The 1 Thing You Have to Understand If You Don’t Want Your Business to Tank

sinking buisness

Meet Roger. Roger is 24, and he loves to party and mess around with his friends. That’s why it took him two years longer than it should have to graduate from a graphic design school. Nonetheless, he managed to get a good job at a well-known interactive agency. Roger’s work was so good that not only did his boss love it, but his clients did too.

In the following years, Roger gained further experience and was continuously improving his design skills. One day, he decided that it was time to leave the company he was working for and start his own business.

That’s when the problems started…

Roger quickly understood that every client he worked with in the past was actually brought in by the company and that he only played a small part, being responsible for getting the work done.

Without the company, Roger wasn’t able to get a consistent stream of clients and, therefore, wasn’t able to make a decent living. Sad, isn’t it?

As a result of this unpleasant situation, Roger started to doubt his skills, talent, and knowledge as a designer. But there was one thing that he missed. He didn’t realize that the minute he decided to become an entrepreneur and start his own business, he changed his job into something completely different. He went from being in the business of designing websites to being in the business of marketing, which is something that he had no experience in.

That’s the first thing you need to realize.

If you have your own business, you are in the business of marketing

Being self-employed is an interesting thing. At first, you think that clients are paying you for one thing, when in reality they are paying you for something entirely different. In other words, you’re not making money from what you thought you were going to.

Let me explain that thought.

Let’s go back to the time when Roger had his day job. Every day, he went to work, sat down at his computer, spent eight hours designing websites, and then went home. And that’s exactly what he got paid for. He was trading his time for money.

Once Roger decided to start his own business, the amount of time he was spending designing websites didn’t matter anymore. Roger could spend ten minutes or ten straight days designing websites, but he wouldn’t get paid for that work.

It didn’t matter how much time he spent if he couldn’t find someone who was willing to pay for it. Roger isn’t trading his time for money anymore. He is trading his ability of convincing people that they should be doing business with him for money. In other words, he’s monetizing his marketing.

Here’s the biggest difference between having a day job and your own business:

If you have your own business, you have to make money before you even start working

Okay, let’s take a look at when Roger actually makes his money.

When he had his day job, he got paid after eight hours of work.

Now, having his own business, he’s making money when a client looks at the offer and says “yes.” And that’s the moment when Roger starts doing actual work. Of course, he won’t get 100% of the money upfront, but, in time, he’ll get paid in full.

Not everyone makes it

Changing what you do in life (from whatever you have been doing to marketing) doesn’t always turn out well. Ninety-five percent of new businesses tank. That’s just terrible, right?

Well, it is, but it’s easier to understand why once you realize that you’re not just becoming an entrepreneur, you are also becoming a marketer. Sadly, you might not be as good at marketing as you were with your original profession.

Let’s look at it this way: Imagine a group of one hundred randomly selected people. Imagine that you give them a task of learning to play the trombone by the next morning. Would you be surprised if 95% didn’t make it?

Every entrepreneur wants to be one of the fortunate five who have managed to learn how to play the trombone.

So, here’s the question:

What do you need to do as a young entrepreneur?

Forget about what you’ve been doing so far as you won’t get paid for it any longer.

The most important thing for you now is your ability to convince your clients or customers that you are the one they need to be doing business with. Remember, you are making money as soon as a client or customer says “yes,” not when you give them a finished product.

This concept has made my life easier since I’ve learned it. What do you think about it?

About the author: Karol K. is a 20-something-year-old entrepreneur from Poland who shares his thoughts on Internet marketing and business at New Internet Order.

P.S. If you want help growing your business click here.


  1. Barbara Ling, Virtual Coach :

    Now this post hits it right on the head! So many people who want to go into business online fail to grasp the need for marketing and sales; heck, even today you’ll see bloggers who feel it’s just plain wrong to ask for money for their premium knowledge!

    I do kinda sorta disagree with “Remember, you are making money as soon as a client or customer says “yes” not when you give them a finished product.” – I feel you’re making money when you actually get the payment in your bank account.

    • Internet Millionaire Mindset :

      Amen to that! And it’s “shame on you” if you rest on your laurels thinking that a “yes” means anything more than “yes…for now…” until you receive that first payment.

      I’m constantly learning that lesson and I wish it was because I enjoy it so much…

    • It’s funny but most people usually don’t get it.

