We could not let go of the New Rich without mentioning what not to do. The journey to freedom includes mistakes, but you can make fewer if warned about some. The New Rich Mistakes, let's go! "If you don't make mistakes, you're not working on hard enough problems. And that is a big mistake."  – Frank Wilczek. Top New Rich Mistakes: As Timothy Ferriss points out, errors are part and parcel of lifestyle design. It involves resisting the ingrained impulses from a life focused on retirement-based deferral.  Here are the common pitfalls you will encounter. Don't be discouraged; it's all part of the journey. 1.Losing Sight of Dreams and Falling into Busywork : Everyone experiences this, but many get stuck and never escape it. 2.Micromanaging and Emailing to Fill Time : Establish responsibilities, problem scenarios, rules, and limits for autonomous decision-making—then step back for everyone's sanity. 3.Handling Problems Outsourcers or Coworkers Can Handle : Avoid this at all costs. There's no productivity or improvement in doing so. 4.Helping Outsourcers or Coworkers with Recurring or Non-Urgent Problems : Provide them with if-then rules for solving all but the most significant issues. Grant them the autonomy to act within set boundaries and emphasize that you will not assist with problems covered by these rules. For instance, allow outsourcers to resolve any issue costing less than  $400 . Review their decisions periodically and adjust the rules accordingly. 5.Chasing Customers, Especially Unqualified or International Prospects, When You Have Sufficient Cash Flow :   You never want to chase your customers. No matter how big or important they seem, you always want to attract them. 6.Answering Emails That Won't Lead to a Sale or Can Be Addressed by an FAQ or Auto-Responder : Use auto-responders to direct people to the appropriate information. 7.Working Where You Live, Sleep, or Relax : Separate your environments—designate a specific space for work only, or you will never be able to escape it. 8.Failing to Perform a Thorough 80/20 Analysis Regularly : If you don't stop to analyze and update, you will eventually stop improving, comfort will set in, and your business will suffer. 9.Striving for Perfection Rather Than Good Enough : Recognize that striving for endless perfection is often just another excuse for busy work. Focus on achieving outstanding results for a few things and good enough for the rest. 10.Blowing Small Problems Out of Proportion to Justify Work : If you're a workaholic, this is a common slip, but take a step back and gain perspective. 11.Making Non-Urgent Issues Seem Urgent to Justify Work : Focus on life outside your bank accounts, as scary as that might be initially. Suppose you cannot find meaning in your life. In that case, you are responsible for creating it through fulfilling dreams or finding purposeful work. 12.Viewing a Product, Job, or Project as the End-All and Be-All : Life is too short to waste and too long to be a pessimist. Whatever you're doing now is just a stepping stone to the next project or adventure. 13.Ignoring the Social Rewards of Life : Surround yourself with positive, smiling people who have nothing to do with work. Create your muses alone if necessary, but do not live your life alone. Shared happiness through friendship and love is happiness multiplied. -> Have you often made these mistakes?  Do you see yourself as part of the New Rich? There's no wrong answer, just options to consider. Last thoughts: When it comes to mistakes, let some small bad things happen. Sometimes, you must let the small bad things go to achieve the big things. Cultivate this skill. Once you realize you can ignore the noise without the world ending, you gain a unique kind of freedom. Without attention, you have no time. Time without attention is meaningless, so prioritize attention over time. If you don't have attention, you don't have time. -> Whether or not you see yourself as part of the New Rich, these are human mistakes.  Eliminating them can only improve your life. See you in a week. Your Zine.

As promised, ProfitZine will explain everything step by step, from micro-testing to remote CEO. Mobile Lifestyle, Part 4, let’s go! “I not only use all the brains that I have, but all that I can borrow.”  – Woodrow Wilson. Micro-test: Micro-testing uses low-cost ads to gauge consumer interest in a product  before production . Several tools are available for this, but let's focus on Google AdWords (a pay-per-click platform), where you pay to advertise on Google search with specific keywords in your ad. Start by analyzing the competition and crafting a more enticing offer on a simple "one to three hours" webpage. Then, test the offer with brief Google AdWords campaigns. These are quick to set up and can run for a week to gather results. The next step is straightforward: drop the flopped products and manufacture the winners only! -> If you can test multiple products, that would be fantastic!   The more you test, the quicker you'll find what works! After the Cash Flow: Once testing is complete and cash flow is sufficient, the next step is to  streamline and outsource  operations to minimize weekly work hours. The goal is to automate as much as possible. This way, you maintain a new income stream while freeing yourself to pursue other interests and enjoy life. The factory of the future will have only two employees, a man and a dog. The man will be there to feed the dog. The dog will be there to keep the man from touching the equipment.  – Warren G. Bennis -> Don't take the dog quote literally, ok?   But remember, it is possible to have a business and not be there… Remote-Control CEO: After establishing a successful product, the next step is to create a  self-sustaining business  architecture. Our aim is not to build the largest possible business but one that requires minimal intervention. This architecture should position us outside the daily information flow, not at the top of it. To establish a self-running virtual architecture, follow these 2 principles: 1.Engage outsourcing companies specializing in specific functions rather than freelancers, as companies are easier to replace if needed. 2.Ensure that all outsourced teams are willing to communicate with each other to resolve issues and grant them written permission to make cost-effective decisions without your prior approval. -> It's time to research and create Standard Operating Procedures (SOPs).  Identify your outsourcing partners and document the systems in detail to facilitate smooth handovers. How to get there: Phase 1: 0-50 Total Units Shipped Handle everything yourself. List your phone number on the website for general inquiries and order processing. This direct interaction is crucial at the start. Answer customer calls to identify common questions, which you will later address in an online FAQ.  This FAQ will serve as the primary training material for phone operators and for creating sales scripts. Respond to all emails, saving your replies in a folder labeled "customer service questions," with subject lines indicating the nature of the inquiry for easy reference.  Personally pack and ship all products to find the most cost-effective options. Phase 2: >10 Units Shipped per Week Add the detailed FAQ to your website and update it with new answers as they arise.  Search for local fulfillment companies and narrow your choices to those who won't charge setup fees or monthly minimums, or at least offer a 50% discount on both.  Negotiate to have any setup fees credited toward shipping or other services. Prioritize fulfillment companies that handle order status emails or phone calls from customers. Use your "customer service questions" folder for efficient copy-pasting responses. Phase 3: >20 Units Shipped per Week With increased cash flow, you can now afford setup fees and monthly minimums required by more advanced outsourcing providers.  Contact end-to-end fulfillment companies that manage everything from order processing to returns and refunds. Discuss costs and ask for referrals to call centers and credit card processors. Consider setting up an account with a call center. They often provide toll-free numbers you can use, but be sure to test their services before committing. -> Now it's time to take action!   Everything is prepared; follow these guidelines and get started! Last thoughts: One last piece of advice: The more options you offer the customer, the more indecision you create and the fewer orders you receive. Minimizing the number of decisions your customers can or need to make is the best way to avoid client indecision.  Fewer Options = More Revenue “The customer can have any color he wants, so long as it’s black.”  – Henry Ford. -> This should not be a problem since you filtered your audience.  All   you need to do now is avoid getting “lost” in all your ideas. See you in a week. Your Zine.

