SFR 169: Good Cash, Bad Cash – Stephen Larsen

SFR 169: Good Cash, Bad Cash

Aug 28th, 2018 anchorwave

Back “in the day” I used to think that money was money, and I should take it when I could. That is SO FALSE. Here’s the difference (from experience) between good cash, and very bad cash…

Several times in the last two-three months, I’ve been offered a lot of money to build funnels for people, and I’ve said “No.”

If you want to buy a course from me, I will not take your money unless you buy within a certain time frame.

Right now, I could go make 100 grand or more in the next month, but I won’t do that because I understand the difference between good cash and bad cash.

My business works for me. I don’t work for my business

No to money

In this blog, I want to share my strategy for when to take on cash, and when you should say no (even if it’s a lot of money).

THE COST OF BAD CASH

The difference between successful people and really successful people is that really successful people say no to almost everything. – Warren Buffett

A few years back, when my wife and I were struggling to support our family, I wouldn’t have even been able to imagine turning down such large amounts of cash.

Stephen with baby

I spent years taking every single little deal that came my way. I spent years sprinting my face off and only sleeping a few hours a night. “Oh my gosh, you have cash to give me. Okay, I’ll take it.”

When you’re short of money, always wondering where your next dollar will come from, it can feel impossible to do anything else, I get that.

However, once your business gets to a certain income level, it’s a habit that you need to break. You have to change the story in your head so that you can make your decisions based on the truths that I’m going to share with you.

If you have too much cash coming in at the wrong time it can destroy your business. If grab every amazing opportunity that comes your way, your business will struggle.

Man in pool of paper

Even though having lots of deals on the go kinda strokes your ego and makes you feel like you’re “The Man,” it’s not true! It’s crap, it’s garbage. Do not believe it.

Deals don’t equal cash, deals don’t equal value, and deals do not equal lifestyle

WORKING ON YOUR BUSINESS NOT IN IT

Unless you want to be a slave to your business, you need to set up systems in your business. People are not businesses, systems are businesses.

If 24/7, I’m the only one bringing in cash and doing the fulfillment, my business dies when I do – or my business dies on the Saturday that I decide not to work. That’s not a business.

We're closed

A business is a series of systems in place that works when you don’t.

I don’t mind working hard. I swear I’ve trained my body to have energy in situations when most people would be exhausted. However, I am not here to die in my chair behind a desk.

Head on computer

My goal is to set up systems that replace me as the operator of my company as quickly as possible.

One of the biggest thrills of having systems in place is seeing how many sales come in while you’re busy focusing on other things. I didn’t close those sales, the systems did. I didn’t fulfill those sales, the systems did. That’s a beautiful thing, right? If you want to know how to make that happen inside your business, then keep reading…

CHANGING YOUR STORY

People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully. I’m actually as proud of the things we haven’t done as the things I have done. – Steve Jobs

If you’ve been a solopreneur for a while, you may find stepping back from the day-to-day running of your business uncomfortable. But you what’s required of you now is sooo different from what was needed during the frantic days taking your product from a brilliant idea to market proven business.

In the early days, you probably had to wear many hats because most solopreneurs can’t afford to hire anyone when they start out. But now, you need to work on your business, not in it.

The days of running around like a headless chicken – trying to do ALL THE THINGS – need to stop.

Dana, I need a new outfit

When you realize that you are most valuable as the CEO, and you start delegating, your business will grow.

The more successful you become, the more AMAZING opportunities tend to come your way. If you get stuck in the feeling that you need to grab every opportunity that’s offered, then your business and your lifestyle will suffer.

If you want to stay sane, you’ve got to learn to say NO.

If you’re like, “but Stephen, there’s so much opportunity out there,” I completely get it. It’s hard not to get distracted by some of the amazing offers that come your way, and that’s why I want to share with you the method I use for deciding what I say yes to, and why I let some opportunities pass me by, even when they are super lucrative.

I want to show you how to get your business ready to take on more of the right opportunities when they come your way.

THE ART OF SAYING NO

There have been multiple times I’ve had to catch myself and stop myself from grabbing an awesome deal. Yeah, there’s a ton of opportunity out there – but not all of it is the best fit for:

  1. My Business
  2. My Systems
  3. My Lifestyle

One of the amazing opportunities I had to say no to recently was a gig building funnels for THE MAN, Tony Robbins.

Stephen with Tony Robbins

I constantly ask myself, “What can I do to have larger cojones?” So, if I’m talking to a major influencer, I think, “What can I do to have large cojones in this very moment? Oh, I can pitch them, yeah!” And so I pitched Tony, and he said yes.

However, at the time, I didn’t have the systems in place to handle all the other aspects of my business – so it would’ve killed my business to take on work for Tony. Does that make sense? I was the bottleneck in my own business growth.

ESCAPING THE BOTTLENECK

man in bottle with cork

One of the cool things I enjoyed about going to college was that for one semester, you didn’t have to do anything but run a business.

At the time, there were only three programs like it in the country. You were put in a group of random students, and given an assignment. I was given a food business. Guys, I am not a cook. Next, we went on a three-day retreat to plan our business and our marketing strategy. Then we had to go make some money.

My team did a bunch of research to find out what food the students on campus would open their wallets for, and how much they were willing to pay us to provide it for them.

The students told us they wanted empanadas. So we created an empanada business.

Until that time, I didn’t even know what an empanada was.

I was voted the CEO of the company – I’ve always been a bit aggressive, I think they saw that.

Lets do this

As the first CEO of our burgeoning empanada company, I created a Marketing Department, (which in retrospect was slightly foolish… I think everyone’s in marketing, but anyways.)

