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10 Steps To Starting Your Business For Free (Almost)

That’s right, for free – or so close to free, it may as well be.

Tracy Lee Nicol

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Don’t delay – Start your business today

start-your-business-today

Start your business today using this easy guide

Do you dream of starting your own business but suffer from nocapitalitis? Don’t despair. We set you up with these ten steps, complete with tips, advice from the trenches, and free tools for starting your business with nothing.

What you’ll need:

  • Time
  • A computer
  • Internet, lots of it
  • Coffee, in abundance

The big idea

Here are eight ways to come up with one that sticks.

  • Ask yourself, “What’s next?”. The most successful businesses are the ones ahead of the curve. Look at trends and technologies on the horizon and how you might move in those areas.
  • Do something about that pet peeve . Some of the world’s most successful businesses started as a one-man operation created out of frustration. You just have to look to yourself and your life to find what frustrates you. There might just be a market in it.
  • Don’t [re]invent the wheel. Sometimes there are ideas that create entirely new industries. But most of the time you don’t need to invent or reinvent one. Analyse big industry players to find their gaps then figure out if you can fill them. Sometimes the big guys create tremendous opportunity in their wake.
  • Big fish, new pond. Think about your skills and whether they may be useful in a new area. Do you have technical skills or expert knowledge in one industry that can meet a need in a different one?
  • Get your innovation on. When coming up with ideas, try to identify markets that haven’t had many recent innovations. Be careful though, there may be no innovation because it’s had its heyday or because it’s a non-starter.
  • Be like fast food: Fast, cheap, and easy. Many companies have got their big start by offering customers an existing product at a lower price. Be smart though. Consumers are discerning and want quality.
  • If in doubt, talk. You don’t have a business if you don’t have a market, and successful businesses have ideas that meet people’s needs. And the best way to find out what people’s needs are, is to hang out with them or just ask them what frustrates and interests them.
  • Don’t be afraid to mix things up. If you’re the evil genius sort, take a cruise down a shopping aisle and see what happens when you combine two products across the aisle from each other. While it will probably spark a whole lot of bad ideas, you may find a brilliant gem in there.

Are you looking for some ideas? Why not have a look through 10 business ideas that are ready to launch.

Market research

business-market-research

Doing business market research

With no market, there’s no business

As the saying goes, if there’s no market, there’s no business. But having a wishy-washy idea of who your market is – like a blanket description of ’women‘ – isn’t going to cut it either.

You need to know everything about your would-be customer, from where they live, the routes they drive, their income, what their interests and needs are, right down to the number of sugars they like in their coffee.

One of the best (and free) ways to get this information is through surveys. Facebook and Twitter are your friend – provided your target market actually uses these social media platforms.

If you have a database of email addresses, online surveys can be useful too, but be sure not to spam, or make them too lengthy and vague.

If social media isn’t your forté, you can try keyword searches on Google, visit competitor links to see their pricelists and offerings, read expert blogs, or go the old-fashioned route and get talking to people on the phone or face-to-face.

Get yours here:

Survey Monkey:

Lets you create surveys free of charge for your own audience. For a little extra, you can also get feedback from your target audience.

Facebook:

Lets you create group pages that you can attract potential customers too. Take the time to generate relevant content, create polls and ask questions to spark interaction.

Related: The Best Ways to Do Market Research for Your Business Plan

Penning the grand plan

business-idea-planning

Write your business plan today with this easy guide

Free help with business plans

To start and run a business you’re going to need a business plan. It gives a clear overview of what you’re going to do and how you’re going to make it happen.

If you’re planning on starting a business for free, it’s more important than ever to figure out where you’re going to incur costs and how long it will take you to start generating cash flow and profit. That way you can implement a cunning plan to get what you need for free.

Some work required

Google ‘free business plan template’ and in 0,18 seconds you get 37,2 million results. Some plans are better than others (and length isn’t the deciding factor either), so make sure you have the following elements thought through:

  • An overview
  • Executive summary
  • General company description
  • The opportunity
  • The industry and market
  • The competition
  • Your strategy
  • Your team and roles (even if it’s just you)
  • A marketing plan
  • An operational plan
  • A financial plan
  • And an appendix.

