Dillon Carter

Entrepreneur, Hacker and Future Mad Scientist 🚀☕

Category: Business Page 2 of 7

Starting An Amazon FBA Business For Fun and Profit

Over the course of this year I realized that I needed to make some changes. I’d already automated my personal finances and begun traveling for free, but going back to college full-time required me to take a job to sustain myself rather quickly.

 

I soon realized this was not what I was meant to do and lost interest. You’ll notice in my monthly reports that I still set goals for this job, but it’s time to extract myself from it and achieve true freedom.

 

I searched for various new business models to focus in on and then landed on Amazon FBA. I listen to a decent amount of podcasts and the same thing kept popping up; I needed to give this a try!

 

After giving it a bit of thought I decided to jump into an FBA course to give me a better understanding of how to go about doing this. Instead of doing my usual information overload, I decided to take action the very next day and bought roughly $200 worth of product.

 

I know this doesn’t seem like a large investment, but I’m currently doing Retail Arbitrage which is going to local stores to find deeply discounted products to resell on Amazon for a profit.

 

Project Extraction – The Plan

 

I’m going to lay it all out here for you. I currently need to generate a profit of $2,000 /month from this business to go full-time. I’ve been getting 50% ROI on products, but let’s assume a 25% ROI to be conservative.

 

This means that I need to be purchasing roughly $8,000 a month to yield $2,000 profit. At first, I didn’t realize how much volume I would need to do each month, but the numbers don’t lie.

 

So now my weekly goal is to somehow spend $2,000 on product either at local stores or using online sourcing as well…. Now that’s a massive goal.

 

In truth, this is only a minor step towards a much larger goal with this business model. That’s right, this is only phase one.

 

Where I’m Currently At With This Business

 

So far I’ve only spent $992.39 in total. This includes cost of goods, supplies and education.

 

In sales, I’ve done $239.61 with actual profit being $143.63. I still have a lot of inventory waiting for sell. A rather slow start as I really get the hang of sourcing locally and online.

 

I’m not profitable yet by any means, but the rule of thumb is that it should take roughly three months to turn a real profit and until I reach the volume needed to go full-time, all profit will be put back into the business.

 

This should vastly decrease the timeframe needed to reach my goal.

 

Here is a snapshot of what I did in June.

 

starting an amazon fba business from scratch

 

June was all about getting set up and learning the process. Now that I’ve done that, It’s time to really throw down some capital on inventory and scale up to the volume needed.

 

How Anyone Can Go From Nothing to The Top 5%

I believe anyone, from any situation or circumstance can rise to the top of the social class using a framework. We no longer have excuses, but it does take time and it isn’t easy. I know what I’m saying is a bit controversial, but stick with me for a bit and open your mind to new potential. In this post I will detail a few key frameworks and ideas that shows how anyone can join the higher class given time.

 

Knowing The Outcome

 

Before we dive into the “how to” stuff we need to do some simple math. If you don’t understand what your ideal outcome is, how do you know if you’re there?

 

First, think about retirement and what lifestyle you want. For me, I want $100,000 a year after I retire, but for this post we will stick with $400,000. Now we need to calculate how much money we need in a retirement account to yield $400,000 every single year based on interest. We assume a conservative 5% and multiply our yearly income goal by 20 (our 5%) which gives $8,000,000 in total.

 

So we need $8,000,000 to bring in $400,000 every single year and to be considered one of the wealthy elite… This is a great start as it gives us a goal.

 

Side note: I’m utilizing retirement accounts because you don’t want to worry about earning $400,000 every single year. Instead you want to protect your assets and have more freedom.

 

Take your target annual income after retirement and multiply it by 20. This is how much you need in a retirement account to live off the interest and to maintain your wealth.

 

Income Is Based On Value

 

How much you make is directly tied to the value you provide to the market. This is why a CEO of a company makes more than the Intern. Overall the solutions they provide in their roles are more valuable to the company/market through experience, knowledge, action and responsibility versus an intern or someone new to the company. This is not to say that an intern or anyone below the CEO is non valuable or lacks similar work ethics as this is simply not the case.

 

Ever notice how the guy at work who stays late and “kisses ass” gets promoted faster? He’s providing more value than everyone else.

 

From a logical standpoint, if we want to increase our income, we increase our value. This is done through going to college, personal/professional development and many more growth opportunities. The downside to working for someone else is that there is always a ceiling that stops your growth. The only step you can take at this level is to start your own company, which you will be providing more value to the market.

