How to Make Big Money in Your Own Small Business

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Ralitsa Fanunza

🧐 Estimated read time | 12 minutes

the book

How to Make Big Money in Your Own Small Business found me quite unexpectedly – on a bookshelf in my rental in Rome. It is a very easy and practical read that gathers useful tips and tricks for every entrepreneur despite the stage of his entrepreneurial journey. The simplicity of the points made by the author makes the book accessible and useful for anyone who would like to build and run profitable business on his own.

How to Make Big Money in Your Own Small Business summed up in one sentence: A book about small businesses and big money.

The practical aspect of the entrepreneurial advice gathered by Jeffrey J Fox in his book lead me to one of those moments of I wish someone had told me that earlier. So there you go, the key elements to entrepreneurial success that we all wished someone had told us earlier.

You are always your own best investment. So it is never too late to start your own business.

Jeffrey J. Fox

innovation is limitless

“There’s nothing new under the sun” is an excuse for not thinking.”

There is always space for innovation – new products, new ways of selling, and new ways to serve the customer. Ignore the idea killers who will tell you that your idea already exists. Coffee also existed before Starbucks. People also had to carry their luggage before someone invented the wheels of suitcases. No idea is too small or too dumb.

the difference between Yes and No

The difference between Yes and No is the difference between the corporate executive and the entrepreneur. The executive looks for the NO that equals a STOP sign which will mark the end of any innovative idea. The entrepreneur will get past the 99 NOs and will grab onto the 100th YES.

Corporations stay away from risk, hence innovation. If you keep an eye out for ideas corporations dismiss, you can get yourself a really successful one.

sources of new business ideas

  • What do I do well?
  • Is there a business a like but is currently unavailable in my region?
  • Is there a family business I can take over?
  • Can I develop an idea I had in the past?
  • What is my company not doing? What has my company dismissed?
  • What is popular now? What’s on TV? Magazines?
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what are you good at that others aren’t?

Anything you do with ease but other find difficult is a small business idea and there will be a market for it. It is very common for people to believe that if they are good at something, everyone is also good at it.

Often, that keeps us away from developing our talents and in order to make money from what we do with ease, we need to be great at it. To be great at something (and make money out of it) means extremely hard work perfecting it.

There is no shameful job! As long as it is legal and fulfils a market need, social norms of what is fashionable should not be paid attention to.

small business owner’s business priorities

[…]- Know how your product is different from what is offered by competition.- Set goals.- Delegate tasks down, down, down to the lowest level person competent enough to handle the task.[…]- Complete the absolutely necessary administrative tasks that if not done now become a big problem later.

most important rules

for small business owners:

1. Have a customer someone who would absolutely buy your product/services
2. Get a customer
3. Keep a customer

a business exists for

the following reasons:

1. Resolves a customer’s issue
2. Makes him feel happy
3 Both

Companies make what their CEOs do so a CEO needs to spend 60% of his time finding and retaining customers.

customers only buy products

for the following reasons:

1. To solve a problem
2. To feel good
3. Both

Monetize the value of the solution or the value your product brings to the customer.

number 1 priority: selling

“Without sales revenues, you have nothing. For most small businesses, selling means reaching out to customers, asking questions, showing benefits, and asking for the order.“

We shouldn’t depend on only one channel to bring customers, but make sure to find, have, and maintain as many as possible. Waiting for customers is not enough. A small business owner has to proactively reach out to them and make them come! As Francis Bacon once wrote, “If the mountain will not come to Muhammad, then Muhammad must go to the mountain.”.

how to spend and save money?

pay steak and eat hot dogs

Pay as much as you can afford in order to get the best employees for your business. Those people will bring your business to success so you need to have the best ones and you need to give them a reason to come and stay.

“Pay them with money, with freedom, with courtesy, with a chance for some ownership, with thank-yous. Pay them more than you pay yourself if you must.”

penny-saver vs penny-pitcher

Penny-saver finds ways to get the same services for cheaper without lowering the quality. The penny-pitcher cuts expenses by cutting services. The penny-saver “targets impersonal suppliers” without risking the beneficial personal ones. Be a penny-saver.

When everyone sells, and everyone saves, the company succeeds.

pick up paper clips… but overspend on customers

If budget cuts are needed, never cut on customers’ needs. If you don’t get paid now, you will get a payback from the satisfied customers later.

who to hire?

Salesperson

Selling is first. “Sell the house before you build it.” Talk and listen to customers so you can keep giving them what they will pay for.

Ex-paper boys

Hire people who work hard and are capable of getting things done on their own.

“Good child labor produces good adult employees. ”

Family

Hire family members who are hard workers, trustworthy and loyal. Hire them because you know their strength and weaknesses. Hire them because they would want the business to succeed so everyone could benefit.

