expenses. The fix is to start now, but to start slow-
give yourself and your business time to adjust to the PFA by
starting with asmall PFP, even ifit is just 1%.
3. Believe it or not, PFA money grows quickly. Within a few
years the account can actually growso much that itbecomes
a riskshould there be a lawsuit or some other crisis. If you
are inthis position, be grateful! Then, on an annual basis,
talk with your attorney and your accountant and determine
how much ofyour PFA you should cash out orspend. You
could use it to make a major purchase, for example, or it
could be your personal year-end bonus - it is nice being
the owner! Try tostrike abalance between legal protections,
business asset reduction and keeping enough in the coffers
should a disaster strike.
Chapter 9: A Good, Solid Flow 151
Pushing profitability forces slower growth, since that money
can't be used to invest in marketing or sales. The discipline
ofhaving profit from day one greatly outweighs the "loss" of
faster growth. With the PFA, you are assuring your wealth;
by growing fast, you are gambling on wealth. I suggest you
don't gamble.
For goodness sake, make sure you put your PFA in aninter
est-bearing account! Don't just putit inachecking account.
You are putting this money away for quite a while. Have it
work for you, not go on vacation. Put it into amoney mar
ket orother stable interesting-bearing liquid investment.
TPE TIP
Free Workforce - Cricket Hill Brewing Company in
Fairfield, NewJersey, has "beer packing parties" wherein
a huge line of volunteers pack boxes in exchange for
beer sampling. Itis fun, and the work gets done. Plus, the
"workforce" often walks out and buys a case or two of
the beers they had packed.
TAKE ACTION NOW!
Completing the next three steps could save your business and make
your life. NOTdoing it will putyour business injeopardy and com
pletely stress you out. So justdoit!
1. Using the method outlined in this chapter, calculate your
goal Profit First Percentage (PFP).
2. Identify astarting PFP that you can easily manage. Most people
start around 5% and go up from there until they reach their
goal PFP.
3. Set up an interest-bearing Profit First Account (PFA) and start
funneling your starter PFP into the account with each and every
deposit.
CHAPTER 10 - KEEP YOUR BUSINESS
TO YOURSELF
"A fool andhisequity are soon parted"
-Me
Soyou have abrand new business that is not worth anything
yet, right? Your company is far from generating revenue; you
dont have asingle client, letalone aphone system to receive
calls. It's just ababy! So why not give your best friend some equity
now? After all, it ain't worth nuttin'!
If you have or plan tohave achild, would you give aportion of your
parental rights to your friend, your neighbor orthedoctor at thelo
cal hospital? I hope you're thinking NO FREAKING WAY. Its your
kid for Gods sake! Your kid, Jeez!
Achild requires atremendous amount of your time to feed, nurture,
train, and keep healthy so he'll stop puking on you. But watching
your kid grow is MORE than worth it. Guess what, Chiefy? Your
business is YOUR baby! While it doesn't look like much now you
will be putting a tremendous amount of time, tears, and sweat into
it. Aswith ababy, you will need to feed and nurture your business,
keep it healthy, and teach it not tovomit on you. As your newborn
business grows, it will slowly but surely turn into astrong, healthy
young adult. Itwould be ashame for you to do all that grueling work
only to be sharing the parental rights when the business starts hitting
its stride. So don't do it - don't give your baby away.
Most partnerships fail. Some end in a bitter, emotional corporate
divorce, some endwithstunted progress, anda few others endwith
a handshake and smile. I can already hear your argument. "If I am
theparent, wouldn't it bebetter ifI hada spouse to help mecare for
mybaby? Wouldn't it be better to have someone to help change the
diapers?" I would say yes, if you were really going to have a child.
In that case a good solid partnership is critical. But youare starting
a company, not having a real baby, so don't get married to equity
partners.
