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BEING A FINANCIALLY WISE BUSINESS OWNER
80% of all NBA players file for bankruptcy within five years of joining the team and getting a huge multi-million dollar salary. While there is no exact statistic for rappers, the number is probably close to 50%. Some of the biggest names in the game have gone totally broke and don’t even make records anymore due to financial issues. Aside from the NBA and the music industry, another place you see this trend is lottery winners. Roughly 80% of lottery winners are completely broke within five years. It’s interesting that the amount of time for both lottery winners and NBA players is five years, and also that the vast majority are effected by this.
It goes to show that being financially savvy is extremely important to the overall long term success of your business, even if you happened to stumble upon a few million dollars out of nowhere (which is unlikely as it is). But one cool thing about finances is that you can hold a small nut and feel rich while at the same time you can be given millions and be broke just a few short years later without anything to show for it. You can make just $3,000 a month and feel rich, though, if you’re financially stable. Let’s say all together your bills, including groceries and household expenses, end up being around $1,500 per month. At that rate, you have an extra $1,500 to spend every month to spend and if you put half of that into your savings and spend the rest, you’ll find you have plenty of money to go around.
The trick with financing though is to take into consideration every single thing you pay for. If you write out a budgeting plan and haven’t included monthly expenses such as tooth paste, mouth wash, deodorant and other household items, then you aren’t financing properly. At the same time if you don’t include investment money every month for your business, then you will find that you don’t have nearly the same amount of success in your financial future than if you did. Sometimes living with your parents for a few months while you get your business off the ground is even acceptable, as long as you end up succeeding and working ten hours a day to make it happen.
REASON 80% OF BUSINESS FAIL IN 5 YEARS
This is a concerning statistic but it’s absolutely true. Can you believe it? Only so many of us are even willing to start a business because of the high amount of risk, involvement and investment necessary (both in time and money) to make it profitable. So it must come as disconcerting news that even if you do try your best and start a business, just talking statistically, there is an 8/10 chance you will fail. WOW! That’s a lot of businesses failing, a lot more than there are actually succeeding. Obviously I’ve been lucky and resourceful enough to actually be one of the long running successful business owners. Our profit margins are high and so it would be pretty hard to sink the ship, but that’s what you get promoting on the internet (easy money, cheap to get sales).
But why is it that 80% of small businesses fail? What does this mean for you and selling beats on the internet? The fact is even if you use advertising on mediums such as YouTube, Sound click or Sound cloud, you’re still at a disadvantage always. That disadvantage is that everybody around you is trying to do exactly what you’re trying to do, and five years from now you have to have your business continuing onward. Easier said than done, trust me I’ve been in business for six years and you can get hit with a curve ball at any time. It’s just the natural way of business.
The first thing you need to understand is that out of the 80% of small businesses that will fail within those short five years, the vast majority of those failures will be due to poor planning. Don’t start spending money at first, instead spend at least a few months on a notebook with a pen, writing down all your possible ideas before you start randomly trying tactics. You need the proper foundation, and I can sum it all up in one word: PLANNING. Without proper planning and actually spending the time to ask (and answer) the tough questions you might feel uncomfortable thinking about, you will fail. You need a truly powerful foundation and brand to start with.
For instance a highly articulated marketable website with all the right features to make you money. You also need a proper logo, the right marketing funnel, the right products and most importantly you must be able to provide long term value to your clients and customers. Don’t expect this to be an easy ride. The fact is you will need to be smarter, better and more powerful than your competitors to last. To gain this power you need the knowledge to make then right moves.
DRIVING TRAFFIC FOR BEAT SALES
How to drive traffic to your beat selling website in order to make the most amount of sales possible. The fact is that without a stable amount of web traffic coming to your page, you can pretty much guarantee your business will not be able to take off. It’s about making your website as popular as possible using methods to bring in traffic that actually work. Before I talk about traffic sources, I want to mention that the first step is actually to make sure you’re retaining the traffic once it comes to you. If you’re not being smart and building your traffic sources in a sustainable way, then the traffic isn’t going to help as much as you might feel like it should. Instead of focusing on sales at first, focus on building your mailing list and using the list to organically make sales.
