Bad Entrepreneur

I can’t call myself a wealthy person. Truth be told, after the cock up with the business last year where we lost almost everything we were a little strapped all around. 

But gradually we’ve scrapped our way back on to our feet and I’ve just done a quick recon. At the time that we started to go under we had 1 real source of income and it sure as hell wasn’t covering our costs.

It was one of those things that frustrated me to no end – the taps had simply dried up and there was no way to actually spread our risk. 

I’ve just done a recon now over the period 1 August – 6 September 2008 income sources. We now have 58 different sources of passive income.  Admittedly many of them produce between R10 and R100 per month so they are not earth shatteringly successful yet. 

But consider for a moment that those 58 sources of income allow me to (by the 6^th of October 2008) buy or add another 6 sources of income (or expand existing investments) and the power of compounding investments becomes obvious. In theory – that means that by the 6^th of January 2009, I will have approximately 84 different sources of passive income and this figure can constantly be reinforced because the money being generated passively by these different types of income streams can then be used to purchase other investments streams or add to the existing ones (i.e. increase the amount that I will be drawing out of them) 

We always hear about the power of compound interest for bank accounts or compounded investments. Here the theory is in action - one stream of income growing the next. If you do the math – that means that by this time next year I will have 150 sources of passive income, which will subsequently be buying other investments.

Possibly my wife and I will then be able to expand into property investments just to spread the nest egg, simply because we now have the cash flow to get us started.  Again – the risk is spread and if these investments come off, the next set of investments can be used to buy other options. I’ve said it before, but if you are planning to get comfortable working from your salary month-to-month, then you are never going to get out of the rat race.

Instead, try and start building up supplemental income and investment streams. The returns don’t have to be enormous to start the ball rolling.

Look around at the number of friends and family you know that may be facing or have been retrenched recently? What is the psychological and financial impact of losing their one and only source of income?  Can you afford to be in that position where you literally having NOTHING coming in?

 Give yourself a chance – stick something away and watch it compound. The power of it will surprise you.

Internet entrepreneurs / GIBS Forum This evening I attended an interesting presentation at the GIBS forum in Johannesburg aimed at aspirant internet entrepreneurs. Having been in the game for a bit, I think I have something to add.

Firstly a big thank you to Michael Goldman and the GIBS team for putting it together. It was top notch.

I felt the sessions were a little short and difficult to extract value out of (speakers were limited to 10 minutes) but I think the networking after the presentations was where a lot of ideas got bounced around.

What I found interesting about the presentation was the makeup of the audience. When I arrived there, I was expecting a couple of semi intelligent young kids in their late teens, early twenties with geeky laptops and IT speak.

The reality was very different. Average age at the presentation I guess was easily above 35 and mix of people was everyone from chartered accountants and listed company directors, right down to a techie who works in an explosives factory (As an aside - that HAS to be a cool job!)

From an academic perspective, the majority of the people there were pretty bright and held MBA’s from places like GIBS.

What I found interesting though, was the number of employed professionals working in banks, factories or other businesses who attended with a vague idea of establishing an “internet business” that would just chug along quietly in the background making them some money until they were ready to exit from their existing jobs.

My experience
What I found intriguing was the number of people who assumed that setting up an “internet business” (not totally sure what that is), involved a few bucks start up, a couple of hours sideline work and you were A for Away clocking up some passive income.

The reality is far different and over the last 24 months we’ve learnt that the hard way.

Since Rival was launched 2 years ago, we have literally pissed away money on trying to establish a brand. Finally we’re starting to break even and perhaps make a few bucks, but it took a hell of a lot of money and mistakes just to get to where we are now.

I have no illusions about the shortcomings of the sites we publish and the technology we use - it’s old school and it’s dated and has long been in need of an overhaul.

But for all the shortcomings we have, there are certain “assets” that we have developed over the last few years:

- We have 2 niche market publications that receive industry specific traffic
- We have built the traffic over the last two years
- Advertisers actually part with money because they know that we reach who they want to reach
- We have brands

Those kind of assets are not something that happens overnight just because we have a web presence.

One of the speakers hit the nail on the head last night when they said “You cannot assume that if you build it, they will come”…

It is a topic that I have touched on a couple of times - “internet businesses” may require (comparatively) low barriers to entry, but that doesn’t make their business model cheap or easy.

Business models for internet based businesses, communities or publications are an intriguing topic and its one of those aspects that I don’t believe people appreciate how difficult it is to formulate.