The three options of Timothy Ferriss to the: How does one obtain a good product that satisfies you? Resell, license, or Create a product. And how to do it. Mobile Lifestyle, Part 3, let’s go! “Creation is a better means of self-expression than possession; it is through creating, not possessing, that life is revealed.”  – Vida D. Scudders. Resell a Product: Buying an existent product at wholesale and reselling it is the most straightforward path but also the least lucrative. It's quick to launch but suffers from price competition with other resellers. The profitable lifespan of each product is short unless an exclusivity deal stops others from selling it. Reselling is a great option for secondary back-end products that somebody can sell to existing customers or cross-sell to new ones online or over the phone. To purchase wholesale, follow these steps: 1.Contact the factories and request a "wholesale pricelist" and terms. Typically, you'll get about 30-40% off retail. 2.If a corporation tax ID number is required, print the appropriate documents from your state's Secretary of State website and file for an LLC or a similar protective business structure. -> Don't make any purchases yet; more information is coming!  This is to verify profit margins and obtain product shots and sales literature. License a Product: Allow others to produce many items using their name and image in return for a % of sales. A licensing agreement involves two parties, and a member of the New Rich could be either. The product creator, known as the "licensor," can grant others the right to produce, use, or sell their product, typically earning 3-10% of the wholesale price per unit sold. Develop the product, let someone else operate production and sales, and gather checks. This approach isn't wrong, but the New Rich usually prefers the other position. The other position is the licensee, an individual interested in producing and selling the inventor's product and keeping 90-97% of the profit. Yet, licensing is a complex field that requires dealmaking for both parties. Creative agreement negotiation is crucial; you'll likely encounter challenges with the first product. -> Visit the "fourhourblog" or similar sites to find complete contracts with financial elements.  Learn how to market products without a prototype or patent and secure rights to products as a newcomer. Create a Product: Creating a product is more straightforward than it sounds. "Developing" might seem more complex than it is. For tangible products—like inventions—hire engineers and designers to build a prototype based on your specifications and then take that to a contract producer. Finding a generic or stock product from a contract producer that can be repurposed for a specific market is even easier. They produce it, add your custom label, and voilà—the product is ready to sell. This is the essence of "private labeling." If you can focus on information products, that would be all the best! Information creations are low-budget, quick to produce, and difficult for competitors to replicate. It's easier to bypass a patent than to reword an entire course to avoid copyright issues. -> Please reflect on information products.  You can create one, repurpose public content, or license an expert to develop it. Expert Status: We understand you're not an expert—the extent to which you need to establish yourself as one depends on how you source your content. If you create the content yourself or repurpose public domain material, you only need expert status within a niche market. Just reading the top-selling books in your field will give you more knowledge than 70% of people and, more importantly, clients. But here's the plan: 1.Join 2 or 3 relevant trade organizations with authoritative names. You can do this online in just a few minutes. 2.Read the top 3 best-selling books on your subject and recapitulate each on 1 page. 3.Conduct a free one-to-three-hour seminar at a nearby renowned university, using posters for promotion. 4.Offer to write 1 or 2 papers for business magazines related to your subject or question an expert and write that article to get your name published. -> Again, you don't need to be an expert!   If you truly want expert status, you can get it in around 4 weeks. Last thoughts: So how is it gonna be? Resell, license, or Create a product? Don't forget, either way, information products are one of the best product classes to choose from, especially for beginners. Still, we want to share more information on this topic, so please be attentive to part 4 for the first time. The ProfitZine is gonna tell you how to go from micro-testing to remote CEO step by step. -> If this sounds too good to be true… it’s just because we don’t have all the knowledge. Because it is real and the first step is to believe it is. See you in a week. Your Zine.

