Evan Carmichael Radio Show - Episode #9

Hello and welcome to the Evan Carmichael Show. I believe in entrepreneurs and I want to see you achieve success with your company. Every week I deal with thousands of entrepreneurs who are frustrated, who are struggling, who think they have a great product or service, but you're not getting the results that you want. I've been there. I was a guy who was making $300 a month, could barely survive on my company. Almost quit multiple times and I finally cracked the code. I made it through. This radio show is all about helping you guys do the same. I'm going to pull you with me and we're going to achieve some success together. I'm excited about the program today. On the agenda: should I start small or think big? How to get in the state of flow? Don't compete on price. What to do when you're frustrated? I get this question a lot. Should I start small or think big? And this is such an important learning tool for you guys today. If you are starting a business, if you're trying to think about, should I just start small? Should I bootstrap this up or should I go for my big vision? I got a great question that came in from Peter who's on my YouTube channel who is thinking about starting up a gym and he's not sure if he should just rent from other gyms and test his concept or if he just go big and go after the big picture, open up his own gym, take out a huge loan and go for it. Here's the thing. This is what's really important. I want you to think big but start small. The reason why it's so important is because no matter how great a business plan you have at the start, you're going to make mistakes. You're going to have incorrect assumptions. If you look at any successful company, you look at the first product or service they came up with, that's never the one that they hit it big with. They always have to adapt to the market. They always have to make changes. So if my friend Peter here goes out, takes out a huge loan, cashes in his retirement savings, goes all in to open up this huge gym, he's gonna make huge mistakes. And it's probably not going to work out. It could. There's a chance it might work out, but it's such a tiny chance where it's much better to start small. Make your mistakes on a small scale. Find something that works and then invest in making that better. I'm an investor in a, a salsa dancing company here in Toronto and we'll help 5,000-6,000 students a year. Learn how to dance salsa. The company was started by a woman who had no business experience. She had never done anything as an entrepreneur before. It had always been corporate work. She worked at the Marriott in HR. When she started the company, she started just renting out a gym. The cost was $40 an hour. She was the only instructor. She had no overhead, no cost except for her studio at $40 an hour. Fast forward to today, a few years later, she's got her own studio at a popular mall costing $100,000 a year to maintain plus salaries of instructors plus admin costs plus marketing costs, all these additional costs. But she's built it up because it worked at a small scale. She tweaked her model and everything has changed from when she first started. What she teaches has changed. How she taught it has changed. The class structure has changed. Who she brings on board has changed. She's made a lot of mistakes and learned from them along the way. It's helped her quickly build up a highly successful enterprise. That's why I wanted to be a part of it. If she had gone out and said, "You know what? I'm going to take out a loan. I'm going to go and take the $100,000." It's $100,000 a year for 5 years minimum if you're looking at a corporate commercial real estate. I'm going to go and take out this loan. I'm going to cash in my retirement savings. It wouldn't have worked out. She would have made too many mistakes all at once, and she would have failed, and she'd be back at her Marriott job and potentially in debt for the rest of her life. So it's important to think big. I want you to think big. I want you to have a big vision for yourself. That's what keeps you going every day. But start small. Test. See what works and continue to apply those changes to your business to achieve success. I want to get to the calls. I have Megan on the line. Megan, where are you from and how can I help?

Hi, Evan.

Yes.

Hi, how are you today?

Good. What's going on?

Evan, I have a question. It's not really about a retail or physical business, but my question is in terms of how much money you put into an endeavor. This particular business or personal endeavor I'm talking about is more of the artistic creative life.

Okay.

And I know, like I said, you know, I keep putting money into it, but I get very little return monetarily from it. So my question is, how long should one continue in this particular, you know, vein until they start making money. Meaning if I put in $10,000, I'm lucky to see $1,500 back in actual earnings.

Why are you doing this? What is the business? Why do you care so much about it?

Well, I really like it. I find it's something that makes me happy. I always wanted to do it. It's very self-actualizing.

What is the business?

Well, it's an art business.

But you're making art?

I'm making it, but at the same time I'm making it, I'm constantly spending money and taking more art classes. I spend money to go into art shows, and what I get for each painting is very, very little. Versus what I'm putting into it. So I want to know how many years should I give myself or should anybody give themselves? Like 1 year, 2 years, 3 years?