This is what retaining traffic is all about: traffic gathering. Just because 100 visitors come to your website every day doesn’t mean you’re making money off of your business. But if 100 people come to your website per day and of those 100 people about 20 of them join your mailing list, then you’ve got a business model worth talking about. At 20 opt-ins per day or 600 opt-ins per month, you’ll have a gigantic mailing list by the end of that year which can be used again and again to generate income even if your traffic falls off the face of the Earth. To get people to join your mailing list first you’ll need a good free incentive offer for joining. Don’t expect to get a high opt-in rate just by putting up a web form and asking your visitors to join. You need to give something away for free and it needs to be automated. In the beat selling business the best way to do this is to give away a single beat for free to anybody who joins your list. It can be the same beat so that way it’s a totally automated system.
Once you’ve secured a good opt-in rate, the next thing to do is to drive traffic. This can be done in a number of ways including Twitter, Facebook, Sound cloud, YouTube, Sound click and more. There are virtually endless traffic sources but only some are worth mentioning as others may not provide the same success for you. Google is another big hitter in terms of high quality website traffic, but Twitter is the best place to start if you just want to get going right away. Aside from that though I think one of the strongest things to focus on is SEO and ranking on Google. It’s not easy to rank on Google and the vast majority of businesses that try end up failing, but if you can somehow pull it off then you’ve got yourself a cash cow unlike any other. There’s no other form of free traffic that delivers quite as well as Google, much less having the top quality buyer’s traffic you need.
But even if ranking on Google is simply too big of a task for you, you can always use Bing Ads or Google Adwords in order to advertise your website on the search engines using pay per click models. To do this successfully, building your email list with the traffic is more important than ever.
PRICING YOUR BEATS AND LICENSES
A lot of my clients come to me asking about pricing of their beats and how they should read the value of their production. The truth is that you can’t just apply the same prices everybody else is using on their beats and expect to have the utmost results with those prices. There is an important line to cross and it has to do with what your beats are worth when compared to others in your market. Don’t post your exclusive beats for $500 because some other big name producer on Soundclick does it if your beats don’t match up to theirs. You have to look at it in terms of value and what your beats are worth WHEN COMPARED to others in the market. Your price should be a reflection of your skill verses your competitor’s skill and pricing.
Personally I think for producers who are just getting their foot in the door, a good $100-$200 for exclusive rights sounds about right. You don’t want to price too high at first, in fact you would be better off in most cases starting low and seeing how business does and how people react to your prices. If your friends and family say your beats are great and worth every penny, that means basically nothing. The only way you’re going to know if you are going to sell your beats easily at your price ranges is by marketing yourself and seeing how actual customers react. If you hear nothing but crickets and frogs chirping, without anybody contacting you to buy beats no matter how much energy you put into marketing your product, then the price and value of your beats is an excellent place to look for answers.
Your prices might be too high or, honestly, your beats might not be good enough. If you want to sell beats on the regular then you’re going to need to understand that your beats need to be at a certain level. If your beats are wack and you don’t make good music yet, then you might consider posting your beats at $35 exclusive rights. So I want to make it clear that no matter what it is possible to make a little side income off of your beats, unless you’re truly horrible and in that case maybe just practice making beats five hours a day for a few months and your skill level will have improved greatly.
So all in all, compare your beats to others and check out their pricing. Being totally honest with yourself, figure out what the value of your beats are and try to sell them at that price.
ENTERING THE ENTERTAINMENT WORLD
A simple factor to your success as a music producer or artist: entering the world of entertainment. If you plan on becoming successful as a music producer I think it’s important to understand what you’re fighting for and the only way to do that is by actually entering the game. For instance if go out to a local club for one of your best friend’s birthday. At the club there will be plenty of people in the club but probably at least a third of them we will rolled in a huge group. The night at a bar usually the world of entertainment starts to unravel itself around you. Music is playing at the bar and there are TV’s on as well playing music videos visually. The music, televisions and friends: this is the world of entertainment. So looking at where the money gets spent is important if you plan on making it far in this industry. The music, televisions and friends: this is the world of entertainment. So looking at where the money gets spent is important if you plan on making it far in this industry.
