TES 011 - Blow Through the Obstacles in Your Path

Hey there, real quick before we jump into the episode, listen, if your earnings treadmill hasn't set you free yet, running faster won't either. Listen, hustle without principles just going to burn you out. So here's what I want for you. I want you to join me for my money machine experience live. It is three free trainings. Deep dive into how to escape the treadmill and build a money machine that actually works for you. All right, grab your spot here by going to moneymachinelive.com and I'll see you in the free training. Hey there. I'm Mel Abraham, the author of the Entrepreneur's Solution and the founder of Business Breakthrough Academy. And welcome back to this episode of the Entrepreneur's Solution show. And in this episode, I want us to continue our journey down the three phases of business life. We touched on it, we introduced and started to dig into it a couple of episodes ago. And now I want to continue this process until we finish the whole process. And remember that these are the three phases of think up, get up, and reach up that allow you to, whether you're launching a new product and you've been in business a while or you're just thinking of launching a new business, this is the process that starts to minimize the downside and maximize the upside. So when we come back after this short introduction, we're going to start to dig in further into stage one of phase one, which is the decide element. And we're going to talk about some of the obstacles and roadblocks and challenges the that you may come up against and what it's going to take to navigate those. And then we'll step into the piece of understanding how to create an elegant solution for your customers. And by the way, if you're looking to get the downloadable tools, the resource guides and all of the information, the takeaways, go ahead and text mylegacy one word, my L E G A C Y to 38470 and you'll get, you'll get a text back with a download link page and give you access that way. So go ahead and do that and I'll see you back real soon.

Welcome to the Entrepreneur Solution, where highly successful entrepreneur Mel Abraham becomes your entrepreneurial mentor. Here, Mel reveals his business building strategies and even gets a chance to answer your questions. Mel Abraham, a CPA by education, but an entrepreneur by exhilaration and a true believer in the entrepreneurial way of life. It's through entrepreneurship that we create community, support society, and live our dreams.

It's where possibility meets reality.

Again.

And you can have the life and lifestyle you want, one of freedom and peace of mind. Welcome to this episode of the Entrepreneur's Solution, where it's time for you to be bold, dream big and live life your way.

Hey there. I'm Mel Abraham, the author of the Entrepreneur Solution and the founder of Business Breakthrough Academy, where we teach you how to design a business and create a life, a life of financial freedom and peace of mind. And welcome back to this episode of the Entrepreneur's Solution show. And I'm real excited about this because we're going to continue our journey going through the model that I use when I'm trying to launch a business or I'm in business and I'm taking a product and I want to launch a new product. It's the three phases of what I call business life or product life. And as you recall, the three phases are think up. This is the time phase one. Think up phase is where you are spending the time trying to understand and come up with the ideas and figure out the models and make some choices and decisions about what it is you're trying to do, who you're trying to do it with, and do all of the intellectual research work here. And then the second phase is the get up phase, which is about the plan you're putting in place, the structure, the financing, and all of those elements which we'll get to in later episodes. And then the last phase is the reach up phase. That's when we start to grow it and we start to scale it and start to build it and in fact, even think about the context of how we want to get out of it. Do we want to sell it, do we want to transition it, Are we just going to let it die and all that. So think up, get up and reach up. And in this episode, we're going to focus on think up. And one of the things to really consider always, always is that every time we're making these choices, anytime we're looking at business, anytime we're looking at decisions in business, what our primary focus is is the customer promise. So underlying everything we're talking about, everything we're doing is what is your customer promise? What is your brand promise? And we spoke about that in an earlier episode and there was a downloadable guidebook that kind of helped you draft what is your customer promise? And you can get that from the downloads. So when we talk about the think up phase, there was things like why, you know, one of the most important decisions. We talked about that in an earlier episode, one of the Most important decision that you can make as a entrepreneur is the fact that you want to be an entrepreneur, that you're not standing, you know, one foot in, one foot out, but that you truly take on the identity of the, of an entrepreneur. That way you start to do the things that entrepreneurs do and anticipate and do the things that entrepreneurs do in the context of the choices you make, how you live your life and, and the dynamics that you bring to your life. We talked a bit about the core strengths and how to refine and define in mind what your core strengths are and how those can relate to creating distinction in the marketplace. And so now I want to kind of touch on the kinds of obstacles, the things that might get in the way, because as we go through this, we're going to have decisions to make as these obstacles come up. And some of them are truly real obstacles that we're going to need to navigate and persist.

