SFR 239: The Most Common Systems I Build POST-Revenue – Stephen Larsen

SFR 239: The Most Common Systems I Build POST-Revenue

May 3rd, 2019 anchorwave

I’m personally very against a heavy focus on systems until after you’re cash flowing regularly.

These are some of the most frequent systems I build POST-revenue…

There are two things that will kill an entrepreneur…

  1. Positioning.
  2. Not taking on help when they need it

I talked about positioning in last weeks blog about finding your big idea… and if you want to do a deep dive, *COUGH*… OFFERMIND 😉

BUT…

How do you know when it’s time to take on help?

There’s a ton of answers to this question… and I’m NOT telling you that what I’m about to share is the law, but for me, (and for where I am now), this is what’s worked…

(…and as usual, it’s the exact opposite of what I was taught in college ;-))

Learn business systems

RUNNING A SUCCESSFUL BUSINESS

I remember when I made the jump and left ClickFunnels… I pulled in about $200,000 really quick. I was like, “Man, this is more money than I’ve ever seen in my life.”

It was a big moment for me and it was very validating for MANY reasons… and you’d think that would be the most AMAZING news ever…

However, at the time, I was the ONLY person in my business.

Soooo…

I had to voluntarily turn down my revenue in order to turn up my systems.

Turning up business systems

I’ve told some of these stories in the past as I was documenting my journey.

That was well over a year ago, so now I can look back and see all the systems that I actually put in place.

College taught me to build a business by first putting the structure together… and then hoping the structure you built is good enough to cause revenue.

Business systems that generate revenue

*THAT SUCKS* Don’t do that!

BREAK THE RULES NOT YOUR BUSINESS

I approach building a business in the EXACT opposite way to what I was taught at college …

  1. Build the revenue
  2. Build a funnel
  3. Make sure sales are coming in
  4. Use that cash to build a system.

… it works way better… and you still own 100% of your business (# No VC funding.)

I am revenue-focused… and sometimes that means other systems in my business suffer a little bit, but I’m not gonna build a system with no revenue.

If you give up half your business for VC funding you get golden handcuffs …and you’re left hoping that those systems create revenue.

That’s a broken business model, but that’s what everyone does.

Broken business systems

That’s the model that I was taught at college. That’s the mainstream model of entrepreneurship. It’s the model that you see most on Shark Tank.

I.e., “Let’s go create…”

  • What’s my logo going to be?
  • What’s my slogan?
  • Where’s our business building going to be?
  • Let’s incur all these recurring costs and take on debt to pay for systems that are hopefully good enough to create revenue.

URGHH!

Learn business systems with Steve Larsen

Instead, I’m going to teach you how to:

  • Solve a core problem with a core offer.
  • Create revenue.
  • Take your revenue to build the systems that support the revenue.
  • … that’s a far better way to play this game.

It’s far more secure, and it’s waaay easier to win. A lot more people make it that way.

Two Comma Club winners don’t just build freakin’ business systems with their logo, slogan, and mission statement…

I call this crap-poop… It’s just junk.

Crap business systems

I’ve NEVER seen anybody make the Two Comma Club on their own.

WHEN TO HIRE?

So here’s the question that sparked this blog…

Q: “What steps have you used to increase your speed from when you first started your journey breaking off from ClickFunnels versus today?”

(I was asked this on a recent FB live and also in an interview I did)

A: One of the things that I’ve done heavily is team building.

When I left ClickFunnels it was just me!

… which meant I was the guy doing fulfillment.. the selling… the closing… the marketing. I was the guy on camera… and the guy doing support tickets.

That’s a lot of freaking roles.

Business structure roles

It’s fine for a while, but then soon… you’re gonna die. You need to get some help… or it’s curtains for you and your business!

RIP business structure

Let’s break this down… as an entrepreneur, you’re gonna die if…

#1: You don’t position yourself well. You don’t have an anti-red message in a blue ocean.

