build business part 2

This report is designed to provide accurate and authoritative information to assist you in building your business.

We are not engaged in rendering legal, accounting, or other professional services by publishing this report.

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Copyright © 2010 by Gary Spirer

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Published by:IYD International LLCAustin, TexasWebsite: www.StepsTo.com

http://www.stepsto.com/

INTRODUCTION ..............................................................................................................................1

WARNING: This is not a report you would expect ................................................................................1

PART ISTART BUILDING ASSETS TO GET BACK ON THE RIGHT TRACK TO FINANCIAL INDEPENDENCE................................................3

My Struggle: The Great Depression Revisited ........................................................................................4

Why I Gave Up My Dream…Temporarily ....................................................................................................4

The Winning Formula Revealed ....................................................................................................................5

My Lonely Entrepreneurial Days…My Struggles Continued ..................................................................7

Success — The Holy Grail…What The Winning Formula Did For Me ................................................8

Why The Richest 1% Own Asset(s) From The Very Beginning, Not Liabilities ................................9

Why You Must Build A Special Type Of Asset: The Golden Goose..................................................9

Discover The Secrets To Wealth That Makes The Winning Formula Possible ..............................11

How The Richest 1% Got There. Is It Luck? ........................................................................................15

How To Find, Create And Build A Golden Goose ................................................................................17

Another Major Insight That Will Change Your Business and Investments for the Better ....................19

More Secrets To Financial Independence And Personal Freedom Revealed ................................20

PART IIBEGIN YOUR BUSINESS AS IF YOU WERE SELLING IT, TO GET INVESTORS, BUYERS AND JOINT VENTURE PARTNERS ................22

The 7 Steps to Wealth Is: The Winning Formula ................................................................................23

STEP 1: IDEA ................................................................................................................................................24

It All Begins And Ends With Your Huge Tipping Point Idea................................................................24

7 STEPS TO WEALTH:THE WINNING FORMULA REVEALED

TABLE OF CONTENTS

STEP 2: DESIGN............................................................................................................................................25

The Right Design Elements Turns Your Idea Into A Business That Works For You ......................25

STEP 3: DISCOVERY....................................................................................................................................26

Find Your Competitive Advantage To Get Customers And Investors ..............................................26

Attract Investors With Your Competitive Advantage And Analysis ....................................................27

Define Your Unique Selling Proposition....................................................................................................28

Use Your Unique Selling Strategy To Avoid Costly Errors ..................................................................29

Large Gross Margin = Competitive Advantage......................................................................................30

Make Sure You Have Production Capacity..............................................................................................31

How To Make Your Delivery System Reliable..........................................................................................31

How To Make Cost A Competitive Advantage ......................................................................................32

The Major Advantages To Being Customer-Focused............................................................................32

How To Put The Right Systems In Place ................................................................................................33

How To Create A Stakeholder Advantage ..............................................................................................33

How To Build A Glowing Market Reputation ..........................................................................................33

How To Take Advantage Of The “Network Effect” ................................................................................34

STEP 4: DEVELOPMENT ............................................................................................................................35

Keys To Translating Your Idea Into Reality................................................................................................35

How To Develop A Prototype That Works ..............................................................................................37

STEP 5: PRE-LAUNCH ................................................................................................................................39

Test, Test, Test And Be A Success Right Out Of The Gate ..............................................................39

Don’t Make Your Customers Guinea Pigs ..............................................................................................39

STEP 6: LAUNCH ..........................................................................................................................................41

Reap the Rewards of Your Preparation ....................................................................................................41

STEP 7: POST-LAUNCH ..............................................................................................................................42

Get Repeat Sales By Being Customer-Centric ....................................................................................42

IN CONCLUSION ........................................................................................................................43

To get how to implement the 7 Steps to Wealth at the Digital Revolution Conference click here.

http://www.digitalrevolutionconference.com/event.html

PART II

Begin Your Business As If You Were Selling It,

To Get Investors, Buyers &Joint Venture Partners

From the time a business starts, your goal is to create value for yourself, for investors (if you need them), and for a possible buyer or joint venture partner(s) in the future. If you wanted to bring in investors or sell the company or bring in investors, you’d want to develop an executive summary.

The reason you want an executive summary is to get people’s attention. Usually people withmoney or anybody else that wants to contribute some type of equity are very busy. The executivesummary is a vortex; it’s a 1-4 page summary of the elements that make up a business such as itsoperating plan, its marketing plan, its sales plan, its financial plan and the rest of the elements thatgo into making a business work.

The Major Premise

The major premise of any business that we look at – and the premise behind StepsTo.com – isthat you’re always building two components. One is the money machine itself or what I call theGolden Goose. The second is what I call the Golden Eggs which are the products or servicesthat you sell and which generate the income.

Major Misunderstanding That Leads To Business Failure

Typically, most people fail to understand this critical distinction between the Golden Goose andthe Golden Eggs. Businesses only go after the Golden Eggs. In a sense, by doing this they kill

22 7 Steps to Wealth: The Winning Formula Revealed


the Golden Goose. As a result, they don’t have anything to support and grow the eggs whichwould become the cash flow or the fuel to drive the business.

The 7 Steps To Wealth Is: The Winning Formula

StepsTo.com has designed the 7 Steps to Wealth to enable entrepreneurs and investors toevaluate, plan, structure, implement, and grow their businesses. The 7 Steps System shows howto build both a Golden Goose and Golden Eggs. This system guides you on how to write yourexecutive summary and to fashion your business plan so that you can raise capital or have a planfor your own money investment when you first start out. Oftentimes, when people start a business,the majority of funds come from the founders and/or family and friends. Rarely will someone attract angel investors, and even more rarely, will they be able to lure professional investors orventure capitalists.

