Shocking Stories of Business Failure!

October 6, 2010 by 1 Comment

Business failureYou know, when your friend or someone tells you of what they did to succeed in business you learn a lot. Learning from others’ experience beats learning from books any day, ama? You know what, though? Nothing beats learning from others’ failures.

In fact, someone once told me: Failure in business happens for a reason, it is the ultimate lesson.

In that spirit, I decided to share some stories of business failure. The smart thing to do would be for you to read them, analyse them, and learn.

I’ll start with my own little story:

Right after high school (6 years ago), I teamed up with two of my neighbors and childhood friends to start a video games arcade in the neighborhood.

It was quite the learning experience – everything that we did, I was doing for the first time ever. This ranged from getting the business licensed to actually building a small shed to buying a TV and playstation, to put a roof over our business. I think a lot of people don’t know how to actually practically do these things.

So after getting everything ready, we agreed on how to share the profit and started. It was a smashing success and we had all the neighborhood kids hooked! I was actually making my money from my own business. Life couldn’t be better!

Not really. We used to charge about Kshs 60 per hour per gamer. But we had only two gaming machines. Things were good at the start but we somehow decided to move the business from our self-built shed to a real building in the shopping center. Rent shot up from 0 to Kshs 10,000 a month. We believed that the exposure gotten from the shopping center would get us more customers and lead us to growth. We were wrong. We still had only two gaming machines and there was only so much we could make a day. Things started to get strained.

Before long, the business broke apart due to the stress and two of us left with very bad tastes in our mouth. My business #1 down the drain!

Lessons learnt: strategically plan your every move and never go with “hunches” – always try to make sure you make decisions based on realistic data.

Here are 25 other stories of business failure.

What do you think? Did you learn anything?

Hey, have you ever tried your hand at business and failed? Why don’t you share your story in the comments below? Thanks!

Filed Under: Internet Culture, Small Business Tagged With:

The 3 Easiest Ways To Make More Money

October 5, 2010 by 2 Comments

1. Freelancing
This is simple – take your skills and find someone who will pay you to do something for them.

Advantages of Freelancing

  1. It is extremely easy to get started
  2. It is extremely easy to set a price for your work – there are lots of example to copy.
  3. The relationship between work and income is very clear – if you work, you get paid certainly.

Disadvantages of Freelancing

  1. Freelancing is hard work and freelancers often get stuck in a “rat race” i.e. you need to work to eat
  2. It is hard to raise your fees and there may be an upper limit to how much you can charge
  3. It is sometimes difficult to know if your skill set can earn you money. For example, not many people may care about how fast you can read a book.

How do you get paid?

  • Per hour
  • Per project
  • ‘Subscription’-based – for example, “you have access to my expertise for 3 months”

Examples: web designer, marketing consultant, babysitter, freelance writer, programmer, etc

2. Productizing
This is related to freelancing – instead of, for example, offering yourself as a freelance marketing consultant, you could write a book on marketing and sell it. When you make your knowledge into a product, you can generate revenue even when you are sleeping. However, while this method can generate higher revenues, it is also higher risk as you are not sure if anyone will buy your products.

Advantages

  1. You can make money even when you are sleeping, or sick, or…
  2. It is easier to make more money than in freelancing – you can sell your book to hundreds of thousands of people but you cannot write for that many people as a freelancer in a short period of time
  3. You get more freedom

Disadvantages

  1. The logistics of selling products include specialist software like shopping carts, payment processors, email marketing software etc
  2. You need to know how to market your product online – this may include blogging, SEO, social networks, etc
  3. It is difficult to know who will buy your product, at how much, and how to price it
  4. The Internet is a sea of horribly crappy products and so it is difficult to convince people that yours is any different

How to earn money

  • Freemium model where you give something for free and then charge for upgrades e.g. DukaPress
  • Charge for single products like books or ebooks e.g. Kiosk 3CB
  • Create a product where you can charge recurring fees e.g online courses e.g. Membership Site Masterplan
  • Create valuable content and then market affiliate products. Here’s how to do this.

Examples: OBS, Kiosk 3CB, DukaPress, WooThemes etc

3. Getting a Higher Salary
Truth is, the vast majority of us are employed so this is an obvious strategy. Yet, very few of us think about it in this way. To get a higher salary, you need to improve your skills at work and demonstrate this to your boss. Hopefully, this will translate into increased responsibilities at work and a higher salary. Simple enough for you?

Advantages

  1. You already know what to do! Just make your boss happy with the quality of your work.
  2. Salary increases tend to follow you through to the end of your career and they are cumulative. If you get a 10% salary increase, it will likely continue like this for the rest of your career and often can only go upwards.

