From 6 Figures to 7: How To Scale Beyond $100k/mo With Content, Audiences, and Influencers #TheOnePercent

Too many physical product brands are just trying to spend money to get in front of the Instagrammer, hoping that magic happens on the other end. Without any offer, without any way to collect a lead, without even knowing who their best customer base is. It takes one free person to create change. This is the show for them. We are the creators of the free world. This is capitalism.com and we are the 1%.

Hey 1 percenters. This is Ryan. Daniel Moran, welcome back to the show. This episode is specifically for those of you who follow me because you know that I made my money in physical products brands. I built the majority of my wealth by building, selling and holding profitable physical products brands. Some of them were on Amazon, some of them had their own store and I've been teaching that for the last several years and have built a decent following. For those of you who follow me specifically for that, today I want to talk to you about scaling from six figures a month to seven figures a month, or at least going from doing okay, you know, running a million or close to a million dollar business to the mid seven figures and what it takes to be able to do that. I just recently did a four part series on my YouTube channel, which is Ryan Moran 13. And since you listen to podcasts, I figured we'd do a summary of of that four part series here on the show. So this series was all about taking a business that was already up and moving. It was not about choosing your first product or getting started on the ground floor. It was about taking something that's already moving and taking it further to the goalposts, taking it to at least the mid seven figures and closer to eight. And what that would require, what does that take? I have discovered in my time that most businesses plateau between the 1 and $3 million rang because they don't pull a few important levers. And if we solve that, then we're able to solve those challenges and cruise through that three to $5 million range. I did a podcast recently that was about the constraints of a million dollar business and that was a constraint of vision, a constraint of people and a constraint of capital. Well, today what I wanna go into is some key areas that if you focus on, will absolutely grow that business. Whether it's a physical products business, a digital products business, a SaaS business, a personal brand, all of these will apply. But I'm speaking to the person who is already running a physical products business because I know that's a good percentage of those who follow me. Now I also have an accompanying guide with this and a Different podcast series which is called Million Dollar Brands. And you can get both of those over@capitalism.com million. And there you're gonna get a download guide that is gonna show how scalable and sellable physical products brands. And second, you're gonna get access to a podcast series that involves some case studies, some examples and some additional training over on a podcast that we have called Million Dollar Brands. So again, that's@capitalism.com million if you wanna dive deeper into this stuff. Okay, with that, let's dive into the four key areas, the four key levers that you can pull and some step by step information on how to implement this. Right now, number one, the thing that is going to give you predictability, high profit margins and the ability to launch products profitably is your own responsive audience. Now I don't mean to insult your intelligence here, but many Internet marketers get dependent on a couple of channels in order to take sales. They're either running Facebook ads to a funnel or they're maximizing Amazon. And that's where their entire customer concentration is. You don't really get free, you don't really get scalable until you're able to command your own audience. When you can hit send and take sales, you are in control of your own destiny. Now, there's two parts to having an audience. There's traffic and then there's the direct response mechanism. When we're talking about the direct response, like the sales collector, that is email and to some extent it's Facebook Messenger. When you have the ability to hit send and take sales, that is when you have the direct sales mechanism. But it takes traffic in order to do that. So the way you build an audience specifically for a physical products brand is you put out content to the ideal market on the traffic sources. That's Instagram, could be YouTube, could be Pinterest, could be your own blog. It can be wherever you are comfortable putting out content and then linking back to the place that gives them the direct sales mechanism. For me, that's email. I build all my businesses around email because that's one of my skill sets. So I am very interested in driving more and more traffic to build up the email list. And I'm gonna focus on taking the sale via email. I'll mail to Amazon, I'll mail to my own store, I'll mail to wherever I can collect the order. But it's really hard to do that if you don't have the email list or you don't have the ManyChat list or the Facebook messenger list. Most physical product sellers are trying to go straight from Facebook ad to Amazon, Facebook ad to Shopify. And that's great, but I find that it's easier to scale and build an audience predictably if you've focusing on driving the traffic to the email capture and then sending them over to the sales mechanism. So in my mind, the easiest way to do that is to start putting out content that is directly targeted to your ideal customer base and then driving them to a coupon code that gives them a discount on whatever it is that you're selling. Now, many physical product sellers think that they have to make content about their product, where in reality, if we make content about the result that the person is going to have, that helps broaden the market quite a bit. So for example, I became a super fan of Quest Nutrition when I found out that I could cook with their protein powder. So