Transcripts
1. Intro: Every iconic brand, every product that we hold
dear and every item that we use on a
daily basis started as a simple idea in
somebody's mind. That person went
through the process of product development,
design, testing, marketing, and distribution
in order to get that final product to the
destination in your hands. Now imagine if that
person was you. Hi everybody. My
name is Zach heart. And if you don't
know me already, I've built several
different companies to over $1 million in
annual revenue. I've pitched my product-based
businesses on Dragon's Den, and I am currently
in the process of building up my next business. We're currently at $1,500
per day and growing quickly. My goal of this course
is to share with you all of the valuable
lessons that I've learned over the last
ten years of building companies and help you
fast-track your path to success while
avoiding some of the painful and costly mistakes that I've personally
made along the way. Starting a company can be a
very stressful experience and it can feel like a
daunting task for many people, especially when there's nobody to guide you along the way. Luckily, I'm going to break down every single aspect of starting
a business so that you have a roadmap to follow with a step-by-step guide to not only help you succeed
and get started, but to leap frog
your competition. Beginning of the
course, we're going to talk about how to get started in the right direction and set up all the systems and processes to keep your business
running smoothly and up-to-date as we progress
throughout the course, we are then going
to start to talk about customer validation and product development and
marketing and distribution. And I'm going to
share with you all of my real-life
experiences so that you have some foundational knowledge
that you can build on. And then at the
end of the course we're going to
start to cover some of the more complex
topics such as taxes, dividends, how you pay yourself, what your corporate strategy is, and how to manage
shareholder disputes. Each video lesson
is going to focus on just one topic and
it is going to be completely independent of
the other video lessons so that you can skip
through if you'd like, and you can easily identify which video lesson
There's going to be the most valuable and the most applicable to your
business situation. And throughout the course
we're going to use my existing business as
an example so that I can demonstrate to you how
I've applied the lessons in this course to the real-world to benefit my business and
generate more income. So if you have any
interest in getting an inside look into how I am building
billion-dollar companies. I'd love for you to take the class and I'll see you there.
2. Project: Alright, welcome to the class
and thanks for joining. This video is gonna be to tell you about the
course project. In this course, we're
going to walk you through the process of building a
product-based business. And one of the tasks
that I'm going to ask you to complete is to build a website or at least buy a domain for the product or the business that
you are building. What I want you to do in this project is to
submit that domain and share that website
with us so that we can understand what
your business is, what you are trying
to accomplish. And hopefully, we can either
purchase from you and become a customer or we can
connect you with other customers or people that
might be able to help you. The goal of this project is to share what you are doing so that everybody else
that is taking this course can see
what you're doing. And hopefully we can
share our connections, we can share our resources, and we can share
our lessons learned with each other
and start to build a community of people that are all trying to see
each other succeed. So if you already have a website or you're building your
website right now, or even if it is just a simple piece of
marketing material, please consider
sharing it with us in the project section so that
we can identify who you are, what you're doing, and
hopefully how we can help you. And I will see you in the
course. Let's jump right in
3. Business Name: Alright, everybody.
Welcome to lesson one. In this video, we're going to start talking about
your company name. Now, I know you've probably already thought about
your company name, and maybe you've
already determined your company name.
That's totally fine. In this video. I just
want to give you a couple of different
things to think about and some next steps to take once you actually
determine that name. Okay, so to start us off here, let's just walk
through a couple of different examples of
types of company names. So, for instance, you
have the founder name. You've probably heard of Tommy
Hell figure or Luis Vitan. Those are the names
of the actual people that founded the company, and they are actually naming the company after that founder. You also have
descriptive names like Facebook where it kind of describes what the company does. You have fabricated
names like Kodak, where the word is
actually just made up, and then you have
real words like Uber, where it just kind of
represents the company, but Uber might not actually
be what the company does. Then you have acronyms like CVS where each letter represents
a different word, and then you have
metaphors like Nike. Nike in another language represents the winged
goddess of victory. And so they're using that word from a different language
as a metaphor for their company to basically help their customers achieve
victory on the athletic field. Now, when it comes to
your company name, there's a couple of things
you want to consider. Number one, is it easy
to read and pronounce. The ultimate test
here is that somebody should be able to read your
company name on a poster. They should be able to
pronounce it clearly. They should be able
to tell their friend how to say it and what that is. And they should be
able to very easily communicate that. And
then that friend, should be able to go online
and type it into Google or Instagram or TikTok with
the correct spelling. That is the ultimate
test of whether or not you have an easy to
read and pronounce name is if it can go
through that kind of chain of command through
different people and still be spelled correctly when somebody goes to type it in online to find your company and hopefully become a customer. Next thing you want to check is, does your company name, means something in
another language. You don't want it
to be derogatory. You don't want it to be dirty. You don't want it
to be something that means something nasty in another language because if
somebody comes here from that country and they
hear your company name, you don't want them to
have a negative reaction, you would also like the
domain to be available. That is the website
that somebody types in in order to
find your company. And we're going to talk
about that real quick. You also want it to be
searchable on Google. So, type in whatever
name you have in your head right now
and make sure that if you build a really good
website and you drive a lot of traffic that you're
actually going to be to show up on Google. That is really, really
key is you want somebody to be able to
type it into Google, and you want to be able
to show up on Google, because if you can
do that on Google, you can do it on Instagram and TikTok and all the other
platforms as well. And then can you build
a brand around it. You just need to make sure
that whatever the word is that you're using or whatever terminology
you're using, it's something that supports your actual vision and
what you're trying to do, and it's something that you
can build a brand around. Now, when it comes
to the domain name, the domain name is
your website address, like I mentioned here, and.com is the best domain
that you can get. So if my business is Zach Cakes, I want to go out,
and my first search should be zaxckes.com. If that is available, I
should buy that instantly, and you should do the
exact same thing. If that is not available or something close to
that is not available, then you may want to go
with your country code. So I live in Canada
right now and a lot of Canadian
websites end in.ca. If you live in Australia or the UK or another country
around the world, it's going to be something
similar to that. Dot com is by far
the most in demand, the most popular and the one that most people
are familiar with. But then if not available, you can go with
your country code. And if that is not available, you can go with dot shop. So, for instance, I've
seen a lot of people do aCckes dot shop because.ca
and.com were taken. And so there's lots of
different options there. Always start with.com, then
go to your country code, and then finish it off
with something else. I would recommend dot
shop since you are running a business that is
trying to sell products. Now, when it comes to
buying your domain name, I personally use go daddy.com. I own like 40 or 50
domain names right now. It's super user friendly. It's fairly inexpensive. You can hold the domains
for anywhere 1-5 years, and I think it's pretty
efficient and pretty smooth. So that is the
platform that I use. The other alternative
here is that if you don't want to buy your
domains on Go Daddy, or if they're not
available on Go Daddy, because somebody
already owns them, you can go through
Go Daddy to purchase that domain from that person
at whatever price they set, or you can use websites like who is.com or who dot
is to figure out who owns that domain
name and then reach out to them
privately and try and make them an
offer to purchase a domain name and get them
to transfer it to you. Now, other alternatives
here if you are running a business and you're not really sure
about the name yet, but you need to get started. You can also open a
numbered company. This is a standard
number company that is assigned when
you incorporate. And so this is my strategy, and this is what I
usually do is I'll start a numbered company because I'm not sure what my brand
name is going to be yet. I might want to re
brand in two years, I might want to change
up to marketing or my business might pivot
into a different industry. So what I'll do is I will
start a numbered company, And then I will do business as. So, for instance,
just so you're aware, Nike is actually called
Nike Incorporated, but they do business as Nike. They have a different kind of front and marketing
name than they do for their actual
kind of business name. Lots of restaurants
do this as well, lots of small
businesses do this, and it makes getting
incorporated very, very simple, quick and easy, and allows you a little bit
of flexibility with regards to what
you actually call yourself with regards to a business name.
So, for instance, If you ever wanted to
rebrand or if you're not 100% sure about your company
name, this can be a very, very nice and easy strategy
to use because you can always do business as
a different company name, and it's very, very
nice and easy. Now, you don't want to
change that very often, but it is something, especially when you're
getting started that can be very useful. Now, if you have an actual
name that you want to use, first thing you want to
do is do a name search. You want to start with
Google and figure out if anybody else is trying
to use that name, And then your country
that you live in will likely have
a database that you can also use to search up that name and see if it
is available in Canada. It is called the
Nuance database. Then the USA, it's the
National Corporation directory and the Secretary of State. If you go to those
different resources, you can figure out
and actually do a search for specific
company names, and it makes it very, very easy. So when it comes to
your company name, it feels like a nice
quick decision, and maybe you've already
thought of it, but hopefully, there's a couple of
different things that you can think about here. And hopefully get you
prepared for the future. Now, in summary for this video, there's multiple different
factors for you to consider when choosing
your company name, and your strategy may dictate
what is most important. So what I mean by that is, let's say that you're
running a B to B business, a business to business company that is not going to
be consumer facing, and you're out there
trying to sell products to large companies. Well, in that case, e commerce might not be
super important to you. It might not be super
important for you to have a crazy good website because
you're actually going to be selling a product
using sales reps. And so, The strategy that you
decide to use is kind of going to dictate
your company name and what is most
important to you. But I can tell you that if you're planning to sell products through your website
and you want to drive traffic to your website, that means that you
really want to focus on some of the things that I
mentioned in this video. You want it to be
able to searchable, you want it to be able
to have somebody hear it and then type it into Google with the
correct spelling, and you want to be
able to buy the domain for it or at least
something close to it, and so lots to talk
about, lots to review. We are just getting started. Thanks for tuning into
this first video. Let's keep it going.
4. Logo: Okay. Alright, everybody,
welcome to Lesson two. In this video, we're going to start talking about logo design. And the first thing that
I want to say is that this is a pretty
exciting thing to do. It's something that
a lot of people look forward to when
they start a business, and it's probably one of
the more fun activities to have when you actually
decide to start a business. But I want to caution
you and I want to say, do not spend a lot
of time on this. Do not spend a lot of
resources on this. Do not spend a lot of
money on this in any way, because this is not going to
make or break your business, and your logo is something
that can change at any point for very,
very low resources. And so a do business evolves and as it starts to scale up,
and as it starts to grow, That's when you can start
to put more effort and more resources into getting a better logo or getting
better marketing. But in the beginning and
at the early stages, all you need is a
logo that represents your company name and kind of communicates a basic message. It does not have to be
the finished product and it does not have to
be absolutely perfect. It just needs to
get you started. Now, my advice here is most of the time
it is best to keep your logo very simple and clean so that it is
easily recognizable. You can see the evolution down here of the Ikea logo over time. It has slowly got more bold, more simple, more
clean over time. And now it is internationally
recognizable. Another application
of this is Lego. You can see the
Lego logo was very, very simple back in
the day in 1934, and it has kind of evolved as the company has grown and
as the company has evolved, and it has changed over time. It has gone through
multiple iterations because the company knows that they can change
it at any point, It's not going to be
perfect right now. It's probably going to
change in the future as the company changes, and as the times and
the marketplace change. So, you do not need to have a perfect logo in the beginning. Just get something that is
good enough to get started because your time and effort should be focused on
building the business, scaling the business, and focusing on proving out
that business model. Rather than building
a fancy logo that isn't actually going to make a tangible impact on your business in the early days. Now, when you do get to the
point of designing your logo, there's a couple of different things that
you want to consider. The main three
aspects that I like to consider here are
the size and shape, and then the color and the
story behind the logo. When I talk about the
size and shape here, I always think that Sax has done the best job of this
that I've ever seen. They took their company name, and they turned it into
a logo that perfectly fit into the waistband of the
underwear that they sell. So if a guys shirts
ever gets lifted up or if they take their shirt off or if they're
walking around, and the underwear
is ever visible, The sax logo is very clearly visible and it is
probably going to be the first thing that
most people look at. They have adapted the
size and the shape of their logo to fit in the
perfect spot on their product, and I think it is very,
very well executed. And it's something that
you may want to consider, especially if you have a product that you want to
put your logo onto, you may want to design that logo around the product, just
like what they have done. The next one here is color. There's a couple of
different brands that have just absolutely dominated
certain colors. Tiffany just dominates this basically blue
turquoise color. Hermez is another
designer brand that absolutely dominates
the orange color. Dewalt tools are a
hardware tool brand that absolutely dominate
the color yellow. And so there's a lot of
different options here, and there's a lot of different things that have
done this in the past. But if you can keep consistent
and repetitive color, it can help to separate and identify your brand
from the pack. Now the next one
here is the story. What you may want to think
about when it comes to your logo is what is the
story behind your company? Is the story that you're
trying to solve a problem, is the story that you
started from nothing, is the story that you're focused only on the
highest quality, What is the story
behind your brand? And can you tie that into
your logo in any way? Louis atan, their story is the story of Louis
Vitan the actual person. And that's why the company
is named after him, and that's why the logo
is actually the LV, the two initials of
the gentleman's name. It's because he had
an amazing story that was focused on
quality and innovation, and they tried to bring
that to life even today, through their logo, through their brand name, through
their story. Now, when it comes to design aspects and actually
designing your logo, you do need to format your
logo in a certain way. So for instance, there's two major formats that you're
going to want your logo in. The first one is a dot PNG, and this is going to
have no background, and it is going to be
best for your website, and when you want to overlay your logo on something.
So, for instance, This logo right here can
be overlaid on my text, and it is not blocking
out the text behind it. That is because it
is a dot PNG image, and the only part
of the image is actually the black
under armor logo here. That is the only part of this image because the
rest of it is transparent. There's nothing there. You can
see completely through it. This logo, however, though, is a JPEG image, and it has a white background. And so when I put
this over the text, it completely covers the text, and it goes over the text. These are two different types
of formats for your logo. The dot PNG is going to be
the best usually for online, and when you want that logo
to be on top of something, and then the JPEG is going to have a
background color in it. So you need to make sure
that you're okay with that, depending on where
you put that JPEG. Now, when you're ready to design your own logo and you want to sit down to the
computer and do it yourself instead
of outsourcing it. There's a couple of different
ways you can do this. Number one, is through
photoshop and illustrator. These are adobe
products that can help you kind of put
together your logo, or what I would recommend
is going to canva.com. This is a very, very
simple and very, very user friendly website that has a lot of
different design tools, including a logo builder, where it has a bunch of
basically pre made templates, and all you have to
do is change out the colors and the angles
and the text that you want, and it can build a logo
for you in minutes. It's really, really good,
and I highly recommend it. So anva.com is the website. If you want to get fancy, you can use some of
the Adobe products, but Canva is definitely where
I would start and remember. Do not spend a lot of time. Do not spend a lot
of resources and do not spend a lot of
money building this because it is not
going to be the factor that makes or breaks your
business in the beginning. This is something that should evolve with your
business over time, and you need to
remember that you can make changes to your logo, at any point, and it costs you almost nothing if
you're doing it yourself. And once you have that design, try and stay consistent, use
that same logo everywhere, and if you change that logo, make sure you replace it everywhere. Same thing
with your colors. You want to stay consistent, you want to be repetitive. You want to make
sure that you're conveying an accurate message that represents
what your company stands for. See in
the next video.
5. Business Model: Alright, everybody, welcome
back to another lesson. In this video, we're going to start talking about
business models. Now, when I talk about
business models, let's just kind of clarify
something real quick here, your business is going to make a product or service and sell it for more
than it costs you. That is the business model. That's the idea that is what
we are doing in business. And in this video,
we're going to focus on product businesses, more so than service businesses, basically throughout
this entire course. And what I really want you to focus on is trying to figure out what business you are in because what I find with a
lot of different companies, especially in that small
and medium sized range, They are in multiple
different businesses doing multiple different things, and they're getting
spread too thin. I read this quote, and it
really, really stuck with me, and it said, most companies
do not die from starvation. They die from indigestion. And basically what
that means is that your company is not
going to die because it runs out of money
or because it just slowly dies because it doesn't
have enough resources. Your company is going to die because it is doing too much. It is biting off more
than it can chew, and it cannot digest and fully properly execute everything
that you have on your plate. Most companies will die
from indigestion like that, rather than starvation, where they're just slowly
running out of resources. And so it's something that you really need to keep in mind. The reason I say that is
because no matter what you do, your business probably has some aspect of design
and prototype. I probably has some
aspect of manufacturing, it has some aspect of
sales and marketing. It probably has some need to get that product
to the customer. So it has transportation
and distribution, and then it also has
customer service. And what I'm trying
to get across to you here is that if
you try and do all of this in house
or you try and be the one stop shop for
absolutely everything here, you are going to die
from indigestion. You are going to bite off
more than you can chew, and it is going to be too
much for you to handle. And so my recommendation
and my strategy here is to get really good at
just one or two things. For instance, as an example, my business, I am selling three D printed
products on Amazon. I do all of the product
development and the prototyping, and then I outsource all of the large scale manufacturing. Once I have a product
that is selling well, and I need to actually go
to scale with this product, I outsource all of
the manufacturing to large three D printing
firms in the United States. And then I give those
products to Amazon, which then handles
all of the sales. It handles all of
the distribution. It handles all of the
customer service, and they handle most of
the marketing. And so, My only job here is to design
and test and come up with new products and make sure that the first couple hundred that I can make in my
house here sell. And then after that, all of the manufacturing is outsourced, all of the production, all the distribution, all of the customer service is
completely outsourced. And I only have to focus
on one or two things, and it means that
I can get really, really good at those
one or two things, and I can let everybody
else focus on everything else because
they are better at it, they're faster at it,
and they can scale up, faster than I can scale up. And so, by me just focusing on design and development
and prototyping, my business can
ultimately grow faster. Now, another example of that is my friend who runs a
company called Inspired Go. They make salads, and they
do everything online. And it's an amazing
amazing business because he has found co packers, which are basically
large production plants that make food products, and he has given them all
of the instructions and resources to make their salads, and he has hired people
to deliver those salads. And so his entire company
of staff of 2030 people, Most of them are dedicated to sales and marketing and online advertising and product
photos and getting really, really good at marketing salads. He outsources all
of the production. He outsources all of
the distribution, and his only job is to quality control the
salads and then make sure that he is selling
enough of them online and running enough
advertisements. And so, what my recommendation to you is look at your
business and try and figure out how many of these different things are you doing and possibly
even maybe more, and what I would recommend is trying
to get really good at one or two things
that are going to make you stand out
in the marketplace, give you a strategic advantage, and make you better
than your competitors, and then find other companies to outsource all of the transportation
and distribution to, find companies to outsource
the customer service to, find companies that
can scale as you get really good at just
one or two things. Now, when it comes to outsource the idea here is that if you can outsource part of
the business or one of those different
aspects of your business, to another company that can
do it better or scale faster, then you should
probably consider it. I am outsourcing all of my logistics and
supply chain and distribution to
Amazon because they can scale to the moon and
because they are much faster than anything I could personally
set up for myself. You need to take that into consideration when
you're building your business because the more things that you try and do, the more indigestion
you are going to have, and that is what causes more businesses to fail
rather than starvation. Now, when it comes to
things to consider, simplify your business
as much as possible. If you have too many moving
parts and too many variables, it becomes very, very difficult
to run that business. Secondly, I highly
recommend getting good at one or two things
and not five or six. You do not need
to do everything. And thirdly, can you add
a subscription model? Do you have a product
that is consumable? Do you have a
product that you can charge on a monthly basis for? Do you have a
product that you can turn into monthly
recurring revenue? That is the golden goose and
the ultimate kind of goal of any business is steady, consistent,
profitable revenue. And so if you can
put your customers on any type of
subscription model, it makes your company
much, much more valuable. And then after that,
when you're making these changes to
your business model, there's one question
that you should be consistently asking
yourself, and it is, how do you get your
customers to buy more often and spend more
when they actually buy? Those are the two main
goals that you're trying to achieve in your product
business is make more sales, and for every sale that you make the average ticket, you
want it to be higher. That is the goal here of the business model and why
we are making these changes. Now, in summary, this
is something that should evolve over time
with your business. If you get to the
point where you've scaled up and now it
makes sense to bring some of those business
models and some of those things in
house, then fine. You can do the analysis
at that point. But as you're
getting started out, as you're getting this
business off the ground, keep it as simple as
you possibly can. That is the number one
thing that should be in your mind is get really
good at one or two things, prove out the
business model with those just one or two things
and then expand from there. The entire idea here
is testing and testing and testing and making sure that you're proving
your assumptions correct. And when the test doesn't
go the way you planned, you need to understand why you need to pivot the direction, and you need to try
something else. Business is a winding road of just testing out
different strategies, and then move into
the next level, and testing on more
strategies until you can grow your company to the
point where you can sell it, you can retire, or you can
just vacation on the profits. Now, you can make changes
whenever you want, like I said, and once
you have a design, try and stay consistent. Once you have put together your business and you
have that business model, do not get fancy. Focus on being the best in the world at that
business model, get extremely good at it and scale up before
you scale out.
6. Strategic Advantage: Alright, everybody, welcome
back to another lesson. In this video,
we're going to talk about your strategic advantage. Now, when I was in university, I had to take an entire course dedicated to business strategy. And the professor for the
company was an old executive at Blockbuster and an
old executive at Walmart and an old executive
at an oil and gas company. He had kind of three
major executive roles. All in the sort
of strategy area, and he came in and
he taught our class, and this guy was like
a military sergeant. He was super hard core, and he just drilled the
answers into your head. He would say
something, and then he would ask you to repeat
it kind of thing. He would test you
throughout the course. And it was a good professor because he took
business strategy, and he made it black and white. A lot of people think
about business strategy, and they talked about
all these fancy terms and these cool ideas and all of these different loose
concepts that can be misinterpreted and can
be sort of manipulated. And this guy took
business strategy, and he made it black and white, and he took everything
back to the data. Every decision that you had to make was based on
data and reasoning. And he basically he did that by asking you so what at
the end of each question. So if you said, I want to do
this because of this reason, he would ask you so what. Why is that important? What makes that important
to your decision? And he made you
justify the example. And it was really,
really good for me because it
completely solidified, in my head, what is a strategic advantage and how damn important it
is for your business. And so in this video, I want to give you
the soft version of why you need to think about
your strategic advantage very early on and what it is and how it can make your life
just so much easier. And so a strategic
advantage to dive into this is something that is
very difficult to copy, and it gives you an advantage to make more sales in
the marketplace. It is something that
makes your business different than everybody
else's business out there, and it makes a customer
willing to pay more for that service. That is the idea behind a
strategic advantage. Now, there's a lot
of different types of strategic advantages, and it really depends
on your business. You can have a
strategic advantage with talent and people. You can have a better
process than anybody else. You can have a better
brand than anybody else. You can do something for a
lower cost than anybody else. You can have a better
location than anybody else. You can have more capital
to spend than anybody else, or you could just operate on a larger scale
than anybody else. There are a couple of
other options as well, but these are the main strategic advantages that
you might want to think about and that
you might want to try and go after with
regards to your So one example here of
scale is Amazon here. They have a huge
strategic advantage right now because they
have a warehouse network that they have built that allows them to deliver
goods in 24 hours. There is almost nobody else in the United States
that is anywhere close to the distribution
capabilities that Amazon has, and that is because they
have economies of scale, and they have grown
larger than anybody else, and that is their
strategic advantage. That target cannot offer two day delivery
anywhere in America, but Amazon can because they have the strategic advantage because they invested in
the infrastructure. Very, very exciting.
ASML is the company, that makes the machines
that make computer chips. They are the only company
in the world that owns the most advanced technology for making those chips.
They have panted it. They have protected it.