You must meet automation and renew your mindset on your way to freedom. To own your life, you don't need to "run" a business— you just need to set one up. Mobile Lifestyle, Part 2, let’s go! “A man is rich in proportion to the number of things he can afford to let alone.”  – Henry David Thoreau. Cash Flow and Time: With these two currencies, all other possibilities become attainable. Without them, nothing can be achieved. There are a million ways to make a million dollars, but for the New Rich, the objective is to own businesses that require no personal time investment. The first step is to identify a product to sell. If you're starting from scratch, avoid service-based businesses since constant customer interaction makes it challenging to be absent. The product should cost no more than $500 for testing. It must be suitable for automation and demand only one day of management per week. The aim is not to revolutionize the world but to create an automated income stream that doesn't drain your time. -> If you own a service business, we will help convert expertise into a downloadable or shippable good.  This will help you break free from the constraints of an hourly-based model. Begin with the End in Mind: Keep a couple of things in mind: 1.The more competing resellers there are, the quicker your product becomes obsolete;  2.Offering exclusivity can be advantageous. By granting one company 100% distribution, you can negotiate better profit margins, in-store marketing support, faster payment, and preferential treatment; 3.Determine your sales and distribution strategy before committing to a product. The more intermediaries involved, the higher your margins need to be. -> Thorough testing and planning can avoid many issues.  Keep reading, and we'll explain how. How to start: Choose an Easily Accessible Niche Market:  Meeting existing demand is far simpler than generating new demand. Identify a market (customers) first, then find a product for them. Ideally, you should be part of your target market, allowing you to understand their needs and spending patterns. To help you choose, consider: Which social, industry, and professional groups are you part of, have you been part of, or are familiar with? Don't overlook the products and subscriptions you possess, both online and offline. -> Think creatively about your resume, work experience, physical activities, and hobbies to make a list of all the groups you have been associated with, past and present.  Then ask yourself, what do these groups tend to buy? Some Advice: Brainstorm Product Ideas:  Aim to create solid product concepts without spending any money. Ensure your final product fits into an automated system with these criteria: 1.The Main Benefit Should Be Clear in One Sentence:  Make it impossible to misunderstand your product. Answer these questions in a single sentence: What makes it unique, and why should someone buy it? 2.Price Should Be Around $50-$200:  Pricing too low is a mistake. A higher price means selling fewer units to fewer customers, allowing you to reach your goals faster. Higher prices attract less demanding customers, reducing hassle. They also provide higher profit margins, which is safer. However, if the price exceeds a certain threshold, potential buyers might need to speak with someone before making a purchase. Quick Production:  Manufacturing should take no longer than 3-4 weeks. This keeps costs low and allows the company to adapt to sales demand without overstocking. Aim for 1-2 weeks from order placement to product shipment if possible. 4.Comprehensive Online FAQ:  Customers will have numerous questions, so ensure your product is fully explained in an online FAQ. -> Do not invest any money at this stage!  Start with the two markets you are most familiar with. Last thoughts: Understanding these criteria first will allow you to make good choices with the future in mind. Then you can ask: How does one obtain a good product that satisfies you? Timothy Ferriss states you have three options: Resell, license, or Create a product. We will cover these and test them in the next edition. -> You don't need to be a specialist.  Being an expert in product sales simply means you know more about the subject than the customer! See you in a week. Your Zine.

The third most-voted subject was mobile lifestyle/outsourcing. Let's explore that because a mobile and free lifestyle is unattainable without outsourcing. Mobile Lifestyle, Part 1, let’s go! “Whenever you find yourself on the side of the majority, it is time to pause and reflect.”  – Mark Twain. Remember the New Rich? The key skills of the NR are  remote management  and  communication . Here's some advice from Timothy Ferriss, author of "The 4-Hour Work Week," to get your feet wet with these skills. Hiring a  remote personal assistant  is a significant step. It marks the moment you learn to give orders and become the leader instead of the follower. You need to learn how to be the boss. For a few weeks, a low-cost and low-risk way to do that is to use a  Virtual Assistant . Becoming a member of the NR is about working smarter and  building systems to replace yourself . Just preparing someone to replace you will create an ultrarefined set of rules that will eliminate the remaining fat and redundancy from your schedule. Lingering and unimportant tasks disappear when someone else is paid to do them. -> Do this small exercise at least for 1 week for the experience (2-4 weeks would be ideal).  This is not a cost it’s an investment with incredible ROI! Before Delegation: Eliminate  before you delegate. Unless something is well-defined and important, no one should do it. Never automate something that can be eliminated, and never delegate something that can be automated or streamlined.  Define  rules  and  processes  before adding people. Using people to leverage a refined process multiplies production, but using people as a solution to a poor process multiplies problems. What to delegate is up to you! It can be personal tasks or work tasks. I can't help you with that, but here are 2 guidelines: 1.Each delegated task must be both time-consuming and well-defined; 2.Have some fun with it. Being effective doesn't mean being serious all the time.  -> Some task examples: web research, errands, document creation, etc.  This is an experiment more than anything else, and it’s for you! Basic choices: How do you find your  VA ? Start by deciding  where : remote or local? USA or abroad? Remember the pros of jumping time zones: People work while you sleep, and the per-hour expense is less in developing countries. VAs  in developing countries can charge between $4 and $25 an hour, with the lower end for simple tasks and the higher end for more skilled tasks, including the equivalent of Harvard MBAs. The biggest challenge with overseas help will be the language barrier, but this can be managed by testing assistants. To overcome challenges, you can hire a  VA  from a  VA firm . This way, you have a backup team and not just a solo worker.  -> Using a VA firm does not increase the cost but increases safety and productivity.   You never know if this exercise will lead to long-term personal assistance... Dealing with fears: A good prevention measure is  never to use a new hire  and prohibit small-operation VAs from subcontracting work to untested freelancers without your written permission. Choose more established higher-end firms and set additional rules: 1. Never use debit cards  for online transactions or with remote assistants. Reversing unauthorized credit card charges or recovering funds withdrawn can be a pain in the ass. 2.If your VA will be accessing websites on your behalf, create a new,  unique login and password  for each site. -> Don't let fear be an excuse not to do this!   Fear can make you exist instead of truly living... Avoid stupid mistakes: How to avoid the “my assistant is an idiot!” sentence – because honestly, it can mostly be your fault… 1.Request someone with  "excellent" English , indicate that phone calls will be required, and be quick to request a  replacement  if there are repeated communication issues. 2.Give  precise directions  and  complete information . Sentences should have one possible interpretation and be suitable for a 10-year-old to understand. 3.Request a  status update  after a few hours of work on a task to ensure that it is understood and achievable. 4.Use  Parkinson's Law  and assign tasks that must be completed within 72 hours (24-48 hours ideally). 5.If possible, send  one task at a time , no more than two, and always set the order of importance. -> This exercise will teach you how you are as a boss.  This is an experiment more than anything else and it’s for you! Last thoughts: This exercise will show you how well you manage others and give proper instructions, how well you are as an entrepreneur, and, more importantly, where you need to improve. Also, remember, practice makes perfect. Practice for you and your VA will make the perfect team. -> If you don’t have a budget for this now, you can do it with a friend for testing your communication skills.  Just don’t forget to ask for feedback! See you in a week. Your Zine.