It is not simply a case of establishing a platform and then hoping that visitors come piling into your site.

It is a mission to attract new visitors every single day and the investment is not only money but time as well. An internet business is not something that will just chug along passively making you some money, without your pouring in a lot of blood, sweat and tears.

Of course you can make a few bucks here and there off an AdSense or Affiliate marketing based site. But at the end of the day, if you planning to make something sustainable, you need to fill a spot and execute it like a real bricks and mortar business.

Thanks again to GIBS. You guys hit a great niche with the topic last night and the fact that there was standing room only in your auditorium shows how appropriate and interesting your topic was.

If you want to mingle with some bright people, do yourself a favour and hop over to the GIBS site and check what other events they have coming up in the Forum. There are some great speakers and they provide good value for money.

 About the author:

The author is managing editor of ManufacturingHub.co.za and RemSpecED

I am always looking for ways for SME’s to market themselves and I came across this press release that might be of interest:

List your business on line with Browzit

Whether you have a website and want to increase traffic, or only an e-mail address and want an entry-level presence on the web, Browzit is for you. Over 3 000 businesses have already listed online with Browzit, a free internet-based business listing service and easy-to-use search engine.

A Browzit listing not only makes businesses with an existing internet presence more searchable, but also enables web users to communicate directly with businesses that do not have their own dedicated website via an internet link to their e-mail addresses.

Gerrit Giliomee of Azapi IT Services says, “Browzit has proven popular to a broad base of businesses, but is especially attractive to those businesses that do not have their own web presence. Businesses need only an e-mail address to list on Browzit.”

Businesses listed on Browzit also benefit from search engine optimisation as the Browzit pages feature very prominently on other search engines such as Google. Even businesses without their own website will reflect on search engines through their listing on Browzit’s web pages.

Browzit, which can also be accessed via mobile phone, was launched last year and has shown sharp growth in both listings and user statistics, attracting over 150 000 hits last month.

Says Giliomee: “A Browzit listing may benefit businesses of all sizes, but is particularly advantageous for small enterprises as it provides for free a basic internet presence, greater online visibility and an additional channel for new business.”

To list your business, visit www.browzit.co.za.

 ENDS

Check them out! There might be something there for you.

Join leading HR and industrial relations consultant Ivan Israelstam for this upcoming labour seminar:

Target audience:      Small Business owners, labour lawyers and HR management teams
Presenter:               Ivan Israelstam
When:                    26 September 2008
Where:                   Greenside, Gauteng
Time:                     09:00 – 16:00
Cost:                     R975 excl. VAT and includes lunch, tea and coffee

Topics to be covered include:

·         Discipline and dismissal – the hidden dangers
·         Changes in retrenchment law
·         Contract workers
·         Lie detector testing
·         Dealing with alcohol abuse at the workplace
·         When can employers deduct money owing to them from employee salaries?
·         Vicarious liability – when you are liable for your employee’s actions
·         Pre-recruitment checks
·         Default judgements
·         Unfair discrimination
·         Dismissal of strikers
·         Moving the takeover law goalposts
·         How to maximize your right to representation at the CCMA
·         Dealing comprehensively with the changes and dangers in labour law

<strong>About the presenter:</strong>
Ivan Israelstam is widely recognised as one of South Africa’s leading HR and Industrial relations consultants. His experience and insight in dealing with a variety of labour related issues have put him in demand as a leading presenter of seminars and as a consultant for HR teams for businesses. He has been widely published in both trade and mainstream media where he has written insightful industry comment.

For further information please contact Marc Ashton on 082-561-1585 or e-mail sales@rival.co.za

I was never very good at math so when somebody explained the business concept of volume = volume to me I was intrigued…

OK i’m probably not going to explain the concept particularly well, but I am damn well going to try.

 I was introduced to this concept when I was chatting to a corporate analyst who happened to cover some of the worlds biggest and best mining companies. These included BHP Billiton.

According to this analyst, one of the things that BHP Billiton does extremely well, is that it does not believe in half measures. When the company assesses an investment, they’re not interested in walking away with the bear minimum - they work out was is a REALISTIC return and then they the kitchen sink at these assets until they produce the desired result.

A lot of my previous posts have often described ’eeking out’ survival for SME’s during their start up phase. I think that there are 2 problems that SME’s face that could perhaps be holding us back:

1. We have unrealistic expectations of what we want to achieve. As a result we dream big and don’t have the tactical acumen to actually carry out some of the things we scheme about doing - OVER DREAMING - UNDER DELIVERING

2. The other end of the spectrum is just trying to scrape together enough to survive that we never push our strengths and really coin it.

