How to Create Your Own Product 1 – Research and Outline

MODULE 1

CHAPTER 11

HOW TO CREATE YOUR OWN PRODUCT 1

– RESEARCH AND OUTLINE

1.0 INTRODUCTION

2.0 OBJECTIVES

3.0 MAIN CONTENT

3.1 Start with Information Product

3.2 The pros

  • The Leverages
  • Global Marketplace
  • Deploying the Power of Global Alliances
  • Better Kitted for Success on a Global Dimension
  • You Become a Highly Marketable Expert
  • Robust Resources for Premium Sales
  • Residual Income Extraordinaire
  • High Returns on Investment

3.3 The Cons

3.3.1 The Learning Curve

3.4 A Blissful Start

3.5 Remember, ‘Everything is a Remix’

3.6.0 How to Decide on the Kind of Product That You Want to Create

3.6.1 Meet Specific Need

  • Conduct a Survey of Your Audience
  • Scour the Internet for Blog Comments and Forums on Your Niche Market
  • Read Between the Lines
  • Showcase Your Expertise

3.7.0 Start with Your Most Convenient Method

  • Audio
  • eBook
  • Video

3.8 Product Forms

3.9.0 The Process

3.9.1 Do your market research

3.9.2 Sourcing for Marketable Information

  • Private resale rights
  • Interview experts
  • Compile popular questions and give answers
  • Permissible thefts
  • Record other people seminar and reuse
  • Set up webinars and teleseminars
  • Screen capture your skills using your computer
  • Adapt a successful eBook into another language

3.10.0 The Act and the Art of Creating Your Own Product

3.10.1 Write out your product outline

  • Write the eBook in Full
  • Turn it into PDF
  • Make Your eBook Beautiful

3.11 Write the Email Swipes

3.12 Create and Set up the Sales letter

4.0 CONCLUSION

5.0 SUMMARY

6.0 ASSIGNMENT

1.0 INTRODUCTION

Creating your own product for sale to your market is by far, a better idea, but it has some pros and cons.

2.0 OBJECTIVES

  • To give details procedures involve in creating an information products
  • To provide resourceful links to make this possible
  • To encourage learners to use this ecourse to plan and create their first information product

3.0 MAIN COURSE

When you are about to start an Internet Marketing business, two things will readily come to your mind.

The two things are:

  • are you going to sell your own products, and render services directly from your own self hosted website
  • or sell someone else product and services?

In other words, what are you going to sell to your customers?

3.1 Start with Information Product

Let me assume that your answer is that you want to sell your own information products. You may not want to start with a service like web hosting or website design service as you may not be a Technical person (AKA a Techie).

Hopefully, you will get to that point someday, if that is what you want. But for now it is a good flay of wisdom to offer an information product for obvious reasons – it is an easier, faster and highly profitable approach to online business.

Creating your own product for sale to your market is by far, a better idea, but it has some pros and cons:

3.2.0 The pros

  • The Leverages

Internet offers the greatest leverages now for any business than had ever existed in Industrial History till date.

If you have not done so before now, please hurry, find and read the book ‘Retire Young, Retire Rich’ by Robert Kiyosaki, and you will understand the above statement more.

This simply means more leverages, more profits at shorter period for your business.

  • Global Marketplace

Having even one digital product to sell to the whole world is abundantly more than enough to pull you out of the woods – i.e. if you know what to do.

Infact, it is knowing the process that really matter in this business, and that is what you should pay rapt attention to learn in these your formative years in this business.

After that, the rest is history, and it is you that is going to create or rather, recreate that your life history.

  • Deploying the Power of Global Alliances

By way of Affiliates who offer their lists and expertise to serve you in marketing your product(s) for free.

  • Better Kitted for Success on a Global Dimension

Talking about the skills and experience you gain in the process, you are among the best, on a global scale, not just a local champion and not just for a while but for expended period of any foreseeable future. Can you beat that?

  • You Become a Highly Marketable Expert

You can now build more and more products faster after the initial experience. Your can do this for yourself and others if you wish to.

  • Robust Resources for Premium Sales

Your initial product can easily be turn into other forms for sales at higher prices – Audio, eBook, Membership site, etc.

  • Residual Income Extraordinaire

You just create it once and sell over and over again, with few and rare revisions when necessary to keep up with technological development in the marketplace.

  • High returns on investment

Such that is never heard of in any other industry. Most of the time, when done, correctly, it usually brings in on a consistent basis, over 100% returns on investment (ROI).

There are so many other advantages to be enjoyed by a digital product owner, but let us just break here so that we can focus on other related issues.