Today’s email presents the last business key terms for a while. We could do this all year, but there’s more to explore! Business Key Terms, Part 3, let’s go! “If you can’t understand it, you can’t change it.”  – Eric Evans. Allowable Acquisition Cost: Allowable Acquisition Cost  (AAC) is tied to  Lifetime Value  in marketing. The greater the average customer's  Lifetime Value , the more you can invest in gaining a new customer, allowing broader promotion strategies. A high  Lifetime Value  customer can justify losing money on the first sale, often called a “loss leader” – an attractive offer designed to start a relationship with a new customer. When each client is worth significant future revenue, spending a few hundred dollars to gain a new customer is logical. First, identify your desired  Profit Margin  to determine your market's  AAC . Start with the average customer's  Lifetime Value  and subtract your  Value Stream  costs ( Variable Costs for creating and delivering promised value throughout the customer relationship). Next, subtract your  Overhead  divided by your total customer base, representing the  Fixed Costs  necessary to stay operational over that time (this gives your net income before marketing expenses). Multiply the  Lifetime Value  by your desired  Profit Margin , then subtract that amount from your net income before marketing expenses. The result is your maximum  AAC . “Any business can buy incremental unit sales at a negative profit margin, but it’s simpler to stand on the corner handing out $20 bills until you go broke.”  –Morris Rosenthal. Lifetime Value: Lifetime Value  (LTV) represents the total worth of a customer throughout their relationship with your company. The more frequently a customer buys from you and the longer they stay, the more valuable they are to your business. Subscriptions  are highly profitable because they improve  LTV . Rather than relying on one-time sales, subscription models aim to deliver ongoing value and collect revenue for as long as possible. The longer a customer subscribes and the higher the subscription fee, the greater their  LTV . “The purpose of a customer isn’t to get a sale. The purpose of a sale is to get a customer.”  –Bill Glazer. Value Stream: A  Value Stream  includes all steps and processes from initiating value creation to the final delivery to the customer. ​​Think of the  Value Stream  as a blend of your value-creation and value-delivery activities. Diagramming your  Value Stream  is the best way to comprehend it. Mapping out the steps or transformations your offer undergoes from start to finish is illuminating. Although creating a detailed diagram of your entire  Value Stream  requires effort, it can help you optimize your process, improving overall performance. The simpler your  Value Stream , the easier it is to manage and the more value you can deliver. “Great design is eliminating all unnecessary details.” –Minh D. Tran. Costs: Fixed and Variable: Fixed Costs  remain constant regardless of the value you generate.  Overhead  is a  Fixed Cost : irrespective of your monthly activities, you still need to pay your salaried staff and office rent. Variable Costs  are related to how much value you create.  If you bake cakes, the more you make, the more flour, sugar, and eggs you need. Raw materials, usage-based utilities, and hourly wages are all  Variable Costs . Reductions in  Fixed Costs   accumulate  over time. Reductions in  Variable Costs  are  amplified  by production volume. Understanding your costs thoroughly increases your chances of maximizing value creation without depleting your revenue. “Watch the costs and the profits will take care of themselves.”  –Andrew Carnegie. Overhead: Overhead  refers to the essential continuous expenses necessary for a business to function. This includes everything needed to operate your business monthly, regardless of sales (salaries, rent, utilities, etc.). Lowering your  Overhead  reduces the revenue required to keep your business running and helps you achieve financial stability faster. Overhead  is crucial to monitor if you are starting your business with a limited budget. The lower your  Overhead , the more flexibility you’ll have and the easier it will be to maintain your business operations. “Beware of little expenses; a small leak will sink a great ship.”  –Benjamin Franklin. Last thoughts: We hope that all these business key terms, concepts, and example situations we explored over the last three weeks have been helpful to you in whatever stage of business you are in and as an entrepreneur. Next time, we will go with the third more voted topic. Can you guess what it is? -> Still, if you want any key terms explained, please reply to this email.   The ProfitZine is here to help! See you in a week. Your Zine.

