SFR 174: Why Entrepreneurs Are Paid More – Stephen Larsen

SFR 174: Why Entrepreneurs Are Paid More

Sep 14th, 2018 anchorwave

Whether you’re an entrepreneur or an employee – I’m going to show you how to make more money. And WHY as an entrepreneur you ARE entitled to make MORE money than an employee.

danger larsen rant warning

Now before you say, “Hang on Stephen, I didn’t know you were a financial advisor?” Here’s a big DISCLAIMER.

I am not a financial advisor and I will never ever try to become one. I’m a marketer, and because of this I’m speaking in massive stereotypes here.

However, what I’m about to share with you has both shocked me, and changed my life, in equal measure… So buckle up, and I’ll tell you what happened.

Im not a financial advisor


It was probably about a year before I left ClickFunnels. We had this big launch going on for a program.

I was really excited because it was one of the first projects where I was about to get a little cut of the action, and I was like, “Yeah, this is super cool!”

I was working my guts out. I don’t even know how many hours I put into that project, but it was an ungodly amount of work. I wanted to prove myself, add value, and make sure that everything was awesome. I worked so freakin’ hard.

When the sales finally came in, we had killed it. So I calculated my percentage, and I was like, “Holy crap!”

It was going to be epic. My wife and I had all these financial goals, and now we were on track to hit them real fast.

Stephen Larsen with wife

After years of struggling and barely surviving before I joined ClickFunnels – it was a big deal for us.

But when the check hit my bank account, I got a sinking feeling in the pit of my stomach, “What! There has to be some mistake! Where did all the cash go?”

Sitting in my account was about half the money that I’d been expecting.

I started going through the pay stub trying to figure out what had happened to all my money?

And sure enough, greedy, disgusting, nasty, filthy Uncle Sam’s gross, fleshy hands had been all over the check, and I’d been taxed 42% on that thing.

wheres the money

I was like, “! Oh my gosh, what?! This is ridiculous!”

It was my first encounter of getting paid a huge lump sum, and only getting about half of it. And I was like, “That sucks.”


I know that for a lot of Entrepreneurs there is the dilemma of, “Should I make more money because then I’ll just have to pay more taxes?”

make less money pay more taxes

Like I said, I’m not a financial advisor, but in my opinion, just pay the taxman, and move forward. Pay those taxes and then make more money. Make your wallet fatter.

However, there are legal ways that you can expense out a lot of your business costs – so that you can keep more of the money.

I had no idea until I jumped ship and left ClickFunnels, how much a W-2 employee gets gouged. I mean straight up murdered with taxes.


It actually made me sick to my stomach to think about how much money I’ve given away to the taxman which I didn’t legally need to hand over.

And what was interesting to me, is when I started working for myself, in January 2018 we had a huge flood of cash come in pretty much straight away. I’d built up a big campaign before doors opened so that I had customers waiting and willing to buy.

But this time, when the surge of cash came in, we kept almost all of it. So what happened?


Again, I don’t want anyone to think that I’m trying to become a financial adviser, I’m not at all. I hire other people for that…

I just want to walk you through 4 things that I’ve learned along the way that have radically impacted my journey, and my bottom line:

  1. Why an entrepreneur gets paid so much.
  2. Why every entrepreneur should have their own LLC.
  3. If you’re thinking about starting your own business soon, I want to focus on who you should hire first to help your company grow.
  4. If you’re not running your own business yet, I want to share with you the best places (in my opinion) to be in any company that you work for.


risk pyramid

I always laugh when people ask, “Is this a pyramid scheme?” And everyone tries to backpedal out of that question. My answer is: “Man, you better freakin’ hope it is!”

To be an entrepreneur, it means that you’re at the top of the pyramid.

The entrepreneur at the top of the pyramid takes all the risk, which in turn means they have a huge potential for reward.

skyrise building

When I left ClickFunnels, I was the one who took all of the risk. If I could make it work, and my family had to struggle, the risk didn’t sit on anyone else’s shoulders but my own.

There may be other people in the pyramid with you, but the entrepreneur at the top takes all of the risk. All of the risk! And with that risk comes the potential for huge reward.

The reason why the entrepreneur gets rewarded so much is because they take on all of the risk.

