We’re About To Destroy Your Dreams (to Help You Build a Better Business)

Shane Melaugh: Hello, and welcome to Episode 29 of the ActiveGrowth Podcast. Today, we're talking about something I call Colliding Ideas with Reality. This is a strategy for planning a business or planning a project that I have found naturally emerge out of much of the work I have done with entrepreneurs, and many discussions I've had with people who are starting businesses. See, it's a real shame if you have an idea for what could be a great business, but you stay in that high in the sky theoretical mode, right? We can dream about how great this will be once it's done, but you don't manage to actually bring this into reality.

Shane Melaugh: To be honest, this is quite difficult to do. That is where a lot of businesses fail. This strategy of colliding your ideas with reality is one way to solve that problem. Now, this applies, like I said, to starting a new business. I also use this very same method for, basically, all projects I planned, so anything from as large as maybe planning a new product for Thrive Themes, a new product release or something like that, but down to really small things like, "Okay, what kind of blog post am I going to write next?" I have ideas for stuff I want to do. I have ideas for what kind of content I want to create, but the first thing I do to start taking action on one of these ideas is to follow this exact strategy of colliding it with reality.

Shane Melaugh: As you'll see, there are various ways in which you can break this down. We will talk through the example of starting a business, and the smaller the project is you want to apply this to, the easier it is to do. If you can apply this strategy to starting a business, you'll find it much, much easier to apply to smaller projects as well. As always, you can find show notes that include links to all of the stuff we mentioned this episode, and you can find the show notes for this episode by going to activegrowth.com/29. You can also find the link in the description of this episode. Whatever podcast player app you have, you can check the description and find the link there. That is activegrowth.com/29, where you can also leave a comment or leave a voice message to start a discussion with us. With that said, let's get into today's episode. 

Shane Melaugh: I'm Shane Melaugh.

Hanne Vervaeck: I'm Hanne Vervaeck.

Shane Melaugh: Something that I've experienced that I'm sure you're familiar with is that among my friends and acquaintances and so on, I've basically become the person to talk to whenever someone is thinking of starting a business. I can imagine it's the same for you, right?

Hanne Vervaeck: I was just going to say, I wonder why that happened.

Shane Melaugh: Yeah, I wonder why.

Hanne Vervaeck: It's not as if we have a podcast about creating a business and stuff.

Shane Melaugh: Yeah, when this happens ... Because of this, I have conversations with people, obviously, about their business ideas. Basically, people come to me for advice and things quite often. One thing I've noticed is that there are certain patterns, in some ways, all of these conversations about these businesses, from totally different people in totally different areas with totally different business ideas, but somehow, in some ways, the conversations are always the same.

Shane Melaugh: These patterns that we always end up talking about the same things, I always end up asking the same kinds of questions, and overall, the arc of the conversation is very similar between different people. That's one of the things that leads to podcast content. When I have three different conversations about starting a business with three different people and they all end up being the same, I'm like, "Oh, we should talk about this in the podcast. Apparently, there's some universal ... The truth in here, right?"

Hanne Vervaeck: I was just going to say, that's usually what happens. Then you're like, "Hey, I've had this conversation multiple times, and it seems that people don't really know this."

Shane Melaugh: Exactly. Exactly. Today's topic comes exactly from this, one of those things that I just saw is kind of something that I introduce people to again and again. People who have a business idea, something, to me, I don't really think about anymore, it seems obvious to me, but when I have these conversations, I realize, "Oh, this is one of the things that's probably the result of me having been doing this for years and years." I've changed my outlook, and this is one of the useful pieces of advice that I can give people. That's what happening today.

Shane Melaugh: To introduce this first, I want to give an example or tell a little story to explain what the point of this is or how I think about this. Imagine that you're planning a hike, and you've never done this before. You have no experience with this. You just have this idea of wouldn't it be nice to spend the weekend out in nature, hiking, seeing nice places and so on, right? You get out a map. You get out a paper map.

Hanne Vervaeck: A what?

Shane Melaugh: You look at a route. It has to be a paper map because, these days, Google Maps will do all of this for you, so bear with me. Imagine that it's the '80s or whatever. You get out a paper map, and you look at a stretch of countryside that looks really nice. You can imagine the broad strokes of this journey. Here, we're going to be walking past the coastline. It's going to be beautiful. Then here, this is going to be this beautiful hilltop scenery. It'll be so nice from here. The view will be great. You can look at the map and easily say, "Okay, people walk at what? Five kilometers an hour, or three miles an hour, something like that on average. Estimate the distance on the map. Okay, that's about two days, right? We'll do the half the first day, the second half, the second day. No problem."