Here's the thing. It's a struggle for every entrepreneur who is starting up. Nobody looks back and says, "Oh, that was so easy starting a business." You're in the struggle mode right now.

Right.

Right.

What gets you through is the love of what you're doing. You do it to do it. You're not doing it because you think you're going to try to make a lot of money off of it. That can happen, but you're doing it to do it. If you look at any successful famous entrepreneur and how they got started, they had failure after failure after failure. People told them, "Go back and get a job. This isn't for you. It's never going to work out." One of my favorite examples is kind of close to what you're doing is George Lucas. You know George Lucas?

Yes, he's a big producer.

Yeah, created Star Wars, Indiana Jones. He went to film school and people thought, "You're crazy. Why are you going to go to film school? You're never going to get a job in the film industry. It's not going to work out." He spent 6 years of failure, just failure. He produced mediocre work. Nobody wanted to buy what he was selling. He thought constantly about going back and getting a job. But he only stuck with it because he loved what he was doing. And eventually it turned out to be a huge success with Star Wars and Indiana Jones and all the other films that he's created. So the question really is, how much do you love your art? And is this a part of you that you need to keep going? You're doing this for you.

So first of all, it's a great day to be on the air because it's—

So what do you think?

Oh well, I'll have to give it a little more time, another 6 to 12 months. But yeah, funding is a big sort of, you call it problem.

Here's the difference, okay? If you really love this thing, if you love this so much with all your heart, then you would find other ways even to make money just to do this because you loved it so much.

Running for mayor? Okay, so you're saying maybe more shows, etc., or do another type of job?

I'm saying there's no tight answer here. There's no, "Hey, in 6 months if it doesn't work you've got to quit." It's listening to your heart and understanding why you're doing this.

Basically.

And maybe what might help you is to look at famous entrepreneurs, someone you respect and look up to, and look at their early struggles and see if there's a lesson you can learn from their success. I'm reminded of Oprah Winfrey too, and when she started, she said that she had to do this, she had to keep doing this, even if she didn't see any success, she had to keep going because she loved it. And she would find other ways to make money to keep doing this because she loved it so much. So the question for you is, do you love your art that much? Is this just a hobby, a side thing, something to experiment with, or is this It's part of who you are.

I really love it and it's actually a second career for me, which is why I decided to do it because I did have some savings from my other job.

So if you love it that much—

When I was working, yeah, I do love it that much.

You have to find a way to keep going if you love it. If this is part of who you are, you're making a difference. You have to find a way to keep going. Even if that means taking on a part-time job in something totally different. Just to keep going. Okay?

I will.

I will. Thank you very much, Evan. Thank you.

Good luck.

Thank you so much.

Everybody has the same problem. I know it's tough. It's really tough starting a business, especially if you're doing something different. But if you love it, you owe it to yourself, your family, your community to keep going. Welcome back to the Evan Carmichael Show. I believe in entrepreneurs and I want I want to see you have massive success with your company, and part of that is getting into the state of flow. I got a great question from one of my YouTube viewers, Donald, who wrote in to say, "How do I get in the state of flow?" That's when you're in the zone. That's when you come up with great ideas. That's when you are insanely productive. When you are coming to the computer at 9 in the morning and you look up and it's 5 at night and you don't even know what happened during the day. It's so important that when you are in flow, to maintain it. How to get there is hard. I can't tell you how to get there, but I can tell you how not to get there. You're not going to get in the flow when you're stressed out, when you're overworked, when you're not sleeping well, not eating well, not taking care of yourself, when you're just putting out fires constantly with your business. You have to allow for freedom and flexibility to be built in. Think about when you get your best ideas. It's probably when you're on vacation. When you're in the shower, when you're chilling out, when you're in the park, when you're walking. That's when you get your best ideas. It's never sitting people down at a boardroom table and saying, "Be creative right now." It doesn't work. And so when flow comes, you have to run with it because it's so important for your business. In my company, we'll push off any other deadlines, priorities when we're in this state of flow. I've got a great new guy on my team named Jason who is working on some projects with me, helping me with my rebrand. The guy has some mad skills. We have laid out a list of priorities. Here is what we need to work on. But what is more important than anything is flow. Because if he is feeling an idea, then Jason, go run with that. Do that. Even if it is not on the list. Because what he is going to make is going to be magical. It is going to be way better than forcing somebody to work on a project they're not interested in. Sometimes you feel certain projects, sometimes you don't. You have to go with that flow. It's so important because the work that's going to come out when you are in flow will be mind-blowing for your business. I want to get to the calls. I have Sasha on the line. Sasha, where are you from and how can I help?

