A Success Lesson From 1939

What could the classic movie “The Wizard of Oz” and small business ownership in America possibly have in common? You might be thinking, “Well, they do both head down a yellow brick road”. Or maybe after your business got up and running you said under your breath “I don’t think I’m in Kansas anymore”. But in my opinion, it all comes down to one thing. Watch the clip below because they said it far better than I ever could.



More people would break the chains of job bondage and experience the financial freedom of being self employed if they could only muster up the courage to venture out. Everyone I know wants to have their own business. Few I know have the courage to make that dream a reality. And that is why we applaud you. It takes courage and guts.

If you are reading this, you have made the amazing decision to go into business. Nobody ever promised you that it would be easy. In fact, just the opposite is true. But you know that most things in this world that are true, lasting, and financially rewarding require bravery and risk.

Have you ever thought that if fear were never present, there would never be an opportunity for you to show courage? It’s alright to be afraid. It’s not alright to let fear paralyze you and keep you motionless in advancing towards your goals.

Have you ever considered that smooth seas never made a skillful sailor? If success were easy, everyone would be successful instead of the few ordinary brave people who become heroes.

And there is an amazing parallel to the movie with your life right now. The scarecrow, tin man, and lion all wanted something they believed they lacked. They journeyed a very long way to see the wizard who could give it to them. The truth of the matter is that they already possessed what they wanted in great abundance. They just needed someone like the wizard to remind them of it.

You have courage!

You have everything you need to be successful in business!

You already possess the “right stuff” that it takes to make your financial dreams come true. You don’t need to consult a “wizard”, or even click your heels together three times.

See it in yourself! Believe in yourself and watch what happens!

Steve Foss writes this blog for startup essentials “because of the wonderful things he does”. Feel free to leave a comment. And join him for the Essential Conference Call Wednesday nights.

This One Is For The Ladies!

If you are a woman in business, chances are you have heard of Suze Orman. She is a master of giving frank, honest, and educated advice about all things pertaining to money. We decided to treat you ladies to an inside look at what she sees are some great qualities of women who are successful in business. Enjoy ladies!

The Eight Qualities of a Wealthy Women
By: Suze Orman

What keeps women from achieving the financial security they -- and their families -- deserve? I believe the root of the problem lies in the dysfunctional relationship women have with money.

That's the launching point for my new book, "Women & Money: Owning the Power to Control Your Destiny." My message to all women: Owning the power to control your destiny requires more than 401(k)s and Roth IRAs. It requires reconditioning from the inside. In this excerpt from "Women & Money," I discuss the eight qualities of wealthy women.

Qualities 1 and 2: Harmony and Balance

Harmony is an agreement in feeling, approach, and sympathy. It is the pleasing interaction between what you think, feel, say, and do.

Balance is a state of emotional and rational stability in which you are calm and able to make sound decisions and judgments.

Harmony and balance are perhaps the most important qualities of all, for they serve as the foundation for the remaining qualities. When you possess true inner harmony, what you think, say, feel, and do is one. We are so accustomed to this split-screen state of mind in which we think one thing, say another, feel something else, and act in a way that has nothing to do with what we just thought, said, or felt. When your thoughts, feelings, words, and actions are not in harmony, it shows up as an imbalance -- you feel agitated, uncomfortable, you sense something is off, so you find it difficult to make rational, calm decisions. This is why these two qualities are a pair.

Quality 3: Courage

Courage is the ability to face danger, difficulty, uncertainty, or pain without being overcome by fear or being deflected from a chosen course of action.

Courage gives harmony expression. When your thoughts and feelings are one, courage helps you manifest them in the form of words and actions. When you are afraid to speak or act, courage helps you overcome your fear. Courage gives you the ability to speak your truth, even when it is not what others may want to hear.

Fear is usually what stands between us and our courage. But if we are to embrace this quality of courage to its fullest, we can no longer allow ourselves to hide behind fear. You can meditate on your fear and think about it rationally and try to will it away, but in the end, if fear is preventing you from acting, you must find your courage and act to overcome your fear.

Quality 4: Generosity

Generosity is when you give the right thing to the right person at the right time -- and it benefits both of you.

Generosity is a quality that most women can tap into very easily -- maybe too easily. As women, we tend to be overly generous with our time, support, love, and money -- but giving simply for the sake of giving does not match the definition of true generosity.