Growing a business and parenting have many similarities, but one
of the biggest differentiators is that your business can hire many
"spouses" to help you feed and grow the corporate baby. There are
many ways to bring in extraordinary people andcompensate them
without sacrificing equity. Treating people well, as you would want
to betreated, enables you to create situations wherein bothyou and
the other "guardians" building the company are compensated in a
waythat does not include equity.
Partners Without Equity
I don't care how close you are to the other person, how well you
know her, or even if she isyour twin - people are different. Differ
ences are a good thing when it comes to building a company, but
small differences can be a big issue with multiple leaders at thetop.
Different Perceptions of Risk- Launching a business is risky, no
question. It requires serious head preparation, an enabling belief sys
temanda crystal clear vision. Danger lurks ifyou andyour partners
go in with different beliefs about the risks involved. Contrary beliefs
are limiting and damaging. For example, one partner may be so skit-
Chapter 10: KeepYour Business to Yourself 155
tish she calls it quits tooearly, andtheother may besobullheaded he
becomes a dead manwalking.
Too Much of a GoodThing - Variety is good when it comes to
building a team, but you can't win a game with only quarterbacks.
When you add the variable ofanother leader, the vision can be slight
ly different, the beliefs may vary and the focus can go askew. As long
as the company's progress is consistent with the collective partners'
desires, things are good. But when things go offtrack, watch out.
Egos can overtake ethics, pissy-ness can kill passion, andselfishness
can destroysuccess.
Different Immutable Laws - Alot ofpeople go into business with
someone they know simply because they know them and the path
ahead seems less scary with apartner. Good acquaintanceship doesn't
make for agood partnership. For your business to succeed, you and
your partner must share the same Immutable Laws and have comple
mentary talents andstrengths.
Different Levels of Energy - We all have varying levels ofenergy,
and opinions about our own energy levels incomparison tothose of
others. One partner who happily works through the night may con
sider the other lazy for leaving work in time for dinner. The partner
leaving at 5p.m. after all ofher work is done may consider her night-
owl partner inefficient and distracted. What may seem like abalance
in the beginning mayleadto serious conflict later on.
ConflictingVision - Amarkedly different vision very often divides
partners. Going in, everyone says he wants to have a multi-million
dollar company, but as time passes, complacency can kick in. The
vision of a large company may be offset by the work demands of
growing a business. When varying visions stop sharing a common
path, problems arise, and things can get nasty.
1B6 The Toilet Paper Entrepreneur
As you build your company, your biggest investment will be your
time, and I canguarantee that no one in your business is going to
invest as much time in your business as you; nor will anyone have
thesame impact as you. Your company may not look like much now,
but it doesn't matterwhere youarenow. All that matters isyourPros
perity Plan, your Destiny. How big do you envision your business
becoming? When it achieves these goals, do you want to share the
rewards with other equity partners, even if they didn't work as hard
or weren't assmart or didn't bring value to yourbusiness?
Ifyou give orsell equity tosomeone, you have tobe absolutely con
vinced it will grow the company. Inmany cases you keep half ofthe
company but end up doing triple the work. Triple? Yep. You'll do
three times the work partly because you have to spend time fixing
problems and differences with the other partners. At the early stages
of starting your business it's tempting to undervalue yourself and
your company, particularly if it brings in people who show great
initial value and expertise. But do you want them to be driving the
train alongside you or riding inpreferred seating?
Watch Out tor VIPs (Very Inordinately Paid
Specialists)
Don't give away equity or lots ofmoney to bring inVIPs. VIPs are
perceived tobe oftremendous value because they have big names, or
add credibility toyour company, orhave key contacts, orbring some
other value to the table. More often than not, however, they don't
deliver. It's simple, really. VIPs don't deliver because they don't have
to. They receive the reward (money orequity) before doing anything.
Think about it.Would you have started abusiness ifyou were already
receiving the money, success, and effect that you want to achieve?
Probably not.
Knowthat for your business, you arethe VIP. It'syour blood, sweat,
and tears, damn it, and for that you should be rewarded, not some
freeloadin VIP.
