nocashnofear

ENTREPRENEURIAL SECRETS TO

STARTING ANY BUSINESS WITH NO

MONEY

I am an entrepreneur who has been starting new businesses since I was a child. Business is in my blood. I cant help myself. My adventures in entrepreneurship have seen me do things

that some people may think are crazy, and other things that

people may think are impossible.

But I am living proof that anyone can start a business with no

cash whatsoever.

In the course of my career, I have started dozens of

businesses, often with no money at all. I opened a ski lodge

to meet women. I bought 23 properties with no cash of my

own. I started a video game business with $2,000 and made a

$15,000 profit in the first week.

I have started a business using the cash advance from my

credit card and sold it for a $350,000 in one year. I have

doubled, tripled and quadrupled my money on the stock

market. I have bounced back from bankruptcy and gone on to

build a $10 million company.

And I have lost everything not once, not twice, but many

times. I have learned more than most people ever wanted

to know about starting businesses, buying real estate, raising

capital and trading in stock options.

Now my biggest challenge is to give away $1,000 to a worthy

cause every single day for the rest of my life.

This is my story the story of the life of an entrepreneur.

I have always lived on the edge even when I became so

wealthy I no longer needed to.

The life of an entrepreneur is a roller-coaster ride, full of the highs

of success and the bitterness of defeat. It is an exciting adventure.

And sometimes, you can even make a living - or a killing.

I hope you enjoy my story and learn from my mistakes!

ES S E N T I A L BU S I N E S S KN O W L E D G E FO R HI G H AC H I E V E R S

IN THIS SUMMARY

The Four Commandments 2

How to Sell Something that 5 Doesnt Exist - Yet

How to Get Your Costumers to 6Finance Your Business

How to Give It All Away 8 Without Dying First

Terry Allen

NO CASHNO FEAR

ABOUT THE AUTHOR

Terry Allen is a born entrepreneur who has launched more

than 20 businesses. He now owns New Business Resources

LLC, a start-up company that offers a variety of services to

more than 100,000 newly formed businesses each month.

He is also a partner in Chicago Venture Partners LP. His

latest project can be found at www.terrystips.com.

THE FOUR COMMANDMENTS

In the course of my entrepreneurial adventures, I have

learned the true essentials of starting a successful business.

To create a thriving business of your own, follow what I

call the Four Commandments.

1. Discover what you love

Whatever you do in life, you must have a passion for it.

Starting a business is full of challenges and pitfalls, and if

you dont love what you do, you will give up long before

your business reaches its full potential. If you dont love

what you do, you will find a way to stop doing it and

the easiest way to do that is to make your business fail! If

you want to succeed, make sure that your business is

your passion.

2. Do your homework

Every industry has its own rules and its own way of doing

business. Unless you understand these clearly before you

begin, you will surely fail. The best way to discover these

tricks of the trade is to get some experience working in

the industry, even if you have to work for free!

3. Go for it!

When you have found what you love and done your

homework, start your business, regardless of whether you

have the money. I have started many businesses with less

money than the cash advance on your credit card. I have

started a business when I was so flat broke I couldnt even

get a credit card.

One of two things will happen. Either youll succeed,

make some money and feel satisfied, or youll have a

valuable learning experience. You may fail and lose all

the money you borrowed or invested, but you will have

learned something important.

Remember, learning experiences can be expensive just

ask someone who has had to pay off college or university

tuition.

4. Ride with the tide

Also known as go with the flow. Channel your resources

towards what is working for you easily. If one part of your

business is easy to sell and another is like pulling teeth,

channel your energies towards the easy part. Another way

to say this is ride the horse in the direction it is going.

And remember: if the horse is dead, get off.

HOW TO START A BUSINESS THAT NEEDS NO CASH

I started my first business at nine years old. I used to go out

catching night crawlers with my father. It was great, because

I got to share in my fathers enthusiasm, and we collected

bait for our regular fishing expeditions. And best of all, I

was allowed to sell the excess earthworms, eliminating the

need for my parents to pay me an allowance.

Flushed with the success of my first venture, I was excited

to receive a loom for making potholders for Christmas.

