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Growth Every Time Pt. 2
I’m going to jump right in because this is part two. I don’t have time to review steps one through five of these ten steps to guaranteed growth. I would highly recommend you do go back to episode 383 so this can make somewhat sense. Number six of this ten-point screen that guarantees growth 100% of the time to any business in any industry of any size is sell to your audience. The key is “Your.” You don’t sell to any audience. You don’t sell to the universe. You don’t sell shoes to people looking for a haircut. You sell to your audience, which means you got to do some homework, some form of a data profile of who your avatar, your perfect client is. You have to have a guesstimation of where the people interested in your product hang out and I don’t mean on Facebook. They could hang out at trade shows. They could hang out watching certain television where you could run a commercial. They could hang out on cable. They could hang out in people’s backyards, I don’t know, but you have to sell to your audience and nobody else. You don’t ever sell to the masses. You don’t sell to the universe.
Number seven, this is where things get touchy. This is where we were in Hawaii and people coming up and very uncomfortable with steps seven and eight. Seven says you have to prove short-term profitability. If we go back to episode 383, step one is you’ve got to have a great idea. You’ve got to have a good product, but you have to prove short-term profitability right out of the gate. Short-term profitability means you’re covering CGS, cost of goods sold, plus advertising. If you can prove short-term profitability, you’re covering for the cost of the goods sold. If you sell shoes, you’re at least covering the shoes. If you do Facebook ads, you’re covering the shoes and the Facebook ads. If you can prove that quickly. Most venture capitalists, most mentors and coaches that have grown a company to at least ten million will say, you don’t give up on that product until you’ve tried five different ways to move that bad boy because then you move into step number eight, you prove long-term profitability.
You don't sell to any audience. You don't sell to the universe. You sell to your audience and nobody else. Click To Tweet
You’re covering the cost of goods sold plus advertising, plus every single thing else involved in running a company and profit. Meaning you’re covering payroll, you’re covering insurance, you’re covering your car. You might be covering an extra car. You’re covering liability. You’re covering accounting. All the stuff most entrepreneurs in the early days want to close a blind eye to. Most people at the beginning of a new product launch, they know they’re clearly covering the cost of the product. They are clearly covering the advertising, “We’re making it,” and then they wonder three years later why they’re still borrowing money from Uncle Bill. For something to make it, you have to prove long-term profitability. One of the things I am most proud of in 27 years as a business owner of the same company is since 1992, we have been between 11% and 17% net profit the whole time. Last year was one of our most profitable years and it was also the largest. Number eight is you have to prove long-term profitability.
Number nine and this is where it’s going to start to grind people. I was in Maui and there was a very wealthy gentleman in the back. He was the first person to come up to me in the hallway and he said, “I wasn’t paying attention to you until number nine.” Number nine is accept defeat when blank. The way you fill in the blank is when defeated. Accept defeat when you’re defeated. This is when this guy started to pay attention. He runs a multinational, multimillion-dollar company, multiple companies actually. Accept defeat when you’re defeated. Here’s the reality. There’s 100% chance your main source of income is going to fail. I went into this meeting talking about one of my older podcasts. I said, “Isn’t it amazing that 460-some of the original Fortune 500 from 1955 are no longer around?” You think, “That’s 70 years ago.” What if I told you that every single one of those product lines are still around, but they’re managed and ran by another company? Then you’ve got to wonder, people were smart in the ‘50s.
Did you ever see the show, Mad Men? People were smart in the ‘50s. How could some of the smartest people in the biggest companies with the biggest budgets have a product that’s still around now, but yet their companies are not around? What in God’s green Earth happened to them? The reality is they got defeated. Their product line got defeated. Maybe they didn’t change their marketing. Maybe they didn’t change their image. Maybe they didn’t change customer service. Maybe they didn’t change whatever. It doesn’t matter. The reality is what you have to accept in business is that entropy is real. Entropy states that anything manmade or God-made is built to go from order to disorder. Everything is made to break down. Your body’s breaking down. If you leave a car in the desert and go back 80 years later, is it a car? Nope. It’s a chunk of metal. Probably not even the rubber left. Everything breaks down.
Jack Welch from GE walked in. They were at $4 billion market cap, four different revenue streams. Twelve years later, he left with twelve different revenue streams, $44 billion market cap. Why? He knew the original four revenue streams had a chance to not be around in a decade and he was right in two cases. He added twelve, he had four, that’s sixteen. He lost four because he left with twelve or whatever the numbers are, you get the point. He got there with four and left with twelve. He had a net of plus eight revenue streams and he blew that company up and became one of the most famous CEOs in world history. Why? Because he knew how to accept defeat when he was defeated. If they couldn’t be number one in the industry, they wanted out. There is a huge difference between number one and number two and three when it comes to profit and effort.
Accept defeat when you're defeated. Click To Tweet
Number ten is so liberating, stack an S-Curve. If you have not gone into the Today’s Growth Classics, which is in iTunes and press the number one podcast. It’s called the number one. It’s the oldest one. It’s the original one. It was what I built this whole podcast series around. It’s called S-Curves. If you have not gone to that, I need you to read that because step number ten says, if you want to dominate and if you want exactly what happened to Kerri and I many years ago when we realized we were going up and down and up and down, we’ve just gone up and higher up and higher up and again in the middle of 2019, we’re going to take a little pause. We’ll probably drop 5%, 8% in gross revenue and then we’re going to go up and up again. Because we have the model in every eighteen to 24 months, we placed this ten-point screen over the company. We say, “What new idea can we come up with, with the same people, the same time, the same energy and the same resources? Then how are we going to prove it by selling it?” Let’s come up with a model. What’s the brand promise of this new idea?”
Go seek out the audience until we find it, until we can relax in the numbers and then we’re going to incentivize that audience until we no longer have to because we need social proof. We’re going to sell to that audience, our audience, the one we found, not the masses. Then we’re going to prove short-term profitability almost immediately within 30 days. Then we’re going to prove long-term profitability probably throw in six to nine months and then we’re going to accept defeat when we’re defeated. Some of the original products we came out with in 2009 and 2010 when we were selling authority websites, which made us very famous. They’re gone. We would never ever sell to another person, no matter how much money they wanted to give us. It’s not scalable. It’s too much work for too little return. Once we find the great idea and we get one through nine, we’re going to stack an S-Curve and do the whole thing all over again years from now. I hope this helps. Take care.
Important Links:
- Episode 383 – previous episode
- S-Curves – Previous episode
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