Get yours here:

Bplans:

By Entrepreneur US expert Tim Berry gets you started on your business plan.

Download our free business plan template here to help get you going.

Free start-up capital

startup-capital

Fund your business

(Or how to get other people’s money)

Now that you’ve got your business idea, you’ve identified your market, and you’ve fleshed out a business plan that documents how much money you’re going to need, you can go about getting that money – preferably for free. Here’s how.

Bootstrapping

If you’ve had designs on running a business for some time, chances are you’ve been saving for it. While timing can be key in starting a business, keep saving until you have enough capital to keep you going for at least three months to give your business time to start generating cash-flow.

Friends, family and fools

The three f’s for funding, and two out of three love you, which means they’re willing to invest in you and less likely to scrutinise your plan or demand high returns for their investment. The bad news is that if things go pear-shaped it could make things more than a bit awkward. So when seeking money from friends and family, here are some basic rules:

  • Treat them as if they were strangers. Keep business and personal separate by insisting on legal documents or promissory notes, and don’t offer less than commercial interest rates.
  • Debt can be better than equity. When someone lends you money, you pay them back with interest and they can’t tell you how to run your company. But when someone buys a share, they are your legal business partner. When in doubt, rather ask for a loan.
  • Tie repayments to cash flow. Try to avoid obligatory and fixed repayment schedules, instead work on a percentage of operating cash flow.
  • Consider non-voting share. If family or friends insist on buying, try make it non-voting so they don’t have the right to second-guess your every decision.

Angel investors and venture capital. An angel investor is someone with loads of money and eyes for mentorship interested in helping out the next generation of entrepreneurs in return for a piece of the action (and anywhere from 10% to 50% equity in the company).

Venture capitalists are in it to make a lot of money quickly and firms have different specialties and requirements. They play hardball and want in on high growth companies, which means your idea needs to have momentum – revenue, channel partners, business development deals – and you need in place a management team, market size, and a number: How much money, and what for, right down to stationery.

Both angel investors and venture capitalists like to see an endgame that will allow them to pocket their winnings by having their shares bought out or selling off the company.

Get yours here:

Get in touch with South African angel investors through various angel investor networks.

For venture capital, check out these firms:

Crowdfunding is a relatively new way to generate capital for launching your business idea. Instead of approaching an investor for a lump sum, crowdfunding is about persuading individuals to each give you a small donation. With enough donors, you have some serious start-up capital. Special rewards are offered in return for donations, ranging from names appearing in menu items, behind-the-scene tours, early releases, small return on investment or royalty.

The best part is that by pitching your business idea to the masses, you also create a base of customers who feel as though they have a stake in the business’s success. The downside is that without an engaging story to tell, your attempt might flop.

Get yours here:

Crowdfunding platforms have sprung up both locally and internationally, here are the most popular sites:

Government grants

These are a godsend if you qualify, meaning your business needs to have a positive impact on the local economy, create jobs and meet the requirements of B-BBEEE. You also need to be prepared to jump through a lot of paperwork hoops and wait a very, very long time.

Get yours here:

The Department of Trade and Industry has dozens of grants, funding and incentive programmes available across a range of sectors.

What you need to get started:

  • A small network of enthusiastic believers to get the ball rolling (See family, friends and fools).
  • Think up other perks in return for money (remember, donors often want bragging rights to share at the pub).
  • Offer a serious business plan that explains what the money will achieve.
  • Show you’ve got some of your own skin in the game.
  • Include media like videos and pictures, links to active social media sites and regular updates until the project is complete.

World headquarters

World

You need to ask yourself if you need an office

Getting free office space

Office costs can be a major hurdle for entrepreneurs with tiny budgets, but the first question you need to ask yourself is: Do you really, really need an office, or is it for show?

There are a number of spaces that can serve as offices, and the first can be your home, lounge, bedroom, garage, local library, café, someone else’s office or even collaborative office space.

If working from personal spaces, offer to visit clients instead of them coming to you (they’ll consider it value add) or spend a little bit of money getting your working space looking professional.

If a home-based business won’t work for you, try co-working spaces by looking for solopreneurs to sub-let excess office space to. If you’re able to offer another business a barter, you could well get your office space super-cheap in exchange for services offered.

