Smart bootstrapping is about turning your lack of resources into a competitive advantage. Peter Drucker says that there are two questions in business: question one is what business are you in, and question two is how is business? That's it. I would say there probably is a third question -- with all due respect to Mr. Drucker -- and that is how do you improve business.

He also said that all businesses are designed to bring in a customer and that can only be accomplished through marketing and innovation. These are the only two functions of business and everything else is an expense.

There is an interesting aspect of leverage that not one in a thousand business owners, CEOs or accountants ever recognize -- and those are the intangible assets. That means the advertising, marketing, good will, customer relationships, distribution channels and expertise that a company possesses -- and ways they could more effectively and productively use them to their advantage.To increase your income or rate of success in everything you do:

1. Take full advantage of what you already have — your hidden assets, untapped opportunities and overlooked possibilities.

2. Create multiple sources of income or success — so you aren’t reliant on just a single approach.

3. Change the way you think so you can continue to grow and improve indefinitely.

Embrace these strategies and apply them well to achieve financial security, influence, recognition and the success you deserve.

1. See the big picture

Most people make the mistake of complicating business more than it needs to be.

For example, building and increasing your business may seem intimidating and complex, but in reality

there are only three practical ways this can be achieved:

1. You can increase the number of clients.

2. You can increase the average sale per client.

3. You can increase the number of times clients buy.

Therefore, to build your business (and your income):

Calculate the number of clients you now have — and how you can increase your number of clients by 10% in the next year.

Figure out exactly how much, on average, each of your clients spends with you now — and how you can raise that average by 10% in the next year.

Determine how often clients are currently purchasing from you — and find a way to decrease the time between transactions by 10%.

Taken together, those three incremental 10% improvements will combine to expand your business by a total of 33%. And frequently, that will result in a doubling of personal income without much of a difference at all in operating costs.

In short, most businesses are constantly awash in a sea of potential opportunities for growth and expansion. All that’s required is:

The insight to see how these opportunities can be connected.

Knowledge of the proven strategies other people have used successfully in similar circumstances.

The ability to leverage these strategies together to produce greater income and success.

When a person understands what to do, they also understand exactly and precisely how they can get anything they want in their business life and career.

2. Create breakthroughs

As well as looking for incremental gains, you should also be attuned to breakthrough ideas — completely different and original ways of doing the same things.

Breakthroughs create quantum and dramatic leaps forward instead of small gains. A good breakthrough also creates leverage — allowing you to change the entire game of business and seize a sustainable competitive advantage.

To use the breakthrough mindset:

Be opportunistic. Whenever you notice a problem, ask,

‘‘What’s the overlooked opportunity here to solve a problem loads of other people are facing every day?’’

Think in terms of possibilities — about different and better ways of doing things.

Be receptive to novel new ways of doing things — outside the traditional or industry standard approaches.

Look at things logically. Be open-minded. Often the most obvious solutions are the last to be considered.

If you keep an ongoing flow of high-quality information into your mind, you’ll be amazed at the number of ideas you can borrow and adapt from other fields that will generate genuine breakthrough business opportunities.

3. Inventory your strengths

In order to start moving forward to where you want to go, you

first need to know exactly where you are today. To do that, you

need to take a personal and business inventory — a strategic

analysis of strengths, weaknesses and how these factors relate

to the competition.

A good strategic analysis:

Lists all your business and personal assets and strengths – including character traits, network contacts, background experience, skills and knowledge.

Categorizes how your business currently generates its business revenues.

Identifies other businesses that benefit whenever you create a new client and evaluates the potential for joint ventures.

Articulates your unique selling proposition (USP).

Analyzes competitors — their strengths and weaknesses along with their competitive advantages.

Details what your costs are in generating new clients — and compares that with the lifetime value of a client.

Looks at all the ways you can lower the risk of transacting business with your organization.

Studies how you go about generating referrals, reactivating old clients and up-selling your existing clients.

Looks at your client retention track record.

In practice, less than 5% of businesses ever get around to carrying out a detailed strategic analysis of themselves.

That’s because most business people spend the majority of their time working in their business rather than on their business.

Until you know what you’re currently doing right and currently doing wrong, you won’t have any ideas about how to improve.

4. Put the client’s needs first

Any business that genuinely and sincerely puts the client’s needs ahead of their own preferences will succeed and prosper.

A viable business serves its clients. By that, the business puts clients ‘‘under its protection’’ or, in other words, it becomes an adviser focused on the client’s interests first and generating sales second.

In these circumstances, the business becomes a valued resource.Instead of being passionate about the product or service offered, successful business owners are in love with the idea of meeting the needs of their clients.

