7 Things I WISH I Had Known Before Starting A Business…

– Hey everybody. So, recently my business was hit with a super frustrating setback, which reminded of me of why this video is so important. And my setback was this, my hand. Some of you noticed what happened and wondered how I\’d hurt it. And the way I hurt it was I sprained it.

And for the first two weeks after I sprained it, I pretty much could not use my hand. Yep, it hurt so much that I had to do pretty much everything with just one hand, although I will say that for the first time in my life, I\’m actually really glad that I\’m left handed. But the funny thing is that even though I started my business 13 years ago, and it\’s now a whole lot more complex and it makes me a whole lot more money, the fact that I wasn\’t able to work properly for two weeks now wasn\’t actually that big of a deal. Whereas, if I had lost use of this hand 13 years ago when I was 16 and I just started my business, my business would have pretty much been screwed. So, in this video, not only am I going to explain why I\’m really glad that I sprained my hand now instead of when I was 16, but I\’m also going to explain the seven things that I wish I had known before starting a business, because frankly, guys, I can see by reading the Comments section that a lot of you also don\’t know these things and you desperately need to know them.

Starting A Business

So just a warning, team, I\’m going to be throwing a lot of shade on this video, including on myself and my poor life choices and I\’m not even sorry about it. One, have realistic expectations about what you can achieve. While, as you will see in this video, I am now a recovered Shiny Object Syndrome patient, in my younger days, I always took on way too much, more than I had time for. \”I\’ve got a great idea for a business! \”I\’m going to start a tee shirt brand!

\”It\’s gonna be amazing! \”What\’s this? \”Being a Forex day trader? \”Cool, I\’m going to become a day trader too!\” I see so many beginners start a side venture, and then before they make it a success, they start another one and then they start another one.

And guys, that\’s just not realistic. Sadly, we don\’t have infinite hours in the day. In fact, we only have 24 and actually, for some of those, we need to sleep. So if you start too many projects with side ventures, you\’ll never have enough time to finish any of them and turn them into a success. So the way I fixed this was actually really simple.

I made a time budget. So let me ask you a question. How would you budget your money? One, you write down all of your weekly income, and two, you write down your expenses and minus them from your weekly income.

Now sometimes you will create a budget and you\’ll see that, yes, your finances are healthy and you\’ve got lots of money leftover.

Woohoo! But sometimes it\’s the opposite. Not only do you not have any money left over, but it\’s worse, every week you\’re going into debt. And so when you make a budget and you see this, you know that if you want to achieve financial stability, you\’re going to have to go through and make some cuts to how you spend your money. Well, it\’s no different when it comes to time.

The way that I nipped Shiny Object Syndrome in the bud was I made a budget for my time. And for me, the way that I did that was about three years ago now, I got this little book here, the Productivity Planner.

With the Productivity Planner, you not only have to write down your tasks for the day, but you also have to allocate how much time you think it will take to finish them. And then you have to complete them in order. And at the end of the day, write down how many tasks you\’ve actually completed, and you need to write down how long it actually took you to complete each task.

And by doing this, I very quickly realized that I was overestimating how much I could achieve because I was underestimating how long everything would take me. And so with this knowledge in mind, I was able to go through and make some cuts to my goals and my projects so that I could take on a realistic amount that I could actually finish. And in the process, I was able to drastically increase the amount of money that I made.

Starting A Business

Two, prioritize product and store quality over sales. So, something that I see, especially in my younger viewers, is this idea that the most important thing of business is marketing and sales, and I hate when I see this, because frankly, it\’s like looking in a mirror.

I did the exact same thing when I was 16. The thing that I cared about most of all was sales and marketing, not the customer experience.

And you know what? I came way too close to killing my store for ever. And if I had killed it, frankly, I would have deserved it.

And so when I see other people do this, I wanna nip it in the bud right then and there. So, take this video as an example, it discusses the 10 things that you should do before selling tee shirts online so that you can make sure that your customers have a good experience so that you minimize returns and that you create tee shirts that customers will be both happy with and love. So that you can take advantage of the ever-growing market and demand for cool graphic tee shirts. And so, what sort of comments did I get on that video? Comments like this.

\”But still, that\’s not the only thing \”about sitting up a print-on-demand e-shop.

 

\”The general thing is to promote it, am I right?\” No, mate, you\’re not right, at all. Gotta love this, don\’t you? \”General thing is to promote it and run ads and get sales.