It’s getting hard to choose the next business key terms. That said, we focused on general ones for business owners. Business Key Terms, Part 2, let’s go! “I don’t know the word ‘quit.’ Either I never did, or I have abolished it.”  – Susan Butcher. Key Performance Indicators: Some metrics matter more than others:  Key Performance Indicators  (KPIs) measure crucial aspects of a system. It's easy to focus on easy-to-measure metrics rather than essential ones.  Business  KPIs  often relate to the  Five Parts of Every Business  or Throughput. Here are some questions to identify  KPIs : Value Creation : How quickly is the system generating value? What are the current inflows? Marketing:  How many people are noticing your offer? How many prospects allow you to provide more information? Sales:  How many prospects turn into paying customers? What is the average customer lifetime value? Value Delivery:  How fast can you serve each customer? What is your current return or complaint rate? Finance:  What is your profit margin? How much buying power do you have? Are you financially stable? Metrics related to these questions are likely  KPIs . Limit yourself to 3-5  KPIs  per system; more than this, you risk drowning in data. P.S. - These questions represent the  Five Parts of Every Business. “It is better to have an approximate answer to the right question than an exact answer to the wrong question.”  –John Tukey. Throughput: Throughput  is the rate at which a system reaches its desired goal, measuring the efficiency of your value stream.  Throughput  is calculated as (units/time). More units produced per time increment mean higher Throughput. To gauge  Throughput , you need a clear objective: Dollar throughput  tracks how quickly your overall business generates a dollar of profit. Using a standard time unit like an hour, day, week, or month, determine how many dollars your business produces on average in that time. Production throughput  measures the time needed to create an additional unit for sale, from raw materials to a finished product. If you don’t know your  throughput , make it a priority to determine —measuring it is the first step to improvement. “However beautiful the strategy, you should occasionally look at the results.”  –Winston Churchill. Return on Investment: Return on Investment  (ROI) measures the value gained from an investment of time or resources. Typically, people consider  ROI  in monetary terms: if you invest $1,000 and earn $100 in profit, that’s a 10%  ROI : ($1,000 + $100) / $1,000 = 1.10 = 10%. A 100%  ROI  means doubling your initial investment. ROI’s  relevance extends beyond money. You can apply it to other Universal Currencies as well. Evaluating the return on invested time is a useful way to assess the benefits of your effort. Every  ROI  estimate is speculative —you can’t predict the outcome precisely. Future  ROI  estimates are educated guesses. You can only know your  ROI  after the investment and returns are realized. “Wise are those who learn that the bottom line doesn’t always have to be the top priority” –William A. Ward. 3 Universal Currencies: Every negotiation involves  3 Universal Currencies : resources, time, and flexibility. Resources  are tangible assets like money, gold, etc. These are physical items you can hold. Time  is the second universal currency. When you work as an hourly employee, you trade a certain amount of time and effort for a certain amount of resources. You can also exchange resources for time, paying others to work on your behalf. Flexibility  is the third universal currency and is often underrated. Being a salaried employee is a complex trade of resources that takes time and effort. While working, you sacrifice the flexibility to do other things. You can acquire more of these desired currencies by making trade-offs between one or more of the others. For example, if you want additional compensation, you might trade time or flexibility. Remember the 3 Universal Currencies when negotiating. You'll discover a wide range of potential options to present to the other party, making it easier to find a solution that works for everyone. “Time will take your money, but money won’t buy time.”  –James Taylor. Gall’s Law: To grasp systems, remember  Gall’s Law : all functioning complex systems evolved from simpler, effective ones. Complex systems contain numerous variables and dependencies that must align to operate. Designing intricate systems from the ground up will not work in reality because they have not undergone environmental selection pressures during creation. Uncertainty means you can’t foresee all dependencies and variables in advance, causing a newly built complex system to fail unpredictably. Gall’s Law  connects environmental selection tests with system design. To create a functional system, start with a simple one that meets current environmental criteria and enhance it gradually over time. “You do ill if you praise, but worse if you censure, what you do not understand.”  –Leonardo Da Vinci. Last thoughts: I hope these business key terms, concepts, and example situations are helpful to you in whatever stage of business and as an entrepreneur. -> Open your eyes and ears to spot situations where you can interact with others.  And practice, practice, practice. See you in a week. Your Zine.