I had visions of making potholders and going round the

neighbourhood selling them to local families. I was sure I

was closing in on my first million.

But my dreams were dashed when I realised the cost

of materials. There wasnt enough margin to make the

business profitable.

THE POWER OF POPCORN

My parents and I moved to a new house with a vacant lot

next door. For the next few years, the vacant lot served

as the site for a kids carnival I held each summer. I hired

my sister and her friends to man the booths. Apparently I

never paid them.

I sold popcorn. Popcorn is a great product it encouraged

people to buy Kool-Aid and sodas, which I also sold at

the carnival. Popcorn makes any event an occasion. I sold

wax-paper bags of popcorn for 5 cents. They cost me a

penny. I was in heaven.

As a kid I came up with many other ventures. I would

collect newspapers and stockpile them until I had enough

to sell them to the scrap paper dealer. The dealer would

collect them once I had collected a ton of newspapers

20 stacks of papers three feet high. My parents couldnt

park their car in our garage until I went away to school.

I hired a lawn mower and spent the summer mowing

lawns. I earned $10 a week a princely sum at the time,

enough to pay for the hire of the mower and to employ

local kids to do some of the lawns for me. And while

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another kid was mowing lawns for me, I was buying cases

of Coke at 212 cents a bottle. Then I walked around the

new housing estates that were under construction, selling

the bottles for ten cents apiece.

Business was in my blood.

By the time I went to college I was always on the

lookout for business opportunities. The first came to me

in the bookstore while I was buying my first semesters

textbooks. The bookstore only offered hardcover editions,

which were much more expensive than paperbacks.

I found a distributor ten miles away who sold paperbacks

and went door-to-door from one fraternity house to the

next. Many students bought my books and returned the

hardcovers to the college bookstore.

This wasnt my only business venture in college. I also

sold personalised stationery to students, distributed a kit

for binding paperback books into hard-bound books and

operated a Roommate Placement Service in Boston.

HOW TO USE YOUR CLASSMATES AS A SOURCE

OF CAPITAL

Dont let your classes interfere with your education

The real learning always seems to take place outside of

class. Dont let classes get in the way of learning the real

deal I never did!

If you have an idea and the passion to carry it out,

finding the money is easy

Almost everyone has a credit card and every one is a

source of money for you to start your business. All you

have to do is ask.

Time is the critical factor that ultimately determines how

much you can accomplish

Many entrepreneurs underestimate by half the amount

of money they will need to start up their business. And

worse, it usually takes three times longer than expected to

reach profitability.

Every selling situation offers the opportunity to be the

buyer Use it!

In every sales situation, one person becomes the buyer

and the other does the selling. The buyer has all the

power. The challenge is to take on the role of the buyer,

even when you are really trying to sell something. A job

interview is a good example. If you appear unconcerned

whether you are offered the job or not, you will often find

yourself in the buyer position. And before you know it

the interviewer will be chasing you down the hall with a

contract!

All unhappiness is due to the difference between our

expectations and our experiences

Manage your expectations and you will rarely be

disappointed or unhappy. This is a very valuable skill to

learn as it gives you what is most important happiness

STARTING A BUSINESS TO MEET WOMEN

When I graduated from Harvard Business School, I got my

first and only full-time job as assistant to the president

of Carris Reels. The good news was that my parents had

given me the use of their summerhouse. The bad news

was that it had no hot water and an outside bathroom. Not

a good thing in Rutland, Vermont.

So I was looking for a place to live. I found an old

schoolhouse that was being offered for sale in a closed-

bid auction. Although I had only 37 cents in my cheque

account, I put in a bid for $4,850 and won the auction. I

had 30 days to come up with the money.

My favourite Harvard professor had told me that the two

most important things to remember were:

1. every business is for sale

2. money is no problem

My idea was to start a bunk-style ski lodge and charge

about half the usual ski lodge rates. I found some

investors, got a loan and set to work converting the

schoolhouse. A month after arriving in town I was the

president and half-owner of a company, I had a roof over

my head and indoor plumbing. Not to mention a haven

for ski bunnies.