Any time you evaluate a business, the main thing you’re focused on is what problem are youlooking to solve? Next, how big is the problem? Why? The bigger the problem, the bigger thesolution to the problem, and the greater the reward. What we’re looking at first is what is thevision behind “StepsTo?”

Since everything comes down to certain steps or a process that you go through, the rightsequences and steps are important things to look at in a business. For instance, people don’trealize that if I give a bunch of people the same recipe or a formula, depending on whether they’reheavy handed or light handed at putting in ingredients, many times they’ll come out with a differentend result. If you’re baking cookies – I was once in that business – depending upon the processor the steps, such as the heat within the ovens, you can come out with a totally different cookieeven though you have the same basic recipe. Therefore, the processes plus the ingredients makefor the end result.

StepsTo.com is focused upon the solution to the problem that most people want to know howto build or grow a profitable business, but even more, they want to know the specific processes,sequences and steps they should take to put the odds in their favor.

23How to Build a Business That Works for You



It All Begins And Ends With Your Huge Tipping Point Idea

Everything starts with an Idea, but we call it the huge tipping point idea. The huge tipping pointidea is a large idea that once people (your customers) recognize it they go, “well, this hasarticulated the problem/solution that maybe I was aware of or wasn’t aware of, and now that youtell me, gee, that’s the solution which I really want.” Now, wants are even greater than needsbecause they’re desires that go beyond needs. A lot of times wants aren’t necessary, but peoplemake them necessary because of their social interactions or other things such as their coreidentity. The key is that people will pay for a solution to their desires or wants.

For example, StepsTo delivers entrepreneurs steps to take ideas and build them into solid assetsand businesses. StepsTo relies upon its research and experience of developing repeatingpatterns that people who have succeeded in business and investing take.

There is a certain sequencing from idea all the way to launch and post-launch that we found fromour research over 30 years that wealth builders take, which we have put together in our 7 Stepsto Wealth (get my course Speed to Your Wealth for an in-depth discussion of the 7 steps). The top entrepreneurs and investors go through these steps mentally, emotionally,physically, socially, spiritually as well as financially. Once entrepreneurs implement these 7 Steps,they create cash flow which then investors or buyers pay a multiple for. When investors put moneyinto a business, it then assigns to the business an approximate value. If the value is maintainedor increased, the entrepreneur has built his/her assets and net worth. If the entrepreneur orinvestor can cash in part or all of his ownership (assuming it has enough absolute value), he/shehas the money and wealth to live the life they want.

StepsTo gives people the step-by-step of how they come to an idea and then how they take thatidea through the different stages. Typically, a simple idea is the most powerful. If people can’tgrasp the idea, then they don’t know that you’re addressing the need or want or the solution thatthey’re after.


STEP 1:IDEA

http://www.7stepstowealth.com/

In StepsTo, we began with the concept of StepsTo starting with the name itself, making the namea certain length so that it’s quick, people get it, it’s not too many letters and it’s a URL that theycould remember.

The next step is we went into the design and, again, there are different types of design. Designcan be strategy. Design can be tactics. Design can be of a specific product o2service, and designis also of the business model itself, or what I call the Golden Goose or money machine, and thenhow do these all come together.

Then we went to the next step of the design process of StepsTo and what the logo would looklike. We went to a number of firms to find the look that we wanted. ‘Steps’ can look formidable,or it can look like something where people see that they can take the right steps and achieve theirvision and goals faster. And so we took that idea into a website because our belief is that the wayto build a company starts with a website because the web enables you to reach out and test andfind the right audience.

The Right Design Elements Turns Your Idea Into A Business That Works For You

The design of a company – the logo, the name, the components and structure of the website –should allow people to get their solution as quickly as possible. Another function of design is thebusiness’ plan and its strategy to take the right steps and create the ultimate value for theconsumer or the customer by developing, marketing and selling its products and services.

Next, we wanted to offer technology-oriented product to complement our original content. ForStepsTo’s plan or design to work, we needed to have online assessment tools. We needed tohave a Video Professor-type product. We created assessment tools for each of the steps in our7 Steps To Wealth. The StepsTo content plus assessments plus training, coaching, mentoring,


STEP 2:DESIGN

represent the three core buckets of its business design. StepsTo uses the 7 Steps To Wealth toimplement an integrated approach from its idea all the way through to its executive summary. Theexecutive summary summarizes the key elements of its business plan, including summaries of itsmarketing, sales, financials, operations, and how all these link together. Unfortunately, manyentrepreneurs and investors see them as disparate parts. They don’t see how they integrate.Without implementing this integration, you won’t have all pistons of your business firing at the same time. People try to speed to wealth, but fail because they have only a couple of thecylinders firing.

Design is the most underestimated step other than post-launch. Apple computer and Jobs provedthat the design of the product itself has a lot to do with the attractiveness and appeal and theexperience of the consumer. You have to give people entertainment as well as content.

Successful businesses strive for seamless integration of each step starting with a clear vision/ideaand design. If it’s a print product or it’s a downloadable product or it’s a DVD or it’s some type of newsletter, there has to be a consistency of design and vision that goes from idea all theway through.

Find Your Competitive Advantage To Get Customers And Investors

Discovery begins or expands significantly your reality testing of your Idea and Design steps.Discovery is very important because it’s the time when you take your idea and your basic designconcepts that you’re thinking of and get feedback. Whether you sketched your Idea and Designout on a napkin or you went to professional designers, or whether you went to friends, you nowhave to go into the Arena. The Arena is the area of discovery because now that you think youhave a winning Idea or Design (or plan), you find out in the Arena or real world who else is outthere. Does someone else or many others have similar Ideas and Designs? Most likely, you have


STEP 3:DISCOVERY

competition or substitutes for your products or services (solutions). In Discovery, you have toevaluate how you are going to differentiate yourself. This involves positioning such as premium.Here’s a very important point that few anticipate. One of the key things that hurt businesses isbad product. Bad product – poor ideas and design – can be your biggest competitor.