3.3.0 The cons

3.3.1 The Learning Curve

This will cost you a bit more in terms of time and money.

But, it is doable.

3.4 A Blissful Start

If you are a professional or you have a high in demand skill set, you can easily start by selling some useful advice on that online.

For instance, you may be a Tailor, Seamstress, Organist, Teacher, Nurse, Doctor, Engineer, Accountant, etc. Do market research on the aspects of your profession that people are searching for more information with the tools that we discussed in chapters 2 and 3 of this ecourse.

Use those results of your market research to build your own product as we shall discuss in this and subsequent chapter.

A teacher may for instance decide to own a website and teach the whole instead of just his classroom members. Look in the direction of any of the following courses which are already in high demand globally:

beauty tips,

language lessons – French, German, Russian, Chinese and even English.

Remember, our world has become a global village, there is therefore a very high demand for these lessons worldwide.

A Nurse can teach Health with special bias on Natural Remedies. Most ailments that have become anathema in Western (Orthodox) medicine have been resolved with the help of these natural remedies. Thus, information on natural cures for cancer, diabetes, arthritis, etc. are selling like hot cake online now.

We have noted somewhere that as far as information marketing is concerned, the big three areas are Health and Beauty, Love and Relationship, and How to Make Money.

But this does not mean that information are not selling in other areas, or that people are not making a living online selling other products outside the big three. For instance, an Engineer may resort to Technical Writing. People who are not even Engineers are doing well in technical writing.

In your own country, what is the current challenges that people have? Remember your information product is not meant to be all about you, but to help people who buy them to solve their immediate problems.

Some people in your country want to travel abroad, learn baking, get overseas education, do rice farming, do importation, export cassava and garlic, learn computer programming, web design, SEO, decoration, etc., etc.

Please note that to minimize delay and confusion of what product to sell, you must first of all decide if you want to start selling at the local or foreign market.

There are a whole world of differences in both marketplaces.

Again, you don’t have to be an expert.

Just find out what people want and assemble information that satisfies that specific want and give it to them at a profit.

3.5 Remember, ‘Everything is a Remix’

Google for ‘Everything is a Remix on Vimeo’ and watch the online video.

Also remember what Steve Jobs said:

‘Good Artists Copy, Great Artist Steal. We have always been shameless about stealing great ideas’ – Steve Jobs, 1994.

This boils down to: creativity + innovation(s) = invention(s).

Again, let’s look at it this way, the basis of modern day information and communication industry started with the invention of:

Telephone, then,

Radio, then,

Telegram (telegraph), then,

Black and white television, then,

Coloured television, then,

Satellite television, then,

Mobile telephone, then,

Mobile satellite television (in mobile phones and PCs), then,

Mobile private and public satellite Video (TV) Channel e.g. YouTube

Mobile private and public satellite Radio Channel (in mobile phones and PCs), then,

And so on and so forth… more abound that I have not mentioned here, and many more are yet to come.

I am not about the order of which one came first, I am leaving that to the students of history and philosophy of science, but my concerns are:

the connectivity of the basic idea* + the main new idea**,

the creativity,

the innovation and

the ‘invention mix’ (as in the ‘market mix’).

And, it all started with GRAHAM BELL’s telephone.

In fact, if you scour the internet, you will discover that, it was not Graham Bell that originally invented the telephone, but the court, US and history at large just credited it to his name because of the wise and skilful innovations he added to the original patent that made it commercially viable till date!

(* the basic idea or the general idea here refers to communication by the old, usual and the natural means.

** while the main new idea here refers to communication by the new means i.e. the newly discovered or to be discovered means, in the case of telephone – communication by means of electrical wires).

That is what I referred to as ‘stealing wisely’ in chapter 9 of this course:

In our days – the 21st century, you don’t even need to steal, just ask the experts for a sample or complimentary copy and they will happily oblique.

So don’t be afraid to give an old information a new dress, shape or form. It could turn out to be very useful to you or at least to the rest of the people out there.

No, just go and take a long-drawn-look at the marketplaces, the categories, the niches and the sub niches and you will discover profitable niches to play along.

Sites like Nairaland, Hot Spot, ClickBank or JVZoo are good places to begin.

3.6.0 How to Decide on the Kind of Product That You Want to Create

Please note well what I want to say now.

It is what makes the difference between a successful business and a struggling one. It also applies to offline business, not just internet marketing only.

Do not sell what people are not looking for. Find out what they are looking for to use and solve their problems and fetch out or create the information product(s) for them and they will happily and repeatedly hand over their money to you in exchange for the solution to their problem.

