Before we discuss how to find and test your million dollar business idea, I have a question.
Do you really, truly want to start a business and work for yourself? Or are you just saying you want to work for yourself?
Take a moment to really reflect on that. There of plenty of people who like to talk the talk. I’ve spoken to them before. They call me, all hot to trot for about 3 minutes. And the next time I follow up, they have done nothing to change their reality.
If you want to tell your boss to go to hell, and really begin to take your life and career into your own hands, it’s absolutely possible. But it’s not going to happen while you sit on your couch, devouring a bag of chips and watching Mad Men on Netflix.
Rather than give you a pristine “how to” guide, I’m going to just tell you how I did it for myself. I don’t claim that my path will be your path, but hopefully you can glean some little tidbits. But first a little background.
My name is Jason Milleisen. I’m the founder and owner of a consulting firm called Distressed Loan Advisors. I specialize in helping people through SBA loan default. I could write about book about the SBA offer in compromise, actually I have, but I won’t get into all that here. All you need to know is that I help small business owners who can’t repay on particular type of loan called an SBA loan to seek forgiveness.
I work for myself, and have since January 2011. That was the month I told the corporate world to take a hike. I was working for a bank called Valley National Bank as a VP and a workout officer. That January, I had worked a VNB for all of the 3 months. I had been hired away from CIT Small Business Lending because of my experience with SBA loans. I hated working for CIT, and I REALLY hated working for VNB. Every day, I had to be the bad guy. Suing people, going after their stuff, and generally crushing dreams. Sweet.
Step 1 Towards Freedom: MOVE!
My first steps towards breaking free of the shackles started years before 2011. You’re probably waiting for that one piece of magical advice, right? The one tidbit that sets you on a course towards fame and riches. I’m sorry to disappoint, but there’s no magic here. How I started? In 2001, I had an idea. I tried it, and failed. In 2002, I had another idea. I tried it, and failed. In 2003, I had an idea. I tried it, and failed. Starting to see the pattern here?
In order to reach your final destination, you need to take the first step. SO DO SOMETHING! I don’t care if it’s the worst idea ever. In fact, it’s probably better that way. Being an entrepreneur means learning to deal with failure and rejection, so developing a thicker skin is an invaluable part of the process.
Need something more concrete? Fine, try this. Make a list of all the things that you are either good at, or love doing. 5 to 10 should do. Once you have your list, go through each item, and think about how you could make a business out of it.
Here’s my list:
- Baseball – (I played division 1 baseball at St. Bonaventure University. Even had tryout with the Mets in High School, and the Texas Rangers had interest in drafting me). Read about my best day ever here!
- Financial Statement Analysis – I went through commercial credit training at Bank of America, and later went on to be a credit analyst and commercial lender at Bridgehampton National Bank on Long Island, NY.
- SBA Workout – I worked for CIT Small Business lending in their workout department, dealing with SBA loan default and SBA Offer In Compromise.
- Starting Businesses on a Shoestring – Odd, I know. Over the years, I’ve learned enough about web design, marketing, branding, and customer service that I could probably add value to someone else attempting to do the same thing.
- Podcasts – No skills to speak of. But I liked them, so I started a podcast.
Keep in mind that you don’t necessarily need to have a defined skill. An idea is just as good. Oh man, have I had those over the years:
Sunday Bagels – Deliver bagels on Sunday to hungover people.
Coin Princess – Coin counting by mail.
Batting Lessons – Set up a batting cage in my parents backyard.
Online Trivia – HQ Trivia eat your heart out
Distressed Loan Advisors – My grand slam. My baby. My heart and soul. I want to pass this business on to my kids one day.
Dun-Rite Underwriting Solutions – Ask banks to outsource commercial loan underwriting.
Orderup Montclair – Have food delivered from local restaurants delivered, but you choose meals weeks or months in advance
Howztraffic.com – Well before Waze, I was going to relay traffic conditions to people via text. While they were driving. Doh.
No matter what you do, remember this: It’s ok to fail. Better yet, EXPECT to fail. I did it a bunch of times, and learn some valuable lessons in the process.
Step 2 Towards Freedom: Pick An Idea
So many, ideas so little time! The big question is which one should you choose, and how do you decide?
Here’s what I did. I set some parameters:
- No brick and mortar – Rent is expensive and leases are long term
- No retail – Retail kinda sucks. Low margins, long hours, highly competitive
- No set hours – My wife works a ton of hours, and we have 2 kids. That means I’m the lead parent. School drop off and pickup. Doctor appointments, gymnastics, tap dance….you get the point. A fixed schedule doesn’t work.
- No physical products – Requires inventory, shipping, and returns. And you’ll probably be competing with Amazon.
- No employees – People only disappoint. Just kidding! Well, kinda.
- No weekends – That whole kids thing again. Plus it’s our only family time.
Ok, deep breath. Now it’s time to pick your idea. Don’t get bogged down by indecision. If you can’t decide, you can always test the ones you like to help you decide. Oops, I let the cat out of the bag….let’s move on to…
Step 3 Towards Freedom: Test Your Idea(s)
I wrote an article about testing your idea here, so I’m more or less going to copy and paste below.
I often hang around message boards on Reddit for “startup ideas”. Fairly frequently, people say they have an idea, but are very vague about them. When pressed on the details, they are afraid to give details be they believe that someone will steal their idea. But in reality, they have NO IDEA if their idea is anything the world wants or needs. So, the question for today is: how to you know if there is actually a market for the product or service? Does the world want your idea?