This is waaay more important than getting VC funding. That’s crap! Most businesses don’t need that junk.

Bootstrap and own your whole business. You’ll actually get further and do better without VC funding.

#2: The second thing that will kill an entrepreneur is NOT taking on help when they need it.

HIRE WHEN IT HURTS

One of my favorite books is called Rework and there’s a concept in there that says you need to “hire when it hurts.”

When I first left ClickFunnels (and all that cash came pouring in my first hire was an affiliate manager who also could take on support.

Startup business structure

#Coultons don’t grow on trees

Then I was like, “Oh man, I should go get a bookkeeper.”

We didn’t even have that…

I was identifying the pain points in my systems and, (honestly in a lot of cases), the lack of systems.

I’ve got to be honest, I’m hurting again now.

You may have noticed me starting to soft-drop a few things out there?

  • A little three-day design challenge that I’m doing, do you really think it’s just for those frames? Come on, son.
  • Asking, “Who’s local in Boise?” Do you really think it’s just about me doing a shout-out? Come on! I’m going to go buy an office soon, we’re expanding.

But in terms of “then versus now,” one of the things that changed is me offloading red dots.

Red dot business systems

If you don’t know what that is, go look at my stuff on Red Dot/ Green Dot.

I offload the tasks of the business, as much as possible…

I’m like, “Hey, let’s create a role. Let’s go!

Boom! Now I’ve created that role and I’m going to watch the system to see if I created it correctly.”

MY COLLEGE BUSINESS

In college, we had this awesome semester where all we did was create a business. We had no other classes, (I was still in the Army), but we had no other classes.

We had to make a real business from scratch with almost no help. The only input we got was when we brought questions to the professors.

Our teachers were not allowed to interfere in any other way, so we had to be careful about what we’d ask.

I was voted as the CEO of the business.

I was already kind of a hard charger and people saw that. I was pretty aggressive.

Aggressive business systems

When we created that first business there were fifteen employees, (fourteen employees + me)…

Very quickly, I became the bottleneck of every single decision.

  • “Should the banner be blue or dark blue?”
  • “Should it be gray or silver?”

… every freakin’ trivial decision had to run through me!

People would ask me the same things every day… and I was like, “I’m going to die.”

I’d spend the full day in our business, and then I’d go home to our little apartment and all the time my phone would be pinging with business-running related questions.

I couldn’t focus on finding new revenue. I couldn’t focus on finding new ways to sell the product, I was busy making all the decisions in the business that frankly had nothing to do with revenue.

Not that they weren’t important questions, they just weren’t the kinds of things I should be focusing on as the CEO.

Business structure departments

So I created departments and said:

  • “Hey, you look like you’re great at marketing. You’re going to be my CMO.”
  • You are really creative! You’re going to be under the CMO.
  • CMO, you’re going to have the authorization to make 80% decisions on your own without talking to me. Don’t bring anything to me unless the group can’t solve it.
  • You look nerdy, and you’re happy about it. You’re gonna be the finance guy. You’re now the CFO. Look at our numbers, look at our projections, find out how far we can run, make sure that we’re not going to run this thing into the ground.
  • Supply chain, I want you to measure current supplies? What’s our lead time on ordering ingredients? How far can we run with the current supply list? Talk a lot to finance to make sure that we’re not gonna run to ground.

Successful business structure

I said, “You’re the…”

  • CMO
  • CFO
  • COO

Now 80% of decisions were now off of my plate.

…so what did I do next?

NOW YOU SEE ME…

After I’d set up the systems, I’d disappear randomly in the middle of the day.

… that sounds psycho, but that’s what I did.

I did that with the intent to test the system that I had built.

Too many times an entrepreneur is afraid to fail at the get-go. They shouldn’t be afraid to fail.

What they should be doing instead is saying: “How can I test the system I’ve built?”

If you don’t have a system, you are the system… which is why you’re not growing. I realized that quickly out of the gate.

I was like, “My gosh, I can’t do this long term. I’m going to die… because I am the business.”