Disadvantages

  1. It is hard to know exactly what kind of behaviour will get you a raise
  2. Everything is out of your control and depends on your boss’ discretion and your company’s budget

Which road will you take?

Filed Under: Make Money, Online Jobs, Small Business

How NOT To Make Money Online

September 30, 2010 by 7 Comments

One of our nice readers sent this email:

“I spend too much time on the internet doing nothing. Sometimes it is fun but it does not pay the bills. I’ve been sort of freelancing for awhile and paid a web designer to do a fancy website that I couldn’t maintain myself, and that thing didn’t generate any leads. Now I don’t have a website, but I have a blog that I don’t even use. Nini mbaya na mimi?

Hakuna kitu mbaya na wewe!

What we all need to do is to stop building all these fancy websites and complex marketing strategies. Are you making money online? Would a blog and Twitter and Facebook help you get your first three paying customers? The plain simple answer is NO. At the beginning your focus should be to get three paying clients (because one or two may just be a fluke).

After you do this, you will have established that your business idea is actually viable; you will have proven that people will actually pay for whatever you are selling. Afterwards, you can start thinking of the blogs and Facebook and other fancy stuff. Not before. I’ll say it again: skip all the fancy stuff that you hear (SEO, social media, etc) and just get your first three paying clients!

The funny thing is that almost everyone who hears this advice does not like it one bit! Instead, you like hearing things like:

  • You need a Twitter page with lots of followers
  • Everyone spends his time on Facebook, you need to get a facebook page
  • You can’t do business without registering a company…and don’t forget business cards

You know why most people prefer the above to actually getting down to work and getting paying clients? Because it is so much easier to start a blog and Twitter and pray that somehow money will just flow in. It is much harder to sit down and make a plan on how to get three people to pay for whatever you are selling.

I have been blogging for more than six years and I’ve pretty much seen it all. If you ask me, 99.9999999% of all bloggers make a shameful amount of money, something like $2 per month. Does that really tie in with your high horse dreams of making it big? We have to be realistic about things, my friend. If your goal is to make money, do not waste time on social media.

Focus on setting up your business, not on the technology; focus on understanding your customer; focus on testing whether your idea is profitable; focus on how to build the best product or service that you can.

Filed Under: Make Money, Small Business Tagged With:

3 Steps To Internet Business

September 29, 2010 by 1 Comment

Step 1: Content
Good Content is the key to a good long-term online business. Why? Because marketing costs time and money. You want to have content that gets passed on naturally through the internet. You still need to do marketing but you’re hoping much of your marketing will be done freely through word-of-mouth. And to leverage word-of-mouth, you need to have quality content worth talking about.

So, spend a lot of time planning and producing your content. Create a ‘content blueprint’ to organize your content ideas. For me, this blueprint is a list of different types of content. For example:

  • Tutorials
  • Interviews
  • News
  • Commentary on industry happenings
  • Videos
  • Series of articles on one topic

Step 2: Marketing
Next comes marketing. With the growing amount of information on the internet, marketing has become more important. There are many sites with great content that don’t have much traffic because no one knows about them. Marketing is simply the activity of letting people know about your site.

I would create a ‘marketing blueprint’. However, I spend most of my marketing time in a few marketing channels. It’s not advisable to stretch your marketing efforts too thin. Marketing channels take time to cultivate before they’re fully effective. Of course, if you have a lot of time for marketing or the money to outsource, go ahead and use more marketing channels.

Here are some marketing methods that have proven effective for webmasters:

  • Blog commenting
  • Social media sites
  • Press releases
  • Forum posting
  • Guest blogging
  • Article submission
  • Video submission

Step 3: Monetization
Finally, we have monetization. Now that you’ve thought about content and marketing, you can focus on converting your traffic into dollars. The key here is understanding your traffic. Why are they coming to your site? What are their problems? What can you sell them that would solve their problems?

Also, think of advertisers with products your audience would find useful. Contact those advertisers and see if they would be partner with you.

Here are some methods for monetizing your site:

  • Contextual advertising
  • Advertising through a broker
  • Direct advertising
  • Reviews
  • Affiliate marketing
  • Sell your own product or service
  • Donations

That’s it! Do you have any questions? We have answers!

Filed Under: Make Money, Small Business Tagged With:

Free Internet Marketing Textbook

September 27, 2010 by Leave a Comment

In this day and age, it is almost suicidal to ignore the Internet’s role in marketing. If you want to do any kind of online business, Internet marketing is, of course, critical. The strange thing is that even for normal, “brick and mortar”, businesses, it is folly to ignore the Internet.

