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- [00:01]
A
What you're going to be hearing is a labor of love, something that Roland and I have been working on for a while, but mostly Roland. This is mostly Roland's brainchild because he thinks big, right? He thinks really big. And so for those of you who are new to scalable and what we're all about here, we really are all about helping entrepreneurs, especially bootstrap founders, grow, achieve levels of operational efficiency and then ultimately be able to scale to achieve their maximum impact for themselves, impact for their inner circle, hopefully impact for the world. We spend the vast majority of our time talking about the nitty gritty of scale. We don't spend as much time talking about what does it look like to achieve that, that truly that next level and even become, to a certain extent, exit ready, whether you want to exit or not. And this is Roland's. This is really Roland's specialty. This is where he is. So I'm excited that we are talking about this role. And all I want to do is, is shut up, which is hard for me, but my plan is to shut up, let you talk, talk, play moderator. And so, Roland, if things, if people seem confused, I'll jump in and interrupt and ask a question, but in general, I want to let you go. And then maybe towards the end we'll come back and answer some questions, if that works for you.
- [01:13]
B
That sounds good. I'm psyched about this because this is something that we started back in 2017 thinking about and iterated and we did a lot of live presentations to very small groups of people, typically 15 to 20, to hone how to best communicate what we were doing. And, and it's evolved over that time. And we've got a really great group of companies that we have created as a portfolio. And so all of this comes from all of that and all of the things that we've done and all of the people, including a lot of you that are on here, who've contributed. So with that, I'm just going to run into it. Basically, this is brace for impact. So this is really about the five shifts that you need to make to get your business to seven figures.
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A
Seven figures per month.
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B
Per month, yeah. Why would you. Oh, you mean just some people want to just get seven figures a year? I see what you're saying. Okay, got it. Yeah. So this is about generating seven figures a month and beyond. So this is the next level for you. And who is this for, really? This is for anybody who owns and operates a business that has already generated or is already generating a hundred thousand dollars Per year. You have to have that first part together to really be able to take advantage of all the stuff that we're talking about. This is really for people who already have a business, you've already cracked that that initial product market fit and you're doing about a hundred thousand dollars a year or more. It's for people. And obviously a lot of our businesses are doing significantly more than that. And so this works really for anybody that's up in that zone, anybody that sells physical or digital products or services, whether you're selling online or offline. The cool thing is we in our collective portfolios we have several offline businesses too. So we own restaurant chains and we own real estate brokerages and, and other things that aren't just online. Whether you're an entrepreneur or an infopreneur, you're selling information. If you're an investor, this is really great. A wonderful way to create wealth is to take these strategies and bring them into other companies to help them grow. So even if you are an investor, this works. An advisor, if you're a coach or a senior level operator, there's a lot of stuff in here that operators can take advantage of and benefit from. And if you're self employed, and we distinguish self employed from entrepreneur because self employed you're really running a business that is very well established that a lot of people are doing. So there's a lot of competition for those. But there's a whole bunch of things that you can do to give yourself a really tremendous advantage over the other people that are doing this. And if your products or services create any kind of unique value for your customers or clients, then this is for you. So I'm gonna show you how to add seven figures per month to your existing income. Even if that seems like it's a little crazy right now, it's really possible to do and we've done it time after time and helped other people do it. Also going to show you how to leverage your existing efforts so that you can get 10 times more results from what you're already doing. And this kind of goes back to the way back when Tim Ferriss first came out with a four hour workweek. It really wasn't about cutting your hours down to 4 hours per week as much as it was about working 4 hours and getting 10 times the results from it. That's really what he was trying to say. And so. Or really about leveraged action. So what can you do now that's a smaller effort that will have outsized results? Also we'll Talk about how to generate consistent bankable profits. Bankable profits are important because those are the profits outside and above what you need to grow the business and keep the doors open, you actually need to be able to be putting money in the bank and stacking cash as well. We want to get your business working for you, not the other way around, which is how it is for a lot of people. Also, how to command a premium valuation for your company. So if you decide to sell it, then you can hit your number, whatever that one number is, that sets you and your family up for the rest of your lives and you don't have to sell it. But a saleable business is going to work much better for you than one that's not. Because the whole point of making a business exitable or saleable or exit able is that you have something that reduces the risk for whoever comes in next. So if their risk is going to be lower coming in next and therefore they're going to pay you a higher price for it, it stands to reason that if you just keep it, your risk of downsides will also be