Step11-Getting yourself in motion

How to Make a Million Dollars

Getting yourself in motion
by Marshall Brain

If you have not read page 1 yet, please start there.

Start by putting some business books on your iPod and listening to them in every spare minute you have -- while driving, while walking between classes, while waiting in line, whatever. Most books now come on CD or as an MP3 file. Here are five books that I would start with. These are "mindset books" -- they get you into the right mindset to start a business:


Mindset books:

See Also The Teenager's Guide to the Real World

• Rich dad, poor dad, by Robert T. Kiyosaki - A perfect book for getting you head in the right spot to start a business.
• The automatic millionaire, by David bach - Teaches you how to manage your finances. A basic guide to "saving $5 a day to become a millionaire in the future." 
• The one minute millionare, by Victor Mark Hansen - a little over the top, but encourages you to think differently about starting companies and building wealth.
• How to be a billionaire, by Martin Fridson - Really makes you look at the world differently.
• The Warren Buffet Way, by Robert Hagstrom - Not light reading, but helps you see how one of the richest men in the world thinks about the business world.
• Never Eat Alone, by Keith Ferrazzi - Helps you to think about business relationships differently.

Then I would go read books about people who have started successful businesses. Start with these, and there are a thousand other books like these that you can easily find:

Examples of businesses that have succeeded:

See Also The Teenager's Guide to the Real World

• The Sam Walton Story, by Austin Teutsch - Tells how Sam Walton went from being a guy with one little store in Arkansas to the richest man in the world.
• Dave's Way, by David Thomas - The story of Dave Thomas, the founder of Wendy's. He started as an orphan bussing tables in a restaurant, and he went on to create an empire.
• Built from scratch - the subtitle says it all: "How a Couple of Regular Guys Grew The Home Depot from Nothing to $30 Billion"
• Nuts!, by Kevin Freiberg - The story of Southwest Airlines.
• Be my guest, by Conrad Hilton - The story of Hilton Hotels.

Also, go to a bookstore or Amazon or a library and find a basic "How to start a small business" kind of book. Or two. There's a million of them to choose from. Page through several and find one that appeals to you. It will teach you about basic stuff like incorporating, simple accounting and accountants, business licenses, federal tax ID numbers, lawyers and so on -- the minutiae that you need to deal with when starting and running a business. Finally, here are several web links that you may find helpful:

See Also The Teenager's Guide to the Real World

• How to make money on the Web - An ongoing discussion of ideas that will help you learn how to make money on the Web.
• How to start a startup
• Why Small Web Design Firms Should Think Big - The article could easily be retitled, "Why Small Firms Should Think Big." It is a general call-to-action for small business owners everywhere. It will help you to think big as you are thinking about starting a business.
• Starting your business - from the SBA. A little dry and traditional, but lots of good information.
• Getting your business started
• Nine more little inspirational stories to give you some extra motivation to get started.

That's it -- start reading these books and thinking about something you can do that other people will find valuable. You are on your way. You just have to take that first step...
And once you make your first million, please send me an email and let me know so I can congratulate you.
Thanks,

Marshall Brain.<< Previous Slide   |   Introduction

Step10-More examples

How to Make a Million Dollars

More examples
by Marshall Brain

So come up with an idea. Find something that you can do in the American economy that would make people's lives better and that they would be willing to pay money for. Build a simple business around it. Start making a profit.
What you have created is called a "cash cow." You have a business that generates excess cash. Now, either you milk the cow, or you sell the cow to someone else. That's it. Suddenly you have become an entrepreneur. Then either you go relax on your Caribbean island, or you try to start another one. And it will be a lot easier the second time because you have been practicing.

See Also The Teenager's Guide to the Real World

Let me emphasize that the idea does not have to be complex. Domino's is not a complex idea: "We make pizza and deliver it to people's houses." How simple is that? Yet it has made millions and millions of dollars. Here are a couple of other examples:

• Netflix -- "You send us $20 a month, and we will mail three DVDs to you. When you mail one of the DVDs back to us, we send you another one." That's pretty simple. The genius behind Netflix is that they got rid of all the little niggly problems that make you hate video stores. People liked it.
• Advo -- Now it does not get any simpler that this. What Advo did was they took a piece of paper. And they folded it in half. And they stuck some flyers in it -- you know, like grocery store coupons or whatever -- and mailed it to people. That's it. Advo is a HUGE company now -- over $1 billion per year in revenue.
• Southwest airlines -- This is a little more complicated because it involves jumbo jets and the FAA and drink carts and such, but at the start Southwest was a still pretty simple idea. They picked three cities in Texas and flew from one to the next in a circle. They picked people up at one city and dropped them off at the next. That's it. Once that was working, they started adding more cities, and pretty soon Southwest was changing an entire industry.
• Refrigerator Filters -- I have a friend who makes a very comfortable living with a little company that sells the filters that go with your refrigerator. You know -- the little carbon filters that take the chlorine out of the water before it gets to the ice maker. He takes orders on the web, ships out the filters and makes a nice profit on each one because it makes things easy for people.

Look at the companies all around you. What is McDonald's? "We sell hamburgers." What is Wal-Mart? "We put stuff on shelves and people buy it." These are not complicated ideas. All that you need to do is create your own idea, get it going, turn it into a cash cow and then either milk it or sell it. Here's how you can get started...


<< Previous Slide    |   Introduction   |    Next Slide >>

Step9-Examples from my life

How to Make a Million Dollars

Examples from my life
by Marshall Brain

I have managed to start three successful businesses. And I am no genius. It has been said that my last name is the only brain I've got. So this should give you great hope -- if even I can start three successful businesses, then anyone can. Let me talk about each one so that you can see what I am talking about.

See Also The Teenager's Guide to the Real World

Publishing One of the businesses that I started -- actually my wife and I in this case -- is a publishing company. I've written a dozen books, and I have used three different publishers (Butterworth-Heinemann, Prentice Hall and Wiley), but I wrote a book for teenagers and I was having trouble finding a publisher for it (yes, even if you write a dozen successful books and sell hundreds of thousands of copies, publishers STILL snub you. It is part of the game.) So we decided to create our own publishing company.
Here's the deal with a publishing company. Go pick up any paperback book that you have lying around. It's probably 300 or 400 pages long. It has a nice, glossy, color cover. It has bar codes on the back. How much does it cost you to print a book like that? If you do a print run of 1,000 or more, they only cost you $2 a copy. Or less. Now look at the list price of the book. You pay $15 or $20 for the book. That's a 10x markup. So you print a thousand books for $2,000. And you sell them, and you make $20,000. If you sell 10,000 copies, you make $200,000. If you sell 100,000, you make $2,000,000. Now that's gross, not net. The bookstore takes some of that when it sells the book -- it's only fair. And you have to pay the warehouse and so on. But you can see the point. If you can write a book that people want to read, there is money to be made. And it has gotten a whole lot easier in the last 10 years with printing on demand and so on. Go look at Xlibris, for example.
So we published a book called The Teenager's Guide to the Real World. It's now in its eighth printing. That means that we initially printed it and ordered 5,000 copies. Those all sold out, so we ordered a bunch more printed, and those all sold out, so we got another batch... and so on, eight times. Is this book as popular as Harry Potter? No. And it doesn't matter. There's still lots of money to be made by writing books.
Consulting
After I wrote my first book, a funny thing happened. This was a book on a topic called "Motif Programming", which is a system you used for creating graphical user interfaces on UNIX machines 10 years ago. Right as that book was being published, it turned out that all the major firms on Wall Street decided that they were going to convert from mainframes over to UNIX and Motif. So my book comes out and I start getting calls to do training and consulting in Motif.
Now, what is that? That is luck. I wrote the book not knowing that Wall Street was making the conversion. I just happened to be in the right place at the right time. So a friend of mine and I started a business. We did training and consulting and programming. We started, literally, with that book, $400 and my friend's PC. We knew nothing about "starting a business." But we did get lucky. We built that to a point where we had 20 or 25 employees and were making several million dollars a year. And the business still exists. My friend is still doing it, although I went on to do something else called HowStuffWorks.
The Web
We could talk for a very long time about the Web, but let me briefly say that, today, there is a lot of money to be made. Google, with its Adsense program and search revenue program, has made it extremely easy to make money on the web. All that you have to do is create a web site that attracts a big audience, and you can make money.
I started HowStuffWorks as a hobby in 1998. In 2000 it had become so popular that it really needed to be a business. Today it is one of the top 1,000 web sites in the world. Something like 5 to 6 million people visit the site every month, and they read about 60 million pages each month.
The great thing about the web is that it is a very open playing field. If you create a web site and people like it, they will tell their friends. And they will tell their friends. And so on. There are all sorts of sites that have made it big this way. Look at Matt Drudge with DrudgeReport.com or Drew Curtis with Fark.com or Rob Malda/Jeff Bates at Slashdot. Go look these sites up in Alexa and see what kind of traffic they get. These are not complicated sites, but they caught on.
HowStuffWorks happened to catch on. HowStuffWorks has succeeded for many reasons -- part of that is luck, part of it is my writing style, part of it is persistence, part of it is being able to work with an extremely talented group of people who all help to make the site better. And so on. The thing is, if I had never sat down at the kitchen table and started HowStuffWorks, none of that would have been able to happen for me. I had to take the first step.
[For details on starting your own Web site and making money with it, see Making Money on the Web]
Your goal
Your goal is to do the same thing. All that you need to do is to find something that people would find valuable...