 I’ve been in the corporate type environment and I just can’t believe how much money is out there - DOING THINGS THAT  I WAS DOING and that I was battling to make R2000 a month other people are selling for R20000 upfront! Bloody frustrating.

 Volume = Volume …. you can’t throw all your efforts into selling 10 widgets with the hope of making a few bucks worth of profit. Rather aim at 1000 widgets at a fat profit and convince people that 999 other people are going to buy it.

Companies feed on this enthusiasm and are likely to respond in a positive light to such initiatives.

And this my friends is where the entrepreneurs come into their own!

The Maxum Incubator, together with University of Pretoria and IdeaBank are organising the first pre-incubation offering for young online entrepreneurs.

Read full details on Ismail’s post here.

Personal opinion - pay per lead marketing - is one of the most underrated forms of marketing for SME’s to look at.

In a nutshell, Pay Per Lead marketing basically involves you advertising your services via websites at no charge, when a client is interested in your banner ad, they will click through to a page on YOUR website where they will say “Yes I am interested in your product, please contact me to discuss further”.

Read the complete article here.

I’m pretty lucky in that I get to attend the majority of the JSE listed company results presentations and ultimately ‘hob nob’ with some of South Africa’s top business people.

Its the middle of reporting season and the last 2 weeks in particular have been crazy.

Seeing all of these top business brains coming in and out of their presentations, one thing has stood out for me - ALL OF THESE EXECS ARE WEARING PURPLE TIES!

I kid you not, one of the insurers reported last week and every single one of them strode into the room with a purple tie on.

It used to be yellow ties with blue shirts, now its white shirts with purple ties…. intriguing!

Conclusion - if you want to make it in the SA business scene then maybe you need to commit a few bucks to some purple ties in your wardrobe!

Exposure makes the SME’s world go round and yet they often never get beyond bashing up a quick website or blog, mass e-mailing a couple thousand people and maybe when they’re feeling rich they take out an advert somewhere…

Sound familiar?

I know it does to me, because I’ve had it since I started running SME’s….

HOWEVER having played in the media game for a bit I’ve discovered a few things that can get you the exposure you probably don’t deserve… and no it doesn’t involve you hiring some high profile PR consultant on a retainer…

Don’t get me wrong, PR and Communications agencies fufill a vital service, but much of what they do a small business owner could replicate.

Rule 1: If you’re handling your own PR - stop bashing off every conceivable news release you can think of to every website and magazine in any space. Trust me - journo’s and editors get tired of filtering out the crap and they will look for the names they know add value.

 Tailor your story or your angle along a specific line and then pitch it to the journalist or editor. Don’t machine gun them with news of your latest widget - tell them an angle and then work with them to identify the value to the reader.

and DON’T fluff up your release about how your IT widget is going to save SMEs hundreds of Rands every month because its so efficient. I’ll be honest - I’ve seen so many of these they’re a bore!

Introduce yourself!

It sounds so obvious but there are some enormously bright people running SME’s who don’t introduce themselves or make themselves available for media comment on industry related matters.

If there is something topical being discussed and you can add value - bash off a quick release or thought to the journalist covering it and you might find yourself being picked up as an industry expert and be refered to for regular comment.

ADD VALUE AND MAKE THE JOURNO’S LIFE EASIER

It is literally as simple as that - once the relationships are established you will find your media exposure picking up rapidly…

You will be surprised to see how quickly you can establish a reputation….

I know nothing about running a bar so I’m going to use this blog post as a way for guys who DO know the sector to maybe give some tips and tricks to other entrepreneurs and see if we can use it as a bit of a resource.

I’ve been asked to take over a sports club bar for a short term basis (really just to manage it until a fulltime person can come on board).

The bar is well situated and it has the capacity to do decent turnover. Unfortunately it is very much aimed at an old boys / ‘club’ environment and is not a social meeting place.

However if it could generate some decent turnover then the club would benefit and attract new members etc.

Are there any experienced hands out there with knowledge of the pub / bar environment who would be prepared to give some advice on how to get turnover up / using drinks specials etc?

Remember we’re working on a relatively tight budget so don’t have bucks to blow initially.

Maybe even just consumers who would have some suggestions for what would make a pub a success?