Competitors can manipulate positioning and claims; they can appear to have your solution. It’syour “word against theirs.” They use psychological manipulation and words that promise peoplesolutions they can’t deliver. When you look at the Discovery step, you have to take into accountmore than who is out there. You can’t just say because a company doesn’t have a good productthat they’re not going to be competitors of yours. Again, they may have very good copywritersand marketers who are very good at manipulating people to buy something. When customers buysomething from them and find that the product didn’t deliver, they’re going to be more gun-shy ofbuying yours if you make similar claims. Therefore, you have to be very clear to distinguish yourselfin the marketplace so that you don’t get caught in all the static in the market and just look like a“me-too” product when you’re not.

Attract Investors With Your Competitive Advantage And Analysis

In the discovery process, one of the most important things for most investors who are looking toinvest in a company; or for an entrepreneur who’s looking to build a company, or anentrepreneur/investor who wears both hats, is what I call the competitive advantage and theanalysis. Some people call it due diligence, but due diligence is part of discovery where you’relooking to evaluate who the person is and what he/she represents. That’s a factual analysis.

But, when it gets all said and done, what you’re looking for is a competitive advantage or whatsome call the “castle and the moat”. The castle is supposedly your product or service and themoat is the differentiating factor, your competitive advantage. When you study great investors likeBuffett, the main thing that they look for is the competitive advantage. In other words, whatadvantage do you have in the marketplace that’s going to be your moat? The moat protects youas competitors try to duplicate what you have. Your competitive advantage gives you the edge.In many businesses, it allows for high profit margins to be maintained. Consistent high profitmargins are indicative of a strong competitive advantage. Your competitive advantage fights offthe market pushing you to be a commodity as more competition arises.

With a commodity, instead of getting premium pricing, your competitive advantage has been lostand you’re just viewed like another bar of soap or some commodity like rice or something that’sdriven down in price. As a commodity, the edge is small and the profit margin is normally very


small because the ability to substitute for that product is very easy. Many times access to themarket is easy, so there’s little barrier to competition.

Define Your Unique Selling Proposition

During the Discovery Phase, you should be looking to see whether your Idea and your Design willbe competitive against what’s out there. Typically you put together a grid and you look at whatelements or patterns are common to staying competitive in the marketplace. I’ve divided this intoelements, attributes and advantages and we’ll cover some of these. For instance, the first thingyou want to look at is what is your unique selling proposition? Do you have a unique selling proposition (USP)? Now there’s a lot of confusion on exactly what a unique sellingproposition is. So if we take the words by themselves, it’ll give a clue as to what unique sellingproposition means.

One, unique means clearly that it’s different than anything else out there.

Secondly, selling means that you’re taking this uniqueness and you’re selling it to somebody. So,what uniqueness are you selling? What job does your product or service do that if somebody buysit, they’re in a sense hiring your product or service to do a job.

Third, the proposition is effectively your offer. You want your offer to be irresistible and unique to sucha point that somebody needs to have your product rather than it’s just nice to have your product.

Let’s go further. Ask, what’s the attribute? An attribute is, what your product or service does thatis attributed to it. What appeal does your USP have? Do you have an overall story? Do you havea positioning? Do you have ways to get attention and stimulate interest and desire? Do you havesomething that’s going to create an emotional bond with the customer so that there’s a realrelationship? Will you have an online relationship? Will you maintain a dialogue? But, a dialogueisn’t enough. You must keep your customer engaged. Effectively, the attribute you’re looking foris one of emotional engagement. Your relationship with your customers is an advantage. Moreand more, your brand is relationships. It’s reflected in your logo and your design like Apple andthe iPod. These are elements that give you a competitive advantage.

Just having a unique selling proposition isn’t enough unless it’s attractive, appealing and points toa satisfying solution for the customers. Ask, is your product/service truly differentiating. Businesswriter Guy Kawasaki asks, are you going to be the best in the world? Good to Great author Jim Collins states: don’t go into a business unless you can be the best in the world. To be thebest in the world, you also have to look at what is your niche. You don’t want to try to market totoo big a market.


The key point here is that you want to dominate your niche by having a USP and competitiveadvantage that is differentiating and appealing to a certain target niche audience.

Can being the best in the world at this make money? Does your USP appeal to payingcustomers? Differentiation plus dominating your niche is what investors look for.

If you’re writing up an executive summary, you must show:

1) what’s proprietary,

2) how you’re the best in the world,

3) how you’re differentiating.

If you can’t show these unique business elements and how you make money, the investor’s notgoing to write the check unless he has some other motivation to do good or do something.Investors who are motivated by a cause beyond making money are called angel investors. WithBroadway shows, they get someone to invest there because, beyond money, the investor oftenwants to see them sell his philosophy or his dream or his idea of himself as a creative person;there is some emotional reason to invest.

But, if you don’t have those elements and they’re not sustainable, investors aren’t going to put their money up because why put money into something if there isn’t an advantage that you can sustain. A lot of times just being faster or cheaper or better is not enough of adifferentiator. People make the mistake of just thinking that being cheaper than their competitorsis enough. That doesn’t necessarily mean you have a sustainable competitive advantage; it maybe one that’s illusionary.