    • This is so true. It is very easy to think that a “yes” on the 1st of the month will directly correlate to money on the 30th. In fact, whether one does B2B or B2C, you don’t have the money until you have the money. We have B2B clients with clients in arrears to the tune of four and five figures. I think it is usually wrong to do so, but they are afraid to force the issue for fear of losing their customers. The one that comes to mind just now told me that they have more outstanding invoices now than they have ever had. And until those invoices are paid, they don’t have the money and will increasingly run in the red. With running in the red on your bank account comes fees, lots and lots of fees. And you can run in the red like that only so long until you have a phone call from your account manager at the bank. This is one of the reasons we decided to go prepaid with our SaaS offering (see link) and to have a process of freezing unpaid accounts, etc. Otherwise, your business can tank just from waiting to get paid. And many small businesses tank for that very reason: waiting to get paid from either the government or a very large, bureaucratic corporation.

      • Going prepaid is an interesting option for sure. Unfortunately, it’s not something you can do in every business.

        • Quite right. This is a serious downside to consulting. But my main point was that money promised is not spendable until it is delivered. I do not know Polish corporate law well enough, but the best thing you can do in other parts of the EU is to ask the courts to roll up the company for not paying their debts. That is a very strong negotiation tactic, but it is not desirable on several points:
          – It is sure to kill any business relationship.
          – It costs money to get the courts moving on it.
          – The business is sold off at fire-sale prices, so you are lucky to get 20% of what you are owed.

        • Right..again, it really just depends on what you’re working with.

        • Yea not a big fan of that. But if it is project based.

          Small upfront fee… 5% shows they are interested.

          Then getting paid on milestones.

      • It really does just vary…

  2. good article, when I first started I too work for someone and got all the knowledge I needed and went on my own, but I am a fast learner so marketing is no joke, you have to understand it before you move on.

  3. I’m sorry but I’m going to have to disagree…with only one word.

    This article should not read “Marketing”, it should read “Selling”.

    I understand where you were going with the article and I agree with what you’re saying but you can have great marketing without it actually translating to a sale if you’re not a good Salesman.

  4. Nicely said Karol. I gone through exactly same phase of experience in my life too when venturing into business on my own at home. After a series of successful target hitting and raking good income for company, I have been able to get more income from the company. Eventually, I have saved some money for the new start up. My first start up fails within 6 months. Followed by another new startup which falls within 3 months. Only the third business able to give steady income until now and it helps me to do more businesses. Even though, newer start ups often fails but I am still managing well my 3rd successful business for last 3 years now which is a blog income.

  5. Oh Karol, forgot to mention that if you want a guest post on my blog, do let me know. I love to get this kind high quality contents on my blog too. Good luck for your new business.

  6. Is the email optin pop up new on the blog? I don’t remember seeing that last time I was here…someone told me that was kinda spammy before…:-)

  7. Marketing applies to anything in life, be it business, blogging, or even something like dating (you’re not going to meet anyone no matter how great you think you are if you just stay home).

    It is always the one piece most never understand, if you build it they will not come. For whatever reason marketing has this manipulative conotation that just is not true.

  8. Joshua Dorkin :

    Great writeup, Karol. Beyond failing to understand marketing, I think we’re entering an era where businesses are having a tough time making the distinction between marketing and spam. This is something that has been rampant in email for a long time, but I’m constantly baffled at how many businesses use social media to spam their potential customers.

    • It’s probably because spam has an ROI as well. A very low one, but you can still make some money by sending gazillion emails. Don’t get me wrong, I’m not encouraging anyone to spam. Spam = bad.

    • It’s a shame that they thing its what they should do… but I guess you’ll live and learn right.

  9. Oh boo hoo! Go read the Emyth and get on with it. Shesh – if you can’t sell you’ll be destined to work for someone that can!!

  10. Dennis Salvatier :

    You’re right. I mean, I’ve always looked at it in terms of being in design to going into sales. Design is only part of what you do now, the rest is going to networking meetings, making contacts, and securing clients (closing clients to be exact). And every time you meet someone, that’s when you’re marketing starts. Marketing is all about how you want to be perceived, and how to speak and carry yourself to potential clients and contacts will determine how many projects you’ll be working on.

    • That’s right. Being a great designer won’t make you rich if you don’t know how to reach people willing to put some money on the table.

    • When you’re in public, you should always be in selling mode. Never should there be a time you’re not. That’s why you need to learn the art of master as it will help you learn it naturally.

  11. best iphone apps for kids :

    Good marketing skills will not necessarily translate into sales as I still see both disciplines are equally important yet different in the value they bring to the company. Marketing skills give you the chance to pitch but selling skills will still the one that closes the deal. I mean, you could be good in reaching out to consumers but not necessarily know how to push the ‘buy’ button once you’re in front of them. I once worked in a huge telemarketing company and for the first few weeks, I was surprised at how many stages there were before my good pitch translated into a sale especially if I’ve unfortunately missed the ‘impulsive buying’ button.