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breakevens

What is a breakeven? Number of customers X average $ gross margin per purchase per customer = total cost of doing business

if you sell only one product or service

Gross margin = product selling price (after paying sales commissions) – material, labour, and direct overhead to make the productGross margin = product net selling price – acquisition cost of the productGross margin = service selling price – direct cost of providing the service

if you sell more than one product

Breakeven of a business selling many products or services = Total fixed costs / average gross margin % of all products

Number of customers you need to attract = breakeven revenue amount / average $ purchase of each customer

fame or fortune?

pick fortune.

As long as you’re not your brand, for instance, being a lawyer, selling your product should be your priority over selling yourself and your personal image. Instead of putting your face on the cover of a magazine, put your products on it.

no home office!

home = distraction

No matter how disciplined you are, no matter if you have a sealed room in your house, there will always be a distraction. Having an office builds the discipline that every small business owner needs in order to succeed. “As soon as you can afford an office outside your home, get one.”

price to value

always.

“Pricing to value means you set your prices as a reflection of the value your product or service creates for your customer.”

“A pricing-to-value mentality and philosophy forces you to focus on areas where your business can provide the greatest impact to your customers.”

big money tips for entrepreneurs

Sign 500 Holiday Cards

Add a personal note, add your phone number, ask for a meeting. Great way to keep in touch with your customers and make them feel special.

Patent, Protect and Padlock

Patent and trademark everything you possibly can. If you have ways to get something faster or better, don’t show off, keep it a secret. Don’t give away your company’s edge on the market place, someone’s always waiting to eliminate it anyway.

Never Let Anyone Outwork You

It’s not about how many times you fail but how many times you succeed. The number of sales made is what grows the profit, not the number of sales lost. Strive to do better, learn from your mistakes and keep trying until you get it.

Give “Surprises”

Surprise your customer, give small “free”, “complimentary”, “on the house” things. Customers LOVE free things. You will keep a surprised customer.

“Let the other guys prove out new technology.”

get it but wait until tomorrow

Marketing & Manufacturing

Make them talk. Marketing and Manufacturing should be in constant communication to make sure that whatever marketing is selling can be provided by manufacturing and whatever manufacturing is making is smartly sold by marketing.

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calculate the size of your market

Your market = # of customers you can realistically and profitably identify, attract, get, and keep.

The formula: # of customers X avg. # of units purchased per year X avg. $ price per unit = $ market potential.

use the leverage levers

You cannot do everything yourself, let alone do it well. Keep it simple and use the leverage levels as often and as affordable as possible.

  • Delegate.
  • Outsource.
  • Hire Consultants.
  • Hire Temps
  • Hire Interns
  • Hire retired grandfathers (a lot of experience, lower pay)

always keep the C’s top of mind

  • C for customer
  • C for cash
  • C for collection (collect cash)
  • C for credit (becomes cash)
  • C for costs
  • C for closing (orders, sales or deals)
  • C for confidence
  • C for calm
  • C for commitment

always take the business

Always take the business even if you do not currently have the capacity to fulfil the need. You can outsource, you can hire temps, can work more, or find other solutions to get the work done but you cannot bring lost business back.

get a personal driver

If you need to commute more than 2 hours per trip, hire a personal driver. Instead of losing so much time driving, you could be in touch with your clients and get things done.

what if he had died

Losing staff members could be stressful. However, the business owner should not panic, and should not take it too personally. There’s no time for drama! Save it to find a solution.

work ON the business, not just IN the business

If you want to grow your business and get better but don’t want to delegate and keep the mindset of nobody being able to do your job as well as you do it, your business can stay only as big as your own capacity.

Work in the business until you can afford it and find someone who can take over doing the job. Only then you can focus on how to make the business better, and invest time in improving the productivity, the employees, the technology, or all.

always working

You are working when you are not working. Behave wherever you go. You are the face of the business, you don’t know who’s watching you.

have regular B&P meetings

B&P= Billing & PricingPricing is crucial to profits. Billing is crucial to collecting profits.

inoculate against FTD

Similarly to STD = sexually transmitted disease, FTD = financially transmitted disease

There’s always this employee that believes he’s underpaid and underappreciated, comparing his salary to everyone else’s, including you – the business owner. Those people have no place in your company, paying them more is not a solution.

Free yourself and your small business from the FTD!

never run out of cash

Try to have enough cash on hand that is equivalent to two months of company expenses.

Cash is more important than profits. A company can have cash, and no profits, and keep going

stay off boards and committees

Boards and committees eat up your time and time is money. Most of the time they don’t bring value, just want your money. It is acceptable to join a board or a committee only after your business has successfully run for at least 10 years and even then, you should only consider boards and committees that will bring benefits (exposure, customers, etc. ) to your company.

Invest this time in yourself, your family, your life, and your business not boards and committees.

the business owner

is not the boss.

It is a common misconception that if you own a business, you are the boss. You are not. Your business won’t exist without your customers, your employees, your leaders and your stakeholders. They are the boss. You work for them and you work for yourself. If they are happy, your business is happy and so do you.

always take notes*

These are the notes you take after a phone call, meeting, supplier, problematic employee, or any important issue.

They are accepted as evidence in civil suits. Especially effective if co-signed by another party.

“If it is not written down, it doesn’t exist.”

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