Hello, I'm from Tampa, Florida.

Welcome to the program. What's going on?

Well, my question will be, how do you investigate what's making people not come back to your store?

How do you— what— how do you get people not to come back to your store?

Yes, sir.

You don't want people coming to your store?

No, like, I have a small business and I'm trying to— like, I need help.

I need help.

What is— what is your business?

My business is a jewelry store.

Okay.

Like, for 2 years I had— I had I had the jewelry store for 2 years and nobody is coming back to my jewelry store.

So they come in once but they don't come back?

Yes, sir.

Why is that, do you think? I really don't know.

I just think they better off somewhere else. I just—

Are they buying from you or they just walk in and they don't come back?

They walk in, they buy like 2 items, and then they'll say they coming back, but they won't come back.

Hmm.

I need some advice.

What's different about your store? What's different?

There's nothing different. It's the same.

Well, that's why people aren't coming back. You have to have something different. There are tons of jewelry stores out there.

So what can I have that's different?

What can you bring that your customers are interested in that most jewelers don't provide? So think about it. Somebody is coming to buy jewelry. Right, they're buying a diamond earring or a ring or whatever it is, right? Yes, sir. You're helping them with the actual product, but what other frustrations do they have that you can help them with?

Well, I really don't know, sir.

So think about even education. I remember when I had to go buy a diamond ring. It's confusing. The first time you go, you have no idea what you're doing.

Yes, because they don't know what to get.

I have no idea, especially guys. We don't know what to buy. You can help.

Well, I can suggest them to many other products. That's basically what all I can do. But if they're not interested in the item, then I don't know what to force them.

A lot of people are looking for simple solutions. Okay, you know, guys might come in looking for a diamond ring, for an engagement ring, and they're quickly overwhelmed with all these different options— color, cut, clarity, all that stuff, right? They have no idea what they're getting into, so they want somebody to be friendly and educate them and teach them what to do and give them a simple option.

Simple option, that's for guys.

Now what about for females?

Some females Females, they just come on in and they just choose it.

Well, think about your own experience. You're female, right? What's your buying experience? What do you look for when you go to a store? Not when you're buying jewelry, but anything. You're buying clothes. You're buying shoes. Look for a company who you respect. What's a fashion company that you respect or a retailer that you go to and you love that company?

Burlington, Cold Factory.

Okay. Cold Factory. What do they do that's great that other coat stores don't do?

Well, they be on sale. They have sales, but what else? I like the material. I like the fabric. I like the design and everything.

How about the experience? How about the salespeople?

Oh yeah, customer service. Their customer service are really great.

This is a great model for you. Because you're taking a company, a coat store, and there's tons of coat stores.

Yes, it is.

Right? There's tons. There's just as many coat stores as jewelry stores. So they've managed to stand out for you in some way. Right? They have unique products. They have great customer service. They make you want to go back. So model that experience and say, "I'm going to be the Coat Factory of the jewelry world." and have unique products and provide great service and make people want to come back.

Thank you.

What can you do? What's one thing you could do from the Cote Factory that you can apply to your business right now?

One thing I can do is first I got to model my products. I have to model my products so the people can come back and want to keep buying from me.

Unique products. Just like the Coat Factory has unique products, you're going to have to come up with some unique products.

Unique products make you stand out like a choccy.

Good. How about the service? What's one thing from the service you love? Their salespeople, they're very customer-centric. What's one thing you could take from their salespeople that you can apply to your business now?

Well, I can apply good customer service. I can talk to people, kind of get to know the people. People a little bit, but not to know all of them, but get to know them, so have a great conversation with them so they probably want to come back and visit more.

That's great. The next time you go to the Coach Factory, really examine how their salespeople treat you. Think about what's the first thing they say? How do they approach you? Nobody likes being approached by salespeople, but everybody likes to be helped. How do they approach you and what questions do they ask?

When they approach me—

Yeah?