 

For entrepreneurs, skipping the 10+ years it takes to reach this ceiling is commonplace. Why go through all of that when you could start your own company?

 

A business is the single fastest growth vehicle for building income and wealth (there is a vast difference between the two!).

 

Starting A Business Without Money or An Idea

 

No, seriously..

 

Successful entrepreneurs understand how to minimize risk and how to effectively find (NOT create) profitable ideas.

 

You don’t need the next Facebook or Google. You need a solution to a problem that people are willing to pay you to provide. This is done using a framework called Idea Extraction.

 

Here is how it works:

 

Target a specific group of people, for this example I’ll choose Real Estate agents. I talk with 50-100 agents and ask about their most painful tasks each day, week etc… I keep diving deeper, often coming up with multiple problems to solve. I don’t want just any problem, I want their most painful problem, the problem they will beg me to solve.

 

After talking to 50-100 agents I find a common painful problem I can solve. My business idea came from people wanting a solution, NOT from myself.

 

I can solve this problem through the various business models such as; a service, physical product, informational product, software etc…

 

Side Note: I focus on software as people will pay every single month for access to the solution which gives me recurring revenue.

 

So I started with no ideas, picked a market, talked to them and find a painful problem they are willing to pay for? Yes… But the idea isn’t completely validated yet. I want them to actually prove it’s painful enough to pay for. So I ask them to.

 

If a problem is painful enough, a potential customer will pre-pay for a solution. They will actually pay for a product that doesn’t exist yet. I know this seems crazy, but I’ve done this before and it’s how risk in business is practically eliminated.

 

So instead of thinking of an idea, finding investors, wasting my savings and wasting 6+ months of my time building a product like most people do, I’ve gone directly to the market to provide more value and can start a business WITH paying customers. Most companies spend well over a year to find ONE paying customer.

 

I now have an idea (let’s assume it’s software). For some reason we assume it takes money to make money, but that simply isn’t the case. I still need a developer to build the software that solves my customers problem, but I can’t code.

 

Remember how we validated our idea by getting people to actually pay for it? This funds our development costs. This is called pre-sales or pre-selling and is done more than you realize. Just look at Kickstarter for an idea of how common this practice is.

 

So at this point I’ve extracted a painful problem for real estate agents that 50+ agents have in common, validated the idea through them actually paying for it upfront and used that money to fund the building of my product.

 

Do you think everyone has the opportunity to reach out to a group of people and find their most painful problems?

 

Achieving $400,000 and Elite Status

 

Let’s get back to our $8,000,000. This seems like a TON of money and it is, but we can’t expect to knock this out in one blow. This may take 2, 5 or even more companies to achieve and that’s ok.

 

Companies are sold every single day to investors willing to pay a multiple of either its monthly or yearly earnings. For most internet based businesses, the multiple is 20-22 times it’s monthly earnings. So if I have a small business that generates $1,000 a month, It’s value if sold is $20,000.

 

At this point we’ve already started a company WITH paying customers who pay us every single month for access to our solution. What they pay can range from $50-$5,000 a month depending on how painful the problem is, the value of your solution and the marketplace. Pricing is also determined while asking the customers what they would be willing to pay and then asking them to do so.

 

Now obviously you would want to build your business even higher in revenue than when you started and eventually you would get to a point where you would either sell the business, higher a staff (virtual assistants in the Philippines for $5/hour) to run and grow your business while you repeat this whole process talking to a brand new industry and finding more painful problems to solve.

 

Conclusion

 

This is essentially a roadmap or a framework for someone with nothing to determine what they need, find REAL problems to solve, fund their business with paying customers, automate or sell and repeat until they reach their end goal.

 

For some, they may only need $50,000 a year to travel the world and so they would need much less than our elite character needing $400,000 a year in income. I’m not saying this is easy, otherwise I wouldn’t be in this class. I would be spending my time how I saw fit, but I am saying it’s possible and is my life’s passion to accomplish.

 

I hope in this post I’ve opened your eyes to the possibilities of finance, business and being conscious about the world around you and what you can achieve.

The Paradox of Choice As An Entrepreneur

I was listening to one of  Tim Ferriss’ podcast episodes this morning about limiting your choice for better output and productivity. While listening to the episode it made me think of of this problem when it comes to starting a new venture as an entrepreneur.

 

When I started my first company there wasn’t much choice, just the decision to do so which made me successful. Now, with so many options, how does one even begin to pick what kind of business to start?