Shane Melaugh: This is kind of the idea phase and the dreaming phase, right? You think of all the nice things that will happen. You make a vague plan on how it's going to happen. This is important, but, of course, once you're actually starting this hike, the reality you encounter on the ground is very different from this bird's-eye view. What you don't see in this daydreaming phase is that, first of all, you can't go from A to B in a straight line, right? It's not a straight road. In fact, none of the paths are straight at all.

Shane Melaugh: The total distance that you have to cover is actually way longer than what it look like on the map. You also don't see things like how exhausted you'd be after climbing up a steep hill in the midday sun. You don't see the parts of the coastline are totally close off. You just can't go through there because it's private property, or it's a farm or something, and you have to take a huge detour maybe countryside, it's a lot less nice to walk through, a lot less interesting. Again, it ends up, basically ... It turns out that the reality of walking from point A to point B is very different from what it seemed like when you briefly thought about it. It's much longer. It's much harder, and there's lots of obstacles and unexpected problems that come up, right? In the end, it ends up being a four-day journey instead of a two days ride, and nobody enjoys it, right?

Shane Melaugh: The reason I gave this example is, of course, if you plan a hike with someone who is good at this, who's got a lot of experience, you go with a good tour guide, they will consider all these things in their plan to begin with, right? They will have the experience that they can look at the map and they can already imagine all of the things that are going to go wrong. They can already imagine all these factors that aren't immediately obvious from the map. This is exactly what I see happening when people think about starting a business. Everybody has this ... The focus is kind of on the big, vague, long-term goals, right, the view from the hilltop. It's kind of once I get there, this is how great it will be, right? This is what my business will do. This is how my business will change the world. This is how my product or my service will be different and better from everyone else's. You can imagine that, but the mistake is then to think that you can essentially get there in a straight line.

Shane Melaugh: Just like with a hike, it's important to have that outlook, it's important to have that goal, right, that vision, but it's also important to know, okay, actually getting there, actually getting the steps to getting there, it's not going to be smooth sailing. The way I think about this is that one of the purposes I have when I talk about someone's business idea is I want to take their ideas, and I want to collide those ideas with reality, right? It's this collision with reality, that's what happens, and it can be shocking and jarring, where you had this lofty idea, but then the reality of the things you have to grind through to get there, that's where all these details start emerging, all these problems start emerging. This collision of idea and reality, I want to facilitate that. That is---

Hanne Vervaeck: I can imagine your friends coming over for coffee, starting this conversations, super pumped up, like, "Hey, Shane, I got this amazing idea," and about one hour later, they're like, go down, shoulders down, shrugging, walking out being like, "Holy, this is going to be so much work."

 Shane Melaugh: Yeah. It should. I tend to be a bit pessimistic, but I do feel like it has to withstand this pessimism, basically. Your business idea has to withstand someone saying, "Okay, but what about this? What about that? What if this goes wrong? What if that goes wrong?" If you can't even stand thinking about those problems, then good luck. Good luck with your actual business, right? Yeah, this is what we're going to talk about. How do you do that, right? Making this collision between your ideas and reality happen is a hugely important step to increase your chances of success, so how do we do that? 

Shane Melaugh: I found that there are two main components to this, and we'll talk about those right now. Component number one is to create estimates, numbers, and projections, to try and put a more concrete frame around what you're going for. Let's take a very simple example. Let's say you want to rent a physical space and put a shop there. The big picture stuff that we talked about before will be, you can easily imagine how nice your store would be, how great the atmosphere will be, and how the vibe of this shop will be, and everybody will be friendly with each other and so on. You have this vision of how this store will be different from other stores. Right? 

Shane Melaugh: What do we do to use estimates, numbers, and projections to make this collision with reality happen? Well, there are some numbers that we can actually get. First of all, how much will rent cost? We can know that for sure. We can find out how much does rent cost here, and we can also then estimate how much does it cost in utilities, how much will I have to spend in initial capital for furnishing an inventory and so on. Then we have an estimate of costs on the one side. Then on the other side, we can look at, well, what's the profit margin on an average sale? Whatever the thing is I'm selling, how much profit do I take away from this? Based on that, we can then ask ourselves, well how many customers do I need to get every day to break even? 

Shane Melaugh: We don't actually need exact numbers for this, right? Estimates are good enough because what's important, the first thing we want to arrive at is to see ... What are we talking about here? If I get a dozen customers a day, does that help me break even? Then, estimates, whether it's one dozen or two dozen, it's still the same ballpark, right? Do I need to have hundreds of customers a day to break even, or do I need thousands of customers a day to break even? This is very important to know because if you look at this ballpark, and you're like, "Okay, I need 5,000 customers a day to break even," and then you look at other shops in the area, and be like, "Well, none of them get 1,000 customers a day. This is not going to work," right? We have to change something about the plan. 

