My Jouney Toward $5k a month

I've decided to contribute to the community a little more and I figured I would start a thread here on my daily activities toward reaching this goal. I'll briefly cover my history.

I'm a full time entrepreneur and professional Programmer. I'm not trying to sell myself, but I can program anything you can imagine, from apps for iPhone/Android to PHP/MySQL based web apps to 3D Games, but I've learned recently that this is actually a weakness. It doesn't matter how great your skills are if you are not solving someone's problem. Also getting over my own ego and 'have to do it myself' attitude was an important step I think in the right direction.

Therefore I figured I would post my daily goals here with detailed reasoning why and my results, and I look forward to any feedback (positive or negative).

My Goals: To create a passive business (one in which I just have to water it once in a while) that generates $5,000k/month. That is $166/day I need to earn. I think this could be possible with the right advertising.

To start: My current philosophy is to learn from those that have already been successful. So I created a Meetup Group in southern california based on the Millionaire Fastlane Book by M.J De Marco (which is another story, but I feel a very motivational book that opened my eyes a bit).

I got lucky and met a multi-millionaire there called John-Chow on the opening day who made his millions (40,000+ a month) teaching other people how to get rich and still is from being an affiliate and selling products on clickbank. He taught me a lot of useful information and "secret sauce" apparently involving the manipulation of gravity score which a lot of affiliates use to base there decisions. His advice was "Get rid of your clients".

So I did. I thought about it and it doesn't make sense to have clients, they will take up your time and you will only earn as much money as you put time into it. On a graph it would be a straight line correlation between time & money or linear.

To the fast-lane business owner time is your most valuable asset. Your business can not move forward if your time is being used, that is the reason they frown upon jobs for themselves like the plague (and I do too!). Some people like to say they have there own business when they are running around finding clients for themselves like a fitness trainer. In reality, you are just creating your own job because your time is involved, there is no way you will make money unless you go out there and train the person. The real business owner back in the day would (if there was a need), advertise for people looking for fitness trainers, hire fitness trainers and a manger, teach the manager what to do and sit back and make the money difference.

The problem with that method is it takes a long time to scale. You can only expand as fast as you can train managers and target new locations.

Therefore, the new way of thinking is to use the Internet. With the internet you can scale your products/services to the entire globe. I think the new approach would be:

1.) Identify there is a market for people looking for fitness trainers online.
2.) If there is, interview these people and see what all these people have in common. Gender, Sex, Race, Time-Of-Day Interested, Interests, etc.
3.) Find a statistically significant amount of people (I think 20) from this niche of people and find out what they would pay for.
4.) If for example, they would pay for a personal trainer because they need help staying motivated then, you start proposing some ideas to solve there problems.
5.) I might suggest, if I had a website where you can see different personal trainers around the globe and could hire them would you do it?
6.) If no, why would you not? Lets say it's because they don't know how trust worthy the trainers would be? So you propose a ranking system based on this sales need (Keep in mind a website has NOT been created yet. I refuse to create a website before a market has been proven.)
7.) If they say they will buy now (or say they would use the trainer in anycase) (and 20 of them do), then you can start work on the next phase, which is getting the trainers. Research keywords and ways to attract trainers online (noting the costs to do this if using PPC for example). You could make a simple landing page saying you got customers for the trainers and see how often they call you, and start a conversation with them about what you are trying to do and what they would pay for. The goal here is not to sell them clients yet but to gain valuable information about who they are, interests, concerns, just like the clients. You can even share with them your valuable information about what you learned about how much the average person is willing to pay for fitness training and what they look for and how they feel secure.
8.) Find out how much the trainers are willing to pay for a lead to a 'customer'. Will they buy from your site if you complete it? If so great you have a customer before you even made your site.
9.) I think at this point if all is good, the next step is to work on the proto-type of the site. NOT going feature crazy, just the bare-minimum of what your customers said they need to purchase. A good site design doesn't matter unless they tell you they won't purchase because of it.
8.) Once you finish this, turn back on the same ads you used to attract your client base in the first place and see if your site starts to make money. If you truly did your homework and both parties was serious about paying money to be connected to each other (or lets say the customers were not, but the coaches were), then either way as long as you are making money off one of them you got the start to a promising business.

One thing I did not note that is very important, is the cost to advertise versus the money you take in. If it costs you $100-$200 in costs to attract people looking for trainers and the trainers themselves and the trainers are only willing to pay $50 a lead or worse $25/lead, then the business will fail .

