How To Run a Successful Business In The #Entrepreneur Era

Dateline: Kuala Lumpur, Malaysia

I’m going to get straight to the point today: businessmen have lost sight of the importance of sales in business.

Too many now value social media exposure over profit – to their detriment.

These days, #entrepreneurs are reluctant to speak about their concrete achievements and the means by which they reached them. Instead of describing their business and sales, they talk about “touching many people’s lives” and use other vague and unmeasurable platitudes. 

If you’re considering doing business with someone who talks like this, RUN. And if you’re tempted to become this type of businessman (or you already are) DON’T.

Pick any interest or lifestyle at random and you’ll discover that the vast majority of people who show interest in it don’t actively do it. You’ll also find that these people do spend a considerable portion of their day pretending that they do.

Being a business owner is no different.

Nowadays, it’s trendy and flashy to be an #entrepreneur. But it wasn’t always like this. I can still remember being considered a geek back in 1996 when I was a 12-year-old who wanted to have my own business. 

It wasn’t cool.

Entrepreneurship is cool now, but as anything gets popular, it gets dumbed down and charlatans disguised as business gurus make their way into the fold with crowd-pleasing but untruthful platitudes like, “The most important thing in business is happiness.” This may be true for life, but happiness doesn’t secure a company’s bottom line.

Some are even insane enough to say things like, “Sales are bad!” and “Revenue isn’t necessary!” 

These #entrepreneurs are not businessmen. They’re cons out for others’ money.

Let me repeat, happiness is important in life, but in business, happiness doesn’t pay the bills. 

Sales do.

At its core, the only important things that matter in business are sales, revenue, and profit. The harsh truth is that if you don’t have a source of income, you don’t have a business, you have a hobby that is the adult equivalent of a kid wearing his father’s suit.

In this article, we’ll talk about how to run a successful business – a profitable business. We’ll unveil the origins of the modern myth that sales are bad, discuss how detrimental it can be to believe this myth, and establish once and for all the importance of sales in business.

We’ll even talk about how to run a successful business by being honest about your objectives, just so all the #entrepreneurs out there can still feel good about themselves when they start makings a profit.

After all, you’re a business, not a charity.

The Origins of The “Sales Are Bad” Myth

In the world of advertising, it used to be that the easiest way to convince the public to buy your product was by associating yourself with an idea. For instance, if you were selling a sports car, you wanted to sell success and elegance.

But over the years, companies began to overdo this. Suddenly, it was so blatant what they were doing when they put half-naked women on cars that potential buyers just learned to tune it out.

This ramp-up to 11 happened, in part, because the public was also able to tune out advertisements entirely, either by AdBlock or simply going to the toilet when commercials were running. So, what few ads the public saw had to be the most effective possible version they could be.

The unexpected side-effect was that overdoing it inoculated people to the approach. It’s like telling a joke too much – no matter how good it is, tell it more than a handful of times and it stops being funny altogether

The more money companies threw at advertising, the less they got back. 

It was in this landscape of marketing desperation that the growing power of social media began to work its way onto the scene. And one of the many ways that social media impacted marketing, as unintentional as it may have been, was by turning marketing into a political play.  

When consumers were given public access to voice their opinions directly to companies about how they marketed their products, it suddenly mattered on a much deeper level if a company was implicitly funding one cause or another by where they ran their ads. 

Previously, brands never got particularly political – they just wanted to know how to run a successful business – but it turns out that politics can be quite viral, and that’s just what advertisers needed.

For example, when the coffee machine company Keurig publicly stated that it would take its advertising dollars elsewhere after the Roy Moore scandal, social media began to buzz.

The response was both positive and negative, but it ultimately generated hundreds of millions of dollars of free advertising when people began talking about an otherwise innocuous coffee machine company taking a political stance.

Other companies took note as they were looking for ways to increase sales. And now you can’t be a deodorant manufacturer without saying, “If you buy a stick of deodorant, we’ll give another one to a child in Malawi.”  

Essentially, as people began to care more about the social impact of their purchases, companies capitalized on that for their own marketing purposes.

The myth that sales are bad is rooted in this new advertising mentality. If this marketing stunt works for you, great. The problem is when you fall for your own marketing and put politics and social causes ahead of your bottom line. 

Don’t Fall For Your Own Marketing

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While the theater and attached social media presence indirectly increased sales for many companies by helping them reach a wider audience for surprisingly little money, the deeper down the rabbit hole people went, the more they seemed to forget how this was originally done out of utilitarian reasons, instead of humanitarian. 

For the increasingly confused businessmen, what started as a means to double your sales by gaining a wider audience became the goal in and of itself. Rather than focusing on how to run a successful business, #entrepreneurs and big businesses got lost in the social media frenzy, often to the detriment of revenue and profit. 

