117. Turning Passion into Profit: Essential Tips for Aspiring Business Owners with Cash Matthews

What if the traditional 9-5 job is holding you back from achieving your true potential? On this episode of Cashflows, we defy conventional wisdom and present you with the thrilling, albeit challenging, world of entrepreneurship. Learn how to identify a real, sustainable market for your product or service, and why understanding your competition is crucial. We recount the cautionary tale of a friend's misadventure with hand-carved wooden Croatian photo albums to illustrate the importance of these steps in laying a robust foundation for your business.

Unleash the profitability of your entrepreneurial endeavors with practical strategies that can make a significant impact. From working from home to sharing expenses with a partner, we explore cost-saving measures that can keep your overheads low. Hear about the essential blend of skill, effort, and patience that successful entrepreneurs embody, and why securing the right capital and respecting your competitors can make all the difference. Finally, assess your readiness to embark on this exciting journey and revisit our previous episodes for even more invaluable insights. Tune in to transform your entrepreneurial dreams into reality.

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Chapters

• 0:02 Starting a Business
• 9:45 Building Profitable Business Strategies

Transcript

Speaker 1: 0:02

Hello, entrepreneurs, dreamers, business owners and happy people with high hopes. Welcome to Cash Flows with your host, cash Matthews.

Cash Matthews: 0:13

All right, welcome back to Cash Flows. This is Cash Matthews, coming to you from Tulsa, oklahoma. I'm a registered investment advisor with WealthWatch Advisors and we'll talk about the concept of investing here, but not specific investments, and your future in investing depends on many factors. We don't give financial advice like that or investment advice, so don't do anything dumb and get either of us in trouble. And so today we're going to talk about a fun topic, and that is getting started in a new business.

Cash Matthews: 0:45

Now you know I'm curious how did all of your grade school advice work out for you? You know this stuff go to school, get good grades, be obedient, go to a good college, make good grades again. You know all that advice get a good job with benefits. And maybe you're one of those few right now who are choosing a different kind of path. Maybe you're one of those rebellious types who's willing to work 80 hours a week just to avoid working 40 hours a week for someone else. Maybe you arrived here at the foot of this path, maybe from a different angle. Maybe you didn't have a choice. Maybe you lost a job or got angle. Maybe you didn't have a choice. Maybe you lost a job or got downsized, or what's the right size. Either way, having a clear understanding of the road in front of you can be helpful if you know what to look for and you know there's a lot of reasons to be an entrepreneur.

Cash Matthews: 1:37

For me, the biggest thing was always time. Freedom Wasn't always about the money. You got to have the money, but I want you to understand something as you move forward, especially in the early days and I believe this is a fact, and here it is you will have less of what you seek while seeking it. If you're seeking more money, you'll probably have a little bit less money while you're seeking it. If you're looking for more time, you'll most likely have less time while trying to create more time. So it's kind of the contradictory nature of starting a business, and sometimes that can be difficult or daunting for people. So as we look forward, you know I've been around business owners for many, many years and once you've answered why be an entrepreneur and recognize you can make unlimited income or go broke and you can have unlimited time or you can build yourself a job. So this can go wonderful, but it can also go terrible and I'm not going to be one of those guys that tell you oh my gosh, you've made a PP and that is so awesome. You're going to be the president one day, but you get into business. You need somebody to sort of tell you what's going on. As you move forward, you'll be able to consider whether you want significance over just basic success, and I'm glad you're here listening to this.

Cash Matthews: 2:58

And in the next few minutes I'm going to share five things you should know about before you put the first foot forward. So we know why to get started in business. In fact, once you get started, you get a little traction, your knowledge level begins to increase, your confidence will increase, your bank account may increase as well and as we begin the process, make sure you've built the proper foundation and examine these relative points of your business. There's going to be a lot of questions and I found that answering the really hard questions in advance may give you some sort of an advantage mentally. Give yourself a huge advantage and know the answer to these five questions before you take time and effort into the next step. Take a little time, get real with yourself, be ready to answer these five questions. And here we go.

Cash Matthews: 3:52

Number one is there a market for what you do or what you propose to do Today, in 2024, when this is being recorded? A lot of people in high tech and Bitcoin and investing and real estate and mortgages. Seriously, this is a great time for lots of business, but is what you have planned? Is there a market? Can you measure the market? What is the age of your best client? How do you reach them? What about the timing of what you're doing? Is this a great time to go into the VCR repair business For you people under 50, that's the way we watched movies in the old days. Timing is very important.