Use Your Unique Selling Strategy To Avoid Costly Errors

Do you have a unique selling strategy? Now this is different than a unique selling proposition. Theunique selling proposition is your differentiating competitive advantage and your propositionpresented as an irresistible offer. Your unique or optimum selling strategy centers on the question,do you make money when your product or service is sold? In other words, does it have a trueprofit margin? Even if your business is just beginning, if you projected that you kept selling at thisprice, would you have a certain cost and a certain gross margin (which is your sales price minusyour cost of goods). Then, after your expenses, if you projected a certain sales volume, would youreally make a decent profit?


Your unique selling proposition is a critical indication that you have a competitive advantage. Or,if you have a competitive advantage and you are not actually or potentially very profitable, you areeither under priced or mismanaging your business. Many entrepreneurs and investors make theerror of selling and of not realizing that they’re losing money on each unit sold until they’re too farinto the company. So they start up and bring in investors. Everything looks great. Then they goout of business. Having a unique selling strategy is having a sales process where your process ofselling is getting the lead; to being able to take that lead and convert it into an actual buyer; andthen, taking that buyer and selling more to them because they like what you have. This increasesthe lifetime value of the customer. There’s a process for you to keep the customer engaged.

The elements of a sale are the units that you’re selling, the average selling price and the frequency.Any increase in one of these elements is going to increase your sales. Your selling strategy is toincrease your number of units that you’re selling, the average sales price and the frequency thatyou’re selling of that unit. Your competitive advantage can be your superior selling system. For abeginning company, 80 percent of your effort has to be in sales. Without sales you don’t havecash flow. The battle is always between keeping the lights on, getting your vision and yourproduct out and enough cash to carry you there.

Large Gross Margin = Competitive Advantage

As I mentioned, you want a large gross margin, because the larger your gross margin, the more itsignifies that you have a competitive advantage. If you look at Microsoft, they might have 70 pluspercent gross margins. Google has superior gross margins. That’s why these companies havesuch large free cash flows. They’re able to generate internally money so that they can carrythemselves and they’re not relying upon outside financing. That’s another thing that you alwayslook for when you’re putting an executive summary together; what’s the real gross margin and isthe company going to be self-funding or is it a company that has to always look outside foradditional capital?

The next question you want to ask is what is your supply chain? One of the main errors that I foundin business is relying upon a single supplier. I was actually victimized in my own business when Iwas in the baking business. We had a complicated product to make and there were only a handfulof bakeries that had the equipment. We essentially relied upon a single supplier. When you dothat, you’re basically at their mercy.

What you want to look at is the supply chain regarding the materials, the labor, the processes andso forth because if you’re the dominant supplier, that’s an advantage, but if you’re the one thatrelies on a dominant supplier, then you’re at a disadvantage. You want to have different sourcesof supply.


With StepsTo, we can create our own product. We can sell other people’s products. We’re notrelying upon any one product. With our own unique software and tools we have an advantagebecause we have a unique positioning among our content, our assessment tools and our training.That gives us a differentiation in the marketplace.

From my experience, what you’re doing is you’re looking at two things: one, multiple sources ofrevenue. Second, you’re looking at multiple ways of creating unique supply. That combination oforiginal content and related assessment tools should create a very strong business model.

Make Sure You Have Production Capacity

The next component in terms of looking at a company is what I call the production capacity. If youdepend upon outside vendors, especially contractors, you’re relying upon somebody’s productioncapacity. If they don’t have the capacity to produce for you, then as your business scales, youwon’t be able to meet your customers’ demand nor refill orders from new customers. If you can’tfind other suppliers, then you have to get your current suppliers to expand their productioncapacity. If this expansion involves additional space, additional equipment, additional suppliers,there will be a time tag that could be significant. On the other hand, there’s an excess of supplyin almost every area. You may find that supply can be dumped onto the market very quickly. Thisdrives down your products to be a commodity. With capacity, what you want is to know yourproduction capacity and whether you are in control of that or not. Is your product unique? Doyou have the ability to scale versus your competitors? Capacity utilization can be a very strongcompetitive advantage properly fashioned.

How To Make Your Delivery System Reliable

How are you delivering the product itself? If you’re sourcing a product in Australia or China, mostlikely, it has to come by boat. Then you have a certain lead time to get your products. This meansthat you have to have on hand more inventory to cover increasing demand in the States if you’rea U.S.-based company. This may cause you to have two or more months of inventory on hand andrequire a lot of capital. You must assess your supply chain. Find out how long it takes to movesupply from manufacturer to the point of being able to be sold. Depending upon when you selland when you collect, you can have a negative capital position. This means the faster you grow,the more capital you need to lay out in advance of sales and collections. One of the main thingsyou want to know is what the delivery mechanism is. In StepsTo, we’re set up to deliver on the webmainly. We have conferences and other events, but the coordinating hub is our StepsTo.com site.



We have physical delivery on certain products. We will have more physical delivery, ourcustomers like the value they receive and like to use our products offline. If we deliver physicalproducts, we have on-demand production of CDs and DVDs, so we’re always selling againstorders. We take into account returns which are rare. This keeps our inventory down significantly.Delivery is a very important subject. Look at whether you have a competitive advantage in yourdistribution. When you have physical products, every time you move a product, you have a cost.In today’s world, if you have to move your products using trucks or rail, you are subject to anumber of variable costs such as fuel. If you have a distribution pattern that has a lot of middlemen, then, your ability to maintain a high margin is eroded. What makes the internet so attractiveis you’re eliminating a lot of the middle men and you can sell direct, so you’re basic middle manis an affiliate and they’re just getting a cut of proceed, but there’s nothing that you have in thedelivery mechanism other than getting your affiliates to be an evangelist for you. And if you do that,then your distribution becomes a competitive advantage as more people follow you.