    • At the end of the day, if you’re presentation is absolutely amazing and mind blowing, you still need to learn the skills necessary to close.

  12. Vivek Krishnan :

    Wow Karol! This is a super insightful post. I think it is really true that when you start a business about something you love to do, it becomes a whole new ball game altogether.

  13. you are right.. we nee to start freelancing before we even think of quiting our real job.. its in the case of all ..

  14. Most people would feel disheartened after reading this article because it seems to suggest that your skills don’t matter, but this is actually fantastic if you reframe the need for marketing as a positive instead of a negative. It makes me really glad that i’ve been reading about marketing so much. Thanks for posting!

    • There’s a popular theory that marketing is more important than the product… I have my opinion on that, but I don’t agree with it 😉

    • It’s not that skills don’t matter, it’s that you need to learn the skills necessary to close deals.

  15. Hey Neil! I like how you started with a story that a lot of us can relate to. I put the problem in a real perspective and kept me reading. Good one.

  16. Rahul Bhambhani :

    This is exactly what I needed to read right now. Thank you for this wonderful article Karol. It’s gold.

  17. women health fitness :

    We should not lose the hope until we get succeed..this my policy!

  18. women health fitness :

    we use to say an proverb “No Pain No Gain” This will help to know about the life.

  19. Hey Neil, why is an affiliate link for a $7 book more spammy than using “best iphone apps for kids” as your name in a blog comment? Why didn’t you just delete the link or insert a non affiliate link?

  20. Cathy Presland :

    Karol ./ Neil

    I think this is really valid – it’s what I teach my clients. If you don’t get the money you don’t have a business (you have a hobby!). Try to get paid AND enjoy what you do 🙂


  21. That’s a great advice, Neil!
    I didn’t imagined that it was necessary to learn so much about marketing, enterpreneurship, B2B and other related when I first founded my company. Later with my most recent projects I have learned a lot about the real multidisciplinary mind that a CEO/director/manager should have to lead a bussiness.

  22. Well I think Roger should def…. start contacting freelancers in his area maybe setup a meeting and say hey this is what I can do. If you are ever overloaded which we all are I can take on your extra clients for a smaller charge.

    I think he could get some business like that

  23. You have to be a Marketer – so very true, and having been in Sales for many years, let me tell you, most people can’t do this. Many could learn, but by the time they figure out that this is actually what they need to do, it’s too late. Great article, it should be an eye-opener for a lot of people.

    • sales is a rough job…. You gotta really love it to make a career out of it I believe…. but that is because I worked for a company that cold called people 70-100 people a day.

      But with that said it shows that all you need is the market and hire sales reps and you can lift up for business… really opens your eyes

    • I think that you can learn anything if you spend enough time on it. Marketing included 🙂

    • I agree… it really puts it into prospective on how we should be.

  24. purchase structured settlelments :

    You make some really great points here. Most people don’t understand what it is to actually work for yourself. I haven’t heard quite the way you put it but you have done a better job than I have seen in the past. Most people will go on about you have to work long hours with little reward. While that is true I fell you put the emphasis in the right place. You need to know and understand marketing a bit. The ability to sell yourself is the most important.

  25. In any business, communication with client and convincing power are very important and play key role in business success. so hope readers and entrepreneurs will learn from your post.

  26. Great post, Karol. It kind of reminds me of Michael Gerber’s message in “The E-Myth Revisited” (which someone referred to in one of the comments above). Just because you have a particular skill doesn’t mean that you can run a business in your area of expertise.

    Like Karol stresses, you have to be able to market yourself and your business in order to bring in clients — otherwise, you won’t even be able to implement the knowledge and skills that you have for anyone.


  27. stainless steel jewellery :

    The assurance to earn while having a business is very minimal at first. Not unless you already build up good relationship with clients. That’s the most important thing that everybody must know.

    • It’s a process but creating those relationships with your customers is what eventually becomes the bread and butter.

  28. Hey Neil,

    Very insightful post here. I’ve never actually look at it this way when you talk about starting your own business. This is definitely the one thing like you said, You might be good in your original business of designing but you’ve never learned how to market yourself. It’s definitely and add on role that will take time for you to develop.

    • At the end of the day, you can have the bes product out there, but without marketing, you’re screwed.

      • Gallery Wall Art :

        On the flip side, there are many out there with inferior products who market and sell really well and are doing ok…not to say that you should compromise on the quality of your product because that’s also a big part of marketing (particularly word-of-mouth)

  29. Too true, all web designers should learn from this as well as anyone starting out a business. Marketing isn’t optional it’s essential the number one reason why businesses fail is not enough sales.