Collaborative spaces are also on the rise as more and more solopreneurs need ad hoc office space for conferences, presentations and resources. In these spaces resources and furniture are provided on a pay-per-use rental or membership basis.

Get yours here:

The Open:

Is a collaborative work space in Joburg’s Maboneng Precinct that you can rent on a membership basis.

Regus:

Offers both virtual and literal office space  on a pay-as-you-use basis.

The Hub:

Is a Joburg-based shared office space for start-ups complete with desks, office resources, kitchen facilities and IT support.

Related: Why It’s Time to Redesign the Way We Think About Office Space

Free workforce

business-man-working

Look at hiring staff or get someone in to help you out

Well, sort of

Remember, you are your best employee. To keep things small and cost-free in the beginning, see how long you can get by with just yourself.

Then it’s time to ask the same people you asked for money to get involved: Family, friends and fools. If they don’t have the specialist knowledge and skills you’re looking for, lure in talent by offering equity or profit share.

If you’re not looking for a full-time employee (expensive), consider using freelancers for ad hoc projects.

Get yours here:

Freelancers can be found all over the place. But good places to start are:

Running your office

office-process

Manage your office like an expert

It’s pretty much free (if you don’t count your bandwidth)

There are dozens of open source and freeware applications out there to help you run your business, some are even designed for operating from a tablet. Whether its project management, communication, creating documents, or specialist programmes, Google is your friend.

Get yours here:

Google Docs: 

Allows you to create everything you could possibly need from anywhere that has an Internet connection. From spread sheets to word documents to presentations, Google Docs has it covered for a couple of dollars a month.  If you’re into completely free software, try Open Office.

Google Hangouts:

Perfect for video conferencing and is free.

Skype:

Can be your perfect free solution if you need to video or phone call one location at a time. If you need some extra bells and whistles though, like video conferencing, you can pick up the tab of a few dollars a month.

Here are 5 time management tools for your business.

Financial and HR

hiring-employees

Human resources you need

Paying people and other people stuff

Unless you have a financial or HR background this can be particularly daunting. But having a clear picture of the financial status of your business at all times is essential.

Fortunately there are various products available to help you out. Be careful though: Some can start free and then quickly become expensive.

Get yours here:

Instant accounting:

Is offered to FNB clients free of charge. It collates electronic bank statements to generate financial statements. It also allows you to prepare income statements, balance sheets, cash flow statements, and provides debtors, creditors, budgeting and Vat functionality.

Snapbill:

Online billing can be done through the likes of Snapbill that allows you to send invoices and can be set for recurring billing. It can be operated from any web-enabled device.

Sage Pastel Payroll:

If you’re not able to keep things to a one-man-band, online payroll can be your answer. Sage Pastel Payroll software offers start-ups more cost-effective solutions depending on the number of employees you have on your books.

PeoplePlus:

People management for SMEs is available from PeoplePlus. It is available 24/7 and offers data back-ups, legislative updates, HR resource information, leave management, disciplinary and training management modules, a recruitment portal, a document manager and payroll module.

Build a website for free

building-a-website

Yes – you do need a website

Probably the most important thing you’ll need after a business plan

Today’s consumer is a few steps ahead of you in the sales process and it’s all thanks to the Internet. So if you don’t have a good website, you’re seriously hamstringing your business’s chance of survival.

At the end of the day, if you’re not online, you don’t exist. But here’s the great news: You don’t need to be a tech boff, spend loads of money or do anything complicated to have a hot website.

Here’s what a good website needs:

  • A domain name that’s easy to spell and correlates to your business’s name.
  • A host.
  • A front end that’s HTML or Flash (that’s amateurish basic text or more sophisticated functionality).
  • Highlight your brand. Make sure you convey what your brand stands for. Be sure to have relevant and useful content, information about the company, news, pricing, promotions, review and testimonials, everything a potential customer would want to know before they decide to purchase.
  • Spell out what your product or service does and why it’s relevant to the consumer.
  • Showcase your brand leaders – it helps personalise the brand.
  • A space to let happy customers grow.
  • Keep it clean! Go easy on flashing, spinning, garish colours, poor quality pictures, and anything that could be annoying.
  • Make sure it’s easy to navigate.
  • Choose smart keywords and get working on SEO so you pop up first in Google searches.
  • Start a newsletter that visitors to your site can subscribe to.
  • Get a blog going that’s linked to your website. People want information. Give it to them.
  • Linking your site to social networks is great for Google ranking, so at the very least, get a Facebook page.
  • Generate interest with news about upcoming promotions or new products and services.
  • If you’re an e-tailer, streamline your payment service to be as quick and painless as possible.
  • Contact information. Make it easy for potential customers to get hold of you for more information and quotes.