Ideas Are Worth the Time Spent on Them
New business ideas are easy to think up and even easier to dream
about. The next big thing is only a couple of beers, a few friends,
andthirty-five minutes away. Andit's right there at thebarwhere the
equity distribution isdiscussed. One-third all theway around, man!
We're all gonna be rich. Another round of Milwaukee's Best! On me!
Ifyou are the schmoe who then puts the majority ofeffort into get
tingtheidea offtheground, you have justgiven away thefarm.
Ideas don't make money, effort does. Some ideas require a tremen
dous amount ofeffort and time. Think cool invention, working pro
totype, patent and salivating customer base. Addmonumental effort
and hard work, and your business may be worth something.
Gauge the valueof your ideaon the effort, not on the idea alone.
TPE TIP
Free Press - Here is the big tip: Start local and small
andthen build your way up. Your local paper is starving
for goodstories about local heroes. Email or fax a quick
press release, and you'll be surprised howfast the local
guys call for an interview or to confirm facts.
Angels and VCs Suck (Kinda)
Letmepreface thisbytelling youthat I amalittlebitterhere -1 have
dealt with VCs and Angels and I did not have a pretty experience.
Not all Angels (high-net-worth individuals who invest in businesses)
arebadand not all VCs (venture capitalists) suck. They did bringus
Google, Starbucks, andother super-successes, after all.
But let's get real here. VCs andAngels are putting money in your
business as aninvestment. They fully want andexpect togetasignifi
cant return, andfast. They are NOT philanthropists; they are in the
business of making money. I'm not saying that these are bad people
or even that there isnovalue inworking withthem; youjust needto
have absolute clarity about what theirobjective is.
Have you ever bought stock in a public company, maybe on the
NYSE or NASDAQ? What mattered to you most? That the stock
went up, and quick, right? Your goal was tosell quickly for big gains.
Right?
Didyoucare about thecohesiveness ofthemanagement team or em
ployee morale? Were you concerned about the personal fiscal health
of the top decision makers? Did you wonder if the President had
enough time tomake it tothe family reunion that weekend? Hell no!
That stuff probably never, ever even crossed your mind. Your goal
was toinvest, make good money, and get out. That is the behavior of
98%of the VCs andAngels out there.
While there are a few differences between VCs /Angels and a stock
investment, one is significant. When you buy stock there are thou
sands and thousands of other investors in therewithyou. Effectively,
you spread your risk with others. You all want thecompany to suc
ceed, but if it fails you all godowntogether.
Angels and VCs invest with two or three others, not thousands.
Hence, their risk is magnified. Theyare investing in a startup com
pany(risky) and theyaregoing it alone or nearly alone (even riskier).
With this level of risk, VCs and Angels have a serious interest in the
success of your company, so theydon't just give you money, sit back
and watch. Theyoften take control, too.
So if you go the VC/Angel route, knowthat you are an investment,
not a partner. And if theydon't like howthings aregoing, theywill
takecontrol (andnot give it back) .
There is anappropriate time toconsider seeking outVCs andAngels,
though, andthis is typically once you are already bringing inmillions
in revenue. At a certain point your growth can be rapidly boosted
through aninjection ofmoney. That's when you should consider this
type of investor. I suggest that you approach Angels after you are in
the millions and VCs whenyou are in the tens of millions. At that
point you may be very happy with how things are going and may
even consider being your own angel.
The Right Way To Balance Equity &Partnering
Are you still convinced that you can't go it alone, that you will be
more successful with the right partner? You may beright. It worked
for Sergey Brin andLarry Page. Here are theright ways to choose a
partner for your business:
Rather than go in 50/50, let the partner who is performing at
the highest level have the majority of the company. Performance-
based equity distribution motivates bothpartners to work hard and
creatively for the success of the company and rewards the partner
that excels.