And with determination, really drive these things home so we can bust through some of these obstacles as we move forward. So what are some of the obstacles that I see working with entrepreneurs and working with business owners and working with businesses? And one is probably one of the most important ones is, are you, are you in the right business? You know, so many times we get an idea and we think about it and we want to run full fledged into it, but are you truly in the right business? Remember, you know, Starbucks at one point shut down, shut down all of their facilities and all of their retail shops to retrain, to retrain all of the employees back to what their core business was. So one of the questions really is, are you in the right business? And many times when you're not in the right business, this becomes a tremendous obstacle. Well, what is the right business? One, it's going to be driven by your passion. Two, it's going to be driven by a vision and it's going to be attached to that. We're going to talk deeper about that in other episodes. But let's just talk about it practically speaking, from a market standpoint. One, it needs to help. It needs to be something that serves at a greater level, that shifts people's lives, that affects a problem, that gives them a solution. And it's not a solution that you see, but it's a solution that they see that is valuable to them, that they are willing to have a transaction, they're willing to pay money for it. I mean, we may come up with some phenomenal solutions. I had someone that came to me that wanted to, well, he had this fascination with jellyfish. And so he came up with these special jellyfish fish tanks that you could, you could get jellyfish and have them in these fish tanks. But he never looked at, is it creating a solution? Is it something that's desirable in the marketplace? And the biggest thing is he had no supply of jellyfish. He couldn't get jellyfish. There was no place to get them or get them legally that would allow him to supply the market even if there was demand. So ask yourself, is this the right business? Am I giving a solution to a market need in a market that they're willing to pay for it, that they see value in it as you move forward, that it is something that truly helps them and that you're serving those needs? So, right. Business is first obstacle. The second obstacle is financing. And I hear this a lot. Well, I don't have the money to start business. The cool thing is that.

There'S a whole host of access to funds. Some of its debt, some of it's bootstrapping, some of it is crowdfunding, some of its angel funding. And in fact, in one of the previous episodes, I answered the question about what is angel funding and how do you get access to it? And gave a downloadable guide about angel funding, including the 12 elements that you need to have in a good pitch to an angel funding group. So financing is an obstacle and we need to think through what is it going to take from a financing perspective. Am I going to need capital or cash for building a prototype? Where am I going to get the prototype built? How much is it going to cost? What's the additional funds necessary to adjust and tweak the prototype? Once we've done, we've tested, am I going to need funding for legal costs? Things like trademarks, copyrights, patents that I need to go through, those are all going to cost money. Where does that come from? Truly an obstacle. But the key is to start, and this is why it's in the think up stage, to not just run full force into something without having alternatives, options and those things available to you. We're going to spend a bit more time in this financing arena in, in a later episode as we move forward. The third obstacle that you may find is, or I hear this all the time is I just, I have a hard time finding customers. Now remember, this whole concept of customers and your customer promises is customers. It's not about sales, it's about connecting. It's about connecting with them and at a level that is an emotional level that connects with them and emotionally and allows them to justify the purchase. Logically. There's this concept that used to be taught in sales. It was, you know, the ABCs of sales. Always be closing. Always be closing. Well.

That'S a fallacy. I don't believe in it. If you're constantly trying to use tactical, technical.

Somewhat manipulative tactics to get someone to buy something from you, you're not creating loyalty, you're not creating connection. You're not creating a relationship. And that's what our markets are starved for, is to create a connection. So where are your customers? And we'll talk about something that I talk about that I call market sifting in a later episode. But finding your customers, where do they hang out? Do they hang out on the Internet? Can you find them on Facebook? Are they on Instagram? Are they on Pinterest? Are they on LinkedIn? Where do your customers hang out, where you can go and communicate, and what forums do they maybe belong to? Where are they looking for things? Where do they typically look for these things? And then enter into that conversation, not from a sales standpoint, but remember, from a service standpoint, to serve them at a higher level. So enter into their world, into their conversation. So finding customers is about finding where they're hanging out and where they look for things that you have to offer. And it can be online, it can be bricks and mortar. It can be through direct mail, it can be through catalogs, it can be through a lot of different things. But we need to understand who our customers are, where they hang out, how they like to be communicated with, and then create that relationship, the relational capital, if you will, and connection with them at a level that you now have a dialogue with them. And it's not some broadcast of some promotion, some sales thing, but actually having a conversation with your customers. That's the key. Then another obstacle is this concept of, especially for those that are just starting into this entrepreneurial space, is, when do I quit my day job? You know, it's this concept of burning the boats. And now I've had a number of entrepreneurs that have sent me emails or have reached out to me and said, well, I'm thinking of just quitting my job and going full force in this. So I'm committed. What I'd like you to consider is that there is a difference between being committed.