True generosity goes far beyond what you give to others. In giving there is a power, an understanding that you are just the vessel that wealth or energy flows through. You allow money to come in through your hands and out through your heart. To be empowered to give, to be moved to give straight from the heart, is a feeling that all the money in the world could never buy. So let me ask you: Is that how you feel when you constantly give of yourself? Do you feel enhanced or do you feel diminished? You think of yourself as a giver, as generous with your time, your talent, your money. Others probably describe you as a generous woman, but if I were to look at you, I might think you give for the wrong reasons. Do you give because you feel that you should? Do you give out of guilt or embarrassment? Understand that true generosity is as much about the one who gives as it is about the one who receives. If an act of generosity benefits the receiver but saps the giver, then it is not true generosity.

Quality 5: Happiness

Happiness is a state of well-being and contentment.

When you find the courage to live your life in harmony and balance, when you understand and practice generosity in the truest sense, happiness spontaneously appears. When you are happy, you are open and accessible. When you are happy, you tend to be more optimistic. You approach new challenges with a clear mind that seeks positive solutions. You see possibilities rather than problems.

Happiness is not a luxury. It is a necessity for true wealth. When you are happy, you have the satisfaction of knowing that your actions come from a place of purity and balance, that they are correct and generous and kind. There are no regrets in this state of happiness -- and that's a goal worth striving for in all areas of your life.

Quality 6: Wisdom

Wisdom is the knowledge and experience needed to make sensible decisions and judgments, or the good sense shown by the decisions and judgments made from an accumulated knowledge of life that has been gained through experience.

The quality of wisdom is more than intellectual, and it is in no way related to how much schooling you have. Exercising wisdom requires cutting through the noise of life and tapping into your core beliefs to make thoughtful decisions. Wisdom results from inhabiting all the qualities that came before it. A wise woman recognizes when her life is out of balance and summons the courage to act to correct it. A wise woman knows the meaning of true generosity. A wise woman knows happiness is the reward for a life lived in harmony, with courage and grace. A wise woman knows how to summon her courage and do what is right, rather than what is easy.

Quality 7: Cleanliness

Cleanliness is a state of purity, clarity, and precision.

Cleanliness is about respecting the importance of order and organization. When you don't know where your money is, when you have no filing system for your important documents, when you dive into your pocketbook to pull out crumpled bills, when your car looks like a garbage can, when your closets are filled with junk and clutter -- you cannot possibly be a wealthy woman. You need to clean up your act -- quite literally -- to bring true wealth into your life. In India, women sweep the front entrance to their home each morning as a way of welcoming Lakshmi, the goddess of material and spiritual abundance, into their home, for there is a belief that she resides at the threshold of every house. In order for her to enter, she must have a clear path.

You might be reading this and thinking that cleanliness is nice but not essential to your financial well-being. I am here to tell you that if this quality is not up front and center, wealth will elude you and you will be left with the mess that you created. Respect the power of this quality of cleanliness. Tell the universe that you have cleared the path for wealth and abundance to enter.

Quality 8: Beauty

Beauty is the quality or aggregate of qualities in a person that gives pleasure to the senses or pleasurably exalts the mind or spirit.

Beauty is what you create when you incorporate the other seven qualities into your life. When you take the steps to have harmony, balance, courage, generosity, happiness, wisdom, cleanliness, and beauty in your life, you will exude confidence in who you are. And there is nothing more beautiful than a confident woman. Remember, when you are confident you feel secure, and when you feel secure you have no fear. And when you have no fear, you have the courage to say what you think and feel in a calm and wise way. And when you are calm, you make wise decisions with your money, which then allows you to be truly generous to others as well as yourself, which, in turn, makes you a happy, powerful, and beautiful woman. Do you see how all of these qualities work together to help you arrive at the goal of being a woman in control of her destiny?

Summoning the 8 Qualities

I've noticed, in my own life and in others', that the more you summon these qualities, the easier they are to access. Harmony yearns for more harmony, and balance abhors imbalance. Courage begets greater courage. Once you are generous in the right way, a lesser form of generosity will feel inferior to you. True happiness will never permit you to settle for a lesser form of happiness. Cleanliness recoils at disorder. Wisdom, once achieved, is with you forever, and beauty inspires beauty in all things.

Carry these qualities with you throughout your life. Write them on a notecard and keep them close at hand -- in your wallet or in your pocket. Make it into a talisman to guide you every day as you make your way through life and all its impossible demands. These qualities will keep you focused and tranquil. Let them and they will offer you constant reassurance that you are acting powerfully and correctly, with love in your heart and the purest intentions, to realize your goals of security and comfort for yourself and all you love.