Determine specific metrics and critical goals for the company's
growth. These may include sales volume, billable hours worked,
purchase savings, customer feedback and products/services devel
oped. Have at least three performance variables but no more than
five. Then, every quarter for the next two and a half years, review
the achievements and split 10% of the equity. At the end of these
ten quarters the entire 100% of company equity will be assigned,
and thepartners will befairly rewarded for their contribution to the
overall success.
It's a Big Deal To Be Small
Partner ornot, funded ornot, youwill start small. This isavery, very
big deal. Andyou can use it to grow big.
Would you call Wal-Mart an intimate experience? Not at all! It is
sterile tosay the least and, inmyopinion, alittle creepy. It seems like
it ships the same weird-looking, funky-smelling, sweatpants-wearing
customers from store to store. Butthe prices are CHEAP, so I still go
often (and get out quickly).
The mega-stores and mega-businesses have an important place inthe
business world, but theydon't have theonlyplace. It isabigdeal be
ing asmall business. The world needs you. Actually, the world starves
for you. The number-crunching mega-store machine can't match the
intimacy and nimbleness of asmall business, nor its ability to make
every single client feel important. This is your advantage in being
small, andyou needto exploit it bigtime.
Chapter 10:Keep Your Business to Yourself 161
Not Much to Lose - Think about it: you have very little to lose.
This isquite possibly your biggest advantage. If anidea has potential
you'll gofor it because you've got nothing to protect.
The Underdog - Everyone loves to root for the underdog. Take col
lege football. The nation went crazy over Appalachian State's win
over Michigan (except for Michigan fans) during the first week of
the 2007/2008 season because the Appalachian State Mountaineers
were big-time underdogs. The game was professionally commented
on morethan anyother game in history. Leverage the fact that you're
an underdog. People just can't help rooting for you, and word gets
out quickly whenyou pull out the win.
Speed- You canmove faster and morenimblythan the bigguys. All
the red tape, back-stabbing, political games, and bureaucracy that
occur at big corporations don't happenwithin a small company, es
pecially when it is just you. You canmakea decision in seconds that
will take them days or weeks. You can be in, out, and invoicedbefore
theyeven return the call. Use speed to your advantage.
It Matters - If you have ten clients and youlose one, that's ten per
cent of your business. If a mega-store loses one, it doesn't care. It
cares about the overall trend. As a nascent startupyou not onlywant
to dowhat istakes to findandkeep goodclients, youhave to dowhat
it takes. Every client is a bigdeal, and you must make sure hefeels
likea bigdeal when doing business withyou. If you can pull that off,
clients will always choose you over the bigguys.
Intimacy- Building on the "it matters" concept, whenyou aresmall
you have the abilityto get to knowyour clients verywell. Some of
them may even become personal friends, and others will become
keycustomers. All of your clients should be treated like best friends.
Get to knowthem beyondbusiness. What do theycareabout? What
are they interested in? What dothey need? Deep down inside we all
want towalk, just like Norm from Cheers* into a bar where everyone
not only knows our name; they stop, look over, andwelcome us in.
That level ofpersonal attention will keep emcoming back.
Break the Rules - The big boys have been around theblock somany
times that theyadhere to rules they nolonger need. Some established
industries get stuck in the mode of doing things a certain way just
because theyhave always been donethat way. Asmall, nimble com
petitor likeyou can identify the industryrules, takewhat you need,
and then break the rest wide open.
TPE TIP
Live Rent-Free - When every penny matters, a TPE
gets resourceful You can have your own house, rent-
free. It's called housesitting. Check out caretaker.org or
housecarers.com. This can be a match made in heaven
for Internet-based businesses that can be run out of the
home.
Throw Out the Way It Has Always Been
Tim Ferriss, the author of The 4-Hour Workweek, won the Chinese
National Kickboxing Championship bybreaking the rules. Well, not
really by breakingthe rules; he actually broke the expectations. He
broke the tradition.