I had 14 little worker bees rather than 14 empowered people making the most logical decision that people can make in each role.

Successful business

Sooo…

I would disappear randomly in the middle of the day… no joke!

In the busiest parts of the day, I would disappear. I’d go hide. People started freaking out, and I’d get text messages saying, “Where are you?”

Testing business structure

… and I wouldn’t answer.

It sounds funny, man… but I would go hide behind a bush.

I’d be looking to see how everyone was reacting. I would watch and observe. I was looking at how they were responding:

  • “Crap! There’s not enough rules, processes, and procedures in the operations group.”
  • They’re asking me too many questions
  • I thought we talked about that!
  • I need to test the system.

BEING A CEO

You have to understand that an entrepreneur solves a problem… but after a while, you need to take on the role of CEO as well.

A CEO is NOT the same thing as an entrepreneur.

I can be the CEO or the president of something… and NOT entrepreneur a dang thing.

An entrepreneur is in the business of problem solving.

If you’re reading this, it’s likely you’re an entrepreneur…

I teach you how to be a marketer who solves a problem with a value that gets you paid.

… but then you need to take on the role of CEO.

A CEO solves problems in the form of systems not marketing problems. A CEO owns systems.

CEO business systems

Q: What is a business?

A: A business is nothing more than a series of systems.

So as a CEO, I’m gonna go in and tweak my…

  • Finance system.
  • Operations system.
  • Marketing systems.

There was a book that I read back in the day. The first half of the book was great, but then the second half got all freakin’ weird.

It was like, “A business has a soul and you need to respect the soul of the business.”

THAT’S CRAP!

Crap business structure

WHAT’S A BUSINESS?

A business is a series of systems that generates a lead and fulfills on the lead.

What is business structure

… that’s all a business is.

An entrepreneur creates that product that all the systems revolve around, but eventually, you’ll need to become a CEO to create systems.

If you feel like, “I don’t want to be that person,” that’s fine.

Eventually, you’re either going to stay the main operator of your business… or you’ll need to find somebody who can do that role and create systems.

A lot of people in Russell’s inner circle are like:

“Look, I’m not the operations and systems person. I’m just going to go create cool stuff, someone else is going to be the CEO and put those things together.”

Understand that if you don’t have systems in place, you are the business, you are the systems, and there’s no difference… you are the support guy!

What makes a successful business

Does that make sense? This is a super key lesson.

I’m NOT throwing rocks at people being CEOs. What I throw rocks at is people who get VC funding and creates the business first and then hope that system creates revenue.

BUSINESS SYSTEMS

In my business, Colton and I are employees.

However, there are 18-20 recurring people that I pay as 1099s to run what I do. Eighteen! EIGHTEEN! That’s a lot of people…

…but they’re all following a system.

I’m NOT managing my team. I created a system that they follow. They don’t follow me, they follow the system.

Following business systems

Then I do is the same thing I did when I was in college. I look to see:

  • Is the system broken?
  • Where are the holes?

( # No hiding in bushes)

That’s why sometimes it’ll look like I’m NOT doing a lot of things… or not launching anything… but in reality, I’m launching a ton of stuff, but it’s SYSTEMS!

I’m building things that support my business so that it’s NOT dependent on me.

If I want to go live on a freakin’ island I can.

Good business systems

I’m NOT the business, I’m NOT the company. I’ve built a system.

Right now, I have two content systems… two content machines as I call them.

Soon I have a product that’ll be coming out called My Content Machine.

I bought MyContentMachine.comwhich I’m really excited about. I’m going to show you guys how I do it.

WORKING 9- 5

A lot of people say, “Stephen, you’re going to die! You never take a break?”

I work nine to five now, nine to six and take breaks… A LOT.

I usually stay up too late, kinda hanging out and partying a little.

Habits of a successful business

My role in the business is to NOT be the business. My role as an entrepreneur is to solve a huge problem, (which I’ve done), and then build a series of systems that support it.