  30. The moment I realized that I stopped being a web designer and started my own blog network. It’s doing well now but I think I’ve just hit my roof and I’m starting to miss my design days. This article kind of brings back that itch.

  31. Yes. There is a difference between being good at what you do and SELLING what you do. There is also project management and customer service. Not to mention accounting, HR and payroll. And you haven’t even started doing what you’re good at yet…

    • There’s a lot of stuff that you need to do, it’s really far from easy.

    • This is why you have to know something about marketing before you throw yourself to the wolves. Without marketing it is like standing in front of the wolves naked and without any meaning of defending yourself.

  32. Spot on. Honestly, this is one of the reasons why I don’t want to leave my job. First, my job pays well and I still have time for other stuff, especially family. If you run your own business, there’s a lot of things to do. Unless, of course, you hire people do the work for you.

    So the notion that it would be easier to have a business than work for someone else is just plain fallacy. You’ll always end up working your butt up 24hours a day.

  33. I’m just hitting this wall myself! Luckily, this is a part-time side business – but I started because I want to make money, not just dabble in a hobby!

    But I’m the “master technician”-type. Been there near four decades now: I get the order, satisfy the customer, and go back in my cubie. It’s difficult shifting the mindset from “fill the customer’s order” to “GET OFF YOUR BACKSIDE AND GO GET CUSTOMERS!!”

    So … could I please ask for some links to the “For Dummies” versions of how us old-and-locked-in types can figure out how to learn this “marketing” and “sales” stuff? I mean, you guys banter around the lingo and spout encouraging words – but it’s a foreign language to those of us who come here trying to learn it.

    Talk about information overload – I could “just dive in” and read everything … but a hint as to where to start the swim might be more helpful than just throwing myself off the end of the dock.


  34. Rubber car mats :

    What I wouldn’t give to have a debate with you about this. You just say so many things that come from nowhere that I am pretty sure Id have a fair shot. Your site is special visually

  35. colon cleanse :

    hey, i m pretty impressed by your knowledge about deep concepts of business..I believe that marketing is more art than science, starting your own business in not an easy that the most important thing is your ability to convince your clients.
    thanks a lot as i really liked your Rogers story.
    keep it up dude.

  36. Any links on how to create that floating RSS box or the pop up? I use WordPress too.

  37. Traffic Secrets :

    Fantastic points, First know the job well that you are going to do, then plan your way and get it done. That’ll ensure that you will not fall suddenly, but also remember ‘Not everyone makes it’.

  38. Each and every post that I am reading on your blog is making me realize the mistakes that I am committing as an entrepreneur. Indeed, the selling starts right away and never ends.

    Thanks for this learning.

    • yep, it’s a never ending process.. you’re always selling something, so it’s best to learn the skills to be powerful and effective.

      • “The sale is made every time. It’s either you who sells something to them, or they who sell you on the reason they can’t buy” – Boiler Room 🙂

  39. I’m trying to become a better salesman. On another note, if you aren’t a great salesman, connect with people that are and give them a deal. Since I’m a web designer, I work with two salesmen that I give a discount to and allow them to re-sell my work to clients that are theirs. They go out and sell and I get to do the design work. Its worked so far, but of course, you never want to completely depend on others for sales… which is why I’m trying to get better. Great article!

    • It’s great that you’ve learned this because most people don’t like being “salesmen”…. but it’s part of the process for success.

    • Jay,

      You’re absolutely right especially since your work is directly client facing, hence being able to close and up sell can increase your over earning tremendously. =)


  40. If you want to have lasting success with your business you have to be a marketer, like you said. Some people think that their product will sell it self. They find out, like Roger did, that you need to be a sales man as well as a web designer. Great article Neil.

  41. Excellent Article. Each and Every Article of Quick sprout is really excellent.

    Neil, your blog is excellent. I really wanted to become the youngest entrepreneur.

  42. those who fail are those who are impatient and do not work hard to get it. especially in a business that can not exist in the can in an instant, but everything in the can with hard work

  43. I agree with your post Neil, staring a business is not a simple thing that you have some knoledge and you start your own business. First of all you need to understand whole market and market strategies, you need to build strong contacts, and so many things are there to be taken care of. A proper market analysis can help to decide whether you can start your business or not.

  44. Currency Broker Pete :

    Hi Neil,

    Hrm. The idea that a designer would doubt their design skills because of their inefficacy as a business owner is preposterous. And a little insulting. Other than that it’s a good post.