Get yours here:

To see if your domain name is available, spend time looking up names and variations.

Domain Check

To register and start building your website for free, a number of sites are at your disposal. Check the conditions though, some downsides might be paying for extra bells and whistles or subdomains.

Building a website

If you don’t have the time or skills to start your own site, spend a little cash having a professional set up and host your site for you.

Lit Creations

To check your website is ticking all the boxes, get it graded with a website grader.

Website grader

Related: How To Have A Website That Works Hard For You

Get the look

Samsung-logo-design

Brand your business like the boss you are

How to brand your business

The impression your business makes on potential customers is critical. It has to speak to your target market, convey the right kind of message and convey legitimacy and credibility. But it needn’t cost you a fortune. Here’s how to get branded:

Logomaker:

Lets you design your logo for free with a user-friendly interface. You can choose from thousands of icons too if you don’t fancy yourself a designer.

Logosnap:

Can also save you a lot of money by designing your own logo for free. It also throws in matching business cards, envelopes and flyers.

How to create a kick-ass logo

Since your logo is a visual representation of what your business does and stands for, don’t cut corners with this important process.

  • First articulate the message you want to convey. Write a one-sentence mission statement to help you focus and stay true to while designing.
  • Get inspiration by looking at logos of other businesses in your industry (including your competition).
  • Focus on the message and personality you’re trying to project.
  • Make it clean and functional so it works well on business cards, websites and a branded truck, for example. Remember: Scalability, ease of reproduction, memorability, and distinctiveness.
  • Your business name will affect the logo design.
  • Use the logo to illustrate the business’s key benefits.
  • Don’t use clipart. It’s not just a matter of looking cheap, it’s too easy to copy.
  • Avoid trends. Remember the dot com bubble where a random object was mixed with a colour? It dates.
  • Watch your colours. Try keep to three or less, and remember colour expresses mood.
  • Once you’re done, protect your logo by having it registered as a trademark.

Tracy-Lee Nicol is an experienced business writer and magazine editor. She was awarded a Masters degree with distinction from Rhodes university in 2010, and in the time since has honed her business acumen and writing skills profiling some of South Africa's most successful entrepreneurs, CEOs, franchisees and franchisors.Find her on Google+.

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1 Comment

1 Comment

  1. Johnnycongo

    Mar 10, 2016 at 09:06

    Very good, relevant and currently valid overview to encourage the hesitant entrepreneur! Thank you.

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Launch

Selling The Dream

When you’re starting a business, the secret to success is getting everyone — from customers to suppliers — buying into your vision.

Alan Knott-Craig

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I started a company in 2016 offering road building in residential areas for local municipalities. I realised that there is too much risk involved and I do not have the capital to purchase machinery. The overheads are also too high. I feel more comfortable supplying municipalities with commodities. I have been in sales and have good people skills and sales experience. However, I’m struggling to get a foot in the door. Manufacturers are reluctant to give me a credit advance. As a result, I had to let go of many opportunities. How do I overcome this obstacle? — Martin

I can only speak from my own experience selling to municipalities. I did it once, successfully. This is how I did it:

  1. I convinced the municipality to roll out public WiFi in low-income communities.
  2. The municipality awarded me a contract.
  3. With that contract in hand I shopped around to find a company that I could sub-contract. That company had to take a risk that the municipality would pay me, and I would in turn pay him. I had to take the risk that the sub-contractor wouldn’t deliver the goods.
  4. I found a sub-contractor.
  5. We deployed the WiFi.
  6. The municipality paid its bills.
  7. There was never a hint of corruption.

In retrospect I realise I was the beneficiary of a succession of benevolent miracles.