Hanne Vervaeck: Now, I have actually a very good example about this because my sister wanted to do exactly that. She decided that she wanted to do a fabrics store in Ghent, so in Belgium, and one of the things that she was dreaming about was having these workshops in the fabric stores. She would do sewing workshops and that kind of stuff, and it's exactly like you said, Shane. She already imagines how the furniture would look like, and how people would feel when they came in, and which type of workshops she would be giving. 

Hanne Vervaeck: She asked me, "Well, I thought about this." I asked her, "Okay, why not? It seems like a fun thing to do, but would this be viable?" The thing is her answer was, "I don't know. I've never made a business plan." I think that's one of those problems was when people think about numbers, they think about, "Oh, I have to write this complicated business plan." It doesn't have to be complicated at all. Exactly like you just showed, with a few numbers, we can quickly get to knowing whether or not this would actually be something that you can do. 

Hanne Vervaeck: In our case, it was like, "Okay, how many people would you be able to have in a workshop?" A group of eight people, let's say. Then how many workshops would you give a day? Well, probably two, no more than two. If you fill them up, that's 16 people, and then what would be a normal price for this type of workshop? Oh, so 20 bucks would be a normal price. At that point, you know exactly how much you could make that day. Then, like you said, you take the rent. You take your time investment. Are you okay with being there every day and giving workshop after workshop after workshop, or was this actually something that you wanted to do part-time and that type of stuff? 

Hanne Vervaeck: We came to the conclusion that this would not be viable. The good thing about this is we came to this conclusion before renting a shop, and before actually doing any investments simply by using this very easy calculation to see if the idea would actually work out. This doesn't mean that she completely give up on it, right? She's still dreaming about this, but at least, she now knows that she would have to change something in her business model in order to make this actually a viable business.

Shane Melaugh: An interesting point about this is what you mentioned, which is that this collision of your ideas with reality is going to happen anyway, right? If you just jump into it and you rent the store, and you start advertising your workshops, you're going to find out that your business idea wasn't viable. 

Hanne Vervaeck: Exactly. 

Shane Melaugh: That's just much more painful at that point, right? This is also why I emphasize this is such an important thing. It's like, "This is going to happen anyway," but it can be made a lot less painful and you can avoid making costly or learning costly lessons by just running through it in your head or on your paper in certain ways. 

Hanne Vervaeck: It's going to be painful financially. It's going to be painful also for your ego because you really believed in this idea, and then just noticing that it's not going to work and that you didn't think it through all the way. That's pretty, yeah, pretty daunting. 

Shane Melaugh: To think about being a pessimist here is that, yes, it can be disappointing to run through these numbers, to make these estimates and see like, "Oh, this doesn't work out." I would also urge you to see that as an opportunity. It reminds me of the challenges, the kind of challenges that someone like Peter Thiel, for example, one of the founders of PayPal, would issue this kind of challenge where, basically look at a business and say, "Not how do we increase profits this year by 10%, but how do we 10X this business. What do you need to do to 10X this business?" 

Shane Melaugh: Another one, I'm paraphrasing here. I don't know the exact numbers, but he had something where he said something like, "Well, what if you had to reach your 10-year goals in six months. How would you do that?" This kind of thing can be a catalyst for innovation and for bringing your business to a whole new level. If you run through these numbers and you see, "Oh, my God, I can't actually do this. This doesn't work." This doesn't have to be something that you didn't just feel terrible and you give up. It's this kind of situation where like, "Okay, I'm clearly not making enough money with what I've set out to do, so what could I do to double the amount of money I make here without spending any more time in this store," right? It's this kind of question that can actually lead to some of your best ideas. 

Hanne Vervaeck: It's actually why I like numbers so much because they really show you what's possible and what is not possible. At that point, you can, yeah, make that idea come to life, and see what this would look like in the day-to-day. To go back to my sister's idea, so for the moment, what she decided to do is, surprise, surprise, start a website rather than having a physical business and doing popup workshops rather than actually renting her own store 24 hours a day and needing to pay for that rent 24 hours a day. 

Shane Melaugh: Exactly. This is one of those things, right, where these questions can bring you to, "Hey, how can I actually do the thing I wanted to do without all of these expensive, complicated stuff?" That's great, right? That's actually a great outcome. Now, we used an example of a physical store because that was very easy to imagine. Okay, the space costs money, and there's a certain amount of foot traffic here and so on. The reason I used this example, even though this podcast is about online businesses, with online businesses, there's this huge fallacy that happens where people think that "Well, it costs nothing," right? Well, hosting costs whatever, $10 a month or something, and the domain costs $10 a year. It's basically nothing, and it's free, right? Everything is free. It's like, "Hold on." 