At the bar in the beginning one of the most noticeable places money was spent up front was most definitely food and drinks. In fact roughly half of the money spent throughout the night was on alcohol alone, not including money spent on things like gas, food and drugs for the night. This is important information, it means if you’re going to be doing shows, performing or otherwise trying to make money in entertainment, roughly half of the income you have to potentially make isn’t from your music at all but actually from alcohol. So assuming you’ve got your own venue and you can sell alcohol, already your chances of profiting go through the roof when compared to the same show without alcohol, or a show selling alcohol and food that you don’t get to see any of the profits from.
Then you’ve got tickets to enter, but usually that’s only about $5 for a club on a weekend. Which, of course, is the price of a single drink at these venues. So even the tickets don’t make up as much money as the alcohol does. Now when you perform at a venue as an artist, usually you get a percentage of the ticket sales (And it’s much less than 50% most of the time), and you don’t get a dime off of the food and drinks sold, which is really where the venue profits anyway. Having said that, for every song that they play at a club, there is a dance beat to it. So by making dance music and licensing it off to artists you can get spins in clubs which ends up making you money. But the artists who use your beats for these types of songs are not the centerpiece either: the centerpiece for the person coming to a club is the party. That’s why while the artist really doesn’t matter at a club (you can play pretty much anybody you hate on, including N Sync, and with enough alcohol and good friends you’ll probably dance all the same), the beat does. If the beat were slow nobody would know what to do.
So you end up having DJ remixes of popular songs for the most part. A lot of times the club won’t even play the original versions of these songs, but chopped versions that are faster paced and with different beats in the background. I think that going to the clubs once in a while is important if you expect to make it in the entertainment industry because it’s important to understand what entertainment really is. You’re getting money from bringing fun to people’s lives, whether that be in the form of drunken dancing or in the form of great suspenseful music for an action movie. No matter where your music goes in entertainment, it’s all meant to serve one purpose: to eliminate boredom and make people feel intrigued.
Real money isn’t made off of album sales, it’s really more towards the things you can sell that make you money. Whether it be t-shirts, alcohol, licensing for movies or selling your beats to rappers, you have to follow the money. If the songs you’re making aren’t acceptable for clubs, movies, TV shows or commercials, then you need to rethink what kind of music you’re making and whether or not you’re really ready to enter the world of entertainment.
EASY TIPS TO BECOMING SUCCESSFUL
Today since we’re starting the new year I thought it would be worthwhile to create a blog post listing some really easy tips to becoming successful with your business. There’s no easy way to create success no matter what you’re trying to achieve in life, especially when it comes to running a business. There’s no easy way into making money off of your business and investments and no matter what it’s going to take some risks. But there are ways to increase your overall chances of success and that’s what we’re going to cover here today.
Hire out to other professionals
When it comes to making your business successful, there’s no easier way than to hire or have employees. Now while having employees can be difficult to maintain and expensive, there are less expensive, less complicated options as well. For instance if you outsource and hire freelancers to complete individualized tasks then you can make things happen in your business faster than almost any other method. It’s a certain feeling you get knowing that a project is being worked on and making progress while you can focus your time on other things. Time is more valuable than anything in business, and it’s certainly more precious and valuable than money. It makes more sense to save yourself a hundred hours of work by hiring three or four other people, perhaps from other countries for cheaper wages, to do specific tasks. This is the power of outsourcing and freelancing.
While some people may consider it to be bad ethics to outsource, which is the process of hiring out to other countries, the fact is in America you get less for your money. The only thing you get more of, in general, is attitude and cockiness. That’s just coming from my own personal experiences. You can get equally good work for small tasks from other countries, however let me warn you: when it comes to spending BIG on outsourcing, you want to seriously watch your tail. Always, always pay small amounts at a time if hiring out to another country. Never spend more than maybe $50 or $100. If you try to hire some guy from India to design your website and he quotes you at $2,000, the fact is you’re probably taking a wrong step.
Actually spending time working on your business
This is a funny little thing that most people are terrible at. People talk a big game about how they’re going to make endless amounts of money through their business and how nothing will stop them from doing so. But when you ask them how much they actually do work for their business, the answer is usually pretty much zilch. That’s not going to help you achieve the dreams you’re trying to achieve. You need to actually find yourself working on your business for hours and hours a day. If you are making all the beats for your company, then making beats should NOT count as “work time”. While it can help you market your stuff by coming out with new material, in reality that’s not going to do the job for you. You need to also be using email marketing, Twitter marketing and Facebook marketing plus other sources to make as much money as possible.