  45. yep, that’s very true. Most people are riiiiggght there, but quite too soon.

  46. yep, that’s very true. Most people are riiiiggght there, but quit too soon.

  47. some people will start the business but they won’t do any promotion because of it they lose the business

  48. Like all things in life “You Reap What You Sow”. In other words, its great to even start a business. The mighty punch comes when your business is exposed to the masses whether online or offline.

    The next step would be the appealing factor. For example does your business supply prodcuts or services as a solution to problems? The only way this can be accomplished is by advertising. There are hundreds and thousands of ways.

    My son has a magic part-time business. His customers come from word of mouth. “So and so told me that you were performing magic”.

    In conclusion, I think at some point when a business is created, a sales aspect acumen especially in Marketing is the only way to keep a business running continuously for years to come.

    Great post from Karol

    • Definitely. These are all great points. You need mass appeal and hard work to be successful in any endeavor.

  49. You need to market yourself to make some money on the internet.

    People hate their 9-5 Job. But they are not realizing the fact that he is not just trading his time for money, he is also being relived of the client hunting effort.

    If you work in big corporations, whether you have work or not, you get paid.

    • Those are definitely great points. The corporate world is often times filled with employee dissatisfaction and inefficiency.

  50. Great post, Karol. It kind of reminds me of Michael Gerber’s message in “The E-Myth Revisited” (which someone referred to in one of the comments above). Just because you have a particular skill doesn’t mean that you can run a business in your area of expertise.

    Like Karol stresses, you have to be able to market yourself and your business in order to bring in clients — otherwise, you won’t even be able to implement the knowledge and skills that you have for anyone.

  51. outsourcing web development :

    Thanks for sharing the info.Business is a thing where you need to take risk.Some times it can be beneficial for and some times it may not.

  52. Charleen Larson :

    The leap from employment to consulting/self-empl0yment is just too huge. When I saw my line of work would soon cease to be relevant (the IT world is like that sometimes) I started a part-time business. It was a lot of fun, selling stuff and getting regular paychecks from the job, too.

    Then the time came to take the leap and it was not so much fun anymore. But at least I had a grasp of marketing skills, I had a marketplace in which to sell products and a growing customer base. I made a lot of mistakes quickly, retrenched, rebuilt the business and now it is something completely different and self-sustaining, giving me the chance to reinvent myself yet again as a blogger.

    My trainer was talking to me this morning about her teenager, who has no idea what she wants to do in life. “What did you want to do when you graduated?” I didn’t know, I told her. I still don’t know. I do what excites and moves me, but I don’t know where I’m going.

  53. Restaurants in United States :

    Excellent Article. Each and Every Article of Quick sprout is really excellent.

    Neil, your blog is excellent. I really wanted to become the youngest entrepreneur.

    • Thanks,
      I appreciate it, and if you want to become an entrepreneur keep reading and learning.
      Maybe one day soon you will get a great creative idea and be able to make it work with what you have learned.

  54. Rent College Textbooks :

    You make a great point. Just because you are good at what you do doesn’t mean you can run your own business. There are many things you need to consider before going out on your own.

  55. The author of this article says that the Roger had “No” experience in Marketing. I’m a marketing major at an accredited university. I also have knowledge of Logic and can discard this argument on the basis that the author of the article uses this false premise to build his article. Roger did have an important skill to start his business. Roger knew how to “build websites”. Most marketers will tell you that being able to produce something is a major part of the whole marketing mix. I do not know if I should discard this article or read on but I will read on just for the fun of reading through. Cheers

    • In this scenario, Roger didn’t have any experience in the field of marketing. Having a skill and being able to do something is different then having experience applying that skill in a certain field. Which in this case he did not. I’m sorry if you feel that I was building my article on a false premise.

  56. colorado springs defense attorney :

    This is an awesome post! I have seen this happen to so many people around me these days and probably this is the reason so many people don’t make it because they have no marketing skills. That is why they all need a company to let them get paid for the skills they have. Unfortunately very few realize this.

  57. Very great post indeed, thank you! Without a true understanding of marketing, it is really difficult to continue own business. People foucs on their won skills (like web desing etc), but sometimes forgwt about ‘business’ skills needed. The core message is that on needs customers in any business, and to get customers, one needs to be doing marketing. Looking for more on this topic.

  58. hey Karol K,
    nice post. it contains great contents.”What do you need to do as a young entrepreneur?”, its explanation is simply awesome.
    over all it was good to read.



  59. The one that comes to mind just now told me that they have more outstanding invoices now than they have ever had. And until those invoices are paid, they don’t have the money and will increasingly run in the red.

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