On a dare, Tim decided to compete in the kickboxing champion
ship. With onlyfour weeks to prepare for the event, Tim was clearly
Chapter 10: Keep Your Business to Yourself 163
at a disadvantage against competitors who hadbeen in theleague for
years. He was facing opponents who hadcommitted theirlives to the
sport. They were born towin - they were thebig guys. Timwas the
small guy anddidn't have achance. At least not without breaking, or,
in Tim's case, exploiting the rules.
Rather than take on the impossible task of achieving the perfor
mance and experience levels of the masters, Tim hit the books. He
studied the known and not-so-known rules of the league. It was here
that he discovered the rule that would bring him victory. If he was
able to throwa competitor out of the competition ring three times
during a match, the competitor would be disqualified, and the vic
tory would go to Tim. This rule played exactly into Tim's talent, his
natural strength in throwing things. This time, he just needed to
throwpeople.
Thedayof the championship, the masters bowed, boxed, and kicked
people. Tim bowed, dodged, and threw people. Timwon. Tim Fer-
riss is a Toilet Paper Entrepreneur.
TAKE ACTION NOW!
No more exercises. No more pondering. No more psyching yourself
up. Your last task is to take one giant leap off the cliffand launch
your business (if you haven't done so already).
Show us what you're made of. Join the few, the proud, the Toilet
Paper Entrepreneurs!
w
o
a
The Youth (and Young at
Heart) Advantage
"The greatestdisadvantage ofyoungpeople
todayis that they havetoo manyadvantages"
- Anonymous
Unless you know the secret to the fountain ofyouth, you'll
onlybe young once. Milkit for all it'sworth. I suredid. I
pulled many all-nighters, paid little mind to my "unique"
living conditions and plowed ahead with excitement and hope for
thefuture. You can go far onhard work and big dreams, often a hell
of a lot farther - andfaster - than people with more education and
experience.
Resilience - Youth brings an ability to rebound that many people
lose as theyage (unless they remain young at heart). This resilience
allows you to bounce back after defeat andtryagain, unscathed. The
entrepreneurial pathislittered withpitfalls and roadblocks; youneed
the capacity to come back again andagain relentlessly.
No False Pretense - How come most curmudgeons are gray-haired
folk? Probably because they are pissed at howlife turned out and
depressed about thelackluster ride ahead of them. The young foresee
many more possibilities andgreat experiences ahead. Thatoldsaying
is true! As a young person your life IS still ahead of you! The best
part is, youcandetermine just howgreat a ride it will be. If youarea
curmudgeon, your life ain't over yet either, Fella. Make it great ride.
Few Responsibilities - Most young people fresh out of college don't
have children and spouses to support. You can put all of your en
ergy into launching your company the right way. This is a HUGE
advantage.
Energy - No question, a young person has more energy than an
older person. Likewise, a person at anyage whoisliving her passion
has tremendous amounts of energy. If you are young AND living
your passionyou are unstoppable.
Bonus: TheYoung (AndYoung at Heart) Advantage 167
No Preconceived Notions - Young people, in general, arefar more
willing totrysomething new than older people. Just think about the
crazy things you tried incollege. No need toshare, just think about
it andkeep that smile to yourself. As we age, we often look back at
ouryounger years andcan't believe thecrazy things we tried. We be
come less andless open torisk because ofall thefears we've picked up
along theway. Be young, becrazy andlaunch yourcompany now.
Flexible Schedule- You pulled the all-nighters in highschool and
college andstill made it to thekeg parties withyourfriends the next
day. Without commitments to your own family, youcanexploit the
flexibility of the single life. You canpartyall dayand workall night.
Or is it the other way around?
Money Isn't a Big Deal - You have been eating Ramen noodles
for the last four years; another couple years won't kill you. Since
most young folks have yet to experience what it'slike to have lots of
money, goingwithout wouldn't be much of a hardship. Plus, when
you start youngand poor, thereis onlyone wayto go. Up. Chicken
Pork Oriental anyone?