In this guys opinion, ideas are aren’t worth all that much. Here’s why. As an individual, it’s VERY difficult to predict how the rest of the world will react an idea. I can’t tell you how many ideas I’ve had when I was like “this is it! This is the idea that the world has been waiting for!” Coin counting by mail is a great example. I was convinced it was going to be a home run! What’s more important than the idea? The ability to test the idea, and when ones shows promise, the ability to execute upon them.
So how exactly do you test your business idea?
If you’ve heard the Cool Idea! podcast before, both Sully from Bombtech and Steve from Earthtiles had some outstanding, yet simple, advice. If you have an idea, build a landing page, with some pictures or a video, a description of the products, and a way to order or pre-order. Then run some advertisements on google or Facebook. For $250-$500 dollars, your idea will either be validated or sunk. If 500 people visit your site, and nobody places an order, pre-orders, or signs up to learn more, you may have your answer. If 500 visit, and 50 order, you now have validated (albeit on a small scale) that there is genuine interest in your product.
The point here is that there is no way to know intuitively whether your idea is a good one, and until unleash it onto the real world, it’s not worth a whole lot.
So before you take an unnecessary risk on an untested idea, take a beat. The worst thing you could do is take an SBA loan to fund your bright idea, offering them your personal guarantee and pledging your home as collateral in the process. Instead, take a step back and run a little experiment to determine whether even a small sliver of the population likes your idea. You don’t need to be a genius to know that losing $500 on some Facebook ads is going to hurt a lot less than defaulting on your SBA loan after your business flops.
Step 4 Towards Freedom: Find Your Sales Channel
Now that you have validated your idea, it’s time to figure out the best way to reach your audience. It’s important to note that just like you tested your idea initially, you should view finding a sales channel in a similar light. We’re not going “all in” on any one channel until we know it’s going to pay dividends.
Let me back for a minute. I should define sales channel. A sales channel is simply a place where you find your customer. And a place can mean a virtual place. The most traditional sales channel is a brick and mortar retail shop. Of course, when we talk about online channels, Facebook and Amazon are fantastic.
For Distressed Loan Advisors, I’ve tried a bunch of channels over the years, including:
- Referral programs – I reached out to commercial lenders, CPAs, and finance bloggers. I offered a percentage of any sale that they referred to me.
- SEO – I wrote a ton of original content. I also got fleeced by a company in India that I hired on Upwork.
- Google Ads – When people search for things like “SBA Default”, they see my ad.
- Direct Outreach – I had lists of thousands of SBA borrowers.
- Facebook Ads – You can pick an audience, and serve up advertisements
- Expert Answers – I answer questions on sites like Quora and comment on blogs relevant to SBA loan default.
- Podcast – I started a podcast, and had Distressed Loan Advisors as the featured sponsor.
- Lead Generation Services – There are companies that will try to get leads for you, and you per them on a per-lead basis.
Did all of these work? No. But there was no way to know until I tried. I did little experiments, and ran some numbers.
So how did it all play out?
- Referral programs – Given the niche nature of my business, the lack of consistent volume meant that noboy wanted to spend the time or effort to set something up.
- SEO – It took about a year, but after writing original, high quality content on a consistent basis, I began to see results. And the best part is that its FREE!
- Google Ads – Work REALLY well the first few years, then tailed off. I also found out that I had paid $5,000 because people were searching for some test called “SBAC”, and Google thought that was a match. That kinda sucked. I still used Google Ads, but with very targeted ads and keywords.
- Direct Outreach – Finding a borrower who needs my services is like finding a needle in a haystack. Just not worth the time and effort.
- Facebook Ads – Similar to direct outreach. I targeted business owners, not know if they were in a position to need my services.
- Expert Answers – Minimal effort, so I will continue to do it. And it’s free.
- Podcast – More of a pet project. No real results.
- Lead Generation Services -The lead generation guys were promising to send me 10 leads per month, and they wanted $2,000 per month to do it. When I compared how many clicks I could get from Google Ads for that price, the lead generation thing didn’t make sense. Even at $20 per click, I’d get 100 people who were interested in my services.
In order to keep costs down, it’s a good idea to become a jack of all trades. You don’t need to become an expert at any of the skills I’ve listed below, but there are many basic tasks you can just learn by Googling.
Website Design Skills
You don’t need to be Mark Zuckerburg. The resources to build a basic website exists in many place, and they are absolutely free. Before you spend $25,000, do some tinkering. I built the Salvato’s Pizza website in a weekend using Wix. Nothing fancy, but it’s sufficient to test my idea (NY Pizza delivered nationally. That’s right, NY Pizza delivered anywhere in the US!)
If you pick a small enough niche, having some SEO skills could eliminate the need to pay for advertising. Imagine selling a product that people are searching for, and having your site come up on page 1 of Google results.
- Be Nice – First and foremost, being courteous, energetic and personable go a really long way. In today’s commoditized market for “stuff” thanks to Wal-Mart and Amazon, those who can master the art of superior service will have a leg up. This applies to both phone and email interactions.
- Get a Chat Plugin – Giving your customers the chance to talk with you while on the site is huge for engagement and conversions. It actually saves me a ton of time. Instead of scheduling calls for situations I can’t help with, I address it in real time via on site chat. There are a ton of them, but I use a plugin called Tidio on my wordpress site for SBA default consulting.
- Get an 800 Number – Having a toll-free 800 number gives you an air of legitimacy, and it super easy to set up. I use a service called Kall8. It allows the 800 number to ring directly to my cell phone, and voicemails are emailed to me in an mp3 so I can easily check voicemail even if I don’t have cell service.
In my next article, I will take you step by step through my most recent business. There are some additional details that we’ll get into that gives a decent glimpse into how the sausage is made.
Looking for some direction or hands on help? I can help you vet your idea and test it. I can be reached at firstname.lastname@example.org or at 1-877-436-4533.