“We live in an era where companies that are not positioning and marketing their brands online are suffering for it. Alas, the Web is a scary place for traditional marketers, whether they work on the agency or client side. After years of successfully relying on conventional media, there is suddenly a technological monster that demands to be addressed. With eMarketing: The Essential Guide to Online Marketing, marketers everywhere can become skilled at harnessing the power of the Internet and using it for the benefit of their brands. With a little help from the experts, it’s never too late to learn.” – Quirk eMarketing

Download the Free Internet Marketing Textbook.

Filed Under: Small Business Tagged With:

The Perfect Business

September 26, 2010 by 1 Comment

I’ve always disliked multi level marketing (sometimes derogatorily called ‘pyramid schemes’) like GNLD. But today, I watched the video below and it changed my perception of these models. Allow me to explain.

In the business world, there are four types of people:

  1. Employees
  2. Self-employed people (solo acts)
  3. Business owners
  4. Inverstors

The poor people of this world are employees and self-employed people. Employees work hard to build businesses that they will never own and are always at risk of losing everything. Self-employed people are safer than employees – what they build, they own but the business depends wholly on them and if anything happens to them, the business fails and financial doom ensues.

Business owners and investors are the rich people of the world. They do not work for money, their money works for them. Clearly, we should all try and learn how to build businesses and invest wisely. It is a subject that should be taught in every school, but sadly is not. Therefore, an overwhelming majority of the population of any country, Kenya included, grows up into adulthood with little idea of how to actually build and grow a business.

Because we should all learn how to build businesses, a great challenge exists for the majority of people – how do you learn how to do business? In the video below, Robert T Kiyosaki, author of Rich Dad, Poor Dad says that the simplest, fastest and safest way to learn how to do business is through companies that offer multi-level marketing. Think about it. If you join a company like GNLD to sell their products, they will support you in all sorts of ways to make sure that you make sales and become successful. While you are doing this, you are learning how to do business in a safe and supportive environment. You could then easily stop the GNLD stuff and set up your own venture using your newly acquired skills and experiences. Makes sense? Watch the video:

http://www.youtube.com/watch?v=pGMUspZyNuo

What do you think?

Filed Under: Make Money, Small Business

How Not To Get Lost In Business (or Anything Else)

September 24, 2010 by 1 Comment

Have you ever sat behind the steering wheel of a car without knowing where you are going? Sounds bizarre, right? What is more bizarre is that we do this every day in our professional lives without finding it disturbing! If you are smart (which I am sure you are and that is why you are reading Like Chapaa!), then you would have figured out that we are talking about GOALS which are important when we leave the house as well as when we want to go ahead in our personal and professional lives.

In fact, my take on this is that having a goal makes life easier by giving us a direction and sense of purpose. If you want to be successful, then one of the things which you need to do is to set goals in EVERYTHING YOU DO. This may seem like a lot of work, but goal setting a habit forming activity and when you see the results, you will not regret it.

So how do you SET goals?
Goals are usually things which we want to achieve in life. Personally, you might have a goal to lose weight (ouch!), professionally it can be to increase turnover, employee productivity, customer satisfaction etc. Once you have a broad goal…you pretty much have a direction which then needs to be broken down into activities that lead towards that direction.

How do you DOCUMENT a goal?
You can have long term or short term goals and their categorization is dependent on the time frame it will take to achieve them. For example, you can give yourself two months to lose four pounds or twelve months to increase customer satisfaction. Once you categorize this, you need to backtrack a bit and break it down into activities which will lead you to the goal.

Remember my analogy about the car? Activities to reach a place, usually involve, starting the car, checking the route, driving, parking, etc. Similarly, you need to document steps which will help you get to this goal.

After documentation comes EXECUTION
This is actually the most difficult part of achieving your goal….you can only get it right if you execute the various steps correctly. This is the place where the difference between KNOWING and DOING can be understood well. Good planning makes it easy to reach a goal. Each step should be understood properly as that will influence the overall quality of the results of achieving your goal. For example, a well planned campaign for higher customer satisfaction is likely to get you close to 80% of your goal while a poorly planned one may get you only 10%.

A goal is only as good as its metrics!
Metrics are nothing but numbers which can help you measure your goals and are as important as setting a goal in the first place. I have to lose weight is a meaningless goal if you don’t tie it with a number. Similarly, a goal to increase sales numbers is unlikely to be of any point if you don’t attach a number to it…let’s say a 30% increase from current levels. In fact, it is only with metrics that it makes sense to have goals in the first place.

There…I have put up my strong feelings towards goals and their measurements and hope to cover metrics in a business in another blog very soon!

Filed Under: Small Business Tagged With: