Ep. 27 | Low-Capital Strategies for Entrepreneurs - Jack Moran

Host Jack Moran shares his insights on early business models for entrepreneurs, focusing on the manufacturer's rep model to build trust with a niche audience. He speaks on the importance of documenting processes for scaling, optimizing sales funnels, and effective branding by positioning the audience as the hero. This episode provides early-stage entrepreneurs the knowledge to make sound decisions when choosing business models, building trust, and scaling effectively.

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Hello everybody, and welcome to episode 27 of Shakin’ Hands. I'm your host, Jack Moran. You can find me on Instagram at Jack Riley Moran. Today on the podcast, I want to talk a little bit about like, early business models for entrepreneurs. I think in the last episode, we touched a little bit on like, what are good business models for someone who is looking to start a business to enter the game of entrepreneurship, with, the ones with the least friction, the least amount of capital investment to make that early struggle as an entrepreneur, as, seamless and as frictionless as possible because obviously, when you're first starting out, as an entrepreneur, you don't want to enter into a venture that's going to be extremely difficult with a ton of hurdles that you have to encounter. That's just going to discourage you from, well, continuing down the path. So the early principles and the earliest models that you go into, or what's going to inspire that confidence in you having the success in that model is what's going to give you the confidence to keep going. So you want to make it make it as frictionless as possible. And I talked about in the last episode utilizing a model that I call the manufacturers rep. So in today's market, in today's world, there is a lack of trust. It is very difficult to build trust with an audience. And you've seen, like with media in traditional marketing, they have been on a serious decline because people are realizing that it's like a pay to play industry. And therefore these traditional platforms are not having the same influence on people that they used to. So that leaves a big void in the market, because everybody needs marketing. Everybody needs sales. Everyone needs to be able to influence people to make action, which that's what a sale is. It's an action or a change of that client. Making a decision to make change typically is purchasing something. So if you can identify an audience, build trust and credibility with that audience, and then have influence over that audience through that trust and credibility, that's valuable to anyone. So say your audience that you define is people who are interested in fitness, just for example, and you start defining the ideals of that audience and figure out how to get their attention. And you build trust with them that your information, your knowhow is credible and you are a thought leader. Define yourself as a thought leader in that space so people come to you for that know how, then you have influence over them. So you could go to a product that is looking to get in touch with the people it align their product aligns with your audience, and you can start to broker that product to that audience because you have influence over that audience. Now, the most important thing to keep that influence with that audience is keeping the trust with them. So you obviously don't want to pick products that are going to be detrimental, to your audience. You want to find things that are going to help them. But what's beautiful about this model is that it's very low capital. It's very easy to scale. You can fully automated it with the power of technology. And because you're relying on other people's products, you're taking yourself out of the like, which I think is the worst business is like the manufacturing process. You have the ability to not just push one product. You don't have to be tied down to one product. You can almost be like a consultant of many different products, and you can jump from product to product, and you can recommend different things as different, you know, better products present themselves in the market and bring that to your audience. And the fact that you have that flexibility and you're not tied down to anything is just further building the trust with that audience. So within this model, you are a broker of a product to an audience. And now you see a lot of these models right now, like with the introduction of the school platform where people are utilizing themselves as the product. So they are brokering themselves like a course or, you know, materials that they've built to that audience. And their biggest focus is growing that audience and then getting that audience to purchase or utilize the products that they have, whether it's just, you know, video of them talking a content folder that they're selling different files or, pamphlets or blah, blah, blah, that they're, they're selling, they're able to use their own knowhow as the product. So that's a really easy model because you can just define, what am I an expert at, turn that into a product, streamlining that into a product, and then bring that expertise to people who are seeking out that knowledge. So super easy, streamlined model. You have full control over your product. You're not doing any manufacturing. You're just literally brokering or selling your expertise. The one caveat I think to that model is that you to make that business fully passive and to replace yourself in the business or to exit the business is very difficult when you are the product at some capacity to expand that business, you will always have to be involved in it because you are that product. So I think that using the manufacturing rep model, and being a consultant and making that brand the authority and the brand, what has the trust and credibility, someone else can come in and run that brand, and you're not necessarily tied down because eventually, unless this is a lifestyle business that you want to be involved in forever, you know, eventually you're going to want to exit or make it passive so that the business is producing income for you passively, without your sweat equity or input into the business. Every single day I want to start talking about like, where do you start with this kind of business model? So the number one thing is you want to pick your idea. And I think that the best idea that you can pick is something that you're truly passionate about. Because any time that you are when you're trying to build credibility within this audience, people are going to feel the energy and trust you more when you're talking passionately from the heart about something. So if you pick an idea that you're just transactional about and you just care about the money that energy is going to translate when you're communicating with your clientele. Now, if you're super passionate about holistic medicine and getting away from the traditional health care system in that the detriments that it has to to your health because of an experience that your parents had when they fought off some disease and, you know, you know, where I'm going with this, being able to tell that story and convey that message from the heart and passionately is going to have a lot more influence over that audience than if it's something that's just you're motivated by money. So I would say number one is pick that idea that you're passionate about. Number two is that passion has to solve a problem for someone. So you want to define your audience, which is your ideal client profile, your ICP. What is the audience of the person who's problems you're going to solve? So you need to know, number one, what is the problem that that audience encounters, why it's a problem for them and why they would need to solve that problem, and then how you provide the solution to that problem. So those three simple, variables are things that you want to identify early because those are going to be wrapped in your messaging, which you're going to utilize to get the attention of that audience. And I think something important to note is a lot of people try to find an audience like a super, super broad audience to target, but it's more difficult to target that audience. And they're thinking in their head like, the bigger the audience, the bigger the opportunity is. But if you look at all the great companies, billion, billion dollar companies like Facebook, Amazon, they all started with a niche. And because when you pick a niche that's really targeted, it's a lot easier to define your process and get really good at your process, at targeting that specific audience. When you choose a really broad audience, there's a lot more intangibles and variables to becoming a master at targeting that audience. So look at Facebook, for example. Mark Zuckerberg started Facebook only servicing students at Harvard once. They got really good at that and they got good engagement from the students at Harvard. Then they expanded to other schools in Boston, and they slowly started adding the layers. But they started at that very niche vertical. Now again with Amazon, for another example, Jeff Bezos, when he started Amazon, all they did was sell books or broker books because he identified a need in the market, where distribution was an issue for books. So he found this very niche problem that he got really good at solving. And then once that business started going, they got good at that. It was obviously producing capital, which he could use that internal capital from the company, not risking outside capital, but using that internal capital from the company to start adding layers to that business and expanding out the service offerings. So it's really important to find that, like I call it a pre unit due diligence, like how can we produce income in the simplest way from point A to point B? And in this business model, point A is getting the attention of the audience. And then point B or the final step is making an action that produces income. So how do you take that customer on a journey. And it's like a funnel. How do you get them to enter your funnel and then bring them through this journey so that the end result is them giving the business money, and then hopefully whatever that transaction is leaves them happy so that they come back and they reenter the journey and they continue purchasing from you. Finding that niche audience is like, now the next step is like defining what is that niche audience that you're trying to target, identifying the problem that they have and how you're going to solve it. And then once you have that messaging defined, you're going to go out and start trying to target that audience. Now this is the top of the funnel is how do you get people who have no clue what your business is to to have to put their attention onto you and onto your business. Now, you can't just immediately start selling to them because you don't have any trust in credibility with that audience. So in the beginning, you need to get really good at the top of that funnel, which is just getting their interest to enter into that space, which I think is just, you know, there's a number of ways to do it. A lot of people are doing it through Instagram. You can do it through LinkedIn. There's a number of different channels that you can engage an audience that has no clue about your business and get them interested in that business, bring them into the funnel, bring them into that process. And so I think the best way and again, you're trying to build trust and credibility with them is just like, give them knowledge like your whole your whole value proposition in the beginning is like offering them knowhow or expertise, and that is going to get them to engage with the business. Now, an issue that I see with a lot of businesses is they start focusing on the end of the journey or that sale before they get really good at the top of the funnel. And I like to think of like a sales process, like a Plinko board. If you're watching this, you don't know what a Plinko board is. It's like the arcade games or the, the carnival games where you put the marble in the top of the board and there's a bunch of nails on the board, and there's six different outcomes, and it bounces down the nails and eventually it pops out to one of those outcomes. Now, if you think of a sales process like that, Plinko board and you are dropping a client in at the top of that Plinko board and you want him to end out here, which is purchasing your product, if you start messing with the nails down