\”Am I right?\” The truth is that this comment really shows you what Every Day is Different is thinking of and where their priorities are lying. They\’re thinking of the money instead of the human beings who are handing him the money. Two things; number one, this is really selfish. And secondly, not only is being selfish gonna make your sales and marketing very difficult because you\’ve not been empathetic towards your customer, but, your selfishness will lead you to losing all that money anyway.

So for example, as my viewers know, I have an online clothing store that creates and produces its clothing, such as tee-shirts, using print-on-demand. Well, for those of you that don\’t know what a print-on-demand store is, here\’s how it works. What I do is I come to print-on-demand services, like Printify here, and choose from their selection of blank tee shirts. Once I\’ve picked a tee shirt I want to sell, I then upload a slogan or a piece of artwork onto the tee-shirt. Printify will then store a digital copy of that tee shirt, and I can then connect that tee shirt to my online store.

 

Then, when a customer comes to my store and buys this tee shirt for, say, $30 plus shipping, which is the usual price I charge for a tee shirt, Printify sees the order for the tee shirt and goes, \”Yep, let\’s make it!\” Printify\’s tee-shirt factory then prints my design onto the tee shirt for me, packages the tee shirt up and it ships it out to the customer.

They charge me the price to print and ship the tee shirt, which is about $12 while I keep the difference as profit. It\’s something I teach further in my free ebook. \”The Six Steps that Six Figure Online Stores Follow \”to Make Over $10,000 a Month\”, and if you\’d like to get that eBook for free, you\’ll find a link to download it in the video description below.

So, let\’s say that I am Every Day is Different and I have decided to open up my own print-on-demand e-shop selling tee shirts. And I\’ve also decided to use Printify\’s print-on-demand service to produce and ship my tee shirts for me. So I want to create a ladies\’ tee shirt and sell it because I\’ve got a great promotion plan that I know is going to make me a lot of money.

 

So I come to Printify and open up ladies tee shirts and hey, this is the first tee shirt it recommends to me. This will do!

So I go ahead and create my tee shirt and put it up for sale in my store and advertise it and boom, all the pug coffee lovers come and by it in droves! And I\’m rolling in the cash, everything is wonderful. In fact, it\’s going so wonderful that Every Day is Different takes their new-found cash and leases a Lamborghini, just like all the other ecommerce influences on Instagram.

But then suddenly, disaster strikes when a bunch of emails flood in! \”Hey, this tee shirt, it doesn\’t fit.

\” \”I want a new tee shirt.\” \”I want a refund!\” Oh no, Every Day is Different\’s customers are unhappy! What\’s going on? Well, it turns out that, actually, this tee shirt had this little warning that they didn\’t care about.

It\’s run small. What this means then is that if a customer would usually walk into say a standard retail store, like H&M, and buy a large tee shirt, that a large tee shirt in this cut won\’t fit them because this tee shirt runs smaller than the usual retail sizing.

If Every Day is Different had watched my videos that focus on product development and making products customers love, they would have learned about this issue and known to avoid it. But instead they, like many others that watch my videos on these topics, got bored and found them a waste of time, just focused on the advertising and the money, and it\’s exactly these people who are going to make short term money and then lose it in the long term to their unhappy customers. All right, so now we\’re going to talk about the two things that you should do before you price the products or services that you are selling in your business.

So the first thing that you should do, of course, is hit that Like button down there, that most important thing that you can do. But no, actually seriously, everybody that gives this video a thumbs up, thank you so much. I genuinely appreciate your support. But yes actually now, there is something that you should do before you price your product. And that is, three, calculate how much you need to price products so that you can make a profit after your expenses.

So, one of the business models that I\’ve talked about on this channel before is sitting up a print-on-demand store on Etsy. And that\’s because print-on-demand apps like Printify often have awesome integrations with Etsy that make it easy. So most tee shirts and mugs you see listed for sale on there are manufactured and shipped with print-on-demand services like this. And I\’ve had several viewers create Etsy print-on-demand stores after watching my video to great success, which is awesome. However, I\’ll sometimes get a comment like this from a viewer who complained that they can\’t make a profit.