Miracle No. 1: Meeting a political leader that shared my vision and was competent.

Miracle No. 2: Getting a legitimate contract out of a municipality.

Miracle No. 3: Finding a sub-contractor I could trust, and that trusted me.

Miracle No. 4: Successfully working with the municipality to fulfil the contract.

Miracle No. 5: Getting paid by the municipality.

Miracle No. 6: Avoiding corruption.

If you believe in miracles, keep going. If you’re slightly more risk-averse (or less desperate) than I was, then rather don’t target municipalities to build your business.

You’ll note that I solved the supplier credit problem by finding a sub-contractor that trusted me. That’s the only way to do it. Not only do you have to sell the dream to the customer, you must sell the dream to the supplier. I recommend reading Shoe Dog, the story of Phil Knight and Nike.

Related: Alan Knott-Craig Answers You Questions From Business Idea To Start-up

I want to start a business, but I don’t know how to approach my local bank or investors, probably because I don’t have any experience in the business field. I am currently in a full-time job and holding on to the security of the monthly salary (which I know is wrong) but I have responsibilities. How do I break out? — Lorenzo

First, the security of a monthly salary is under-rated. Don’t be so quick to wish it away! Of course, a salary is a long-term dead-end. When you’re forced to retire at 65, you’re likely to be staring at 35 years of supporting yourself and your family relying on pension and savings alone. Assuming they don’t retrench you before age 65.

Be grateful for a salary, but be on the look-out for a way to make a living on your own terms.

That way you will learn skills that can be used after forced-retirement age, and even more important, you will be able to keep yourself busy rather than spending your old age pottering around the house in boredom and driving your significant other mad.

Forget about banks and investors. If you want to start a business, you must do it without ‘other people’s money’. Find a problem in your industry, solve that problem, get paid for solving the problem. Repeat.

Ideally find a like-minded colleague that you trust, pool your efforts and partner to find a way to make a living in your own business. Partnership massively de-risks entrepreneurship.

Related: Pay Your Dues Before Raising Capital


3-rules-for-being-an-entrepreneurAlan Knott-Craig’s latest book, 13 Rules for being an Entrepreneur is now available.

What it’s about

It’s easy to be an entrepreneur. It’s also easy to fail. What’s hard is being a successful entrepreneur. For an entrepreneur, there is only one important metric of success: Money. But life is not only about making money. It’s about being happy. This book is a collection of tips and wisdom that will help you make money without forgoing happiness.

Get it now

To download the free eBook or purchase a hard copy, go to www.13rules.co.za.  To browse Alan’s other books, visit bigalmanack.com/books/

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Launch

5 Lessons To Follow As You Take Your Product To Market

Don’t overly complicate things when launching your business. Instead, follow this advice from a successful entrepreneur so you’ll do things right.

Scott Duffy

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When launching a new business, product, or service, the most common mistake entrepreneurs make is trying to do too many things at once in the belief that going to market with “more” is better.

It isn’t. During your initial launch period, or when relaunching new products or services, “more” means additional risk. More also means unnecessary complexity, as well as additional time to market, so more capital will be required.

Below are some important things to remember as you prepare to take your product to market:

1. Don’t try to build Rome in a day

I have a good friend who raised $2 million in a very tough market to start a consumer internet business. Finding that much money to start a new business was amazing, and I congratulated him on a big win. He was ecstatic and told me he couldn’t wait to get to work on the site.

One year later, I ran into him again and asked how it was going. He sang the blues. He said he was doing terribly. In fact, he was on his way to his attorney’s office to shut the company down. They had launched a few months before but had already run out of money. I asked how that was possible, and he talked about his big vision, how his company aimed to provide everything their target customer could possibly want to buy in the category. Their goal was to be a one-stop shop. He and his team invested all their time and money building something big and comprehensive, confident their target customer wouldn’t want to go anywhere else once their website was up and running.

When the company got started, they were solving one problem for one target customer. It was a simple concept. But when the money came in, everyone started working on other “great ideas” and “shiny objects.” They kept building and building and building. They went from solving one problem for one very specific target customer to building a one-stop shop that did a lot of things for a lot of different people. Then they started running low on cash, so they decided to push the product out.