when they started putting out recipes about how to cook high protein meals like high protein pizza crusts and high protein protein frosties, stuff like that, when I discovered that you could do that, then I became a super fan of Quest and that's when I opted into their list because I saw that you could do all these cool things with their product or even if it wasn't with their product, I could do it with someone else's product. And that made me more likely to follow Quest. So now they have my email address and when they email me, sometimes I buy things. And so I'm a prime example of somebody who opted into their list because their content made a meaningful impact for me. That's how we need to think about promoting our business as well. Not talking about our product as much as showing the transformation or showing the end result or giving advice on that person's journey and then sending them back to the email capture page that is our product or promotes our product. So that's part one. Putting out content on Instagram, Instagram, swipe up ads, Facebook video, YouTube ads, podcast advertisements, and sending them to an opt in. That's part one. Number two is going to be putting together the offer. I don't know why, but physical product brand owners are notoriously bad at making offers. I think it's because it's so easy to create a product and just list it for sale on Amazon, Amazon or ebay or Kickstarter or wherever that people forget about salesmanship. They've gotten a little bit. Well, that muscle is atrophied. So if you look at any of Russell Brunson's stuff, it is all about crafting the offer to Take the sale. So if you read Expert Secrets or if you read.com Secrets, the two books by Russell Brunson, you'll quickly see what it looks like to put together a compelling offer that you can buy traffic to. So without the offer, without a compelling reason of why they're purchasing from you and purchasing from you now, it's really difficult to scale paid media. So my buddies Joel and Josh, the co founders of BioTrust, built $100 million supplement company. How did they do that? It's not like they knew the buddies at Walmart to get them into distribution all over the place. It's not like they ran a bunch of TV ads. It's not like they had even viral ads. What did they have? They had converting sales pages and relationships to affiliates. So what did that do? It gave them the ability to spend money to acquire customers, and it gave their affiliates a reason to promote them. When you've got the compelling offer, when you have the ability to put out content, drive it to an email capture and make money from the sales offer, well, now you can at scale put out content that builds your audience and gets customers. If you listen to the episode here on the podcast that I did with Joel Marion, who is speaking at the capitalism conference this January 21st, the 23rd, you can get tickets. @capitalismconference.com he talks about how important it was for the scale of his company to be able to predict how long it would take to ROI on a customer. And he was willing to lose money for 90 days knowing that he's eventually going to make money from that customer. That's the type of mentality that scales us from six figures a month to seven figures a month. Even if we're not as aggressive as Joel, even if we're not buying traffic at the same scale, if we have the ability to buy traffic, get a lead and turn it into a customer, we now have the ability to move on to the next part of the process, which is cold advertising and partnering with influencers and other audiences. Now, when people talk about influencers, you often hear them talking about paying Instagrammers to talk about your brand or talk about your page or talk about your business. And I find that to be a quick way to throw money down the drain, especially when you don't have the other pieces in place. The ability to collect an email address and a compelling offer that makes people want to purchase. I am a super fan of the company Mizzen in Maine. Mizzen in Maine is a clothing company. I have spent more than $5,000 with them. And I know this because I'm in their Admirals club, which is their most like their highest level client club. Like I have a personal rep over there. I spend so much money at Missing in Maine and I found out about them on the Tim Ferriss podcast and guess what? Their product was just different enough and there was a compelling enough offer for me to check them out. And once I checked them out, then I became a buyer and once I became a buyer, I became a super buyer. Now most people are just thinking about who can I incentivize to talk about my business, who can I pay and they'll put me in front of their audience. We have to switch the mentality a little bit. We have to think about how can we spend money in order to have it ROI in 60 to 90 days. In the mizzen and main example, they probably spent 20 to $30,000 to sponsor Tim's podcast. That's per episode by the way. And they know that over time they're gonna have super buyers like myself coming back over and over again. So they'll need five superbuyers like myself in order to talk about mizzen and main enough and spend enough money at mizzen and main in order for it to be worthwhile.

Right?

So they have to know those numbers in order to be able to justify that type of ad spend. Now you don't have to start with a $25,000 ad spend. You can start with $500 in Instagram swipe up ads, you can start with YouTube ads, you can start with Facebook ads. But until you have the ability to buy traffic to an opt in to a sales experience, you really don't have much of a business spending money on influencers. Influencers are best used when you've already proven your offer. So if you've got an offer that you have already proven to cold media, proven to work on Facebook ads, proven to work on Instagram, Pinterest and these other traffic sources, now we can go out and pay the people who are in that space and already have the audiences to talk about us. It's basically the affiliate marketing world revisited.