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Here is Brad, he sold three mugs on Etsy. On Etsy, if you\’re selling to USA customers, a rule is you pretty much have to offer free shipping on orders over $35, so after all of his print-on-demand fees and shipping costs and Etsy fees, he made a grand total profit of 86 cents. And when I saw this, I was like, \”Brad, you do realize, there\’s this thing \”called increasing your product prices \”to match your business expenses, right?\” A lot of people have this idea in life that if you start a business, you need to price your product to the lowest going price.

So they come to sites like Etsy and they see other people selling mugs and they go, \”Hey, look at that.

\”This person here, they\’re selling their mug \”for $10, $11, $12, $13. \”I guess that\’s what I have to do too,\” while they completely ignore the fact that other people on Etsy are successfully selling their mugs for higher prices, like $18, $19 and even $20-plus instead. And so if Brad had instead priced his mugs for say $19 after Etsy fees, he would have been left with $51.99 for all three mugs. And considering that on Printify with the premium subscription, which any regular seller should have, a mug costs $7 with $6 for shipping and then $4 for shipping for each subsequent mug ordered, if a customer had ordered three mugs, then even after the mug production and shipping fees, Brad should have been left with over $16 in profit, not 86 cents.

I found Brad\’s store and he\’s charging $13 for his mugs.

Before he slapped on that $13 price point, he really should have done the maths first to make sure his print-on-demand provider would have left him with profit after his expenses. If he\’d done that, he would have realized that he did need to price his products higher. Of course, he probably would have felt iffy about doing that because it looks like he\’s making another pricing mistake, which leads me to my next point.

Four, pricing is subjective and oftentimes higher prices beat lower prices.

Here is the reality. Pricing is entirely subjective and oftentimes, pricing your items on the lower end of the scale doesn\’t help you, it hurts you. For example, The Sun in an article highlighted how, at Tesco in the UK, these exact same cans of corn manufactured exactly the same have drastically different prices. One reason is because one presents itself nicer, but the other reason is psychological. People look at these two cans of corn and they go, \”Huh?

\”I wonder why this other can of corn here \”is priced higher than this one here. \”Well, the more expensive one must be better, \”otherwise it wouldn\’t be priced higher.\” Now, obviously we now know that\’s not true, because The Sun has given us perfect information on how these cans of corn were manufactured. But the general consumer does not. And so when Brad sells his tee-shirt here like he is for $15 on Etsy, not only is his store presentation a bit bland since he didn\’t bother to include a lifestyle mock up picture, what he could have easily created, by the way, with something like PlaceIt, but I digress.

The consumer also wonders, \”Huh? \”I wonder why this tee shirt here is selling for $15, \”but this one here, it\’s $24? \”I\’m just an average Joe. \”I don\’t know how tee shirts are made, \”but I do know that this one is priced higher. \”That must mean it\’s better, am I right?

\”Yeah, I\’m gonna buy this better tee-shirt instead.\” If your business is an online store, then how you present yourself is crucial. That\’s why in my premium video course, I have a tutorial which shows you how to create a simple, yet professional-looking online store with Shopify. If you\’re interested to see if this course is right for you, I\’ll have a link to it in the video description below. Five, you can usually find answers to things that you don\’t know with simple research.

I can\’t even begin to tell you how many times I get comments from people who are stuck and not moving forward because they have questions that they could have easily found answers to with simple research.

\”For CafePress, if you live in the U.S., \”you need to enter your social security number. \”Am I missing something?

\”Because I cannot and do not know what this is.\” Hold up, hold up! Don\’t worry, Spellcast. It is okay, I\’ve got you. Let me help you out with that.

But seriously, I see this all the time. People like \”Sarah, I wanna start a business, \”but there\’s something I don\’t know about.\” For example, \”I\’m just a teenager, \”I don\’t know what taxes are, someone help!\” No, Hillary, that\’s not how successful people do it.

Don\’t ask others to help you, help yourself.

You\’ve heard of this scary word, \”taxes\”, and you know that when you earn money that you need to pay taxes. You just Google, \”what are taxes?\” and start reading and learning yourself. Do you think that I, a successful business owner, just magically knew how to pay my taxes? No, I had to learn just like everyone else.

I remember when I was a kid, I had this really weird idea that when I became a legal adult, I just suddenly know how to do all things that adults do. Like paying taxes, eating a balanced diet, balancing a budget. But no, sadly that\’s not how it works. And I genuinely don\’t know why little Sarah thought this. What separates successful people in life from everyone else?

