By: Stefan Aarnio
Freedomway.ca
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The brilliant American entrepreneur Bill Bartmann once asked the question: "Where do you go to catch a fish?"

He remarked that most people would say "a lake", "a river", "a stream", "the ocean" etc. and all of these are bodies of water do indeed contain fish.

Most entrepreneurs and real estate investors try to catch fish randomly in the ocean. They spend thousands of dollars on fishing line, casting nets, driving their fishing boats far away from land to catch the proverbial fish in their business - the customer.

The time spent chasing the fish, the money spent on the gas, the risk of bad weather, the cost of the boat and the crew are often too much for an entrepreneur to bear. Many businesses are bogged down with too much overhead because we think that we need to own the boat, spend the money on the gas, own the nets, own the fishing rods, hire a crew and take all the risks of the storm.

Oftentimes, these entrepreneurs will venture into the water and come home empty handed with no fish. The ocean, the lake, and the river all vast bodies of water and the chances of catching fish can be slim.

Catching fish, and catching customers in the traditional sense has a very high risk and a relatively low chance of success.

I once spent $2700 on a magazine advertisement that only produced 1 phone inquiry for a business that I just started. The expense wiped out my business and my boat capsized. The salesperson who sold me the ad told me that it would be a great investment and that I would get lots of customers. The only person who made money on the transaction was the salesperson and the magazine. In my foolishness, I was the fisherman who had bought the expensive boat, bought the nets, bought the lines and hired the crew to catch no fish. I may as well burned my cash because my money was never coming back. I told myself I would never do traditional advertising again.

But how would Bill Bartmann catch a fish? The question he asks has an answer better than all others. While most people say a river, lake, stream or ocean, Bill's answer is smart. If Bill were to catch a fish, he would go to a fish farm.

Some of you reading may say "that's cheating", but I can guarantee that Bill would catch more fish at a fish farm than most would by taking their chances in the ocean.

Of course, going to a fish farm may be associated with a premium, but the premium would be well worth it. The fish at the fish farm are trained to swim to the surface when it's feeding time, they can hear your footsteps at the edge of the tank and are ready for the food you are about to give them. They are fed throughout the day and any amount of fish can be harvested with no risk and all for a small fee.

Outside of fishing, where can an entrepreneur find a proverbial fish farm for customers? Anyone with a list of customers, or a group, or a club, or a media outlet can be a fish farm. Anyone who is a centre of influence can be brought into a  joint venture in which you offer your product or service and pay the influencer a fee on all sales generated.

If it's so easy, then why doesn't every entrepreneur skip traditional advertising, forget the fishing boat and run straight to the fish farm? There are two things that hold most people back:

1) Most entrepreneurs and investors don't know about joint ventures or the "fish farm" mentality.
2) Most entrepreneurs are too cheap or greedy to pay the fish farmer his fee to access the fish.

The biggest expenses in life come from the opportunities that are not capitalized. It is time to change the way we think about lead generation, get creative and explore new avenues for growing our businesses!

Action Step: Analyze your ideal customer and begin to search for centres of influence or "fish farms" where these customers congregate. Do some research and figure out how much it would cost per sale to access this new audience.

Thanks for reading!

Stefan Aarnio
Freedomway.ca
facebook.com/stefanaarnio
https://twitter.com/stefanaarnio
http://ca.linkedin.com/in/stefanaarnio

Get Stefan Aarnio's book "Money People Deal: The Fastest Way to Real Estate Wealth" at MoneyPeopleDeal.com!

P.S: Please share this article if you found it enjoyable!

By: Stefan Aarnio
Freedomway.ca
facebook.com/stefanaarnio
https://twitter.com/stefanaarnio
http://ca.linkedin.com/in/stefanaarnio

Remember: Please share this article if you found it enjoyable!

Why do some businesses grow to enormous while others fail in the first five years?

90% of businesses fail in the first five years and of the survivors, 90% will fail in the following five years. Business is not an easy game.

Consider the average realtor; Average realtors make less than $40,000 per year and do 12 transactions or less. You see realtors printing their faces on park benches, printing their faces on note pads and mailing them to strangers, and sending letters that say it's the "perfect time to buy and sell your home" (which makes no sense). If it's the perfect time to buy, it's not the perfect time to sell and vice versa. However, because Realtors make such great commissions, buying and selling is always good for them (perhaps not for you).

These self employed salespeople do some of the most ridiculous things to hunt and "kill" new prospects every month. It's a proven fact that it takes 7x more effort to sell to a new customer than an old customer and yet, most realtors, business people and entrepreneurs are running around chasing new business when they should be focusing on their existing business. Existing customers are much more likely to do business with you than new customers, yet most of us do not consider the lifetime value of an existing customer.

This year I did 12 joint venture deals and I learned very quickly how valuable pre-existing customers are. I was originally planning on doing 12 deals with 12 different partners. However, after acquiring 6 partners, my existing partners were lining up to do more deals with me and I didn't have to pick up the phone to call on new business; such is the magic of existing customers.