The clockis ticking, and you're gettingolder. Use these advantages
whileyou have them or someoneelse will. Tick, tick, tick...
Ivy League or County College - So What!
I don't carehowsmart you are or howtalentedyou are or what col
lege you went to. When it comes to launching a company, that stuff
just doesn't matter. What does matter is howsmart you believe you
are, how talented you believe you are, how driven you are, how fo
cusedyou are and howpersistent you are.
I have presented at college campuses throughout the U.S., from the
IvyLeagues to thecommunity colleges. Almost every student I meet
explains how her education is about mastering certain processes.
Fourteen weeks of Accounting 101, sixteen weeks of Investment
Strategies, etc. This is important stuff, don't get me wrong, but it
sure as hell won't have asignificant impact on starting a company.
To the contrary, if this is the stuff you worry about when you are
starting out, you are doomed. The early days of business are about
survival. Classes for cooking onadime and how to make one cheap
suit looklike three different, not-so-cheap suits will probably better
serve you.
It doesn't matter what your background is or how much education
you have; what matters is what you believe you can or can't do. Yes,
your background andexperience have agreat influence on yourbe
liefs. Butonce yourealize youhave theright and theability tochange
yourbeliefs, you can achieve whatever you can envision.
So if you are a college dropout, don't sell yourself short. You can
achieve the same level of success an Ivy Leaguer can andwill most
likelypass by those well-educated types in ablink of aneye. Just fol
low your passion, be relentlessly persistent, and truly, truly believe
in yourself. The same applies to Ivy grads. Once college is over, we
are all on common footing. The people who believe the most will
achieve the most.
TPE TIP
Free Lodging - Need a free place to stay during your
travels? Become a couch surfer. Checkout globalfeeders.
com or hospitalityclub.org for a free place to stay
anywhere in the world.
Bonus: The Young (And Young at Heart)Advantage 169
Moire In with Your Mom (And Other Painful
Thoughts)
If you are a young entrepreneur, you may have good fortune in a
supportive mom and dad. Ifyour folks will let you move back home
after college, then use this toyour advantage as long as you, and they,
can stand it. I know you dont want tolive with them any more than
you have to, but if you bunk with the folks for a year or two after
college, you can save some serious coin. Just don't live at home into
your30sor 40s. That isjust plain oldembarrassing.
Reduce your personal and business expenses by starting your com
pany in the basement or your bedroom. Borrow the car. Use the
home phone. Andthere's nothing better thanMoms home cooking.
Besides, its free! Eat at home and have the leftovers for lunch.
Need part-time staff? Perhaps Uncle George can help with the
accounting andAuntJane can handle email inquiries. Maybe Mom
& Dad can be your office cleaning crew (minewere).
Launching a business is about surviving and doing it intelligently.
No, its not glamorous to have Mommy answering the phoneor Un
cle George reviewing the books. But it is economical and prudent.
Save your money, every cent youcan, and use the pennies you have
to grow. Live "offthe land" as longas youcan.
Master Bocce Ball
Too old to movebackhome, or have another really good reasonnot
to? There is still a way. There is always a way. I found a waywhen I
started my first company. I could have moved home, but it would
have been tough since I was engaged and had a child. Tryspringing
that one on the folks.
"Hey Ma! Great news! Ijust started my first company. Yep, but itgets
better. I found the girl ofmy dreams and we are going to get married.
No, no, that's not all. I am going tohave ason!!! Would you mind if
we all move back home?"
Nope, that wouldn't have worked for any of us, not my folks, my
wife, orme. So we needed tofind an alternative. And when you have
no money, it is amazing what you can do. Within a few short days,
my wife had found a retirement complex that welcomed us with
open, flabby arms. That's right, an old-age community for people
between eighty and dead.