It\’s not their age, but their ability to hit a roadblock and rather than it let them stop them or freak them out, to find an answer.

That is what Google is for. And the good news, Hillary, is that, in the U.S.A.

, there were over 30 million people running businesses and over 50% of them are more than five years old, still running successfully. And yet only 2% of the entire USA population is of gifted intelligence. Clearly, most people who are running successful businesses are just average. So if average people like me can figure this stuff out, I\’m sure that you can too. But you know, if there is a question that you would rather ask me than Google, then there is an opportunity to do so because at 8:00 PM Eastern USA time tonight, as in the day that this video goes live, I am hosting a live QA hangout session on my Instagram page.

So if you haven\’t followed me, go ahead and do so. But anyway, back to the video. Six, have realistic expectations with profit margins. So, honest truth. When I first got started in business, I had wildly unrealistic expectations and ideas about how much profit businesses actually made.

And I can see by reading the comments that a lot of other people do, too. See, take this comment from Saul here, who\’s username on YouTube used to be John. Fun fact, but yes, this comment was in response to a video which showcased how you can sell custom tee shirts you create on Amazon by using their print-on-demand service to create and upload tee shirts and sell them and make money for free.

By default, Amazon will take 74% of the money the customer paid and use it to, you know, do the marketing, to bring in over 2 billion visits to the marketplace, so that customers can find the tee shirts you list and buy them for free, no marketing cost to you. And of course, the actual process of printing the design onto the tee shirt inside of their print-on-demand factory, plus the service of, of course, packaging your item up and then shipping it out to the customer.

For the privilege of Amazon doing all of that for you, the standard commission rate is they will take 74% and pay 26% out to you as a commission.

So when I read Saul\’s comment, the honest truth was I was like, \”Ah, Saul, you might need to rethink \”your expectations a little here.\” And honestly, he\’s not the only one. I get so many comments from people that think anywhere from 15 to 20% profits are low, but in actuality, in business, well, it definitely differs from industry to industry, in the majority of industries, a 20% profit margin isn\’t considered low, it\’s considered high. 10% is average.

Seriously, try complaining about a 26% profit margin to your local bakery and see what their response is. Seven, it\’s better to earn less passive income than more active income. And so here is the real kicker. After declaring that 26% profit margin is low, Saul declared that he would much rather go and buy these tee shirts in bulk himself from a tee shirt manufacturer, in their different size and color variations, and handle all the processing, packing, and shipping himself so that he could make 40 to 50% profit margins instead of 26%. And I was like, \”No, mate, no, no.

\”Trust me, it\’s not worth it.\” See, here\’s the thing. As I said, when I first got started in business, I too had wildly unrealistic expectations around profit margins. I too would have balked at earning a 26% profit margin on the items I sold. See, just like Saul here, I too processed, packaged and shipped all the items myself.

Why? So that I could save money and thus have a higher profit margin. But of course, that was incredibly stupid and shortsighted for numerous reasons, and I\’m only going to talk about one of them in this video, but if you can think of any others, please leave them in the comment section.

But again, for the sake of brevity, we\’re just going to focus on one. And that reason is actually this, my hand.

This hand here, it was so messed up that I could barely use it for two weeks. So just imagine if instead of my current print-on-demand store where my print-on-demand providers, Printify and Printful, take care of all the production, orders, and shipping for me and I had to do all that myself? Well, you know, I would have been pretty screwed, but not anymore. These days, I\’ve built my eCommerce business around print-on-demand apps that will create and sell the products for me automatically as customers order them and for any products that I can\’t use print-on-demand providers for, I buy them in bulk and store them in Printful\’s fulfillment warehouse and I essentially drop ship it from there. Anytime I sell a product I\’ve stored in here, Printful will see the sale of the item, they\’ll automatically package it up and they will ship it out to the customer.

And yes, it does mean that I have smaller profit margins because I have to pay these services fees to be able to make use of them. However, in my opinion, it is well worth it. So if this video helped you, then please hit that Subscribe button for more videos about creating and scaling a successful online business. And hit that little notification bell so that you don\’t miss out on any of my videos. And if you want to find out the seven mistakes that I made in my first store that caused it to fail and what I did to fix them, then be sure to check out that video now, which I will have a link to here on my end screen.

So go ahead, click on my next video and I will see you over there. (smooth electronic music).

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