After the launch, they learned, much to their surprise, that about 95 percent of their users used just 5 percent of the site! And that 5 percent was the original product to solve the original problem.

So that means 95 percent of the time and money invested was essentially wasted. What can you learn from this?

Related: Hello Group’s Initial Product Failed The Night Before Launch. Today They Are An Industry Disruptor

2. Focus on one thing, the simplest thing

When kicking off a new product or service, put all your energy and focus into that product or service. Focus on one thing at a time. It shouldn’t be the hardest thing; it should be the simplest, what we’ll call the minimum viable product (MVP). The MVP provides the opportunity to learn the most about your customers, with the least amount of time, money and effort.

The MVP puts you in a position to go to market quickly, collect valuable feedback and not waste time building things customers don’t want. This strategy significantly mitigates your risk and helps avoid the trap my friend fell into. Remember, Amazon started just as an online bookseller.

3. Follow the 85-percent rule: Good is good enough

good-is-good-enough

Striving for perfection is the enemy of any product launch. As a rule of thumb, when the new business or product is 85 percent of the way there, you’re ready to go. In my experience, the level of effort required to reach 100 percent isn’t worth the additional time and expense at this stage. You’d be much better off getting something into the market and beginning to test.

4. Be great at collecting, and learning from, feedback

Once you’ve launched, listen to and learn from your users. Develop feedback loops to learn everything you possibly can.

  • What do users like and dislike about the product or service?
  • What features would they like to see added to enhance their experience?
  • Which features don’t work or generate little interest?

Do whatever you have to do to engage with your users. That may include offering incentives to get feedback on surveys or in focus groups, reaching out on social media, or generating outbound calls to learn more.

The hardest part of this process for many entrepreneurs is to be completely receptive to what customers tell you. Given your passion and all the time you’ve spent on the project, you may not want to hear negative feedback. You may be inclined to think the customer just doesn’t get it. But feedback is the most valuable tool you have as an entrepreneur. So listen, consider, and use what you learn to iterate, improve, or even throw out some of what you have built or planned.

Related: 3 Start-up Funding Tips To Help Launch Your Company

5. Avoid the shiny ball syndrome

As you start developing your MVP, you must fight “feature creep” at every step. You, your team, partners, and everyone else you share your vision with will have ideas about what should be added. While many of them will sound good at the time, they are instead shiny objects that distract you.

Your job is to stay focused on one thing, get it to market and then deliver the next thing. By focusing on one thing at a time, you can get to market quickly, learn a great deal about your product or service from actual customers and make changes based on their feedback And if your launch doesn’t fly, you have significantly mitigated your risk.

This article was originally posted here on Entrepreneur.com.

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Launch

How To Launch An Online Coaching Business

Cut through the noise and create a viral product.

Bedros Keuilian

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Work from home? Control your own schedule? Impact people across the world with your product or service?

Internet marketing is on the rise for a reason. It gives you the ability to scale your business to a global level without forfeiting your personal freedom. Still, there’s one question that still prevents entrepreneurs from entering the online space: “Is it really possible to make a living off the internet?”

Not only is it possible, it’s lucrative when done correctly. We live in the Golden Age of internet marketing. Thanks to social media, everyone can get in front of a camera and pitch their idea to the masses. Good enough, right?

Not quite. These days a big idea will only get you started; it’s what you do to bundle and package that idea that matters. Here are the three steps you need to take to launch a profitable online business.

Flesh out your idea

Of course, before you create your product, you need an idea. Your idea must solve a specific problem that a specific group of people face. Make sure you establish that before you move forward.

Now, before you begin creating your product, you need to write your sales copy. Your sales copy (or sales video, if that’s what you prefer) should be enticing enough to take prospects from “I’m interested in this” to “I need to buy this now.”

Related: Paddy Upton: People Centred Coaching

But, why write your sales copy before creating your product? Too many entrepreneurs write copy that promises a lot but delivers next to nothing. When you write your copy before creating your product, you build the blueprint to create a product that satisfies your customers’ needs –without overpromising.

Your sales copy should address the prospect’s problem, explain how your product is the solution to that problem, and include a list of bullet points that summarise the benefits of your product. Make sure you nail the first 500 words – easily the most read section of your sales copy. Finally, always create a sense of urgency or people at home won’t be motivated to buy your product.

