← Rich Dad Radio Show: In-Your-Face Advice on Investing, Personal Finance, & Starting a Business
Rich Dad Radio Show: In-Your-Face Advice on Investing, Personal Finance, & Starting a Business
How I Built a Business That Gave Me Time & Financial Freedom
00:14:23
Entrepreneurship is supposed to bring freedom—but too often, it does the opposite. In this episode, I dive into how I built a business that let me live on my terms. From learning to sail to getting my MBA and being fully present with my kids, I...
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- [00:00]
Ryan Seacrest
Hey, it's Ryan Seacrest For Albertsons and Safeway. Spring is in full swing, which means it's time for spring cleaning. Don't worry, we've got everything you need to stock up on spring cleaning essentials because a clean home is a happy home. Shop in store or online for spring cleaning favorites like Method All Purpose Cleaner, Swiffer Heavy Duty Mopping Cloths, Lysol Bathroom Cleaner, Scotch Brite Sponges and Clorox Disinfecting Wipes and Save. Offer ends April 22. Promotions may vary. Restrictions apply. Visit albertsons or safeway.com for more details.
- [00:31]
Indeed Representative
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- [01:25]
Tyler Jorgensen
Freedom doesn't come from just making money. Most people move from employee to self employed. This is one of the riskiest moves in all of the cash flow quadrant. So they trade a 9 to 5 for a 24 7. I was the only employee right? This was a small business that I was starting on my own. I didn't want to be the cheapest and the low cost. I didn't want a business that attracted deal seekers. I positioned my my company and my products as a premium prompt. For me in that business I didn't exist. But one of the biggest mistakes that I ever made in this business is I didn't grow it more and fast enough.
- [02:08]
Ryan Seacrest
You're listening to the Rich Dad Radio show.
- [02:11]
Tyler Jorgensen
The good news, the bad News about entrepreneurship.
- [02:13]
Ryan Seacrest
Here's your host, Tyler Jorgensen.
- [02:16]
Tyler Jorgensen
A lot of entrepreneurs say that they want freedom, but most of them end up building a business that traps them more than a 9 to 5 ever would. I knew that I wanted to build things differently. My business allowed me to learn to sail, to go back and get my mba, and most importantly to be fully present as a father as I raised my four young kids. But freedom doesn't come from just making money. Today I'm going to break down the real reason why most entrepreneurs stay stuck in the grind and how I built a business that worked for me, not the other way around. One of the biggest risks of going out on your own and starting your own business is that you take the leap from employee. And if you're looking at the cash flow quadrant, we could put a picture of the cash flow quadrant here. If you're looking at the cash flow quadrant, most people move from employee to self employed. This is one of the riskiest moves in all of the cash flow quadrant because even though you're working for yourself, you don't yet have the structure and benefits of a business. You're still on the left side of the cash flow quadrant, but you also don't have a team and a company that's supporting you. So you're in this really, really risky position. And so the way that most entrepreneurs and first you know people that are just starting out fix that is by working more. So they trade a 9 to 5 for a 24 7. There's two important things that have to happen when you get into this point. You have to first make the decision that you want to continue moving through the cash flow quadrant into business owner. And even if you're not there yet, you need to treat your self employed business just like a bigger company. So here's what I did to ensure that this business that I was building gave me the life that I wanted and gave me freedom. Because it was really important to me that as I built this new business, it gave me time, freedom so that I could do things like go and learn to sail, go back and get my MBA at usc, but most importantly to spend time with my kids. So here are a few things that I did to create freedom in my business. Now again, this was a little while ago and a lot of these things are still going to work today. But the Internet changes and customer habits change and customer needs change. And so but what we did right off the bat is I built the business to attract the right type of customers. I didn't want to be the cheapest and the low cost. I didn't want a business that attracted deal seekers. I positioned my, my company and my products as a premium product. I wanted to be the highest quality. I wanted to be the highest priced. Even so we were, our prices were much higher. I think I mentioned in one of the previous episodes that even though our total average order value was much higher, our cost per ounce was much lower. But I Wanted to attract people that weren't afraid to spend. In my experience, people who are looking for quality and who are not afraid to spend tend to have significantly less customer service needs. I didn't want a business that every time I shipped a product I had to deal with 10 or 15 emails or phone calls or all these things. And that leads to the next thing. Not only did I set up the business to attract the type of customers that I really wanted, but I also set it up so that communication was limited. I made