<< Previous Slide    |   Introduction   |    Next Slide >>

Step8-How America works

How to Make a Million Dollars

How America works
by Marshall Brain When you are playing Halo (or any video game) for the first time, you have no idea what the "environment" looks like. You don't know where the bad guys are hiding, or where you go to reload your weapons, or what buttons you have to push to deactivate the tractor beam or whatever. The same is true of the business environment, so let's look at the American business environment in the simplest possible terms:



Here is how America works. What we've got is a $10 trillion economy. That means that, all over this nation, there are people handing each other $10 trillion in return for goods and services each year. You call up Domino's and pay $10 for a pizza -- that is 0.0000000001% of the American economy. You actually play a role in that $10 trillion figure every time you buy something.

See Also The Teenager's Guide to the Real World

How much money is $10 trillion? If you go down to Wal-Mart and buy a gallon of distilled water, it will cost about a dollar. So I want you to imagine a swimming pool that holds 10 trillion gallons of water. It would be a swimming pool that is about two miles on a side -- two miles by two miles wide and two miles deep. It is a BIG swimming pool. When you start a business, you get to swim in that swimming pool. Drink all you want -- you won't even make a dent in a swimming pool that is two miles deep. Or think of it this way -- If the whole pool is 10 feet deep, it is 67 miles on each side. $10 trillion is a HUGE amount of money! You can swim for a long time in a pool that is 67 miles wide. Your job is to look at the American economy and all the people in it. Now think to yourself, "What can I do that some of these people need? What can I do that would make their lives better in some way, and they would be willing to pay money for?" All you need to do is figure out a way to snag 0.00001% of the money flowing around in the American economy in one year and you have made a million dollars.
It does not have to be a complicated idea, and it does not even have to be original. For example, let's take the idea of selling pizza. People like pizza -- you know that. If you can start a pizza restaurant, and if you make $1 profit off of each pizza you sell, and if you sell a million pizzas, you have made a million dollars. It has happened before. Ever heard of Domino's? Papa John's? Pizza Hut? Little Caesars? Chuck E Cheese's? Red Baron pizza? Tombstone pizza? DiGiorno's pizza? Freschetta pizza? Lots of people have made a lot of money selling pizza. And it will happen again.
Let me give you three examples from my own life so you can see what I mean...



<< Previous Slide    |   Introduction   |    Next Slide >>

Step7-Understanding the quotes

How to Make a Million Dollars

Understanding the quotes
by Marshall Brain Let's summarize:




"If you try, there is some chance of succeeding." If you don't try, obviously, there is not. You've got to be playing the game in order to win.
"Those who keep trying eventually do succeed." That is a fact of life. Luck favors the prepared, and it also favors the persistent.