less. So it's a better business to own. Basically, it's how to do all of this stuff without working more hours, without going into debt, don't have to borrow a ton of money. You don't have to give up ownership to investors, which is something a lot of people do. And it's really very often a mistake because they do it early on. And that is when you really don't want to give it up to investors. Also, you don't want to be. You don't be selling out your customers or your employees and leaving them hanging or your own dreams and do this rise and grind stuff that everybody talks about, or fake it till you make it, or fund your way to success that, that none of us really wants to do. None of us. I don't. I haven't met a single person that says, I can't wait to get up and grind today. Okay? So my promise to you is a step by step strategy for seven figures per month and a couple of house rules before we start. This is not get rich quick. This is definitely going to take work to do, but it is so worth it. It is so worth it. You also have to offer real value to your customers. It can't be just, we're going to, we're going to saturate the market and try to get a quick cash grab. Okay? This is a real continuing and perceived value that you can convey to them. And remember, 90% of businesses fail. I love this line from Jeff Bezos's last letter as the CEO to shareholders at Amazon. He said, differentiation is survival and the world wants you to be typical. I can tell you that there is absolutely nothing typical about what you're about to learn or the results that I am going to share with you today. So if this sounds like you, you got a product or service that people want, but you want to reach a whole lot more people and generate substantially higher sales without a whole lot more effort, or every month you find that you're starting out at zero sales and each month sales depends on new customers that you can sell during that month. Or you watch other business owners on Instagram, Facebook or TikTok and they're living the life that you think you want. Now, the truth is, you might not actually want that life, but you don't have any idea how they're doing it, or you're just completely overwhelmed with all the things that you feel you have to know to do to succeed. You've got tech stacks and hiring and mastering every single online platform. That is a difficult way to go through life. Some months, maybe, you take a lot of money out of the business and then the next month you're wondering how you're going to even pay the bills and you find yourself saying from time to time, I'm done. And you just want to sell. And at the same time you're wondering, how the heck do these unicorn companies, these billion dollar valuation companies, become worth so much so fast? I feel like it's like a feeling that you're looking through a glass at the other side, but you just don't know how to get there. And one thing that's nice though, is once you actually have achieved scalable impact, you'll be able to generate as many sales as you want at will from a wide variety of low effort, highly leveraged actions. You'll have enough profits to not only fund your growth, but also to reward your employees and pay yourself more than you ever have before. Ryan and I are very focused on what is the business doing to pay us? How is it that we can double our salaries? How can we get more out of what we're already doing? Work will become fun again when you have scalable impact. Work is actually fun again, the whole reason that you probably got into business in the first place, but you actually enjoyed what you were doing the way it was when you first got started, before all of the problems came along. And you'll also have investors that are continually asking. We get hit up several times a week if they can pay you a premium price to acquire your business, not a fire sale price, but a premium price. And then you'll have the option of either cashing out with the big exit payday, or cashing in and holding on to your business as something that can be a cash cow. So let's talk about what the scalable impact framework is and how it came to be. The way that I discovered this was through trial and error, down in the trenches, doing a ton of deals, acquisitions, integrations where you take a company that you buy and then make it work with the company that bought it. Turnarounds and exits. And what I've found is there's really three big problems that every single business eventually faces. The big challenge is that they're either going to face unleveraged sales. So they're on that hamster wheel of having to continually go out and find new business all the time. And the efforts that they're doing are ever greater because the initial sales that you get. Have you ever noticed like when you launch whatever pent up demand existed or whatever existing relationships you already have with potential buyers, that's what happens first, right? That is easy. And then it starts to get harder and the sales efforts actually have to be greater and greater. So you're not using any leverage, you're actually deleveraging your sales in most cases. The other is that there are inadequate profits. So the challenge with that is you're effectively a toothless chihuahua, right? You have no ability with no profits to find out how to grow without going and getting yourself in debt or giving up pieces of equity to other people. So you've got to have profits that make sense. And also, I don't know how many of you have experienced this, but I know early on in my career I felt like I had a lot of jobs working for myself, but still it was a job. I didn't get anything that was a reward for being an entrepreneur. That extra money that distributions that I should be able to put in the bank account. And that created a challenge. And then last but not least, non transferable value. The problem with many of us is that we are dancing bears, right? That we're just out there doing the work that we do. We effectively, like I said, have a job. And there's nothing that we're building in terms of an asset that somebody else will want to buy because the minute that we stop dancing, the people are going to stop throwing the money. That