The systems that I mostly focus on as a beginning entrepreneur is to find ways to systemize my support… because if I answer tickets differently every time…

If someone can reach out to me on Facebook and find my phone number and find my email address, (which is creepy)…

Business systems

If there’s no system there, I am the system!

That’s why I don’t answer support tickets if they don’t come through the support ticket system (which is plastered on every single footer of every page).

We don’t hide the thing. It’s on all the emails. It’s all over the place!

It’s the same with revenue…

I’m NOT the funnel.

When people are like, “Stephen, I’m considering buying your thing,” and they tag me in a Facebook post, most of the time I don’t answer.

Business systems messages

It means that the funnel did not capture that person correctly…

So…

I don’t look for how can I answer that question. I’m looking for why did the funnel not pick up this person? What’s the excuse they’re using?

…because a funnel is just a system, too. It’s a revenue system.

Why did it NOT do to pick that person up… now it’s pooped them out the other side and they didn’t buy.

Faulty business systems

Now they’re on FB saying, “Will it do this?”

I’m like, “Crap, I should have talked about that!”

Let’s add an FAQ because it’s the third time they asked this question… so we’ll put it on the sales page as an FAQ, BOOM!

Does that make sense?

I’m not building a hobby, this is a company where I go in and tweak the revenue… that’s where my expertise is.

I’m really freakin’ good at revenue systems. We call them funnels.

Successful business funnels

Regardless of the product, price point or industry… that’s what I’m good at!

The systems thing… I’m learning how to do that. I’m taking that on, and because it’s NOT my expertise, that’s where I go get mentorship.

I hire guys like Alex Charfen and James Friel. That’s what they do, that’s what they’re good at, so they’re going to have shortcuts for me.

Hire people for a successful business

I don’t want to take the time to figure that out… “Let’s go hire the person,” and they’re going to tell me, “Install this system,” BOOM!

BOOM BOOM! BOOM!

… but once I’ve learned the 80% from somebody, I will either seek out somebody else… or I’ll stop learning for awhile while I just execute and then replace my roles with either:

  • People
  • Tools
  • Processes

… that’s what James Friel talks about.

Business structure

There’s either a person, a process, or a tool that replaces my role in the business.

BUSINESS SYSTEMS… WHAT DO YOU NEED?

A lot of people have asked, “What other systems… what other tools do you need beside ClickFunnels to run your business?”

I’m like, “That’s kind of a trick question…”

… because in the beginning, ClickFunnels is all you need.

But as I’ve expanded, and I don’t want to do certain roles, I take on other tools.

That’s why I have BestMarketingResources.com.

Best marketing resources for business systems

There are about 50 tools that I pay for…

Someone was like, “You need all this and ClickFunnels to be successful?”

Tools for a successful business

I’m like, “Yeah, down the line, dude! Settle down!”

Go make some revenue first and then start to grab each one of those tools as it makes sense. I’m not paying for it! The customers are… the business is.

I was like, “Man, chill out, bro.”

Just focus on revenue, and then grab all those things afterward.

HOW CAN I INCREASE MY SPEED?

Business systems that increase your speed

When I ask, “How can I increase my speed?”

The answer to that usually is usually a tweak to my business systems rather than squeezing out another hour in my day.

I learned this from Russell…

I was sitting next to him and one of the Inner Circle people asked:

“What truly is the difference between a six and seven figure business?”

Without hesitation, Russell was like, “LEVERAGE! Getting to seven figures has nothing to do with working more hours in the day.”

The difference with a successful business

In fact, when I work more hours in the day, I get less effective for the following day. That’s why I don’t really subscribe to the whole hustle until you die thing.

`There’s a phase for hustle…

When I left my job, the first three months, was certainly, “yeah, I was 100% hustling my brains out…”

But eventually, that would’ve killed me. That will kill ANYBODY.

I won’t have a life for the things that I built the business for in the first place.

Steve Larsen business structure

A lot of times we ask for the blanket statement answer, but it depends where you are!