The second most voted topic was business key terms. Let's see what you know and what surprises you today. Business Key Terms, Part 1, let’s go! “All truth is found in the cash account.”  – Charlie Bahr. Cash Flow Cycle: The  Cash Flow Cycle  outlines how cash circulates in a business. Picture your business’s bank account as a balloon. To make it expand, keep adding air and ensure no holes. More inflow and less outflow mean a larger balloon. Boost revenue and cut expenses. To boost cash flow, speed up client payments, and limit credit. Getting paid quickly improves  cash flow cycles . Ideally, get paid before buying materials or delivering services.  Extending credit is common, but remember, you’re a business, not a bank  – collect payments promptly. “If something cannot go on forever, it will stop.”  –Herbert Stein. Cash Flow Statement: You have to review financial reports to understand a company's performance. But where to start? Josh Kaufman, author of “The Personal MBA,” suggests the  Cash Flow Statement because it is simple. It reviews a company’s bank account over a period, like a checkbook ledger: deposits and withdrawals. Each Cash Flow Statement covers a specific time: a day, week, month, or year, depending on its purpose. Shorter periods help ensure the company doesn’t run out of cash, while longer periods track performance over time. Cash moves in three main areas:  operations  (selling and buying inputs),  investing (collecting dividends and paying for capital expenses), and  financing  (borrowing and repaying money). Cash Flow Statements  track these sources separately, clarifying cash flow origins. Investors often use “free cash flow” to evaluate companies: This metric comes from the  Cash Flow Statement,  the amount of cash from operations minus capital expenses. “Lack of money is the root of all evil.”  –Mark Twain. Profit: Business is about what you keep, not just what you make. Profit  is a straightforward concept: earning more than you spend. For a business to survive, revenue must exceed expenses. Otherwise, it won’t last. Profit  also provides a buffer against unexpected events. More profit means better handling of uncertainty and more options to adapt. “Remind people that profit is the difference between revenue and expense. This makes you look smart.”  –Scott Adams. Profit Margin: Profit Margin  (often “margin”) is the difference between revenue and spending, expressed as a percentage. Formula: ((Revenue - Cost) / Revenue) x 100 = % Profit margin If you spend 1$ to get 2$, that’s a 50%  Profit margin . If you can create a product for 100$ and sell it for 150$, that’s a profit of 50% and a  Profit margin  of 33%.  Your  Profit Margin  can’t exceed 100%, which only happens if you sell something at no cost. Profit Margin  differs from “markup,” which compares price to total cost. Formula: ((Price - Cost) / Cost) x 100 = % Markup If something costs $1 and you sell it for $2, your markup is 100%, but your  Profit Margin is 50%. Markups can exceed 100%, depending on the price and the total cost of the offer. Businesses use  Profit Margins  to compare offers. They favor high-margin offers and eliminate low-margin offers to cut costs. “I never lost money by turning a profit.”  –Bernard Baruch. Standard Operation Procedure: A  Standard Operation Procedure  (SOP) is used for repetitive tasks or common issues. Well-defined  SOPs  reduce friction and save time solving already-solved problems. Avoid bureaucracy in  SOPs ! They should streamline tasks. If  SOPs  require effort without value, it’s friction. Review  SOPs  periodically—every 2 weeks to 3 months. Update outdated, wasteful, or unnecessary steps. “The measure of success is not whether you have a tough problem to deal with, but whether it’s the same problem you had last year.”  –John Foster Dulles. Last thoughts: “The Personal MBA” by Josh Kaufman is the best book I have ever read on key business terms. I can’t recommend it enough! The ProfitZine will cover many of them, mainly the ones that can be useful for the majority of businesspeople, but we will be here all year for all. “Little by little, one travels far”  – Spanish Proverb. -> If there’s any key term you would like explained, feel free to reply to this email.  The ProfitZine is here to help! See you in a week. Your Zine.

Influence is easier than you think. There's no need to convince others to believe what we say. You just have to stop them unbelieving… Negotiating, Part 3, crush it! "During a negotiation, it would be wise not to take anything personally. If you leave personalities out of it, you will be able to see opportunities more objectively."  – Brian Koslow. Control and Illusion: One of the most effective ways to dispel disbelief is to give the other person the illusion of control through calibrated and open-ended questions—AKA asking for help. When you ask close-ended questions, you push a single correct answer, and the other person feels no control. When you ask open-ended questions, you initiate a break and a thinking process,  encouraging the other person to engage in problem-solving actively , and the other guy feels in control. Open-ended questions are not requests but curious questions that involve a "How" and "How" ask for help, which commits both parties. Example:  "How am I supposed to do that?" -> Reflect on your habits about negotiation.  Don't fight for control. Borrow it strategically. Calibrated questions: Declarations offer a target for attack. Calibrated questions don't. These questions are subject to interpretation rather than being strictly determined. They let you present ideas and proposals without sounding pushy. Calibrated questions can educate the other party about the issue instead of causing a battle by telling them what the problem is. Always keep the path you want the negotiation to go in mind. Use and abuse the words  "what" and "how."  Avoid the words "why," "who," "when," and "where." Examples:  "What about this is important to you?"; "What's the objective?"; "How can I help to make this better for us?". -> Do you tend to force 1 specific answer? Your answer...  You can't force it. Just illuminate a path for the other part to reach it. Some rules: Albert Mehrabian's  7-38-55 percent rule  states that only 7% of a message is based on words, 38% on tone of voice, and 55% on body language. Don't just focus on the words. Read the room and meet people face to face if you can. We all can identify a reluctant "Yes." Address it on the spot. The rule of 3:  Get the other person to agree to the exact thing 3 times in the same conversation. This is crucial to spotting liars. It's tough to lie or fake conviction constantly. And it's not literal. You can ask something 3 times in 3 different ways. Btw, this is one way to test the 3 types of "Yes" we discussed last time. Examples:  "What's the biggest challenge you faced?"; "What are we up against here?"; "What do you see as the most difficult thing to get around?" -> Your intuition always notices when the speech and the body say different things.  Practice reading other people's body language consciously. Negotiator types: What's your negotiation style? There are 3: Accommodator, Assertive, or Analyst. The Accommodator:  Very friendly and pleasant, quickly makes the first concession, peace-seeking even when there's no deal.  – Nothing wrong with it just make sure you don't sacrifice your objections! The Assertive:  Very fiery, loves winning, direct and candid, hardly will make the first concession, and time is money.  – Great for any negotiation, but always be aware of your tone! The Analyst:  Methodical and diligent, never in a rush but always doing it right, and hates surprises.  – You will be the most well-prepared, but don't forget to smile! -> Can you identify which one you are?  When you know both parties’ negotiation styles, you can adjust and optimize results. What else? The  Ackerman Bargain model  uses the offer-counteroffer method. Plan the negotiation and use the summary below to achieve your goal. 1. Set your target price (your goal); 2. Set your first offer at 65% of your target price; 3. Calculate 3 raises of decreasing increments (85, 95, and 100%); 4. Use lots of empathy and different ways of saying "No" to get the other side to counter before you increase your offer. 5. When calculating the final amount, use precise, nonround numbers. 6. On your final number, include a nonmonetary item they probably don't want to show you're at your limit. -> This is what preparation for bargaining price looks like.  You can use it to buy products, negotiate rent, and in any other situation where you need to lower a price. Last thoughts: Your job in a negotiation is more than just reaching an agreement. It's reaching one that can be implemented and making sure that happens. In Chris Voss's words,  "While an agreement is nice, a contract is better, and a signed check is best." "He who has learned to disagree without being disagreeable has discovered the most valuable secret of negotiation."  – Robert Estabrook. -> Implement slowly. There was a lot of information, and it will take a lot of practice . But these will come naturally, like playing a game. See you in a week. Your Zine.