Hanne Vervaeck: You can get it set up in a weekend. Basically, yeah, the barrier of entry is really low, which makes people often not think it through as much as a local business, let's say, right, or a real business. 

Shane Melaugh: Exactly. A real business, yeah. That's exactly a problem. I think it's better to really think of it as what are my costs here, right? What are my costs to make this happen and to think ahead a little bit? We'll go through an example of how to apply this to an online business in just a bit, but that's just a reminder here, right, that even though we used an example of a local store, the truth is that even for an online business, you do have costs. 

Shane Melaugh: Even if it's just opportunity cost of the time you spent, and also just the cost of your time is worth something, right? You can actually end up, if you just assumed that everything is free and don't put that pressure of I have to make a return here on yourself, that's exactly how you end up tinkering away at your website for years and nothing happens, right, because you're not putting that pressure on yourself of I have to get a return on investment here. 

Shane Melaugh: We'll get back to that in a bit, but first, let's look at the second component of colliding ideas with reality. The second component is about knowing the first step. I want to reiterate. There's nothing wrong with having this vision and this long-term goal with thinking about, like you said before, what the vibe is in your store, or how your business is going to change the world and so on. I would even say that's vital. You have to have this kind of goal to reach for. 

Hanne Vervaeck: You will need that to get through the day-to-day anyways. 

Shane Melaugh: Exactly. Only having that is not enough. What you should do once you have this vision, you should write it down, and then you should try to start working backwards from that vision, to start breaking it down. Ideally, you want to break it down to the point where you know exactly what your next step to take is. That is what's often missing from this kind of business plan, is, "Okay, what are you going to do today to move towards this," right? All our goals are at the middle distance or further, so it's always like, "Well, I'm doing something." It's always like this, it's basically the later problem, right? It's like, "Oh, I'm going to quit smoking later. I'm going to get in shape later. I'm going to do the things that I ought to do later," which basically means never. We just place it at this middle distance where it can forever be, right? That's what we have to avoid doing with the plans for our business. 

Hanne Vervaeck: You know what the best day is to start your new diet, right? 

Shane Melaugh: Tomorrow. 

Hanne Vervaeck: Exactly. 

Shane Melaugh: I mean, that's when I always start my diet. I'm not giving any diet advice, so that's fine. What you can do is if you have this vision, right, you have this vision, and you've done the first set we talked about, which is you attach some numbers to it, then the next step is to put a deadline to that, right? When do you want to reach this, the grand vision? Is that maybe a one-year goal or a twoyear goal, right? I wouldn't put any further out than that. If you say, "Okay, one year from now, I have built this, or maybe two years from now." Then you start breaking it down. Well, if I have this website and employ three people, and I have all these products and all this stuff happening two years from now, where do I need to be one year from now, right? How much revenue do I have to be making? How many products do I have to be selling, and so on? 

Shane Melaugh: Then, okay, further back, if that's where I need to be one year from now, where do I need to be six months from now, three months from now, at the end of this month, at the end of this week? Now, when you do this, you will probably get some feelings of anxiety. That is a good thing because that is the feeling when you realize that you're actually in a hurry, right? It's when you realize that if you actually want to reach your two-year goal in two years, you have to get some stuff done today because otherwise, you fall behind on the whole chain of goals you have, all the way to your two-year goal. Hanne, you told me about this when you were working in shoe sales and shoe buying that you had this thing where if something is delayed early on, you basically learn the lesson that you can never make up for that, right? 

Hanne Vervaeck: Yeah. Exactly. It's one of those rules where it's just like, if you didn't make ... For us, it was very clear in sales and revenue. Basically, if that week, you didn't hit your revenue goals, well, you don't make up for it the next week. It's not all of a sudden, you will get the double of clients next week. It's just lost. This is something that I like to keep in mind because it's one of those things where you're like, "Oh, okay, I was supposed to launch my product in January, but I'm going to do it in February anyway." People, they don't adjust the rest of their goals, which is a huge mistake, because if you missed out on January sales, you're not going to make up for that in February. It's just lost. 

Shane Melaugh: This is basically scary to think about because we like to think that, "Oh, it's fine, a bit late on this, but I'll make up for it later." In fact, we think like that about many things, right? We think like that about sleep, for example. You're like, "Oh, I didn't get enough sleep today, but it's fine. I'll catch up later." We don't like to acknowledge that being sleep-deprived can affect us on days on end, right? 