Suze Orman's web site full of myriads of financial tips and tricks can be found here.

eCommerce Business Model 101

I've been answering a number of emails lately from business owners that request that I look at their website and offer my suggestions as to why their website isn't generating more sales. I've also been asked about eBay listing strategies, shipping strategies and finally marketing questions. By "reading between the lines" I've determined that there are a few concepts about the ecommerce business model that seem to be confusing or just not understood clearly by these business owners.

My goal here is to impart some logic to the ecommerce business model.

First, let's define a few basic concepts:

Margin = The money you receive when you sell an item to a customer minus the money you pay to your dropshipper or wholesaler to get that item. This number is usually defined in percentage. (i.e. You purchase a necklace for $5 and sell it for $10. Your margin is 50%)

Variable Costs = The percentage of your sale spent on three items: Shipping, Marketing, and credit card processing

Fixed Costs = Any expense that will occur regardless of whether you have any sales or not. An example of a fixed cost would be a lease on a warehouse.

Obviously the goal is to make positive margin on every individual transaction, and then do enough transactions to cover your fixed costs. Any amount above and beyond this is your profit. (by the way, profit is a good thing and so is paying some taxes. It's the government's way of rewarding you for being successful!)

As an illustration of a successful business model I'll write out the plan for my website, JustGolfBags.com

I price my products to gather an average margin of 40%.

My Marketing costs are around 7.5% of sales

My Shipping expense is about 11% of sales (I offer free shipping on many orders)

My credit card processing is about 3% of sales

Add all of my variable expenses together and my Net Margin per Sale is about 18.5% (40% margin less 21.5% variable expenses).

This translates to say that for every $100 golf bag that I sell I am putting $18.50 in my business checking account. Then, I need to sell enough of golf bags to cover my Fixed Costs such as Rent, Utilities, Phone, Supplies, and Payroll. Whatever is left over becomes the profit for my business. Easy, right?

Ok, so how does this effect me you ask? The truth is I don't know enough about every product being sold to tell you what the correct business model is for your business. What I can tell you is that you should look at each number independently, then pull them all together to see if your business will make money.

The first place to start is by figuring out how much margin the products that you sell will generate. Obviously the higher the margin, the better. Try to stay away from product categories that offer less than 20% margin, it's just too hard to make any profit.

Next, determine how much marketing you'll want to spend to generate traffic and sales. I personally try to keep this number under 10% of my total revenue.

Then, figure out what your credit card processing rate is. I would guess it's between 3.5% and 5% depending on your volume. As your business grows you'll be able to lower this rate because of your business volume and a lower risk of default.

Finally, determine your shipping strategy. This is where I see the majority of the small website owners get stuck. They are trying to charge too much for shipping and people visiting their site are buying elsewhere from a site offering a better rate! Shipping in my business is 11% of my total expense structure for a couple of reasons. First of all, it's expensive to ship golf bags, but more importantly the market conditions almost mandate that I offer free shipping. It's what my competition does so I pretty much need to do the same to remain competitive. Especially since we all are selling similar products as similar pricing.

To really gain an understanding of how all of this works, build a spreadsheet with the some example scenarios. Play with the numbers until you have a plan that makes sense from a financial perspective and is realistic to implement. The great thing about ecommerce is that you can play with the variables until you determine the perfect solution. Is it by offering free shipping? Maybe it's just subsidizing shipping by charging a low flat rate to your customers. The answer might be to sell at a lower margin by offering products inexpensively. Or, maybe the answer is just more marketing?

Sample Business Model
Revenue	A	B	C
Target Margin	30%	45%	60%
Expenses
Credit Card Processing	3.50%	3.50%	3.50%
Marketing	7.50%	10%	25%
Shipping	5%	10%	15%
Net Profit Margin	14%	21.50%	16.50%

I truly wish I had the perfect solution to every business's quest for more sales but since I don't, just follow the simplicity of the above model and you'll be well on your way to building an ecommerce empire!

Marketers in Love with E-Mail

Below is an article from a newsletter that I receive daily about online marketing tips and tools. The premise is that while Pay-per-click programs continue to grow, it still hasn't surpassed the tried and true method of email marketing.

The main point that I took out of this article is that many online vendors are using email marketing to drive incremental sales from their existing customer base. As you build your business and your online marketing campaigns, don't forget to put together a program to continue to reach out to existing customers. It's been proven to work and is a great deal less expensive than trying to acquire new customers!




















Here's a link to the full article on eMarketer.com

eBay Tips by Jody Brothers

We focused our Essential Conference Call last night on eBay and was really excited to see the positive response to our Q & A. Thanks so much for all of your who sent in questions. As I continued to respond to emails through the evening and again this morning I thought I would address a few issues and offer a few tips.