The answer is, “IT EVOLVES.”

That’s why at Funnel Hacking Live, I was talking about ONLY finding the answer for the next single step in front of you.

Only study for the next step in front of you.

YOUR NEXT STEP

Someone reached out and they’re like, “You give EVERYTHING away on your podcast!”

“Uh, no, I do not. Ha ha ha ha. Absolutely not.”

I’m giving you guys little tiny tasty goodies.

The reason I started OfferMind last year is that I wanted to finally have a platform where I could just teach with thought, it’s not just a random rabbit that I’m following.

I spent weeks preparing just the slides to make sure that it was articulated in the way that it needed to be to actually dump out the formula and the patterns.

OfferMind business systems

I’m very formula driven, as you guys can tell.

I wanted to have a platform to teach all this stuff in the order it should be in.

That’s why, (with any new entrepreneur), I jump into marketing stuff first, rather than:

  • What’s your slogan?
  • Let’s go get a business loan.

That’s garbage. You don’t need any of that stuff.

You don’t need a lot of the systems I’m using right now if you’re brand new.

Eventually, you should probably get them, but there’s definitely an order that most frequently causes success with this stuff… which is the purpose of OfferMind.

It starts with the offer… and the offer really starts at the who.

Don’t think you need any kind of qualification in order to be successful in this stuff. It has nothing to do with that.

Starting a successful business

Understand…

  1. The main idea of your offer comes from the Red Ocean
  2. Increasing your speed usually has nothing to do with you working harder and EVERYTHING to do with leverage and creating systems that replace you.

Thankfully enough, the majority of the time, most businesses need the same kind of systems over and over again:

  • Support
  • Fulfillment
  • A sales department, (meaning phone sales… that’s one thing we’re adding right now).

First, I chose to hire a role that was revenue generating.

Coulton is the affiliate manager, meaning I’m bringing in a role that is helpful, but also revenue generating.

He came in and he took over support plus affiliate stuff… and as we’ve grown some of the roles that he was doing in the beginning, he’s not doing anymore. They’re offloaded. Same with me.

… it’ll continue that way as we grow and continue to offload certain thing we’re doing.

That’s why I hire when it hurts. In my honest opinion, you should be cash flowing pretty hard before you hire anybody.

But that doesn’t mean you can’t have systems.

  • Go create a ticketing system.
  • Go create a fulfillment system.

I stopped shipping our boxes. I went and I used ShipZOOM, they’re amazing. I don’t even look at this stuff anymore because they’ve got a sweet software that syncs with the back of my ClickFunnels account.

They even order the stuff when it gets low, it’s awesome.

A lot of guys are like, “Well, I need to know ALL that before I launch.”

“No, you don’t! No, you don’t! Just launch!”

Create the revenue and then the revenue lets you build the systems.

I’ve never in ever put a dollar of my own in my business ever because of that.

  1. Freakin’ publish because you’ll get an audience.
  2. Launch your thing to that audience.
  3. Take that revenue, (don’t you dare take profit), and reinvest it back into ads and eventually systems.

Do that three or four times, and you’ll make way more money than most nine to fivers could ever dream of in a month.

… but most people just can’t go do it.

All right, my friend, I’m excited to see you at OfferMind.

Steve Larsen OfferMind

Hopefully, I’ve answered some of your questions today! Those are the major questions most new entrepreneurs struggle with.

Woo!

Hey, there’s MORE marketing resources than there are sands in the sea… am I right?

Okay, maybe not, but there’s A LOT!

How do you know if you’re paying for good ones?

Recently I went to my business bank statement; I counted 51 internet tools and resources that I use to run my business every day and keep my team size small.

If you want to see the list, I actually filmed an individual video teaching you why I use each tool and the strategy behind it… then I dropped the link straight to the source right below it.

If you want to see the list and see what you can use yourself, go to bestmarketingresources.com.

Best marketing resources for business systems

That’s bestmarketingresources.com.

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