AskPat 699 Episode Transcript
Pat Flynn: What's up everybody? Pat Flynn here and welcome to Episode 699 of Ask Pat. Wow, closing in on 700. How crazy is that? Thank you so much for joining me today. As always, I'm here to help you by answering your online business questions, five days a week.
All right now here's today's question from Tyler.
Tyler: Hi Pat, how's it going? Tyler Austin here. First of all thank you so much for everything you've done. I've been following you since you started and you do great work and I appreciate that. My question is, what would you recommend for those out there that are trying to start a business? They have an idea but they might have limited resources in order to get that idea into fruition rather it's funds, really primarily funds. I'm just going to stick with that. There is business loans out there, maybe to pay yourself until things get going. But if your idea doesn't work then you got a bunch of debt and things like that. I have read your book Will It Fly? and you mentioned some strategies in there as far as selling your product before you have it and things like that. But in order to sell your product there is only, you could ask out in groups and some free resources.
But it would be beneficial to promote that a little bit. There's just so many different avenues in that. But really I just want to keep the question simple with, if you don't have funds to start a business what is your recommendations in order to still start your business? You might hear my baby in the background. All right bye bye.
Pat Flynn: Hey Tyler, thanks so much for the question, truly appreciate it. I think a lot of people are going to appreciate this question. Now I would've recommended Will It Fly? but you had already read that and that's a great way to start and potentially get funds and validate your idea first. That's the idea behind Will It Fly?, you validate your idea, you could potentially get paid for that idea even before you build it from your prospects or your customers or future customers, who can then help you build it in the way that you want. That's the way I would recommend doing it. But not all businesses are going to be able to utilize that strategy. Although, I think most could. But there are other kinds of businesses that will need some funding and potentially a lot more funding than just a few customers after validating.
There's a few other things you can do. I mentioned in the book, Kickstarter and Indiegogo and other crowdfunding platforms. But depending on your business idea, it may be suitable and wise to run a Kickstarter campaign for it. Most of the items on Kickstarter that you'll find are items that are simply ideas or prototypes and they just need the funding to actually put them out there. But at the same time they're using that as validation. Just make sure that there are people out there who actually want those things. Many people also use Kickstarter to have a good cash injection or an injection of cash at the beginning of their business because they know that they have those customers and they're going to get some cash because of it. It's either it works or it doesn't. Kickstarter could be a good route as well.
You might also consider starting with a partner. There's businesses that I've started and other businesses that I know about that have done very well. It needed a little bit more funding and instead of me paying for it all. You kind of go into it with somebody and you kind of split the costs or one person might be the developer. Instead of having to pay for the developer, they actually have a percentage of that product or that company and earn profit share. There's a number of different ways to go about too. You don't necessarily have to be a lone soul here in the creation of your business. Actually connecting with other people who have other specialties and skills and talents. Depending on the business model it might work out better that way. But I would highly recommend you make sure that if you're going to work with a partner that you make sure it's the right one. You don't just want to find somebody and maybe they have a great resume or have good accolades and that's what you base it on.
You want to base it on a relationship. A partnership is very much like a marriage. Go on a couple dates first then talk to each other and see what happens. That's one way you could go about it. In a similar fashion, you could go instead of finding a partner. You could have, you had mentioned small business loans. I mean that could work out very well. SPA.gov could be a place where you could get a loan for your small business. But many people especially in the start up world, really into software and other kinds of services. They're getting funding from venture capitalists and angel investors. This is what Gary Vaynerchuk and Tim Ferriss, this is what they're main focus has been for a while. Is finding companies out there that are going to be great. Even before they go big and try to align those dollars with success so that they can get a cash payout in the end.
Now I will say that when you do that, you're giving up part of your company and you're going to give up some say on what happens. There's a lot, a lot involved with that from everything that's set in the contracts to, like I said it's a marriage with these people who are going to be your venture capitalists for your business. But that's another way to go about it. In that case you want to make sure you have a good business plan in place and you have a great idea obviously. The more that you can show that it's going to be one that's going to work, the better and more likely you're going to have investors interested in it.
Now if you wanted to go more grass roots, I think you had hinted it at this. You could get different groups of people to pitch in. I know a lot of people who have asked family members and friends to join in and actually put some money up front to help with the business idea. You kind of have to be careful there. There's a lot of things that can be involved with that if the business doesn't work out, are they still going to be your friend. If the business doesn't work out, what's going to happen? Or if it does what's going to happen? There's a lot to think about when it comes to that.
But here's the final thing I'll say Tyler, not all businesses need a ton of funding. Sometimes what they need is an audience. That's how Smart Passive Income was built. Sometimes they need information that isn't available yet. That's what a business can be like Green Exam Academy which was my first business back in 2008. I provided a ton of information for free on a website called GreenExamAcademy.com to help people pass the lead exam and because of that, that became my asset. It was very easy for me to then after building authority and showing expertise on topic, sell an ebook and then recommend practice exams. I was an affiliate for with another company and so on and so forth. Again funding depends on what kind of business you have. If you are looking into getting funding for a business, I would really make sure that you know exactly how much you need and what it would all be used for.
Tyler hopefully that answers your question or at least gets you thinking about other ways that you could potential make an income and generate some funds so that you could get your business up and running if it's needed. But yeah, good luck to you and I want to send you an AskPat t-shirt for having question featured here on the show. For those of you listening, if you have a question that you'd like potentially featured here on the show. Just head on over to askpat.com and ask right there on that page. Thank you for listening through, some of you have listened to all the episodes so far, 699 episodes. The next one is the big one 700. Looking forward to serving you in that one.
I appreciate you and to finish off today let's end with a quote as we always do. This is from Vaibhav Shah, “Whenever you see a successful person you only see the public glories, never the private sacrifices to reach them”. You got this, take care guys. See you in the next episode, bye.