A business that puts client needs first:

1. Identifies client needs before figuring out what to sell them.

2. Acts as a trusted adviser — not just a sales person.

3. Won’t hesitate to recommend a cheaper solution that’s better.

4. Thinks in terms of solutions rather than merchandise.

5. Acts in the best long term interests of clients.

It’s all a matter of loyalties in the final analysis. People that put their client’s needs first are passionately committed to creating solutions that work for those people. For that reason, they’re trusted — clients look on them as a resource someone else is paying for.

5. Calculate lifetime value

The best possible offer made to a first-time client should reflect the lifetime value of that client’s future business — not just the profits that will be generated from a one-off sale.



Why? Because once you’ve calculated how much profit you’ll make over the lifetime of a client, you’ll realize the initial transaction profit is really of little consequence.

Therefore, make it as easy as possible for people to start a relationship with you. Eliminate any hurdles. Offer a free, introductory period. Give them incentives to do business. Break-even on the first sale in anticipation of recouping your investment over the longer term. As long as you deliver genuine added value, they’ll keep coming back for more.

To calculate the lifetime value of a client:

1. Compute your average sales revenue and average profit.

2. Add the profits derived from follow-on sales.

3. Multiply by the average number of transactions per client.

4. Subtract the costs of acquiring that client.

That will give you some feel for how much business each new client will generate over their entire association with your business. Logically, then, you can afford to spend some additional money in acquiring new clients in anticipation of recouping that investment over their lifetime of business.

That additional money should be used primarily to make it as easy as possible to begin doing business with you. That way, you start your own ‘‘positive feedback loop’’ — where the more business you have, the more business you can afford to generate in the future.

Keep in mind your goal isn’t just to cut the price of that first transaction. Instead, you want to be creating an offer that is so appealing, so attractive that people will be breaking down your doors to do business with you. Create that kind of offer and the fireworks are just getting going.

6. Develop a USP

A USP is your ‘‘Unique Selling Proposition’’. This is:

The way you differentiate yourself from other businesses.

The appealing idea that sets your business apart.

The unique benefit you — and only you — can deliver.

The very reason people should do business with you.

There are loads of USPs possibilities, such as:

1. Price — The same product for 25% less than anyone else.

2. Service — We make house calls to keep you in business.

3. Quality — Our products have a 5-year no-question warranty.

4. Exclusivity — Only 100 of these are made each year.

5. Selection — The biggest superstore on earth.

The possibilities are endless. A good USP is clear and to the point. It states unequivocally and succinctly why clients should do business with you. It identifies the niche your business fills better than anyone else.

Good businesses align everything with their USP. It colors and influences every action taken. There’s a high degree of consistency between what the company says and what it does. It is the biggest single reason someone should consider doing business with you.

In every business transaction, someone is asked to take a risk – be it financial, psychological or emotional. Smart businesses create ways to assume the risk themselves rather than asking potential clients to do so.

Businesses that do that lower the barriers of starting a new relationship with them.

In short, savvy businesses totally and completely guarantee any purchase. They offer better-than-risk-free guarantees — if anything goes wrong, the business will fix it as well as pay the client something of tangible value.

To create an offer people cannot refuse:

Consider offering a bonus the client can keep, even if they don’t transact any business with you. That shows you value their time and their trust highly.

Make offers clients can cancel at any time for a full refund, no-questions-asked.

Offer a double-your-money-back guarantee.

Offer to buy them a competitor’s product if, after using yours, they like the competitor’s better.

Let them try it free for 30- or 60-days first.

Test different offers and come up with something that hits a hot button for your clients. People are afraid of making a mistake.

By assuming all the risk, you create a situation where they can’t possibly make a mistake. Most businesses that have tried this approach actually find if they increase the guarantee, they increase their profits — partly because it puts pressure on them to deliver on whatever they have promised and partly because most people tend to be fair and very few will take unfair advantage of a genuine risk-reversal offer.

In every transaction, think about who assumes the risk and find ways to make certain it’s you, not your client.

8. Cross-sell and offer add-ons

Many companies unwittingly limit the amount of business clients do with them rather than actively offer additional products and services. Instead, they should be offering clients:



The opportunity to purchase related items that add value to their original purchases. Future supply options — automatic renewals, large quantity discounts, higher quality alternatives.



Combinations or packages of products or services that add value to the original purchase — with one easy decision.

Auto dealers have done this for many years, but add-on opportunities are not limited just to consumer goods. Every product or service has numerous add-on business possibilities.

Some ideas to consider:

Think about the end result — what a client actually wants when they purchase from you. Offer more of that — for a fee.

Offer delivery, assembly or installation services.

Make related products available. Create a bundle of products and services that is a complete solution.

Add volume or frequency options.

Offer extended terms — let clients buy over time.

Offer a larger or deluxe version of your product or service at a higher price.

9. Test everything

Anyone can produce the same results a marketing genius will result — if they just test everything first and find out what the market wants rather than assuming they know.

Every aspect of marketing should be tested first. That applies to each and every variable in marketing:

· The structure of the offer, especially price

· The headline or attention grabber.