Shane Melaugh: The same thing with the business, right? We like to think that, "Oh, yeah, I'm late now, but it's fine. My two-year goal is still intact. I'll make up for it later." No, and it's scary to think that. If I'm not on point now, if I'm not shipping what I need to ship now, I'm basically pushing back my entire ... All of my goals are being pushed back. Everything is being pushed back later. 

Shane Melaugh: It's like this weight of responsibility of, "Oh, my God, I have to actually do something today in order to stay on track." Like I said, this might feel unpleasant to do, but I think this is very important. You have to get to the point where, first of all, it's very clear to you what steps you need to take next. Secondly, where you really feel that pressure. You really feel like if I'm not doing this stuff today and this week, then I'm jeopardizing my entire plan. 

Hanne Vervaeck: By now, we hope that you who's listening to this podcast is feeling pretty uncomfortable about this. 

Shane Melaugh: Which is basically one of our main goals in this podcast. It's kind of true. We try to push you out of your comfort zone, and this is an example of that. 

Hanne Vervaeck: Exactly, but it will feel good once you get to that goal, right? Don't just stop listening and watch television. That would be a pity. 

Shane Melaugh: Exactly. That would be very counterproductive. Now, you know. Now, you know everything depends on what you do today. It's too late. You can't escape into TV or YouTube anymore. Having said that, those are the two components talked about. Creating estimates, putting numbers to things, and then breaking things down so that you get to the point where you know the next steps to take. Let's look at an example that is more in line with what we have talked about on this podcast, which is creating an online course. Think of the process we've laid out so far in this podcast, and if you haven't listened to the earlier episodes, go back and do that. We've laid out a process that helps you come up with the right idea, validate that idea, start making money, and all that stuff, and leads to creating an online course or an information product. 

Shane Melaugh: If we follow that path and applied today's lesson to it, then we start with the daydreaming about the grand vision part, where we think about, "Okay, what do we want this online course to look like?" The important thing to think about here is what kind of experience do I want to create for my customers. I think that's one of the most important questions, right? How is the experience that my customers will have? How is that a good experience, and how is it better than what they get in other similar courses? That's part of the grand vision. There should also be some financial goal. 

Hanne Vervaeck: Most people, when they think about creating an online course, part of it is to get that passive income, and to get out of the day-to-day, and to be financially free and all that type of stuff, which, okay, sounds cool. It might be a good goal, but you have to know what that actually means for you. Does that mean that your course have to make 1,000 a month, or does that mean that that course has to make 10,000 a month? It's good to have this clear financial goal also that you want your product to get for you. 

Shane Melaugh: Okay. Now, we have this vision. We know what it looks like, what experience it provides, and how much money we wanted to make. Now, we put a deadline on it. By when do you want to arrive at this grand vision. Now, here, as a quick aside, if this is hour first time creating a course, I would assume that my grand vision will be fulfilled by version two of the product, not version one. As you know, I'm a big believer of shipping and improving later. This is actually exactly what I did. My very first online course, I released that. I released the best version I could create at the time. Then about eight months later, I created a version two of it, where I redid the entire course based on everything I'd learned in the meantime. Version two was much better. Version two was kind of what I wanted to build all along. It's just that I didn't have the skills to do it yet in version one. 

Shane Melaugh: That's just a tip here, which I think can also take some of the pressure off, right? If you have a grand vision, if you're very ambitious, you might not have the skills to make that happen yet. Take into account that you can and you should very much launch something and start making money before you reach that goal of perfection, basically, right? You can put that into your planning where you say, "Okay, here, I'm going to start with, like we talked about in earlier episodes, with some coaching, and I'm already going to make some money, then I'm going to create the first version of my product and sell that. Then I'm going to create the second version and so on." That can be part of your plan and I encourage that. 

Shane Melaugh: That is how you can put a deadline or multiple deadlines on your goal, right? You say, "Okay, the version two is out here on my timeline. Version one is closer. The first coaching clients are closer, and so on and so forth." Then you want to keep breaking that down and ask yourself of what you have to get done, like we talked about, this week and this month in order to be in line and on track with these goals. That can include things like what kind of marketing things do you have to start doing right now? Can you start building relationships with people who you might want to work together with at a later point? Can you start doing that now? Can you start getting in touch with some people now? 

Shane Melaugh: What things do you still have to learn, maybe? Maybe there are some skills you have to build in this time in order to get to your grand vision and think about what are all the moving parts of making this happen that you can and need to take care off starting right now. Part of that, if you follow our method, is to start reaching out to people, start having conversations with people, start having coaching calls with people, and even start making money already as part of how you build your product. Again, this is something that happens right now, right? You can start reaching out to people and getting on calls with people starting today. 