They have trade secrets, and they are the only company
in the world that can make these machines for the most advanced computer
chips in the world, and that is their
strategic advantage. They have pats and they have protection over
their technology, and that means they
are the only company in the world that can do it. Another example of
this is McDonald's. They have a low cost advantage because they can
make a full meal, that is faster and cheaper
than almost anywhere else. One more example of this
is this read adapter. It's an adapter that goes on the end of a nail
gun and they have a strategic advantage
because they have patented this specific design. So if somebody comes out and tries to copy this exact design, they will be unable
to use it or read, we'll be able to go after them. My strategic advantage in my business right now is
that I can prototype and I can launch new products extremely extremely
fast and at extremely, extremely low cost, which allows me to consistently
test new products, and when I find them, I have the marketing skills
to scale them up. That is my personal
strategic advantage in my business. Now, When it comes to your business, there's a couple of different
questions that you want to ask yourself about your
strategic advantages. Number one, do I have something that
is difficult to copy? There's a lot of
people that have gone out there and tried to drop ship products off of Ali
Baba and start a website. And the problem
with that is that it is very, very easy to copy. Anybody with a
laptop and a couple $1,000 can copy exactly
what you're doing. Next thing you want to ask is, what are the barriers to
entry for this market? Is somebody going
to be able to step in very easily write
a big check and basically knock me
out or replace me or directly compete with me?
Another question to ask. Next thing here is what makes me different than
the competitors? Especially if you have a competitor that
is larger than you, you need to have a very, very clear and articulable stance on what
makes your company different and better
than that competition. And then lastly here,
what can you do to build that strategic advantage or make that strategic advantage better and stronger in the marketplace. These are a couple
of things that you need to be asking yourself and you can use these other examples to hopefully help
guide your path. And what I would try and do is find a company that has
developed a strategic advantage in a slightly
different industry and then try and look at
what strategy they have gone with to get
there and try and apply it to your industry.
Now, in summary here, somebody can come up
with a computer and a couple thousand
dollars and rip you off. You do not have a
strategic advantage, you need to be
very, very careful. And the reason that
this is so important is because if you have a
strategic advantage, it makes business much easier. It makes it easier
to generate profits. It makes it easier to charge higher prices to bring
in more revenue, and it makes your
business unique, and it can't be knocked off. It can't be copied,
and it gives you the ability to run
an easier business, a more profitable business,
and that's what we're all Definitely put some
consideration into this. This is a super, super
important topic, and you need to consistently
be asking yourself, what is your
strategic advantage? And can somebody come in
here and knock me out and rip me off and basically
copy exactly what I'm doing? Because if they can,
you may want to reconsider your strategy
and what you're up to.
7. Business Partners: All right, everybody, welcome
back to another lesson. In this video, we're going to talk about business partners. And this is a super
important lesson because when you look back
on the history of your company
at the end of it, you're gonna say, okay, there's probably a couple of major decisions that influence the direction of that company. And I can guarantee you
that the business partners you choose will be one of those decisions
where you look back, you say that made a huge impact. And so hopefully you can learn
from some of my mistakes. Have started several companies. I've broken up with
several business partners. I have had several great
business partners and several terrible
business partners and hopefully share some of those lessons with
you in this story. Now, before you get started with a business partner at the first thing you
want to consider is what stage of life and risk tolerance are
they compared to you? Because depending on
your type of business, they may not align. Let me give you an example. I ran a company where we were trying to grow
very, very quickly. We were taking on
debt in order to scale up because we thought
there was a massive, massive opportunity
and we were doing things slightly risky in
order to scale quickly, kind of like the
California's startup model and business partner. One of them had a mortgage with a wife and kids on the
way and payments on his car that he had to make
and a lot of responsibilities that he was tied to and then he couldn't really let
people down on it. So here we were a couple of young ambitious
entrepreneurs that we're ready to take
on the world and, and go out and really
swing for the fences. And one of the business partners was at a very different stage of life and had a very
different risk tolerance and that caused friction
in the relationship. And so before you go into
business with somebody, get to know them,
get used to them, understand where they come from, understand what their
situation is at, and understand where
they're at in life. Do they have kids? Do they have a mortgage to their
family in town? Do they have plans for
those kind of things? Because they do they may have to choose between the
business or this or that. And you need to just make sure that you're
on the same page. Second thing to
consider is work ethic. If somebody does not have a good work ethic than they shouldn't be part of
your founding team. If somebody doesn't
have the same level of work ethic is you, then you might not
want to consider them for a business
relationship. Thirdly here as roles and responsibilities do not
bring somebody into your company because
they're your friend or because you get
along really well with them or because they're just like you because I can tell you right now that that relationship
is not going to work. You want to bring somebody
into your company that is a founder or a
business partner, where their skill set
compliments your skill set. You are the ambitious, outgoing strategy entrepreneur
and you need the behind the scenes executer that doesn't care about
fame and fortune, doesn't really care
about social media, just cares about getting the job done and making as much money as possible and just wants
to focus on the team. Those two people work
really well together. But if you have
two guys that are battling for the attention and battling to be the CEO of the company is
not going to work. I can tell you right
now from experience, you need to make sure that
where one person has strength, the other person has weaknesses, and you can make
up and vice versa, so that you guys compliment each other instead of battle
against each other. Next thing here is
strategy and direction. You need to make sure
that you are aligned with what direction you want this
company to go in long-term. That is what I call
the North Star, and that is what helps you make all of the different
decisions while you wanna do is have a very
strong Northstar and mission. So that when you're
making decisions, you make the decision
and the choice that aligns most closely
to your north star, it makes life simpler and
makes decision-making easier. It makes sure that everybody is always aligned in
the same direction. Third thing, or last thing here on this page is reliability. If you can't rely
on that person, don't go into
business with them. Plain and simple. Now, once somebody
has kinda made it through your gauntlet and
your checklist there, and there's somebody that you
want to move forward with. One thing you should consider
as a shareholder agreement. There's a formal
document that defines the business relationship
for shareholders. A lot of the times when you're
just starting out and when everybody is going to sign into the same agreement
with the same terms, you use what is called a unanimous
shareholders agreement. That is basically a
document that says, here's how all the
shareholders get along. Anybody coming in, assigns this and we all play
on to the same rules. Usually the best place to start, and you can find a lot of
templates for that online. I'll also put some
links to it in the resources for this course. Now, next thing here is
that you need to have some tough conversations with that person before you
sign any documents, before you draft anything. You just need to have these really difficult
conversations upfront because they
suck right now. But if it gets to the
point where you guys have a disagreement after you've
gone through everything, these conversations
are ten times worse. And so what you need to
talk about is number one, how do you end the relationship
or exit the company if things don't work out and you guys don't get along
and you butt heads. Relationship falls apart. You need to have a strategy
and a process in place there. Number two is how do you decide
what to do with profits? Do you keep it in the
company to put it back and take it out of the company and pay yourself
higher salaries. Do you pay yourself dividends or do you invest it
into new projects? You need to be on the same page because that can be a
large confrontation point. The next one here is how
do you make a decision if there's a disagreement,
like I said, having Northstar
so that hopefully those decisions are aligned
towards that North Star or that overarching
goal and mission of the company and makes this
situation much easier. But let's say that you guys
can't agree on a decision. How are you going
to move forward? How are you going to figure out and actually make a decision? Because you can't just
still made it in business. You need to actually do
something intestine and try it. Next thing here is how do
you bring on new partners? If you realize that you need more help or if an
employee wants equity, what is your strategy there? Are you going to offer it? How are you going to offer
it and how are you going to handle that amongst your team? And lastly, if you have
to take on debt or loans, number one, do you
plan on doing that? Number two, who is
going to guarantee it? And three, who's going
to take on the risk for those debt and
for those loans. So you need to be
very careful here. And if you can have these
conversations upfront, I can tell you right
now they suck, they're awful, they're horrible. They're awkward
and uncomfortable. But it's ten times
better to do it up front than it is when this situation
comes up like let's say you need a bridge financing because you've got a big order, but you can't finance the
inventory and you need to take on the debt and somebody
needs to guarantee that loan. It's really nice if you've talked about that ahead of time. So I highly recommend it. The next thing here
is shock and Closet. This is something
that can be very helpful if somebody wants
to leave the business, is basically a situation
where if I enact a shock on clause
with my partner, they have to come to
me and say, Okay, I will buy you out
for this amount or you can take that same
valuation and buy me out. And what it does is
it forces somebody to leave with a
reasonable valuation. Now the terms of that deal
can vary pretty drastically, but it's something to look into. It can be a very quick, simple, and easy way for
one person to exit the company with a fair
valuation and a fair price. The challenges you
have to both have the financial resources in
order to make it happen. So there are a couple
of stipulations there definitely something
to do some research on, and there's a variety
of different ways that you can structure
this as well. Now, when it comes to ring in that business partner On you go through the paperwork,
you get them set up. The next thing you need to
do is get a job description. This is a formal document
that literally outlines the step-by-step roles and responsibilities of
that person's job. This is what helps people
from butting heads and overlapping and
micro-managing each other. And it gives them their
area to focus on, all aligned with and directed to that overarching mission
and goal of the company. This should include
the responsibilities, the decision-making
power that compensation, pretty much everything
that that job entails. It needs to be in
that job description and it needs to be written down. I know that you're friends with the person you
gotta relationship, you known him forever. Job descriptions are
pretty clear in your head. It doesn't matter, it
needs to be written down. It can help avoid
major conflicts down the road and also
just helps people to know what they should
be focusing on and where their
decision-making power is, so that it can also be used as a tool in case
you guys disagree. If the marketing guide
disagrees with the CEO or the COO on a strategy? Well, he knows that he's responsible for this
budget in this area, and it's his job on the line. And so the COO can
voice his opinion. But at the end of the day, it's not his call to make
the job description can play a major role in helping to smooth that over now
new shareholders. This one is kind of
tricky and it depends on the situation and the
finances of the company, as well as what that new
shareholder brings to the table. But in general, that new shareholders should
either one be buying in with cash upfront to get stock in the company
or overtime, or they should be
earning that stock over time in return for a
lower cash compensation. That is, either of those
options are totally fine. Basically what you
are looking at is total compensation for
a new shareholder. Ideally, they're an employee or a major founding member of
the team or executive team. And they are coming in to play a major role
in the business. You want to give them
$100,000 a year, but 20,000 inequity
and 80,000 in cash. You can structure it
like that and you can change it up and
basically add in different features so that
they only get the equity over time or they only get certain amounts or at
certain milestones. Full control over that when somebody is entering
into your company. Next one here is caution. I have spent a lot of money on legal fees dealing
with shareholders, getting them in and
out of companies. And so my caution to you
is that it can be very difficult and expensive
to remove a shareholders. So be very, very careful bringing new shareholders
into your company, especially if they're
going to be on your management or
executive team. I am talking in the tens
and '20s and '30s of thousands of dollars just to kinda get somebody in or out. And so be very, very careful. That's worst-case scenario and that's if there's
issues along with it. But I've paid a $25,000 legal
bill for this exact reason. So be very, very careful. Not everybody needs
equity in your business. That is also something
that you really, really need to consider
here is maybe this person doesn't need to be a
long-term shareholder. Maybe they don't actually need equity and maybe it's
just better to pay them a higher salary
or find somebody else with more experience and
pay them a better price. Because giving up 5%
equity or 2% or 1% equity now can cost you a lot of money when your company becomes worth 1 million or 2 million
or $3 million, that 123, 5%, whatever it is, it becomes very, very valuable. What I like to do and what I
think is sometimes a much, much better option is to do profit sharing so that they get paid out extra based on the success or failure
of the company. I just find that that is a more tangible thing
for the employee. They get more immediate
benefit from it and it leaves off the control in the
current shareholders hands, which in my mind is who I am, who I am trying to make
this course for it. So definitely
something to consider. And you need to ask yourself these questions before you
bring on a new shareholder. Number one, do I actually need a business partner or could
I use a good employee? That is like literally
the ultimate test because you can
find some really, really amazing people for 60, $8,100,000 a year that can do some absolutely
amazing work. And so if you had the
best employee ever, do you really need
a new shareholder? It's something to ask
yourself because maybe you should just go find that
best employee ever. Next one here is,
can I work well with this person for the
next five to ten years, a lot of people get excited about business
and they kinda go through that honeymoon phase right at the beginning where
everything is exciting and things are all good
and there's money in the bank and your overheads low, so it doesn't take a whole lot, but as you grow, things become more stressful. You go through the ups and downs and it can really start to
show pupils true colors. And so you need to ask yourself, can I work with this person for the
next five to ten years? And when things get tough, can they handle
the stress or are they going to completely
break down and melt? Because business is gonna be one of the hardest things
that you do in life. And I can tell you that it's
not all smooth sailing, so definitely something
you need to consider. And then last thing
here is do they make my business
drastically better? Because if it's not a
drastic improvement, then you probably
shouldn't bring them in as a business partner
and a shareholder. Now I hope this video helped
I am seriously talking from experience when I make this video and when I share
these lessons with you. And so seriously consider before you bring on
a business partner, do they compliment your skills? Get king work with them
over the long term. Is it something that you actually need in your
business or would you be better off just hiring a
really, really good employee? Because if you're at the
point where you need somebody to help you out but you can't afford a really
good employee. Ask your friends,
ask your family to help you out short-term
or just buckled down and put in an
extra two or 3 h a day because bringing on
a business partner if it's the wrong
business partner, will be one of the biggest
mistakes you make. Bring It On the right
business partner will also be one of the best
decisions you make. He just needs to be very, very careful about how
you handle the situation, how much equity you give up, and about how you
structure the deal. There's lots of
different ways to do it. You can structure it
any way you want. There's unlimited
flexibility here, and there's a lot
of different ways. So if you need more
input on this, definitely have some phone
calls with a lawyer, speak to a professional, talk to an account and
speak to other people about their advice because this is
a very important decision, AN need to take
it very seriously
8. Financing and Debt: Alright, everybody. Welcome
back to another lesson. In this one, we are going
to start talking about financing and debt when you
are first getting started. Now, when you are ready
to start your company, the first couple of things
you should do is invest your own money and make a
couple of initial purchases. Number one, you need to spend some money and get incorporated. Number two, is like
I mentioned before, you should buy your domain name, once you have a company name, you should go out and
buy it and secure it right away so that you don't
have to worry about it, and nobody else is
going to come in and swoop it up and buy it
from underneath you. You may also want to consider a trademark in Canada
and the United States. They're fairly
cheap, The'ree $400. And you can trademark a slogan, a name, a creative phrase. There's a bunch of different things that
you can trademark. So it might be
something you might want to consider,
and it is cheap. It's a couple $100. You also want to set up
an accounting software to keep track of all
your transactions. That's going to
range anywhere from maybe 30 to $70 per month, and then you're going
to need some way of accepting payments. You could do this with
cash with a register. You could do it with Shopify. You could do it through Amazon. You could do it with stripe. There's a lot of different ways. But basically, in order
to be a business, you need to bring in revenue, and so you need a way to
capture and manage that money. Now, when it comes to actually
funding your business, once it's up and running, and you've got those things
kind of knocked out, the first things that
you need to consider is your strategy for how you're
going to fund your business. Now, there's a couple
of different strategies that I'm going to go
through in this video, bootstrapping, shareholder
loans, friends and family, debt and taking on investment. This is going to be the
bulk of this video, and I'm going to walk you
through step by step with each of these strategies starting
with bootstrapping. Now, when somebody
says bootstrapping, or they claim that they bootstrapped the
company to $1 million. Basically, what they are
referring to is they funded the company using the
operational profits that the company generated. So they basically
started the company with probably a couple hundred or
a couple thousand dollars, got it started with an
initial investment, and then that company was
profitable fairly quickly, and they just reinvested
that money back into the company until
it eventually grew. The idea here is that
you're growing slow and steady with the profits that
the company is generating, you're reinvesting
those profits, and you're trying to
do everything pretty much as cost effectively
as possible. When somebody is bootstrapping, it usually means
that they're trying to do things as
cheaply as possible. They're just trying
to get up and running and off the ground, and they're trying to
test out the business, usually, because they're not
going out and raising money. They're not taking
on a ton of debt. They're trying to basically do the minimum amount of work
possible to test and see if this business has
traction and see if it has success and see if this is something that
they want to pursue. And for a lot of people, especially starting
your first business, This is the strategy
that you should go with. This is the best way to do it because it will teach you
all of the lessons that you need to know and understand in order to start going
up and leveling up your business
skills and starting that next corporation that you can really start
to scale quickly. Now, the next one here
is shareholder loans. This is where the
shareholders are basically continually funding and adding
money into the company. These shareholder
loans are basically there to get through
funding gaps, and they are there where the shareholder themselves
personally have funds that they can invest
more into the company, usually in return
for some interest. The problem here is
that this can get very messy and it
can skew decisions. It can make the decision making very short term because if I put a bunch of money
into the company, I probably want to
get that money back as fast as possible.
And therefore, I might be making
short term decisions as somebody that is
managing the company, or if things don't go
well for the company, this can get fairly messy because then it might
not be very easy to pay back my shareholder loan using the funds that
the company has, and so I don't usually
recommend this to many people. I say, try and
avoid this because it can get messy very quickly. Next one here is raising money from your
friends and family. This is where you've got
people that are really interested and very
supportive of what you do. And they want to help you out, you need a little bit of
money to get off the ground or get started or buy
your first inventory, and this is going to
be your friends and your family that are
going to write you those 5,000 thousand $20,000 checks that are going to help you
out with your business, help you get started in return for some equity
in the company. This is fairly
easy to do as long as they're actually
friends and family. As soon as they are
not long term friends or close family members, it becomes more and more
difficult to make these kind of transactions because as soon as you kind of step
out of that boundary, It's a very different
type of investment. You're not necessarily investing in your friend or your family. It's kind of like a
general public investment. It really changes things if you go outside of your
friends and family here. That's why when you hear a lot of people starting
up their company, they'll say, Oh, we did a nice, small friends and family round. If you ever hear
somebody say that, it means they
probably raised 100 $200,000 in just small checks from the friends and
family in their network. They did not go out and solicit investments from the
general public or from angel investors or from venture capital investors.
That's what that means. The challenge with this here
with friends and family, though, is that it can be a large burden on relationships. If things don't go well in the business and that business
closes down eventually, you will have just lost all of your friends and family money, or if things don't
go well right away, and it takes longer
than expected. And it's a tough burden. And let's say you need
more money eventually. You friends and family
might get diluted. They might not get their
money back in time, or they might need that
money in the meantime. And unfortunately,
you're holding onto it, and it's not very easy for you to get that money
back to them. And so, This can be a burden
on relationships. Again, I caution you against
this if you're going to go down this path unless you know exactly
what you're doing. The next one here is debt. This is basically the idea
of borrowing money from a financial institution
and paying interest on it. So, kind of like the
shareholder loans, but instead of the shareholder actually putting money
into the business, you are going out
to a bank or you're going out to some type of
financial institution, and you're borrowing
their money and saying, I will pay you back with
interest over time. This may require a
personal guarantee, a lot of the time for
small businesses. It will require a
personal guarantee, where you as the person, we need to basically
guarantee that debt so that if the business can't pay
it, you have to pay it. You have to pay it personally, and it can be a very, very large personal burden that can cause a lot of
stress on people, especially if that business doesn't do well
over the long term. So something that you need to be very, very
cautious against. You need to really,
really think through what you're doing before you ever
sign a personal guarantee. And if you can avoid it, I would highly recommend it. The other thing here is that
you must be able to get a better return on the money than the interest being paid. So, let's say you borrow
$20,000 at 5% interest. If you cannot invest and use that money in your business and get a better return than 5%, then you should not be
borrowing that money, because unfortunately, you'll
just be losing money there. You'll be earning less than the interest that you'll
be paying on that debt, and that is never
a smart decision. Now, the last option
here is taking on investment from
angel investors or venture capital or the people from ragensden or other people that might just be interested
in your business and are willing to write a check for a small chunk of the pie. Now, the idea here is that
you're going to go out and you're going to pitch your
business to these investors, and you're going to try and sell them equity and
return for cash. There's a lot of
different structures and ways that you can kind of
manage this relationship, and you can structure
it over time. You can structure it in a
variety of different ways. But in very simple terms, you are basically
selling part of your company in return for cash, and then you're going
to use that cash in the business to try and hopefully grow and
make it more valuable. This is a good strategy when
you are dead serious about scaling your company
and you have lots of traction.
What I mean by that, is you better be completely certain that you're
going to do this for the next five to ten
years and try and take this to the next level and
really scale up your business, and you better have a lot
of traction and confidence. What I mean by that is, let's say that you're
starting a social media app, and you've just got the
first prototype out there. If nobody likes it and
nobody is downloading it, you have very bad traction. But if it is crashing
the servers, and you've got so many
people downloading it, that it is just
glitching out because it's overwhelmed and
there's so much attention, and you're starting to
get some press around it, that is really good traction, and that is what
you want to have in a business when
you're raising money. And so you need to
be dead serious that you're going to
stick with it for the next five to ten years, and you need to
have good traction behind you if you ever want to go out and actually search for investment from other people. And if you ever get to this
point, send me an e mail. I do some angel investing. I've made about five or
six deals right now where I've invested usually
$25000-50 thousand. So if you ever get
to this point, send me an e mail, but
be very, very cautious. The other thing that
I want to touch on here between debt and equity, these last two options, is it can be a trade off. And what I mean by that is, let's say that you
need $100,000, to fill a massive
purchase order and go to this trade show and
secure a big customer. You need $100,000 to take your business
to that next level. Well, you can go to the bank
and you can borrow $100,000, it's going to cost you 5%
or 10% interest on it, and you're going to have to
pay that back over time. Or you can sell part
of your company to an investor for let's
just say 5% equity. The problem here is that debt is only going to
cost you five or 10%, you know exactly what it
is going to cost you, and you can factor that
in and you can basically put that into your equation and know what it's
going to cost you. The problem with equity
is that it is almost always going to cost you more than debt if things go well. What I mean by that is 5% right now for
$100,000 is a good deal. But if your company is
worth $10 million in the future or $200
million in the future, That person now has 5% equity, and they only paid
$100,000 on it, which means you just lost
out on all of the rest of that money between
where you're currently valued and that
$100,000 back then. So you need to be very, very careful when you bring on new partners, you
need to be very, very careful when
you sell equity, and you should only sell equity when you know exactly what you're going to
do with that money. You know what type of
investor you're looking for, and that type of
investor can help add to your business and
make it stronger. So, Be very careful before
you make a decision, and you need to choose
the best method here that is going to fit your business because for a lot of people, bootstrapping is the way
to do it for some people, shareholder loans when you've got a lot of personal worth, personal net worth
putting some money into the company through
a shareholder loan can be a great option. If you've got friends
and family that are backing you that
are pretty wealthy, that can be a great option. But if you're going
to go down the debt or investment path, I really caution you to kind of compare the two options there, figure out which one is
going to work best for you and choose it based
on your business, not based on anything else. Now, in summary here, there are a lot of different ways
to fund your company. What you need to do is figure out what type of company
you want to run. Do you want to run
the Silicon Valley startup that's going to scale to the moon and just keep raising investor money until
they're profitable? Or do you want to
be the bootstrap entrepreneur that
takes the business $0-1 million completely on your own using your own profits that you generate from
within the business. Those are two very
different strategies. Neither one of them
is right or wrong. It just depends on what type of entrepreneur you want to be. We'll see you in the next video.
9. Accounting: All right, everybody, welcome
back to another video. In this one, we're going to start talking about accounting. Now, this is a super
super crucial piece to get right from the beginning, because if you get
this wrong and then you start operating
your business, it can take a lot of
work, time, effort, and money to reset and put
back to where it should be. So if you can set it up
properly from the beginning, it will save you a
lot of headaches, time and effort down the road. Now, when it comes
to accounting, what specifically
am I talking about? What is accounting?
