Two weeks ago we had a pivotal day in our business. It was business as usual. No big contracts signed, no launch party, no special offers. Just our first 5 figure day of “standard” business (no special orders, no weird custom stuff, no contracts, in other words, no windfalls).
No champagne was touched.
There’s a lot of important factors that go in to owning a business that makes 10K a day, but the most important one is mindset.
If you aren’t there yet, I think its important that you pre-emptively develop the mindset and attitudes that exist in folks who are there. That’s why I’m recording how I’m thinking about this stuff as its happening. I’ve never had a 15K day of turnover, but I’ll be damned if I’m not preparing for it!
For years now Ian and I have been practicing visualization. It seems silly to some people, but I believe that the most important part of growing a business and making money is believing you can do it.
The key difference between day dreamers and folks who get it done is how detailed and realistic your visualizations become (I believe more details = more realistic). I would visualize having a 10,000 dollar day, my dreams would include the number and dollar value of the products we’d have to ship, what kinds of products they would need to be, how many people would need to be in our organization, and what kinds of customers we’d need to be in contact with.
Having a strong sense of where you want to be will help you overcome fear and challenges. There will be a lot of both.
When it comes to major obstacles like contacting an influencer or cold calling a huge customer (or believing you can help them in the first place), you’ll need to create desires that are so compelling to you that your fear begins to pale in comparison.
You can think of it like putting your fears in the proper context. They have an unfair advantage in your brain unless you actively manage them.
When I visualize our future business, daily turnover plays a big role in my thoughts. “Business as usual” is essentially passive income. That’s income that we don’t have to work for. We have to keep systems in place to maintain it, and its inevitable that the market will shift and we’ll have to adjust. But the odds are with me that I could just quit working for the next 6 months and the sharp cats on our team would probably keep things at least about the current level.
In my mind that means everything I do extra is gravy. Contracts, new product lines, new ideas, pushing things along further.
Here’s some of the things I’ve learned on how to get to this point, and where to go from here.
- The only system we over-focus on is our phones. (we use Grasshopper and Skype). There is no substitute in most businesses for meeting and creating deep relationships with key partners, customers, and suppliers. Talk to them regularly. Help them. Make it happen for them. CALL them. We do stuff like order automation and we create protocols for stuff, but relationships and revenues are where we over-focus.
- Hire people. The single most important thing you can do to scale your business. I’m a fan of cart-before-the-horse tactics, which means, if most businesses that make 10K a month have at least 4 employees (for purpose of illustration), and you want to make 10K a month, find ways to get those other four people involved as soon as possible. I know this can seem a little crazy, but finding ways to manage employees, and supply vision to four people is precisely the kind of work you need to be doing if you want to achieve scale. Insisting on doing everything yourself holds you back from the kind of work that you need to get good at. If you are nervous to hire, educate yourself about the power of hiring in the Philippines and get serious about your idea.
- Don’t just partner up with your buddy. You aren’t going to make hay if you are partnering up with your best friend because you think it will be fun for the next 6 months. I know this one is kind of flip but its a classic first timer mistake. Take stock of your situation and make sure you aren’t just in a marriage of convenience.
- Have solid accounting and cash flow plan. Know exactly how much money you want to be making from your business. At the scale of 10K in revenue in one day, “cash” might only exist on paper, that means the conceptual framework you use for your personal finances, “x in the bank, x in my wallet,” doesn’t work. You need to preserve cash in a business if you want to earn it. If you leave profits in your business, have a clear plan on why they are there. Cash will disappear when its not tended and preserved.
- Know Your Shit. This is a common mistake I see people making. To make a great business work you need to understand something valuable. That can take time. People often want to outsource or hire-in to understand their own markets and products (this is especially the case when it comes to software and web-based products). This is almost always a disaster. Find me a successful entrepreneur who doesn’t understand the key technical elements of their product. You don’t need to be a programer (in my case I manufacture steel products, but I can’t weld!) but you need to understand in great detail how this stuff comes together.
- Minimize your tax burden. “Making money” is all about protecting it. You haven’t earned a dollar if the government takes it from you. Find ways to legally minimize your tax load and make efficient investments that don’t take much of your energy away from growing your business. Starting an office in an overseas location can help a lot with this, I’ll be discussing these benefits in my upcoming book about the Philippines (get on the mailing list!).
- Never confuse expenses with investment. Those new chairs that you think will make your staff more productive are not “investments.” The are “expenses.” That’s it.
- When you earn your first chunk of cash, don’t spend it. I want to be a cash millionaire, so when I meet one I practically tie them down and try to drain their brain. I’ve had the opportunity to talk to lots of folks who made their millions from scratch, and this is the #1 piece of advice I hear by far. (Even Mark Cuban mentions this in his great “How to Get Rich” series). Liquid cash means access to opportunities, so be prepared not squander those opportunities on stupid stuff.
- Hustle. The better you get at it, the more fun it becomes and the more interesting the party gets.
- Don’t be a douche, unless you are insanely good at what you do and you have endless energy. I’ve met a lot of really sharp douches who have taken calculated risks that didn’t work out and they landed their asses right back in a job. “Good will” might not make your company worth more, but it sure as hell helps you develop a network of people that are willing to help you out when you need it.
- Fire fast. Generally when making a new hire, I stress the importance of a 3 month trial period. I let them know there are lots of chemistry issues that are important to our organization, and that we move people who don’t fit out quickly. I look at employment as a fair and agreed upon contract amongst two consenting adults. I don’t think job security is a fundamental right. When I hire someone, I promise to put them to work the best way I know how in order to create profits for a growing company. In return they can expect a paycheck as long as they are involved and the chance to engage all the new opportunity that will come in to the organization. One of the biggest problems I’ve encountered in my career is the inability of executives to fire employees or re-align people when the dynamic of an organization has changed. I’ve seen businesses lose millions of dollars and waste years of people’s lives by keeping people working in positions where they were no longer contributing to achieve a companies vision. In many cases, these people were no longer respected by their superiors! Keeping mediocre performers in an entrepreneurial, growing business hurts everyone else’s chances to create a great living for a lot more people and offer incredible value to your market. In other words, you aren’t doing your employees any favors by keeping them in a job they aren’t good at.
- Don’t worry about your competition. Beat them. If you are in a zero sum market, put them out of business. Think of ways you can. If you are in a market where you can support each other, find a way you can make money off them.
- Work at it everyday. Every. Single. Day.
- Scale into parallel markets with product tweaks, partnerships, and new positioning. Re-package, re-brand, white label, tweak slightly, license your company rights to a foreign market, re-position, cut deals based on what you’ve already succeeded with. You’ve done all the hard work, now milk it!
- Blog it yo! Share with others so we can learn. This shit isn’t easy and learning from other entrepreneurs helps in a big way and keeps me inspired.