Chateau Ecole was born.

HOW TO GET YOUR BOSS TO FINANCE YOUR

VENTURE

Where theres a sound business, there are willing investors

There are willing investors for every sound business idea.

If you cant find an investor to back your business idea,

you probably wont be able to market it.

The first product or service you sell is usually not the

biggest profit-maker

The first product, service or idea that launches your

business is usually not the one that makes you the big

bucks. Once you have your business up and running,

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your customers will tell you what they really want. You

will build relationships with customers and suppliers and

discover markets you never dreamed of.

The sale begins when the prospect says no

When the prospect says no, it is your opportunity to get

creative and turn the prospect into a customer.

HOW TO BUILD A REAL ESTATE EMPIRE WITH NO

MONEY DOWN

I was eventually fired from Carris Reels, which was a cause

for great soul-searching. I decided I should probably work

for myself. That way, if I ever got fired again it would be

my own doing. I decided to become a real estate agent.

I was terrified of failing the state real estate exam, so

I studied like crazy. I passed the test with such flying

colours that I started teaching a course on how to pass the

exam. This kept me going financially until my first real-

estate deal closed. I was also teaching courses on business

at Castleton State College.

My real estate company was called Better Realty. One of

my promotions was what I called the Better Realty House

of the Month. Under the heading were the words: I think

this house is such good value that if it doesnt sell at this

price in 30 days, I will buy it myself at this price.

This program got me a lot of listings. It also got me 23

properties in two years all acquired without a cent of my

own money.

Of course, most of the properties I bought with no money

down were multi-family low-income housing. They were a

hotbed of domestic disturbances, often attended by police.

Once I replaced all the zinc piping in a tenants bathroom

with copper pipes. I came back on a maintenance call to

find that her boyfriend had cut all the copper pipes and

sold them for scrap. I could tell another dozen stories like

that. The bottom line is that owning this kind of real estate

really sucks. Just because you can buy it with no money

down, doesnt mean you should.

In fact, most of the time, you probably shouldnt.

LESSONS ABOUT LEVERAGE

You can build a real estate portfolio with no money down

But just because you can doesnt mean you should.

Managing real estate especially low-income properties

is one of the worst possible businesses you can imagine

The moment of pleasure you felt when you got the

property for no money down will soon evaporate when

you realise what a headache it is to manage.

Never borrow money from your mother

Money borrowed from family is tainted. Your family

will loan you money because they love you, despite the

desperate state of your finances. But they will exact a

price greater than any interest you could possibly pay.

Emulation is as good as creation

Dont be afraid to copy. If it works for them, it might just

work for you.

There is no such thing as a stupid question

At the ripe old age of 26 I was appointed president of

the Rutland Savings & Loan. The reason they chose me?

Because I asked so many questions at board meetings.

DONT BUY IT, RENT IT

I came across another opportunity too good to pass up

the Rental Store in Rutland. I had no idea whether it

was a good business or not, but the store had two big

advantages:

1. the owner offered it to me for nothing down

2. the store had a load of tools that I could use for my

real estate renovations

In typical fashion, I went on to buy first one, then two and

finally another five rental stores in surrounding towns. But

as with the real estate business before it, I soon found it

was more fun to buy the stores than to run them.

In addition, a huge amount of competition began to spring

up. Prices dropped and I realised I had to stop buying

new stores to try to recoup past losses.

It was time to try some marketing tricks to boost revenue.

LESSONS FROM THE RENTAL STORE BUSINESS

Do your homework before you ask a banker for money

You have to educate your banker. If your banker doesnt

understand your business, you havent got a hope of

getting the money.

So make sure you understand your business and can

explain it clearly.

Just because you can get 100% financing or buy with no

money down, doesnt mean you should

The business has to make sense for now, and the future.



Beware of easy-entry businesses

If its easy for people to get into the business, they will.

Easy entry businesses attract stupid competition and

stupid competition can send you broke.

Make certain that you as the entrepreneur are suited to

the business

If youre a mechanic and your business needs a marketer,

youre doomed.

Its always easier to buy than to sell

Remember that when you are looking at a new venture.