Another way to say this is:

People generally want to buy solution to their problems. They have a pain they want to relieve, they have a sore or painful area in their live that they want to resolve as soon as possible or they have a level of pleasure that they want to enjoy. That is the reason they go online to seek for solutions.

Thus, your product must be a solution to their sore or painful areas of their lives, or it must provide the pleasure they need. It must relieve a specific pain(s) or give them a specific pleasure(s) they were looking for.

That and that alone is what will make them match down your website in droves in search for your product. So far as it resolve the pains or provide the needed pleasure, they will happily and repeatedly pay you for it.

But, there is still another way of saying this: ‘in online business, first, find out what people want to buy, then, find (or create) the product and sell to them at a profit’.

In practice, this applies in reverse order to offline business: where people first, find or create the product before they set out to find a market to sell to.

Thus, this small difference is what makes online business a highly profitable venture compared to offline counterparts.

By the time you finish the process of getting your information product, the market is ready, willing and even very hungry to buy it from you.

3.6.1 Meet Specific Need

You Can Be Sure Your Product Will Meet Specific Need and bring in high returns by doing the following things:

  • Conduct a Survey of Your Audience

This is possible if you have an existing Blog or Email list. If not, do not worry, there are many other ways to do this as we shall see next.

On your blog comment or email feedback, ask them the type of product that they will like to have, the format and the topics they will like treated. Find time to interact with your blog readers or members of your list. It can be very rewarding.

  • Scour the Internet for Blog Comments and Forums on Your Niche Market

Many people go online to talk about their problems and their cares. If there are many people talking about a certain issue in a forum or blog, this means that products that resolve such matter will sell well. Some blogs and forum require signed membership for this very reason, so do not be afraid to sign up. Do not ignore the social media in the process: Facebook, Twitter, Instagram, YouTube, Google Hangout, etc.

  • Read Between the Lines

This an advanced tactics. If you are already selling affiliate products online successfully, then watch out the type of products that people buys regularly and create similar product of your own in the market. It will sell like wildfire.

Remember, everything is a remix!

Not only in this business but in all aspects of life, everything is a remix.

You can also observe your blog for the most widely read articles and then create related products for sale. Then just add your links to those popular products and you are good to go.

  • Showcase Your Expertise

I have already talked on this in the previous paragraphs. As a professional, if you have a high-in-demand expertise (e.g. a beautician, physiotherapist, naturalist, etc.), then you can do market research to find out how people like you are selling theirs online and follow suit.

To avoid creating a product that will not make you money for your effort and investment follow these step one by one and will you find among them one, two or more that you can follow through based on your level of experience.

Please go back and follow the above steps one after the other to arrive at a marketable and profitable product(s).

3.7.0 Start with Your Most Convenient Method

  • Audio – you can just read out or dictate or talk what you intend to write in a standby microphone in a silent environment where there is no background noise. At the end what you have is an Audio product that you can sell anywhere around the globe.

Audacity is one of the best tools for doing this, Google for: audacityteam.

  • eBook – later, copying out the content of your audio product into a computer software like the Microsoft word (Open Office, it’s a FREE software, just browse and get it on the net) will create an eBook for you.

To sell it online all you need is to turn it into a Portable Document File (PDF) and it becomes a scalable product. More on this in a while.

  • Video – in most part of the world, people who wax music for the first time usually start with an audio CD and later a Video CD and progress to other formats including FLAC, MP3, WMA, WAV, etc. or vice versa.

Did you ever ask, why?

Convenience, cost and preferences.

Camtasia Studio is one of the best and industry standard nowadays for online video. But you can even start with your smart phone and upload the videos onto YouTube and it will be acceptable while you are making money to acquire expensive camera or learning how to use online software like Camtasia.

3.8 Other Product Forms

In the final analysis, your product must take so many forms so that you can sell it in so many markets in response to the market preferences.

Such forms include:

Audio training

Video series

Questions and answers

Membership Site with new contents added monthly

eBooks

Coaching supported by telephone calls,

Emails,

Skype,

Webinar,

Short reports,

Assignments,

Templates,

Continuity programs – weekly, fortnightly, monthly, quarterly, bimonthly, etc.

Workbooks,

Swipe files, and so on and so forth.

Suppose you want to start by creating your own digital product now, how do you start?

3.9.0 The Process

Below is an example of steps to follow in your information product creation process:

3.9.1 Do your market research

Google Keyword Planner, Market Samurai, and Longtail Pro, Nichebot are the best tools in the market for this task. I have already discussed in one of this course how to use at least one of them. You can Google for others.