If you are not actually spending hours per day writing ideas in your notebook (if you don’t have a notebook or use any kind of note taking yet, step your game up), brainstorm, and once you’ve come up with ideas, actually physically pursue those ideas. You need to be able to spend the time to try to achieve tasks based on your research and knowledge.
Carrying yourself and your business professionally
Carrying your brand starts with the person, honestly. If you’re not carrying yourself and your business with professionalism then you’re not doing your job. Remember that. It’s up to you to carry your business forward and you can’t do that acting like an unprofessional moron. Seriously. This isn’t child’s play this is adult conversation, talking about starting a business or keeping it running and growing. You can’t put half of your energy into it, you have to be willing to do more.
FINDING THE PERFECT CLIENTS FOR YOU
When it comes to marketing yourself online, there is simply nothing more important than finding the right clients. If you find the right clients every time then you will not face the majority of problems that hurt small businesses. A lot of people consider the old phrase “the customer is always right”, but I would say there couldn’t be anything further from the truth. I mean let’s put it this way: a guy walks into a Nike store and buys shoes. He wears them for three months and ends up cutting holes in them due to overuse. This same guy walks back into the Nike store, three months later, hands the store his cut up broken shoes and asked for a full refund.
Does it sound like the customer is always right when it comes to stuff like this? Well no, and of course somebody who bought from Nike would probably not even think about going into a major corporation’s workplace and ask for such a refund, because they would know they are not going to get their money back. Yet people talk to small business owners like this every day, and being that you are a music producer or artist, you are going to need to know how to protect yourself from clients. Small business owners have to deal with this all the time and especially those people in service. A good example for this would be, if a customer contacted you and wanted custom production done and paid you to do it. Then you do hours upon hours of work for them and they love it for a while but then ask you to go an entirely different direction. This is going to hurt you by losing you time and money, not to mention the fact that the client could then try to get a refund regardless of how much work you put in or how much they told you they loved it.
This is incredibly important. If you can get the right clients- those who are serious and ready to make something happen, you will find that your overall success rate, satisfaction rate and refund rates are at their all time best. Not only do you get happier customers, but you also get higher sales and the selling process is a lot easier. So how do you find these clients? Well first of all you have to figure out what the age group is. In my experience, it’s better to target an older audience, even if you’re the young guy. I’m 25 years old and the majority of people I work with are in their high 30’s or 40’s, easily. But these are customers who are a lot easier to work in my experience. Web advertising allows targeting of age groups pretty much no matter which advertising platform you use. It could be Facebook Ads, Google Adwords, Bing Network or any other ad network and you can always target your demographic.
If an advertising platform is selling premium advertising space for your banners on their actual website, then do demographic research before ordering. I like buying media ads personally but you can purchase ads of any type. It’s crazy how far you can go if you just start spending on advertising and actually profit with a big enough margin to continue that form of advertising. Realistically though, you need to get your offer to at minimum 200% profit. Meaning if you spent $1000 for advertising, you should be able to make $3000 minimum back if you expect to keep up with that advertising source.
Think of it this way, the more money you spend on advertising, the more sales you get. But since the total amount of money you earn has to take into account the money you spent, advertising technically takes a “commission”. You have to make sure that you make enough to pay for the advertising, pay for your service, and the licensing of the artistic material, plus perhaps pay another employee to do some of the production work for you. This means you have to have offers that are highly priced ($1,000-$5,000) and sell to a market that can afford it (30-50 year olds). But don’t be afraid to turn down a client if it seems like a good idea.
TRACK SEPARATION: THE IMPORTANCE OF TRACKED OUT WAVs
An issue that a lot of artists ask about or often have a question such as: “Is track separation important? Should I invest in the tracked-out files when I lease a beat?” It is a great question, and the answer depends totally on your personal goals as an artist. To begin, I’d like to first define what track separation is. Before getting into it, please understand that there are several terms for track separation, and every producer will call it something different. The following terms all pertain to track separation:
Tracked-Out Wavs or Tracked-Out Files
WAVE Separation or Track Separation
Separated Tracks or Separated WAVS
All of the terms above all pertain to the same process. For the sake of simplicity, I will refer to it as “track separation” for the remainder of this article.
What Is Track Separation?