means sales stop. So it can be very difficult. Okay? The five shifts that I want to talk to you about today. There are five of them, and you need to do these in order to get your business to seven figures a month. And I'd want you to do this without working harder. And I don't want you to sell your soul or your company to banks or investors. So I'm going to walk through those with you right now. Now, the first three shifts are external. These are shifts that you need to make in your business. Okay? And then we'll cover two internal shifts that you have to make in yourself because a lot of it starts right here. That said, the three external shifts that you have to make are sales, profits, and value related. So to achieve scalable impact, you have to do three things. First, you've got to. And these are very important to think about from a strategic standpoint. And how are we going to activate these things? You've got to amplify your resource deployment and efficiency to generate more sales with less effort. So basically, you need to figure out, how can I sell more stuff with less effort? That's called leverage sales. The second thing you need to do is you need to be able to increase your profit margins so that you can have greater owner distributions. The more profits that you can get, the more freedom that you'll have. And these are called bankable profits. Not just profits, but bankable profits, meaning that they are able to pile up in the bank for you. And then last but not least, you've got to separate and augment the business's identity value and operations from its owners and founders so that you can have the freedom and the exit ability. Not that you might want to exit, but. But having the option is a really big deal. We call that transferable value. Okay, so let's look at the SPV framework. This is how this all comes together. First, you've got leveraged sales. Okay. And then you've got bankable profits. And then you've got transferable value. And where those meet creates impact. So let's talk about each of these. Right? That's scalable impact in the center where all of these meet. So to get there, we want to do both leveraged sales and bankable profits. When you've got leveraged sales and bankable profits, it's giving you momentum because you have profits that you can plow back into the business and pay yourself. Right? Bankable profits plus leverage sales gives you momentum. Momentum is a critical component to driving your business forward. The second thing to think about is when you have bankable profits and also have transferable value that's awesome, because now you've got options, you have optionality. If you've got bankable profits and transferable value, you can just continue to let the cash come in, or you can transfer the value by selling some or all of the company to somebody else, or you can go out and buy additional companies. You can do mergers, you can do acquisitions. There's a lot of ability to do different things when you have both bankable profits and transferable value. And then last but not least, if you've got leveraged sales and you've got transferable value, then you have power. You have power in the market, you have buying power. You have the power to move the market in the direction that you want. You are a player in the market. Okay? Now when you have all three, you get momentum, you get options, and you get power. And when you have all three of those, that is really what creates what we call scalable impact. So let's look at these three external shifts. The first shift is where we're going for leverage sales. And I'm going to give you a strategy spotlight with each of these as we talk to them. So the strategy spotlight here is bolt on business, which I'll talk about in the context of the case study that I'll share with you. So here's the challenge. Now, we talked about what it means to have all of these things, but let's talk about what it means to not have each one of them. What if we don't have leveraged sales? If we don't have leverage sales, it's really hard to build momentum because sales are going to ultimately peter out. We're going to find that we can't continue to drive new sales, and that's going to slow the growth of the company. We also find that we really don't have any power to move the market or to negotiate with our suppliers or to command premium prices with our customers. So that's a challenge. If we can't get leveraged sales, we don't have momentum and power, and we definitely aren't able to achieve scalable impact. And to unlock this leverage sales, what you have to do is you have to implement systems that are going to cause your prospects to decide to buy and to pay quickly. Okay? So you can never succeed, by the way, in causing prospects to do something you don't do yourself. So you want to be your ideal client. You want to step and live in the shoes of your ideal client. You also need to decide and pay quickly when you see value. Right? It's really Important. I know Ryan Moran, who was, who exited his business a few years back, was telling us that he came into a hundred thousand dollars mastermind that we had because he said, I can't run a hundred thousand dollars mastermind until I have paid 100,000 and been part of a mastermind. He said, I need to be the client that I want. And this is true for all of us. You got to live in their shoes. So let's do a case study with Digital Marketer. And this is going to be a walk down memory lane for Ryan because these are really all, or actually most of the products that Digital Marketer had when I came into the company back in 2013. Ryan, I don't know if you remember any of these, these products, but it's. There was a whole bunch of them.
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A
And this is not even, this is not even half.
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B
This is.
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A
It was a. Yeah, there was nothing connected. It was, dare I say, a smattering of products. Yeah. There was very little strategy. It was just. Yeah, this is walk down memory lane. Some more painful than others. But sorry, keep going. Yes. Thank you for this reminder, though.