When they approach me, they ask me, "How can I help you? Do you find anything that you're interested in? Are you looking for something like very specific?" This is all great and keep modeling. Keep modeling the product.

This is your assignment for the next week is to go to Code Factory, model their success, apply it here. Does that make sense?

Yes, sir.

Alright, good luck. Let me know how it goes. I'm on every 2 weeks.

Alright, thank you.

Welcome back to the Evan Carmichael Show. I believe in entrepreneurs and I'm about to put more money in your pocket. Don't compete on price. As entrepreneurs, we tend to undervalue the service that we're providing and we undercut our prices and we think it's the only way to get new business is to deep discount our prices to get customers to come in the door. The problem here is you're not going to get ideal customers, right? You don't want customers buying from you only because of price. They're not going to tell their friends. They're not going to be long-term loyal customers because as soon as you start increasing your prices, they're gone. And there's always going to be somebody who's hungrier who's going to undercut your price. It's just a race to the bottom. The challenge for entrepreneurs is you have to think about what more added value you can provide to your customers to make them pay not even average price, but a premium price. You should be master class. You should be one of the best in the world at what you do. If you are, you deserve to get paid so. I had a question come in from Colin who has a rental property. He was trying to figure out how do I make more money with my rental property. Every time I drop my price, I get business. Every time I increase it, it sits empty. Here's the thing. All he's competing on is location and his price. It's not a winning strategy. You've got to think about other ways to add value to the customer experience. Think about other frustrations they have that they're coming to you for that you could potentially help solve for them. Why do people buy from you? Pay $1,000 a night to stay at a Four Seasons room when they can go to a $50 a night hotel room. You're still getting a bed and a place to sleep, but you're getting a lot more added value by going to the Four Seasons. They're selling the convenience. They're selling the fact that you're going to get a hassle-free trip. For a business person who's on a big deal, they're about to close a multimillion-dollar deal, where are they going to stay? They want to know that they're they're going to be at the top of their game, they want a good night's sleep and they're going to go and pay an extra couple hundred bucks to stay at the Four Seasons because they get that added value. For Colin, who has his rental property, again, think about what people are coming for. What other problems do they have? Can you tell them about the city that you're in? Can you give them a tour? Can you tell them about upcoming events that are happening? What else can you do? Think about their challenges. It doesn't have to cost a lot of money. It just has to have high perceived value. High perceived value, but it doesn't have to cost you a lot or anything. A great example is I work with some brand clients that are trying to reach entrepreneurs. What I do with them is every quarter I sit down and I explain, here is what is happening in the entrepreneur space. From all of my research. I collect tons of data, questions that come in from you guys on YouTube, Twitter, everywhere, and I get a sense of where the entrepreneur market is going. I collect this information anyway for myself, for my own purposes. It helps guide the content for this program. It helps guide my YouTube videos. I'm already doing this. But these big brands that are my clients, they have no way of accessing this data. So I give it to them for free. I give it to them for free to build the relationship. And then when they hire me for programs, they know that I know what I'm talking about and I can charge 5 times as much as the next guy. So I'm adding a ton of value, but again, it's not costing me anything because I'm already doing it. So think about the frustration that your customers currently have. Beyond what you're helping them solve. Go the extra mile to give them more value and start increasing your prices and get paid what you're worth. I have Sarah on the line. Sarah, where are you from and how can I help?

Hi, I'm from New York City. I'm actually calling about my little brother's business he's starting in the Northern Virginia, D.C. area. I was listening to your show and I loved what you were saying about the Thinking Big but Starting Small, and my brother and his friends are starting a bakery that does like late-night delivery and cookies with the idea that it would reach out to, you know, the party scene or the campuses. There's a lot of colleges in the D.C. area that they think they could tap into, but they have absolutely zero capital and they're trying to figure out how to get their product out there fast, even if it means investing a little bit up front, but they don't— they're not in a position to take out a loan or anything crazy. They'd like to get a food truck, but that even seems really expensive at first. So, I guess my question is, how do they take that first small step?

That's a great question, and congrats on wanting to start small and build it up. Does he already have connections into that university market? They—

I think of the 3 of them who are starting this, one of them definitely works like with the campus and universities, and they do already have a friend who has a bakery, but she's been doing most of these things from home, and they're looking to collaborate with her and sort of expand from there and really reach campuses.