Hanne Vervaeck: When you think about the moving parts, one of the problems is that you don't know what all the moving parts are when you just start planning this. That's okay. You can do this at the best of your ability with the information that you have, with the information, maybe, that we provide through the podcast, with information that you find online to piece that puzzle together, right? It will change. 

Hanne Vervaeck: Once you start doing things, you will notice that there were things that you forgot about, things that you didn't know that you didn't know, and so that you still have to learn, but that's just how it goes. That's basically, when you look at that map, and you're seeing that it will be kind of a straight line, and actually, it's not that straight at all. You have to take some detours. It's okay not to know all the moving parts, but you do want to get to that thing that you can do today to get started, to actually start working on this online course. 

Shane Melaugh: An interesting thing here is that out of research chiefly done by Gabriele Oettingen, she is a researcher on productivity, and one of the things she found, which is really interesting, and she did a lot of studies on this, is that by preparing for obstacles, it makes people more likely to be able to overcome obstacles, even if the obstacles they prepared for are not the same as the ones they encounter. Like you just said, right, you can't actually plan everything. You can't know in advance what's going to go wrong. That will just basically happen as it happens. 

Shane Melaugh: Interestingly, even if you make a plan that includes thinking about what might go wrong, what kind of obstacles might I overcome, even if the actual obstacles you encounter are totally different, it still makes you more likely to be able to conquer them. That's just an interesting thing to keep in mind. Your plan doesn't have to be perfect. Somehow, just being prepared for things being difficult and being prepared for unexpected things happening makes you more likely to succeed. 

Hanne Vervaeck: That's definitely interesting. I didn't know that it actually ... Just having a plan B, even if it was not the correct plan B, and you need a plan C is actually helping. Okay. Cool. Now, I want to get back to those projections for a second because ... About the financial stuff, right? One of the things that I've seen very often, especially with online businesses, is that people are way too optimistic about the number that they will be able to sell because they don't realize what really goes into it. I want to give a very concrete example about this. Let's say that for this online course, we projected a 10K a month two years from now and that we're selling this at 1997. Basically, 1,000 bucks, right? You only have to sell 10 courses a month. Now, when you hear this, and you don't think about what this actually entails, it seems completely possible. You're like, "Oh, 10 courses a month." 

Shane Melaugh: Yeah, 10 a month, 10 sales, no problem, man. 

Hanne Vervaeck: Exactly. That doesn't sound a lot, right? Let's break this down a little bit more. Because if you imagine that your sales page converts at 1%, which isn't that rare. I'm going to use conservative numbers here, but not at all crazy numbers, so 1% of people. 

Shane Melaugh: Yeah, to think here, at a price point of $1,000, 1% conversion rate in your sales page is actually pretty good, right? Of course, this is really something that changes a lot. If you sell it for $10, then 1% wouldn't be that great. That's one of the things that I guess people easily forget is that, yes, you need to sell less of a more expensive thing, but it does take more to get someone to hand over $1,000. 

Hanne Vervaeck: 1% on your sales page, $1,000, 10 people have to buy, which means you need 1,000 people to that sales page. Now, watch out here. I'm saying, 1,000 people to that sales page, not to your overall website. 1,000 people that month going to that sales page. Let's say that those people have to be at least a little bit interested by what you're offering, right? At this point, you can start thinking how would you get 1,000 to that sales page. One of the things might be your newsletter because that's something that you've heard many people talk about. It's like, "Oh, money is in the list. You need to build your email list," which we are the first one to tell you that, right, to start building that list, but let's go deeper. 

Hanne Vervaeck: Let's look at some numbers again. Maybe now you're thinking that you can send an email, a sales email, and then get those 1,000 people to your sales page, but imagine that you have a 5% click-through rate in your email, which means that 5% of the people who receive the email will actually click on the link and go to your sales page. In order to get 1,000 people to visit your sales page, this means I have to send this message to 20,000 people. Now, how do you feel about those 10 sales right now? 

Shane Melaugh: Yeah, and keep in mind, you have to do this every month, right? You'd have to have 20,000 new people to send this message to every month. 

Hanne Vervaeck: Exactly. At this point, the 10 sales look so much bigger, but it is way more realistic. Of course, this is one email. You can tell me that you'll send multiple emails and that your sales page is going to do 5% instead of 1%, whatever. You can play around the numbers, right, but at least, at this point, you're thinking about it. You're just not like, "Oh, yeah, 10 sales a month. That sounds pretty easy." 

Shane Melaugh: Yeah. Again, this is just about creating these estimates, right? Of course, another thing to do here is, by the way, is to look at the different steps in your funnel, right? Maybe you can't do much to get a huge increase in traffic or conversions on your sales page, but maybe what you can do, maybe you can get closer to a 10% click-through rate on your email, or maybe if you test your email copy and so on, there's a lot more to be gotten there. That means already that you only need to email 10,000 people, it makes a big difference. Then we can take that even further back and say, "Okay, how do these people get in your mailing list in the first place? Maybe that opt-in form, or that opt-in landing page, you run some tests there, maybe you can double the conversion rate there. 