How To Make Cost A Competitive Advantage

Cost is a big factor in businesses. There are certain manufacturers that have a competitiveadvantage because of their production capacity, delivery and supply chain systems such asWalMart. WalMart excels in their information systems tracking supply, products on the shelf andthe ability to manage cost. When the baking business I was involved with dealt with WalMart, welearned that they would not tolerate being out of stock since that equated with lost sales and lostmoney. Costco and others have low margin, high volume operations reliant upon many efficientsuppliers. If you have this type of business model, cost can become a factor. Most times thecompanies that have an advantage over time have had a cost advantage because of the way theyperfect their systems. Greater cost advantages enable efficient companies to deliver overdistances and still undercut the local players. Greater reach because of their supply and costsystems has enabled companies like WalMart to expand nationally and internationally.

The Major Advantages To Being Customer-Focused

The next clear advantage is your customer base. In an online business, your customer base or listis clearly the heart of your business. If you have a responsive list and you can mail to it at a lowcost of the internet, you can maintain high margins. StepsTo continues to build its list by followinga number of strategies that include joint ventures, PPC and SEO. This combination of strategiesenables you to grow your revenue and increase the lifetime value of your customer. StepsTo growsits client base by giving them deeper knowledge of what they want at higher price points indicativeof greater value.


Customers today are very fickle. You need design your business to be customer focused likeAmazon. It’s a huge competitive advantage once the customers recognize that they’re beingserviced well.

How To Put The Right Systems In Place

Systems are effectively what make up the money machine. That means financial systems, sellingsystems; marketing systems and operational systems need to be part of the infrastructure tosupport what you’re selling. The attribute or distinctive quality is high productivity. Yourcompetitive advantage is effectively your infrastructure, your technology and your operationeffectiveness. Each system itself can become a competitive advantage and contribute to youroverall competitive advantage.

The goal of StepsTo.com remains to deliver high quality original content on how to build abusiness and get the money through sales and/or raising capital.

How To Create A Stakeholder Advantage

The next advantage which there’s a lot of research on is what’s called the stakeholder advantagewhich most people aren’t aware of. They have found that companies that communicate with allthe people that are involved in the company have the highest rate of return of any type of companygood to great or whatever, that means for me it supplies all the way through to our customer base.

So the ability to communicate with your stakeholders including your investors becomes acompetitive advantage if you know how to integrate.

How To Build A Glowing Market Reputation

Another competitive advantage is the company’s reputation. A good reputation signifies theattributes of integrity and competence, and this also leads to name recognition. In a values basedculture, corporate vision and values are drivers because the attribute is clarity and clarity is acompetitive advantage. Patagonia and other companies like Wal-Mart are driven by a certainphilosophy, purpose and value system. Your team or who is going to implement your plan is the



key separator between successful and non successful companies and the competitive advantage.Your team provides competitive advantages such as leadership, culture, know-how, innovation andentrepreneurialism. Intangible assets are competitive advantages such as patents, trademarks,exclusive licenses, location, superior locations, especially in retail. Difficulty of replication wouldbe like American Express, Visa, MasterCard where the more people that use the card, the morecompetitive advantage you have because you have a network advantage. It’s very difficult toreplicate an American Express network or a Visa or MasterCard.

How To Take Advantage Of The “Network Effect”

Another competitive advantage is switching cost where people won’t switch from your product toanother. Microsoft has a switching cost advantage since Microsoft’s operating system, Windows,has become the standard. Even if somebody comes along with the greatest operating system,are people going to scrap all their investment in Microsoft to get some advantage with some newplayer? There’s also the advantage of developers creating more and more applications forMicrosoft’s products. Switching cost becomes a major factor in trying to compete with largerplayers. Will people make that investment to switch? Even today with Apple and the iPhone, thePalm’s biggest obstacle is will they create enough critical mass to get people to developapplications that can compete with the ability of the iPhone and the amount of people creatingapplications for it.

The Discovery step brings up a subset called due diligence. Due diligence involves the investigationof a business or a person prior to doing business with them. I always begin putting together abusiness thinking of what investors or other stakeholders would require to do business with mycompany or myself. Probe deep enough to determine whether your competitions’ competitiveadvantages are reality; often, businesses appear at first to be leaders but in time someone else comesalong and does it better. They had the idea, but somebody came in and took away the market becausethe original company did not get it right. When AOL came in they were dial-up, but they did not reallyanticipate the broadband. They tried a strategy of being an island. Google-types came in and had anopen system of information and AOL never recovered. They thought they would create a competitiveadvantage with Time Warner, but in reality it was illusionary. Today, the pendulum is swinging back toless open applications and portals like Facebook.

The competitive advantage has been found to be one of the most important components of abusiness, its business model and creating wealth. Those who get it right increase their chancesof success and of making tons of money and building fortunes. It makes no sense to go and sayI’ve got a great idea, I have terrific design, but I can’t articulate a sustainable competitive


advantage. If you can’t articulate that, then what’s the sense of investing in the prototype andputting in all the money when from the beginning you have a losing proposal?

The idea behind the 7 Steps to Wealth is, as Jack Nicklaus says about a golf swing: 85 percent is in the set up and the preparation. When you begin the golf swing, it has a muchgreater chance of success if it’s set up right. When you don’t have the set up and preparation, itis almost impossible to have a repeating swing that produces consistently good to excellentresults. Same for any part of a business, or the products and services it looks to sell. Theexecutive summary is one part of the Discovery step and due diligence process that lays outwhether the business-to-be or an existing business has taken the right steps – has the rightpreparation and set up, including clearly spelled out assumptions.