The razor blade manufacturer Gillette, for example, ran an advertising campaign (it didn’t even have the honesty of calling itself an ad, it instead named itself a “short movie”), in which it decided it was a wise idea to accuse their audience of being guilty of widespread sexual harassment. For weeks, the internet was inflamed with positive, and mostly negative feedback. 

In unrelated news, a few months later, Gillette’s parent company Procter & Gamble wrote down the value of the razorblade manufacturer by $8bn.

It’s gotten so out of hand that successful entrepreneurs are wondering whether they’re doing things wrong. 

I’ve spoken to them myself. 

We work with seven- and eight-figure entrepreneurs who look at the madness of the crowds and begin wondering whether they’re the insane ones for focusing on how to run a successful business by generating revenue instead of waves on social media. 

The primary purpose of a business is to make money – much like the purpose of a knife is to cut things. What effect you have with the tools at your disposal is entirely up to you.

Be Honest About Selling

Now, you may not be running a charity, but that doesn’t prevent you from being honest about your ultimate intent. Honesty is always the best policy. If you want to know how to run a successful business, start by being honest and upfront about the fact that your objective is to make a profit.

Then, act with that purpose in mind. 

Back when I worked in the radio industry and we were trying to convince people to pay us to appear on the radio, we got the best results when we presented things clearly: “We make money in the spread between the price we pay the radio station and what you pay us to appear on a show.”

In this way, our clientele could contextualize it as a marketing business expense. But if we dressed it up in flowery language, people almost thought they were doing us a favor for being on a show and that they deserved payment in return.

When this happened, the whole business model got muddled and it was a nightmare untangling people’s expectations from reality. Being honest was not only more profitable but also more beneficial for both parties involved. Everyone knows what to expect and what advantages they gain from the exchange.

Being honest about your objectives just makes good business sense. 

Do I believe charity is good and that you can help make the world a better place? Absolutely! In my own time, I take dividends from my businesses and give them to charity. 

However, I keep things straight and you should too. Business is not where you go to achieve your inner zen, it’s about selling.

You should always begin with the end goal in mind and then work your way backward to achieve it. If what you want is to make the world a better place, then start a charity. Don’t do two things at once, and in doing so, forget the original goal you wanted to reach. 

Being direct about having a product or service to sell is far more sustainable than trying to tug at people’s heartstrings to get them to loosen their purse strings. 

Be A Business, Not A Charity

Let me use my own business as an example. I have a YouTube channel where I upload daily videos. There’s a good chance you discovered Nomad Capitalist through it, in fact. I provide all of that content for free.

I also produce articles for free. At the time of writing, there are over 1,300 articles on this site. If we guesstimate that the average size of an article is about 1,700 words, then there are 2,210,000 words free for you to read – or, put differently, the equivalent of 30 books on real estate, citizenship programs, investing strategies, etc.

Is Nomad Capitalist a charity though? Absolutely not!

We can reconcile the fact that I’m giving away libraries-worth of content for free because it ultimately leads to sales.

I understand that 99.99% of my audience will not buy anything. What we offer at Nomad Capitalist is a very petite, bespoke service that most people would find unaffordable. Our target audience is made up of entrepreneurs with annualized seven- to eight-figure incomes who make up a tiny fraction of the worldwide population, so it stands to reason that we have to cast a wide net.

However, when a potential client does come our way, I have a sales funnel in place and I know what to do. I also understand the power of social media and I use it to boost my bottom line, not my ego.

Contrast this with the #entrepreneurs and large companies that have made gaining attention at any cost, even if it damages their reputation, their goal – they don’t have a sales funnel or any plan to monetize this attention. 

Our own team has been guilty of this as well. At one point, they geeked out about the strategy and means of gaining attention but left sales on the roadside. So, they started going for all kinds of people, instead of the most profitable ones. We had to reign in the goals of the business somewhat to be on the right track once more.

This just goes to show that the allure of not focusing on profit is there. But if you do that too long, your business will die a death by a thousand unoptimized cuts, or simply stagnate. 

If you want to run a successful business, you need to make a profit. You need sales – they are the lifeblood that keeps the whole system working. If you don’t prioritize sales and they dry up, the whole company is in danger. 

Remember, cash is king.

Again, if you’re wondering how to run a successful business, begin by being truthful. Be honest about the fact that you’re in it to make money. 

That doesn’t mean that you can’t make the world a better place on your own time, but once you clarify what the ultimate goal is, then the steps to achieve it and the pitfalls to avoid will be obvious.

Source: https://nomadcapitalist.com/2020/06/12/how-to-run-a-successful-business/