Track separation is the process of exporting every single individual sound in a beat as its own separate file. Let’s say I just finished a beat which was composed of piano, guitar, bass, a kick drum, a snare drum, an open hi-hat, a closed hi-hat, and orchestral strings. When I track this beat out, each of the aforementioned instruments would be solo’d, separated, and exported into their own separate audio files. The end result would be 8 different audio files, all of the same length, and each would include only one single instrument/sound. You may be wondering why every track is exported as the same length. This is done so that every track can be aligned at the “zero” mark in your recording software, and play at the proper time so that you do not have to manually align each track up when it is supposed to be played. It simply makes it much easier on you.
Why Is Track Separation Important?
So now that you know what track separation is, let’s talk a bit about its importance. When you buy a beat without track separation, you receive one file: The WAV or MP3 file of the fully mixed beat. Because it is only one single mixed file, you do not have the ability to change the volume, panning, or EQ of any single instrument in the beat. Any modification that you make affects every single instrument in the same manner since it is all one mixed file. For example, if you or your sound engineer needed to move the piano a bit to the left because it was clashing with your vocals, they would in effect be panning the entire beat to the left, since the piano is mixed in with all of the other instruments. This would be a catastrophe for your mix, as the entire beat would be panned to the left. If you have the tracked-out WAV files to the beat, you/your engineer have FULL and TOTAL control over EVERY sound in the beat.
So let’s say you have the track separation. You finish recording your vocals, but you find that the piano and guitar are clashing with your vocals. Your sound engineer decides that he/she wants to move the guitar to the left a bit, the piano to the right, and lower their volumes a little bit. Your engineer has the ability to do this if he/she has the tracked-out WAV files to the beat. He can move any sound, EQ any sound, add effects on any sound….basically do whatever he/she needs to do to make your mix sound the best that it can. Please remember that the reason that this is so important is that the entire mix of the beat changes once you add your vocals to it. And because your vocals are the most important part of the song, a lot of times the instruments in the beat need to be changed to compensate for your vocals once they are recorded. Track separation gives you the full control needed to make your song sound the best that it can.
Should I Buy Track Separation When I Buy A Beat?
This leads us to the big question…should you purchase track separation when you lease beats? The answer is something I’ve always told anyone who asks. It depends. If you are a serious artist who is looking for the absolute best sound out of your music, then track-separation is invaluable. If you really need your music to sound the best that it can, then you should absolutely purchase it. However, if you are just releasing a mixtape, or just creating a song for fun and are not too serious, then you can definitely get away without purchasing the track separation. You can still make a good sounding song without track separation (as long as the beat is mixed well), but you will never achieve the optimal sound without purchasing the track-outs.
THE TRUTH ABOUT MAKING BEATS
MYTH: A beat maker is a producer, and a producer is a beat maker.
TRUTH: Producers are much more involved in the entire songwriting process, from making the beat to working with the artist in the studio. A beat maker (also known as a programmer) makes the beat and sells it online, never actually collaborating directly with the artist on the project. “A person that makes beats will start with an idea and make that idea, but won’t get involved with the songwriting end of things”. “A producer in a studio will start a beat, but then they might hire a session musician to come in and work with them to make the beat a complete track. Producers are very involved in the entire process – working with the artist and lengthening out the beat into a complete song – while a beat maker simply comes up with the beat.”
MYTH: You should stick to one style of music.
TRUTH: If you pigeonhole yourself to one specific type of music, you’ll definitely miss out on other opportunities.
“To be successful as a beat maker, you have to be diverse,”. “I see a lot of people fail when they concentrate so much in one lane and then they’re given the opportunity to do something else, like a pop record, and they have to turn it down because they don’t know how to make pop beats.” I agree. “There was one style of hip hop I created early in my career, but I quickly realized that no one really wanted that. I had to transition into more of what was popular at the time. I had to learn how to make pop, dance, and dubstep beats so that I could be more well-rounded, and therefore get more people to use my productions.” That said, if you make a really incredible beat, and people are interested in it, be prepared to make more. So once you find a great sound, create several beats, because there’s going to be a demand, especially if the original track is hitting the radio and gaining popularity.”
MYTH: You’ll start making money selling your beats right away.