So what you really need to do is prove that this model can work, because a bakery— if you're— like, the actual costs of a bakery aren't that much. To get a physical location is expensive, but the material costs is really cheap, right? To make bread and cookies, you're not going out and spending a ton of money.

Right.

They could do this from home or they could work with that baker and use their place off hours to test it. The biggest thing to see is do people want this late night delivery service? Right? Nobody's done this before. It could be a great idea or it could totally tank.

Right.

So the biggest thing is not on how to produce this thing. It's more more on the marketing side.

Okay.

It's how do I see if people want this or not? How do I expose this to the university crowd?

So listening to what you were saying before, like they shouldn't be going to universities or places and just giving away free products or starting small, or should they just be doing anything they can to get the name out there and the concept?

You can do sampling, and again, when the costs aren't that high, like for them to make cookies is not going to cost them a lot of money. It's it's going to be most of your time. So you have to invest a lot of hustle in getting that out. But it's really tapping into the university market and seeing how you can get involved in campus life so that people know about you and want to try you out.

Okay.

So I see it much more as a marketing exercise than actually producing the stuff because he doesn't need to go out and get a store to create his first product. Your first product, right? And if it works and you start making some money, then you can invest that back into business and get your own location if you want and expand to multiple universities and take this thing nationwide and take over the world.

Got it.

So should they target maybe like one college specifically first and see how that goes and then jump from there? Should they be hitting as many different possible markets as they can?

I try to look for whatever the lowest hanging fruit is to start.

Okay.

Whatever colleges they went to or that partner, whatever college they're a part of right now, working at, then that's your easiest connection in.

Okay.

Just get the ball rolling and test the concept. If people love this idea of late night delivery of cookies, then you roll with it. Probably what's going to happen is, and this is typical with most companies when you're first getting started, there's something to the idea but it's not perfect yet. You have to tweak it. So the delivery model might be great but they may need to change their hours or people may not like cookies at all. Maybe they want donuts or maybe they want cake or something else. So you have to play with the model until you get it working really well and the tighter you are to your customer so the closer they are to those universities and can get some real feedback because the first experience probably won't be perfect with the customer. Right. So having somebody to kind of sit there with you and be patient and say, "Hey, I'd really love it if you could do XYZ," and that could be the business that really helps them take off.

Got it.

That's great. I love that.

What's your role in all of this?

Joe is my little brother and I was listening to the show. But he's been racking his brain and really stressed out because he just proposed to his girlfriend. Woohoo! So he's been really busy, but this is something that he really thinks could take off. And he's still got a side job, and so as I keep hearing all these things, I was listening to the show and I was like, wait, this might be a really good opportunity to get some answers for him.

So you're just a loving big sister.

That's what I do.

It's great. It's great for him to start part-time. It's great for him to test this out, see if it works, and really just listen to the customers. Listen to what they want because they will tell him what needs to be changed for this business to actually work.

Great.

If he wants to call in, let me know. I'm on every 2 weeks. I'd love to hear from him and see the progress.

That sounds great. I will definitely tell him about it.

All right. Thanks, Sarah.

Thank you so much.