Well, very simply, accounting is the act of classifying the
transactions that go through your business. So when you go out and you
buy ten different things, you need to classify
those transactions. To basically say, Okay, this is part of my
cost of goods sold. This is a salary.
This is my overhead. You need to kind of basically classify those
transactions so that when you put together your
income statement and you say, This
was my revenue. This was my cost of goods sold. Here's my operating
expenses and my profit, everything is going
to look correct. That's the idea behind
classifying your transactions. Once you classify
your transactions, you're going to
basically want to do what's called a reconciliation. This is where you compare
what's in your quick books or your accounting software
to what is in your bank so that you make sure
everything lines up perfectly. That is called a reconciliation and it is done
every single month, basically just to make sure
that all of your accounting is on track and that
everything adds up correctly. Next one is assembling
your financial statements. This is what you're
going to look at to review and make decisions
about your business. This is how you're going to
analyze your business and try to improve it
over time using data. And then lastly here,
you're going to need to put together your year
end financial statements, and you're going to need
to pay and file tax. So those are the main
kind of topics that I am talking about when
I talk about accounting. Now, when it comes
to your options for how to handle
your accounting, you have a couple
of different ways. Number one, you can do
everything yourself or you can pay to have
somebody else do it for you. Most people will hire
a bookkeeper to do the classifying of transactions to reconcile their accounts, and to assemble their financial
statements internally on, like, a monthly or
quarterly basis. You can hire a
bookkeeper to do this. They will take care
of everything for you and kind of eliminate
that headache, or you can learn how
to do it yourself. However, you will have to hire
an accountant if you start a business because that
accountant will have to do your year end financials
and your tax filing. That is something that is extremely difficult
to do yourself, and I would highly recommend not trying to go down that path. Now, when it comes to costs, it is going to vary
depending on who you hire, where you live, what
country you're in, and what you're looking for. But in general, a rule of thumb is that a
bookkeeper is probably going to cost you 50 to $100 an hour for a good bookkeeper. A accountant is probably
going to cost you 100 to $200 per hour. And based on my experience,
living in Canada, I've run several businesses, and I've filed a lot
of year end taxes, and the average cost for a basic small company
that is very, very simple, like
what we are trying to start here is going
to be about $1,500. You might be able to get
it down to 1,000 and might be slightly higher
than thousand $500, but it's going to be
in that ballpark. Now, if you want
to do it yourself, here's what I would recommend. Number one, go and get
a QuickBooks account. That is the accounting
software that I use. As of right now, they have
promotions where you can get a monthly subscription
for as low as $6 a month. And then it goes
up to $35 a month depending on the features that
you want in that software. What I would recommend is
you find somebody with experience in that software
or experience in bookkeeping, and you ask them to help you set up your accounts right away. So as soon as you incorporate and you download that software, get somebody that knows
what they're doing to help set everything
up for you and set up the right accounts and your GST number or your tax
number or anything like that, and get some advice for how to set things up properly
in the beginning. Next thing you want
to do is spend a day watching instructional
videos about that software, whether it's quick books or wave accounting or whatever
software you decide to use, they're going to have tons
of videos that walk you through step by step about
everything you need to know, and it is so worth
putting the time and effort in to watch
those videos and get a step by step
guide of how to use that software because sometimes these things are a
little bit complicated. But if you can put in the
effort and find the resources, you can answer pretty much
any question you will need. And then once you
get all of that, you're going to need to
learn how to classify and reconcile all of your
own transactions. On a monthly basis,
assuming that you're doing, let's just say ten
grand in sales, this should take you
like 15 or 20 minutes. That should not be
a big time drain. I should not be something
that's super difficult to do. It should be something that
you can do fairly easy, and you should be able to
learn this yourself as well. Now, when it comes to my
business, like I said, I'm selling three D printed
products on Amazon. I am personally going in and classifying all of
my transactions. I'm basically downloading the
transactions from the bank. They get automatically
uploaded to quick books. And then I go in and I say, Okay, this purchase
here was for filament. That is cost to get sold. This purchase here is for
rent. That is my operations. This purchase here was my
salary, boom boom boom, and I basically go through and classify all those transactions. I also reconcile all of my books each month,
and I do that myself. You could literally
watch a YouTube video that just gives a step by
step guide on how to do this. And you will know everything
you need to know. It is not a difficult process. It's actually fairly simple. It just takes a
little bit of time. And then at the end of the year, I hire my accountant, I give him all of my books. He goes through and
reviews everything, gives me my year end
financials and files my taxes. And like I said, you can
expect to pay about $1,500. My fees are coming in at
around $3,000 per year right now because I have a bunch of investments in my
company as well. And so, This is what you can kind of expect with regards
to accounting. Now, when it comes to receipts, this is a question that
I get a lot just from other people starting
their business that don't know how to do this. Number one, keep all
of your receipts. If you buy something online, you buy something with
a credit card, print off the receipt,
and keep that receipt. What you should do is I have
some folders right there, and I have a folder
for each year with 12 different kind
of slots into it, and each one of those slots is a Just to show you exactly
what I'm talking about. Here is my 2021 receipts, my 2022 receipts, and
my 2023 receipts. And if you open this up, all I've done is divide this
folder into months so that I can come in here and I can deposit all of my receipts
on a monthly basis. And then everything is kept
nice and clean and organized, and it is basically in chronological order
based on date. So this is the key to keeping
your books together, keeping your receipts together. It's about being organized
and being prepared. And literally, these are
like, ten or $15 on Amazon, and they will just
make your life so much simpler because every
time I get a receipt, no matter what happens,
it goes into one of these folders just depending on when I made that purchase. And that way, everything
is kept all together. Now, When you are going out to eat. If you have a business meeting, are you going out for
entertainment or are you going to a sports game,
whatever it might be? Number one, if it is an
entertainment piece, your taxes are different. So here in Canada,
we have to pay GST. If you go out and
make a purchase, you can submit that
GST and you can get all of that GST back on
the purchases you made. If you make a purchase for
food or entertainment, though, you only get
half of that GST back. So definitely have
a conversation. With your accountant
or bookkeeper about how you're going to
classify those transactions, depending on where you live. The other thing here
is if you go out for entertainment and let's say you pick up the bill for dinner, you should write on the
back of that receipt. Number one, you should get the itemized receipt and
the credit card receipt. And then you should
staple those together. And on the back of that receipt, you should write
down who you were with, what you talked about, and any other
relevant information that might kind of justify
why you went to that meeting. So let's say it was
pitching investors, let's say it was a
marketing meeting, let's say it was a catch up with an old colleague,
whatever it might be, write as much information
on that receipt as you possibly can so that you can justify it in case
you ever get audited, which is where the government
comes in and says, Hey, I don't believe this
number right here, I'm going to open up
all of your books, and I want to see everything. And if you have all of that
information together and it looks professional and you have all the details
that you need, an auditor is going to
go through and go, Oh, This person knows
what they're doing, I don't have as many concerns. But if an auditor says, Hey, can I see this receipt right
here and you can't find it, that's going to cause
them to dig deeper. And then they're going to say, Okay, what about this receipt, this receipt, and this receipt? And if you don't have
any of those that are ready to go and
well organized, they are going to tear
your business apart. They are going to scour
absolutely everything, and they're going to
comb through with a fine tooth brush to make sure that you're doing
everything correctly, and it is going to
be a nightmare. And so if you can do things professionally
in the beginning, it's not only going to
make your life easier, your business is going
to run smoother, and it's going to eliminate
headaches down the road. Now, a couple of things to consider when it comes
to your accounting. Number one, is you need to keep your books up to
date and organized. Your books should never be
more than a month behind. If you leave it for one month, and then you classifile
your transactions and you reconcile your
books totally fine. You don't need to be doing
this every day or every week. You can leave it to
a monthly basis as long as it's not overwhelming
at the end of each month. Next thing here is
that in my experience, it is worth it to pay for
good professional help. The amount of money
that you pay for a good accountant or
a good bookkeeper, is usually going to be worth it because you won't
have to redo that work, you won't have to go
find anybody else, and they will be there
when you need them. I promise you this kind of
skill set is going to be worth it for your
business to pay a higher price and get somebody that knows what
they're talking about. And lastly, good financials and good bookkeeping should
help make you a better entrepreneur and help you make better decisions for your business because you have all of the information
that is clear and understandable and well organized, and you
know it's right. Now, in summary
here, number one, you can do most
of the accounting yourself if you're
willing to learn. It is going to take some time. It's going to take some effort. It's going to be a
little bit frustrating, but you can do it
yourself and you can get a better grasp of how
your business works, if you can do it yourself. However, you will need to
hire an accountant for year end taxes and filing.
And here's the thing. If your books are
organized and you can pull up your financial
statements and you can analyze your
data and you can see where you're making money and
where you're losing money, you are going to be a
better entrepreneur 'cause you're going to be
to make better decisions. You're going to be able to
grow your business faster, and you're going to
make more money. And so setting up your accounting and
setting up your books properly from the beginning
is super, super important. What I recommend is
finding somebody that knows exactly what they're doing, get them to help you out, get them to help you set up the software, and
then from there, take over all of the day
to day management of classifying transactions and reconciling at the
end of each month. That is what I would recommend. That is how I would do it. If you want to learn
more about any of these softwares
or how to do that, you're going to have to
dive into YouTube or dive into the tutorials
for those softwares, because I don't have enough
time in this course. But I hope this
video is helpful, and I'll see you in
the next lesson.
10. Margins: All right, everybody, welcome
back to another lesson. In this video, we're gonna
talk about margin now, when I refer to margin, what I'm referring to is how much money you are
making as a business. And there's three
different types of margin that we're
going to focus on. So when you look at an income statement and income statement talks
about how much money you brought in as revenue and
how much you had leftover as net profit and everything
that happened in-between. And that is where we're
going to find our margins. So when we have
our revenue here, this is what we are
selling our products for when we bring in money
from a customer, that is what is
considered as revenue. Underneath that, you have
your cost of goods sold. That is, how much it
cost you to produce that product and sell it at that event or market, or online, or in a marketplace
wherever it might be, when you subtract your cost of goods sold from your revenue, that leaves you with your
gross profit margin. Basically, all
we're doing here is taking all the money
that we brought in and subtracting the
cost of the products. And that is going to leave us with our first type of margin, which is gross profit margin. Then when you start to subtract
your operating expenses, this would include things
like your rent and your Wi-Fi and your cell phone, and your management, and anybody else that isn't directly
producing products. When you subtract those
operating expenses, you are leftover with
your operating margin. So the operating margin
is what is leftover after all of your operating
expenses makes lot of sense. Once you have that number, you then are going to have
to pay for your taxes. You're going to have to
account for depreciation. And I'm going to
walk you through what that means and
how that works. At the end there, you're
gonna be left with your net profit margin or
your total profit margin. And that is the third margin that we're talking
about right now. Now, you just heard me
mentioned cost of goods sold. So let's talk about
that and what is actually included in
your cost of goods sold. So in theory here, this is going to be including everything that is required
to make your product. That includes the raw
materials and the parts and the packaging and
the tape and the box, and every type of material
that goes into that product. It also includes all of the labor to basically
assemble that product. And then you also have the shipping if you're not
charging it to your customers. So if you're offering free
shipping on your website, that is actually
going to be part of your cost of goods sold them. So these three things are what makes up your
cost of goods sold. And then depending on how you
are running your business, you may want to add
in maybe some of the research and development
costs or some of the patent costs or
anything along those lines, then you can factor
that out based on the number of products
that you plan to sell. Now when it comes to gross
profit, Here's how it works. You sell your product for $10. Your total cost of goods sold, including all of the things
that I just listed for you, there is $2.50 that would leave you with a 75% gross
profit margin. Now when it comes to
selling in retail stores, here is how you need
to think about it. You need to sell that
product to a retail store and you need to make money
on that transaction. Retail store also needs
to sell that product to an end consumer and they need to make money
on that transaction. And the more money
that they make, the more motivated they are to push your product and
sell your product. So it is a balancing
act between making more profit on that
first transaction versus giving more profit
to the retailer so that there are more
incentivized to sell your product. And so just as a
rule of thumb here, Here's what the margins
look like in retail. Most of these manufacturers will produce a product for $2.50. That is their cost
of goods sold. They will then sell it
to the store for $5, and the store will
then sell it for $10. The store has it 50 per
cent gross profit margins, and the business has a
50% gross profit margin. That is the general rule of
thumb that you will find that most retail stores for things
like toys or furniture, or arts and crafts, or anything that you'd find at a typical retail store where you can go in and buy the product. That is a general rule of thumb for retail
is at least 50%. Now, if you decide to sell your products on
Amazon, like me, for instance, I have
a couple of products that I sell on Amazon for $10. Those products cost
me $2.50 to make, and I'm paying about $3 to $4 in fees depending on the
size of the product, the dimensions, and the weight. So my total cost of goods sold, Let's just say for this example, $5.50, that would leave me with a gross profit margin of 45% because my profit
at the end of this, the 250 plus the $3 in fees, it's going to be $4.50
and on $110 sale, that gives me 45%
gross profit margins. That is how we're
going to calculate it. And that is just a rough
general good case scenario for selling products on Amazon. Now let's say that you sell your products on
e-commerce through your Shopify website or your Wix website or
whatever it might be, you again, produce that
product for $2.50. You sell it on your
website for $10, that leaves you with
a gross profit of $7.50 or gross
profit margin of 75% However, in order
to get that traffic to your website and to get people interested
in the product, you may have had to spend up to $4 and marketing
and advertising costs, and that gets factored into
your marketing budget. And so these are what
some of the margins look like in different businesses depending on how you
sell your product. Now keep in mind here,
I'm talking about the exact same retail price and the exact same cost
of goods sold, but just sold in
different avenues. And that generates
different profit margins and different business models. And so what you wanna
do is figure out what your margins are and then
what distribution strategy, whether it's e-commerce or Amazon or selling
through retail, you want to figure out
which one is going to be the best fit for your business. Now, one thing that
I want to talk about here is operating
profits and net profit. That is what comes
after the gross profit. Remember, we have the gross
profit here and then you have your operating expenses to give you your operating margin. Then you pay your taxes and
your depreciation and you're left with your profit
margin or your net profit. And what's really
important here is that when it comes to the
operating expenses, you kind of control this
and you can manipulate it. And what I mean by that is
if you go out and you rent a really fancy facility or one that's way too big
compared to what you need. While all of a sudden your
operating expenses went up, if you decide not to pay yourself because you're
living off your savings, all of a sudden your
operating expenses go down. You really have a lot of control over your
operating expenses. And my advice to
you is try and keep this as low as
possible for as long as possible so that you can make as much operating
margin and have healthy margins so that when you want to expand or you
want to scale up, or you want to
really grow things. You have healthy margins
and you've already proven that you can do
it at a small scale. You are not going to be
able to do something at large-scale if you can't
do it at small scale. So that is something
that you really, really need to keep in mind. Now, when it comes to operating profits and
net profit, remember, you can manipulate this by paying yourself a
certain amount, either high or low, or investing into a
large or small space. We're getting really
fancy company vehicles, whatever it might be, full control over this. But what you need
to ask yourself is, do you want to reinvest your
money back into the company? Or do you want to pay
yourself and give yourself really nice
perks and benefits? Because when you're young and
you've got a small company, I can tell you that
reinvesting it back into the company is gonna be
the best thing for you. You need to delay
that gratification. You need to push
those nice perks and those nice benefits down the
road a little bit longer. You need to work really hard to build that business up
until the point that it is generating so much cashflow
that you're not even worried about paying
yourself a larger amount. That is the goal, and that's
what we're trying to get to. Now, when it comes to
growing your business, here's what you need
to think about. There's only two ways
to grow your business. That is, it is
super, super simple. The first way is to
sell more product. The second way is to make more money on every
product you sell. Margin is the amount of money that you make on every
product that you sell. And so working on your margins, reducing your cost
of goods sold, keeping your operating costs low is how you're going
to improve your margins. And that is one of the best
ways to build your business. And so I hope this video was helpful if you have
questions about any of the different margins for the different selling
paths that you can take. Leave a comment and I will get back to you as soon as I can. And in summary here, focused on your
gross profit margin. It's something that you
can't really control as much as you can control
with regards to your operating and
net profit margins. But you can really
work to get it down over time by negotiating
with your suppliers, finding new suppliers, finding better and more
effective ways to manage your labor and perform or
manufacture the product. There's so many different
things that you can do to improve your
gross profit margin, you need to be constantly
and always working at it. Now, as a general rule of thumb, just in my experience, you should not be selling
a product with anything lower than about a 35%
gross profit margin. Now, there are
certain industries that just operate on
way lower margins. And if you're in
that industry and you have the research
to prove it, then no problem, that's
totally okay. But for me, general rule of thumb and to new investors and entrepreneurs, if you're trying
to find a product, you want to look for a way to sell that product that you can scale up and maintain at least
a 35% gross profit margin. Because that means that
you're only keeping just over one-third of every
dollar that you bring in to cover your rent, to cover your salary,
to cover your overhead, to cover everything else. And so unless you just kind of a middleman brokering
large volumes, you really want to
focus on getting a nice and healthy
gross profit margin because you're going to
have customer returns, you're going to have
things that go wrong. You're going to have employees
that you need to train. You're gonna have all these
expenses that come up. And if you have at
least a 35% margin, It's really going to help you. Now. Next thing here is
to make sure that you understand every single cost
that goes into your product. You need to time out how long it takes to
manufacture your product. You need to account for
every single penny and every single product that goes in to the finished product, the packaging, the
raw materials, the little bolts and screws. And one thing that you
also need to factor in as the cost to get
those materials to you. I see a lot of people
that don't factor in the shipping cost of
getting the raw materials, they get a quote for something
and they use that quote, but they don't factor in the cost to actually get
those materials to them. And a lot of the time it increases the price
by 15 to 30%. And so really, really, really, you got to totally break down every single cost that
goes into your product. You need to work to lower those costs
continuously over time. If you have questions
about this, leave a comment down below
and I'll help you out
11. Paying yourself: All right, everybody, welcome
back to another video. In this one we're
going to talk about a very exciting topic of
how do you pay yourself. So let's dive in number one,
how do you pay yourself? First thing and the thing that a lot of people have
actually thought that I've talked to is that they can just transform
themselves money whenever they want and just kinda deal with the taxes later. And I want to put
that to rest and say, No, you cannot do that. You cannot just
transfer yourself five grand and worry about
taxes at the end of the year. It does not work like that. You actually have
three different ways that you can pay yourself. And we're going to
walk through all three of those
strategies right now. First one is salary, second one is dividends, and the third one
is a bonus. Now, when it comes to salary,
what I'm talking about here is a pretty steady and
consistent payment that is made either every two
weeks or every month to you for basically the
exact same amount. Now this is really nice for entrepreneurs and
it's really great for business owners because it makes forecasting very simple. If you are trying to forecast
where you're gonna be at in 12 months with regards
to revenue and expenses, and makes it really
easy to know that $3,000 a month is
going to come out and go to me and I can just budget that in
and that's going to be what I live on or
whatever number works best. It also makes your
taxes simple because they're basically treated
like everybody else. You can run your, you can pay yourself just like you're
going to pay your employees in the future. And it's not a very
complicated process, and it's also very
easy to set up. You can set it up to
your accounting software that we have already
talked about. It's a couple of
steps. It's going to depend on where you live, but it's not difficult to do. And paying yourself a
salary is probably going to be the best answer
for about 80% of people. Now the other option
here is dividends. Dividends are basically
the profit that is leftover in the company and
the owners of the company decide to pay that profit
out to the owners of the company based on the number
of shares that they hold. Now I know that for a lot of us, we're probably going
to be the only shareholders in our company. If you make $5,000
in profit and you decide to pay $2,500
out in dividends, all that $2,500 goes
directly to you, and then you are going
to have to pay tax on those dividends at
the end of the year. Now, there is some paperwork
that comes with this. You do need to make
sure that you are doing this properly and there's
a bit of a process. But what's nice about dividends
is that they usually have lower taxes than
if you were to pay herself the exact same
amount in a salary. The other thing that's
really nice about dividends, that they can be increased or decreased whenever you want. You can pay a dividend either monthly or quarterly
or annually, and you can pay it for
as much as you want. It can be totally different
every single time. It really does not matter
and it doesn't make life any more difficult when
you change these numbers. The problem with dividends
is that if you are an entrepreneur right
now and you want to go get a mortgage on a
house in the future, or you wanna go
refinance in the future. If you pay yourself ten
grand onetime in dividends, and then 30 Gran one
time in dividends, and then five grand onetime in dividends. Well, that's great. You are building up in income, but the bank is going to
look at that income and say, this is not consistent, this is not reliable. I can't guarantee that you're going to
make this amount in the future because it's going to be totally dependent on
how your business does. And so you need to be careful
here because if you're planning to buy a home
in the next two years, especially if it's gonna
be your first home, the dividends are not as attractive to mortgage
brokers and mortgage lenders. As a salary. A salary for $200,000 is going to look a
whole lot better than somebody that got a
bunch of payments up and down for $200,000 in dividends. It's just the way
it works because a salary looks more consistent, it looks more steady
and it looks more reliable to the people that are going to be
lending you money. Now the third option
here is a bonus. A bonus is a onetime
payment that is made to an employee of the company if you work in your own company, yes, you're an owner, but you're also an employee
of that company. And the nice thing about
a bonus is that it can be easily increased
or decreased. And they are very,
very useful for tax purposes in a
profitable business. So for instance, in my business, I pay myself $200,000 a year in a salary that comes
out every single month, and that goes directly to me. After that, I have my business which generates a profit at the end of the year. If I generate $100,000 in profit after all of those expenses at
the end of the year, my business is going to
have to pay tax on that $100,000 if I decide to give myself a bonus at the
end of the year for that $100,000 and I pay it out
in the next calendar year, that $100,000 is
going to count as income from me and I'm going
to have to pay tax on it just like I would
have had to anyways, but it is going to reduce
the overall profit of my business and reduce the taxes that my
business has to pay. So just again, to simplify this, if you have a
profitable business that generates profit
at the end of the year, you will regularly have to
pay tax on that profit. If you bonus out that
profit to yourself, you'll have to pay income tax on that profit or income
tax on that money, which you're going to
have to do anyway. But at least you can reduce the profit that
your company makes. And therefore you can
reduce the amount of taxes that your company is going to
have to pay on that profit. And so bonuses can
be a useful tool To reduce your corporate profit as long as they're
used correctly and responsibly and they
leave enough money in the company to operate safely
for the foreseeable future. The problem with
these is that, again, just like dividends, they're not reliable, they're
not consistent. They are not something
that somebody can really bank on when they
are lending you money. And so they're not great
for getting a mortgage. A mortgage broker will like a salary much more than they would like
dividends or bonuses. Now the real question here is how much do you pay yourself? How do you actually
set that number? And here is the answer that, that is going to work
for 99% of people. You need to pay yourself enough to live
within your means. And when I say live within
your means, I mean, a reasonable apartment
with reasonable furniture, with a reasonable food budget
that is not extravagant, that is going to make
sure that you are focused on the job at hand, but you have enough money
to live without stressing. You do not want to add
additional stress on top of the business because
you don't have enough money to live
on that as a problem. And if that happens, you need to reevaluate
the entire strategy. You need to pay
yourself enough to live within your means
throughout the year. And then at the end of the year, when your company has a
good amount of profits, you can decide on a
bonus or a dividend, but you should only
do that once you have your year-end financial
statements so that you can see exactly
how you performed and you have a plan
for the future. You don't want to do is pay
yourself a huge salary and then a huge bonus and paid
tax on all that money. And then realize that your company is actually going
to need a cash infusion. And six months,
you're going to have to put some of that
money back in. That is a terrible
situation because you will have already paid
income tax on that money. And so it's just a nightmare that you do not want to be in. That is why you want to
make sure that before you pay yourself a dividend and before you pay yourself a bonus, you not only have a plan for
the future that you have forecasted and you
know and understand. You also want to make sure that your financial
statements for the past, that you can evaluate and
make sure that you understand how much money is actually leftover for you and where
that money came from. Now, when it comes to taxes, there is a lot of different
opinions about this. There's a lot of
different ways to do it. There's a lot of people that
try and skirt the system and there's a lot of people that get caught and go to jail doing it. And so when it comes to taxes, I want to let you
know that taxes hurt. Taxes take a lot
of money from you. They took a lot of money
from your business. They slow things down and they
hurt and they are painful, especially when you're an
entrepreneur and you have to send yourself money and then you have to send the
government money. You see exactly
how much money is going there and it is painful. Well, you need to
understand though, is that they are
part of the game and you have to pay your taxes, there is no way around it. You can reduce your taxes by
being smart with your money. You are going to get a tax bill. If you are making money, it is part of life and you
have to pay your taxes. And what you should do is
instead of thinking of it as taxes and what am
I getting in return, Think of your taxes
as the cost of the opportunity to do business in the country
that you operate in. So a lot of the people watching
this course are probably going to be in Canada or
America, or in Europe. You live in a pretty good place. You need to understand that. You need to recognize that. And because you
live in that place, you have customers with
disposable income that want to spend money on your
product. You know what? It's just the cost of doing
business where you live. And if you don't like it, you can move to another country. You can move somewhere
else and operate somewhere else in a lower
tax tax situation. But at the end of the day, the taxes or the cost of doing business in the country
that you operate in. And therefore, it's part of
the game, it's part of life. You're playing on an
even playing field with everybody else
in your industry. So you cannot complain, you just need to be better
than them at running your business and
generating more profit. Now, in summary, there's
three ways to pay yourself. You can pay yourself
with salaries, with dividends, or with a bonus. The taxes and the proof of income or a big
consideration here, proof of income is what
I'm referring to by a steady and consistent
income that you get with a salary as opposed to
dividends or a bonus. When the mortgage broker sits down next to
you and says, Hey, can I see your
year-end tax documents and proof that you filed them, paid your taxes when
they see that you had $200,000 worth of income instead of $200,000
worth of dividends. They're gonna be much more
supportive in helping you out and it's
going to be much easier to get that mortgage. Third thing here is live
within your means and build a profitable business before increasing your
expenses and salaries. The number one thing where
young entrepreneurs go wrong is they start to see
a little bit of success. And then they ramp up
the expenses that go get the fancy car that
gets a new clothes. And all of a sudden
they have a couple of rough months and the
stress hits hard as soon as you have higher expenses
and the business takes one or two bad months,
things really change. You want to avoid that stress. You want to keep
things as lean as possible for as
long as possible. And then once you're profitable, once you have a foundation
that you can build up and scale and modelling
different places to grow. That is when you really want to focus on maybe spending more. And once you've proven it out, that's when you can
pay yourself more. But until then, first step, build a profitable business, get a year's worth
of financials, a plan for the future, and understand how much of that plan is going to cost you. And then the money leftover is what you can pay out a
dividend or a bonus. I hope this video helps if
you have any questions again, I know this one is a
complicated topic. Leave a comment down below and I will get back to
you as soon as I can see you in the next one.