Do you really want it now and in the future?

SELF-PUBLISHING

In the course of my adventures in the equipment rental

trade, I drove around a lot between stores, keeping an

eye on the managers and making sure the business was

turning over smoothly. I spent many hours on the road,

which was a great opportunity for creative thinking.

One day, it occurred to me that I needed a book about

how to market my equipment rental stores. I searched

Books in Print but found nothing. I thought that if I

needed a book like this, other equipment rental store

owners must need one too. And so my first book,

Advertising and Promotion Ideas for the General Rental

Store, was born.

First, I had to test the market. I couldnt just assume that

other equipment rental store owners would be looking

for a book like this. So I got my hands on a list of 1,000

equipment rental store owners.

I sent out a letter setting out the table of contents of my

proposed book, along with an order form. I offered a

pre-publication discount if they paid the money within 30

days. Of course, it wasnt just pre-publication - apart from

the contents page, not a single word of the book had been

written.

The response to my mailing was incredible. Over 100

people sent money, over $1,000 in total. This was a small

fortune in those days more than I had ever earned in

one week at my highest paying job. A printer agreed to

print up 2,000 copies for $2,000, and after mailing costs of

$1,000, I stood to make a profit of over $12,000.

I completed the book in less than a month. Every single

one of the 2,000 copies was sold with the first mailing.

Of course, buoyed by my great success, I promptly forgot

everything I had learned. I hired a graduate student to

write similar books for hardware stores and florists. We

sent out 15,000 mailings and sold next to nothing. It

seemed a similar book had recently been marketed in

both industries.

I lost half my profits from the first book but learned a valuable

lesson every market is different. Always test the market.

HOW TO SELL SOMETHING THAT DOESNT

EXIST - YET

The best new business ideas come when you find a

problem with no known solution

Sometimes if you want something done, you have to do

it yourself. I needed a book that didnt exist, so I wrote it.

All I had to do to make a success out of it was to know

that enough other equipment rental dealers had the same

need.

Trust your intuition

Every good business decision I have ever made has felt

right. Sometimes that didnt seem like a good enough

reason to go ahead, but I have always trusted my gut

instincts.

Do your market research with an order form

Dont ask people what they want ask them what they

will buy.

Dont believe that something has to exist before you can

take orders for it

You dont need a prototype, you dont need a photograph.

All you need is a hand-sketched drawing or a verbal

description of what its going to be. If youre lucky,

you may generate enough advance orders to pay for

manufacturing the real product.

Every market and market segment is different test

them all

If you encounter success in one market, dont assume you

can duplicate it in any other industry. The new market

must be tested with an order form.

THE INFORMATION INDUSTRY HOW TO SELL YOUR

PRODUCT AND STILL HAVE IT TO SELL

Six months after starting an ambitious new venture, we

were nearly out of cash. We needed to sell something

and fast.

But what could we sell to make some quick cash? It

occurred to me that there might be a market for the list of



real estate sales on our records. No one at our company

had particularly high hopes for this idea, but I was

determined to give it a shot.

We got a list of all the real estate brokerages in Massachusetts

and sent out 5,000 packages. For $50 a year we offered a

monthly list of all the real estate sales by county.

To everyones astonishment, we got 500 orders with

$50 cheques enclosed. That was enough to finance the

new business - the Real Estate Transfer Directory. It also

opened our eyes to the magic of selling information.

A second mailing signed up another 500 customers and

within a year we had over 1300 subscribers. We marketed

a weekly list of sales, which went mainly to insurance

agents and fuel oil dealers. This company grew to become

Auto-Data Systems.

HOW TO GET YOUR CUSTOMERS TO FINANCE YOUR BUSINESS

Collecting deposits from your customers is the very best

source of start-up capital

There is no interest to pay on this money and there is

no need to give away stock. You return the capital by

providing the product or service preferably with a large

profit margin.

When on an elephant hunt, dont chase after the rabbits

Its essential to understand your companys dominant

mission and focus your energies on that specific business.

There will always be exciting new opportunities to tempt

you. Only pursue those that are in line with your company

mission.