So why choose aretirement community at the tender age oftwenty-
four? Because we could afford it! Rent was something like $475/
month for a two-bedroom. For NewJersey in 1995, that was agreat
deal; plus, theretirees made some good food. Life was not luxurious,
but we managed, and ate a lot of Ramen Noodles and hand-me-
down fruitcake. And of course we became masters of Bocce Ball and
Pinochle.
Ifyou have the will, there is away. You may have toeat alittle ofyour
pride, but it is worth it, and it builds character. Who knows, maybe
you andI can have a no-nonsense Pinochle game one day. Winner
gets a couponfor the early-bird special.
Still in School? Graduate Profitably.
When the last final exam is done and the last beer bash concludes,
your classmates will trod their way home with the parting words,
"See ya next year, bee-aacchh." They are offto enjoy some summer
sun and maybe get a summer job. You shouldnot follow suit. Thisis
Bonus: TheYoung (And Young at Heart) Advantage 171
anopportunity tolaunch a small business, even if it is just for a few
months.
Make a product thatyou can sell, freelance aservice you have to of
fer, do whatever youwant that canmake money. This is about mak
ingsome payola andlearning thecritical parts ofstarting a company.
Plus, you probably will make more than minimum wage and have
more fun doing it.
Hold on a minute! What about a polished resume that youcanshow
to a future employer? If you are thinking along those lines, you are
reading the wrong book. This isaboutlearning the core principles of
running a successful business, and thereis no education better than
doing it.
But what happens when you have to get back to school? You have
options here. You can close up shop, or you maybe ableto keepyour
business rolling along. Part-time, of course; you do want to keep up
the grades and get a good education. Try to recruit a few peopleon
campus to workfor you, but avoid using friends sothat youcantreat
them as beer buddies, not colleagues. Thisis an opportunity to build
your leadership skills and learn to manage a team.
Make the most of your college days. Makea little bit of moneyand,
most importantly, don't forget to PARTY!
Party!
You or your folks laid down some serious cabbage to pay for your
college education, and you better take full advantage of it. Go out
and party, right now! You heardme. PARTY!
I'm not suggesting you get involved inabooze fest (well, maybe just
a few); I'm suggesting youlearn how to communicate with others
and network. Entrepreneurial success is dependent upon your ability
tolead andcommunicate with people. You are going to betheCEO
(Communicator, Energizer & Organizer) of your newbusiness so
you betterstart acting like one.
Use your partytime at school to find the people you click with. In
vestigate what it isaboutyourclosest friends that youlike. What are
the values theyshare withyou, withothers? Figure out the best and
fastest ways to meet otherpeople who share yourvalues.
Tryplanninga party(strictly legal, of course) withyour friends. Can
youset a commonvision of howthepartywill godown? Can youget
your friends to not just buyin, but feverishly support you?
Howgreatcanyoumake the party, allwithvolunteer work? Can you
get people to do the PR, the collections and accounting, purchasing,
and customerservice? Thisis a greatopportunity to learnabout your
own values, hone your skills, discover your strengths, and learn how
you best manage people.
If at the end of the night everyone makes a toast to youand applauds
you for a job well done, then congratulations! You have potential to
be a great CEO. You alsohavea backup plan as an events coordina
tor.
^ in
O " "
Tom "The Big" Grapper
It would be a sin not to include the story of Thomas Crapper
in this book. I can't think of a more fitting way to use these fi
nal pages. Mr. Thomas "The Big" Crapper was anentrepreneur,
plumber, purported inventor oftheflushing toilet andaguy with the
best name ever. I gave him thenickname "The Big." Poetic license.
Although Crapper held nine plumbing patents, none were for the
flushing toilet thatheisoften credited with inventing. Instead, Crap
per was a sanitary engineer duringthe 19th centurywho ran his own
plumbing company and owned manypatents. Today, one hundred
years later, all over London, you can still seemanhole covers embla
zoned with his name.
Crapper had an extraordinary entrepreneurial run by any measure.