TRUTH: Maybe, but probably not. You can make a living selling beats, but it’s not a walk in a park. It’s just like being an actor or an athlete. It’s all about the time and commitment you put into it. It’s an uphill battle, and most people are usually also doing something else on the side, like producing, engineering, mixing, or writing. Often times, when beat makers are starting out, they’ll give away their beats for free, just so they can get their sound out there. A lot of rappers are making mix tapes, and they will often solicit up-and-coming beat makers for their tracks via Twitter. You won’t get paid, but at least you’ll get the credit.
“Making beats and selling them online isn’t extremely lucrative because the market is so over-saturated with people who will sell their beats for $5-$30”. “If you’re going to try to make any type of substantial income off of making beats, I don’t think that’s the way to go.” Another way to make money is to sign a publishing deal with a company, songwriter, or major producer. And yes, while the disadvantage is that you don’t keep all of your earnings (the industry standard is around 50%), there are benefits too. “It’s a lot [of money] to give up, but now you’re catapulted out of your bedroom and are getting the opportunities to present your music to major acts that you wouldn’t have had before”. If you’re not going to go the publishing route, at least make sure you’re legally protected when selling your beats. Read over all of your contracts, and if you can, have a lawyer look at them as well.
HELP STOP THE THEFT OF MUSIC
DON’T LET ANYONE copy, share, burn, rip, upload, side-load, re-distribute, duplicate, or otherwise infringe upon our copyrighted recordings and intellectual property. Its okay to put our CD’s on your personal iPod, but please don’t let our albums be copied by friends or family. These days, we’re really trying to prevent unauthorized duplication, file sharing, and music piracy, and you can help. The unauthorized copying and distribution of songs is just plain wrong, and it really hurts and makes it financially impossible for some musicians to record their albums. Giving away music for free does NOT result in more CD sales for some or all musicians; it just takes money away from bands, and makes it impossible for some bands to stay in business. That’s not fair or cool at all. Is it okay to sneak into a movie theater without paying, as long as you tell other people how great the movie was? Of course not.
This is the real and serious consequence of music piracy and illegal downloading. Yes, the internet can be a source of great exposure, and artists appreciate people spreading the word. But stealing is NOT an acceptable way to promote music or anyone’s music. A better idea…just TELL your friends about an artist that you like, let them LISTEN to one of that artist’s CD’s, but THEN tell them to PLEASE GO BUY that Artist’s OWN CD. The albums of the artists or musicians are theirs; they created them, they own them, and they are allowing you the people to enjoy their work on the condition that you pay a purchase price. There are real costs associated with recording, producing, manufacturing, and distribution, and all musicians or artists have to sell as many CD’s as possible just to break even. They don’t want a huge profit; they aren’t in this business to get rich. They just want to earn enough money to continue making more new albums for you the crowd to enjoy.
All Musicians they do what they do because they love the idea, they love the music, but most of all, they love the fans who “get it” and support them the musicians or artists with their loyalty and integrity. So, please keep supporting the musicians, artists by respecting their hard work, and by making sure you aren’t participating in or enabling the crime of stealing music. If you’re gonna steal something, we recommend you and all musicians go after gasoline, pharmaceuticals, and patio furniture. That stuff is overpriced! We and I believe all musicians love loyal fans, and want to continue making new CD’s for fans that are loyal because they are the ones who will always understand, support and buy Cd’s to make the musician they like to continue his work and what he is supposed to do as a musician. Help all musicians in the fight against music piracy. MUSIC PIRACY is illegal. Treat your new CD like a valuable treasure; you paid for it, so, let’s make sure no one else gets it for free!
As a music producer/beat maker people buy from people that they trust. Selling something online is a lot different from selling something in a store or in person. When online, a prospective client cannot shake your hand, look you in the eye, or have the total human to human experience that is normally attributed to conducting business. Since that’s the case, you have to simulate this experience by creating content that allows people to get a feel for who you are as a person. That’s how you build trust. This can be done through you tube videos, blogs, Facebook, etc. Your first priority is to build rapport with people and get a GOOD name established. Once you do that, you’ll experience the benefits of word of mouth and it won’t be nearly as hard to sell beats. It becomes a snowball effect of more customers supporting your business over time. It’s not an overnight process. Do everything in your power to keep a good name. You WILL make mistakes. I’ve made plenty mistakes. That’s part of being human. But, you have to correct mistakes swiftly with your customers, get back up, and keep working towards maintaining a good reputation. People like trustworthy people.