No problem. For everybody listening, This is a great model to follow. Start small and test your concept. If he goes out and he buys a bakery and invests all of his money into this and takes on a loan, it's probably going to fail. Who knows if people even want late night delivery, right? Instead of testing your assumptions on a big scale, test it on a small scale. See if it works. Get some feedback. Put that feedback back into your business and you're on the path for a successful enterprise. Welcome back to the Evan Carmichael Show. I believe in entrepreneurs and I want to see you massive success with your company, and part of that is going to come by breaking through the frustration. I'm frustrated with my business constantly. I want it to be going faster. I want to hit our goals more quickly. I want things to happen now. I want things to happen yesterday. And that's part of life as an entrepreneur, and it's okay to be there. It's one of the things that we don't talk about. You know, you read magazines and books and listen to radio programs and everybody is saying, "Do these 3 things and you'll be successful." Right? You have to bust through tons of frustration and just stick with it to be able to get you through. If you're frustrated right now with your business, you're not alone. Here are a few things you can do to help you bust through. The first thing that really helped me was model success. I researched entrepreneurs who had made it, who had done what I want to do, who had really hit it hard and looked at how they got started and found that they all struggled too. All of these guys, they struggled. Nobody had it easy from the start. They struggled and struggled and were frustrated and they pushed through. And researching those stories of your favorite famous entrepreneur or somebody in the industry that you look up to, will not only give you strategies on what to do, you know, they did this so I can do it too, but they'll give you the motivation to keep going and bust through the frustration. The second thing is remember why you're doing this. Why did you start this business? What are you trying to accomplish? One thing that really helped me early on was I would go and I would do presentations to entrepreneurs. I would go and I would meet entrepreneurs and give a great presentation and feel inspired and change their lives. I'd wake up the next day like I had to start all over again. Like my motivation had disappeared. Where did it go? Some days you just wake up and you don't want to do anything. And so what I would do is read the testimonials that people would left for me. I would look at the emails that people would write into me. And it would keep me motivated to keep going because I saw the impact that I had. I kept wanting to do it. The third thing you can do is use frustration as fuel. When you get so frustrated with your company, two things are going to happen. Either one, you are going to quit, you are going to give up, shut down, go off and get a job, or you are going to use that as fuel to keep going. Remember that when you are frustrated, you are not alone. This is something that really hurt me early on because I felt like I was the only one going through all these problems. Like it was super easy for everybody else and I was the idiot who couldn't get it. Why was I reading stories about these guys who came from nothing and made it big and here I was struggling to get clients? I had a great product. I had a great team. Why was this so hard? I almost quit multiple times. I remember one time I was on the call with my business partner. This was the worst period of my life and my business career. It was a family event and we had been through so much pain and struggle trying to get our company launched. I took a call from my partner and I went upstairs. The end of it was I told him I quit. I had had it. I had enough. This was too much. I feel like I need to be doing something where I can get some results. I couldn't understand why it was taking so long. Maybe we're just not meant to do this. That's it. I'm done. I quit.

No more.

I'm doing something else. Then I hung up the phone and I just cried. I bawled my eyes out, tears streaming down my face. My nose, everything. I was just a total mess. And my mom came up, she heard me crying, and she put her hand on my shoulder, and I, I couldn't even say anything to her. I was just so frustrated and so upset and so disappointed in myself and so ashamed and embarrassed, you know. I had so much confidence going into this thing, and to be at this point, to hear me say that I quit, was so So embarrassing that I couldn't say anything. I just sat there and cried. I ended up going to sleep that night and just feeling terrible about myself. I woke up the next day and went back to work because that is what I needed to do. I had a business to build. I almost quit. That was the first time that I actually threatened to quit. I meant it at the time. I wanted to quit. I wanted to go do something else. I was so frustrated with this business and it was not going well. But I kept going through the frustration. The next day I woke up and remembered those 3 things. One, modeling success. I looked at entrepreneurs like George Lucas and Oprah Winfrey and saw all the struggles that they had when they got started. I didn't want to regret for the rest of my life that I had quit too soon. I looked at their success and I researched what made them so successful, what got them to that point, and applied it to my business. But more importantly was just knowing that I wasn't alone in this. Like, other people are struggling too. Everybody struggles with their business, from your local dry cleaner, local pizza shop, all the way up to Donald Trump and Bill Gates. These guys are all struggling at times in their business. The frustration can be used as a tool to get you through. The model of success works. The second one again was remember why you're doing this. I looked at my customers and I looked at the great feedback that we got. I wasn't getting a lot of customers. I wasn't making a lot of money, but I had some customers and they liked it. It was helping them. Reading their stories and reading their emails, made me want to keep going. I feel like I had let these guys down. We had a noble purpose for this business. So I needed to keep it going. Then the last part is using it as fuel. I didn't want to quit. I was facing huge resistance, but I didn't want to quit. I didn't want that mark on me. I didn't want to regret this for the rest of my life. So I kept going. It was hard. It was brutally hard. And you're going to go through something similar, if you haven't already, multiple times. But know that you're not alone. Everybody goes through these phases. It's completely natural. And you can break through. Thank you guys so much for joining me for another great show. I want to thank especially my producers Fernanda and Zach. Zach is back. Love you guys so much. And I'm on every 2 weeks. I'm back. Love to hear what you guys have to think. Hit me up on Twitter. I'm @evancarmichael. Thank you so much, and I'll see you in 2 weeks.