Use of Dropshippers

I would be extremely careful using dropshippers to fulfill your eBay auctions. Nothing will get you negative feedback from a buyer quicker than not being able to fill a successful completed auction. As much as I'd like to think this is not the case, occasionally dropship companies go out of stock on certain items and have to place the item on backorder. If you want to use an item from a dropshipper and feel strongly that the item will be successful on eBay, I would recommend that you order 4 to 6 pieces of this item and have them shipped to your home for inventory. This will allow you the opportunity to take a few additional photographs if necessary and also will allow you to save any dropshipping fees by ordering in bulk versus individually. You might even get a quantity discount, this increasing your profitability.Another great result of selling the same item multiple times is that the work you do to post the item is saved within your My eBay section and the item can easily be re-listed. In fact, using this approach allows you to run auctions at a variety of times so that you can determine by page views and final selling price the best time to list auctions.

Pricing Strategy

If you have done your research and viewed completed listing for similar auctions of your item, you should have a decent idea of what your item will sell for. I never purchase a product for resell on eBay without first thoroughly researching completed listings. For example, if I know approximately what my item will sell for I can then determine my listing/pricing strategy. If you visit my eBay Store at http://stores.ebay.com/JustGolfBags you will see a number of listings, some of which start at .99c, others much higher.

A golf bag for .99c? Are you nuts? Actually, we aren't... We know that most of these bags that we list will end of selling for $50 to $100, some even higher... Our research has proven this true time and time again. We list this item at .99c because the listing fees (the fee eBay charges us to list the item for auction) is much lower than if we listed the item for a higher opening bid. Also, there is a psychological strategy at work as well. When someone initially views the low opening price, it gets a lot more page views than if the opening bid was higher. More page views and more exposure to prospective bidders all results in a bidding war at the end of an auction. By the time the auction ends people are emotionally attached to the idea of winning the item and will often times bid more than they would have originally planned because they really want to win it! They've invested too much emotional energy to quit now! The result is an auction that I paid very little to list, but often times has great results.

The only time we don't utilize this strategy is when we research a product to sell and there's not much interest in the product. We'll list the product with a Buy it now price at what we would like to sell the item for, and the opening bid amount about 15% less than the Buy it now price. This is also a good strategy to incorporate if you are really unsure what an item will gather in a .99c auction strategy.

As you can see, selling on eBay can be extremely simple, but at the same time very complex strategies are applied to enhance your opportunity for success. The key is to just get out there and do it! When I began my eBay journey I sold everything that wasn't attached at my home. Old golf equipment, hats, vintage clothing, tools, old computer equipment, books, were all target items. As I look back I definitely made a little money, but what I found was the more I used eBay to sell things around the house, the more clear my future as an ecommerce entrepreneur became. Selling on eBay truly prepared me for the challenge of building JustGolfBags.com!


Jody Brothers is an entrepreneur who consults with small business people just like you. His blog can be found here.

Ramping Up On eBay

As much as we would like to just walk in to our boss's office and quit our jobs so we can devote every waking moment to building a successful eBay business, many times that is not possible. There are bills to pay and responsibilities we must take care of. But the question for many is whether they can keep their job until they have built up enough cash flow to leave without missing a financial beat. Here is an article from an eBay expert that will help you prepare for a smooth transition to becoming a full time entrepreneur.

Managing A Full-Time Job And

An eBay Business

By: Skip McGrath

Working a full-time job and running a profitable eBay business can be a real challenge. Some people seem to handle it with ease while others struggle. I did this for a number of years, and although we were successful, it was a struggle. Of course, I had an advantage - my wife Karen. The truth be told, she did by far most of the work. If you are married with a spouse that stays at home, this is a significant advantage. Many of you, however, either have no spouse or your spouse also works. This means that you are essentially on your own.

The first question you need to ask yourself is: Are you looking for a hobby or a business? If it is a hobby or a very part-time business whose goal is to make a extra hundred dollars a month or so, then you will have a fairly easy time balancing the hours you spend at work and your eBay business. However, if you are running a business designed to earn $1,000 a month or more, then you have different issues.

Another question to ask yourself is: What are my long-term goals? If your job and your career is important to you, then this must always take first priority. If, on the other hand, you are in a boring or dead-end job, then you need to plan for your success and how and when you will leave your job and do eBay full time (as thousands have done before you).