 

The marketplace has shifted. Yes jobs may be hard to find, but it isn’t because they are going away, they have shifted online through entrepreneurship and freelance work. As more and more people shift into this style of work, more innovation increases.

 

Never before has there been so much opportunity, too much opportunity. With limited options comes forced results. This is no longer a problem in our culture, no matter where you live in the world. Almost anyone can start making money online, but what route will they go and will they stick with it long enough to see it through?

 

The Problem

 

This has created a major problem for myself and others. With so many options fatigue sets in. I know I’m capable of achieving success with any business model, but I can’t seem to stick around long enough for one to hold and mature. I could blame my generation who lacks patients, but I don’t believe that is the total problem.

 

You could choose from any of the following:

  • Startup (bootstrapped or venture backed)
  • eCommerce (Dropship?)
  • Amazon Products
  • Physical Products
  • Information Products
  • Membership Sites
  • Podcasting
  • Blogging
  • Affiliate Marketing
  • Network Marketing
  • Service Business (online or offline)

 

There is probably a ton more that I can’t even think of as I type this post.

 

Can you see how someone could get lost in learning about these different business models, but more importantly, being able to completely make a decision to only do one?

 

You can no longer dabble in all of these. You must completely control your output through limiting your choice. For instance, I would only choose to do eCommerce until I become successful. If I fail the first time with the business model, I continue by using what I learned to start another eCommerce business.

 

This ensures that you build upon your new found knowledge instead of jumping ship into the next best thing.

 

We tend to fantasize about the best case scenario of starting a new venture. It goes something like this; You’ve been working on starting a new podcast but cannot seem to get it off the ground.

 

Then somehow you land on the idea of creating an information product. You think of how easy it must be and how successful you would become. What you forget is the fact that you felt the same way about the podcast before you started the project.

 

This is a never ending cycle of shiny object syndrome where you travel from idea to idea instead of taking enough action until you become successful. I struggle with this a lot and it’s the main reason why I wanted to write this post. I need to get this off my chest and create a solution.

 

The Solution:

 

My solution is simple: I must find someone to hold me accountable and who is currently in the position I want to be in within the next 3 months. I am unable to work on any project or research/learn about anything new unless it directly increases my chances of success with the current business model I am working towards, I am limiting my choice to ensure my focus and output is primed for takeoff.

 

Because I no longer have to make this decision I free up more mental space to focus on growth and success rather than worrying if this is the right business model for me or whether it’s good enough.

 

Because of dreamlining(!) I know exactly what I need to make in profit each month to consider a project successful and to fund my ideal lifestyle. Now all I need to do is make it happen by focusing on taking action rather than making a decision.

 

I’ll check back soon with an update on my progress and how this plan is working out.

How To Extract Your Next Big Idea

If you want to build a highly profitable business you need to solve real problems. You need to set aside your notebook with all of your “amazing” ideas and stop playing business. I want to shed some light on a new method that is gaining in popularity within SaaS startups that apply to any business model you choose.

 

Business, more importantly startups have a high risk perception. The reason startups are so risky is because the founders are going about business the wrong way. They have this amazing idea, get funding to spend 1-2 years building the product and then launch without any idea if their product solves a painful problem.

 

Like me, you probably don’t have years or even a large amount of capital to waste on guessing.

 

What Is Idea Extraction?

 

Idea extraction works backwards from what you are used to when it comes to developing profitable ideas. There are two simple ways to find amazing business ideas:

 

1. You have an amazing idea and your mom says she would use the product so you spend your savings and years of your life without ever speaking to a customer to build your product and then launch to the sound of crickets.

 

2. Or, you take a few months to interview and have conversations with real customers without pitching to listen to what their most painful problems are. After talking with 10+ people you find a common problem that you know how to solve and start a business with paying customers before it’s even built.

 

Which option makes the most sense?

 

The Framework

 

Let’s get to the meaty part of this post and dive into how to extract your first profitable idea without having an anxiety attack.

 

We need to pick the industry, we are going to focus on, but the industry must meet the following requirements:

 

  1. Profit driven business (no non-profits)
  2. 5,000-10,000+ businesses in the market place
  3. Easily reachable!
  4. Currently pays for some kind of software/our business model

 

We want an industry that has the means to pay for our solution from a SaaS business model to a service based business. We also want to ensure our market size is large enough so we don’t run out of new customers any time soon and most importantly, we can actually reach them to do our idea extraction. Most of this is a guestimation, but it’s enough to get you thinking and to not waste your time on a terrible industry.