3.9.2 Sourcing for Marketable Information

To make product creation a lot easier for most green horns and even topflight experienced business executives, there are ethical ways that you can source for information to make your new products.

Such ways include but not limited to:

  • Private resale rights

Just type that into your browser and you will find multiple sites to choose from. Usually you buy and rewrite them as your own product and add your own angle to the product. Remember this product is sold to many people and not only you, so endeavor to polish it to make it unique. If you are using free products for this, always endeavor to check out the rights, to avoid legal issues in the future.

  • Interview experts

Find out experts in your field and interview them. You can then use transcription services at Fiverr, Upwork, etc. to write them out in any form that you want.

  • Compile popular questions and give answers

You can do this by yourself even as a newbie in your market niche. You can also use freelancers at: Peopleperhour, 99designs, Craiglist, Toptal, etc.

  • Permissible thefts

Go to EzineArticles.com and browse for your popular categories. Download about 50 articles in your chosen niche topic and compile them into an eBook. You can cite them in bits and pieces and spice the book up with some Vimeo or YouTube videos.

This is legal so far as you keep the authors’ resource boxes intact. Remember to insert link to your site as you introduce the subject matter, turn it into PDF and sell.

  • Record other people seminar and reuse

You can help a friend record his seminar on the agreement that you will use it also to promote your own products. Your phone or your camera can do the job cheap for you, no need for a professional cameraman.

  • Set up webinars and teleseminars

You need some experience and confidence to do this, albeit it is not a hard thing. You can skip this till when you have enough money to hire expert to help you in the process. There are free and paid services to choose from.

The free ones are: Google hangout, zoom, bigbluebutton, join.me, meetingburner, mikogo, zohomeeting, webhurdle.

Anymeeting and gotomeeting are paid service, but they also have free trials for new clients.

  • Screen capture your skills using your computer

If you want to teach your skills to online audience, this is the preferred approach.

There is a free tool you can use for this: screencast-o-matic

  • Adapt a successful eBook into another language

China is a global destination now for global trade. Find a book, obtain the right and adapt it into Chinese and it will sell like hot cake. You can also do this with other books and other languages.

This is called Transcription service.

3.10.0 The Act and the Art of Creating Your Own Product

3.10.1 Write out your product outline

Start with major topics that you would discuss in your eBook, then write out the bullet points under each topic. As you fill in simple explanations in between the major topics will later become the chapters, while the bullet points will become the sections and sub sections of the book.

3.10.2 Write the eBook in Full

After the initial rough or manuscript as some may like to call it, go through the product again with the aim of crossing the tees and dotting the ais. Also read the whole plot with the aim of ensuring Mechanical Accuracy and some Congruence in the points presented.

Some people may differ on this by saying that you should not aim at perfection, there is actually no prefect product in the market as the Internet world is always changing in a very fast rate.

But I am not advocating perfection here, but wish to clarify the fact that there is always a growing competition in the marketplace and most victims are poorly and unduly hurried products.

If you found it more convenience to start with the Audio format, you can also use this software to get both Audio and eBook copies delivered to you online at the same time at:

dragon speech recognition software

3.10.3 Turn it into PDF

From your Microsoft word (Microsoft Open Office), you can easily convert your eBook into a PDF format. PDF is a globally available software that is usable in all types of computers.

This is advisable to do as you will be sending your eBook to different people in different parts of the world. Different people in different environments are orientated to different software, so it is good to have your eBook in a generally acceptable format that satisfies these global markets.

Henceforth, think and see your business as a global venture.

3.10.4 Make Your eBook Beautiful

It is more than a common sense to note here that if you add an attractive eBook cover to your product, you will attract more sales than if you just sold it as an ordinary PDF.

Period.

If you don’t know how to do this yourself, employ the services of experts online at ebookbaby, myecovermaker or even at Fiverr.

3.11 Write the Email Swipes

Email swipes will form part of your marketing materials.

See yourself now as a Vendor in one or more of the Affiliate Program sites like ClickBank or Affiliate network like Commission Junction.

Email swipes are follow up emails that you and your Affiliates will be using to follow up your prospects. It is known that most people won’t buy from you until you have been in touch with them for about seven times. Go ahead and write them now.

3.12 Create and Set up the Sales letter

A Sales Letter is your secret sales machine and the untiring Salesman.

This is going to be the page that you are going to show to your prospects who sign-up in response to your ads. It gives in details the benefits of your product, why he should buy now, how much he should pay into which account.