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So when we've got YouTubers and Instagrammers and podcasters who control the same type of an audience that we do, and we pay them to show up in front of their audience, that's how we leverage influencers to grow our business. Once we've spent money with them, then we can open up a conversation for a deeper relationship. Influencers are relationships just like anything else. So the way I do this is I spend money with them, that opens up the relationship. And now I'm a client, which means they're gonna pay attention to me, which means I can get my foot in the door, which means we can start a relationship. And eventually maybe my brand will show up on their podcast organically, or maybe they'll have me on the show or something else. It's relationship building just like everything is. Too many physical product brands are just trying to spend money to get in front of the Instagrammer, hoping that magic happens on the other end, without any offer, without any way to collect a lead, without even knowing who their best customer base is. Without that, we're guessing. So my recommendation is to spend 500 to $2,000 a month on cold traffic buying that media to a squeeze page, developing the follow up process to sell more product to that email list, and then going out and sponsoring the podcasts, running the YouTube ads, sponsoring the Instagram posts to get them through that funnel. And when those roi, then we start to build a deeper relationship and that might mean partnering with some of them, it might mean giving equity to some of those influencers, it might be being a regular advertiser to that influencer. But most people are just guessing, hoping that they strike gold. And that simply doesn't happen very often. So that is, from an advertising perspective, how we really scale physical products, brands, content to build the audience, offers to make that scalable and sustainable. And then being in front of other audiences, I like to shoot for, at the beginning of a brand, 1000 superfans, 10 personal contacts and one influencer. I know that I can get a business off the ground and launched with those numbers. One thousand fans, ten personal contacts and one influencer. A thousand fans might be a thousand email addresses, 10 personal contacts would be 10 people that I know that could be basically mini ambassadors for a business. So if I'm selling a yoga brand, it would be the 10 cute girls in a yoga studio that I chat with once in a while. Because I've got 500 to 1,000 personal friends on Facebook that also do yoga. Well, guess what's gonna happen if they get behind my yoga products business? That's 5,000 to 10,000 people that are gonna see my products. That's a good start. And then one influencer, one modestly sized influencer of 10 to 25,000 people because they're not hit up a hundred times a day by advertisers. So I can get in front of their audience at a much lower rate and get more buy in from them. Cause I'm probably their first significant advertiser. And if I can already show that I have personal friends talking about them in an email list, there's a good chance we can do business together for a long time. A thousand fans, ten personal contacts and one influencer is enough to get a product or a business off the ground. That is my total model for scaling a business. That's how we get started and that's how we grow it and how we build an audience that has high profit margins. I went through a bunch of examples of this in my YouTube series on this. So if you want to see that, I'm Ryan Moran, 13 over on YouTube. Now I wanna go into the fourth part of the equation and that is the cash management side of scaling a business. There's two parts of this and I'll try not to overcomplicate it or make your brain hurt too much. But the first piece is identifying how much can we afford to take off the table for ourselves until you're running a million dollar business. That number's usually zero until you're at $100,000 a month. You should be rolling everything back into that business. Once you're at a million dollars, I take a profit first approach. Profit first is a book written by Michael Michalowicz. Fantastic read, but I'll summarize it for you in about 30 seconds. Basically argues that before you increase expenses, before you buy the next round of inventory, before you buy the next advertising, you allocate 15% of your gross sales for profit. You also allocate 15% of sales for your salary. So there's 30% of sales coming off the top right away. And when you do that, you get much more prudent about managing inventory. Now, on YouTube, I did a whole whiteboard presentation on this that I was actually pretty happy with how it came out. So if you search for it on YouTube, I think it's worth watching if I say so myself. But the Cliff Notes here are after you've allocated money for profit and money on the table, you basically have 50% left to work with to operate your company. Now, that makes a lot of sphincters go because we think that when there's money in the bank, we should allocate it for growth. So I call the profit allocation my profit and reinvestment allocation. I live on the salary that I take from the business and I allocate my profit for investing into further growth. And what's left is the operations of the company. Now, there's a problem here, and that's that a lot of physical products brands only run on 20 to 30% margins. So if you've just taken 30% off the top for profit, what is there left to invest? It's here that it makes sense to deploy strategic debt now real quick without being in front of the whiteboard. I'll try and make this simple. A lot of physical products brands have $100,000 purchase order that they need to make in order to keep inventory going. And they've got $200,000 in the bank. So when they make that next purchase order, it takes up half their capital. What makes a lot more sense is using Amazon Lending Kabbage SBA financing traditional bank loans in order to finance that inventory order. And if you pay 10% interest on that debt, then that $100,000 order is actually only a $10,000 cost. You're only paying the interest as an expense. The rest of that is going to be paid out