- [17:29]
B
What's cool about that is Digital Marketer was promo bound at the time. It was on a hamster wheel. And I remember that at TNC 2014, which was the first year that we moved it into, into San Diego, Ryan and Perry and I were sitting down in the lobby bar and we were talking about how we were going to make payroll. And I was like, this is the company that I came into. We don't know how to make payroll. And the conversation went around, the problem is this, that we have hit after hit, but we have to keep having hits to be able to generate the profits that we want to generate. And so despite the fact that Digital Marketer was a great brand, despite the fact that it had millions of dollars in sales, it was living launch to launch and promo to promo. And so that made it impossible to scale. And so the conversation that we were having was, I remember Perry because Perry was writing offers on one of the sides of the business and he's like, man, I just can't do it. I've got to have 16 offers, complete offers, complete new products and programs every year to be able to have the eight, let's say, that are going to be successful because half of them might not work out the way that you want. And then to be able to promote them, to be able to generate the revenue that we wanted to generate and the profit we want to generate, and it was just impossible. So here's One of the challenges was that each of those products, if you go back and look at them, they were very ephemeral, right? They didn't last and it didn't allow us to build a catalog. So when we said, well, let's just go pro, let's go promo, one of the successful ones from last year, and everybody was like, yeah. Problem is that everything has changed. And so if you're in an industry where things are changing or you're living in this launch to launch or promo to promo business, you really want to think about sales accelerator number three, right? Sales accelerator number three. There's 197 by the way of these sales accelerators. 197. So we look at each business. When I get. When I go into a business, I do consulting, right? Just $25,000 for four hours to consult. I have one today, this afternoon. And when I go in, I look at the business and we talk about what are the biggest challenges. And then I've got my menu of what Frank Kern calls my bag of tricks, right? I've got a menu of options that I can choose from to say which tool can I apply to this situation? The very first tool that I look at here and what we talked about when we had that meeting was how can we have evergreen products? How can we build a product catalog with multiple seven figure evergreen products that we can continue to sell all the time instead of just doing this launch thing? Or even if it's a product that, like Jeff Walker's got a great product launch formula and he launches it once or twice a year and that's it and then it's done. To me, that's awful. It's great for him because he's a lifestyle business person, but in terms of growing a business and hitting the number that you want to hit, it's a really hard way to go about it. So the second sales accelerator that we applied was the subscription model. And that was just simply turning the things that we were selling and selling one time, like a course for 4:95, let's say, into a recurring revenue product. And we were able to build up our annual recurring revenue. So multiply your monthly times 12 to about $9 million a year simply by doing that strategy. And then last but not least, we applied sales accelerator number 105, which is a bolt on business, which is our strategy spotlight for this section. Okay? So bolt on businesses happen, where we're looking to say, what are we doing right now really well that somebody else could use. And we have a whole process and tool for going through this. But the bottom line is we were talking with infusionsoft Keep and they said we would like to have more qualified sales leads, which is somebody that basically asks for a demo. But we're not as good at lead gen as you guys are. You guys are digital marketers, so you should be able to do that really well. And we said, as a matter of fact, we are. And so Ryan created with them in mind a content marketing program that we then had them agree to pay. Initially it was 25,000. It went up to $50,000 a month plus 10% add on to that for managing it, a program that they were paying the advertising for. And we were co reging the leads, meaning that we would actually have Ryan delivering the content. The infusionsoft would pay the ad budget every month. You're talking about 25 then 50,000 plus the five to manage. So $55,000 a month. That that was free advertising that we got because we bolted our business of content generation onto their desire to receive leads. And then whenever one of these leads, we would sell them digital marketer products and other products, they'd go on our list. And then whenever one would say through the nurture process that they were interested in a demo with infusionsoft, we would send them over there. And that's something that we still do to this day. So three really cool strategies that we're able to use to increase our sales without having to increase our efforts. We're still thinking about this with each of these. This is really important. So with sales accelerator number three, the first thing we did, we took what we know, what we did have to do before we were already doing, which was selling products. And we said, what if we just have products that continue to sell? And here's the thing, the reason there's 197 of these is because there's so many things that are small things that multiply. Multiply the effectiveness and impact of that you've forgotten to do right that you're not doing right now. I promise you that when you go in and you start doing these things and you get them systematized into your business, the impact is ridiculous. That's how you move to a seven figure a month business. You don't leave all these things that