If keeping your full-time job is your priority, you also need to factor in the type of employment you have and your employer's policies. People who work outside for a living rarely have an opportunity to check a computer during the day. Office employees, however, are usually connected to the web at work. Many employers today have very strict policies about using your computer at work to transact personal business. There is also the issue of simple integrity. Is it fair to your employer to do outside business while you are being paid to work by the company? Some employers don't mind if employees use a computer for personal web surfing during their lunch hour or breaks. If this is the case, then you will be able to check emails and auctions a couple of times a day from your office.


No matter which category you fit into, the simple fact is that you are away from your home computer from 8 to 10 hours a day. How you deal with the realities of this will determine your success. Look at some of the problems you will run into. We all know that many eBay buyers can be impatient. They send an email and expect an immediate answer but you can only work on emails for a brief time in the morning before you leave for work and after you get home. There is the matter of shipping. How will you get to the post office or UPS store during the hours they are open if you are at work? There is also the matter of time for your job, time for your business and time for your life and family. With this in mind, let's look at some strategies and ideas:

1. Organization -- The very first thing you will have to do is get organized. Taking the time to set up organized structures and systems can be a huge time (and money) saver. You will have to take a lot of photos and you don't want to spend time setting up lights and a tripod every time you want to launch an auction. Set up a permanent or semi-permanent photo set up in your garage or spare room. Next is a shipping station. Again, you want a table set up with all of your tape, boxes and shipping materials handy. If you have a UPS account you can get one of their small thermal printers to print out your shipping labels. Or, if you use the post office there are several computer programs that will calculate postage and print out labels so you can drop your packages at the post office instead of standing in line. You should automate your auctions with software or an on-line auction management system such as Meridian (www.noblespirit.com) or Vendio (www.vendio.com). These systems will save you time launching your auctions, sending out payment request emails and processing payments, posting feedback and keeping track of your inventory, costs and expenses.

2. Go High Speed -- Time is money, and time is also your most valuable commodity when you have very little of it. Any time you can save, will be repaid several times over in profits. DSL and Cable can be a bit expensive, but these high-speed services will save you several hours a month. If DSL costs you an extra $25 a month and saves you only 2 hours, think what you can do with that two hours. For example, if you are using an auction management service, you can launch anywhere from 10 to 30 auctions in that period of time. (If your product has a standard description and you already have images, you can launch many more in this time) How much do you make on each auction? If you could launch an extra 30 auction a month, would you make more than $25.00?

3. Get your own UPS account -- This can be a real time (and money) saver. If you have your own UPS account you can rent a scale and thermal printer and save hours of time shipping each month. If you volume is high enough, you can also get discounts from UPS. These discounts will often offset the cost of shipping materials allowing you to make a small margin on your shipping and handling costs. UPS will not pick up packages from a private residence1 but once your packages are prepared with the UPS label you can simply drop them at any UPS drop box or UPS store. For example, you can prepare all your shipments in the evening and drop them off at a UPS store in the morning on your way to work.

4. Let your customers know your situation -- People can me a lot more understanding if they know what and who they are dealing with. Most email programs allow you to append an automatic pre-written signature line. For example, you could add a signature line that said something like: "Your complete satisfaction is important to me. Please understand that I work a full-time job during the day, so I cannot always respond to you immediately. Please be assured that I will respond to any request you have at the very first chance I get."

5. Save Some Time for Yourself -- Your mental health and your family's happiness is also important to your success. Working a full-time job and coming home and spending 4 hours a night on the computer, or taking photos or shipping goods is very tiring. It is very easy to get sucked into the business and suddenly you turn around and it is 11:30 in the evening and you have to get up in 6 or 7 hours. Time management is crucial. You must set aside some quality time for yourself and your family. Remember, the goal here is to make some extra money -- not to get a divorce. If you are single, be sure to take some time to relax, eat dinner or have a glass of wine and watch your favorite TV show. Set a limit on how much you will work each evening. If you take the time to actually do a schedule, then you will be more likely to follow it. If you have a family, the same is even more true. You simply have to set aside some time each evening to spend with your spouse and/or children. If you don't do these things you will find yourself becoming stressed out and this stress will be reflected in your eBay business and in your job.

eBay has been a phenomenal success as a company and has provided opportunity to thousands of entrepreneurs and home-based businesses. It is not as easy as it seems to start and run a successful eBay business -- but it can be done by most people. The secret is nothing more than a modicum of talent and intelligence, hard work, a good plan and paying attention to the details. Good luck in your eBay business!

1 There are some exceptions to this rule. You should discuss this with your local UPS representative once you open an account.

Skip McGrath is the author of the eBay Power Seller's Manual and How To Start and Run An eBay Consignment Business. He also publishes a monthly newsletter the eBay Auction Seller's News.