Look at Darwin’s evolution. It closely mirrors the survival of the fittest businesses. Like evolution,businesses that survive have differentiation (a competitive advantage). They are selected bycustomers and investors. They survive and thrive, or scale. The model of evolution reflects thecompetitive advantage model. Competitive advantage is basically natural selection. Successfulbusinesses follow the same pattern that evolution follows from Darwin.

You’ll immediately see in the development stage, how it’s going to lead to the pre-launch and thelaunch phases. This is the prototypical stage which is the transitional stage of all businesses.After you look at your competitive advantage and you feel like you can position yourself in themarket and can differentiate your business, you enter the step where the real money and timebegins to be spent.

Keys To Translating Your Idea Into Reality

Picture you are designing a house or a website. First you start sketching it out. You take yourdesigns and compare them to market. You see if your original idea or concept still works the wayyou thought it would. You evaluate the competition. You imagine your positioning. You have


STEP 4:DEVELOPMENT

moved into reality. With the sketches of the design, of your product or service, the tire hits theroad. You’re now going to try to take that concept whether it’s a blueprint of a house or a blueprintof a website and you’re now starting to translate idea, design and positioning into real productsand services.

This is where a lot of things can go wrong, and often they do. Typically, it’s very hard to translatean idea into something that’s focused and able to be understood readily and captures peoples’interest. How do you take an idea and capture it in reality?

What we went through in this stage of development of StepsTo is very instructive to putting abusiness plan together and bring an idea to reality. We started with the concept of makingSpeeding To Your Wealth our URL. What we found was that the name captured peoples’attention, but, unfortunately, it was too long of a name for a URL. It was also too long of a nameto put on a business card. It was very difficult to find a logo that worked. We were all ready tocharge to market, but we found that the first company we hired literally couldn’t produce oneattractive logo. Ironically, I was talking to one of my consulting firms. They said they had justcome out with a product and they had a short name. I decided we had to find a new, shorter namefor our business and website. This realization prompted me to go online for literally hours until at1 o’clock at night. I looked at numerous how-to variations and it didn’t matter what how-to I lookedat, somebody had the URL. I started to feel like there could be “how to milk a purple cow” andsomebody would have it.

I then found the StepsTo URL. I realized that StepsTo.com was like another how-to site. We tookthat URL and then we took a number of variations of URLs that had StepsTo, projecting out in thefuture that these could all be micro sites once we got the concept going. Here’s the exciting part.The minute we got the StepsTo URL, quickly a number of people wanted to get involved becausethey understood the potential of having an equivalent of a how-to site and a URL with only sevenletters. It was clear pretty quickly what the site would be about – steps to things, people and places.

We learned that preferably, you want a short name. A name should be two words maximum, nomore – Coca Cola, Wal-Mart; it’s kind of one and two, Costco. You look at the length of yourname. You count the number of letters. We felt that StepsTo was really good and once we cameto this, the design accelerated. But we weren’t satisfied. We fired our original design group. Wewent to our web design firm. We asked them to work on the logo. We ended up going to a firmin Paris to design our logo to get the look and feel that we wanted. Then we accelerated thedesign implementation of the StepsTo.com site. Next, we looked at the website prototype. You’llfind with the 7 Steps is they constantly loop back. It’s not a linear process. You start with the ideaand design. You look at your competition. You start your prototype. Then you come back to thedesign element. Then you leave it. Then you keep coming back to your idea, your design, yourpositioning in the marketplace. You’re constantly moving those three steps, constantly revisitingthem as you go into the development stage. We went through each navigation button on the site.The wireframe of the site was laid out. We wanted design that didn’t look like a template. We




ended up using white and blue. We went back to the Paris firm, went to the U.S. firm and cameup with what we felt is a type of site that has a degree of openness.

How To Develop A Prototype That Works

When you’re in development, you’re creating your stage upon which you can showcase yourproducts and services and business. For example, your website, such as our StepsTo.com sitebecame our platform and virtual business card. You incorporate your design and your positioningyou researched in the Discovery step. If you sell products, you put up the means to capturenames and emails, such as giving away free stuff. You are going from your blueprint into the realityof your prototype. Your prototype allows you to get more specific feedback as your idea becomesmore concrete. You begin to face the reality of what works and what doesn’t work.

Note: Many design firms and web development firms really do not understand direct marketingper se nor do they understand how various technologies needed for internet marketing work andintegrate. We had to make sure that our underlying technology could operate, meet demand aswe grew and track the metrics or the numbers, such as what customers are coming to the siteand from where are they coming? We had to set up for affiliates – an online sales force – so wecould track what people they directed to our site so they could get commissions for their sales.So we had to put together technology system that integrated a shopping cart, email system, auto-responders and the ability to capture the names of people that opt in (give their emails) so we canthen send out emails to them.

The development stage is similar to a vortex. It starts to bring together the idea, design and thediscovery or positioning. The development stage, the prototype stage sits in the middle, so thereare three elements that are before it and three elements that are ahead of it. The developmentstage represents the major transitional stage where significant time, money and resources arespent. If the prototype isn’t developed properly, then your whole design plan is going to fall apartwhen you go to market. You need to make sure that the 7 Steps are put in place. Back to golf.If you don’t set up or prepare correctly, the minute you come under stress, whatever your weakpoint is, it’ll come out just like your playing in the last nine holes of the U.S. Open. Things unwindwhen there is a tremendous stress on a company and its product(s) or service(s). But, if youdevelop your prototype correctly, and set your base or fundamentals properly, the chances of yourproduct, the company, unwinding are much less. If you fail here, the marketplace will know prettyquickly. The faster you try to grow or scale, the faster you’ll fail.