An entrepreneur works 24 hours a day

The only good news is that the entrepreneur has the

freedom to decide which hours she or he works!

When you fail in business, dont take it personally

Even though I have learned this lesson many times, I have

never been able to do it. I still feel business failure deeply.

No matter how many times I tell myself there is no failure,

there are only learning experiences, it still hurts.

HOW TO START A BUSINESS WITH $2000 AND MAKE

A $15,000 PROFIT IN THE FIRST WEEK

A combination of bad luck, bad timing and bad

management had finally taken my real-estate data supply

business beneath the red line for good. I had discovered

that I was a good entrepreneur but a lousy manager.

After years of sailing close to the wind, we had finally

sunk. Bankruptcy was my only option.

I felt like a terrible failure. I was still selling the Merchants

Welcome Service, another of my ventures, at trade shows,

and pretty soon something caught my eye. There was

enormous interest in one of the earliest video games,

Pong. I found a new Pong game that was superior to the

product selling at the trade shows.

I bought one game as a sample. Without any sales

literature or brochures, I turned up to the trade shows.

The Pong booths were always staffed by fast-talking

hustlers who convinced everyone who came in that the

video game business was a potential gold mine.

Then, people came to my booth and found that I was

selling a better game for 30% less. I didnt have to say

anything, just write up the orders. At the first trade show

weekend, I took deposits on 27 units and made a profit of

$15,000.

The cash profits were cheering me up and making me feel

less like a failure. But soon things started to go wrong. My

video game competitors didnt take kindly to my success.

Before I knew it, I had been ousted from the trade shows.

After some pretty hairy incidents trying to break the

blockade, I gave up. Pretty soon the video game industry

moved on too.

START A BUSINESS WITH A CASH ADVANCE FROM

YOUR CREDIT CARD AND SELL IT FOR A $350,000

PROFIT IN THE FIRST YEAR

In January 1980 I found myself in a sticky financial

situation. I had lost my entire net worth trading options

on the stock market, and owed over $11,000 to a

clearinghouse in Chicago.

I decided to run some seminars on the stock market to

make some quick cash. One of the men I approached

for a loan to set up the seminars was all fired up about a

game called All About Town. The game layout was based

on the streets of the town and it included vouchers from

local merchants. I caught his enthusiasm, and once again I

was excited about the prospect of starting a new business.

My adventures with All About Town provided some of

the most difficult moments of my entrepreneurial career. I

had artists working in my living room until my wife nearly

threw me out. I hired alcoholics and kids from a juvenile

corrections program to assemble games. I probably broke



child labour laws by putting my kids and stepkids on the

production line.

I fought with the county about permits for my building. I

worked like a demon to have my games placed in Macys

stores only to have Macys hide them in the stationery

department. And to add insult to injury they never paid

me for the games. I had my credit cards stolen by an

employee, who used them to buy an expensive guitar,

bifocals and a trip to Vegas.

And after all that, All About Town never really made

any money while I was running it. Sure I paid off my

considerable debts and the credit cards that I had used

to finance the purchase. But I only really made money

when I sold the business. Over the next three years I

collected $350,000.

But in the end, I was proud of myself I had moved into

a strange town, penniless, and had made over $100,000 in

one year.

FUN & GAMES WHAT I LEARNED FROM ALL ABOUT

TOWN

Starting your own business can result in truly

staggering profits

I started All About Town with cash advances from my

credit cards and an unsecured loan at 100% plus interest.

In less than a year, I had started a business and sold it for

$350,000.

Having your own business will inevitably result in

experiencing the ecstasy of victory and the agony

of defeat

My experiences with All About Town ranged from the

sublime to the ridiculous.

The business jungle is crawling with snakes

Not everyone is as honest as you are. If you find that

someone has been less than honest with you, forever treat

what they say with scepticism.

Large retail department stores are the most ruthless

and difficult of any business organisations

You may need their help to succeed, but dont count on

it being easy. They will drive a very hard bargain, and if

they ever pay you at all, it will be very late. They will take

a cash discount whether you offer it or not. If you feel a

sense of pride in having your product for sale at one of

these prestigious outlets, you will pay a high price for

the privilege.

