Frugality Cost Me $10M..The Mindset Shift That Changed Everything | Nikhil Sai | #entrepreneurship

This video is a very tough one for me because this is the truth. I've lost over $10 million in potential revenue which I could have made if I did avoid this mistake. And I genuinely want to transparently share with you the mindset issues and the different problems I've actually faced while scaling my business so that you can avoid them while you're actually building your business up. You know, I'm super frugal in my business, in my personal life in general. That's how I'm built, especially Indians who actually come from background I'm coming from, we all are built almost with a similar mindset that you shouldn't spend money, you gotta save it, you gotta control it, you gotta own it, all of that bullshit jazz. It is okay, but the problem is when it comes to business growth, you wanna invest, you wanna take risks, you wanna have a calculated way, a right budget to actually spend onto your marketing, your advertising, your sales, your fulfillment, your operations, your team, and whatnot. Because of intentions I actually had in my early business days, because of my early childhood experiences where I had absolutely no money, It kind of built a very frugal mindset for me, which made me stuck in many situations. And I could have had made extra $10 million or more, but I didn't. I only ended up making a few million dollars instead of $10 million. But I'm on the pathway to it. But I'm just trying to transparently share the mistakes I made so that you can avoid them. Now, quick background. Most of us don't come from well-off places. We don't have super rich parents. We don't have fancy cars. We are not living in big homes. For a fact, I was living in a small a 1,010 square feet house as a family of 4 in my entire childhood. It's not like we didn't have food or anything crazy like that, but it's just that I deeply wanted something more and I felt that we couldn't because we couldn't afford it very clearly. And I'm not complaining. In India, there are hundreds of millions of people who had much worse childhood than me, but that cannot be my excuse to build a wrong business or to be frugal in my business while I'm trying to scale it. So what we do is, unfortunately, which I did as well, is take our childhood experiences, take our childhood memories, and make decisions using them. The sooner we realize that those experiences are not going to help us, we want to become a different person to get to a next level, we really want to change fast. And trust me, you need to change yesterday. It's going to cost you so much more if you don't. So what happens with this type of mindset? Most of the times while you're actually making decision, you should look at the value, the result, and the price. But I was actually doing the inverse. I was looking at the price first, then look at the result, and if I like it, I look at the value. And this reverse decision-making process didn't serve me so well. Whenever I was actually in the early days, I was doing all the work by myself. I was trying to be a freelancer instead of business owner because I could have 100% profits. But guess what? 100% profits of $10,000 makes no sense. You would rather take 10% profit in a $10 million company and make $1 million. This mindset shift happened slow to me because I didn't want to change my mindset. I didn't want to change my spending habits. I didn't want to change the way I look at money. Trust me, money is just a resource. It will help you get things done. It's just an energy which can flow and which will allow you to have more power to do things. So you want to use it the right way. Don't be frugal with it because you should know that you can make more and you want to use that energy, the money, in the right places where you could actually make more. So you could actually make much fruitful and wealthy decisions for yourself. So that was the biggest mistake. I was looking at the money, I was getting emotional because $1 is 84-something rupees, which is just like, oh, that's a lot of money kind of thing. Not a single day I had a dollar in my pocket when I was in my school days to spend. So that kind of bad childhood memories always made me super attached to money while I'm actually spending it. And unfortunately, it also affected my business decisions about hiring the best teammates. I was actually looking for the cheapest deal instead of looking for the best teammate who had the most value, who could deliver the outcome and then look at the price. I inverted it. I was already looking for the cheapest candidates, and this was a very big mistake I made in 2020. So instead of hiring professionals, I've hired my friends, I've hired different people who I already know. I was just trying to fit it, hoping that they could get it done, but that wasn't the case, and I learned it the hard way. So this is where the 10x mindset should come in. You should read the book 10x Is Easier Than 2x, which will help you get more context, but I will summarize it in a minute for you. You should take your past experiences and only use the past which can help you achieve the future. And you only want to be super focused on the future you which you want to achieve, the 10x mindset, and reverse engineer what you need to do and get to that as a to-do list for today. So you only be very clear on the goal you want to achieve, you reverse engineer that as a list for you to act right now, and you