Are you afraid of the word no? "No" is never the answer you desire. But "Yes" does not cut it either. Negotiating, Part 2, let’s go! "One of the best ways to persuade others is by listening to them."  – Dean Rusk. Yes? Be careful. "No"  is always a negative word for sure, but never  worthless .   It means rejection, and naturally, all humans fear rejection because it does not feel good or positive. But if you phrase something so that the only possible answer is  "Yes,"  that positive reply becomes  meaningless . How often have you said "Yes" just to shut someone up or rush a conversation you are not interested in?  Examples: "Do you eat? Well, yes…"; "Do you sleep? Yes, of course…"; "Do you drink water? Lol, yes…". As you can see, "Yes" is not what you want, and there are 3 types of "Yes": counterfeit, confirmation, and commitment. Counterfeit "Yes":  Use to rush a conversation about something that you will say no to later. Confirmation "Yes":  Use generally to reply or agree innocently. Commitment "Yes":  Use to take action. When emotion and logic give you the green light to move forward –  This is the one you want. So,  don't fear the word "No."  Practice hearing it without an emotional response. In most cases, it is not even personal and has nothing to do with you. You are just a messenger, and the word "No" gives you an intersection where you can choose the next turn. -> Do you realize how much you have heard the word "No" in your life? You are not dead, correct? Don't sweat it. Use it. No? That's a start. "No" always feels like rejection, but often, that is not the case. It can mean many things, such as not being ready to say yes, not understanding, or needing more information. You just have to find out the true meaning of the "No" to keep the negotiation going. And that's why  you want to get a "No" as soon as possible.  Chris Voss's advice to get the true meaning of the no's is solution-based questions. Examples: "What about this not working for you?" "What do you need to make it work?" "It seems like there's something here that bothers you." Also, when you give the person a chance to say "No," you give them a sense of control over the conversation. They feel protected and become active listeners. Here is a great tip for my fellow copywriters: When your emails are ignored, provoke a "No." Example: "Have you given up on…" -> "No," it is not a failure. It's a process!  Just think as a detective: Why this "No"? That's Right = Gold "That's right" is the "Yes "you want. It's like an  epiphany that starts behavioral changes , not just that "Yes, doctor, I will right from now on," but you don't. Remember what we've discussed so far about silence, imitation, and labeling. These are always part of the negotiation process. To get the "That's right," you add  paraphrasing , which means repeating what they say but in your own words. This shows you do care and are at least trying to understand them. Using paraphrasing and labeling, you create a good  conversation summary , which gives you the  "That's right." An important distinction: "You're right" is not a "that's right." "You're right" does not create the epiphany needed for change. It is just another counterfeit yes. -> The summary is the action that emphasizes the how, so practice it. "Yes" without "How" means nothing. Never split the difference! Creative solutions generally involve danger, frustration, chaos, and irritation. Therefore, don't settle!  Compromising isn't the right choice! It's just the easier and safer one. Concession and settlement rarely lead to great solutions. The best example: your partner wants you to wear black socks but you prefer the brown ones. Do you compromise in the middle and wear both black and brown socks? NO! Don't strive for a middle-way solution. Strive for your goals! Also, fairness is just a perspective, but it has much power. When you say that "you just want what's fair," you are implying that the other person is not being fair, which triggers them. It's the same but worse when you say, "This is a fair offer." To use fairness positively, you must address it. Example: "Please let me know if you feel something is unfair at any point." -> Embrace the hard stuff. That is where the great deals are. Last thoughts: Clearly, yes and no don't mean just yes and no. You need to be able to identify when a "Yes" means don't bother me, and when a "No" means I need to know more. And there's no way around it: practice. With all the people and conversations present, you will start to notice these differences more and more. We didn't say everything we meant to, but we definitely hinted at it. You need to be able to spot it and address it. "Information is a negotiator's greatest weapon."  – Victor Kiam. -> I'm repeating myself, I know, but practice as much as you can. A good negotiator needs confidence to explore solutions. See you in a week. Your Zine.

