The Toilet Paper Entrepreneur: You Can Pull It Off

Mike Michalowicz is the author of the book The Toilet Paper Entrepreneur, a great book for first-time entrepreneurs. He’s launched three multimillion-dollar companies, including Obsidian Launch, a company that partners with first-time entrepreneurs to grow their concepts into industry leaders.

In terms of resources, Mike explains that when you have a company with a staff of five people, you’ll find a way to use them. You might not use them efficiently, but you’ll use them. The same thing goes for money, or for any other resource.

However, when you have scarcity you become very disciplined and get the most return from the few resources that you have. Mike argues that this is the best way to grow a business. He adds that he’s an advocate for the scrapper entrepreneur: the people who are willing to dumpster-dive to get their business to succeed. Here’s a quote from Mike:

“I discovered that it does not take money to make money. In fact, it is the lack of money that forces innovation and out-of-the-box thinking. And when you are a startup entrepreneur with no money, you start finding new, unexpected ways to get things done. Ironically, if you had a fat wallet, you would be blinded to the innovations you could bring about.” (Source.)

Although his target audience when writing the book was the college-age crowd, he’s discovered that people of all ages and from all walks of life are benefiting from reading his book and applying the wisdom it contains.  In fact, he says that people can start a business at any age.

Keep reading below to find out more about “The Toilet Paper Entrepreneur”.

Explanation of the Book’s Title: The Toilet Paper Entrepreneur

The explanation of how Mike came up with the book’s title is a bit graphic, so those of you who get queasy easily will want to skip this section. Here’s a paraphrase of Mike’s explanation for the book’s title:

Have you ever been in the bathroom only to realize that there are a mere 3 sheets of toilet paper left? Yet, somehow, you manage to make it work?  This is how a Toilet Paper Entrepreneur (TPE) runs his/her business: they make do with what they have, pull “miracles” out of the trash, and make more with less.

When you start a business it’s likely that you won’t have a full roll of cash. But if you have the desire, if you really want to succeed as an entrepreneur, you’ll find ways to succeed.

The Entrepreneur Mindset

Mike explains that the biggest challenge that an aspiring entrepreneur faces is their mindset. People feel, “Well, I’ve only been able to do this much up until now, so this is all I’ll be able to do for the rest of my life.”

We’re surrounded by opportunity but we restrict ourselves from seeing that opportunity. Mike explains that we can do anything we want, but we first have to believe that it’s possible.

Your beliefs are paramount. If you absolutely believe that you will succeed, you will. If you don’t, you won’t. It’s that simple. You need to master enabling beliefs and destroy limiting beliefs.

Mike goes on to say that you have to believe that you have certain gifts and talents that no one else has, and then exploit that. Also keep in mind that other people’s beliefs, and other people’s perceptions of you are not what matters. What matters is what you believe and how you perceive yourself. (Source).

At the end of the book Mike states the only five things you need to succeed at anything:

1. Determine what you want.
2. Set an enabling belief.
3. Commit focus and attention to your goal.
4. Take the most obvious actions to achieve your goal.
5. Monitor your progress, adjusting your actions to realign with your goal.

The Three Documents You Will Need to Build Your Business

Mike argues that you don’t need a business plan in order to build a business. What you need instead are the following three documents:

1. A Prosperity Plan - A detailed vision of what your company will be like in 10 years.

2. A Quarterly Plan – A list of goals that you must accomplish in the current quarter to make the most progress toward your Prosperity Plan. Every quarter evaluate where you are, and then write the next quarter’s Quarterly Plan. (This is the concept of “tacking” which is explained in the next section below).

3. Daily Metrics – The numbers that immediately measure the health of your business. It can be sales, cash flow, or whatever you’ve chosen as the best measure of how your business is doing.

Go here to see these three documents filled out for Mike’s company, Obsidian Launch.

Tacking: Make Routine Adjustments

Here’s a quote from “The Toilet Paper Entrepreneur” in which Mike refers to tacking, which is a term from the sailing world. It basically refers to the fact that by making routine adjustments, you’ll eventually make it to your destination.

“He (the sailor) knows that he will not follow a straight line; the changing winds alone will not allow for that. Instead, he will travel in a zigzag-like pattern. By tacking, the sailor travels a short distance, maximizing the winds and avoiding hazards. He then analyzes where he is in relationship to his destination, adjusts the sails, redirects the boat and continues the zag part of his travels. After another short distance he again evaluates his relationship to the destination and adjusts.”

You need to have a clear target in mind, but you also need to readjust based on market conditions, industry trends, your personal circumstances, and so on. Although the shortest distance between two points is a straight line, sometimes the wind changes and you have no choice but to zig and zag. However, make sure that with all that zigging and zagging you don’t lose sight of your focus.