here and changing that piece of the process before you start messing with the beginning. Now that marble, it enters the board and it's bouncing down. It keeps going off to the left and it's not reaching your your goal because you're not affecting any of those nails at the top of the board. You're worried about your product and your back end and your sales and blah, blah, blah, and you haven't even figured out how to engage the client correctly. So in a sales process, you want to start like with those top nails that the customer is going to hit first and get those really good to push that marble to the right or that customer to the right. And once you've gotten really good to the point where every time you drop that marble in that marble initially goes to the right, then you can start working on that, you know, second bit of nails and it's like, okay, it's going to the right now, but afterwards it drops off to the left. So you have to start playing with that next stage of the process and those next nails until you work your way all the way down, that every time you drop that marble in automatically, that marble comes all the way down to the right, which is the outcome. And it's your customer going from the engagement with your business to the outcome, which is purchasing your product. So through that process, as you're building that process, it's super, super important to be documenting every single step that you make within that process. The more detailed you can be in the documentation, the better. And this is something I learned the hard way. I built my business out for 2 or 3 years before I learned this information, and then I had to go back and define my process and document that process because that is the key to scaling is that documentation, because when you have that documented manual of how your business operates, that per unit due diligence, you can then pass that off to someone else and say, here's how you run the business, or I need to delegate the first three steps of the process. So I want to give that to another person. If I don't have that documented, where are they going to get that information? They have to come to me to get that information every single time. And me giving them that information is taking time away from what is the best use of my time. So if when I am building that process, I document every last step that I make. When I put that documentation in place, I never have to answer that question again. Because if anyone has a question when I'm trying to delegate, they can just go to the manual and if they have a question that is not defined in the manual, when you answer that question, it immediately goes in the manual and you never have to answer it again. So defining that process is super important from the very beginning. Like to the point the more detailed you can be, the better. Like if you have to send an email, your customer engages with your with your Instagram. For instance, in this model they have seen one of your videos and they enter your Instagram page. So they are now in your funnel. You're building trust and credibility with them, and you have a link in your bio that says, if you're interested in learning more, click this link where at this point they have now entered, you brought them to your website where you're trying to rake their data. When they get into your website, they put their email down and you know in your process, when they put their email down, you send them out an email. Now think about it. If every single time they put an email in, you have to write a new email to them. It is a waste of time. But now if you have documented within your process a templated email that you utilize that every time that person enters their email into this process, you have an email that has that gets sent to them with a call to action. Now, if you want to remove yourself from that part of the process and you have that within the manual, when you delegate that process to someone else that you hire, you could just give them that manual and they go to the process. Okay. When emails come in this template email goes out so they don't have to reinvent the process. Now another piece of information that I'll give is like when you're starting to define this process, you are you understand who your audience is, you understand the problem that you're trying to solve, and you understand your service offering that you're trying to up the how you're going to solve that problem for them. You can figure out from that. You can basically throw things at the wall and it just like that Plinko board, you can try different things and get that customer to go deeper into the journey and convert them. And you can define that process from zero. But chances are there's someone that has executed a process similarly, and in business, you never want to reinvent the wheel. If there's someone out there that's already doing it, just copy their strategy. Then you're going to have 7,080% of the strategy implemented, and then you can tailor it down to your specific audience, and it's going to save you a lot of time. Now, if you want, you can start from the beginning and maybe test every last step that you do, and keep optimizing it until you figure out that same information. But if you just go to another person strategy that's doing something similar, similar, even if it's a different product or a different audience like you can utilize their strategy and take 70 or 80% of it and then tailor it to your your own strategy, and you're going to save yourself a lot of time. And I think that suppressing your ego and not and being willing to go out and get that information is going to save you a lot of time and heartache. So you have to constantly be like getting that information that is going to tailor your process. And so this process, it's like a uncut rock in the beginning. It's going to be this ugly, like asymmetrical rock. And every optimization step that you make within that process, like in the beginning, if you send out that email to a client and you're testing two different emails, your AB testing those two different emails, and you figure out that we send this to 100 clients and ten convert, but we send this 1 to 100 clients and 20 convert. And you choose that that second email. That's an optimization step where you have