sure that communication was all done in email. We had a phone number, but it was an automated voice response system. I didn't want to take calls. Some other things that we did right off the bat on the website, we made sure to list multiple contacts. If you wanted to reach out for wholesale, reach out to wholesale at company name. If you wanted to reach out about press and news, then reach out to press company name. If you wanted to reach out to customer service, it was customer service. I was the only employee, right? This was a small business business that I was starting on my own. But I created all of these things because I was thinking about what the business would look like when it grew. And what that allowed me to do is it is that as the business grew and as we started hiring people, they could just take over each of those individual components. So the first person that I hired basically just stepped in and took over all of it. And then we ended up having it more people and they could handle different pieces. But it's important to begin with setting up the company from day one to look like it's a little bit further along. And that just gives you way more flexibility and freedom to control how you interact. Because for me in that business, I didn't exist. So Tyler Jorgensen didn't exist in that business. It was all run by just with a pseudonym. Right. I didn't want to run the day to day parts of the business. I wanted the customer to deal with somebody else. And that was for a few reasons. I really wanted a little bit of anonymity as I was rebuilding myself and figuring out what it is I was going to do. Some other things that we did right off the bat to really focus on lifestyle design. It was I chose a business that I didn't have to work day to day in. So once I built the website, once I set up distribution channels, once I set up ads and established some basic customer service like sops and standard operating procedures, I could leave, step away from the computer and everything else worked. So what would one of the fun things that we would do is while my family and I were out on vacation or we'd be driving across the country in our minivan, my phone was set to chime every time a sale came through. And since the sales were pretty good size, you know, pretty good size order values, each sale meant a lot to us. And we'd be driving and we'd hear the phone chime. It was a cash register sound. Cha Ching. And every time we'd hear that sound, the kids would all scream and we'd be like, yay. And we'd cheer. And it was really fun because it made, made it so that the kids were kind of a part of the success of the business. They didn't know what was going on behind it. They just knew yay. Keep. That means we could keep going on vacation and we'd take, you know, a week long or a two week long road trip and those every time the phone would chime, we, we'd all celebrate and keep going. So a couple of other things that were really important to me in terms of lifestyle design. I didn't want to be tied to my computer. I didn't want to feel like I was still working a 9 to 5. I didn't want to show up in the face of the business. And I wanted location and time freedom. I built all of those things into the business so that I could really stay focused and present with the kids. And it was awesome. It was such a wonderful time. But I still made mistakes. And I've mentioned some of the mistakes that we in the last episode in terms of importing and manufacturing and things like that. But one of the biggest mistakes that I ever made in this business is I didn't grow it more and fast enough. You see, I set a goal and we hit that goal in the first 30 days. I didn't expect to hit it that fast. But I. What I didn't do once we hit the goal is I didn't reset the goal. And I think the biggest mistake is that I didn't reach out for help. I think part of me was a little bit embarrassed that I had gone from running the big a big real estate and mortgage company to now I was just selling some supplements online. I don't know why that was. That was. I felt that way. In hindsight, that was really cool and I should have been super excited about it. But I didn't reach out to people for help. I didn't. I just was doing it all on my own. I was figuring it out. I was And I was kind of keeping it quiet. And there was a couple of times where people reached out and said, hey, what are you doing? And I would tell them and they'd say, man, that seems like, that seems pretty cool. You know, I do, I do this, maybe I could help you. And I, I didn't accept the help fast enough. And so at one point I was doing well. The business was, was doing six figures and six figures a month and, and making pretty good money in terms of net profit. And I had somebody kind of ask questions about what they could or what I was doing. And you know, I even sent them the website and give them a discount code so they could order the product because they said they wanted to use it for themselves. And they said, hey, I, I do Google Ads. Maybe I could help you. And I was like, yeah, that'd be cool. We should connect. Well, before we could connect, it turns out that person just kind of modeled the business I was doing and started running ads for their own business. They set up their own contacts and their own, you know, manufacturing partners, but they scaled like crazy. And where my business did okay, their, their