The results were financial fortune and eternal fame. He achieved this
by:
1. Acting As If - He was a plumber who acted as if he be
longed in the bigleagues andwas treated asif hewas already
there.
2. Exploiting Strengths - He knew the industry, he could
close down the deals, and he could sell. Little did he know
his name would be his best asset. Crapper is the only en
trepreneur in the worldwho, more than one hundred years
after his death, canstill sayhe is number one in the number
two business.
3. Smallwas Big- Hewas asmall operation hiswhole life, but
lookat the fortuneandfame it brought him. He was nimble
and jumped on opportunity.
The Not-So-Hidden Bonus Section: Tom"The Big" Crapper 175
4. Belief, Focus & Action - He knew he would succeed. He
stuck with his business and stayed acutelyfocused on what
he wanted. Crapperdid not quit; he just kept marchingfor
ward. His products still line the streets of London. That's
what belief, focus, and actionwill get you.
5. Toilet Paper Entrepreneur - Through and through, Crap
per was a TPE. He didnt come from a silver-spooned, Me
dia Darlingbackground. He heldhimselfsolely accountable
for his own success. He exploited a niche. He had strong
beliefs, he knewexactly what he wanted, and he got up (or
sat down) and did it.
According to Plumbing & Mechanical Magazine, Tom Crapper
"should best be remembered as a merchant of plumbing products,
a terrific salesman, and advertising genius." Technically, the origins
of how "crapper" became a synonym for "toilet" are unknown. But
you and I both knowthat it can only be the work of a Toilet Paper
Entrepreneur. Thomas Crapper, unquestionably, is a Toilet Paper
Entrepreneur.
Are you the next Toilet Paper Entrepreneur? I hope so. Actually I
knowso, if youknow so. So, no more jibber-jabber. There isnothing
else to discuss. This is your moment. Its your turn to succeed. You
can clean up with just three sheets. All you need is to get down to
business. NOW!
started his first business
at the age of 24, moving
his young family to the
only safe place he could
afford-a retirement village,
With limited resources and
no experience, he system
atically grew a multimillion-
dollar technology business,
sleeping in conference rooms to avoid hotel costs.
After selling his first company, Michalowicz
launched a new business the very next day, and
in less than three years, sold it to a Fortune 500.
With his newest venture, Obsidian Launch, he fosters
startup businesses with his "get rich right" approach.
A graduate of Inc. and MIT's Birthing of Giants
Entrepreneurial Program, Michalowicz received Young
Entrepreneur of the Year awards multiple times.
He is a recurring guest on CNBCs The Big Idea
with Donny Deutsch; has been featured on Na
tional Public Radio (NPR) and in The New York
Times, SmartCEO Magazine, and other publications.
Michalowicz is a guest lecturer for entrepreneur
ial groups at Babson, Boston College, Columbia,
Harvard, Penn State, and other colleges throughout the
country. He lives in NewJersey with his family.
Visitwww.ToiletPaperEntrepreneur.com
rtograph by DavidRig"
ke Michalowicz
We can't all be Media Darling Entrep.v
a-billion wunderkinds who gave us companies like Google,
YouTube, and Facebook. Most of us are destined to be
Toilet Paper Entrepreneurssteadfast innovators who make
miracles happen with three sheets or less. But according
to Mike Michalowicz, three sheets are all you need to build a
hugely successful business. In this book, Mike teaches you:
Whya business plan is a total waste of your time.
Whyfulfilling your own needs is the first and last order of business.
Which three sheets of paper you need to successfully launch,
manage, and grow your business.
Howto get started in business with little or no money.
Howto find and exploit resources that no one else knows about.
How to stop procrastinating and take action NOW.
ny Deutsch, H
The Toilet Paper Entrepren
Cameron Johnson. Entrepr
You Call the Shots
ISBN: 978-0-9818082-0-8
5 2 4 9 5
yDO-Vl-SM0
) 780981"808208

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