See Also The Teenager's Guide to the Real World

You will hear people say, "Nine out of every 10 businesses fail, so why bother?" Here is another way to look at that -- the chance of success is 10 percent. You start nine businesses that fail and then the tenth one succeeds and you make a million bucks -- those are damn good odds. Compare that to a lottery, where, for example, 9,999,999 out of every 10,000,000 tickets fail. And tens of millions of people play the lottery even though the odds are that bad. Starting a business is not as easy as buying a lottery ticket, sure, but keep in mind that, "Anything you practice gets easier." Let me repeat that, because it is very important: "Anything you practice gets easier." The more you practice something, the easier it gets. Take video games. How many of you play video games? Come on -- Everyone plays video games. Admit it. So let's take Halo. The first time you played Halo, how well did you play? Be honest. You sucked. The first time you play a video game you suck. That's true of just about anything you try the first time. First time you rode a bike you sucked. You fell off. First time you ice skated you sucked. And so on.
So you play Halo and you suck. Now what? You play some more, and you get better. And you play some more and you get better again. And pretty soon you are pretty good at Halo. Practice makes perfect. It is true in anything.
How long does it take someone to get really good at Halo? Be honest. A person who plays video games might "invest" 50, 100 hours of practice in a game to get good at it. It is a fact that the more you practice, the better you get. And the easier it gets.
So the first business you start, it is going to be hard. You don't know anything. You will make mistakes. You will try things that don't work. Whatever. But the second business you start is a lot easier. And the next one is easier still. Right now you look at "starting a business" and it looks hard. That's because you've never done it before. You haven't practiced. Simply start practicing and it will become trivial eventually, just like a video game.
You are never going to get rich practicing video games. What I would suggest is that you stop playing video games. And get rid of your television. Take the music off your iPod.
Instead go get some books-on-CD that talk about starting businesses. I'll give you some examples at the end of this talk. Put those on your iPod and listen to them over and over again. The first time you listen, they might not make much sense. That's because all of the material is new. The second time through the book it will make a lot more sense. And then the third time you will understand what is going on. Practice makes perfect.
Now you are starting to get somewhere. You have taken some steps. You are learning about starting a business from the books you are listening to. Let's look at the environment...




<< Previous Slide    |   Introduction   |    Next Slide >>

Step6-Three important quotes

How to Make a Million Dollars

Three important quotes
by Marshall Brain


Woody Allen's quote is so true: "Eighty percent of success is showing up." If you will simply take the first step toward starting a business, you improve your chances of success dramatically.

See Also The Teenager's Guide to the Real World

The second reason is more important. If you ever listen to motivational speakers like Dennis Waitley, Tony Robbins and Zig Ziglar, one thing you will hear over and over again is this interesting fact about setting goals -- if you will simply take some time to create some goals for yourself and then write them down, the chances of reaching your goals goes up by a huge amount. It is huge. Putting your goals on an index card and taping them to your bathroom mirror so you see them first thing every morning is also a smart move. I do not know why this works so well, but I do know that it works.
So what you should do is write down on a piece of paper a few goals for yourself, and one of them should be, "get my xyz business going," and you should tape your goals to the bathroom mirror. I would do that today.
Churchill's quote is also right on target: "Success consists of going from failure to failure without loss of enthusiasm." What does that mean? It means that, whenever you stretch yourself and try to do something successful, there are going to be failures along the way. Sometimes lots of failures. All you can do after a failure is get up and try again. If you keep doing that, one of two things will happen -- either you will succeed eventually, or you will die. And if you die, then you won't care anymore. And at your funeral people will say, "You know, he never amounted to anything, but you sure have to give him credit for trying. The guy had a lot of heart." There's nothing shabby about that. It will beat having them call you a couch potato.
Larry King's quote is amazing in its accuracy: "Those who have succeeded at anything and don't mention luck are kidding themselves." That is so true. The thing is, luck can only happen to you if you try something. If you will just take the first step toward starting a business, and then the second, and so on, you immediately open yourself up to the beneficial power of luck. If you don't, then luck cannot happen to you. Everyone who has ever succeeded has benefited from luck -- sometimes lots of luck. But you have to be playing the game in order for luck to find you.
So let's summarize...



<< Previous Slide    |   Introduction   |    Next Slide >>

Step5-Entrepreneurs

How to Make a Million Dollars

Entrepreneurs
by Marshall Brain An entrepreneur. The dictionary definition goes like this:

A person who organizes, operates, and assumes the risk for a business venture.

Here's my definition:

An entrepreneur is someone who starts successful businesses. People are not very kind to those who start unsuccessful businesses. The instant you are successful, however, you are a hero and they start calling you an entrepreneur.