And being reckless. And if you're going to move forward with your business, with your product, with your idea, I want you to be committed, but I don't want you to be reckless. So before you start to think about quitting a day job or.

Doing anything like that. Let's go through the steps to see that we've minimized the downside risk, maximize the upside potential, and that we've got a plan in place that makes sense and that you have a financial foundation that is there to support you during the lean times, during the process. And if you have a family, if you have children, if you have a husband or wife, you have responsibilities. And I get it. You may look at it and say, this is what I want to do, this is my dream. And I get that. But at the same time, you have responsibilities and there's a responsible way to go after that dream. And it's not to put your family, it's not to put your spouse, your significant other or anyone in jeopardy. And something that we don't think about, not to put your health in jeopardy. So when you talk about this concept of burning the boats or quitting your day job, we want to be responsible about it. Do you have enough cash put away? Do you have access to capital to carry on during the lean times? How is it going to affect your family life? How is it going to affect your relationships and how might it affect your health? Before we start to go on this journey and many times we don't think through that, many times we're so caught up in the dream and the vibrancy and the energy of the dream, we just go chasing it and all of a sudden we're hitting rocks and we're wondering what's happening and why is this all of a sudden happening? Why is it a struggle and why is my relationship challenged, why am I not sleeping at night and all that. So I'm not saying that it's all going to be pixies and roses, but it's going to, we can minimize that by being smart about it. So what I will say is that you can in some cases, if you're just starting out, start to try and build that business while keeping the financial side of you. If I don't have a good financial store, well, keep the day job and work this as it starts to build. And when all of a sudden you want to have proof of concept. Two, you start getting cash flow in three, you see a growth, a growth level and four, that the cash flow coming in from this part time endeavor as you're building it is at least 30% of what you're making, then you can start thinking and having a discussion about quitting your day job because it's important to be responsible. Now if you are all alone and you don't have a lot at risk, then maybe it's okay. But it's going to be specific for each and every one of you out there as to when's the right time, what's appropriate, and what you should be doing. This is something that will put a tremendous amount of undue stress on you, unnecessary stress on you if done incorrectly. So think it through, plan it out, make sure you have some alternatives, make sure you have some cushion, and make sure that you move forward. Now, there's one other thing that I want to really be clear on because I've had this happen before where someone says, well, I want to cash out my retirement. Now, as many of you know, I'm a CPA by education and I still have my CPA firm. So my belief is that, that retirement is about peace of mind. It's about your future. Do not touch it. Aside from the fact that, at least currently, as of the filming of this, the rules, the tax rules in the United States, when you draw out from your retirement account premature, before you're allowed to draw it out, they're going to penalize you. And by the time you're through with the penalties, which is minimum, at least currently, it's 10%. And then the states have penalties, like for instance, California, it's 2.5%. So I have a 12.5% penalty for taking out of my retirement account, plus I have to pay the tax. So what ends up happening is that the majority of the time, if you draw money out of your retirement account to try and use into your business, you're going to lose 50% of it to taxes and penalties before you get a chance to use it. So, so here's the thing to watch out for. I've watched people do this. They don't think about the taxes and then they can't pay the tax bill when it comes due. So.