business, which was essentially a model of, of mine, did phenomenal and really set them up financially just to be really well off for a long time. There was other things that happened and things like that, but the biggest mistake I made was not scaling when I had a winning offer. So if I could have understood things that I didn't then. So things that I didn't understand then that I understand now is the lifetime value of a customer and the cost to acquire a customer. So customer acquisition cost and lifetime value. If I had understood those two things really the way that I do now, and I'm gonna explain them a little bit here, I would have known to put the pedal down and just spend like crazy and scale that business as, as fast as I could. In general, if you can look at how much it costs to acquire a customer, and if you can acquire a customer profitably on the very first purchase, you're already beating a lot of your competitors. There's a lot of the big companies out there that are selling supplements or really any type of services online that they don't expect to be profitable until your second purchase. And that's, you know, maybe they're VC backed, maybe they got kind of crazy money to burn. But if you're an entrepreneur and you're just getting started, you need to be profitable on your very first purchase. I was, I was very profitable on the first purchase and I didn't this was new to me, so I didn't understand email marketing and ascension and how to get people to buy again and lifetime value of the customer. And if I did, what I would have seen is that I was acquiring customers for about $34, sometimes up to about 50. My average order value was $127. My average cost of product and shipping was, was 27. So I was making $50 profit per new customer. Man, why did I stop spending money? Why was I limiting my Google Ads budget? And there were other people, right, that, that person that I said that kind of came in and modeled. They were willing to only acquire, you know, to only make about $10 per customer. So they spent way more money on Google Ads than I did. Right. And there's a lot of fun benefits when you run a business that spends that much money on ads, especially if you're using a credit card or something that gives you rewards. Right. There's a lot of cool things that you can. You get some cool benefits that are kind of an unspoken fun benefit when you're spending that much on ads. But the challenge of doing those things is, is that you don't know what you don't know. And again, one of the great things about today is that you have so many mentors, right? We have digital virtual mentors all over here. You can listen to episodes and shows like Rich Dad Radio. You can go around YouTube and find out experts. These things weren't as easily shared as they were when I was doing it. And so now you can really find answers and stay humble when you get your first few wins. Sometimes it's easy to stay in and quiet and into yourself. And even though I had somebody kind of, I don't like the word steal, but take that idea and run with it on their own instead of collaborating with me, I still encourage people to talk freely and to, to reach out to others and ask for help. The, the odds of somebody modeling what you're doing and running with it are really slim. It's happened to me, absolutely. But more often than not, especially if you're reaching up out to people that are further ahead than you, more often than not, you're going to find people really like to be supportive and helpful. I just came back from a mastermind where the entire event was built around deal flow and joint ventures entirely, just focused on helping you move your business ahead. Right. By sharing networks and connecting with each other. And so I think that in general, in business, more people want to help than to steal. And I think if we have an abundance mindset instead of a scarcity mindset, we're going to find far more opportunity. And maybe that person wouldn't have stolen my idea if I had responded faster with yes, I would love your help. Can we meet tomorrow? Right. And so this business gave me was starting to give me an amazing freedom. We were able to travel a lot. Every time my kids were out of school, we were on a vacation. We were doing really fun things. I was able to be present to coach their teams and and just be be around while they were really little and in cherish and enjoy all of those moments. But because I was so focused on that freedom, which was good, I also made a lot of scaling mistakes. And so in the next episode here of Rich Dad Radio, I'm going to break all of that down for you and I'm going to reveal the biggest business lessons that I learned the hard way so that you don't have to. I'm your host, Tyler Jorgensen. Join me for the next episode. It's your turn to go out and do something.
- [15:48]
Ryan Seacrest
Hey, it's Ryan Seacrest for Albertsons and Safeway. Spring is in full swing, which means it's time for spring cleaning. Don't worry, we've got everything you need to stock up on spring cleaning essentials because a clean home is a happy home. Shop in store or online for spring cleaning favorites like Method Allpurpose Cleaner, Swiffer Heavy Duty Mopping Cloths, Lysol Bathroom Cleaner, Scotch Bright Sponges, and Clorox Disinfecting Wipes and Save. Offer ends April 22. Promotions may vary. Restrictions apply. Visit albertsons or safeway.com for more details.