We connected by phone at the scheduled time Sunday afternoon. On one end of the line: a sales guru who has certainly received plenty of (self-promotional) publicity and has a clear and obvious online presence. On the other side, me.
(I won’t name the guru here because this post isn’t entirely positive and it goes against my policy to negatively identify individuals or organizations here, except in the most exceptional circumstances.)
The sales guru had offered through an email message an opportunity acquire sector rights to his concepts. There would be a major overseas trip to implement the strategy. His email marketing set out some qualifying criteria and I thought that I met them. (I presume, indeed I did, because he personally called me a couple of days after the initial email response to set the time for the formal conversation yesterday.)
I happen to like some of the guru’s concepts — there’s usually some gems worthy of reporting and in fact I’ve cited him by name in some previous posts in this blog. I also am envisaging a transition to a more consultative business and the idea of having a package of tools to build on seemed useful.
However, there were cautious signs as well. I ordered his basic book through Amazon and after reading it, discovered it to be low on actionable substance and high on self-promotion. And I web archive searched his earlier marketing materials, and discovered some “here now, gone later” strategies, suggesting that he was going with the flow and where he could extract the most in profits for the least amount of work. Most importantly, I sensed he was operating with the typical online consultant techniques — cheap entry points leading to very high ticket purchases from disciples and/or those with lots of surplus cash floating around.
In any case, we didn’t waste time in our phone conversation yesterday. After he summarized his general vision and asked me a few questions about which markets I thought I could serve, we cut to the chase.
How much would this cost? He said; $7,000 US a month, plus $15,000 for the initial two-day training/support (plus of course the travel costs to the overseas location.) I quickly calculated that the project would cost at least $100,000 — allowing for the start-up costs and giving it six months to break even. (Oh, and he would take a 15 per cent royalty on every sale as well.)
“That seems like a fair bit to put at risk,” I said. “It also seems to set a rather high break-even threshold and I’m not sure if the payback is worth the risk.” He answered: “Well, it would just take a few consulting/coaching contracts for you to make your way.” I answered, “I’ll pass.” His response: “Ok, we’ll disengage. If you want to consider this later you can reach me.”
Fair enough. In fact, I have the resources to go ahead, but I’ve never spent that much money to try to implement someone else’s ideas or vision. In fact, I started my own business 27 years ago without a cent of capital. (I had my first publication advertisers prepay in exchange for a discount — thus covering the cash-on-delivery expectations of the printer and graphic designer.) I wasn’t about to spend upwards of $100K trying on someone else’s ideas for size.
At least that was my decision yesterday afternoon. While I haven’t changed my mind, there always is the question about opportunities like this — what if I had taken it, and gone with the flow, and reached out for the experience?
The answer, of course, comes down to both rational and practical decision-making, coupled with emotions. There are a lot of fun things you can do with $50 to $100,000 (allowing that presumably I would cut my losses if it was proving to be an utter disaster and wouldn’t have allowed it to go all the way.)
And there are also other investments and choices. Just keeping that kind of money in dividend-bearing equities, allowing for volatility, could generate a return of 3 to 6 per cent, without really putting any time or effort into the process. What if I took $100K and used it to develop a truly independent freelance consulting package? I probably wouldn’t need to spend nearly that much money — heck I can code my own WordPress sites these days and know where to find offshore labour inexpensively).
Still it is fascinating to see the process of high level business development, because obviously if this consultant can sell a few of these recurring-income business opportunity plans he’ll make plenty of cash with rather little effort. Good for him. And this is a good reminder of how sometimes thinking big produces potentially huge results.