My goal in this upcoming year is to strengthen my current relationships with my partners and grow my business organically by emphasizing my new mission to create partners for life. If we do the math, we actually do not need very many customers to make a decent living. I saw a book a few years ago targeted towards independent musicians and the premise of the book was "you don't need a record label". The message of the book was that with 1000 paying customers, you can make a decent living in the music industry. Many bands have more than 1000 fans, yet the bands do not bother to create ongoing relationships with those 1000 people. Since most bands don't build 1000 relationships with their fans, the band members have to work at McDonalds to keep the music dream alive.

If you are in real estate investing, you need less than 10 customers to make a very comfortable living and can even become very wealthy by establishing less than 5  partners for life. The lifetime value of a few good relationships is more than enough to send both you and your partners to higher levels of wealth.

Build your relationships vertically rather than horizontally, keep in touch with your customer base, know your audience and give them what they want. We are all standing on very fertile soil, we just need to work the land and reap what we sow.

Thanks for reading,
Stefan Aarnio

Thanks for reading,
By: Stefan Aarnio
Freedomway.ca
facebook.com/stefanaarnio
https://twitter.com/stefanaarnio
http://ca.linkedin.com/in/stefanaarnio

P.S: Please share this article if you found it enjoyable!

By: Stefan Aarnio
Freedomway.ca
facebook.com/stefanaarnio
https://twitter.com/stefanaarnio
http://ca.linkedin.com/in/stefanaarnio

Remember: Please share this article if you found it enjoyable!

Beauty is in the eye of the beholder, and so is value.

Everyday, we, the human race, wakes up and chases value until we drop dead from exhaustion at night.

It doesn't matter if you are Donald Trump sitting on a multi billion dollar real estate portfolio or monk in a temple. We are all chasing value.

The real question is, what is value and what is valuable?

Of course, value is highly subjective and can be very hard to determine.

I always find it interesting to see how excited people are to buy new clothes. Shopping malls are filled with rabid people who are frantically purchasing new garments to wear and 6 months later the clothes that they purchased will be donated to charity or thrown away.

The value of the clothes goes from "I will sacrifice my financial health to wear this" to absolutely "I will never wear this piece of garbage again".

The same thing happens with electronics. The day that apple releases a new iPhone or iPod, people are camping out overnight to get their hands on the new gadget and will pay a mortgage payment to own it. 6 months later, the same people are giving the old iPhone to their dog or are using it as a coaster on a coffee table because the newer, thinner model came out.

But what about investments? Real estate? Houses?

What is the true intrinsic value of a house?

Most middle class people will say "our house is our biggest asset"!

Most middle class people will have nearly all of their net-worth tied up in their home.

But what is the house actually worth? What is any house actually worth?

The truth is, all real estate is actually worth $0. Land and buildings are completely worthless.

If you would like to see the true value of land and buildings, drive to Detroit where you can buy a city block for $1 and nobody wants to buy it. People who live in detroit would rather have a $1 Taco at Taco Bell than own the liability of a city block.

Land, real estate, houses, and buildings only get value when there is a USE for it and an END USER. The end user places his or her subjective value on the Real Estate and that is where values come from.

There are more people who want to live in Manhattan than Detroit. That's why Manhattan real estate is worth so much more than Detroit.

At the end of the day, Real Estate is only worth what the end user is willing to pay. However, one metric I have been using more and more of lately is dollars per square foot.

When comparing two similar properties, dollars per square foot is one of the best ways to measure the current and future value of the property.

For example, in Winnipeg right now, many houses trade in the $200-$250 per square foot range. If you can make a purchase at $100 per square foot in an area that is trading at $200-$250, you have an opportunity for profit.

Construction in Winnipeg for a new build is approximately $200 per square foot, so if you can purchase for less than $200, you are getting the house cheaper than it would be to build. Likewise, if you pay $270 per square foot, you are paying more than it costs to build.

When analyzing retail single family homes, dollars per square foot is an excellent metric for intrinsic value of the property.

BUY ON INTRINSIC VALUE, SELL ON EMOTIONAL VALUE

One of the easiest ways to profit in any market is to:
1) Buy on intrinsic value and
2) Sell on emotional value

There is always profit in markets that have irrational buyers. Irrational buyers means that irrational amounts of money are floating around looking for irrational products.

For example, the neighborhood River Heights in Winnipeg is a desirable neighborhood where people will pay irrational amounts of money to get their kids into the local schools. In River heights properties trade for $200-$250 per square foot, prices that are well above cost to build.

However, in up and coming parts of town, there are "rational" buyers who will only pay prices that less than construction prices. These areas will trade at $150-200 dollars per square foot.

The key for profit is to buy with on an intrinsic value, pump the value and sell to an emotional, irrational buyer. The irrational buyer is unconcerned with what they are actually paying. They WANT the product and perceive that they NEED it. If you have a business, you want irrational buyers. Irrational buyers are consumers who allow you to create massive spreads in your products and grow your business.

Do what you can to attract irrational buyers. When you capture these buyers, take great care of them, and they will take great care of you.

Thanks for reading,
By: Stefan Aarnio
Freedomway.ca
facebook.com/stefanaarnio
https://twitter.com/stefanaarnio
http://ca.linkedin.com/in/stefanaarnio

P.S: Please share this article if you found it enjoyable!