I want to share with you guys a case study from an actual attempted business I had. My video for it is on youtube as paybylead, it's shutdown for now until I figure out a solution if there even is one.

I've recently been studying different niches and came across pool service as an interesting niche that I am thinking of targeting if someone is interested in working with me on that.

In my days doing internet marketing I would always get pool service tech's asking me to do their adwords marketing. I had a good reputation for it because it only took 3-4 clicks to get a customer with the keywords I was targeting. It was like a magic lead generation machine. I also found out that for pool service customers they are willing to pay $300 - 400 a lead if you can guarantee that lead will get them business, or $25 otherwise if it was not guaranteed. They are willing to pay this because they can turn around and sell that route for $1200 to $1500, and pool customers tend to stay customers for life if you do a good job. They make roughly $80/month per customer on average, sometimes $100/month.

I found that on average (assuming the pool service tech answers his phone) that the cost per lead would be $20-$25 before they got a phone call that turned into actual business. I could tell because I had all phone calls go through a tracking number and therefore recorded for studying the marketing (both parties were aware of course).

That said, I identified a need.

1.) People looking for pool service
2.) Pool Service tech's who want customers

My first business was to do just this. Try to sell these leads with the guarantee on it. Surprisingly it did deceptively rather well, I made around $2000 for only spending $300 in adwords cost. Only problem is, I had to pay $1600 for a convention and $3000 for another to find the pool service customers to make that happen and once the pool service tech's got there leads they didn't buy anymore because they became satisfied. I only had '1' of them ask for a refund, so I took a minor $50 loss on that case, but I had accounted that would happen from time to time.

I had also spent a YEAR to develop the complicated software system they would use to buy more leads and get them automatically. It literally was as easy as them buying leads and my advertising would turn off/on based on the calls.

I ran into so many unforeseen issues. For example, the biggest problem being the pool service tech's not picking up their phones. Every-time they missed a phone call I would lose money. Every-time they did not do there business correctly and lost the customers because of the salesmanship I would lose money. Now don't think I was stupid, I was aware of these issues going in, and even with that accounted for I would still make money. The even bigger problem was, how to passively get pool guys to buy leads. It was VERY expensive to get in the 'face' of pool service techs. I have yet to find a way to do this cost effectively. If I can, I can probably start this business again.

The business model was just NOT profitable. I was so discouraged and went into depression for a good 3 months. I thought I for sure had the money making machine by selling leads but I forgot the most critical aspect.

Cost to get my customers versus money I bring in:

My cost to get a pool service customer might be $2000 in convention costs.

Here is the BIO on your typical pool guy based on interviews with literally hundreds of them from conventions and in person/phone.

1.) White or Hispanic
2.) Older with sun-bleached wrinkled skin (from working in the sun all day)
3.) Drives a truck
4.) Very money focused, tend to be greedy.
5.) Very cautious of advertising and scams, paranoid.
6.) Shady personalities on a lot of them
7.) Don't use an iPhone or smart phone, let alone know about a computer.
8.) Very content once they earn a certain amount of money, no ambition.

The market that purchased my product was the 5% that actually knew how to use a computer.

If it cost me $2000 to get a pool service tech, and $20-80 before I get a lead that turns into business for them that sells for $300 or $400, I don't have any profit now do I .

Thus that business collapsed very quickly on it's self.

Rather than deal with all that headache, I'm going to try and take a new approach to this business this time. I'm going to talk to some pool service tech's and see if they would pay for a guide that guaranteed them new customers or there money back and find out what they would pay for this guide. I'm thinking they would easily pay $400 or even $500 for this guide. I will give them step by step how to make their landing page, where to advertise (on craigslist and using adwords), and everything they would need to know.

I have to find out where new pool service tech's go, what websites they frequent (for the few that do), and then run some test ads and get them in contact with me somehow.

If I can learn the sales conversation for the guide with them by talking back and forth by email then I can make the pitch page that follows that sales conversation put a $100 out on the keywords that attracted these people in the first place and hopefully make the difference in profit.

I have a real product that generates real money for these people. I just need help finding a marketing expert to help me get in front of the right audience and see if this thing can sell.

If it does, my next plan is to target clickBank and start getting my gravity score up to attract people to sell this for me so that this eventually becomes completely passive.

I don't mind throwing all this information out there and telling my story because I want to learn from those that have done it and get there input on my strategy. The flaws/problems with it.

I don't claim to know what I'm doing, I just know what not to do so far.

I'll write more tomorrow on the steps I'm taking to do this after I get feedback.