Choose a Business That You’re Passionate About

When choosing a business to start you have to ask yourself what you’re passionate about. It’s not about looking for the next get-rich-scheme or whatever it is that people are doing online right now to make a lot of money, it’s about passion.

One of the reasons that it’s so important to start a business that you’re passionate about is that a key component of succeeding in business is persistence. If it’s not something that you’re passionate about, you won’t stick with it while times are tough. Here’s a quote from “The Toilet Paper Entrepreneur”:

“At some point every business will have a dark day, month or, God forbid, an entire year. You are going to struggle for a while. Even the big guys struggled. Gary Erickson, the founder of Clif Bar, maker of organic energy and nutrition foods, had to live in a garage, work a day job, and stay up all night making product. Early entrepreneurial success is defined by surviving, not thriving. Set out with the beliefs, focus, and actions to grow rapidly and strongly, knowing that initially it is all about just getting up off the ground.”

What gets you through those dark days? Passion. When you’re doing what you love, when you’re engaged in an activity that brings you joy for its own sake, you will stick it out when times get tough.

Some of Mike’s Tips

Here are some of the tips Mike offers:

• Make good use of social networks and other social sites.
• Envying others’ success is limiting your own potential for success because it’s admitting you can’t achieve what they have.
• Instead of forcing yourself to say “My business is great,” put “he or she thinks” in front of that, and it’s much easier to build your confidence.
• To be a market leader, your company must excel in one laser-beam-focused area. Mike says to be the “est” in that area.  That is, the fastest, the cheapest, the hottest, and so on.
• Select your key differentiator and focus all your innovation around it. For example, if quality is your key differentiator, innovate ways to keep increasing quality. If it’s price, innovate around lowering price. If it’s convenience, focus on that.
• You need to act internally (in your mind) as if you have already achieved what you want, and you must act outwardly in the way you want to be treated once you arrive at your destination.
• You have to have “fire in the belly” in order to succeed. You have to want it really, really badly.
• Mike uses a method which he calls “The Formula of 5″ to determine if a particular niche has the ability to bring his business $5M in revenue within 5 years of starting. One key is that it must currently have 5 or less direct competitors to his startup.
• Hang out with people who have achieved what you want to achieve.
• Trust yourself over anyone else.
• Once you identify the target consumer you’re going to serve, you need to identify their values and expectations. What are they starving for? What do they hate about the industry you’re in? What expectations do they have that are not being met? By identifying and servicing these needs you’ll be differentiating yourself drastically from your competition.

The Ten Biggest Entrepreneurial Mistakes

Mike argues that the following are the ten biggest mistakes that entrepreneurs make (Source):

10. Trying to get rich quick. Success takes time, perseverance, and some luck. You have to give your business the time to grow.

9. Assuming no competition. Even if there are no direct competitors, there will be other businesses that will be offering alternatives to what you offer.

8. Being a weak leader. A great leader sets the course for the company and inspires the team to get there.

7. Being all business all the time. Your business will require lots of time and attention, but you need to make sure that you’re eating well and exercising, and that you have a life outside of the office. If you don’t have some balance in your life you’ll burn out and your business will ultimately suffer.

6. Pie-In-The-Sky Financial Goals. Setting unrealistic goals hurts your credibility and is very demoralizing. Set SMART (Specific, Measurable, Accountability, Realistic, Time-Specific) goals.

5. No rallying point. Have a purpose everyone in the company can rally around. Your company needs a reason for being other than just making money.

4. Cutting Price. Often, the first thing entrepreneurs do when times get tough is to slash prices. However, customers are willing to pay for quality. If you need to attract more customers do it by increasing the benefits you offer, not by cutting your price.

3. No clear marketing message. Send out a consistent message. A potential customer may hear about you through several different routes and you want to make sure not to create an inconsistent message.

2. Not being forthright. If you’ve made a mistake, admit it, fix it, and move on.

1. Trying to do it all. Surround yourself with people who are strong where you are not.

Conclusion: The Eight Characteristics of a Toilet Paper Entrepreneur

To conclude, here are the eight characteristics of a toilet paper entrepreneur (Source). A TPE does the following:

1. Takes full responsibility for their problems and their successes.
2. They are frugal (which is not the same thing as being cheap).
3. They use creativity and ingenuity over money.
4. They use atypical resources and leverage them up.
5. They are very focused.
6. They are relentless: they just keep going.
7. They exploit their own strengths.
8. They have a preference for action rather than planning. When it comes to choosing between starting now or thinking more, they choose action now.

To find out more, get The Toilet Paper Entrepreneur and/or visit Mike’s blog here.

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