Ensure that your sales letter is professionally written. A good blend of text and graphics is recommended.

But if you are scared, you can get a virtual assistant at Fiverr to handle this on your behalf.

3.13 Set up Everything and Get Ready For Sales

By now you must have set-up a self-hosted website for this product. There are FREE and reliable software as well as paid once for this depending on your budget.

Just upload everything – the email swipes, sales letter, all the graphics and relevant files onto the website.

Remember to test-run everything by yourself, as well as asking your friends or mentors to also help you test-run, before you begin to advertise your business to the public.

3.14 The Profits are in the Links

I want to end this chapter by emphasizing the fact that we are living in the LINK ECONOMY. In other words, the profits of this business flows through the links.

This means check all your links to ensure that they all work fine. Use affiliate link where appropriate, confirm your right to use free products sourced online to avoid legal issues; and most of all be sure the download link of your own product is working as intended.

That’s the deal.

4.0 CONCLUSION

I just notice that I have gone so far, many pages, many sections and sub sections.

This is because, when you have your own product that is where the Internet Riches that you have been hearing of, actually comes from.

5.0 SUMMARY

I covered step by step details on how to create your own profitable product for the marketplace. But there are still other details that I have left out for the next chapter.

6.0 ASSIGNMENT

Go over this chapter again and again to get a good grasp of the process as I will be dealing with another aspect of this fast-tract riches in the next chapter.

The Speed of CSLA Vs Open Source Alternatives

Standing for Component-based Scalable Logical Architecture, CSLA.NET is a software development framework designed to manage the cost of building and maintaining applications. By focusing on object-based design, CSLA gives all of its created business objects full functionality with all.NET platforms. CSLA is widely preferred because of its versatility and detailed documentation. The great barriers to successful CSLA implementation stand with the challenging learning curve and its complexity; these factors lead some to consider other options.

Businesses gravitate toward CSLA because of its ease of use with other critical programs and platforms. The latest incarnation of CSLA.NET, version 4.3, functions with Microsoft.NET 4.0, Visual Studio 2010, and Silverlight 5. As demand continues to increase for strong mobile applications, CSLA 4.3 also supports mobile devices, including Linux, Android, and Mac OSX.

Utility aside, some critics argue that CSLA’s learning curve makes it unsuitable for some business needs. In theory, small businesses enjoy neither the time nor the budget necessary to learn the program or hire experts. CSLA’s sole documentation comes in the form of creator Rockford Lhotka’s books, and while they are not prohibitively expensive, some may balk at the proposition of learning a software development framework from a book. The alternative would be to seek a mentor in a classroom environment, but the cost – and perhaps more significantly, the time – involved could form a barrier to entry. Even with training, businesses will need least one person with expert knowledge of things like serialization, generics, and programming using abstract classes. Though no software development framework is “easy ” to learn, other open-source alternatives may provide a simpler solution. Likewise, the belief in CSLA’s “feature bloat” usually comes from those with a specific need as opposed to CSLA’s broad applications. For a fledgling business with a small project, CSLA’s powerful capabilities could become unnecessary complications.

Other users cite frustration with CSLA’s reliance on reflection over interface method implementation. CSLA’s DataPortal uses reflection to identify an object’s data save and retrieve behavior, which can lead to problems when debugging code. Specifically, reflection will negate compile time during DataPortal’s runtime, increasing the threat of deploying buggy code. Furthermore, reflection’s detractors claim it is slow, especially when compared to static code execution.

Lhotka developed the primordial version of CSLA.NET in 1998, and its long history of refinement has currently afforded it the status of the “alpha and omega” of open-source software development frameworks. To some, its over-arching capabilities will require too intricate knowledge for efficient use because of budget and time constraints. Those without the expertise or finances to take full advantage of CSLA.NET’s offerings should consider a more narrowly-focused open-source alternative. For enterprises who have the means to take full advantage, however, it remains one of the market’s top choices for open-source.NET development frameworks.

Wealth Formula That Can Never Fail

One question that keeps coming up in my interaction with some of my readers during the out-going year is, “What can I be doing to earn steady income and stop depending on people?”

Each time someone puts this question to me, it gets me thinking. I turn the question around and ask, “Is there a wealth creation formula, one that can never fail? If there is, what is the formula? And how complex is it? Can just about anyone who is determined do it?”

After months of deep reflection and extensive research, I believe I know the answer to those questions. Yes there is, indeed, a wealth creation formula, one that can never fail!