People always ask me, “Well, what if I’m not a good writer?” That’s OK. Just say your pitch out loud, record it and send it to an online transcribing service. For a relatively inexpensive price, you’ll get your sales copy written out for you. Just review it, copy it and paste it to your website and boom – there’s your sales copy!

Build the “know, love and trust” factor

Most people believe you need to sell prospects first, then deliver results. But, what if you flip it? It’s much easier to sell someone once they know, love and trust you as an authority in your space, rather than selling them on your product before they even know if you can deliver the results you’re promising.

That’s why the most successful internet marketers – including myself – give away boatloads of free content via blogs and videos. Granted, the stuff we give away for free could easily be packaged together into a high-priced course, but that would be short-sighted. You don’t want prospects to buy from you once and move on – you want them to become long-term paying clients.

See, you deliver free quality content to your prospects, then they take it and implement it into their businesses. They start to see results in advance, which leads them to trust you more and more. Soon, they begin to crave more knowledge from you, and their willingness to pay for your products and services increases.

Eventually those prospects become your most loyal clients. They buy your front-end products, your upsells and your flagship products – all of which I’ll get to in just a second. But, before you get that far, make sure your prospects know, love and trust you before you worry about selling them anything.

Create your front-end product and upsells

Once your copy is written and you’re building the know, love and trust factor, your next move is to create a front-end product – a product that’s easy to sell. This could be an ebook, a membership site or a course that comes with follow-along videos.

Now, you might be tempted to charge a high price for that product. Here’s the thing: Most of the money is made on the back end. I’ll talk more about this in a second, but for now just remember that the front-end product is not the final product you’re really trying to sell them. I – along with many of my fellow internet marketers – don’t mind breaking even or losing money on front-end products because I know I’ll more than make my money back with my flagship product.

Instead, your aim should be to use that front-end product to upsell them instead. So, after they purchase your front-end product, offer them three different upsells. An upsell is a higher-priced product or service you offer a customer after they’ve bought something from you. These upsells should be done-for-you, and they should enhance the front-end product by making it easier to understand or more efficient at getting results.

Why are upsells so important? Besides adding value to your front-end product, you’ll be able to recruit more affiliates to promote your business. An affiliate promotes your product to their own audience for a commission fee. If you make money through upsells, affiliates will choose to work with your business over your competitors because you can pay them higher commissions. The payoff? You get more traffic going to your webpage and ultimately more bottom line revenue.

Related: 6 Questions You Should Be Asking When Coaching

Move them to your flagship product

That’s how you set up the front end of your online business. But, what about the back end? Remember I said that most of your money will be made on the back end and not the front end?

That’s why you need a flagship product to pitch your clients once they’re done with your front-end product. But, what in the world does a flagship product look like?

It could be high-end coaching sessions. It could be a spot in your exclusive mastermind group. It could even be a suite of software that teaches them everything they need to know about their industry. The front-end product is a way to get your clients through the door; your back-end product is the money-maker product, the one they’re more likely to buy once they’ve already purchased something from you.

I’ll give you an example. People will often find my products online. Usually when they finish using those products, they’re still hungry for more knowledge and advice. At this point, they’re considered qualified leads for my mastermind program, so we make sure they know about that programme and how to become a member of it.

That leaves you with one problem: How do you send marketing emails to every single person that buys your front-end product/upsells? It’s basically impossible, unless you’re in front of your computer screen 24/7 (which I’m sure you’re not). Fear not, because it’s actually easy to do when you use an auto-responder system to send out all those emails on your behalf.

It’s simple: When your clients purchase your front-end product, the system automatically sends them emails from you. That way, you can build a sequence where you give away even more of your best free content before sending them an offer for your flagship product. By the time they get to your flagship product, they’ll be so confident in your expertise and results that they happily pay the higher price for your higher level of service.

That’s the simple science behind converting your prospects into clients, and your clients into fiercely loyal clients. It’s how you sell your highest-priced online programmes without running into any of the typical sales objections. Follow these three steps and start building your own online business empire today.

This article was originally posted here on Entrepreneur.com.

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