Under no circumstances, and there isn't a lot of absolutes, but this, to me, is something you do not do. You don't draw out of your retirement account prematurely so you can go start a business. There's other ways to look at it. Don't burn the boats until you're ready and you have a plan, then understand this. I mean, a lot of people come to me say, should I be an entrepreneur? Should I do this? And I look at them and I say, there's what I call the deposit employment shuffle. And every day of an entrepreneur's life we spend standing with one foot in the bank deposit line and the other foot in the unemployment line. And we need to get comfortable with that. It's not necessarily an obstacle, but it's an obstacle psychologically that we need to be comfortable with. The fact that in entrepreneurship, it's not just a straight up trajectory. It is going to have ebbs and flows, it's going to have peaks and valleys. This is why I talk about using the 50% rule in creating your life, so you can navigate those peaks and valleys and you can build something for the future as you grow. So understanding that you've always got one foot in the bank deposit line and another foot in the unemployment line, getting comfortable with that, being okay with that becomes really, really important as you move forward. And then there's challenges and obstacles with respect to legal, tax and money management. So many entrepreneurs are idea people. I've got products, I got ideas, and I want to go out and I want to make money at it. I want to go do it. Well, they go out and they create products and they create ideas, but they never tend to the house. They never necessarily consider, you know, what's my legal structure? What are the things I need to do to make sure that I'm covered? How do I do these things with contracts, they go into partnerships or joint ventures without agreements in place. And these things are ticking time bombs that will absolutely destroy a business or destroy the value of a product if it goes wrong. So making sure that you have proper legal advice, make sure you have good legal counsel. You may not need them right away, but get yourself a relationship with someone that you can get on the phone with, that you can write an email to and say, what about this? So we want to make sure that you are legally covered, and you want to get that in place, but you want to do it at the right time. I wouldn't go spending a ton of legal costs to get everything all set up when your idea hasn't proved out first. I've seen that happen repeatedly, too. You want to make sure that you have your tax game properly set up, no matter what country you're in, what state you're in. There may be different rules, but there's still taxes. We need to think it through. Whether you like it or not, if you're in the United States, Uncle Sam, the government is a partner in your business, and they're going to be sharing in the business to the tune of anywhere from 20 to 40%. So getting that piece of it structured right and understanding that is important because 40 cents on the dollar could be going the wrong way. So we want to make sure that you cover the taxes. And here's something that has driven businesses into the ground in the past is ignoring taxes. I'll pay the taxes later. Get your taxes paid up front. Get your taxes taken care of. Make sure that you have a process and a system in place to make sure that they are funded and paid for and you're not borrowing from your taxes to pay other things. Because at least the government here, the state governments and the federal governments in the United States and most of the foreign countries, Australia and Canada, are the same, they're very aggressive and they have rights to take property away from you that you and I wouldn't have ordinarily. So make sure you have that in place and then get your accounting system in place. What kind of accounting system? What kind of people do you have to look over the books? And how are you going to look over the books? Don't just trust someone and hands off, oh, I got an accountant or a bookkeeper and they're taking care of it. You want to make sure that you have enough information to manage your business and to know that nothing is going out the door and that everything makes sense. Yeah. That means that maybe you're going to have to get a little bit more educated about the financial and the accounting elements, which I know seems a little boring, but it's important and you'll thank me as you go down the road and you can look at things and understand them then. This is a big one. That is an obstacle again. This is a mind trap. It's something that we deal with and it's self doubt or what I call the imposter syndrome, or what's been called the imposter syndrome. You know, it's this, this fear that you're going to be found out that you're not real or that you're not good enough or, or maybe you shouldn't be doing this and it's going to creep. And I, I have been an entrepreneur for decades and I still struggle with this from time to time. It happens anytime I'm launching a new thing. Should I be doing this? Is this the right thing? That self doubt and this is something that, that you want to create and make sure that you have the tools at your disposal to deal with the psychological demon called self doubt, this psychological demon called the imposter syndrome, to not necessarily suppress it, but let's get ready to deal with it and overpower it to make sure that one, you're making good decisions, rational decisions that are planned out through, thought out systematically, and that's the best way to fight it, if you just on sheer willpower suppress it, then it may not be enough. Deal with it by making sure that whatever that doubt is, you've taken care of it, that you've done things to mitigate that doubt because it may be telling you something, but what it's not telling you is that you're not good enough because you are good enough. You've got a lot going on, you've got a lot of, of capacity and capability