only use what will help you to achieve that future from your past and not recollect anything else. And this will help you to be very, very clear and much more focused. So this frugality has stopped me in doing many things. You know, this didn't let me allow hire great teammates, invest in right coaches, invest in best mentors. I eventually did. It's just that the compounding effect was so much more. You know, so many people assume that I actually have overachieved, that I made $1 million in just 2 years starting as a 19-year-old dropout, which is kind of true compared to everybody else. But I could have done way more. I could have done 10 times more if I would have played a few things right. Hiring best teammates, investing in right mentors, investing in better masterminds in an early state— in an early stage. Because this is a huge mistake most entrepreneurs do. You've been a freelancer and then you start hiring people, then you become a high-paid consultant and you have still that frugal mentality that you want to spend 10%, 20%, 30% on fulfillment and keep 90% of profit and take home and use that for yourself, your family, and whatnot. I mean, it is okay in the early stage when you have nothing, you know, you want to get somewhere, that is okay. But once you get somewhere, say, okay, stop now and, you know, reinvest it into the business. Because trust me, when you withdraw— hypothetically, when you made $100,000, okay, and let's say your fulfillment cost is $30,000, hypothetically assuming you're a service business, you know, a good business, and you know, all of your clients are coming from referrals, you made $70,000 net. You can actually do two things. Number one, you could take that $70,000, go home happily and buy your next real estate deal, or invest in gold, or invest in things which, you know, you will feel more secure about. Or Be like, okay, I will do that. You know, let me take $30 grand out of it and do it that way. Let me use that remaining $40 grand and spend $10,000 on marketing, $10,000 on hiring an executive-level C-suite member who could hire where I'm not good at, which could be operations, system building, hiring, whatever it could be. Invest in that domain. $10,000 into getting a personal mentor, a coach, somebody who could hold you accountable, who have achieved what you are really trying to achieve and who can help you to avoid all the mistakes they have already made. And $10,000, which will be a cost of mistake. Like, if anything goes wrong anywhere, you could pump this budget into that. If you set it up this way and use it, guess what? Your business will go from $100,000 to potentially even $150,000, $200,000 in the next 90 to 180 days, realistically, if you just execute right. And if you do this for long enough time, and if you're okay with that fact, the net income— you could have made $70,000— could actually increase to $150,000, $300,000 as well. You just want to play the long game. You don't want to let the mentality of our childhood let us make decisions in business. And this is the problem. The problem is the dollar you're taking as profit to your home today, if it is reinvested into your business, into your marketing, into your advertising, into your teammates, into your fulfillment, into your operations, that could compound in just a year and come back as $10. Isn't that crazy? I realized this late and it cost me so much money and I don't want you to do that. Please understand this. Every dollar you're taking from your business as profit to your take-home, which you actually don't need, You should reinvest that into your business. But most entrepreneurs, what they do is when they're increasing their revenue, they increase their lifestyle expenses as well. So they always feel that they don't have money to reinvest into the business because all of their business net income is going back into the business owner's lifestyle maintenance, which is the worst thing you could do. Listen to me carefully. If you do these things, you will actually grow exponentially fast because the compounding is true. Sit down, have a list of things you absolutely need, not your wants, not your Gucci shoes. I'm talking about things which actually will help you live a moderate life. You don't want to impress anyone, you want to be for yourself. So create that moderate life. Keep your expenses as low as possible, keep your business expenses as low as possible in a manner where you're maintaining quality. And everything else which is left over in your business revenue as net margin, reuse it to reinvest into business and see what happens. Don't take immediate high net profits. Don't cash out from your business. And I get it, most of the times you will be uncertain. You will feel the uncertainty that the money will be lost. I would rather take the profit and take home and invest in assets which are more secure. But what's more secure than your business? Do you trust real estate, gold, than your business? And what's the point of running it in the first place? Get it right. Every dollar you're taking out of your business today as profit could actually make $10 back if you keep it in your business and use it the right way. I would rather actually keep it in my business and take $10 out later on or build a wealth, build the value of my company over just withdrawing your profit, which was the early mistake I made, which I learned the hard way. And this is the death valley of entrepreneurs. Every revenue stage will keep us