There is a balance in the prototype stage or the development stage. The critical question is: Howmuch work do you put in to try to perfect it and how fast do you go to market? You have to



balance it because if you go too fast, you’ll fail fast. If you go too slow, you’ll miss the opportunityand you’ll burn through cash flow. What I found is, depending upon the size and opportunity thatyour trying to do, you may take more time in the preparation stage to get it right, essentially right,not perfect. Then you go to market following the next steps, which I will show you. This is thechallenge. The internet has changed. You can’t get away with coming to market too fast and thenperfecting fast. You must come to market at a fairly high level of quality.

You must come out at a higher level if you want to compete at a high level and attract big playersto joint venture with you. You have to look at your level of product development and yourpositioning and decide at what level you want to play. It’s harder to go up if you come out withlow level quality products and services. First impression really counts. The top level players willremember if you come to them with inferior stuff. If you’re going after a smaller market, therefore,you may have more leeway than if you’re trying to go immediately into the major leagues. One ofthe other factors that has to be considered, and I would advise most people to do this, is that youwant to take other people’s products first and see if you could market them. If you try to developyour own products, there are obvious advantages of control, much higher margins, etc. But, onthe other hand, the costs of development can be significant and sometimes take years and yearsand years to create.

Fortunately StepsTo is focused on evergreen or timeless principles. But, we still had to keepadjusting to the market changes with the Great Recession. The buyers for certain productsevaporated – we decided focus on entrepreneurs. To bring this point home, take a real estateproject. You do everything right. Develop it. Come out in the market in the wrong time, andthere’s little market. Now you’re sitting with a virtually empty building or a half rented building ora half sold building especially if it’s high rise condominiums.

You have to assess and reassess whether you can develop a differentiating product or whetheryou should look to market others’ products since most businesses are not good marketers orsalespeople. There are tons of products out there looking for you to do the marketing. Thesebusinesses view the sales you can bring them as incremental revenue that they never would havehad. In today’s economy you can take on others’ products without the cost of developing it. Youcan use the product to test your own website, test your skills, test your technology, make moneyand then look more to create your own products.

Because the prototype stage, Development step, is your critical transition point, you have toconstantly monitor your market. Has somebody else come up with the same idea or somethingsimilar? You have to constantly refine your product as you move through the prototypical state.As a rule of thumb, you want your product to be at least 85 percent to the good. Then you wantto be able to set a process to keep improving it. The Development step is as exciting and stressfulas having a baby. You see your seed – your idea – come out of the womb – weak, not yet ableto walk. The next step gets you on your feet and prepares you to walk on your own.


Test, Test, Test And Be A Success Right Out Of The Gate

There are many ways through surveys, friends and other feedback to be able to test your prototypebefore you get into market. In the pre-launch phase, your feedback will be even more accurate,from your close knit group to those who do not know of you or your product. This feedback ismuch more indicative of the marketplace you will face. Think of pre-pre-launch as the first 4 Steps– Idea, Design, Discovery and Development.

Think of Pre-launch as your rehearsal or your Broadway showing before you open to the full public.Ask, what test are you going to run before you go full blown? When new products are developedby larger companies, they constantly go into test markets. The attraction of the internet is that youcan give a sampling of your product away free as one of your strategies. How can you give itaway? Because you only need a couple of percent of people to buy. Why? The internet deliveryof an email or a product that can be downloaded is pennies.

The reverse is when you’re selling a physical product, such as cookies. Just 2 to 3 percent of yoursales for samples can be enormously expensive. You can only sample 2 to 3 percent in thephysical product world. In the internet world, you can sample 97 to 98 percent of your productfree! It costs you almost nothing. That’s why the internet is so powerful; it keeps your cost downwhile you perfect your prototype, and when you are ready, you can give almost all your productaway and make money on just 1% to 2% of your mailings.

Don’t Make Your Customers Guinea Pigs

I went through an experience years ago with a software company in which I owned an interest.They put a prototype together. Then, they launched it into the marketplace to their key customers.The software was full of bugs. It needed to be significantly reprogrammed. We had customerslike Citigroup, NCR and IBM. This pre-launch destroyed the marketplace and was a clear


STEP 5:PRE-LAUNCH

misrepresentation to the investors. Everybody lost. A company that had enormous potentialnever recovered because they rushed to market without a plan of how they were going to positionthe prototype. They did not inform their customers that the product hadn’t gone through stresstests and debugging.

The key point here is to manage expectations. You can test ideas, designs, positioning andprototypes even if the prototype isn’t complete. You have to let people know where you are at.You can even test products that don’t exist, but you have to be careful here. The fact is, mostpeople need to visualize what you are proposing. The first product that we completed was acourse. Just by getting out the introduction, the reaction was so strong that we were ableessentially to build phenomenal user interest and create joint ventures. With just that beginningpart of the prototype, people could visualize the quality. Also, we attracted somebody to create aconference for me to be the sole speaker for three days, and to endorse us to their list of customerbase. The conference sold out by 33%. This opportunity started with a simple introduction to the7 Steps To Wealth that I am revealing to you. The conference gave us proof of concept andenabled to marketplace to see that of our products, and attendees were thrilled to pay $3,000 aperson while the market was crashing at the end of October 2008.

That’s what happens in the pre-launch stage is. We pre-marketed the conference and we had toexpand the space at the Westin in Dallas from 90 to 120 before we maxed out. The sponsormailed to a small responsive list.

What you’re doing is not only rehearsing, but investors want to see that will people actually payfor your product, at what price and what’s the level of interest. As I stated, the pre-launch is likegoing on Broadway. When I invested in Broadway shows, they had previews where for weeks.They’d run the show, get audience feedback and then be able to adjust the performance to see ifit would work. They had enough feedback to see if they could orchestrate a winning program.

