{"id":31974,"date":"2013-10-03T09:00:16","date_gmt":"2013-10-03T13:00:16","guid":{"rendered":"https:\/\/mixergy.com\/?p=31974"},"modified":"2016-06-24T17:58:40","modified_gmt":"2016-06-25T00:58:40","slug":"course-cheat-sheet-cash-float","status":"publish","type":"post","link":"https:\/\/mixergy.com\/course-cheat-sheet-cash-float\/","title":{"rendered":"How to use cash float"},"content":{"rendered":"

Sam Ovens had a promising startup, but no money to invest in it.<\/p>\n

\u201cI had an awesome idea with SnapInspect<\/a>,\u201d he says. \u201cI knew it was going to do well, and it was growing, and it was profitable, but I wanted it to grow faster, and I wanted to build more features.\u201d<\/p>\n

To do that, he needed cash. But Sam is in New Zealand, with no access to Silicon Valley money. And he didn\u2019t want to take on investors, anyway. So instead, he took a hint from Warren Buffett.<\/p>\n

Sam had read about how Warren Buffett used the “cash float” from his insurance business to fund his other companies. \u201cFor those of us who don’t have the luxury of owning multiple companies, consulting businesses can be used in the same way,\u201d says Sam. \u201cI realized I had a lot of basic skills and that consulting would be a good business to do on the side of SnapInspect, to make some money, and to stimulate SnapInspect’s growth,\u201d he says.<\/p>\n

Sam started a consulting business that now brings in $35,000 per month, which he poured into his startup. With a full-time developer and other staff, SnapInspect took off. Today SnapInspect has about 1,500 paying customers and revenues of $37,000 per month.<\/p>\n

In his Mixergy course<\/a>, Sam shows you how to use \u201ccash float\u201d to fund your startup. Here are three highlights from the course.<\/p>\n

1. Go Where the Money Is<\/h2>\n

\"\"Most people target customers who don\u2019t have any money.<\/p>\n

\u201cWhen I first started out trying to get consulting clients, I would approach companies that…didn’t have enough money,\u201d says Sam. \u201cA company that’s scraping month to month, even if you’re going to solve a big problem for
\nthem and you’re really going to help them, expenses is the last
\nthing they need.\u201d<\/p>\n

The result? He wasted a lot of time trying to make it work with those clients, and he made almost nothing.<\/p>\n

So how do you find prospects with money?<\/p>\n

Look for success indicators<\/em><\/h3>\n

Find prospects who are already spending money on advertising.<\/p>\n

\u201cI’d just go through the yellow pages,\u201d says Sam, \u201cand I looked for full-page, color ads, or just big ads…and just tear them out without looking at who the business was. I’d just go through and rip them all out.\u201d<\/p>\n

Then he grouped the ads by industry. \u201cI could actually see which industries were…spending a lot on marketing, just by cutting and tearing full page ads out of the yellow pages,\u201d he says.<\/p>\n

2. Get Past the Gatekeeper<\/h2>\n

\"\"Once Sam had prospects with money, he had to figure out how to reach them. But cold-calling is hard, and people sort their mail over a trash can. Sometimes your mail never even makes it past the secretary.<\/p>\n

\u201cA lot of times, you’ve got to get through gatekeepers with mail in bigger companies,\u201d says Sam. \u201cThey’ll open it, and if it’s marketing stuff, people see brochures and stuff, trash bin, trash bin, trash bin.\u201d<\/p>\n

So do you reach the successful prospects?<\/p>\n

Make it to the top of the pile<\/em><\/h3>\n

Send them signature-required \u201clumpy\u201d mail.<\/p>\n

To do that, Sam created a package with the prospect\u2019s yellow pages ad, a sales letter, a CD with a 5-minute critique of their website, and the offer of a risk-free 30-minute consultation.<\/p>\n

\u201cIf it’s in the bubble-wrap pack and it’s lumpy, it gets you excited and you want to open it,\u201d says Sam.<\/p>\n

Plus, something lumpy can\u2019t sit at the bottom of a pile, and a secretary won\u2019t open it. \u201cThe gatekeeper’s going to think, \u2018Well this is something he’s probably bought, personally, on the Internet. I’ll let him open it himself,\u2019\u201d says Sam.<\/p>\n

3. Give Yourself a Scooby Snack<\/h2>\n

\"\"Marketing yourself isn’t fun, so Sam avoided it as much as possible.<\/p>\n

\u201cWhen I first started out, I’d constantly find myself inventing things to do to, like, oh, we need a new WordPress theme, or I need more Twitter followers, or my profile picture isn’t good enough,\u201d says Sam. \u201cStuff that doesn’t generate money.\u201d<\/p>\n

Then he heard Tim Ferriss ask, “Am I inventing things to do to avoid the important?” Sam realized that selling was important, and that he was avoiding it because it was uncomfortable.<\/p>\n

So how do you make yourself do the thing you\u2019re avoiding?<\/p>\n

Make success a habit<\/em><\/h3>\n

Find a trigger, a task, and a reward.<\/p>\n

Sam read The Power of Habit<\/em>, which says that every new habit requires three things: a trigger, a task, and a reward. He decided that his trigger would be starting work in the morning, \u201cbefore email, before anything,\u201d he says. His task was sending out direct mail pieces. \u201cI’d drive to the post office, send it, and then my reward for doing that was I’d go to the cafe next door, and I would get a $5 coffee that I always used to think was too expensive, and I would just sit there, and I wouldn’t care if I took half an hour just to sit there,\u201d he says.<\/p>\n

After a few weeks, it became harder to not do it than to do it. \u201cIf I didn’t do that, if I
\ndidn’t send that piece and get that coffee, I just felt guilty, and it became a habit so quickly that it was, like, the only way I could get satisfaction…was to do that,\u201d says Sam.<\/p>\n

Written by April Dykman. Production notes by Alex Champagne.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Sam Ovens had a promising startup, but no money to invest in it…<\/p>\n","protected":false},"author":2370,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[293,295,245],"tags":[],"class_list":["post-31974","post","type-post","status-publish","format-standard","hentry","category-cheat-sheet","category-course-cheat-sheet","category-courses"],"acf":[],"yoast_head":"\nHow to use cash float - Business Podcast for Startups<\/title>\n<meta name=\"description\" content=\"Sam Ovens had a promising startup, but no money to invest in it...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/mixergy.com\/course-cheat-sheet-cash-float\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How to use cash float - 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