So our Empanada business looked like this:

  1. A Marketing Department – which at the time I still thought meant logos and crap.
  2. A Finance Team – because we needed to measure the numbers.
  3. A Supply Chain – because we were in a supply chain intensive business.

We launched and started doing one and a half to two grand a week. Which is not bad when you’re selling to poor college kids.

However, the issue was that every single decision that had to be made came to me.

I was the bottleneck of every decision inside of that business

There was no autonomy was for any of the departments because every decision had to run through me.

Without me, there was no way for anyone to make a decision on their own – which meant I on the phone, 24/7. Nothing could move without me, and so things moved slowly.

I didn’t mean to set up the business that way, but that’s how most entrepreneurs operate when they first start out

Then one night, as I was journaling about what I was learning in the business (which we had to do that as part of the course), I realized that if we wanted to grow, I had to remove myself as the bottleneck of the business.

So I appointed a Head of Marketing, a Head of Finance, and a Head of Supply. 80% of relevant decisions could be made by these people.

Then once a week they would come to me with the remaining 20% and ask, “What should we do? What do you wanna do?”

The funny thing was, that when I put those systems in place, our revenue increased. We actually started selling more when I was no longer the bottleneck of my own company

Once I had those systems in place, the second thing that I started doing was fine-tuning.

HIDING FROM THE EMPANADA GANG

Shhh you haven't seen me

I wanted to see if the systems that I’d set up would work effectively without me, so I purposely started stressing the system. This may sound ludicrous and kinda nuts, but to do this, I started disappearing during the busiest parts of the day. I wanted to see what would happen. Would the team follow the system, or would things just fall apart?

Sometimes, I’d be hiding and watching them. I’d see them running back and forth cooking empanadas, getting new supplies. I was watching to see where the holes were in the system.

When the system doesn’t work, emotions kick in, and you’ve gotta take emotion out of system building. System building should be emotionless – (which is why I use Trello so much, and why we teach so much about systems in 2 Comma Club X.)

When I saw a hole, I’d go back to the business, and I patch it up. I’d stay working in the business for a while.

Sometimes I’d become the bottleneck again, just to get everyone back on their feet and train them into the system, and then I would disappear again.

I did this over, and over again. Until finally, the business freakin’ ran on its own. And that’s when they rotated the CEOs, and I finally got kicked out.

MISSION DUPLICATION

piggy banks

At the beginning of the year, we brought in like 200 grand real fast, bam – which sounds great, right? But the problem was that I didn’t have the systems set up to deal with the increase in revenue:

  • There was no support ticketing system
  • The fulfillment was different every time
  • The way I was handling objections was different every time

So when my revenue went whoosh! My business went ARGHH! I had to slow down the revenue to build the business systems to create the consistency that frees up your mental shelf space.

Otherwise, by default, you have to work in your business, rather than on your it… And that’s what I’d started finding myself doing.

Once you have an idea and the market has voted with their wallets, it’s not enough to just go scale a funnel. You gotta scale the business at the same time, or you’ll kill the business.

If Russell had left Clickfunnels during its first year, Clickfunnels would’ve probably dwindled to nothing – because there were no systems.

When I left Clickfunnels, they created an internal agency to replace what Russell and I did together.

Teaching with whiteboard

Duplication is not in finding another to replace you. Duplication is creating a system that replaces you

You start removing yourself from the business. It’s not that you’re trying to remove yourself from the customer. I still over deliver. I still do Q&As, but when it comes to the purchasing process and fulfillment, it’s an exchange.

I’m gonna exchange the product for their money, but I’m also going to make sure that 99% of the time, the systems ensure the exact same scenario.

WHEN TO DUPLICATE YOURSELF

silver balls with arrows

  1. When you build your first funnel, your only goal is to bring in the moula – Revenue is all you should care about
  2. Don’t set up your systems straight away – Who freaking cares about fulfillment or support if you can’t fund it?
  3. Make sure that your my script sells and that the funnel is awesome
  4. As revenue come in start to document all the support tickets coming in – What are things that people have questions about?
  5. Then build the support to handle it, and do it in a way that outperforms the revenue – then you can start building a second because you’ve got the support systems in place
  6. Don’t sabotage yourself by taking on more revenue than you can handle – I’ve done that multiple times, and it sucks your time and energy.

WHEN TO SAY NO?

no no no

The bottom line is that you say “NO” to anything that distracts you from building your business in a focused and sustainable way. Even if it’s Tony Robbins, a big wad of cash, or selling your product to a customer at a time that isn’t right for you, your systems, or your lifestyle.

That’s why I’m so forceful about my 48-hour funnel. If a customer doesn’t buy, I push them over to a waiting list. Sometimes, I might open within a week, sometimes it’s six months to a year.

I know that might sound nuts, but:

  1. It creates genuine scarcity and urgency
  2. I’m building a business that works for me
  3. I’m conscious that what I say “NO” to, is as important as what I say YES to

You’ve got to get good at identifying good cash versus bad cash. Cash that’s progressive versus cash that is a distraction to you.

Until Next Time – Keep Crushing IT!

BOOM! If you’re just starting out, you’re probably studying a lot. That’s good. You’re probably geeking out on all the strategies, right? That’s also good. But the hardest part is figuring out what the market wants to buy and how you should sell it to them.

That’s what I struggled with for a while until I learned the formula. So I created a special mastermind called The OfferMind, to get you on track with the right offer. And more importantly, the right sales script to get it off the ground, and sell it. Wanna come?

They’re small groups where I’m purposefully gonna answer your questions in person, for two straight days. You can hold your spot by going to offermind.com. Again, that’s offermind.com.

The post SFR 169: Good Cash, Bad Cash appeared first on Sales Funnel Radio Blog.