· The format of the material used.

· The closes used.

· The USP around which the marketing offer is made.

· The method by which the offer is delivered to potential clients.

· The guarantee and other elements.

The whole point is nobody should assume they know what works and doesn’t work in the marketplace on the basis of anything except actual field testing.

Testing doesn’t have to be expensive but it does need to be accurate. By using a keyed coupon or telling clients to specify a department number to use when they order, empirical data can be gathered. That way, the marketing can be fine-tuned and optimized for profitability.

Most people are astonished at the difference little changes can make in the pulling power of marketing. If you don’t test, you won’t be aware of the lost profits that may presently be unexploited by your business.

In essence, too many businesses assume they know what the market wants. The smarter approach is to test everything. By comparing the results of one offer against another, some surprising profit opportunities will become apparent.

10. Host-beneficiary alliances

Instead of marketing to the general population, smart marketers make offers to people who are ready to buy. How do you find them? By setting up a host-beneficiary relationship with another company.

Here’s how a host-beneficiary alliance works:

Ask, ‘‘Who already has a strong relationship with the people who are likely to buy my product or service?’’

Contact those businesses and make them an offer on a joint marketing promotion to their customers. Offer them a risk-free, effort-free return.

Explain your marketing will in no way detract from theirs, and that you’ll bear all the risks. Offer them final sign-off approval on the marketing program – just to ensure it’s worth being associated with.

Let them handle the orders that come in — so they can verify what results are achieved for the purpose of any profit share arrangement.

All in all, the concept is simple but enormously productive. The key to success, most frequently, lies in coming up with a rewards package that appeals to the host company so they feel comfortable sharing one of their business assets. There must also be a high degree of trust the alliance won’t offer goods or services of poor quality.

The benefits to the host are:

· An additional revenue stream.

· No costs are incurred — hence no financial risk.

· Leverage of their customer base is increased.

· Cross promotional opportunities may be available.



One thing to bear in mind, however, is forming an alliance of this type usually takes time. Allow potential hosts to get up to speed about your products and services before asking them to make a decision whether or not to participate. This will usually be a process, rather than a one-off decision.

11. Generate referrals

Many business are of two minds about referrals — they realize direct or indirect referrals already generate a significant proportion of new business but despite that have no formal referral program in place.

To develop a workable and effective referral program:

Set the stage. Suggest to clients the sort of people they know who may enjoy the added value you deliver. Get them thinking first — don’t surprise them.

Provide a template — a list of ways to identify the people who may benefit from whatever you offer.



Make an obligation-free offer to confer with their friends and give them a sample of what you have to offer.



Make a special offer. Explain the only way this offer can be accessed is by being a friend or contact of an existing customer. Deliver genuine added-value, and the offer will come across well to both the person giving the referral and the recipient.

Referrals are always the least expensive, most effective and highest leverage way a business can be built. If you look at your clients as valued friends, set up a formal system by which they can refer their associates.

Referral generated clients buy more, stay longer, negotiate less, understand and appreciate what you offer and, in turn, refer their own associates.

12. Reactivate past clients

Your inactive client base is a huge and often unexploited resource. Get these people to buy again and sales will soar.

Most people stop buying for one of three reasons:

1. Something totally unrelated has happened in their lives.

2. They’ve had a problem with what you offer.

3. They can no longer benefit from what you offer.

How do you get them to buy again?

Contact them sincerely and humbly. Invite them to do business again — and make it worth their while with a special welcome-back offer. (This will get back everyone who has just never got around to doing business with you again).

Focus on their needs — ask what can you do to serve their needs again. Be candid with them — the impact can be powerful. (This will be the best approach if someone has had a previous less-than-satisfactory dealing with you.)

Make a no-strings-attached special offer — like a gift certificate or a voucher.

Send unsolicited gifts or samples.

Contact them in person. Talk with them. Ask why they have decided to take their business elsewhere. That information alone may highlight shortfalls in your product or service delivery you weren’t even aware of.

If all else fails, diplomatically ask lost clients to refer someone else. What have you got to lose?

Any business that cuts its attrition rate in half will generate a significant boost in revenues — frequently as much as 20% or more.

Every business is engaging in certain money-rendering, customer and

prospect generating processes they don't even recognize -- let alone measure and analyze. Until and unless they recognize what and how they're doing, they can't begin to see how much better they could be performing.

If you want to really develop wealth, the way to do it is through your own business as opposed to passive investment because the upside is so much greater and there is almost no downside.

People could care less why you're in business. The only reason they deal with you (or they let you deal with them) is that to some extent they see an advantage in it for themselves. The clearer and more powerful you are at expressing, articulating, demonstrating, illustrating and comparing how you render that advantage better than anyone else you deal with -- the more business you will get. Only you can control your own destiny.

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