Before I tell you what the formula is, let me quickly explain the word formula because it holds the key to your having a clear understanding of what I’m trying to share with you here.

Formula, according to one online dictionary, is a set form of words, as for stating or declaring something definitely or authoritatively, for indicating procedure to be followed, or for prescribed use of something.

In other words, it’s a fixed or conventional method for doing something; a rule or principle, a recipe or prescription.

With that definition, you get the idea that a wealth creation formula is a set of principles or recipes. So now what is the formula? It’s a four-part process which, when combined, makes it possible for you to create wealth.

Here are the four parts:

1. Make GOD the foundation

2. Find a way to start earning legitimate income at a regular frequency and discipline yourself never to spend it all;

3. Learn the art of how to get paid over and over for your service and

4. Focus absolutely on steps 1, 2 and 3 by finding a way to do it better and better repeatedly.

That’s the formula. Now, let’s break it down. The first part is straight-forward, isn’t it? What it means is that you’re to make a decision to fall in line with what GOD says. That implies that you must know what GOD said and can align yourself with it.

The best way to achieve this is to become a serious student of the Word of GOD and, as you get to know what the Word says and be committed to doing them, you are laying a solid foundation for wealth creation.

For example, if your GOD is the same One that I’m serving, then you will be a committed hearer and doer of what GOD has said which are recorded in the Bible. A devoted and excited doer of the Word is a sure candidate for enduring wealth.

That person just cannot fail to have all round success. This is how the Word confirms that assertion: “Do not let this Book of the Law depart from your mouth; meditate on it day and night, so that you may be careful to do everything written in it. Then you will be prosperous and successful.” Joshua 1:8.

That should make your heart sing for joy if you’re a hearer and doer of the Word. Why? Because you’ve just heard Him say it [hearer] and if you now go ahead and do what the Word says, you have become a doer.

Then you will qualify for what the Word promised. And my GOD will never deny Himself. He will do whatever He has said in His Word. Nothing is too hard for Him.

Part two of the formula says to find a way to start earning legitimate income at a regular frequency and never spending all your earnings.

Usually, this does not mean earnings from a dream job or a top flight career. We are here talking about someone who is probably jobless and has no clues about where the next meal will come from or someone whose total income in a month is “nothing to write home about.”

The temptation for people who find themselves in this situation is to either get so discouraged and despondent that they give up on life.

I have to admit that this is a very challenging condition. But if you can just brace yourself up and do what I’m about to recommend, you will not only find your feet, you will also escape from the shackles of poverty.

The thing to do, to overcome this challenge is simply to get up and find a valuable service that you can render for somebody for which you will be paid. And, whatever that thing is, make sure it’s legitimate.

Then when that effort starts to generate some income, go a step further and discipline yourself not to spend all your earnings no matter how meagre it may be.

This is a very crucial aspect of the wealth creation formula. Most people don’t get past this stage. They either get stuck with the menial job they are doing that is giving them steady income or they look at the money they are earning with disdain, instead of thanking GOD for it.

But if you understand how this formula works, you will have a different mind-set. First, you will realize that this is a temporary stage in your life. It’s not a place you want to stay too long at.

All you want to do here is to have some money coming in which can provide you with some food to eat [not necessarily a regular satisfactory meal] as well as have some left to invest on self development.

For your investment in self development, be careful in making your choice. Here is a secret I want you to learn. Acquiring a specialized skill which you can master very well and use your knowledge to serve others is the best way to go.

For example, you know for a fact that there are some things that people and companies will always pay other people to do for them. Choose one of those things that you like, learn how to do it and then work at being the person who renders the service better than anyone else.

If you can discipline yourself to do this, you are halfway out of the poverty zone. Before I go to the third part of this formula, let me emphasize another thing. Earlier on, I hinted you about the danger of not being grateful for the meager income you’re earning from doing menial jobs at the second stage of the formula.

Well, you really ought to be careful about it. If you allow lack of gratitude to creep into your heart, it will so consume you to the point of not letting you have the desire to engage in self development. If you allow that to happen to you, you will be in deep trouble. So watch out!

Okay, now you have crossed that first dangerous hurdle where many get knocked down. In the third part of the formula, your goal is to hone in your skill in order to be getting paid over and over for your service.

What exactly does this mean? Remember that you now have a skill? And that you have mastered that skill to the point where you can position yourself as the one that can do it better than anyone else? Now is the time for you to set up a business based on that specialized skill.

Being the number one in your area of specialty does not automatically translate to your business spinning off profit once you opened shop. This is another trap that often trips people that are just starting in business.