12. Banking, Insurance, and Accountants: All right everybody, welcome
back to another video. This one is going to be super exciting and super
important because right now we're gonna be talking about patents and trademarks, okay, so to start us off here, a patent prevents others from making or selling an invention. So if you invent a
brand new product and you don't want somebody
to directly copy you, you can go out and
try and get a patent. And then if you find
that somebody is making a product that
violates your patent, you basically take
them to court and have the court forced
them to stop selling that product and
basically pay you some renumeration or
some reimbursement for the damages or money
that they have lost. Now, a trademark is a
little bit different. A trademark protects
words, symbols, sounds, logos to identify the source
of goods or services. So if you look at
the Coca-Cola logo, that is not a product
that could be patented, but it is a source of
words and symbols that represents an
identifies the source of the goods or services. And so that is a trademark that Coca-Cola has
that is extremely, extremely valuable and that they spend a lot of money to protect every year by taking people to court or sending letters saying, stop doing this or I'm
going to take you to court and that's called
a cease and desist. Now the real question here
is, should you get one? Should you get a patent,
should you get a trademark? And the real answer here is that only if you
think that what you have is worth protecting and you're willing to
protect it in court. So what I mean by
that is if you have a product that sucks
that isn't selling, then you probably
shouldn't pan it. If you have a trademark like a company name or
a logo or a brand, that's not doing big
sales right now, probably isn't gonna do
big sales in the future. And that you might shut
down at some point, then you probably shouldn't spend the money to
get a trademark. You should focus on
trying to build that business backup patents are
also extremely expensive. Lowest quote I've ever
seen is like $10,000. And that's because the patent
got through first try, but that does not
happen very often. Pants are extremely expensive
and the people that write the patents are
also extremely expensive. Trademarks are not as expensive. You can actually
file a trademark for a couple of hundred dollars. I have filed several
here in Canada. I've done them myself. You can look online,
look on YouTube, look through chat GBT, and get some guidance on
how to file a trademark. It is not extremely difficult, but patents are much
more difficult. They're much more
expensive and they usually take more time. Now when it comes to
patenting your product, like I said, it is
a long process. It is not something that is
going to happen overnight. It is something where it is a very regimented system
where you have to just follow the steps and you're
going to have to pay a professional in order to
file all of your documents. You also need to make sure that your product is patentable. You cannot patent something
that already exists. You cannot pan something
that is obvious. And you need to be very, very sure before you
spend the money, you need to make sure
that what you are trying to patent can be patented. You also need to make sure that whatever you are patenting, you're willing to enforce
the pan that you received, which means hiring lawyers
and taking people to court and forcing
them to stop selling. And so before you ever
get to that point, you need to just make sure that whatever product you
are trying to patent, you need to make sure that
that product can generate a profit before you spend the
money to get it patented. Because if that product doesn't generate
any profit for you, and then you have to go in
and force that penned, well, now you're already losing money on the product and you're losing money on trying to enforce it and it just doesn't
make any sense. So number one, make
a great product. That is the best thing
that you can do. And then go pan if you
are seeing some success, I'm going to talk about how to do that at the end
of this video. But just so you are aware, I've been through this process. I have hired patent agents, I've hired patent lawyers. I've looked at trademark agents, and here is our rough range of good patent agent is going
to cost you $250 per hour. And a patent lawyer
is going to be almost at an absolute minimum,
$500 per hour. And this pan lawyer is going to bill you for
every phone call, you take every email, every conversation that he has with his colleague
about the case. Absolutely. Everything
you are going to get billed for an IT is expensive. Trademark agents are
a little bit cheaper, but it depends on what you are looking for and
how you're gonna do it. Oftentimes, they actually sell their services as a package. So the company in Canada, I think it's like $1,100. And they basically do
everything from start to finish for you with
regards to that trademark, but it does depend. Now, the trademark
process is pretty simple. Like I said, trademarks
can be filed on your own. You go to your countries
Trademark Office website and you just follow the steps and then
you pay your fee. Here in Canada, It was
like five or six steps. You got to put in all
your information, say what your trademark
is classified into a certain
basically category, and then pay your fee and wait for them to
get back to you. Very, very simple. The patent process
is not very simple. You first need to, like I said, make sure that you can
actually pan your product. You do that by doing
a prior art search to make sure that
your product is new and can be patented
and hasn't been patented or hasn't been
shown to the public before. You also then have to pay to create and filed the
patent application, which is a long document which
basically just describes everything in your pant and what you are
trying to patent. And then you need
to change or modify that application as needed. If your application gets
rejected for XYZ reasons, you can go in, you can change, you can modify that application
and you can resubmit it. And then if it's approved, you need to pay for
the final pen fees and then you'll be granted
your final pattern. And at every step
of the way here, you're going to need
either a Patent Agent or pen lawyer to file
those documents, to have conversations with, to develop the strategy with and to talk
about your product with and so you need to be
ready to pay those fees. My experience here is that
patents and trademarks can be extremely useful when the
product is successful. Coca-cola is a very
successful product, and so that trademark
is extremely valuable. But a trademark and a patent
is useless if the product is not good or if you do not have the capacity
to enforce them. So if you have a brand
new product that's making you $500 a month, I'm telling you right
now you do not have the capacity to
enforce that panned. A lawyer is going to
cost you too much money. It's going to cost
you too much to go to court and you just don't have the capacity to do it if that product was making
new $20,000 a month, though, all of a sudden, you can afford a
really good lawyer. You can go to court, you
can challenge and you can take people and
you can enforce them. And you can basically
forced them to stop selling and pay you what basically amounts to a royalty for all the products
that they have sold them. So there is a lot going on here, but you need to make
sure number one, that you have a good
product, and number two, that it is worth panting
because it is expensive. In summary, here, consider
if you need a patent or trademark to protect your
strategic advantage. Like I said before, the
strategic advantage is what makes your business unique
and better than the others. And so if a trademark or patent will solidify
that or help that, then that is very, very valuable to you
as a business owner. Enforcement of a patent
or trademark can oftentimes costs more than
the application though. So you need to be well
aware that if you spend 10,000 on a patent in my cost
you 20,000 to enforce it. And that is just the
cost of doing business. So you need to make
sure that that product generating enough
profit for you. And then you need to prove that product before you
actually filed a patent. And what I mean by this is that product cannot be available
to the public unless it is U. So for instance, if
you've come up with a new product and you
share it on Instagram, you have 12 months from
that date in order to file your patent application and basically have your name
on the list and say, I'm the guy that invented this. And so there's a lot of
small rules here and there's a lot of intricacies
of the patent system. If you want to go
down this path, what I would
recommend is finding a local patent agent first and asking them as
many questions as possible. And then moving on
to a patent lawyer if it's absolutely needed, try and stick with a patent
agent if you can though, because it's going to
save you some money and make sure that if you're
going to go down this path, you are willing
to go down it all the way and force
it till the end. Otherwise, you're better
off taking those resources, taking that time,
taking that energy, and trying to improve your
business in other ways. Hope this was helpful. Trust me, I'm speaking from experience in this
category here. If you have any questions about this, let me know down below
13. Patents and Trademarks: Alright, everybody In
this video we're gonna talk about how to
find a good banker, a good insurance broker, and a good accountant for your business to
help you succeed. Let's jump right in
by far the best way that I've found to
find good people in any of these professions and honestly any
different aspects of business is to ask all of
my entrepreneurial friends. My entrepreneur real friends
are running businesses, are doing something
similar and they have probably already
had to go through this challenge of
finding somebody to be their insurance broker
or to manage their banking, or to be their accounting. And so if you can
go to them and say, hey, how was your experience? Have you had any luck in
any of these departments? Is there any references or introductions that
you can make for me because I'm looking to
find a good accountant or a new insurance broker
or a better banker. And I could really
use your help. Other entrepreneurs want
to help make introductions because it builds their
network and makes them more valuable
in that network. And it helps them help their
friends get more business. Entrepreneurs always
want to help each other. Always ask your
entrepreneurial friends first and after that, what I've also
found to work well, if that doesn't work and if
nobody has any references or if nobody specializes
in what you do, I've put a post on LinkedIn for my insurance broker just a
few months ago and it really, really helped me
out. People can see you were doing, they
can follow along and they can make the
introductions online, which opens up their
network even wider. If you have a big presence on Instagram or any of these
other social media sites? I would do the exact same thing. I would say, Hey,
I need some help. I'm running a
business and I need an accountant for my year-end, or I need a new
insurance broker, or I need to find a
really good banker that specializes in this. Your network is online. You need to use that to your
advantage and let them make introductions for you because
it's good for everybody. It just basically
stimulates the economy. And if neither of these work, if you can't find
any references, you get any introductions
from your network. What I would recommend trying to look for promotions. Now this has worked
for me in the past, one of my businesses. I couldn't find a
good banker anywhere. I couldn't get any
introductions and and everybody basically
just seemed the same. So what I did was I
looked for promotion, so were happening
in the marketplace. And I found a bank
that was offering a full year of free banking. If you signed up and you move your accounts to
their basically bank. And so I did that and I
got an entire free year of banking that at the time
was about $70 per month plus extra fees.
And so I saved over $700 just by going
with a certain bank, those running a
promotion at the time, it's well-worth it to put
some effort in here because these fees from all of these professions add up
quite high over time. Now, when it comes to insurance, here's what I would recommend
for a new entrepreneur. Number one, ask yourself, why do you need insurance
for me to sell on Amazon? If I sell over ten
grand a month, I have to have
liability insurance. If I sell other products in
other markets, in retailers, for instance, I have to have
certain insurance and so it's literally just a
requirement for my business. If you do not have that, make sure you are
asking yourself why you want to buy insurance? Because maybe you don't need it, maybe it's not required
and maybe you should reconsider holding off
on insurance for now. I don't say that to add
risk or anything like that. But there's a lot of businesses out there where there's very, very, very low risk. But unfortunately you're
paying hundreds of dollars a month and insurance just
to have it and honestly, you're probably never
going to use it. So just evaluate whether
you need insurance. It is not completely required just for starting a business. And so something to
consider after that, you should always
get multiple quotes. There are hundreds
of thousands of insurance brokers in the world. There's thousands and
every country you need to be able to
get multiple quotes, go to multiple different places to let them compete
for your business. And you can even go back and negotiate with a lot
of them as well. Also, I would try and find a broker that specializes
in your industry. Not all insurance
brokers are the same. Some of them focus on AutoSum, of them focused
on manufacturing, some of them focus
on online sales. I have an insurance
broker that specifically focuses on Amazon sales
in the United States. And so you can find insurance brokers specialize
in what you're doing. I would recommend that, especially if you're
in any type of niche or something
kind of specific, because it will allow them to just understand your
business a whole lot better and give you
better quotes and prices because they have more
data around that industry. Next one here is do not lie
on that application form. They are going to ask you
a bunch of questions, get you to fill out
a bunch of paperwork and if you lie or give any wrong answers or
mislead them in any way, they can use that
as a reason not to pay out in the event
of an insurance claim, you also need to try and ask for a monthly payments that is the best way to pay
for your insurance. And you need to ask as
many questions as you can to that insurance
broker about the policy to make sure that you fully understand
what is covered, what is not covered, and how that policy works. Next one here is banking. My experience is that the bigger banks
are usually better. The only reason I say
that is because they usually offer more
products and services. Their cards are accepted in more places and they can handle the currencies of
different countries much better than a small bank. You are more of a number. You're going to get
changed around a lot. You're probably going
to get new account managers every few years. But in general, if you're
running a business, especially if it is cross-border with multiple currencies, you're going to
want a bigger bank. When you go sign
up for that bank, you are going to need
a checking account. You may also want to
keep a savings account, but probably not
in the beginning, and you may need an account
in a different currency. So for instance, I do a lot of business in Canada and
the United States. So I have both Can$1 account
and the US dollar account At my Canadian bank, it makes my life very easy
and it also allows me to control when I want to take
advantage of the currency. It allows me to control that
currency exchange rate. And it just gives me more
control of the situation. And if I am based
in Canada and I receive US dollars and I want to buy something
in US dollars. I don't have to convert
it one way and then convert it back and
pay those fees twice. I can just keep it in US dollars
and pay with US dollars. And so it can really
save me a lot of money when it comes to banking
for your business though, it is structured very differently
than personal banking, you're usually going to get
hit with a monthly fee plus a cost based on the number of
transactions and your plan, you really need to evaluate how many transactions you
think you're going to have going through your
account because that is going to dictate what type of plan you should choose when you get to the bank. It is very different
than personal banking, how that is structured.
So keep that in mind. Now, if you have a banker
that is not responsive, you need to email that banker and tell them they are not very responsive and you need to ask them to improve that
responsiveness. And if they do not improve
that responsiveness, you can either ask
for a new banker or you can go find a new bank. The last thing you want though, is to have an issue with
your money or an issue with your payment or an issue
at the transfer and not be able to get a hold of the guy or girl that runs your
account at the bank. Super, super important there. And just so you know, you can move banks
whenever you want. You can also have
multiple bank accounts. You can have six bank
accounts if you want. If you have large
amounts of money though, especially anything over
$250,000 in a single account. That is when you really want to have multiple bank accounts. Now when it comes
to an accountant, it's actually the
exact opposite. You do not want a
big accounting firm. You want a, you want
to find a small, tiny little shop with
1234 or five employees. That is good people. They've been there for a while. They look reliable. They are going to help
you and walk you through and guide you through the
accounting of your business. You do not want to be a number in a massive list of
different customers. You want to be one of
very few customers. You want to have one primary
contact and you want to find a small shop that
does good business. That is what you are
looking for an accountant, you want to count that will look out for your best interests and will guide you and
teach you along the way. Accounting is not intuitive. You'd never be able to say, Oh, I'm just going to learn accounting and learn
it as it comes. That is not how it works. You need to understand
the basics and the principles before you can
apply it to your business. And a good accountant will help walk you through
those principles, walk you through
how that all works. And I can tell you
right now that a good accountant is
going to cost you money, but in the long term, it is going to be well worth it to set up your
books properly, to manage your books properly, to do your year-end properly, they give you the right advice. Cost good money, pay them money. It's worth it as long as you didn't find the right person. And if it doesn't feel
like the right person, keep on looking me personally. I found my account and by
typing in Accountants near me, I found three or four of them. I went and basically
call them all up, figured out who had the best
customer service and who specializes was the closest
to specializing in what I do. And my accountant lives 10
min away from my house. I drive to his house for a meeting. Every
couple of months. We go back and forth over e-mail and it's a
great relationship and I highly recommend trying to find something
similar to that. Now with regards to cost, my cost right now I
currently bank with ATP and they're $85 per month. They are a small
bank, but again, they basically gave
me that promotion and I'm looking to
transfer right now. I don't think I'm going to be
with HB and the next year. And so just an example of not
happy with their service, no problem transferring over. You will also find
that once you've been with a bank for a
little bit of time, people that manage your
accounts or like the representative start
to get shifted around. And so I think I'm on my
second or third representative and it's just not a
great experience. So I do think I'm going
to change my bank, but right now pay $85
per month and I pay about $15 per wire transaction. My insurance broker on
Amazon is called Fox quilts. You can look them up
online if you want. If you plan to sell
products on Amazon, they're fantastic so far
I really liked them, pay $97 per month to them. And my accounting is about
$1,500 for a year-end filing, which is basically
putting together my finances at the end
of the year and filing my taxes or there
about $150 per hour depending on what the situation is and what we are working on. So that is sort of what I'm paying for my help
on the banking, accounting and insurance side, I hope this helped in summary, building a team of
good professionals that can help you build your business is going to be well-worth it
in the long run, focused on finding good
people and keep moving until you do if you're not
happy with your insurance, if you're not happy
with your accountant and if you're not
happy with your bank, drop them, cut them, cut them, leave them behind, go find somebody new, find somebody that cares
more about your business. And I promise you they're out there and might just
take some searching. But that good health is worth
the money in the long run
14. Lawyers and Legal Fees: All right, everybody, welcome
back to another video. In this one, we're going to talk about lawyers and Legal Fees. This is something that is
going to come up at some point if you're in business for long enough and it is going
to cost you some money. So let's talk about
how you can save some money and when you
actually need a lawyer. First of all, lawyers will
bill you based on time. All lawyers will
have an hourly rate. And basically what
happens is that part of that rate goes to the
lawyer as their income, the rest of that money goes to the firm and it gets used
for expenses for rent, and it gets basically
sent back to the Partners that are at
the top of that law firm. That is how these
legal companies work. One thing that you
should know is that their rates are negotiable. Most lawyers will
have a set rate, but they will also
have most of the time, their ability to discount
that rate by up to ten to 15% is usually the ability that they will have to
do that on their own. I know this because
I've invested in a legal startup right
now here in Calgary, and they're run by lawyers. So I've had these conversations. Most lawyers can
negotiate their rate. They can easily drop it by at least a couple of percent
and they can usually get approval to drop it down even more if you are very
good negotiator. So definitely try and always negotiate the hourly rate
when you hire a lawyer. One thing that you
should also note is that all lawyers have a specialty. There's no lawyer that does
corporate law and we'll go do trial law and will also help you with a divorce
lawyers specialized. They do not do everything. They specialize in one thing, if a lawyer focuses
on businesses, they will not focus on criminal law and they will
not focus on family law. They will stick to one thing. And so you need to
find a lawyer that specializes in what you do. Basically, you want to try
and find a lawyer that practices corporate
law in your industry, or at least they
have a couple of clients that are
somewhat similar to you. That is what you're
looking for because that lawyer will understand
your business and there'll be able to help you more
because they have more in-depth analysis and more in-depth knowledge of what your
business actually does. Now, why do you need a lawyer? And what are some events that might cause you
to need a lawyer? Well, if you ever
want to put together a shareholder agreement with your other business partners, a lawyer can help you do that. They can also help
you put together an equity plan for any
of your employees. Or if you want to buy out one
of your other shareholders, they can help you put
together those agreements. They're also great for adding new shareholders or raising
money and raising investment. They can review
your contracts to make sure that everything is it's kind of In-order and get a protect you the
way that you want. They can help you set up
a merger and acquisition. They can help with you with
licensing and partnerships. Can help give you a
non-disclosure agreement and help you protect your
intellectual property. They can also help you
with employment issues and terminations and any problems that you might have with
any of your employees, as well as in entire slew of other services that they just
have a ton of experience and and they can do
properly and they can make sure that everything holds
up in a legal setting. And that is basically
just something that as a regular entrepreneur, we just don't have
the experience, we don't have the knowledge
base and we don't have the resources to put together a lot
of these agreements and a lot of this paperwork. And so the lawyers come in and they do all
of that for you. Now, the question becomes, how do you find a lawyer? How you hire a lawyer? And how do you
actually figure out which one is gonna
be the best for you? Well, live in Canada, this is the company
that I've actually invested in is called
good lawyer dossier. They help young entrepreneurs
connect with lawyers that specialize in what they need and they offer
discounted services. So if you live in Canada, definitely check out
good lawyer dossier. And if you live in the USA, I would recommend
Legal zoom.com. They're very similar platform, but they're focused on the US. And if you live in Europe or
if you live somewhere else, I would recommend trying to find a marketplace that
lawyers goto so that you can review online a bunch of different lawyers and figure
out what they specialize in. They can contact them online. If you can't do that, I would ask your
friends, family, or anybody that you
know in business for a reference or contact or connection that they
might be able to lend you, that is always gonna be
the best way to do it. Or you can just go
online and try and find a lawyer that is number
one close to you ideally, and find one that specializes in your size of company
and your industry. Those are going to be the criteria that
you're looking for. Now, just a couple of tips
when hiring a lawyer. Number one, I usually like
to start with an email, especially if I'm
looking for them online. Email them with a
brief description of the situation and ask
if they can help a lot of the time that either gonna
give you information in an e-mail response or they're going to ask
for a phone call. Now, most lawyers are open to having a
phone call with you. And most of the time that phone call is going
to be free because they're basically there to evaluate whether or not they want
to take on your case, whether or not they
want to work with you and whether or not
you're kinda worth the hassle of putting through the system and
starting to work with. And so what you wanna do here is try and prove that
you're serious. Prove that you are
willing to pay them for the services if they can
help you solve this problem. But you also want to try and ask as many questions as
possible so that you can get a better understanding
of what the options are and what the overall
situation looks like now, if you have not agreed to pay the lawyer before that
phone call and if they do not start off by telling you their hourly rate and that they plan to charge you
for the phone call. You can assume that
that phone call is gonna be free if they try and charge you at the end of that phone call
and they say, Hey My hourly rate is $500. We just spent 45
min on the phone. Are you okay if I
send you an invoice, that is when you
are going to say in a very stern and
confident voice. No. I did not agree to hire
you for your services yet. You did not let me know what your hourly rate was before
we started this phone call. Therefore, I am not agreeing
to pay your invoice. And I was under the
impression that we were having a brief conversation to understand what the
situation was like and discover if we were a
good fit for each other. You say no with a
ton of confidence. That is the goal here because nobody wants to pay $500 for an introductory phone call when nothing is actually
even happening. You're just gathering
some information and seeing if there even
a good fit for you. So keep that in mind. If somebody tries to charge
you for that phone call, you can say no as
long as you do not agree to any of the
prices ahead of time, you do not agree to pay for that phone call ahead of time, you cannot go back on your Word. But if you are having
an introductory phone call with a lawyer, most of the time, you're not going to
have to pay for that. Now, one thing is that
you can challenge their legal invoice and make
them prove every line item. So for instance, once
you finish your project, let's say it's bringing
on a shareholder raising a round of funding. They're gonna send you an invoice and they're
going to say, Hey, here is the amount of time
that we spent on this, here is what we did and
here's the time slot. And then you're gonna
get a big invoice with a bunch of
those line items. What you need to do then is
go through your phone calls. You need to go