and potential and possibility. And our own mind gets in the way. So dealing with that imposter syndrome and self doubt becomes important. And then as we start to scale, we need to think about the concept of staffing. How do we deal with staffing? Who do we hire? How do we hire? I'll spend more time on that. But in a nutshell, I believe in value based hiring, value based coaching and value based firing, if it comes down to it. In other words, I want people that are going to work with me, contractor or employee, doesn't matter, that have the same or similar values that I do. That's going to raise and keep the standard at a high level. That's going to create a culture and an image out in the space, in the marketplace and in all of my dealings that's consistent and that comes from a value based approach to things. And so there's staffing, things that will come into play again. There's legal issues and employment issues that get involved with that. You want to make sure that you're informed with it. And I'm not, I'm not expecting you to know all of the rules, but I'm expecting you to research enough and know where to go to get that. And I'll give you some resources as we, as we move through some of these episodes where you can find some of this information, but it becomes you as the entrepreneur, as the business owner, your responsibility, ultimately it all flows up to you. So it's going to be on your shoulders and you can't put your hands up and go, I didn't know any better then. The last obstacle that I want you to think about is what is your competitive positioning? Now we talked about how do you create distinction through your strengths? And that's part of the aspect of saying, how do I create my distinction? When I'm successful in creating distinction through my strengths, through strategic strengths, now all of a sudden my competitive positioning becomes a little easier in that process. But if I'm simply going out there to be another widget out in the world, then I'm going to be lost in the sea of sameness. How do I turn around and stand out? Let's take a great example. Like Apple, when Apple came out with the ipod, when you think about the ipod, the ipod is simply an MP3 player. And at the time that they released the ipod, there was 70 plus other companies that had MP3 players out on the market marketplace. But they created a market distinction by creating and they did part of it through advertising, by creating a cult like feeling of wanting to belong to the cool crowd, having this really cool thing, thousand songs in your pocket. In that context, they, they created a position that really in effect quashed and squashed all the competition along the way. The majority of us have our music on our ipod or our iPhone or you know, if you're Android, maybe an Android device. And Most of the MP3 players that were around when the ipod was first introduced are gone. They've fallen by the wayside because it was just another MP3. So think about what is your competitive positioning that you're going to bring to the place and remember, overarching and the foundation of all of this. What's your customer promise? What's your brand promise? So I hope that this helped you understand some of the obstacles that you might run into, some you may not run into. The point of this is to make sure that you understand you're not alone. All of us entrepreneurs, many of us will run to many of these obstacles. They're out there and we need to just navigate through. The cool thing is that you know that it's been done before. We just got to do it again. And so if you have questions, if you have challenges with any of these obstacles, let me know and I'll be certain to try and help you through it. I'll try to answer your questions and help you, give you guidance as you move through. Remember, it's about me trying to be your entrepreneurial mentor through this show and to give you the tools, the tactics and the strategies to allow you to grow, to allow you to build your business, to live to your potential. And if you have a specific question, why don't you go to askmelnow.com and you can leave me a message like many of the community is leaving me with your question. And I'll use it on one of the shows and make sure that we get it answered for you so we can serve you at the highest level. And if you want to get some of the downloadable tools, the takeaways from this session, go ahead and go to melabraham.com session 0 that's 0 11@melabraham.com session 011 and by the way, again, if you're in your car or you're at the gym listening this and yet you can't write down the link, just go ahead and text to 38470 mylegacy one word my L E G A C Y to 38470. We'll get that link to you so you can get the downloads. And until we get a chance to see each other in the next episode, may your vision be grand, your journey epic, and your legacy significant. See you soon. Keep living in possibility.

We hope you enjoyed this episode. Make sure you subscribe so you get access to all of Mel's business and success tips. And if you like this episode, share it with a friend. If you have a specific business or success question, you can ask it at www.askmelnow.com. remember it it's all about being bold, dreaming big, and living life your way. Because the world needs you. Until the next episode, may your vision be grand, your journey epic, and your legacy significant.

And that's it for this episode of Building youg Money Machine, where we help you learn how to master your money, eliminate financial stress, and live a life of of choice. If you found this valuable or helpful to you, here's what I'd love for you to do. If you do me a favor, go to Apple, Apple Podcasts, or wherever you're listening to this podcast and rate and review the show. It helps us tremendously to keep us at the top of the list so we can continue to get this information and this message out to people. Because I truly believe that financial freedom is your birthright and I want to help each and every one of you claim it. Thanks so much.