Shane Melaugh: Again, that reduces the total amount of people you have to shove in one side of the funnel to get your result on the other. That's one of the things that you really only start thinking about when you start running these numbers. Email is just one example because, again, whatever your idea is on how this is going to work, right, maybe, "Oh, I have an affiliate program, and affiliates will send me this traffic," but, again, you have to think about, "Hold on, what kind of affiliate can send this amount of traffic? Who would be capable of doing that? Also, then, I give them a commission. Then I have to sell more again, and so on." This is just one of the ways in which you can then start playing around with these numbers and arrive at a much clearer idea of what you actually need to make this happen. 

Shane Melaugh: Then, again, you can take the conclusions you've gotten from this and break that down into goals and tasks because, for example, if email marketing is going to be very important to what you do, then, well, you have to figure out which email marketing service to use. You have to figure out how to use it to its maximum effect, right? How do I test different emails? How do I increase my conversions on emails? How do I test my followups and so on and learn about what are the best ways to do this, and also, how do I increase conversions on my opt-in forms and so on? 

Shane Melaugh: That's then going to be a whole area of focus that turns into tasks that you have to start doing now, right, this work you have to do now. Again, if you go down a different route and whatever, you want to do SEO, then you have to start doing this SEO work. You want to work with affiliates. You have to start reaching out and building connections and so on, but whatever it is that you end up with, you have to break it down into what do I do this week to start moving my business in this direction. 

Shane Melaugh: All right, in conclusion, everything we talked about is basically, like we said before, right, you might feel uncomfortable doing this, but it's this kind of medicine thing, right? It's like medicine. It's unpleasant, but it's good for you because all of this stuff that's happening, when you think through this, and when you do this, when you start colliding your idea with reality, all these problems start cropping up, like, "Oh, my God, how do I get this many people on my email list? How do I find affiliates like that? How am I going to put my course together, and how do I get to the production value I want my course and so on and so forth?" 

Shane Melaugh: All these problems and questions come up, and that is actually a good thing, all right? That is exactly what we want. That is the collision that I'm talking about. That's why I use the word collision, by the way, because it does feel a bit like a collision. It does feel like your idea is experiencing a train wreck. You have to somehow sort through the rubble and try and keep your business together from it. This is exactly what should be happening. At the end of it, if you run through these different scenarios and so on, at the end of it, you might be a bit less optimistic. You might be a bit less high in the sky. Oh, my God, everything is going to be amazing, but you'll be so much more likely to actually succeed. 

Hanne Vervaeck: You might have noticed by now that we're, what, I don't know half an hour in, in the podcast or something, and we did this with this online course business idea. It took us a few minutes to do this. It's not one of those business plans, I will do this in five weeks, write everything out type of thing. You can actually take your idea today, this hour, immediately after we finish this podcast. Go through this and run the numbers, and think about, "Okay, how realistic is this actually? What is the very first thing I have to start doing to get to that goal now that I have a much clearer vision about what that goal looks like in numbers, and in goals, and specific things rather than this just dream vision? 

Shane Melaugh: It is the kind of thing that you can do or at least start doing on the back of a napkin. Now, actually, we mentioned business planning. I do want to tell another story about this where I was talking to a friend of mine who was thinking of starting a business and eventually started. Now, he's running his own business. At the time when we were talking about this, and I had this conversation with him with many of the things we talked about today. I kept saying, "You have to have a clear plan. You have to have a plan of what to do next, and so on." A few weeks later, he sends me a document, which is his business plan, and he went out and made a by-the-books MBA-type business plan. I was like, "Oh, my God. I'm so sorry. That's not what I meant. That's not what I meant." 

Shane Melaugh: Like you said earlier, Hanne, we're not talking about a by-the-books business plan. Really, a by-the-books business plan. Really, a by-the-books business plan will include some of this stuff, but it will also just include all this fluff. You don't need any of that. You really don't need any of that. I have my business plans in the past, but I see business plans as some of the early mistakes I made. I've never gotten any use out of a business plan, right? We're not talking about creating a business plan. We're talking about what we said is like confronting yourself with the possible problems, and building a scenario of what to do next. That is usually what's totally missing from a business plan. It's like, what are the actual next steps? I do want to emphasize that. Now, when I talk to people ... I'm very explicit about this. Look, when I talk about a plan, I'm not talking about a business plan. Do not write a business plan. That's not what I mean. 