See Also The Teenager's Guide to the Real World

The whole point of creating a successful business, of course, is to have it generate money. There are two ways to extract the money from a business you create. You can either take the money out as you go along, in the form of a salary and dividends. Or you can sell the business and take your reward in a lump sum. Or, in the ideal case, you do both. In the ideal case, the money that you pull out of the business is being generated as passive income. For example, let's say you start a restaurant. You hire all of the staff, and then you hire someone to manage the staff so the restaurant "runs itself" without you ever having to actually be there. That is passive income. A house you own that generates steady rental income every month is another example.
Note that the dictionary definition of the word "entrepreneur" includes the word "risk." That is important. If you are starting a business, you are going to have to invest both your time and (in many cases) your money in getting the business going, There is some chance that the business will fail without generating anything. Businesses fail all the time. That's part of the game. There are three things that you should keep in mind...


<< Previous Slide    |   Introduction   |    Next Slide >>

Step4-Start a business

How to Make a Million Dollars

Start a business
by Marshall Brain



Yes - you need to start a business. In America, starting a successful business is the surest, most controllable path available to you for making a million dollars in less than 42 years.
And really, this decision to start a business gets us to a key part of our conversation. There are two mentalities at work in our economy today. Either you can be someone else's employee, or you can be the one who hires the employees. You can work for a business, or you can own a business of your own.

See Also The Teenager's Guide to the Real World

Now please note that I am not saying that "being an employee" is a bad thing. There are lots of good reasons to be an employee. For example, being an employee is a great way to learn how a business works so that you can open a business of your own. You simply need to become an employee with that approach in mind. In other words, you work so that you can learn the ropes. Go into the job with the intention of learning everything you possibly can while someone else pays you to get your education. Many large coporations even make a point of advertising this fact. For example, McDonald's says on its Web site: "You'll be encouraged to grow, learn and develop the broad-based skills you'll need to move up fast -- with McDonald's Corporation, an independent McDonald's franchisee, or almost any company in the world. Having such experience on your resume will open eyes, not to mention doors." [ref] And that is true.
Compare this to a normal college education and you will realize how great a deal this is. When you are in college, you pay to get educated. When you are an employee, someone else pays you to get educated -- it is a much better deal.
So let's assume that you have made the decision to start a business, and you have worked to learn the ropes. If you follow this "start your own business" path, then what people will call you is...




<< Previous Slide    |   Introduction   |    Next Slide >>

Step3-Save $5 a day

How to Make a Million Dollars

Save $5 a day
by Marshall Brain


If you want to make a million dollars, all ya gotta do is put $5 in a bank account every day. Just about anyone can come up with $5 a day. It is not a huge deal -- heck, a pack of cigarettes costs $5 in a lot of places these days. You put the money into an account, like a stock mutual fund, that gives you 10% per year interest on average and presto. In 42 years you have a million bucks. What could be easier than that?
The problem is, who wants to wait 42 years? It takes too long. What do you do if you want to short-circuit the process and make a million bucks in a couple of years? There is only one way in America to accomplish that reliably...



<< Previous Slide    |   Introduction   |    Next Slide >>

Step2-Easy ways to make a million

How to Make a Million Dollars

Easy ways to make a million
by Marshall Brain If your goal is to make a million dollars, there are a couple of easy ways to reach your objective:


If you are looking for the easiest path to wealth, inheriting the money would have to be at the top of the list. Of course you have little control over this.
Marrying the money would probably be the next easiest, assuming you can find an appropriate spouse (Note that I did not take my own advice here and followed the path of "true love" instead).
You can buy lottery tickets or head for Vegas and hope for the best.
Or there is the well-worn path to a lawsuit. The problem is, a lawsuit can take a long time and you have to spend most of that time talking to lawyers. I'm not sure the rewards outweigh the pain.
It seems like there should be an easier way, and in fact there is...

Next Slide >>

Step1-Introduction

How to Make a Million Dollars

Introduction
by Marshall Brain Last week I was invited to speak to a group of 200 students at Duke University. The organizers gave me pretty much free rein in picking my topic, so I decided to talk about this:


How to make a million dollars is: a) something students are interested in, and b) something I am qualified to talk about. And the talk went really well. So well, in fact, that I have received requests for copies of the presentation.
I did not make a tape, so what I have done here is lay the talk out in writing for you to read at your leisure. I hope that it is helpful to you, and and that it shows you how to begin walking down the path to wealth.
Let's get started on making your first million dollars...

Next Slide >>>