Leaving ClickFunnels without having a revenue stream setup was kinda ballsy, and I only did it because I had enough experience to feel comfortable doing that. I put certain strategies into motion – so that I could mitigate the risk. I don’t recommend that anybody else takes this approach.

Somebody messaged me once, and said, “I quit my job, just like you did!” I was like, “Oh crap!”

green exit sign

So let me just be clear on this, I’m not telling you to quit your job.


It is insane how much money you DON’T have to pay in taxes when you have revenue going to an LLC instead of direct to you as W-2. I lost a lot of money that way.

So, one of the first moves I ever made was to immediately take every exemption I could for my own company. The full amount.

One of the things Russell always told me was:

The business exists to serve people and to make the entrepreneur money.

You need to take money from your business. Your business exists to create income. Don’t be afraid to get paid by your business.

Here’s what I did:

make a change

  • I started figuring out what ways we could put more expenses back on to the business. I’m gonna live off the business, I wouldn’t do that. However, if it made sense to expense it to the business, we did.
  • I made myself a W-2 of my own business, so I pay myself a small amount. I get paid the exact same amount as I did at ClickFunnels, but I keep way more of it.
  • We had greater amounts of discretionary income because of the fact we run a business and had an actual company.
  • I ended up being about the same tax rate as when I was working at ClickFunnels, but suddenly I could expense things like the car.


fruit pie

One thing that my dad always taught me growing up was:

Stephen, always make sure you are in the revenue side of the company, not the cost side of the company.

Which means, that If you are an employee, always make sure that you are based on the revenue side of the business.

If you are in a position that makes it rain, it’s really easy to justify:

  1. Paying you more.
  2. It’s hard to get rid of you.

If you need the job security, just figure how to make it rain.

Someone who’s in support is a cost to the company, you don’t bring revenue in, you’re a cost. I’m just being real with ya.

Think through, “Does my position in this business make money? Do I add to the bottom line of this business or do I take from it?”

money in jar growing

WHEN the crap hits the fan, not IF, WHEN… the positions that are the first to go are the ones that are a cost on the business. Suddenly, everyone learns more things, or they put on an additional hat to cover more positions.

The people they don’t get rid of easily are the ones that make money for the business. Why would you get rid of rainmakers? As a business owner, you just wouldn’t do that.

I’ve heard a lot of stories where someone hires there first virtual assistant or something like that, and that person wants to take a share in the revenue fruits – without taking on any of the risk.

I heard all these stories of people who are like, “Well, I should be getting this, I should be getting this!” I’m like, “What are you freakin’ talking about? I don’t need to give you a dime, alright?”

If you’re not making it rain you are replaceable and I don’t need to give you dime.

So, how do you become a rainmaker?


man in chair with papers flying around

If you want to move up in a company or make yourself irreplaceable. Maybe you have a side hustle going on that hasn’t taken off yet, then this is how you make sure that you are on the revenue side of the business.

When I was, I was an employee at ClickFunnels, I was actively trying to demonstrate this very principle.

I’ve never talked about this, but this was a theme that ran in my head all the time, “How can I make it rain? How can I provide solutions instead of providing problems?”

You should never walk up to your boss and say, “We’ve got this problem!” without also suggesting a solution.

woman with question mark

So if you wanna be the go-to person for the new and upcoming opportunities inside of a company, you gotta be:

  1. A solutions provider.
  2. Finding ways to sell.

You don’t always have to ask for permission to do this.

At ClickFunnels I actually sought opportunities to sell without being invited to do so.

For example, I had an opportunity that came my way from one of my good friends, Ben. Ben Wilson of Conversion Marketing Radio.

He invited me to speak at a DECA regional conference. If you don’t know what DECA is – they help high school students figure out what they wanna go do to make money – they’re kids who are going places.

So when I got up on the stage, I sold ClickFunnels to 2,000 kids, lots of advisors, lots of MBAs.

Why did I do that?

I could have sold my own thing, right? I was selling because I wanted to be a solution provider. I wanted to be the guy who hustles even when he’s not asked to.

I made sure I was selling and bringing extra revenue into the business.

You gotta go to war, you gotta be ready to step up to the plate to kill it and crush it and take down.

ready to crush it

Until the entrepreneur can see that you’re ready to go to war for ’em, they’re not gonna put you on the revenue side of the business or give you any of the fruits that come with it.