Hanne Vervaeck: I was reading a book recently and one of the things that they said was that business plans are only for bankers. 

Shane Melaugh: Exactly. 

Hanne Vervaeck: It's the only time that you actually need this corporate business plan is if you need a loan from the bank and you need to convince them, but then it actually ... Nobody looks at it anymore. It doesn't help you in your day-to-day. It's really, it's not helpful for anybody. 

Shane Melaugh: Yeah. Probably, they don't even read it either. It's just like, "Okay, this person put together a business plan, okay, it looks nice." They leaf through it. Okay. They clearly put a lot of work into this. All right. Fine. 

Hanne Vervaeck: It's a PowerPoint problem, where it's like, "Oh, yeah, this PowerPoint looks nice. It must be a good presentation." It's like, "Oh, this business plan looks solid. It just looks solid. It just looks well put-together. This might be a viable business." 

Shane Melaugh: Yeah. It's kind of an extension of you have to show up in a suit and stuff, right, as if it makes a difference, but it's like, "Yeah. Sure. You look the part, here is the money." 

Hanne Vervaeck: We could probably do a full episode about this, about how to fake it. 

Shane Melaugh: Yeah. Yeah. Yeah. Fair enough. Okay, but that's for another episode, maybe. To finish this off, let me just also read one of the latest reviews that came in. I really like this one. That's an Apple podcast or iTunes review by the travel tourist from Canada who writes, "There's no doubt, I've listened to many other podcasts in this genre, and some merit a good listen, but the ActiveGrowth Podcast from day one has provided me with actionable and practical advice on growing your business, particularly an online business. It's been difficult to find a podcast that leads you by the hand and explains clearly step by step how to build your business from the group up with practical examples. This podcast does that. Thank you Hanne and Shane." 

Shane Melaugh: Thank you very much for this review. I really like this. One of the reasons I read it is because this really summarizes what we try to do on this podcast. If you're listening to this, if you're new to this and you're wondering, okay, is this for me? This review really summarizes what we aim to do and what the of this podcast is. Thank you very much to the reviewer who sent this in. If you enjoy this podcast, one of the ways in which you can help us out is by leaving a review like this or by telling your friends about it. Simply, if there's someone you know you think benefit from this, tell them that they should give it a listen. 

Hanne Vervaeck: Thank you very much, and indeed we read all the reviews, and it's really what keeps us going, doing this. I appreciate everybody who takes the time to tell us what they think about this. 

Shane Melaugh: All right, and that's it for today's episode. Well, actually, let me call back to something I talked about in the intro for a moment. We talked about how to apply these two steps of creating estimates, running some numbers, making some projections on a project, and then breaking it down to know the first step and giving yourself a timeline. Those are the two main components of breaking something down and colliding an idea with reality. Now, in the intro, I talked about how you can also apply this to smaller projects, like your blog content or something like that. 

Shane Melaugh: Now, if you think about this, for something like a single blog post, there's really not that much to do, unless it's the first time you're doing it. If you're a content marketer, you've done this a few times. Then you can probably just get started with very little of this applied. If you have more ambitious goals, if you want to try a new series of content or a new type of content, or maybe you want to launch of podcast. You've never done that before, right? Shane Melaugh: It's like a project that's much smaller than launching an entire business, or opening a store somewhere, but it's like, "Okay, I have a new idea for a series of videos, or I have anew for a series of videos, or I have new idea for an epic piece of content," where you also start with this goal of what will this be like, almost what will this feel like, what will feel like for readers to encounter this amazing piece of content? As soon as you stretch your ambition a little bit, as soon as you go beyond what you're used to doing, then this immediately starts to climb because you can ask yourself, "Okay, if I want to make this epic blog post that's way better than anything I've done before, what does that look like, right? What do I need? In terms of resources, how much time do I need? Do I need to maybe design resources that I've never used before? 

Shane Melaugh: Then again, you can break that down. Give yourself a timeline and figure out, "Well, what's the first step? What do I do now, and how soon do I have to get what done if I want to get this thing published by the end of the month or something like that?" I encourage you to try this on different sizes of project. Anything, as soon as you're stretching beyond your comfort zone, you will feel yourself getting into this daydreaming mode, into this goal-setting mode, which as we talked about is good. Then as soon as you notice that happening, you can apply this strategy in small ways and large ways to help yourself move forward towards your goals. 

Shane Melaugh: I'd love for you to try this out, whether it's starting a whole business or a small project, and let us know how it goes for you. You can do that by leaving a comment or leaving a voice message. You can go to activegrowth.com/29 to get the show notes for this episode, and also leave your comment or leave any questions you might have. That is all for me. Thank you for listening, and I'll catch you in the next episode.