stuck, will make us complacent. We actually want to be super conscious about this, that okay, I'm getting comfortable at this $10,000 a month revenue. What should I do? I should not withdraw more profits. I should take bigger risks in business in terms of Getting better marketing system, getting better sales system, getting better advertising, getting better teammates, getting better operations, getting better client success, all of that stuff, and just let it compound. Yes, it will fail, obviously. But guess what? If you do 10 things, not all the 10 will fail. That's— if that's how dumb you are, you should probably stop the business. Even if most of them fail and one thing actually clicks, that will give you outrageous return, which will let you— which will offset all the risks you have already made. And make you a positive ROI. You wanna budget it the right way so you are comfortable when you're actually losing money. Don't get scared. For example, if you start spending money on advertising, you don't wanna count every dollar and get anxious about it. No. Think about like, okay, I'm gonna spend $5,000 and actually close 2 clients. That's the agenda, that's the goal. Just keep it that way. You charge $5,000, you invest your $5,000 into ads, you made $10,000 back. Let's call it a W. Don't stress it. And there is a bigger problem than the frugality thing. You don't actually want to accept that you're frugal. So what you do is you actually mask it up with something else. For example, in my case, I'm frugal with advertising and marketing. I know my clients spend $100 and they make $500, $1,000, $10,000 just using that little ad spend. And I've seen that happening day in, day out. Instead of me actually taking that smaller risk of investing into advertising in my early stage, I actually made it difficult for me. So I masked it up and I made a new thing out of it saying, oh, You know what, my face doesn't look good, my accent is thick, people might not click on my ads. The CPMs are very high when I use my face on ads. So I made up something which is not true and I masked the entire reality and then I blamed it and then I didn't actually invest in marketing in my early stages and it just cost me so much growth. Back in 2020 when I ran ads for a real estate marketing agency, for a real estate offer we were actually running, there was one negative comment on and all I want to do is shut down my ads. And I got a Facebook notification that my ads got disabled, then great. I never applied for it. I never reapplied to get the account. That's how I was actually escaping the pain. The problem is when you escape the pain, you can't get the result. The one who sacrifices can get the result. If you want a big result, you want to sacrifice big time. That's the truth. So don't mask your frugality or the mistakes with some new thing which you don't want to, which will not allow you to discover the absolute truth. Now I will leave you with one last thing. Think about the compounding you're going to lose. I made $1 million in 2 years. I could have made it in 1. I made multiple million dollars in last few years. I could have made 10. I could actually have much more things done at this point of time if I would have made the simple adjustment in my thinking process while making decisions. Invest in marketing, invest in sales, invest in operations, invest in team. These are the exact sequences you need to follow and you will win. Believe in yourself and have the right mentor beside you. To actually get the support you need while you're actually trying to build your business. And, and trust me, having mentors who have been there, who have done it, will help you a lot. And I learned this the hard way, and I don't want you to. And one thing I want you to constantly think about it, if you make the right business decision today, how much far it's going to compound? How much more of compounding effect you will actually experience when you're 80 and you double your revenue today because you're reinvesting in your business? How much more growth it could actually give you in the '80s, in the '70s, in the '60s, for your wealth. If you don't believe me, go check out Warren Buffett's wealth chart. You will understand he was absolutely growing in a compounding manner. It's just a matter of time. So you want to have that patience and you want to have that risk-taking ability so you could reinvest into your business. So I'll sum it up in one line: don't take profits, reinvest into your business, and get this point that every dollar you're taking as profit today could be $10 actually when you reinvest into the business, into the right forms. Take bigger risks. You will not go dead broke. You will not die. Nothing will go bad. You'll probably learn and get better as you spend more and actually get better experiences. So that's pretty much it for now. If you're frugal, that's okay. Don't let that stop your business from growing to its full potential. Just realize it and start taking action. That's it for now. This is Mili Nikhil Sai, 19-year-old dropout, built a million-dollar business in just 2 years. I could have built 10. Unfortunately, I didn't because of this mistake. Save yourself from actually being frugal and actually make the right business decisions. And if you need my help, go check out fillclients.com and apply to work with us. If you want to scale your coaching consulting business from $10,000 to $100,000 a month, we'll be looking forward to help you.