Thank you so much for all the feedback. This Zine will always keep improving. You spoke, and The ProfitZine heard. Negotiating, Part 1, let’s go! "Anger can be an effective negotiating tool, but only as a calculated act, never as a reaction.”  – Mark McCormack. Life is a negotiation: Even in our interactions with colleagues at work or family at home, we usually try to make deals or negotiate something, and all negotiations come from our primal, natural urge:  "I want." Examples:  “I want you to accept that…”; “I want to pay this for…”; “I want you to give me…”; “I want you to go…” Negotiation helps us do 2 essential things:  get information and influence others . From work to love life and everything in between, a lot can depend on your negotiating capacity. And let’s stay away from the word manipulation. This word comes from  harmful influence , which is not what we discuss here. As Chris Voss, author of “Never Split the Difference,” explains in detail:  Negotiation is nothing more than communication with results.   So, getting what you want, yes, as a bonus, but without harming others. -> Even if you don’t think of yourself as a negotiator, you can be.   Practice makes perfect! Posture and Mindset: First, no matter how smart, well-informed, or prepared you are for a situation,  always be ready for a surprise . Second, humans constantly show others if we're ready to have fun, argue, laugh, or yell. We don't even realize we're doing it, so tonality means a lot! Usually, you should talk happily and playfully, like a friendly and positive person. Having a  cheerful and optimistic attitude opens doors. And even if you are on the phone, smiling has a very positive impact, and the other person will catch on. The 3 Voices: 1.Calm and Trustworthy:  To highlight something with power and reliability without triggering  – deep, calm, and slow voice. 2.Friendly and Playful:  Default voice  – Speak nicely and with a smile to create a friendly atmosphere. 3.Militant and Aggressive:  To avoid!  – This will lead to issues and resistance. No matter which tone you're using, always  slow your speech . If you appear rushed, the other person won't feel heard, which takes trust away. Saving the best for last:  Mirroring or replication . It's another thing we do without even realizing it when we connect with others. Use it purposefully, the FBI does... Sometimes, simply repeating the last 3 words you heard is enough. You do this when you want the other person to explain more about what they just said and to strengthen your connection. You can repeat this until you achieve your goal, but remember to use silence between questions. -> If you feel that these postures are fabricated, you are right.  But negotiation is a game we all play. Are you okay with losing? The Role of Emotions: Healthy human connections need empathy. When you identify emotion in a negotiation, don’t ignore it, address it. You have an opportunity to sway them in your favor. And for this, you’ll need to  talk less and listen more . If you can sympathize with the other person and  understand their pains, label them and speak them out loud as a friendly question. Examples:  “It seems like…?”; “It sounds like…?”; “It looks like…?”;  This is an effective way to remove obstacles in negotiations. After this, can you guess?  Silence  until you get a reply. And “I” sentences are forbidden! It will end badly for you. Example:  “I feel like…”. “Emotions aren’t the obstacle, they are the means.”  – Chris Voss. -> Don’t be afraid to voice potential problems.  It can feel uncomfortable at the beginning, but you will get there. Last thoughts: “Never Split the Difference” by Chris Voss is, personally, the best book on negotiations, especially tough ones. It is a short and fun read—yes, fun! Highly recommend it, you will not regret it!   It includes a lot of techniques for conflict avoidance and conflict resolution.   – Plus, the book is small. Next time, will master the “no” to avoid all of the “yes, but…”. “Practice isn’t the thing you do once you’re good. It’s the thing you do that makes you good.”  – Malcolm Gladwell. -> Open your eyes and ears to spot situations where you can interact with others.   And practice, practice, practice. See you in a week. Your Zine.

Profit, the basics, round 3: Yesterday was the 25 of April in Portugal. We celebrated 50 years of freedom from fascism and dictatorship. It took a little while to end communism after that, but people were on their way to the maximum level of freedom possible to attain at that time. Freedom is why we fight. Freedom is why we profit. Profit is how we fight for freedom these days… Swimming in money is not the goal. Having money to go swimming across the world if you want is! Modern Freedom: We currently live in a free world , not totally, but generally. This international gain brought us a lot of win-win opportunities and, of course, a better life and future. But despite the freedom to be independent and make your own choices, to think and express yourself, and to travel the world, the majority are still enslaved. It’s just not slavery as we know it, so some do not even notice how we are still ruled over against our will  and forced to do certain things because it used to be much, much worse. We have gained general freedom for the masses and, with that, opportunities to generate money independently, which allows you to achieve the personal freedom you desire. Because you and I want different things, at least after the basic needs,  true freedom is to be able to go and get what you desire. Like in the Portuguese Red Carnation Revolution, no wars are needed. But this time, more freedom is not in the hands of the military —it’s in ours!  Only you know what you want and can go get it. No matter what, you will need money, and for that, you need to profit. How much do we need to profit to be free? Well, it depends on your definition of freedom and your goals, but the ProfitZine advises you to build generation. -> How can you build wealth? Keep reading… ...as long as there’s money and property in this world, you can win. Ownership and Contracts Build Wealth Consider this wealthy idea:  Money is good for building your business, but it is even better for buying a small, thriving business, especially now. Codie Sanchez, the queen of small businesses, explains why there are so many opportunities now and how to buy a business even if you don't have money. To sum it up: The Why?   Not even counting the people who need to sell their businesses because they failed to grow them to be sustainable and successful. Many boomers are retiring, and not all of them have family to take on with the business. So they will be looking to sell. And not all of these boomers want to retire. But they don’t want to close their businesses to be able to retire… But I have no money! Creative financing to the rescue.   Have you heard of seller financing?  The owner pays you a % of the future profits of the existing business, and you use that money to buy the business over multiple years! Finding these win-win business opportunities and negotiating with the owners can take time, but it does not require money… … and it will make you money along the way! -> Do you see yourself as an owner? I hope so.   Millionaires know it’s easier to buy businesses rather than create them… Last thoughts: Creative financing is real, legal, and simple. But most people don't even know a solution like this exists! So, get creative! Leave all limited beliefs behind, bring back your creative child, and do right for you and the people around you. Win-win situations are everywhere you look. You just have to be on the right perspective to be able to see them. And when you improve yourself, you improve others and the world by consequence! This is the most vital quote from the Portuguese Revolution: The united people will never be defeated! (O povo unido jamais será vencido!) -> Stop paying attention to our differences!   It is the common ground that unites and empowers us. See you in a week. Your Zine.