through your e-mails. You need to compare
what actually happened to the invoice
that you received. And if there's any
discrepancies, you need to make
sure that they are proving exactly what they did in that time slot and
why it took them so long. And if that does not happen, you need to knock
down that invoice, bring that price down and
negotiated all the way down. I know people that
have brought a $50,000 invoiced down to $15,000 and Legal
Fees can happen. You can bring that price down. A need to really make
sure that number one, you document
everything in writing. And number two, if you have a phone call with that lawyer, you need to make sure
that you're recording it. You need to literally record
everything that you do with your lawyers because
if they send you an invoice for $50,000, when you think it's $25,000, you are going to be in the whole you're going
to be very upset. You need to have some
evidence and some proof to justify why you think that invoice should be
lower. So keep that in mind. I promise you, if you record all of your conversations
and do everything in writing with your
lawyers and is going to save you so much money
in the long run. It is a mistake that
I made very early on and I can't tell you how
much money I lost on it. So it's a big thing. Record everything, make
sure it's in writing and record your phone calls and your conversations
with your lawyers. Next one here is when to bring in a lawyer. This
is really important. So when to actually go through the hiring process once you've had that introductory
phone call, like, okay, I need
your services, you're going to help me. Here's how you handle that. Number one is stage one, and this is where you're still sort of understanding
the situation. You want to use the
lawyers expertise to answer all of your
questions so you can understand what all of your options are and you
can make the best decision. This is an information
gathering session where you need to come prepared with all of your questions. You need to be as
quick as possible. You need to get as
much information and value out of that
lawyer as you possibly can in a concise time
period because they are literally billing
you by the minute. Lawyers will charge you and basically document their
day in 10-minute sections. And every 10 min section is a bill that is going to
one of their customers. You need to make sure that every 10 min session that you
have with your lawyer, you're getting the
maximum value out of. And so if you're at
stage one where you are trying to understand the
situation and the options, and what are the
different strategies that you can put in place? You need to be prepared. You need to have
questions ready. You need to get right
down to a point. Do not delete data and shoot the and talk about anything
you want with your lawyer. You need to get
down to business. Stage two here is where you have gathered all
that information. You have major decision and you have a plan that you
want to execute. That is when you go to
your lawyer and say, Here's what I want to do. I need you to perform XYZ
tasks and send this back to me hopefully within this date
or within this time period. And you give that to
them and you say, how much is this
going to cost me and you'd get that out
ahead of time. If you do something with your
lawyer and you say, okay, put together a draft and
then you go talk about it with your business partner and you've got a bunch of changes, then you have to go
back to the lawyer and then your business
partner changes his mind. You've got to go back
to the lawyer again. That is where your
bill starts to skyrocket as soon as you have to keep making changes and having phone calls and going
back-and-forth with your lawyer, that is where you are gonna get a bill that you
were not expecting. So what you wanna do here
is have those conversations and have those negotiations
primarily beforehand. If you understand
what you're doing, you want to have those
negotiations beforehand. And you kinda wanna set
out the rough terms. You want to go to
your lawyer and say, here's the outline, here are
the terms of the contract. Here's what I want,
here's what they want. Put this into a
document or perform this task or follow
these orders. Basically, you do not want to have a lot
of back-and-forth, and you do not want
to have to change your mind once lawyers
have already started to work because that
is when the bills just start to really
rack up for work, that doesn't end up getting used and that's
the problem here. So that is when you
should bring in a lawyer. And just on my experience alone, I've paid well over $100,000 in legal fees and the lawyers that I've paid
work best when you know exactly what
you want them to do. When you have already
processed your information. You've gathered all
of the information, you've gathered all the options. Guardian Lorien, say
I want you to perform XYZ and you give them
a very clear outline. That is going to be the best way to get the most value
out of your lawyers. And lastly here is that
good lawyers are expensive. It's the best
lawyers that I have dealt with are
well-worth their money, but the money is
like $500 an hour. So it is not something
that kid around with. It is not something that you
want to joke around with. And usually they're going
to take a retainer upfront. Or retainer is a large payment that you
have to make ahead of time for the work that's
about to be serviced. The lawyers take that
so that they know you can pay for it
and so that they have at least a certain
number of hours that has already paid for and they
know you're serious. And so that is how the
legal world works. In summary, here, start with an intro phone call and try
to ask as many questions as possible for
free and understand the situation and do not
pay for that phone call, refuse to pay for
that phone call. And if they want you to
pay for the phone call, just go call another
lawyer online. That's the way to do
it. Next one here is higher lawyer that has
experienced in your industry. You want somebody
that understands the industry and understand
your business because they'll have more
knowledge and give you better advice and information. You can also
negotiate their rate. I would start by asking
for an immediate 15% off. If they don't give
you that, I would negotiate down at 10%. You wanted to basically
just try and not pay their entire full rate without either
sounding cheap and sounding like a headache of
a case for them to take on. And you want to
incentivize them and say, Hey, I'm going to be in
business for a long time. I'm going to need lots of
legal work in the future. This could be the start of
a very long relationship. Next one here is
you want to give clear and concise direction and keep the back-and-forth
to a minimum. You do not want to have to get product or get a service
from your lawyer, then have to negotiate with that because as soon
as something changes, you gotta go back-and-forth and it's just gonna
be a nightmare. And you can challenge all
of the invoices to make sure that it matches with your phone calls
and your e-mails. You can bring that price down. I know it's tough to
negotiate with lawyers. I know they can
seem really hard, but I can tell you
right now that these lawyers are billing
out in 10 min sections. And every every conversation that they have with one of
their colleagues at lunch, their billing you for if they talk about your case in any way, they're billing you for it. If they send a text message
while they're on the toilet, they are billing you for it. You need to be prepared here and you need to
make sure that you have documentation that
you can use to say, Hey, this didn't
actually happen. This didn't actually happen. I can't believe this
took half an hour. Can you please explain that? And that is going to really significantly bring your
Build down at the end of it. If you don't believe
me leaving a comment, let me know the situation. Maybe I can help, maybe I can't, but this is my experience
after probably well, I've hired seven or
eight different lawyers on the good lawyer
platform and I've had probably five or six big
law guys from before that. So I've got some
experience here and it's painful and expensive
experience and hopefully I can save you a
couple of dollars with this advice will see
you in the next video.
15. Paperwork and receipts: All right everybody, welcome
back to another video. In this one, we're going
to talk about what to do with all of your receipts
and your paperwork. Now in general, this is
definitely going to depend on the type of business that you have and where you
have that business. But you basically need to keep track of all of your revenue, mostly in the form of invoices. You also need to keep track
of all of your expenses. And then you need to
keep track of all of your documentation for money that is moving in
between accounts. So if you move it from a Canadian dollar
account to $1 account, or you move some money
and you take it out of your savings account
and you turn it into cash. Those are transfers
between accounts, so you need to keep
track of those. And then you also
need to keep track of all of your agreements
and contracts. And so these are the
four points that we are going to dive
into in this video. But first, let's just talk
about why is this important? So number one, you
are going to have to complete your year end taxes. That's where your account
is going to take. All of your transactions, all of your receipts,
all of your financials. They're gonna put it
together. They're gonna tell you how much
money you made, how much money you lost, and how much money you
owe the government. And if you have all
of that paper work well organized and put
together and documented, it makes their life very easy. And it also reduces
your accounting bill because it means that it's
going to take them less time. So super important there. Second thing here
is that in case you get audited by
your regulator, what that means is
that in theory, you can expense
anything you want. As a business owner. If you
have a business credit card, there's nobody that's going
to stop your hand and pull it away from the teller and not let you process
that transaction. Like that's never
going to happen. And so in theory you can buy anything you want as
a business owner. But what's going to
happen here is if you get audited by your regulator. For me it's the CRA in the US, it's a different organization
in different countries, It's different regulators
all over the world. But if they decide that
they want to audit you, it means they're
going to look into all of your transactions. And there is going to be
a smart person sitting across from you at the table and they're
going to ask you, hey, you spent money
at this location, why did you spend
your money there? How did it help this business? Does this actually qualify
as a business expense? And you have to give
them a good argument for why that was super
important to your business. And if you can't give them
a good enough argument, not only that get deducted and you have
to pay that money back, but you get interest accruing on top of that from
the date that you purchased it all the way out. And so what happens here is that you end up
paying a whole lot more than if you just documented everything properly
in the beginning. Next one here is so you can use that information to make better decisions about your business. If you stay up to date on your paperwork
and you do the work, you can get accurate information about what your business is, how it is operating, and
how it looks so that you can make better decisions
as an entrepreneur. So those are the three reasons that this video is going
to be so important. Now let's dive in to the
revenue side of things. So revenue is the money
coming into your business. It is what is at the top of
the income statement and that is basically the source of all of your money coming in. To pay all of your expenses, you need to be able
to document and prove where your revenue is coming from and that you charge the appropriate taxes
on that revenue. So if you're a
company that meets the requirements in your
country to charge sales tax, you need to make sure
that you're charging the appropriate
amount of sales tax. And you need to be able to prove where that revenue
is coming from. Whether it's from a
customer or I mean, obviously they're all customers. But whether it's an individual, whether it's a business,
where that happened, what date it happened on, all of that information gets tracked on the invoice
or the receipt. And you need to be able to document all of
that information. Now, a lot of the times, for a lot of the business, this is actually going to
happen electronically. Your software is going to pull all of that information in from the invoices or from the
receipts, or from your software. And this is all going
to be done online and automated through
your accounting system. The key here is making sure you have that set
up and automated, and that's just
going to depend on your software when you
go through that process. But basically what I'm
trying to say here is that any money that
comes into your company, you need to be able to
answer the question. If I sat down next to
you and said, hey, this transaction rate
here where you received $125 where did that
money come from? You need to be able
to say it came from this customer on this date and here's what they purchased. You need to be able to
have that information. And that all comes
just basically in keeping track of where
your revenues coming from. Next one is expenses. Like I said, nobody is going to stop you from
purchasing something. And so as a business
owner, in theory here, you could go out and you could spend that money on
anything you want. But if you get audited, you're going to
have to justify to your regulator why that
was a business expense. And if it wasn't a
business expense, you have to pay it back and you have to pay interest on it. So it's a terrible nightmare. But the key thing here
is if you do this properly and you get
audited, and you go, here's all of my expenses in chronological order with
all of the explanations, the auditor is going to look at that for 10 minutes and say, wow, this guy has
a stop. Or girl. This stuff put together, they
know what they're doing, they're well organized and
I'm just going to spot check them and if
everything looks good, I'm going to let it go. So having things organized is really, really crucial here. Now, like I said, you can expense anything, but you need to be
able to justify it. And to justify it, what I mean by that is let's say
that you go out for dinner and you go out
and you spend $200 or a big amount on a fancy
dinner with a customer, and you're taking
that customer out. What you need to
do at the end of the night is you need to get that receipt and you need to write down the customer's name. You need to write down
what you talked about. You need to write
down what you're trying to achieve
with that customer. And you just need to
put as much information as possible as you can on the back of
that receipt so that if it ever gets pulled
up or brought out again, you can justify why that was a good business expense and why it could
have been valuable. Taking that customer out
to dinner. Same thing. If you go on a trip or if you go traveling or
whatever it might be, You need to document on that receipt exactly why
that was a business expense. Then you can file it away. And I'm going to
show you exactly how to do that in just a minute. Now, when it comes to
transfers, like I said, transfers are when you move
money within your business, whether it's from
your debit account and you pull it out as cash, or you move it from one
currency to another currency, or you put some money on
Paypal, whatever it might be. You need to document
those transactions. What I like to do is build a really simple Excel sheet where I can just
document the date, the account where it went from, the account where it went to, and then a note that describes why I made that transaction. The reason I do it on an
Excel sheet is because not every system and
software will allow you to add notes to that transaction
or to that transfer. And so if you go to do your accounting transactions at the end of the week or
at the end of the month, and you see that
in there that you moved $200 from here to here. You might forget why
you moved that $200 You might classify it wrong and it might mess up some
of your accounting, or it might just throw
off some of your numbers. And so what I like
to do is build a simple Excel sheet
just with dates, accounts, and then the notes makes things really,
really simple. And it allows you to track
it very, very easily. You can do it on Google Drive
or just Microsoft Excel, whatever works best for you. Now, when it comes to your
agreements and your contracts, this basically
includes any type of written paperwork that you
have with your employees, your contractors,
your suppliers, your customers, your
landlords, your tenants, whatever it might
be, you need to make sure that they are
kept in a safe place. I would try and keep them in both a paper copy as
well as a digital copy. And you need to put
them in a safe place where they are organized
by the vendor. So if you have five suppliers
that you buy products for, you need to create a folder with all of your contracts
and agreements. Then you need to create
another folder with all of their different
names and then put those contracts into the
corresponding folder. That's how you
need to set it up. You can do the ex act same
thing with paper copy, but you need to make sure
that they're kept in a safe place and
you need to make sure that they are
kept up to date. Now, the next thing
you're going to need for company paperwork is
a company binder. This is what mine
looks like right here. And when I open it up and you see the tabs right
here on the bottom. And these tabs correspond to the tabs that are listed
right here on the Powerpoint. They are the Articles
of Incorporation, so that is the paperwork
you're going to get when you form
your corporation. You're also going to
have your tax documents. So this is basically going to be your corporate
number and your GST, or your sales tax number. Then you're going to have
your bank documents for going out and setting
up your bank account. Then you're going to have your annual financial
statements and tax returns for each
and every year. I also keep a folder in there
for corporate donations. So if I make a donation to a charity or I give to
an event or a cause, I try and get a
receipt if I can, and I can use that to reduce my taxes at the
end of each year. And so what I would recommend doing is go out
and get a really, really simple little
three ring binder and a whole punch that you can put
all of these documents in. And then you just
continually add to this binder every
year that goes by and every time that you have a piece of paperwork
that needs to go inside. Now, when it comes to your
receipts and your paperwork, your receipts and your expenses, what I've done
here is I actually have a new binder for
each and every year. I go out and I get like a
12 or 13 folder binder, or 12 or 13 slot binder, and
then I write the year on it. So I've got 2021, I got 2022, and I got 2023 right here. And inside I have them
separated by month. And then this is where I
put all of my receipts. And so I've got January, February, March, right here. And I put all of my receipts and expenses in here in the
corresponding month. And that way all
of my expenses for literally three years worth
are nice and well organized. And I've written on all of
the back of the receipts, and I can justify every single expense that is
in these folders right here. And it makes my
life really easy. And if I ever get audited, I have everything super easy
to find and well organized. And so if I were you, what I would recommend is go
out and buy some folders. Go out and buy a
binder get set up now for the rest of this
year and maybe next year. And try and build a routine for your paperwork that you can go through on a regular basis. Maybe it's once a week,
once every two weeks, or once a month, whatever it is. Just make sure that you stay
on top of it because you're going to need to classify all
your accounting documents, You're going to need to
reconcile your accounts, you're going to need
to do your paperwork. And so there's going
to be a couple of things that you need
to do in order to just maintain your business
on a regular basis. Next thing what I would
recommend is, like I said, think for the long term and plan out a system for the
next year or two, right? So like I've got another
binder ready to go for 2024 that's already
set up and ready, so I'm not going to be behind As soon as
January rolls around, I've got somewhere to put
those receipts because I've planned it out and I'm going to be organized and ready to go. It's also going to
make my life much easier when I have
to go out and file my annual taxes or
my annual return and get all of that paperwork
ready for my accountant. Now, in summary,
staying up to date on your paperwork will
make your life easier. In the long run, it is going to take discipline to do
it every two weeks, or every three weeks, or four
weeks, whatever you decide. But it is going to
create more freedom for you in the long term. I heard somebody say this, that discipline builds freedom. I think it's so, so true. The other thing that I would recommend to you is
that you need to document everything if you
are negotiating on prices, if you're changing an
agreement with your employee, if you're doing anything that changes your contractual
obligations, it needs to be written down. It needs to be documented. And it needs to go through
this formal system. And it needs to go
into your folder so that you can reference it and look back on it and make
sure that you're on the same page with whoever
you're dealing with. And I would also
recommend setting up those folders as
soon as you can. I hope this video helped, and I wish I had this information back when
I was getting started. So we'll see you guys
in the next video.
16. Annual Requirements: All right everybody, welcome
back to another video. In this one we're
going to talk about all the different things
that you need to do in order to stay up to date with your business on an annual
basis. Let's jump right in. Okay? So when it comes to
things that you absolutely must do and that you cannot skip out on, there's
three main things. So first one is you need to file and pay your
corporate income tax. I'm going to talk about
this one real quick and then we're going to
dive into the other two. But first, file and pay
your corporate income tax. Basically what happens
here is if your company makes profit at the end of
the year or net income, you need to pay tax
on that net income. In Canada and the United States and most countries
around the world, they have tax breaks
for small businesses that generate under a
certain amount of profit, you're probably going to
fall into that tax break. And so your tax burden is probably not going
to be very large. I would not be worried
about paying income tax, It's probably going to be
a very small percentage of the profit that you
actually generate. And what's nice about it is you do have a little
bit of control. If your company generates some profit at the
end of the year, you can choose to bonus yourself out or pay some extra salaries. Or reduce your income by
spending some of that money on expenses that will reduce the profit they generate
at the end of the year. And it means you have to pay
less corporate income tax. However, the goal is
not to avoid tax, the goal is to generate as
much profit as possible. So I highly caution you
against that strategy. That is the first thing
though, is that you need to file and pay your
corporate taxes. You're going to need an
accountant to do that. The second thing here
is you need to file and pay any
additional sales tax, and then you need to
complete your annual return. The sales tax is really important here and you
need to register for your sales tax number if you meet the threshold
and the requirements. In Canada, it is $30,000 within the last
12 months of operations. So if you're bringing in more
than $30,000 in revenue, you have to start
charging sales tax. You need to charge
that sales tax on every sale that you make, and that money gets
submitted to the government. However, all of the
sales tax that you spend on raw materials and
products that you purchase, all of that money gets
subtracted from what you owe the government and so you only actually owe them
that difference. This can get a little bit
complicated, but basically, you're deducting the sales tax that you spend and
you're charging all of your customers the sales tax and you're sending the
government the difference. That's what's happening
here. And you need to make sure
that you set this up properly when you are getting started and when you
meet that threshold. Now, the third thing
that I really want to point out here is
your annual return, depending on the country
that you are operating in, this might look
slightly different. But basically what you're trying to do here and what the
government is trying to do is update the
confirmation or the contact information and the ownership of
that corporation. So for me, I basically, I have to fill out a form that says, here's who owns the company,
here's where they live, here's what their job is, and here's how to get
ahold of everybody. I have to go in and
I have to update and fill out that form
every single year. It is probably going to be called something different
depending on where you live, and it's usually done at a registry office or some
type of government building. But it is something
that you will likely need to complete on
an annual basis. Again, possibly depending on
what country you live in. Now, other items
that you are going to need to do on
an annual basis, and this is obviously going to be dependent on your business, but if you have employees, you need to issue tax slips to those employees at
the end of each year. So here in Canada, if you
pay somebody a salary, you need to give them a T
four at the end of the year that they can use to fill
out their own income taxes. Super, super important. You also need to update
or renew your insurance. Your insurance is
probably going to change from year to
year depending on the sales that you
bring in and your operations and how big you are and how many
employees you have. So you need to make sure that
you keep that up to date. Next one here is you need to extend or renew any
of your contracts. So if you have any contracts with any of your employees or contracts with your suppliers or your vendors or
your customers, you need to review them
on an annual basis. Make sure that
they're up to date. Make sure that they're
still applicable. Make sure that they
still encompass everything that the deal is. You need to just make
sure that you're on the same page with all
of those third parties. Depending on where
you operate, you may need a business license, especially if you're a
retail or consumer facing, you'll need to
update that business license on an annual basis. And you should also
be checking all of your fire and safety equipment. So if you operate in a facility, you need to check the
fire extinguishers every single basically
every quarter actually. You also need to check
the plan for escapement. You need to check the
hazard assessment. You need to make sure that all of these just box
are checked so that if something ever
went wrong you can at least say you had
the basis covered, you were prepared and you did
everything that you could. Now, in summary
here, there's not a whole lot of
stuff that you have to do on an annual basis. I covered pretty much
everything in this video, but you do need to
make sure that you're on top of these requirements. You need to make sure
that you look into the requirements
for where you live. Because if you don't
live in Canada, the United States, some of these rules are going to
be a little bit different. And the timelines
and the deadlines will also change depending
on your country. So depending on when
your year end is, that's when you're
going to have to file your year end taxes. It's going to be usually three
or six months after that. And so the time lines are
also going to change. Not everything is always
based on the ca***dar. Next thing here is paying
a professional to do the work and focus on
building a better business. Yes, you can probably do some of the services that you
could pay a professional. You could probably
do it yourself. The problem is if
you do something wrong or if you don't
know what you're doing, you were going to spend
a lot of time trying to correct that mistake or
trying to figure it out. If instead, you hired a professional to do the work
that knew what they were doing and could do it properly
on the first try and you put your time and your effort
into growing the business. My bet to you is that
it would probably yield better results for
you in the long term. It might cost a little
bit more money up front, but long term I think you would
get closer to your goals. And you'd know that
all of these services like accounting and
finance and book keeping, you'd know that they're
being done, right? So that's my recommendation
to you is hire professional, make sure that you're focused on growing the business and what actually adds value and builds that business
up over time.