The sales guy is the only position where there is hardly any risk, but there’s still a huge potential for reward.

If you feel like, “Oh, I’m not a sales guy.” Freakin’ learn. That’s not an excuse. It’s not. You gotta learn how to be a salesperson, you gotta learn how to sell, you gotta learn how to make it rain.

A lot of CEOs who were working in a company before they became the CEO, a lot of them were salespeople.

You don’t see the head of HR really becoming the guy who’s the CEO in the future, that’s not really like a standard play. It’s the person who knows how to make it rain.

notebook with dollar sign

Who better to have the future of the company be rested on than the person who can continue to make it rain – the person who knows how to make more money.


bottle pouring liquid out

One day, when we were filming Funnel Hacker TV, I pulled the camera up, and said, “What’s up, everyone? Not only do I help make the Kool-Aid here at ClickFunnels, I drink it too!”

Each time we launched a funnel, I would go buy the product. I wanted to be one of the first people to buy the product. And they’re like, “You could just log in and make yourself an account.” And I was like, “Yeah, I know.”

There are very few things I could buy for Russell that he couldn’t buy on his own, right? So instead I focused on becoming his best student. I drank the Kool-Aid that he made because I believed in it.

click funnels on wall

I am one of his best students, I know that. Russell knows that. The community knows that. I do what the man says!

If you are an employee:

  • Figure out how to be a solution provider.
  • Learn to sell.
  • Drink the Kool-aid, don’t just make it.

Be all in, then an entrepreneur is far more likely to give you a slice of the reward pie because you’re helping to remove some of his risk. But until then, why on earth would he ever do that?


Finally, if you’re hiring people, ask: “Who will make it rain?”

I love what Dana Derricks says in his Dream 100 book. Dana says that your first hire should be a dream 100 / affiliate manager. So that was my first hire. Boom!

Coulton Woods and Dana Derricks

Coulton is my affiliate manager, and he’s the dream 100 manager. If you want to promote our products, you contact him. And the reason why he was my first hire? – because he makes it rain.

I don’t have a dedicated support person yet, Coulton and I kinda tag team that. I’m getting a support person next. But why on earth would I get support without the other positions that make it rain?

Stephen Larsen with whiteboard full of text

These funnel games are so freakin’ cool because the actual business structure, when you gotta funnel the works right, the actual business structure, man, you only need like three to five people tops depending on what you’re doing.

If you have massive call centers, okay cool, but I’m talking employees though.

I’m getting an assistant and a dedicated support person soon, but we haven’t needed those for a long time. I’ve been obsessed with building the revenue machine – the actual funnel and the sales.

Grant Cardone teaches that the order of operations that you have as a business owner is this:

#1: Close the lead. The issue with that is that when you close a lead, you no longer have a lead. So you gotta refill that pipeline.

#2: Replace that lead – otherwise the future of the business is gone.

#3: Fulfill on the first lead.

That might sound backward to you, but it works. I’m always closing leads, then making sure we have more leads, and then I’m fulfilling the sale.

That’s the reason why I always sell something before it’s even made. If it doesn’t sell consistently, who the freakin’ cares what I’m making!

Next, you find salespeople. Because of all that automation that goes on you can automatically do anyway with a lot of things if you set up your systems.

The bottom line is whether you are an employee, or an entrepreneur, you need to be a rainmaker.

Unless you know how to freakin’ make it rain – you are replaceable.

Boom! Until Next Time – Be A Rainmaker!

A few months ago, Russell asked me to write a chapter for a secret project he was doing. I had to write a chapter for a book, and this was the letter I got from him:

“Hey Stephen,

Let me ask you a quick question.

You suddenly lose all your money along with your name and your reputation and only have your marketing know-how left.

You have bills piled high and people harassing you for money over the phone.

You have a guaranteed roof over your head, a phone line, an internet connection, and a ClickFunnels account for only one month.

You no longer have your big guru name, your following, your JV partners, other than your vast marketing experience, you’re an unknown newbie.

What would you do from day one to day thirty to save yourself?

-Russell Brunson.”

If you wanna see my answer and the answers of a bunch of other amazing marketers, then just go to

email from Russell Brunson

You can see the entire summit, you can see the book, and each of our detailed plans. Just go to

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