 

At this point we have picked what industry we want to work with and now comes the uncomfortable part; Picking up the phone. We want to interview all of our potential customers either over the phone or in person, never over email if possible. If they are local, buy them coffee, if not, a phone call will do.

 

When scheduling your interview just tell them who you are and that you are doing research for a paper about the most painful problem within the industry and need to speak with industry experts.

 

How To Extract

[youtube]https://www.youtube.com/watch?v=RNwX0-KJfeo[/youtube]

There are a few key questions we need to ask in order to get straight to the point:

 

  1. Walk me through a typical week/day for you
  2. What is the most painful task you do?
  3. Why is it painful?
  4. What are you currently doing so solve it?
  5. Why isn’t that awesome?

 

By the end of this conversation we’ve gained a huge advantage and understanding about that persons life and what they actually find painful. If you were to follow Dane’s style you would ask what it would be worth to them to have that problem solved, then actually ask them to pay for it upfront to prove the problem is painful enough.

 

Repeat this process as many times as possible. Eventually a pattern will emerge, a common problem the majority of people you spoke with have.

 

This is your business.

 

So instead of thinking up some amazing idea, trying to get funding for a company that doesn’t exist and wasting countless years trying to get profitable, you’ve started a business with paying customers solving a real problem. When you solve a real problem, you don’t need much marketing to generate more sales. Your product will do the selling for you.

 

The Challenge

 

If you’ve wanted to start a business for some time or you just stumbled in this world of possibilities I challenge you to use this method to start your next or first business.

 

Stop making excuses for yourself saying that you just need a better idea. The truth is you do need a better idea, but you’re wrong to think you need to pull that idea out of thin air. Business doesn’t have to be so risky and you don’t need funding to start a massive business. Start with what you have, find a real problem to solve and start solving it without forming an LLC or hiring someone to make you a logo on Fiverr.

 

Stop playing business and start a business.

 

ps. Comment below if you want to see me use this method to extract a profitable idea through a case study!

The 4 Factors of Success

We all understand the struggle as entrepreneurs. We have multiple projects going at a time, unsure of which to focus on and no certainty of success whatsoever. For some of us, we spend years, making no money and being called crazy. For others, success is simply around the corner or at least within grasp.

 

With all of this chaos, how do you organize yourself to highly increase your chances of success?

 

Creating Clarity

 

If you don’t have a clear understanding of what you want, anything will do. Take the time to focus on what success truly means to you, from an emotional, physical and financial standpoint.

 

Clarity is the hidden power that grants you access to knowledge that clearly defines what actions you need to take to reach success. So many companies these days are simplifying. Instead of focusing on every metric possible, businesses like AppSump focus on one metric until it has been achieved.

 

Focusing on one simple metric forces you to clarify what you want.

 

Build Confidence

 

What do the most successful entrepreneurs and CEOs of the world have in common? Undoubting faith in themselves and their business. Insecurity can completely destroy you before you even get started. This is why all of your friends and family members with “amazing ideas” never pull the trigger to make it happen.

 

Sit down, think through what bothers you, what doubts you currently have and draft a plan to eliminate them as quickly as possible.

 

Once you have clarity and a direct understanding of where you want to go and what it will take, you need to build confidence to take action and make it happen.

 

Find Like Minded People

 

At some point in your life, you will need support (aka right now!).

 

Now that you understand where you want to go, what it will take and have the courage to do so, you need to be surrounded by people who are doing something similar or who have already accomplished a similar goal.

 

Would you rather learn how to make six figures a year from a friend who works at the local grocery store or the millionaire down the street? I’d bet money that the millionaire can get you to six figures a whole lot faster.

 

The kind of person you need to be to go from average income to six or even seven figures is very different. Surround yourself with those kinds of people and watch just how different they truly are.

 

Create Your Success Habits

 

Chances are you have a million things on your mind right now, so how can I ask you to think about even more? Because if you don’t take action every single day, your motivation will begin to drop and eventually you might burn out.

 

You need to take direct and effective action towards your goal each day.

 

Once you understand where you are going and what it will take, break it down into a smaller sub-goal you can do each and every day. If you were to write a book, would you lock yourself into a room for a month? Heck no, but you could focus on writing 500-1000 words each day.

 

Your daily actions add up to your larger goal quickly and guarantee consistent progress.

 

The barrier to entry is so incredibly low for starting a hugely successful business and for you to create your ideal life. It only takes clarity, understand and action.

 

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