How to Scale Your Income

Last week was incredible. I had my first thousand dollar day in my newest business before it was even launched. I’m incredibly thankful and blown away by the transformation, and just wanted to share the key changes that got me here.

Stop Thinking Small

I never really understood what “thinking big” really meant until this week. Whenever you take on a task, you might as well approach it as a “big task”. Ask yourself how solving a problem for one client can solve the same problem for others.

For example, if you’ve got a freelance job working on a Doctor’s marketing and online infrastructure, build it with the idea of selling a franchise to the infrastructure later. It really takes minimal amounts of effort to be able to resell the bare bones software once the design has been put in place.

Hack Capital

Software as service is an incredible opportunity to hack capital. Imagine, for example, if Adobe Creative Suite Master Collection were billed at $40 per month, instead of $2,599 up front.

How many more people do you think would be willing to pay for Creative Suite?

This is the biggest hack we’ve got. Make it easy for companies to have access to thousand dollar software, and begin enjoying thousand dollar benefits for a fraction of the cost.

Nobody wants to blow that capital right away, especially not on your unproven product.

Solve Difficult Problems

My startup is targeted at small businesses. They’ve got the capital necessary to invest, and yet are lost when it comes to online marketing. I’ve chosen to solve that problem for them. I might not have the ultimate solution to local marketing for them, but I do have a proven system.

For them, this is a difficult problem. How do you manage marketing online, and build a presence, and cut through the bullshit? The Yellow Pages companies are scrambling to fill this market, and they’re not doing a very good job at it.

Put Yourself Out There

Writing and interacting with a diverse group are key essentials to building businesses. You must apply knowledge that is “stuck” in one group to another. And vice versa. I’ve found writing and putting myself out there helps broaden my horizons.

Always Give First

I just released an Open Source Personal Privacy distribution in my busiest week ever. And it won’t affect my bottom line. But I believe in giving first, and being a servant first.

This has been essential part of scaling my income to my first thousand dollar day. Pursuing projects which have the opportunity to provide a lot of value for many people. And if they can help them make more money, to charge for it.

However, giving must always come first.

Think Like a Capitalist First, a Business Owner Second

Rule No.1: Never lose money. Rule No.2: Never forget rule No.1.

– Warren Buffet

What matters most in your business?

That your product delivers more results than it cost.

Your market must get much more out of your product than what they’ve paid for. Warren Buffet and his fellow value investors call this spread between a purchase price and intrinsic value delivered a “margin of safety”.

For them, an investment is worthwhile with a margin of safety above 90%.

Consider 37signals, and Basecamp. For the price of $24 a month, business owners are getting access to tools to impress and land more clients. This means purchasing Basecamp pays for itself quickly, and becomes an asset in the hands of its users.

But Basecamp improves its “margin of safety” for potential clients by letting them try their product free. If the end user ends up getting more value than $24 out of their month’s usage, they continue paying.

Look at any successful company and you’ll see the same few formulas for business success. Capitalists invest an initial sum of money in product creation, and then minimize the costs for delivering the value to as many people as possible.

Example: The iPhone has millions of dollars of research and development built into it, and we all get a piece of that pie for the steal of $200.

Smart Investing Means Searching for Informational Imbalances

For Warren Buffet, his initial investment criteria was a “margin of safety” of 66%. This type of investing meant he’d look for companies trading at a market value of a third of their actual liquidation price.

To find such steals, he leveraged informational analysis harder than anyone else. He looked at the markets, searching for pieces of information other people has glossed over. Such steals are rare, and so most of his investment time was spent searching.

Later, he came to change his mind, as he acquired vast resources of capital. Instead, his motto became:

It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.

In other words, as you get bigger, you can focus on value delivered for investments over haggling for price.

Maximize Investments in Your Business

This is where your informational leverage comes into play. In what areas, realistically, are you weakest? A true investment means getting big results at a fraction of the price.

Throwing money at a PPC campaign sending visitors to your purchase page is not an investment.

Creating goodwill within a community (your target market) is.

We’re past the point now where we can call people prospects. Things are shifting quickly, and people’s BS meters have become very attuned to marketer’s tricks.

Investing in solving your customer’s problems first and build beneficial relationships daily. By investing in positive results for your market, you’re minimizing capital risk, and maximizing potential for geometric growth. A PPC campaign only scales as much as your budget and expenses allow. An active campaign to deliver results freely has the potential for a geometric growth curve (due to social media, etc.) like we’d love to see instead.

As a bonus, we don’t have to act like our customers are morons. No more psychological manipulation or cheesy sales letters.

Beneficial Relationships are what make businesses work.

Instead of focusing on psychological tricks to get people to buy, focus on serving your prospect’s every need. This is the model that will build success.

Invest in delivering more value for cheaper to your customers.