On the internet, you can change your copy offers and pages fairly quickly. You get immediatecustomer feedback. If you see a price resistance, you don’t have to lower the price. You couldadd more bonuses to increase the perceived value. What makes the internet so powerful is thatyou’re combining direct marketing techniques with content or information products which are highmargin with the speed and very low cost of delivery.

The pre-launch is so important because that’s where you’re not only getting your feedback, butyou’re basically pre-selling your market ahead of your launch. If you view the pre-launch likelaunching a movie, you’re essentially getting people to line up for your release of your movie oryour performance (in this case, your products or services). If you follow the 7 Steps To Wealth,you actually can release your products and finance your company using certain launch strategieswhich we’re not going to cover here. But at least you can understand that if you follow the rightsteps with the right people, you can actually launch your business, have customers, income anda beginning list, within a relatively short period of time.


The key point is to test, test, test what you have. You are constantly testing better ways to createleads, conversions, the right copy, to achieve solid metrics that show that every time you send outan offer, on average, you can generate so much revenue against a certain cost to acquire a leadand a customer. Overtime, you can show how much a customer will buy from you – called thelifetime value of a customer. With proven metrics, you can go to numerous joint venture partners,powerful affiliates who will want to market your products because they have proof that every timethey sell a unit they know how much they can put in their pocket. There’s no guess work becauseyou’ve taken the risk out.

Reap the Rewards of Your Preparation

The concept of the 7 Steps To Wealth is as you march towards your Launch step – the actualselling of your products and services – you’re increasing your leverage, reducing risk, andmaximizing your rate of return on investment.

Using the 7 Steps To Wealth you can address your launch of your product, your business andyour offering to your investor(s) at the same time. You’ve put together your business in a way thatcreates a special asset I call a money machine. The launch is effectively the result of yourpreparation. When you launch, you use all the tools of the digital world such as social media,direct marketing, including linking strategies. Pay Per Click, email, blog, article and videosyndication, conferences, webinars, teleseminars and automated sales funnels (all theseapproaches and strategies we’re using at StepsTo).

There are all types of things that come into play once you get your core products created. Usingthe internet and credit cards, you’re getting cash immediately. From an investor’s point of view,you get paid immediately with high margins. You have a relatively low breakeven point andpotentially a high rate of return on investment. Here’s the mistake most marketer’s make. Theyare focused upon their product and sales in the launch which makes sense. But, they maintain


STEP 6:LAUNCH

this focus and never build an asset – a company. When they stop selling, the company stops.There is no value beyond their efforts. The 7 Steps To Wealth helps you create a business and wealth.

Get Repeat Sales By Being Customer-Centric

OK, the last step is Post-launch. Post-launch is the reflection of what happened. Now you startto get the customer feedback. What is key is that you are building a relationship. If you don’tdeliver on time, if your promises aren’t being fulfilled, then you are undermining all of your goodwork. Your first sale is the beginning of your business, not the end. You want to build arelationship with your customers so they want more products from you and attend yourconferences and tell others that you are the best. Your sales basically have set in motion yourbusiness. Once you reach a certain level of sales you add more products into the funnel. You willcreate more offers, more cross selling and up-sells.

Your main objective is to be customer-centric. Customer service makes sure they get what ispromised and gets things handles or clarified as easily as possible. Now you have to find waysto communicate and bring new things to your customers to maintain their interest and their loyalty.That’s all part of the post-launch; getting feedback, getting surveys and keeping your customershappily engaged. You must give your customers a positive experience, entertainment, and anemotional connection. It’s not just about having products; it’s creating an engaged relationshipthat maintains attention and makes them feel like you’re bettering their lives.


STEP 7:POST-LAUNCH

IN CONCLUSION

Now that I’ve revealed the 7 Steps to Wealth: the Winning Formula, you now possess thefoundation to build a business that works for you. Keep this report and return and review it oftenas you implement your business. As I have mentioned previously in this report, I follow these samesteps in my own businesses every day. It’s worked for me and my clients time and time again. Sothis is a proven system.

I’d like to conclude with a few reflections. Building a business that works for you is just thebeginning. Whether you have an idea or started up a business or are trying to build a businessto the next level, it all comes back to you.

Like in the song “Alfie”, you will be asking yourself, what’s it all about? What’s my purpose? AmI living the life I truly want to live? Have I been fair and honest with myself and others? Should Iquit or stay the course?

As Dickens said, these are the best of times and the worst of times. As to the best of times, thereis so much opportunity. Change has never been greater as we are still at the very beginning ofthe Digital Revolution. In the worst of times, the best companies like Microsoft, Google and Applewere founded. In these seeming worst of times, there is much hope. There is nothing morerewarding than being an entrepreneur. It is what our country is founded upon.

Even though you may be pacing at night full of fear and wondering how to make ends meet, I canonly give you solace that there is a better way – the 7 Steps to Wealth: the Winning Formula.Follow these principles and your odds for success will be greatly improved.

The key of all of this is to live your life to the fullest, find your true passion and purpose, and makethe world a little better for your efforts.

For your effort, you will find an inner peace, true meaning and ultimate happiness.

Let’s together Build a Business That Works for You.

Gary Spirer

To learn more about wealth creation, I go into even more detail in my course, Speed to Your Wealth,where I cover additional success models that support the 7 Steps to Wealth System

and give you additional sequences, processes and steps to implement the Winning Formula.

To get how to implement the 7 Steps to Wealth at the Digital Revolution Conference click here.

http://www.digitalrevolutionconference.com/event.html

http://www.7stepstowealth.com/

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