17. Contracts and Terms: All right everybody, welcome
back to another video. In this one, we're going to talk about contracts and terms. So anytime you have to put together an agreement
with an employee, a supplier, a vendor, a customer, it doesn't
matter who it is. Hopefully this video will help give you a better idea
of how to do that. Okay, so when it comes
to contracts and terms, there's basically two rules of thumb that you
want to think about. Number one is, if
you are supplying somebody with a product and you're collecting
money from them, you want to collect that
money as soon as possible. The idea here is that if
you collect that money, you don't have to
borrow money to fund your operations and fund
the cost of goods sold. If you collect that money early, you have all of that money to use and to invest
in the meantime. And if you collect
that money early, there's no risk of
not getting paid. And so there is no downside
to collecting money early. It is something that you
should try and focus on as a business owner
because it will make your life easier if you land a big order from Walmart
for your product. But they're not
going to pay you for 60 days after the
product is delivered. That means that you
have to go out and fund all of the labor
and all of the cost of goods sold and all
of the overhead and all of the expenses to get
that order out the door. And then you have to still
wait for Walmart to pay you. And so the sooner that
you can collect payment, the better it's going to
be for your business. On the flip side of
that, the later that you have to pay your vendors
and your suppliers, the better it's going to
be for your business. Because the longer
that you can keep that money and the longer
you can hold onto it, number one, you can invest it and generate a
small return on it. Number two, it's gonna
make your life easier because you don't
have to worry about funding your operations. And number three, it's going to make your vendors
more interested in making you happy because they know that they still have
to collect on that payment. And so in general, you want to bring in your money as quickly as possible and you want to let it go
as slow as possible. Now, when it comes to negotiating in order
to achieve that, the one thing you
have to understand is that everything is negotiable. If somebody wants something bad enough in the
world of business, they're going to be willing
to jump through hurdles, jump over different hurdles
and get what they need. And so what you need to remember here is that everything
is negotiable. If something says it
doesn't have a warranty, but you're willing
to pay extra for it, well, it might have a warranty, or if somebody wants
to sell it bad enough, they might be able to
budge on the terms and you might be able to
pay them 60 days later. You need to understand that you can negotiate
for everything. And if somebody's not willing
to negotiate on one thing, you can use that as a chip
against them and say, well, if you can't give
me net 30 terms, then I can't give
you full price. You can literally use it as a negotiation tactic if somebody says they're
not willing to budge. Now like I said before,
you want to always try and negotiate for payment
as soon as possible, and payment upfront is actually
the best case scenario. So if you can get paid
before you actually deliver the services
or build the products, that is going to be the
best case scenario. And that's what you should
always try and aim for. You also want to
try and negotiate for discounts if you pay sooner. So if you're buying
a product off of somebody or you're buying
materials off of the supplier, what you may want
to consider here is they want to get
payment earlier as well, and they might be willing
to give you a discount. So if you say, hey, I'll pay you upfront or I'll pay
you in net seven days, can you give me a 5%
discount or a 2% discount? You can negotiate for that using the payment terms super,
super valuable here. And believe me, over time,
it can really add up. Also, if you pay for things
with your credit card, you can protect your payment. So for instance,
if you pay $10,000 for some supplies and they
don't get shipped to you, you can go back to your
credit card supplier or credit card company and say, hey, I got scammed. This never got delivered, I never got the final product, and you can get that money back. Also, if you do
receive the product, if you pay with a credit card, you can earn some cash back, or you can earn some points
for travel, things like that. The big thing here
is that the terms of the deal are just as
important as the price. A lot of people negotiate on the price and they always
focus on the price. But what they don't
negotiate on and they don't focus on is when is payment due? When is the product
going to be delivered, how is it going to
be transported, who's paying for shipping,
things like that. And in reality, all of those terms combined
are just as important, if not more important
than the price. And so keep that in mind here. If somebody's not willing
to move on the price, they might be willing to move on those terms and you might be
able to get a better deal. A couple of common terms
that you should know about. Net 30 means that payment
is due in 30 days if it's net 15 or if it's net
seven or whatever it says, if it's net And then a number, that is how many days
can pass between when today happens and when
you need to deliver payment? If something has payment
terms that are CD, that means cost on delivery. That means that
your payment is due when the product
arrives at your door. You're probably going to
have to pay for it on a credit card or have
your payment ready to go. Another common term
that you will probably come across is something
known as an NDA. This stands for Non
Disclosure Agreement, and it basically means
that you're not going to disclose any information
to other parties. So if we are working
on a major deal, and let's say I am launching the new iphone 15 and you're
one of the suppliers, I don't want you telling the media what the
iphone 15 looks like. So we're going to sign a non disclosure agreement
that says you are not going to talk to anybody about what the designs
are of my product. Now, the NDA can
be about anything. It can be about the
company information. It can be about a product. It could be about
an acquisition. It could be about
anything that you just don't want to get
out there publicly. And you want to make
sure that you have an agreement where if it
does get out there publicly. You will get remunerated
and you will get compensation for the damage
that that information causes. Now, one thing to
really consider here and where I've
made mistakes in the past is when I'm
putting together a contract where I'm
negotiating with somebody, or I'm going through a
deal for the first time. It can be super, super value
to get a second opinion. Get a second opinion from a lawyer that has experience
in that industry. Get a second opinion from an entrepreneur that has gone through what you're
trying to go through. Or get a second opinion
from somebody that has vast experience
in that general area. If it's consumer
packaged goods or if it's buying B to B businesses,
whatever it might be. Just find somebody
that has experience in that industry that can
give you a second opinion on the transaction and
the deal, and the terms. And what you're trying to
actually achieve here, if you don't have
anybody that you can easily call up and get ahold of. Good Lawyer is a company in Canada that will do
a contract review for you for $299 They'll give
you an hour of their time. They will review
the entire contract and they will give you as much feedback as possible
and give you an opinion, and it's $300 And honestly, if you're putting together a contract that is
meaningful to your business, to spend $300 just to
get it reviewed and checked over by a lawyer should be an
absolute no brainer. I can tell you it's probably
going to be worth it. Last thing here is that
other people have gone through the same process
that you are going through. You're probably not
the first person to ever come up with a product in that category
and trying to do a deal with this type of company or deal with this
type of supplier. Somebody has gone through exactly what you're
trying to do right now. And so what I recommend is find them on linked in, find
them on Instagram. Find them on some
type of social media. Follow them, see if
they make content. And if they don't, You
need to reach out to them and ask them for
advice. Ask them for help. Show them how hard
you work and how much you are trying to see
this to be a success. And they will buy
into your vision, they will believe in you, and if they've done it before, they're probably going
to be happy to help. As long as you can show that you're actually putting in the work to try and
achieve something. Now, the golden rule
of contracts and negotiations is that everything needs to be put in writing. A lot of negotiations happen
over the phone, though. I totally understand that. And if you are negotiating or debating something
over the phone, you need to follow up
that phone call with an e mail that writes out
everything that you agreed to. This will save your butt. This will save you nightmares. This will save you
hours of headache. And it's something that
you absolutely need to do. You just write a quick
e mail that says, Hey Trevor, thanks so
much for the phone call. Just wanted to reiterate some
of the things on the call. Boom, boom, boom, bullet point, bullet point, bullet point. Here's everything
that looks good. If this doesn't look good to you or if we talked
about anything else, please let me know. Otherwise, I hope to see you next
week, Whatever it might be. Keep it short, keep it simple, but just highlight all
of the bullet points and put it in writing so that
if there's any issues, you can address them right away or right after
the phone call. Next thing here is
that it does not have to be a legal contract, like a lot of people
think that they need a real formal document
and legal paperwork. And the truth of the matter is, let's say that your deal, or your contract or whatever
it is, it falls apart. It goes to absolute crap. And it doesn't work out
if you are not willing to hire a lawyer for
hundreds of dollars an hour in order to pursue
legal action and try and rectify the situation and get your money back
for that contract. I would not worry about it
trying to be a legal document. It costs an exorbitant
amount of money to hire lawyers and to go after people and to try and win
legal battles. If you are not willing
to go down that path, then your best case scenario is to have a conversation
with that person. Whoever you're
trying to deal with, put all of the terms in writing
and just make sure that you guys are on the same page
with what that paper says. Because it doesn't have
to be absolutely crazy. It doesn't have to
be super formal, it doesn't even have to
be reviewed by a lawyer. As long as you guys are on the exact same page and you've got all of your bases covered, that can be good enough
for a lot of scenarios. But if you're starting to
deal with lots of money, you're starting to deal with some really important things. That's what we need to want
to have the legal contract. Next thing here is have
a way to get out of that contract or that agreement if things are not working. So a lot of the times what I have seen is
a 30 day notice. I can give you 30 days written notice to
end the contract. I can give you 15 days written notice to
end the contract. I can terminate it immediately,
whatever it might be. Just have something in there that if you are not happy, you can get out of that contract that is super, super important. And just make sure
that the steps are very clearly identified. Most of the time it's one step and it's like
written notification. So you can keep it pretty
simple if you're interested in finding some tools to help
you with any of this chat. Gpt is actually the tool that I've been using
the most recently. It is completely undervalued. You can use it for a lot
of legal resources and help and especially understanding
contracts or documents. You can put them into chat BT, get Chachi BT to interpret it and tell you what it means
or give you the highlights. Good lawyer do is a website that I use and that I've talked
about here a couple of times. They are absolutely
amazing and they are perfect for small businesses
that need legal help. You can also go to Legal Zoom if you're in the United States. Law Depot.com has a lot of great resources and there are other people
in the industry, lawyers around your office, your accountant or finance
professionals are very, very knowledgeable in
these kind of areas. And anybody that has
experience in business, hopefully relatively
close to your industry, should be able to offer
you some guidance as well. Now, in summary here, always ask for guidance. If you do not know
or you are unsure, do not enter into an agreement unless you fully understand it. Always get a second
opinion if you are not sure and never rush
into anything. If something is too good to be true, I am here to tell you that it is. You need
to snap out of it. You need to see it from
a third perspective and you need to double check
it three or four times. After that, put
things in writing, gets everybody on
the same page and it helps to keep them there,
that's the big thing. It's not just getting everybody in the room on the same page, that instance or on
that phone call. It's about making sure they're
still on the same page, a year later when everybody's kind of forgot
what the terms are. That's the key.
That's why we put it in writing, and
I hope this helps.
18. Sales Channels: All right everybody, welcome
back to another video. In this one, we're
going to talk about your options for how
to sell your product, otherwise known as
your sales channels. Now when it comes to
your sales channels, what I want you to know
is that you have lots of options and there's tons
of different strategies. And there's no one
right solution. There's probably multiple
right solutions for you. And the key here
is to figure out where your customers want
to buy your product. What I mean by this is a sales channel is how you sell your product to
the end consumer. So whether it's through a retail store or
whether it's on line, what you want to do
is figure out how your customers want
to buy that product. There's a lot of products that people don't like to buy online, and there's a lot of products
that people really love to buy online because they know what
they're going to get. And so what you need to
think about is who is your ideal customer and where do they ideally want to
buy that product? For some companies, let's take
Louis Viton, for instance. The experience of going in and buying that purse and getting somebody to greet
you at the door, and making that purchase is really something special
for a lot of people. And so Louis Viton likes to sell their
purses in the store. That's why all of
these fancy brands don't sell their top
products online. You have to go into the store to experience the
customer service, to experience the brand
and to really embrace it. And so think about who
your ideal customer is and where they want to
purchase their product. As an example, I am currently three D printing accessories
for power tools. So that is one of
the niches that I'm going after with my three
D printing business. I am designing three D printing and selling these products and I'm really excited about
it. It's going really well. We just had like a
$2,000 day yesterday. So that was really nice.
And it's a really, really fun little business. But I now need to think about where do people want
to buy those products? And for me, my solution
was to sell it on Amazon. Now the thing here is that
you need to do some research because there's a lot of different theories that you
might have in your head. But for most industries, you should be able to find some research to show you an example. I was able to find this in
just a couple of minutes, and it was from Track
Line Inc. And they say that when shopping for power
tools, 59% of consumers turn to certain outlets, primarily because of
competitive prices. So number one, that tells
me that the people that are buying power tools
are price sensitive. I need to be
competitive on price. That is great for
me because a lot of the time I can print something
for very, very cheap. It also goes on to
say those shopping at Amazon and Harbor
Freight were most likely to buy a tool at these outlets because
of a good price. So the people that were
shopping at Amazon and Harbor Freight were there
because of a good price. And more Amazon shoppers
than any others purchase tools at Amazon due to a good
selection of products. By comparison, only 28%
of buyers industry wide bought their tools from a certain outlet because
of a good selection. And so Amazon has
some advantages here. Number one, people are
shopping for the best price, so if you can compete
in that niche, you're going to do very well. They also love the selection, which means there's lots of
room for products like mine. And it shows that
this research, well, basically the entire article shows that people are actually buying power tools on Amazon,
which is a very good sign. And when they do go to Amazon,
they have high intent. Now this is just my scenario and my example and why I chose
to go through Amazon. But there's lots of
different options. So number one, you can sell
your product in stores. So lots of people dream about coming up
with a product and seeing it on the shelf of
Walmart or Costco or wherever. One day that is an option. Another option is to
open your own store. Lots of companies
have their own store where they only sell their
own branded products. Some examples of this are stores like Apple or Louis Viton again, or Victoria's Secret, or any of these companies where they only sell their own
branded product. A lot of clothing companies are like that, as you can see. Next option here is
on your own website. So you can design your own
website using Shopify. I'll put a link in the
resources for that. That's the website that
you should use if you're going to build an e
commerce website, or you can have somebody
else build it for you, but it should still
be on Shopify. That's just what I can
tell you from ten years of experience like we've already
talked about, Amazon. I sell my products on Amazon. You can also sell your products on third party websites. There's a lot of other websites out
there where they focus strictly on e commerce and
they sell in a specific niche. You can sell on those websites. You can also go to
a market in person. You can go to a trade show. You can go to a pop up, or you can create a pop up for your store or
for your brand. Or you can sell your products through a group on or through some type of crowd
funding effort or through some type of
discount retailer like that, where basically
people can get access to it in bulk and you
can sell that way. And there's also like a bunch of other ways that are a
little bit smaller. Your main one here is
going to be in retailers. In your own store,
on your website, and then on Amazon is
sort of probably a little bit smaller than the number of people that sell on
their own website. So lots of different options. I just want to lay this
out for you here so that you can test out
different options. But again, it goes back to
where do your customers actually want to buy the product that you
are trying to sell. Once you have chosen one of
these different options here, or while you are choosing or
kind of narrowing it down, there's a couple of things
you want to think about. Number one is profit margins. If you sell on your website, you're going to make
a lot more money per product than if
you sell at retail. Because that retailer
is going to want some of that profit margin
in order to sell it. So you've got a way better
profit margins on line, but the retailer if
you sell through them. They take some of that
marketing expense and they handle the
customer service. So it goes both ways. Distribution is another
important factor. I live in Calgary, Alberta, which is like north of Montana, but not very close to Vancouver. And so distribution is
a chal***ge for me, especially in the United States. Customer service is also a chal***ge for me
because it's just me. I'm trying to keep a
very small overhead and a small team and
a small company. It's also scalability. This is something you
need to think about here, is what one of these
avenues is scalable. Because if I go
back to the options here and I talk about pop ups, or I talk about trade shows, or I talk about markets. Those can be difficult
to scale up. You might be doing really well in your little
neighborhood market, but how do you go to
100 of those markets? Because I can tell you you're not going to find the
people to do that. You're not going to find
people that enjoy doing that. You're also not
going to find people that can tell the
story like you can. And scaling up pop ups
can be very difficult. Scaling up trade shows can
be a little bit difficult, and scaling up markets can
be very, very difficult. And then when you
get into retailers, you get into third
party websites, sometimes they want exclusivity, which means you can't
sell on other platforms. And so there are some
limitations here depending on which option you choose and then shipping time. This is a big one,
especially for me because of distribution and my ability
to get products out. Shipping time, if I want to
send a product down to Texas, can take a very long time. And so that is something that you need to
consider as well, depending on which options
you're choosing here. Now now my scenario here, I'm designing and selling
three D printed products. I'm located in Calgary,
Alberta and like I said, I want to keep a
very small team. And so I am selling
on Amazon because I don't want to pack
individual orders. I don't want to have to deal with shipping and trying to get the best quotes
because it's going to be terrible here
living in Calgary. And I don't want to deal with
customer service because it's something that I just
don't find any enjoyment. And so I want to outsource that. And so for me, I decided
to go with Amazon. Now the other thing
you have to think about here is something
I touched on earlier, is those profit margins. You'll make a higher profit
margin selling on E Commerce, but you give up
that feasibility of just shipping out the
product and putting the burden to sell
on the retailer. What I mean by that is if
you sell on E Commerce, you have to pay to manage the customer or provide customer service once
that order is shipped. You also have to pay to find that customer and
market and brand your product and get
that customer to your website to get
interested in your product. And so you kind of take on this burden where if
you sell in retail, you have to share the profits. But if you sell on E Commerce, it's going to cost you more
in customer service and marketing and
fulfillment because you got to do all
of that yourself. And so it is a dilemma that you kind of
have to think about. And you kind of have to
choose which side that you want to take based on
your own personal situation, because every business is
going to be totally unique. My advice on this though, is try to keep your business
as simple as possible. I have run a business where we are manufacturing
and distributing, and selling on line, and
running the marketing, and doing absolutely everything. And I can tell you it's really, really difficult to get good at that because you're
spread so thin. But if you can focus
on one or two areas of the business and
really nail those down, it can really help you
in the long term and improve your business results
in the short term as well. Now when it comes to testing
a new sales channel. So let's say that one
isn't going well, or you've got one that's going well and you want
to add to that. No problem. Here's what
I would recommend. Before committing to
a new sales channel, you should try and test it. And what you want to do here is something that's called the MVP. That stands for a
minimum viable product. And the idea, and
the concept behind running an MVP is
that you want to find the cheapest and
easiest way to test the sales channel before you
commit a ton of resources. So what you want to do is let's say that you want to
expand into retail. You want to find a store
to sell your product, and you want to share
the profit with them. What I would do if I were
you is instead of calling up Walmart and Costco and
100 different stores, I would find the closest
neighborhood store that you can build a
relationship with. You can meet the owner. You can actually understand how
their business works. And I would try
and sell to then. And I would try and get my
products in their store. I would make sure that
they're super happy with it. I would make sure that
products are selling. I would make sure that things
are going really well with one single store because it's not going to cost
me a ton of resources. I can do it in my spare time. I can manage the relationship. I can go and drop product
off if I need to. And it's not going to cost me
a ton of money in this way. I'm going to be
able to test things out to see if I actually want to sell in retail before I go land a chain
that has ten stores. And I get way too
deep into it and I commit a ton of
resources when in reality the profit margins at retail just weren't good
enough for my business. That is the situation that
you want to avoid all cost. And so the idea behind an MVP. So you want to find the
cheapest and fastest way to test out the concept
or test out the idea, or test out the
new sales channel. In this scenario, for as little upfront
resources as possible, your resources are your time and your money at what you're
committing to the project. Now in summary, here's
what I recommend. As always, business
gets complicated, so keep it as
simple as possible. There are different ways
to sell your product. I listed like ten or
15 note here for you, there's lots of different ways. Focus on one, get
really good at one, and then add a second
one if you think you can handle it and you think
you actually need it. Third thing here, think about which sales channel
actually complements your current situation
based on your skills and your location and
your product and what you're good at and
what you actually enjoyed. That is how you should
be kind of choosing which sales channel you want to go down and then
do your research. And don't try and be
good at everything, like there's too
many people that try and run a business
that try to do every aspect of that
business instead of outsourcing it or
hiring a professional, or just focusing on what
they're really good at. And it's one of those things
where it's like if you have two countries and one of them's really good
at producing wheat, and the other one's really
good at producing corn. But they're terrible at
producing, vice versa, It's so much better if they can trade and exchange and
focus on what they're really good at than
to try and produce a little bit of wheat
and a little bit of corn. That's
the concept here. It applies to farming, it applies to business. It applies to economics. It applies to everything.