HOW TO SURVIVE BANKRUPTCY AND PROSPER THE

SECOND TIME AROUND

One day an appointment was cancelled and I had two

hours to kill. My thoughts turned to my old company

Auto-Data Systems. I called their offices and spoke to my

former office manager. We arranged to have lunch.

We discussed the company and how it was doing these

days. Suzanne was dissatisfied with the way the new

owners were running the company. They wouldnt give

her the small resources she needed to improve the service.

They had not paid me as promised so I had no love for

them either. We casually suggested that we should go into

business together in competition with them.

Before we knew what had happened, she had given one

months notice and I was once again setting up shop in

the real-estate data business. By providing a better service

than the competition, and through aggressive marketing,

we were relatively successful.

After a year or so in business, we had taken over 40%

of our main competitors business. Even though our

competitors were better financed and had more clout in

the market, we outfoxed them. We found a way because

we wanted it more.

We did it by:

1. keeping our prices lower than theirs

2. guaranteeing faster delivery of the information

3. offering better statistical information

4. offering extended payment terms

5. offering a freecall number

6. providing higher-quality data

7. delivering more than we promised, and

8. maintaining close contact with our customers, sending

personal thank you notes, Christmas and birthday cards.

Eventually we moved into a range of new services and

took over a major competitor. This new venture was

so successful that by 1996 we had a $5 million dollar

company and 100 great team members. But I was

unhappy. The company had grown too large for me.

It was time to sell. We negotiated for a company called

ABI to buy us out for $10 million.

90% OF EVERYTHING YOU WILL EVER NEED TO

KNOW ABOUT SELLING BY DIRECT MAIL

The list is king

Probably 70% of success in direct mail campaigns is due to



the list, 20% is due to the offer and 10% can be put down

to the copy.

Every list should be segmented for higher returns

Our lists were segmented into current and former clients,

respondents to our earlier mailings, respondents to our

competitors mailings, and newly established and qualified

accountants. Careful targeting to segmented lists brings

higher returns.

A good list should be used over and over

You may get a better response from each successive

mailing. Each time you contact your prospects, your

credibility increases.

Your customer is the absolute best prospect for

additional sales

Some successful direct mail marketers send mailings

to their list up to 20 times a year and they often make

increased profits on each mailing.

Test, test, test and test some more!

Direct mail can be a very scientific marketing tool. Each

mailing should be coded so that response rate and

profitability can be calculated. Keep testing, and save the

big dollars for the methods that tested best.

Never underestimate the importance of the offer

Your prospects will be looking at your mailing and

thinking Whats in it for me? Answer them quickly and

effectively.

Include testimonials

Testimonials sell. Testimonials are pure gold in any direct

marketing campaign.

Offer a money-back guarantee

Few people will take advantage of it, but the increased

response rate will easily cover the cost.

Always include a Post Script (PS)

The most read sentence, after the first sentence, is the PS.

It should repeat the major emotional appeal or offer of

the mailing.

HOW TO GIVE IT ALL AWAY WITHOUT DYING FIRST

Now that I was finally wealthy and successful, I wanted

to give something back to the community. My accountant

suggested I set up a charitable remainder trust so that I

could live in luxury and money would be given to my

selected charities when I died.

I told him I thought that sounded like the most boring thing

imaginable. Whats the fun of giving your money away if

you dont get to enjoy it? I set up a charitable trust. The

trust is required to give away 5% of its assets each year.

My goal is to give away much, much more. I want to give

away $1,000 each day for the rest of my life - $365,000

each year - and to create a base so that the same amount

could continue to be given away by the trust forever.

Giving money away is more fun than making it. There is

something deeply satisfying about giving money to worthy

causes while youre still alive.

I hope my story has communicated the spirit of an

entrepreneurs life. I have always lived life on the edge

and Ive never been able to stop.

An entrepreneurs life is an adventure sometimes

terrifying, sometimes magical, sometimes fun, but always

exciting. Whether this is the life for you, is something only

you can decide.

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