of the future inventory sales. So the cost to you in immediate dollars is only $10,000. That frees up $90,000 for reinvestment into other areas in the business. Now think about this for a second. The first time you ever launched a business, you spent while a what, $5,000 to launch the product, right? And what happened? You got that product up to 50 or 100 sales a day. Awesome. So that $5,000 order now is actually making you $50,000 a month. That's a good ROI. So why would you take $100,000 and go buy $100,000 worth of inventory? You should be predicting that with debt, someone else's money. Take the $10,000 in interest and allocate that to the next set of inventory and use the freed up money to go launch new products, to hire more people, to try new advertising, to go into areas of multiplication. That is how you really scale a business quickly. You finance what you can reasonably predict and you allocate the rest of your profit into areas of multiplication, which is how you can both pay yourself and run a real business. When you do this and you're allocating money for your salary and for profit, you'll actually enjoy the process much more. Because at a million dollars, if you're taking home 15% profit right off the top. And guess what? $150,000 is enough to live on the beach if that's what you want to do. Now, it's not gonna make you a billionaire or buy the Cleveland Indians, but most of us can live on $150,000. That's only if you're running a million dollar business. So that's what we all got into this for was the lifestyle was to live a better life. Right? So if you can now take 150 grand off the table, business gets a lot more fun. And you'll be more prudent with the rest of the money that is sitting in the business. What we'll do with the rest of the profit and investment is to put it into those areas of multiplication. And we'll use some debt to keep the operations of the business healthy, knowing that our inventory is going to sell to pay through that debt. That's how we're going to be able to scale this thing. It's freeing up that capital that is going to allow us to hire a content creator or hire that inventory manager or pay for new advertising experiments. Right? Those are the areas that we're going to basically use as research and development and areas of scale and doing those four things. Building up content to create an audience, crafting offers, using cold media advertising, and running a profit first approach alongside a Multiplier effect is going to take a business from seven figures to eight figures, assuming that's what you want to do. If you want to see the full series, you can grab it on YouTube or if you want to go through the podcast series that I have specifically made for physical product owners that's called Million Dollar Brands and that's going to show you how to outline and launch a million dollar business selling physical products. We're also starting a new podcast here@capitalism.com that is all about highlighting successful brands and it's gonna be called the Brand Builder Podcast. You can find it on itunes or on Spotify, or you can go over to capitalism.com and click on the tab that says Podcasts and just look for the Brand Builder Podcast. This is specifically gonna be about highlighting physical products, brands that are scaling, it's going behind their stories and their strategies for growing impactful companies. So if you have been missing some of the content that has been all about physical products brands here on the show, you can find it@capitalism.com and subscribe to Million Dollar Brands and or to the Brand Builder Podcast. I think you're going to like both. Slash all of that content. Hope you enjoyed today's episode. Would love to hear your thoughts. Feel free to shoot me a message on Instagram. I'm RyanDaniel Moran. As always, I think that this is the most predictable route to a seven figure business and now an eight figure business. And I think that entrepreneurship is the way that we make the biggest impact in the world. So it's a privilege and an honor to share this with you and I hope you find it impactful. Thanks for listening and I will chat with you on the next episode.

Hey, a quick note for you Amazon sellers and brands who want to be on Amazon and haven't made it a priority yet. I am often asked about changes with reviews or changes with Amazon terms of service or changes with what's working with ranking and all of that kind of jazz. And I'm proud that I have partnered with one of our backroom members. His name is Jeff. He runs an agency that specializes specifically in optimizing your Amazon presence. So if you're a brand that is neglecting Amazon and you've heard me talking about it and you're like we know we gotta get this together, or if you're an Amazon seller and you know you need to turn your attention to audience building and funnels and the stuff that is really gonna grow your company, I would recommend that you give a quick shout out to my boy. Jeff at Turnkey Product management. They're@TurnKeyProductManagement.com and as I said, they're in the back room. They work with my team and the rest of the big companies and equity groups that are involved in our little circle. And they're usually ahead of everybody else in terms of what's working, what's compliant, what review strategies are cool and kosher and are actually effective. And they're not out there hawking a bunch of info products. They're out there actually doing it. So they're an implementation agency that just handles it for people and they run their own businesses, some of which they have built and sold, kind of like yours truly. So I feel really good about partnering with them and recommending the big companies and the brands that I work with to outsource their Amazon management over to Jeff and his team. So if you're looking to add some automation into your arsenal, I would recommend the good folks@TurnKeyProductManagement.com and Jeff and I are on speed dial with each other and are collaborating on what's working. So you're always getting what's the latest and greatest in the Amazon world. So contact those guys if you're looking to outsource, automate and optimize your Amazon presence@TurnkeyProductManagement.com.