Focus on what you are good at and find other
people that are good at. The things that you don't
want to do or don't enjoy doing or aren't good
at. That's the idea here. And then test out your sales channel if you need
help with this, leave a little caption
in the comments. Now below, tell me a little
bit about your situation. I will offer as much
guidance as I possibly can out of this list that
I have put together. I have different ways
to sell your products. I have sold in retailers. I have never opened
my own store. I sell on a website, I've sold on Amazon, I've sold on third
party websites. I have done more markets and trade shows than you
can ever imagine. A pop up is kind
of a loose turf, so it depends on your
definition here. And I've sold on group on, so I've done pretty
much everything here. If you have any
questions about it, leave a cart down below. And I will do my best
to help you talk. Tu
19. Logistics and Distribution: All right everybody, welcome
back to another video. In this one, we're going to talk about distribution
and logistics. Now when I refer to
those two words, basically what I'm
talking about is how you get your product
to your customer. And there's a couple different
factors that you want to consider here when figuring
out your strategy. Number one is shipping cost. The larger and
heavier your item is, the more it is going
to cost to ship and the more it is going
to play a factor in your customer's
decision making process to buy or not buy your product. So shipping cost is
a huge factor also. Shipping time in the world of Amazon where everything is
one or two day delivery. You need to make sure that you are competitive with all of the other alternatives
and other products that a customer might be
evaluating your product with. Also packaging
requirements, if you have special packaging or you want customization or a
handwritten note, anything along those lines
is going to be super important when deciding
how to ship your product. Also inventory, if you have a lot of inventory and
you think it's important to spread that
inventory out across a country so that you can
achieve shorter shipping times. That could be something that
you really need to consider. And then production
lead times if it takes a long time to produce your product or if it's
coming from somewhere else. That is also something that
you need to consider when evaluating how you're
going to ship and distribute and manage
your logistics. And so when it comes to that, there's basically three
different options. You can, number one, manage the inventory yourself
and ship it to a store. Or you can ship all of
your produced inventory to a three PL or warehouse. Three PL stands for
Third Party Logistics, and these are
basically companies that specialize in warehousing. So if you produce 100 candles and you want to ship them across
the United States, you could send them
to a warehouse that's located somewhere in the
central United States. Or you could send them to two
warehouses on both coasts. And that way that
company, that three PL, or third party
logistics company, will receive your
bulk inventory. They will store it on the shelf, and they will ship it
out to your customers as the orders come in. That means that you
only need to send out one or two shipments to
the major warehouses, and they send out the 50 or 100 different shipments
to your customers. That is one option here, and then the last
option is that you can ship it directly
to your customer, which means you're producing the product or you're
getting it produced. You're managing the inventory, and then you're putting
every individual order into a box and you're
shipping it out. Those are the different
kind of options, obviously, if you're going
the retail route, you're shipping it
to a store and it needs to be ready
to put on a shelf. So you need to think about your packaging
requirements there, because they're
probably going to be very different then if you're shipping them
directly to a customer. So lots of different
things to consider there. And if you're shipping
to a three L warehouse, you need to have
units that are inside of cases that could be
packed on palettes. And what I mean by
that is you can ship a palette out
to each warehouse. They can unbox it, and they can find
20 units in a case. They can put that case
onto the shelf or onto the rack where they have designated
your inventories. And then they can pull
out individual units and put them in a new
box to ship them out. So that is kind of
what the three L or warehousing strategy is. This is what I use and this is basically what
Amazon does for me. So I manufacture product
on my three D printers. I put a bunch of units, usually 150 units, into a box. That's my case. And
then I send out multiple cases to one warehouse
in the United States. And then those cases get
distributed to a variety of different warehouses up
and down each coast, and then individual
units get sent out. This makes it really easy for me because I can just
send in a couple of boxes instead of
having to send out hundreds of different boxes
to individual customers. Now, when you're getting into the shipping and
logistics world, there are a lot of
different terms and abbreviations that you
might want to know. So I'm going to give you just a quick walk through rate here. If you already know all these
terms, you can skip ahead. But there's probably going
to be some value here, especially if
you're new to this. So first of all, LTL stands
for less than truckload. This is basically any time you
are not shipping a parcel, you're shipping probably
a palette of products, but you're not taking up
the entire truckload. If you're shipping large volumes or you're shipping
to a retailer, you might be getting up to the size where you're
shipping a palette. That is, when you need
to switch over from parcel couriers
like Fedex and UPS. You then need to find basically a freight courier that can handle your less than
truckload freight. That's the idea here, and that's when LTL comes into play. The carrier is the company that is shipping
the goods for you. And the bill of lading is a legal document between the
shipper and the carrier, Details basically everything
in that shipment, including the goods
that are being carried. A freight forwarder is a
company that assists in arranging shipments for
individuals or other companies. We're going to talk about
this in just a second. Ftl stands for Full Truckload. This is when you're taking
the entire shipment or the entire truckload is
full of your product and it's going from point A to point B with no stops in between. A duty is a tax that
you're going to have to pay when you're importing
or exporting a product. It is basically set by your country depending
on where you live. The HS code or harmonized systems code is
something you need to be familiar with and all
of your products will fall into an HS code category. You need to understand
what that is because it will dictate how you are taxed and how the duties are assessed for your shipment. A skid is also known as
a palette or a platform, and this is basically
what you would pack your products on for a less
than truckload shipment. Pod is proof of delivery
and it's basically something that proves
that the shipment actually made it to
its destination. And then the stock
keeping unit, or skew, is a unique identifier
that allows the business to easily
check their inventory. A skew is basically the
business's classification of that specific product. Sometimes it's the
same as the barcode, sometimes it has its own
individual coding to it. Basically, the skew is the short form name for
whatever that product is. Now when it comes to finding
the best shipping rates, especially if you're going
to do this yourself or if you're going to ship to
your customers directly. You want to try and find
a shipping aggregator. That is what I found in my
experience, to be the best. Because a shipping
aggregator will create a business account with all the different
shipping companies. And then they will
take in your order as well as all of the other
orders so that they have a high volume of
orders and they can get discounted rates with all
those shipping companies. And then they
basically just connect it to and so the
one that I used for years and years was called
Freight Como.com right? M.com You have to
create an account with them and you have to basically give them all
of your information. But in my experience,
they did the best job. And that is the company that
I use for years and years. You can also use
shipstation or shipper. But if you're looking for
individual shipments, a shipping aggregator,
in my experience, give us the best rates
over the long term. The other options
that you have if you're just going
to parcel shipping, especially if you're shipping to the same location every time. So for instance, I'm shipping to an Amazon warehouse that's almost the same
warehouse every time. And so I always get the
best rates with UPS, so I just set up an
account directly with UPS and now you get
even better rates. But if you're doing
parcel shipping, you can do that with UPS, Fedex, Purolator, or DHL, if you're doing a lot of
international shipments. Ltl shipment. So if you're shipping something on a palette, I found that setting up
accounts with a company called Dan Ross and Fast Rate
gave me the best rates. But this is obviously going
to depend on where you live. This is where I lived
here in Calgary, Alberta. These are the companies
that worked for me. You need to test it out because some companies are
headquartered in different areas and will
get better rates in certain areas because they already have trucks
coming and going. So you need to test
out a couple of different companies and I'd
recommend starting local now when it comes to packaging materials and
how you're going to pack these products and
ship them out and everything like that, you
need to figure that out. And it's going to
completely depend on your business and your
location and your products. But the one location
that I would go to for almost all of my stuff is U Line.com I still
use them today. I buy all my boxes, all my tape, all my shipping supplies from U Line.com they have
next day shipping. And I will tell you that
it is slightly pricey, especially if you're
replacing a small order. But when you're running
a business and you are looking for reliability,
consistency, and a company that's
always going to have your stuff in inventory
and in stock, Uline is the best
in the business. There's almost nobody that
can compete with them. They are slightly pricey, but they are usually worth
it because it's reliable. It shows up the next day and you always get what you
ask for and they have the product in inventory year after year after
year after year. So you're not going
to get something that just doesn't exist later on. Now, when it comes
to your shipping strategy, here's the question you
need to ask yourself. Number one, is it better for you to ship individual orders or is it better to send
them to a warehouse and pay to have them
shipped from there? This is going to depend on your business and your
product and what it is. And obviously, if there's customized or if it's fresh
or as an expiration date, you probably need to
ship it out yourself. But here are the benefits of warehousing because I
think it's something that a lot of people
probably should do and they probably
don't do it, at least soon enough. So number one, sending
your products in bulk to a warehouse reduces
your shipping cost. You only have to send
out one or two shipments in bulk where you're
sending out lots of units. You send them directly there and then they take care
of everything else. It will save you money
in the long run because all of the individual shipments
from locally basically, or more local warehouses will save you money than
shipping them directly. Minus the two
warehouse shipments. Like you're always going
to save money by using a warehouse that is located closer to your customers. That's what I'm
trying to say here. Secondly, it also
lowers your overhead because you have less employees
and you have less labor. You don't have to sit there and package product for
hours and hours a day, and you don't have to pay
anybody else to do that. That is the number
one advantage. That's the main reason
that I don't do it. And this is just huge because it allows you to
have lower overhead, allows you to run more flexibly, allows you to have less stress. And you need less
money coming in every single month
just to break even. And so this will help you
become more profitable faster. And it will give you
that variability that you need instead of having that consistent paycheck that you have to keep
paying to an employee. Thirdly, it frees you up to
focus on high value tasks. You don't have to
worry about setting up a shipping system about buying boxes, about
all of the crap. That comes with actually managing your own logistics
and distribution. You just have to make sure that you can send out a couple of shipments every now and then and you can
manage your inventory. And it allows you to focus on the high value tasks
like marketing, selling more product and coming
up with the next product. On top of that, you're
also going to have shorter delivery times for your customers, which
is what they like. They want cheaper, faster, shorter delivery
with reliability. And it's going to be
also cheaper for you to produce these products
in large batches. So think about it, if you
only have to produce, let's say 100 units and send them out to the
warehouse every now and then, You can probably get really, really good at producing 100 or 200 or 300 units instead of doing smaller
batches every week. So think about if there's
any economies of scale that you can achieve by going
with this strategy as well. Now, the drawbacks here
is that it's going to cost you more money
on every order. Obviously it's going
to cost you money because even if you weren't
going down this path, you would have to pay
somebody and you'd have to pay for those
packaging materials. You'd have to pay for
somebody to go in the computer and create
that shipping label. And so you need to really just weigh out the costs here,
because most of the time, the companies that specialize
in warehousing and shipping are going to be better at it than what you
can achieve yourself. And they're going to
be cheaper as well. So it's something to really,
really consider here is will it cost you more money? It's going to cost you
money no matter what, but will it cost you
more money to pay a warehouse and a three PL
company to do it for you? It will cost you
more money upfront. I will tell you that there's
usually a set up fee for this and you have to buy the
inventory before it's sold. So there's definitely a
more higher upfront cost for going with the
warehousing route, but there is no opportunity
for customization. So if you want to write
handwritten notes to all your customers or you want to customize it
with somebody's name, anything like that, you're
not going to be able to do if you want to
warehouse the product. And you may need to
ship with palettes, so if you're doing a
large enough volume and they're requesting
you to ship in palettes. You may need to have a warehouse
or a dock, or somewhere that you can ship
out that palette. Or you may need to pay
an additional fee for a large truck to come in with a tailgate that can raise it up. So just things to consider here. There's benefits and
drawbacks to both. And it does depend
on the product you're selling and
your situation. In my scenario though, to use me as an example, I do not want to ship
individual orders. I don't want to pay
to have an employee to ship individual orders. I would rather let
companies that specialize in that do it for me. And so I choose Amazon. Amazon has the best logistics
system in the world, and they're also a
marketplace where I happen to be able to
sell their products. So it's the best fit
in the world for me. Because I want to focus
on design and production. And I want to leave the
logistics, the distribution, the customer service, the
returns, all of that work. That doesn't add value
to the business. I want to leave that
to somebody else and I want to focus on adding
value to the business, which is improving my marketing, coming up with new products, and making my listings better. And so that's what I
choose to focus on. And also it makes returns really easy because I
don't have to deal with it. And if you have a warehouse that can manage that
for you as well, it just makes your
life easy as well. So I would recommend
going with it. But again, it depends
on your business. Shipping to three PL or
warehouse can help you scale faster at
the end of the day is basically what I'm
trying to say here. You want to try to
keep it simple and focus on what the
customer wants. Maybe the customer doesn't need it. Maybe they're
willing to wait. Maybe you've got a
high ticket item. Focus on what your
customers want. That is what you
should use to make these type of decisions and
to lead your direction. What is the customer value? What do they want?
What do they need? And where do I fit
in the marketplace when they're evaluating
these different options? But I can tell you in most
scenarios that fast, cheap, and reliable delivery, where the product shows up
the way it's supposed to, that's what makes customers
want to come back. And that's what makes
customers trust your website, trust your business,
and trust you. So that's what I recommend. I know this was a long video. I hope it's valuable. Thank you so much, and we'll see
you in the next one.
20. Marketing strategies: All right everybody, welcome
back to another video. In this one, we're going to talk about different
marketing strategies. Now when it comes to
marketing strategies, they basically fall into
one of two buckets. The first bucket is
organic strategies and the second bucket
is page strategies. When I talk about
organic marketing, what I'm talking about
is how you build your website and how you optimize for search
engine optimization. And the social media
posts that you make on Twitter or Tiktok or
Instagram, or Youtube, or the videos that
you post on any of these platforms or the news and the press that you can
get from local media, the blogs or the linked in
posts that you make and the e mail list that you can generate and
build up over time. These are all considered
organic marketing because this is anything that does not cost you money to get views. This is stuff that you
can do totally for free. You can open an Instagram page, you can post on linked in. You can start making
Youtube videos. None of it is going
to cost you money, it's just going to cost
you a little bit of time. On the other side of
it, you have all of these strategies that are
gonna cost you money, but they're going to save
you some time possibly. And they're going to
get your content in front of more people because
you're going to pay for it. And so you could run
Google search ads where if somebody types in wedding cakes
in the city of Milwaukee, and if that's what you do, you can show up right at the top of Google, but
you have to pay for it. You can also run social
media ads on Facebook or Twitter or Snap Chat or
whatever platform you want. You can go out and get
some traditional media like billboards or TV or radio, or you can sponsor
events or teams, or charities, or
basically anything. There's tons of different
sponsorships all the time, and it basically
gets your brand in your business at the
event that is happening. Or you can go to trade shows
and you can buy a booth and you can set up and you can
display all your products. Basically, this paid marketing here is going to be
anything that cost you money to get eyeballs and views on your
brand or product. Now when it comes to
evaluating your marketing and figuring out which
direction you want to go, there's two major factors
that you want to consider. The first one here is the
average lifetime value. And this is the total
revenue that you generate over the average
lifetime one customer. So if you took all of
the customers that you have that have been
with you for a while, probably over six to 12 months. And you say, okay, here is how much money I expect to
earn on every single customer, that would be your
average lifetime value. And then the second
one here is the cost of acquiring that customer or
customer acquisition cost. And this is basically how
much money you have to spend to acquire one
additional customer. And what you're looking for is a really high average
lifetime value so that you can generate lots of profit from a single customer. And you want to try and acquire that customer for as
little as possible. So you want this to
be high and you want customer acquisition
costs to be really low. And that is going to give you
a profitable business and a profitable marketing campaign that you can continue
to run and scale up. And so to get to that
point, here is what I do. Number one, I really focus
on creating organic content. And then I watch the analytics
to see what does well, I look for certain themes, I look for certain questions, I look for certain hooks. And I just look
for the videos in general that do
the absolute best. And then what I do is I spend
money to get those videos shown to more people because I know that those videos
already do well, or they draw engagement, or they draw purchases, or they get e mail subscribers. I'm going to learn all of
that in the organic content. And then what I'm
going to do is I'm basically going to
put fuel to the fire. I'm going to spend money to get that content shown to
more and more people. So just as an example of this, I have a Youtube channel
that does fairly well. I make videos about
personal finance and investing in day
trading and swing trading. And what I did was I
made a ton of videos. I made a video a day
for almost a year here. I went into my analytics
and I watched to see which video made the most
subscribers per view. And so in other
words, I wanted to grow my channel and
get more subscribers. And so I looked at which video generated the most subscribers
for like 1,000 views, and I found one video generated a higher conversion rate
than everything else. And so what I did was I started running advertisements
for that video. And that way I could
run advertisements for something that I know already works and I can scale it up. And that video ended
up bringing in thousands and thousands
of new subscribers to my channel that
I was then able to monetize with all of the new
videos that I was making. And so what you want to do
here is test everything with organic content and then set
fire to it with paid ads. That's at least one strategy that has worked for
me in the past. Now when it comes down
to choosing which kind of platform to work on or
where to put your money, or what strategy to choose, There's a couple of things
that you want to consider. And this is where
it's going to differ depending on your product
and your business. What you want to do is
think about your customer, your ideal customer,
or the customer that makes up the
majority of your sales. And you want to think
about where they're making their buying decision and then you want to focus
on that channel. My customers from my
Three D printing business are making all of their
decisions on Amazon, so that's where I'm
going to run my ads. A lot of customers are
getting their ideas and their impulse buys
from Tiktok or from short form content on
Instagram or Youtube. And so if that is where
your primary customer is making their decision to discover the product
and buy the product, then that's probably where
you should be running ads. If you have a product that
somebody needs to see and feel and really hold
in their hands or try on, then maybe a trade
show or a market is the best thing for you if
you have something that is Cater to a really old demographic or an old
school clientele. Then maybe the radio and the TV and the billboards are a
better strategy for you, but you need to just
think about it and put yourself in the shoes of
your consumer and say, at what point do they
make the decision to buy? And how can you kind of
control that channel? Or at least be in that
channel and optimize your advertisement and your
content for that channel. For me, a lot of my stuff
is on Youtube and Tiktok, and so that's where I
spend a lot of time. But what I would suggest
is really focus on making organic content and
figuring out what does Well, I would recommend making
that content about you, making the content
about your business, and making the content
about the product. All three of those categories. Figure out what does well and what you're
trying to achieve. And then go from there. I test paid ads with a small budget, using content that has already
done well organically. Here are the things that
I've learned so far. Number one, test lots of ads and optimize the budget to spend more on the best performing ads. And so let's say you
make 30 posts on Instagram and you're looking to put some money into it now. Take five or ten of the best performing posts and then put money
into all of them. And then slowly drop
off number ten, number nine, number eight, number seven, based
on performance. So the ones that do well get more budget and the ones that don't do well get less
budget or get totally cut. That's how you
optimize a campaign and that's how you
optimize your budget. Number two is let the algorithms find your customers
when possible. The algorithms that run these advertisements are
getting better and better, and better and better
every single month. And so it might
take some time for them to figure out who
your target customer is. But once they do that, they can probably do it better than you trying to
do it manually. At least that's what I've
seen in my experience. Number three is that you do not need to be profitable
right away. But you do need
to be profitable. And so let's say that you
took ten of those creatives, or ten of those ads, and you
put them into a campaign. And you ran it, and you
started putting money into it. Those ten ads do not
need to be profitable. But by the time you narrow
it down to, let's say, two ads and kind of
a target market, that's when it needs
to be profitable. Or you need to at least
see a clear path to profitability because otherwise you are
just burning money. And number four is, if
you need to learn how to set up Facebook ads or how to set up Google ads,
anything like that, I am not going to
go into detail on every single platform here in this course because there are thousands of tutorials
on Youtube that will walk you through
in greater detail than I will be able to do. And you'll be able
to find videos that specialize in
the type of business, type of product, and type of content you want to advertise. And so do your own research on the individual platforms
and how to use them. But know and understand the big picture is
that you need to run that advertisement and you need to have that
information in front of your customer when they're
making that buying decision. And that's how you should choose which platform to use and
where to put your money. As an example, now you
sell a product for $100 Let's just say it's
a widget and it costs you $50 in
cost of goods sold. So it's $50 to make you
have a gross profit of $50 and your average customer will buy two of them
in their lifetime. That means that each customer
is going to generate you about $100 in profit
over their lifetime. And so if you are
trying to spend money on advertising
and marketing, that means that you
need to acquire that customer for definitely less than $100 You
also need to cover your overhead and
your management salary and stuff like that. And so ideally, you're probably looking to acquire
that customer for like 25 to $50 so that you have $50 left over in profit that can hopefully
go to the bottom line. And so that's sort of how you need to think about
your marketing is. Depending on what
my gross profit is, that's how much money
I have left over. And then the average customer
buys x number of units, which means they're
worth $500 to me, every new customer that I get. So if I can spend
less money than that, it leaves me with x amount left over as profit at
the end of the day. It is literally as
simple as that. You just need to
find the system and the process that you can scale up by just
adding more money to. Now one trend that
has really taken off recently and that I've
seen done extremely well, especially on linked in
is building in the open. And what this means
is that 510 years ago a lot of people were super
secretive with their idea. And they were worried something
was going to copy them. And they thought they have the best thing in the world and it's super unique and they're the only ones that have
ever thought of it. This happens a lot with young and brand new
entrepreneurs a lot. And so what they end
up doing is they end up holding all
their secrets in. They don't tell anybody
about their business, They don't want to give it away. They think they've got
something super unique and special and they're worried somebody's gonna
steal it from them, and that is the wrong
way to do this. What you want to do is you want to be super open about it. You want to tell people
what you're doing. You want to have trust in them. And starting a business
is extremely difficult. So nine times out of ten,
nobody is going to copy you. What you want to do though,
and the trend that's picking up right
now is documenting your journey and building
your company in the open and posting your struggles, your triumphs,
your tribulations, your successes and
your failures. Sharing what the journey is like of building your company. Because no matter
what age you are, there's millions and
millions of people that are probably in a similar
age group as you, that are too scared
to start a business, but would love to live
vicariously through you. And that traction can
drive more customers, can drive new investors, can drive new suppliers. And it can really just build what you are trying
to do for you. And so what I would
recommend is if you are okay with it and if
you're comfortable on camera, try and build your company in the open by documenting
your journey. As an entrepreneur. Share
what your product is, share what your business is,
share what you believe in. And share your struggles and your triumphs online so that
your customers can see it. Investors can see it, your
suppliers can see it. And people can begin
to support you. Because you would be surprised how much support
you will get by just sharing your highs
and lows and showing people that it's not all
sunshines and rainbows. But hard work does pay off. I mean, that's the
story at the end of it. And so you'll find support
from new customers and new business and it will
be very hard at first. I can tell you this firsthand when you start making videos. It's like this uphill
battle into a mountain that is never going
to end because nobody's watching your videos. You don't get a lot of
support in the beginning. But I can tell you right
now that if you do it long enough and you do it
well enough over time, it's kind of like this hurdle where if you can get
to the other side, it's a snowball that just
grows and grows and grows. And the ROI on it is
absolutely amazing phenomenon. And it will be the best
thing you ever did, and you just have to get over that hump and then it
will be well worth it. I absolutely promise you. If you are interested in
seeing some examples of this, shoot me an E mail and I will
send them to you on linked in because there's a
couple of companies that are doing this really well. One example right now is Stan. Stan is the company
where you see somebody on Tiktok and they
go check out the link. In my bio, they run that link. They're the software
behind that link. I personally use them
on my Tiktok channel. And the founder, I
think his name is John. He's been posting his
entire journey on Youtube and linked in of what it's like to
build this business. And he is building
it in the open because he is sharing
it with everybody. And it's a perfect example. Check out Stan, and the
founder's name is John. I think his last name is Hugh. Really, really great example. And an excellent, excellent
way to build in the open, especially for his business. Now, in summary here, this is what I have
to say about it. Number one, focus on where your customers are
making buying decisions. Focus on organic content, and then use paid ads to boost the best
performing content. Continue to test new creatives
and content all the time. So continuously test new things. Never stop testing new things. And then share your journey, including your ups
and your downs. And the biggest thing
here, and I don't think enough people
actually talk about this, but when you're trying
to figure out what to post on Tiktok or what to post Instagram. Think about what would provide value
to your customers. Think about something that
you can post or that you can share with your customers that is going to entertain them, that is going to educate them, or that is going to make them
feel good about themselves. Those are the three kind of categories of content
that you can make. And so focus on providing
value in your organic content, engaging with your customers, building a real following because they value
what you have to say. And then take that
best performing content and share
it with the world. That's the idea here. And that's kind of the
overarching strategy behind how I think about marketing for a product
based business. So I hope this video helped, and we'll see you
in the next one.