When most people start their business, they expect it to take off with a bang. And they can’t wait to start banking their profits. But it hardly ever happen that way. And when it doesn’t, most people lose interest in the business and wander off to other things.

To get this part of the formula right, you have to learn to exercise patience. And I can tell you this from experience that this stage of the process leading to your financial freedom could be even more challenging than when you had to do menial jobs to generate cash flow.

A combination of all the lessons you learnt in parts one and two of this formula are what you will rely on to help you overcome the winter season you will encounter in the part three of the formula.

There will be a new demand on you to learn other skills, especially skills like how to run a successful business, how to market your products and services, how to manage human and material resources and how to attract customers and make them happy for life.

Your ability to learn these things and excel in them will determine how successful your business will be. But if you persevere and put everything you learn into practice, not discountenancing integrity and ethical behaviour in your business, you will get to a place where that profit you thought would not show up or was too late in coming will be the order of the day.

When you get to that place, all you will ever need to do will be to be applying everything you learnt in steps 1, 2 and 3. But this time, you will be doing it better, smarter and faster. And as you keep doing that, you will be growing bigger and bigger.

That is my formula for creating wealth that can never fail.

Is Now the Right Time to Buy a Car Dealership?

There is never a wrong time to buy a car dealership, only a wrong way to buy one.

In 2009 there have been dealerships (both domestic and import) that have made over half a million dollars in one month, yet the majority of the pundits said that 2009 was not the time to buy a dealership.

Remember “If you wait for perfect conditions, you will never get anything done.” Ecclesiastes 11:4. It is not the “conditions” that count; it is your “analysis.” The fact is that most car dealerships that closed in 2009 were bought or established during what the pundits now describe as “the good times.” The times when owners and the experts lamented were “the right times” to buy and build.

Case in point: In 2008 Automotive News ran a front page story on a fellow that was building a Toyota dealership on the freeway, across from the Oakland Coliseum — a $35 million store, with five floors and a four-story glass showroom. The experts proclaimed about the dealer “… has a broader vision about the relationship between real estate and car dealers than you would ordinarily find.”

On February 24, 2009 The Oakland Tribune reported: “New Toyota dealership in Oakland closes”. In that article the dealership’s customer relations manager lamented: “I’m kind of in a state of shock because we thought we had such a bright and opportunistic future here, and with this, it just leaves an empty taste… “

When one analyzes that situation, the dealership was supposed to fail.

For a plethora of reasons, not the least of which was the store’s rent factor, the dealership’s success would have been contrary to the laws of nature. Analyzing that situation, however, is left for another article. For this article, the object lesson learned is: Even though the factory approves a transaction, the lenders finance it and the trade publications applaud it, those endorsements provide no guarantee a dealership is going to succeed. Having said that, there are many buyers who will still believe those endorsements mean success.

With the epidemic of lawsuits today, factories and lenders cannot give business advice because if the dealership did not succeed, it is the factories and lenders that will get sued. Consequently, one must rely on oneself and advisers that are not afraid to contradict the boss.

As an aside, be careful not to associate with habitual “deal-breakers.” Some advisers are perpetual naysayers because advisers do not get sued for telling a client not to do a deal. They only get sued when a client gets into a deal that goes sour because it is never the client’s fault. It is the bank, the factory, the accountant, the lawyer, the business advisor (anyone other than the client) that is to blame.

The bottom-line is that there are two critical factors in buying an automobile dealership that will help ensure success for the long term: (1) How it is bought; and (2) How it is managed.

Each factor has a story, but those are the two keys. How the dealership is bought and how it is run will determine its long-term success or failure. We say “long-term” because car dealerships provide enough cash-flow that some deals could take five years to fold.

Buying a Car Dealership

What is the right way to buy a car dealership in bad economic times?

In the “good times,” buyers were paying premiums for dealerships, based upon brand names, pretty buildings, nice locations, and so forth. The fact is, in good times or bad, dealerships should be valued in the same manner: by how much the buyer expects to earn after the purchase. In other words, upon expected ROI (return on investment) — not the brand, or the building, or the location.

Determining what a store can earn after its purchase encompasses more than math. Regardless of how often the “multiple of earnings theory” has been proved wrong, members and associates of the trade still perpetuate the myth that the purchase of a car dealership can be that effortless.

As a natural consequence of the ROI method, purchase prices will fluctuate because one would tend to expect to make more during “good” times, versus “bad.” Therefore, when one states that the values for blue sky or goodwill are dropping, their statement has nothing to do with the “value” of the dealership. Furthermore, there is no information in the foregoing statement to help one decide a reasonable value to pay for a dealership. Rules of thumb are only guides. Guides are good servants, but bad masters.