gotten the data that this email works best and better than this other. That is like a shaving of that uncut gem. And every time that you do one of those optimization steps and you define that process and make it more simple, make it more streamlined, which means it's going to require more inputs to get from start to finish, which means it's going to cost less money to get to start from start to finish, which means you're going to have more margin from start to finish, which means you're going to be more profitable. Every stroke that you do, every optimization step that you take in that process, you're going to get closer and closer for your from your process looking like an uncut stone to a diamond. And that's what you want to continue doing, is just shaving down your process and shaving down your process until you can get from engaging that client to converting them in the simplest way possible. If you can do that in one email, great and convert them. Then you have a two step process. That's awesome. But you know, more often than not, maybe it's going to take 7 or 8 steps and you want to define all those steps. So I think that that is like a really good business model. As an early business model, to start understanding how to build a process, how to systemize a process and how to start converting an idea into income. And I want to just touch on because the biggest thing when you are doing this business model again, is going to be influence within an audience. So I want to throw in here like a little bit of how to brand or how to define your messaging, that you are going to be pushing out to the audience. So I read a good book that, you know, you guys should read. I think it's called, Building a Story Brand. I forget who it's by, but it talks about like the correct way to message your to define your product and the messaging that you put out to your audience. And I see now that I've read that book, I see all the time with companies how they're doing it incorrectly, the typical way that people market themselves. Like if you look at their website, you're going to see their messaging like, this is our company and this is all the things that we do. Great. So it's me, me, me, me, me. And as an audience, it's human nature is to think about yourself. So if you're an audience logging on to that website and you just hear me, me, me, me, me about that company, it doesn't have the same influence as a company who makes their messaging all about their audience. So the simple formula that I learned from this book, what you're trying to accomplish through this messaging, is that your audience is the hero. So highlighting that they are a hero. So in the messaging that you are, displaying, make that a point. If there's boxes, you have to check. You want that reader to feel like a hero. Number one in your messaging, two is identifying the problem they will encounter that will limit them from being more of a hero. And three is identifying yourself as the guide that will help them overcome the problem so that they can become more of a hero. So with that messaging, it's going to have a lot more influence on your audience than if you're just talking about yourself. If you're stepping into their world so that them as a reader is feeling themselves being highlighted and has a lot more influence psychologically. And I would also like second that by saying, this is the same with I talked about before, when you're trying to not reinvent the wheel, so it will make it so much easier for you when you're starting your business. If you can get mentorship, or you can find people with the information that have already done it before and get them to give you that input, and you can start implementing that into your own business to save yourself that process of learning, learning and going down the path yourself. And like learning through trial by trial and error. But if you approach people and you seek out that information, Transactionally and you are always talking about money like your branding is off, but if you're messaging is again, what are you trying to accomplish through your messaging? People focus on the money, but if you make the money the priority, I think that that is limiting for you. Whereas what really brings the value and where you really get the money is through knowledge. That knowledge, if you have that knowledge, if you understand the process, if you understand how to convert someone, if you understand how to build trust and credibility, with someone, if you understand the needs of your audience, if you understand, you know the touch points of your audience, that expertise is what is going to get you the money in is going to convert the client and get you the money. So what is more important? Is it the money first or is it the knowledge first? I think it's the knowledge. So how do you brand yourself in order to convert people, to give you more knowledge? I think personally that it is branding yourself as someone with very little ego who just wants to learn. And when you talk to people like that, unless someone's really a dick, they're going to help you out. So if you reach out to someone in your branding and your messaging is, hey, I'm trying to start this business, I just need help, I'm running into this problem. I was hoping that you could give me this information. Typically, the person is going to, you know, return the favor and give you that information which you can use and implement into your business to make it successful more quickly. But if your messaging is strictly transactional, I think it's really going to limit you and the knowledge that you're able to get. So that is kind of just like my introduction on the manufacturer business model and the brokerage of a product to an audience and building trust and credibility within that audience. And I think there's a lot more to it. So if you guys are watching this and I can come up with any questions or want more clarification, please, don't hesitate to reach out. But other than that, this concludes episode of 27. I'm your host, Jack Moran. You can find me on Instagram at Jack Riley Moran. And once again, if you guys have any guests that you want to recommend or any questions about entrepreneurship or help defining your business model, please do not hesitate to reach out. So. You.