21. Trade Shows: All right, everybody, welcome
back to another video. In this one, I am excited because we're going
to talk about a topic that I have a lot of experience in and
that is trade shows. I've spent hundreds
of thousands of dollars at trade
shows across Canada, across the United States, and I've got some good lessons. I've got some hard
learned lessons here. And I've got some
tips to hopefully save you on some
of the headache. Now, when it comes
to trade shows, there's two different
categories. You have business to
business, and this is where you're selling
to another business. Or you have business
to consumer, where you're selling
directly to the public. Now when it comes to finding the right
trade show for you, there's a couple of tips and tactics that I would
recommend. First one, try to attend it as a guest. So if you know that there's a big trade show that you
want to go to at some point, go the year before and
attend it as a guest. And make sure it's a place where your business
would actually fit. And then you can do
some quick math that we're going to walk through
in this video to try and figure out if you'd
actually be profitable or what it would take to become
profitable at that show. Next thing here is ask other companies what
their best show is. So go find other companies
that you can make friends with or that don't
directly compete with you, but might be at that show
and ask them, how was it? Was it a good experience? Was it well organized? Was
it worth the money? What kind of
customers were there? Ask them those
kind of questions. And try and build a
relationship with them. And try and offer them something in return for that knowledge. Because it's actually
something super valuable, especially in the small
business community. Now, next one here is try to start with small
shows and markets. So if you are selling jewelry or if you are selling leather
goods or whatever it might be, try and start with
a small trade show and then build up from there. It's going to cost you
a whole lot less time. It's going to cost
you less inventory and you're going to
have to spend a lot less to get set up and build your booth and basically
do everything. And so if you can test
out your strategy with really small trade shows
and then work your way up, I would highly recommend
going with that. You should also try to
find videos of what that show or market looks
like while it's running. That can give you
kind of a sense or an idea of maybe how
much volume is there, how big it is, what are the
kind of vendors are there, and what your competition
might look like. And if you can try and
apply as early as you can to get in so that you can sort of choose
the best spot, you can plan out the payments. You're not in a rush
and you can really sort of organize yourself
around that trade show. Now when it comes to the
cost of the trade show, this is something
that people really, really underestimate. And after doing, I can tell you I've done 30 to 50 trade shows. Like I have spent
days and days on the road doing all different
types of trade shows. And it is more expensive than
you think it's going to be. Let me just walk you
through some of the costs. Number one, you have the booth cost. That is the cost that the
trade show is going to charge you just to have a booth at their event or
whatever it might be. Then you have to have
your booth design. You can either do this yourself, or you can get somebody
else to make it for you. If you get somebody else
to make it for you, the prices are going to shock
you at how expensive it is, but you can also do it yourself, but you just need
to factor that in. So depending on what you sell, your booth might need to be really high end or it
can be sort of crafty. It kind of depends on what you're going for and
what your product is. If you sell at a trade
show that's indoors, you might need electrical, You might also need internet, and you might need
carpet for your booth. I've been to a lot
of trade shows where carpet is
absolutely mandatory. And I can tell you
that lugging around a giant carpet to your booth every time is really annoying, because a lot of the times your booth is a different size, or a different orientation,
or a different shape. And so carpet can
be really annoying, and it can be really expensive. Transportation is also
something that's big. If you have your own vehicles,
you need to pay for gas, you need to pay for mileage, you need to pay
for wear and tear if you're getting your
stuff shipped out, you need to pay
for the shipping, the customs, the transportation, all of the stuff
that goes along with getting yourself
and the products to and from the trade show, as well as loaded up and
inventoried for the trade show, and unloaded and un inventoried
for the trade show. Which also takes a few hours that a lot of people
don't budget in. And so transportation, as well as the loading and unloading of everything that comes with your trade show booth and your inventory needs
to get factored in. You also have your
food and beverage while you're away or
while you're at the show. You have your hotels,
if it is on the road, you have your trade
show supplies. This is going to be things
like your pens, your pencils, clipboards, QOS, the way that
you take in any raffles. The cash that you might
need to have, the box that you need
to put the cash in, All of those little
things that you need to run a good
trade show booth. The little card holders that you put your
business cards in, all those little
things, you need to remember them and
they cost money, and so you need to
factor that in. And then obviously, you have your labor while
you're at the show. That is something that you
need to factor in as well. And so when you go
and you look at the cost of what this trade
show is going to cost to you, all of this needs to be at least factored into that total price. And then what you
need to do is you need to calculate
your break even. Your break even is your
total trade show cost. It's flexible on how
you calculate this because it's going to depend on your situation, for instance. Your booth design. Maybe
you design it once for $1,000 and you can use
it five times, okay? You split it up $200
per trade show. Really do whatever you
think feels right here. But basically you need to come
out with a total cost for your trade show or at
least an anticipated cost, what you think it's
going to cost you. And then you need to look
at the gross profit that you're going to generate on
every unit that you sell, or even on average, or maybe it's what a new
customer is worth to you. You need to find
some way to quantify each sale and then you need to find your break even point. So in this case,
if we make $50 per unit and our break
even is that $10,000 or that's our cost is
$10,000 Our gross profit is $50 That means that
10000/50 is 200. So we have to sell 200 units in order to break even
at this trade show. Everything after that,
we are going to make $50 in profit per unit. Now after spending ridiculous amounts of money at
these trade shows, I have a couple of tips for you. Once you have figured out what trade show you want to go to, you've done your analysis
on the break even point and you think it's
still worth it 'cause you can sell
that many units. Here's some tips once
you've committed. Number one, have
a way to interact with every single person
that walks by your booth. You would be surprised
at how valuable it is to have a way to do this. And then not only that is you get value out of it ever
interaction you have. But your booth looks busier, which draws more people in because they want to
see what's happening. And so number one, obviously you want
to sell somebody a product and you want
them to buy from you. Number two, you want
them to sign up for your e mail list so that you can consistently market to them. And you can stay at the top of their mind and you can
send them discounts, and you can continuously
provide value to them. You need to have an E mail list. If you're starting a
small business right now, it is not something
that is in the past. I'm telling you right now this
is pretty much mandatory. Thirdly, you should have a
raffle. Give something away. Get people interested,
get them to sign up, get them to engage
with your booth. Give them a reason to stop at your booth for 20
seconds and fill it a little form so that
you can ask them questions and identify
if they're a customer, if they're not a customer, what you can do for them, how you can help them, how they might be able to help you, and strike a conversation. Fourthly, you give
them a sample, give them something
that they can walk away with that they
can remember you buy. That can just give them a
little bit of an idea of how they might be
able to contact you when something
comes up again. Or give them a catalog
and a brochure. Don't leave it at
just a business card. If you can, give them something
that shows your product, that shows your prices,
that shows what you can do, shows what your services are, and shows how creative and
amazing your business is. That's the first tip. Second tip here is automate your follow up. If you go to a trade show and you're standing
at your booth, you're probably going
to get a lot of people, probably going to get a
lot of business cards. Hopefully you make a
lot of connections. You need to find a way to manage those connections
moving forward. And what I would suggest to you is automate your follow up. So collect your cards
and your contacts, put them all into
a list and then categorize them as contacts that could help you
out in the future. Possible customers that you want to stay in touch with and follow up on and people that might be able to
help you in the industry. Maybe they're suppliers,
maybe there's something else, categorize them into what
makes sense for you. And then set up an
e mail automation that follows up two
to three times, especially with the
possible customers. So somebody walks up
and they say, hey, I'm interested in buying this,
I can't do it right now. For whatever reason,
get their e mail, get their contact information, set up an automation here and continuously follow up with
them two to three times. And you can automate this
through a website called Zapier.com Or if you just Google e mail
follow up automation, you'll find a bunch
of different services that can help you out with this. Next one is to advertise in advance if you are
going to a trade show, especially business to business. This is most important
for business to business. If you're going to a trade
show where you know that a certain company or buyer
is likely going to be at. You need to reach out to
them and you need to try and get them to come for
a meeting at your booth. You need to get them like a month or two months
ahead of time. Reach out to them. Ask them if they're going
to be at the show. Ask to book a time for them
to come by your booth, whatever works best for
them. Shake their hand. Be ready to go and have an
entire pitch to give them. When they get there, show
them the entire product line. Get ready to go, because
this could be your moment. And if you can set
it up ahead of time, you can guarantee
that you're going to be busy while
you're at the show. If you're going to a
business to consumer show, try and let your
potential customers know that you will be there and that they should come by your booth. And so depending on what
type of show it is, you might be able to advertise, especially on Facebook
or Instagram. You might be able to advertise
on local billboards. You might be able
to advertise at the show itself on
the entrance way, or sponsor one of their
different departments. And try and get attention so that people
come to your booth. It is worth the money if you
can do it the right way. It is always worth
the effort if you can reach out to
buyers in a business to business setting and convince them to come by at a
certain time and date. Though, that is going to
be the best strategy, especially if you're
going to a B to B conference meeting event. Anything along those lines,
that's the best way to do it. Next one here is you need
to have a goal like this. One is a little bit difficult, especially if you're going to a trade show for the first time. But it's really
good to have a goal because it gives you a
target and at least a milestone of what
you should try and hit on every single day. This goal should be based off
of your break even point. So let's say you
want to break even, plus you want to
make $1,000 a day, something along those lines. That should be your target
to hit every single day. You should also have a target to try and grow
your e mail list. Or try and grow your raffle. Or try and build a certain
number of contacts every day. And you want to use that
data and keep track of that data so that you can
forecast for next year. Now lastly, a couple
more tips everybody. As a customer or
knows a customer, keep that in mind because
when you go to a trade show, a lot of people, especially if it's a business to
business trade show, they're going to have
badges on that will say their name and what
company they're with. Don't look at the badge.
Treat everybody with respect. I'm telling you if you
stare at somebody's badge and you don't look
them in the eye, it's going to mess with you. And a lot of people
walk around with different badges so that you don't judge them certain ways. And so treat everybody like
an absolute ideal prospect. And then eliminate them when
they become not a prospect. With some of the answers to the questions that you ask
them, this is really big. I can't tell you how important this is,
because everybody, especially at a lot of
these B to B trade shows, everybody is either a customer
or they know a customer. Because anytime you're at
an industry trade show, anybody that's been
in that industry for a long time
knows everybody else in that industry and they can connect you if they
really wanted to. And so try and treat everybody
with as much respect, enthusiasm, and ambition
as you possibly can. Because you never know who
you're actually talking to and you never know if that person is actually wearing the
right badge either. Next one, get off your
phone and stand at the front ready to greet
people. I know this is tough. I've been to trade shows
where the floor is empty, it's late at night, it's the end of the show,
whatever it might be. I'm telling you right now, some of the wealthiest people, some of the most
important buyers, and some of the trade
show directors that are looking for something unique will walk around at
the quietest times. And they will focus on the people that are standing
at the front of their booth, eager to talk to people and trying to make
the best of it. It makes a difference. I know it sucks. But I'm telling you right now, if the trade show is
starting to die out and you get bored and you sit at the back of your
booth on your phone, it is going to hurt
you and you're going to miss out
on opportunities. There might not be a
lot of opportunities, but I can tell you that
those late ones or those early ones
are usually some of the most important
opportunities that I have had. Next one here is make things super easy for the
customer if they want to fill out
a form or if they need to create a
profile as a customer. Or if they need to
place an order, make it as quickly, as smoothly, and as easy
for them as possible. The quicker it is and the smoother it is,
the better it is. And so if you can do everything electronically on an ipad, that's probably what
I would recommend. If you can do it for
them, that's even better. And just ask them and let them stand there and answer
questions for you. Keep their hands free,
keep it enjoyable, make it relaxed, but
make it smooth and easy. And continuously ask
the customer questions to make them feel important, understand them, build a
relationship with them, and get to know them and
hopefully solve their problems. Now, in summary, trade
shows have to give a positive ROY and you
need to have a target. Nobody should go to a trade show if you think you're
going to lose money at that trade show and you
need to have a target, like there's no point in trying
to invest all this money, and time and effort if you don't have a target that
you're trying to achieve. So those are number one things. Secondly is focused on trying to interact with every
person that walks by. First, you try to
sell them something, Then you try to get them
to enter the raffle. Then you try to get them
to enter your e mail list. Then you give them a sample. Then you give them a brochure. You ask them if
they know anybody that might be interested
in their products. Ask if they can make
any introductions. Do they know anybody that might be able to
supply with some of your raw ingredients or some of the parts
that you need? You can try and build a
relationship with almost anybody. Because if you dig deep enough, usually there's some type
of connection there. And then lastly,
always try to maximize your time and effort
while at a show. These shows cost a lot of money. They take a whole lot more work and energy than
most people think. So stand at the front of your
booth, get off your phone, make the best of it, and talk to every single person
that walks past. Because you never know who
you're going to say hi to, Hope this video
helps. Good luck.
22. Media Attention: All right everybody, welcome
back to another video. This is one that I'm very
excited about because my first business actually
got its big break when the editor at a local news
station sent a journalist to come in and do a story on my business that I had
started like a week ago. And that night the story
aired and I had sold like a couple thousand dollar
worth of product that I hadn't made yet and that I needed to make over
the next few weeks. And so media attention is actually what started
my first business. It gave me my big break. I also went on to pitch
on Dragensten that had a monumental
impact on my life. And I've been on the
news several times. And so this is something that
I'm super passionate about. It can make a big difference
in your business. And I think I have some tips that might be able
to help you out. Number one, when I talk
about media outlets, the number one, the golden
goose here is news stations. You'd be amazed at how many
people still watch the news. It is a lot and it can
have a huge impact, especially if that older
demographic is your audience. They all watch the news and
so they trust the news, they believe in the news,
they like the news anchors. And so if you can
get on the news, it is a huge, huge boost
for your business. Obviously you have to
have the right product and something that
appeals to that audience, but it can be really good. Also, newspapers and magazines. I'm talking about
New York Times, Business Insider, I'm talking
about Washington Post. Anything that is online, that is a newspaper
that writes articles, that has any type of paper, magazine, or basically anything that has a major following
at the end of the day, like it could really be
any type of organization. A lot of these are really
starting to blend together now. But basically what
you're trying to do is you're trying to get an organization
that has a lot of trust with the general public. And the general public reads
their products for content. You're trying to get that type of media outlet to write
a story about you. That's what I'm
talking about here. That's what I was able to do early on in my first business. That's what we were able
to do with Dragonstan, and we had a lot of fun with it. And so when it comes down to setting this up and trying to search it out and actually get attention for your company,
here's the key to it. Number one, you need
to find a journalist, or an assignment editor, or an editor in general that
you want to reach out to. And you need to pitch
them the story. Basically what you want to do is you want to
get in front of the person that's going to
decide what gets written. Sometimes it's a journalist, sometimes it's their boss, which is usually called the editor. And you need to pitch
them on your story. And you need to get
somebody interested in it to the point that they
want to write about it. That's the goal here. Now, in order to do that, you
want to do some research. You want to find a journalist, or an editor, or a magazine, or a newspaper that has talked
about something similar to your business or your product or what you want to get
written about in the past. So you need to do some research and need to find
something where it actually makes sense for them to talk about your business and
what you're trying to do. Once you have done that
research and you have identified either
a journalist or an assignment editor that
works at the news station or the company that you want
to have writing about you. You need to find them and you
need to reach out to them. I recommend starting
with Linked in. That's probably going
to be your best bet. After that, you might
want to go to Twitter. And after that, the long shots here are Instagram and Facebook. And if nothing works there, I would try as hard as you can
to find their work e mail. If you can't find their work
e mail online anywhere, what I would try and do
is find a work e mail at that company and figure out how it is formatted
for other employees. Find any employee that
works at that company, figure out how their
work e mail is formatted with their
first and last names. And then basically go back
and find the journalist and insert that format into
that e mail and send it out. Pretty simple. Not
super complicated, but you need to find a way of getting ahold of
these journalists. And then once you
get ahold of them, there's a couple of
things you want to keep in mind when you reach out, especially in the first message. Number one, you want to give them the story
that you want to tell. What I mean by that is the journalist is
not going to want to read your pitch here and then have to
figure out the story. They want to read your pitch and understand exactly what the
story is going to be and decide do I want to go
further with this or do I want to throw this
on the back burner or throw it in the trash? That's literally
what is going to happen when they open
your first message. And so you want to make
sure that you have a catchy subject line and you want to be
brief in the intro. And then you want to
get to the point. If possible, you want to
use that research that you did and relate your message
to their previous work. Try and build onto it. You also want to try and provide as many
visuals as possible. So if you're talking
about a product, try and put in photos
of your product. You also want to follow up
if you don't get a response, but you only want to follow
up what I would recommend, once per week, maximum.
Twice per week. And when you do get a
response from them, you want to respond right away. I have found that some
of these journalists, they will pick up a story when they have a couple
hours that is free. If you can get back
to them right away. Otherwise, they get too busy a few days later and your
story never gets published. And so you need to
be very careful. And when you do
get that response, you need to jump on
it like lightning. Now, just to give
you an example of a first message that you
could write to somebody. This is what I would write in an e mail or a
linked in message. For example, I would write, hey, my name is Zach Hartley. I run a local Calgary
clothing company with a mission to give
every homeless person in Calgary a brand
new winter hat to help stay warm. That
is the introduction. Now the reason I'm doing that
is because if I say, hey, I run a local Calgary
clothing company and we're doing a 10% off sale, they're never going to
do a story about that. They will never, ever, ever make a story that, about that. And so
what you need to do is give them a story. Give them something that
could actually make the news solve a problem,
donate to something, make a change in the community, raise money for something, give them a reason
to write a story. So in this example,
we're going to put a winter hat on every
homeless person in Calgary. That is the subject
line. That is the gist of the
first, basically, paragraph here with a brief
introduction about me. And then I say to do this
and I'm going to explain, Hopefully she's interested
at this point or whoever it is I'm going
to say to do this, we are launching our
new winter line of clothes and 10% of every purchase will be
devoted to purchasing and distributing brand new
hats in the Calgary area. So that's the explanation
of how we're going to do it and what we're going
to do and what she's probably going to
want to write about. And then I need
to give her proof and confidence that
this is a good idea. So I write so far,
Calgarians have been jumping at the opportunity to participate and
support our mission. So I'm reaching
out to see if you can help us spread the word. I'm not asking her to write an article directly.
I am not saying, here's the story. I am
asking her to help us spread the word so she
can make it sound like it's her idea or his idea. I'm just thinking here, I used the name Jessica in the
follow up e mail here, so that's why I have
that in my head. But regardless,
we'll keep going. So I'm reaching out to see if you can help us
spread the word. I would love to set
up an interview or a phone call
anytime next week. Please let me know what day
and time works best for you. If she likes the story and
she wants to run with it, she's going to need
more information. Therefore, she's probably
going to want to meet with you either in person
or get a phone call, or send a camera crew
to your house or your shopper or your
business, whatever it is. And so you need to make sure that you are available and you need to ask for that upfront
so that in the next e mail, she can just be like,
hey, Tuesday next week, 03:00 P.M. this location, we'll see you there and
you can jam it out. That's the key here. You
want to be very quick. You want to be concise,
but you want to get her interested and intrigued. Now let's assume that you
don't get a response. It's probably going to happen
nine times out of ten, no matter how good your
first e mail is here. These people are busy.
They get pitched a lot, and you are a nobody to them, so probably not going
to get a response. Here is my follow up. And make sure anytime
that you follow up, you need to be very
respectful and you need to try and provide
additional value. Nobody wants an e
mail that says, hey, just wanted to see
if you got my last one. Yeah, we got your last
one and we didn't respond for a reason.
So keep that in mind. If you want a response, try and provide even more value. So here's what I would
say. Hi, Jessica. See, I use Jessica, I don't know why I didn't use
that in the first one. I think I just ran out
of room but hi, Jessica. We just got our first batch of inventory ready to ship out. And so far we've given
away over 200 hats. We've got traction.
We're giving away hats. We're doing this with or
without your media attention, and we're going to make a
big change in the world. That's what I'm trying
to get across here. Next thing, things
are going well, but we still are
a long ways from our goal of helping every
homeless person in the city, and winter is coming fast. So reminding her that
we are mission driven. We are trying to do this
for something that is a better purpose and
a higher purpose than just growth and
profit for our company. And then I go on to say, we have everything we need to
accomplish our mission. So shows confidence that we can actually
get this done and we can be the first city in Canada to achieve
something like this. So again, something
that is valuable and unique and could even be
the headline of the story. And now we just need a little extra help to spread the word. Again, I'm not directly asking
her to write an article. I am not directly asking
her to write a story. I'm just saying we could use a little help
getting the message out. Lastly, I have saved a couple extra hats for
you and your colleagues. Let me know if you have
any time next week to set up a call and we can get the
rest of the City covered. Best regards Zach Hartley, Basically what I'm
trying to do here is I'm trying to make her think that if she says no, she is against putting
hats on homeless people. That's basically the message that I'm trying to
put across here, but in the most nice, respectful way that
I possibly can, and I am doing this to try, and one, help the
homeless people, and two, help my company grow. And three, get a little
bit of media attention. And so this would be
my follow up here. And my third one would probably be something
similar to this, just with different examples. Now this is just one example. Obviously you need to customize
this to your business. You need to adapt it
for your products. You need to bend these words
to fit your situation. But you do need to
think like, hey, if I'm going to reach out to
the media to write a story, I need to give them something to actually write a story about. Nobody is going to write a story if you just come out with a new clothing line or a new piece of
jewelry or whatever. But they are going
to write a story if you are solving a problem, doing something
for the community, doing something that's
never been done, or just helping people
on a massive scale. So find some way to
actually give them a reason to write a story
about you because that makes your job
ten times easier. Other tips I have for
this, Number one, like I said, make sure you
have something newsworthy. Number two, always be
respectful, no matter what, take the higher ground and
walk away if you have to, If you ever get a
disrespectful message back, if you ever get a
rude message back. If you ever get somebody
that says stop messaging me. If you ever get a swear
word and a response, do not become a
keyboard warrior. It is not going to
look good on you. It is only ever going
to backfire for you. You have already done damage
and **** somebody off. Take the higher
ground, walk away. Never think about it again. Wipe it from your mind.
Number three here. Do not pester anybody and
do not appear desperate. Nobody wants to put their
resources into a sinking ship, And sinking ships have
desperate captains. And so if you come
across desperate, it looks like you're
the captain of a sinking ship and nobody
wants to be a part of that. So be very, very careful that you do not
appear desperate. You want to appear like
you are going to do something regardless of
the media attention. It would just be great to spread the word and share
it with more people. That's the pitch that you want to kind of come across with. And then you want to
take that media coverage and repurpose it on
other platforms. So if you get news coverage you have featured in an article, you need to share it on
all your social media. You need to use it in
different ways and try and use that media coverage
as social proof to grow your business
in the future. Now, in summary
here, number one, media attention can be a
turning point for your company. And it can be completely free, except for a little
bit of effort in order to get that attention. It can be the best marketing that you possibly could achieve, so I highly recommend it. It might be worth
just half an hour, maybe 1 hour a week. Or maybe you hire
somebody to do it, get an intern do something. But if you can find a
way to create something that's newsworthy and then
get news attention for it, it is going to be well worth
the time and the effort. But you need to make
sure that you are reaching out in the right way, like I have kind of
exemplified for you here. And you need to make
sure that you have something that is
actually newsworthy. I know I keep saying just
like keep in mind you are pitching a story to somebody that gets pitched on
stories all the time. So you need to have something different,
something unique, and something that they
are actually going to get interested in and
want to put on the news. And when you do get
that opportunity, be prepared because it can be a life changer if it's
executed properly. If you are unprepared
for it though, and you are not ready
with your pitch, you're not ready to
answer questions. You don't seem like you
know what you're doing. It's just not going
to happen and it's not going to reach
his full potential. So be prepared when you
get the opportunity. Make sure you see it. If you
need help, reach out to me. Happy to help out with this one. Thanks for watching and we'll
see you in the next one.
23. Conclusion: All right everybody, welcome
to the end of the course and congratulations on making
it all the way through. Throughout this course, we have covered a lot of
different topics. Starting with how to begin your business and get
started on the right foot, how to launch your products, and then how to
properly run and grow your company into something that is larger and
than just yourself. I hope you found some
value in this course. I put a lot of effort
into it and I try to use as many real life examples
as I possibly could. Now before we go, there's a couple of things that I
just want you to remember. Number one is that
business is a marathon. And not a sprint. You
want to try and build something that is going
to last a lifetime, something that is going to
be here for a long time, something that is
going to generate consistent and steady
profit for you, and something that
you can be proud of. You are not going to
build a get rich scheme. You're trying to
build a business that you can stand behind and be proud of and even pass down to your children
if you wanted to. The other thing that
you need to know is that this might not work out, this might not be the
business venture for you. But I want you to know that
every skill that you learn, building this business, is going to help you build
the next business. There is very, very
few people that can do it properly
on the first run, and it's like one in 100. So you are more than likely going to fail at
your first business. But I can tell you right now that all of the lessons
that you learn, all of the hardships
you go through, are going to make you a better entrepreneur for
the next business. Do not be afraid
of taking a couple of attempts at going
down this path. It is more than likely what
you're going to have to do. But remember, stay focused. Remember your
strategic advantage. Make sure that it is a
strong strategic advantage and do what you
can to protect it, because that is going
to be the key to protecting your business and making it grow over
the long term. Now, if you've got
any value out of this video and out
of these courses, please remember to
leave a review. It really, really helps me out. It helps other students
understand what's in the course and what kind of
value it is actually worth, and it really means
the world to me. And if there's anything I can do to improve any of
the lessons or add more information or just make the course more
valuable for you. Please leave a comment in the
section where you think I should be adding
more information. It really helps me out. And I promise you that if you leave a comment
that says, he Zack, I wish you could
make a video about this topic right in between
these two rate here, I promise you I will
make that video. So please leave a
comment. I sincerely appreciate it and it really
helps me to improve. And lastly, a final reminder
for the course project, I want to help your business. If you post a business
in here where I can use your services or I can buy your product or or I can
support you in some way, I promise I will do it and I will encourage everybody
else to do it. And if we can go through
this and start to share our business and our companies
and what we're good at, hopefully we can start
to build a network of like minded people that
want to support each other. And if that grows, who knows, maybe we even turn
it into a community. At some point. That would
be the ultimate goal. Now if you're interested,
I have put together a list of resources which
is are all the companies, the services and the websites that I used to run my business. And you'll be able
to locate that under the projects and resources
tab of this course. Now if you're interested in
following me on social media, you can check out
my Youtube video. That's where I have a ton
of long form content. Instagram and Tiktok
is more sort of short form video
content and then Twitter is where I post
some of my analysis. I also run a discord chat for all of my investing
and my trading. So if you're
interested in any of that, definitely check it out. You can find all of it online. And I'm also going to try and add some bonus material into this course over the next
few months here where I want to give you updates
on how my business is going, how I'm thinking
about my strategy, how I'm thinking about
my cost to get sold, and how I am managing
the business. I'm going to give
you full updates. I'm going to give
you full insights. I'm going to walk
you through how my mind processes different
business scenarios. So if you're interested
in seeing any of that, I'd love to see you in those videos and we'll
talk to you soon.
Zac Hartley, Entrepreneur and Investor