Cash Matthews: 4:34

You know, in college I had a buddy who went into business many years ago and he was so excited. He found the perfect product, the perfect city, and had sole distributorship of the product, which gave him a monopoly on the local level. His quality was high, his price was right on line. He was absolutely dedicated to the following idea Hand-carved wooden Croatian photo albums. Yeah, me too. Take a breath. Right there, I got to admit they were beautiful and there was only one thing missing Nobody wanted them. Photos were becoming a thing of the past. Kodak was busy going bankrupt and while you know, they ignored the arrival of the iPhone, which also had a phone attached to it, you know, for it did just change the game. There was no demand and I'm sure his in-laws were very elated for the next 20 years to get these as gifts, because he had 500 of them and they're stacked in his garage. At the end of the day, it cost him 50 bucks to go put them in the dump.

Cash Matthews: 5:35

So make sure there's a real, sustainable market for what you do, right? Number one do people want what you do? Number two that you must know is who is my competition Seriously out there? Who wants you to fail, you know, besides your ex-spouse or mother-in-law? And, more importantly, how will you compete in this existing market? Is your product or service like a commodity, meaning? There's a little brand value and price is the only consideration. Knowing the playing field in advance will give you the advantage you need to get started. Don't be afraid of the competition. Be the competition.

Cash Matthews: 6:14

Number three that you must know is ease of entry. Simply put, do you have the right amount of capital to get started on your business idea? Depending on your model of business, this can vary significantly. Now, if you want to put in a McDonald's franchise, they're pretty successful, but it can take millions of dollars to get started but, once again, virtually certain to succeed. Or a lemonade stand can be a lot of fun for about $20, but has very little chance of making lifetime income. I think you'll have a good time, but maybe somewhere in between $20 and $3 million that it costs to start a McDonald's there's an amount of money that's going to be required to get up and running, and do you have access to the right funding? If you have to borrow the money, do you have access to the right funding? If you have to borrow the money, do you have access to a steady line of credit?

Cash Matthews: 7:04

Now there are many service-related industries real estate, professional financial advisor, consultant, coach, guru on the internet, media influencer, network marketing. I know those are all fancy words In 2024, all of those have very low startup capital requirements. All you need to get involved in most of those are a high ego and a debit card and you're ready to get going and I'm not making fun of those. I love those type of things, but for those things to work, you can be up and running for a thousand bucks. Now you have to check your local requirements for licensing and fees and continuing education, but they're all great choices. I mentioned network marketing. They've made a good name for themselves and many reputable companies are still out there on the landscape and the opportunity is giant. Usually these type of companies can be started under a thousand dollars. They offer training and incentives, and if you're willing to do that and I'm not endorsing any one company or industry, but you need to know they exist I just want to give you the option to say no to it. So, whatever your choice, you must know the capital requirements for day one, for the first year, maybe the first two or three years.

Cash Matthews: 8:18

So question three was can you afford it? Number four and this is a biggie is can you do it? I know you saw somebody else who could do it, but my question today is can you do it? It's a fair question Can you do the thing? Whatever you do may take advanced training, education, the additional ability to market yourself, speak in public, do sales?

Cash Matthews: 8:43

Most people hate sales, but they love the result. Most endeavors have a sales component. So even if you become a dentist or a lawyer, those require massive marketing efforts. So at the end of the day, a real quick question Can you do it? Do you have the skill set to do it? The determination of the day. A real quick question Can you do it? Do you have the skill set to do it, the determination, the follow through?

Cash Matthews: 9:04

And then number five is can you make any money at it? Not a living, you know, not a thousand bucks to break even, but can you make it profitable? I mean, wages are great. Profits are better than wages. Can you find evidence of others just like you who could be profiting from this same idea? Is there a long lead time for creating profits? What if it takes you two or three or four years? Maybe you're like Jeff Bezos. It took 10 years to become profitable at Amazon. Can you survive at Amazon? Can you survive? Of course, jeff Bezos is a gigajillion billionaire because he figured out how to be profitable.

Cash Matthews: 9:45

Now do you have staying power? How might you increase the profitability of your endeavor? Working at home instead of leasing an office is one way. Sharing expenses with somebody in an office is another. Success and profit require skill and effort and diligence and patience and coffee and you got to have a lot of coffee to make this work. If you have a real market for what you do, you have the right knowledge and respect for your competitors, have the right capital to get started. The right skill, the right attitude set. You're ready to get started. So here's my question for you Are you ready to get started? I'm Cash Matthews, with Cash Flows. We'll answer these and more questions in upcoming episodes, and don't forget to go back and hear some of our past episodes. Thank you for being here today and I wish you the very, very best in these endeavors.

Speaker 1: 10:46

That's our show for today. Stay tuned for another riveting edition of Cash Flows.