were working once for you on the table and you think bigger. You think, what if I could sell my product one time that my. What if I could sell my product that I'm selling one time a whole lot of times with no additional effort using all of the collateral and creative and ads that I created before, what if I just give that to an agency, let's say, and let them run that. Now I've got an evergreen product. It's the same level of effort or even less if you're putting it out to an agency and now you're building conversion assets one on top of the other as you get these products. The second one is the same thing we were saying, okay, right now we create these courses and products, but we just give them one time and then it's one and done. What if we just do the same thing that we were doing before, but instead of that, people pay us every single month for these products. And then the third one is, we're already doing this marketing. What if we get somebody else to pay for it so that we don't have to? And we can either take that $55,000 a month home and have a wonderful life with it, or we can put it back in the business and grow it, or whatever we want to do. But this allows us to increase sales with other people's efforts and with other leveraged activities that don't require us to do anything more, but allow us to have significantly more sales. So the leverage sales impact potential of this first shift, I want you to calculate. Right. See, I would say right now, here's my monthly average sales. So you would take your average. Excuse me, you would take your annual sales. So let's say that you had $600,000 in sales last month. You're going to divide that. Excuse me, last year, you're going to divide that by 12 months. And so that means that your current average monthly sales are 50k. Right? 600,000 divided by 12. Your best sales month, though, might be significantly higher. So a really good way to figure out what is the potential impact of activating these sales activators is to say, okay, my best month, Maybe that was 100,000, and my average month was 50,000. Then that means that there is $50,000 times 12 months. So 100,000 was my best month, minus my average. That means I'm 50,000 over my worst. Excuse me, over my average in my best month. If you multiply that by 12 months, your immediate sales growth potential is $600,000. Okay? And so doing this math to me can be very motivating to, because it helps us to see what we're potentially missing out on. So I would encourage you to take your best month over the last 12 months. Take a look. What's the best one that you had and then subtract your average monthly sales from that, multiply the answer by 12, and that'll tell you what your immediate sales growth potential is before you really do anything else. This is stuff you've already done. That's how we start, right? This is what you've already done. Okay, so your best sales month, every month there's a. I gave you the formula. Oops, I gave you the formula for that. So there is a worksheet for you to do that right now. Basically, if you write your best month down, subtract out your average and then multiply that by 12, that'll give you your, your potential growth. Okay? So the bottom line here. Don't leave money on the table. Don't leave money on the table. Why? Every business experiences ups and downs in sales. So the challenge is that very few business owners take the time to analyze exactly what helped make the high months high and made the low months low. So once you see the variance and you can identify the cause by reverse engineering it, you can say, how do I replicate having the best month every month? And if you can't? Because like we did this with Traffic and Conversion Summit when we owned a hundred percent of Traffic and Conversion Summit, we said it's really only one month out of the year whenever we hold the event that we have this giant pop in sales and we have this huge audience that's assembled and we have the ability to sell stuff at our booths and things like that. How could we replicate that and have it every month? And before the pandemic started, we actually did have a plan to do that. That was called globalization. Right? They call it geo cloning, where you take the thing that's already working and you move it to other geographies that maybe aren't currently coming to see it. Even though we have people from all over the world that pre pandemic came to see tnc. We had people in Russia that wanted to put TNC on. We had people in Brazil that wanted to put it on. We did it in Australia, we were scheduled to do one in Singapore, we were scheduled to do one in Amsterdam. And all of that will happen once the world returns. Because we were able to exit TNC, we sold 80% of it to a Blackstone company called Clarion. And Clarion has the skills, experience, money and contacts to do that expansion. So we actually could have this one time event that was this big spike in our revenue every single year, over and over every single month. We only needed to have it in 11 more places. Okay, so as crazy sometimes as it sounds, if you start thinking like this, it will open you up to the possibilities that you can have your best sales month every month. As a matter of fact, you can go way past that. We had 197 ways to do that.
- [29:07]
C
Hey business owners, I've got a quick question for you. Do you feel like you're missing the data you need to make strong business decisions? If so, it's probably time to build a CEO dashboard. It's an easy way to get everyone in your company literally on the same page, focusing on the numbers that matter. So the scalable company put together a free spreadsheet template that will give you everything you need to deploy your own dashboard. And to make it even easier, Ryan Deiss recorded a short training on how to use it. If you want to get your hands on the template, go to businesslunchpodcast.com dashboard that's businesslunchpodcast.com dashboard and you can download it for free.