If a dealer is going under and throws a prospective purchaser the keys to the building and says: “It’s yours. I just want out.” That act does not make the dealership worth more or less. The questions a buyer must ask are– (a)” what is it going to cost me to open the doors?” and (b) “what do I think I will earn after I own the store?” In other words: “What is my expected return on the investment?”

At one time there was a dealer group in Colorado that presented an offer for the existing dealer to pay them (the buyer) $2,000,000 for them to take-over the stores. The offer was based upon projections of what the stores would lose while buyer tried to turn them around. The seller refused and ended-up losing several million more before the stores closed. The dealerships properties were eventually sold to a church.

A good checklist for valuing car dealerships can be found in IRS Revenue Ruling 59-60, published by the Internal Revenue Service in 1959. While the ruling (59-60) was intended to outline and review in general the approach, methods and factors to be considered in valuing shares of the capital stock of closely held corporations for estate tax and gift tax purposes, the methods discussed are applicable to valuing an automobile dealership and valuing blue sky in an asset sale simply by backing-out the amount of the stock valuation attributable to goodwill/blue sky.

The Five Biggest Mistakes Buyers of Automobile Dealerships Make:

1. Thinking that when they verify earnings they have completed a major task. The truth is, what the seller made or lost does not matter. A plethora of details and formulas need to be applied to determine what the new owner can net. What rent factor PNUR can the store afford? Do those numbers correlate to the percentage of gross requirements?

2. Overestimating vehicle sales projections. The first question is: “What can the new owner realistically retail?” We have seen too many dealerships that went under because the buyer could not accurately predict potential sales. On more than one occasion we have seen factories and lenders approve dealerships where the prospective purchasers projected sales volumes that exceeded the volume of the area’s historical sales leaders.

3. Famous buyers thinking their names alone can turn-around dealerships or sell cars. We can name more unsuccessful, former car dealers that are famous, than successful car dealers that are famous. We have one photo that depicts a famous athlete getting a business award from the President of the United States. He went to the White House and received the award the year before the factory closed his stores. Either nobody saw it coming, or nobody cared.

4. Thinking that buying a store at a low or zero multiple of earnings means they got a bargain. The biggest misconception of a bargain is when the factory awards a new point. Most people think they got something for nothing. They really did not. The ones that do succeed, however, usually succeed because of the timing and the location — not because of the dealer.

The fact is, it takes about a year to build the service department of a new point, yet the dealer must capitalize the store as though it were already operating on 8-cylinders. In many instances, a new point suffers through months of losses until, if ever, it finally becomes a successful store. Those losses are “blue sky.” In other instances, it is the second owner that makes a go of it and in some instances, such as the Englewood store mentioned above, the point goes away.

The savvy purchaser understands there is a value to buying a dealership that has its number is in the phone book, a loyal service base and repeat customers. The main value is that the day after the store is sold there are people lined-up for service, people buying parts and customers coming back to the store. That is worth a bonus (blue sky) to the owner even if the store has been losing money.

5. Thinking there is some “magic” formula that will make a store successful. The only formula that will work most of the time is a mixture of hard work and knowledge of the retail automotive business. Each of those words is an operative word: “retail” and “automotive.” Knowledge of another business is not enough.

One last bit of advice to rookies. When making changes in the retail automotive business act swiftly. Erasers are made because people make mistakes. We have yet to meet the person who has never used one, although in today’s world one might substitute the word “eraser” with “backspace” or “delete. When a mistake is made, the trick is to analyze, decide and act quickly. Do not hesitate to correct errors and bad decisions.

That advice has been around for thousands of years, both in the proverbs one learns as a child (such as “A stitch in time, saves nine” and “He who hesitates is lost,” and so forth), and in Ecclesiastes 12:12 “But, my son, be warned — there is no end of opinions ready to be expressed. Studying them can go on forever and become very exhausting!”

In summation, do not hesitate to buy a car dealership in a bad economy, just buy it correctly. Read the articles referred to above and act upon them.

“A dealership should be bought for one reason and one reason only — to make money. It should not be bought because it is close to home, because the buyer likes the franchise, because a partner wants to provide a job for a relative or, because the building is attractive. A dealership is purchased to make money and, in order to make money, it has to be “bought right”. A Practical Guide to Buying and Selling Automobile Dealerships, National Legal Publishing Co. (1989), at page 2-4.

That was written twenty years ago. It was true then and it is true today.