Colin Sprake breaks down the three areas every business needs: production, operations, and sales and marketing. Most startups starve their marketing budget, he says, which kills growth and creates debt. He recommends spending 65% of your time on sales and marketing to scale fast.
How many of you wanted to build a business quickly? How many of you think give me ideas. If you wanted to build a million dollar business in a year, how would you do it? After what you. From what you've heard this evening so far, okay, it is quickly. How do you believe you could do, you could build a million dollar business in a year? Everyone can do it. Okay, so let me give it to you. What are the three major parts to a business? The make up a business. From all our seasoned business owners in the room. What are three key areas? Administration, which is. Or operations. What's the other two? Production. Sales and marketing go together. Okay, so sales and marketing go together. So when you start a business, I'm going to do this in red because this is my, this is a typical business in startup phase. So in a typical business, what percentage of time do you think you should spend in producing? Some people go for production. I don't have a product. No, you just have to produce your consulting packages or your service or your courses or whatever. In the service industry you still have to prepare for it and put your goods together. So you still have production of your goods. Whether you're in service or in product based business, what percentage of your time would you spend in production? 20, 20. You're close, your honor, you're very close. 25%. What percentage of time in operations in a typical business? Yeah, close. This is a typical business. This is from a report that was done a few years back. So what leaves how much for sales and marketing. Now you understand why most businesses are broke. I really mean that. That's one reason. This is what any bankers in the room, be careful. This is what I call the line of credit column because that's where your banks want you to. Your bank is best friends when you're doing little marketing and making big loans. I really mean that. I've watched this through so many banks that I've dealt with. I actually trained for some of the banks. I've trained for bank of Montreal, bank of Nova Scotia. I love. Sadly, I don't love. I love this column. I'll tell you why. Now this column is a line of credit card. How long do you do before you make money? When you ask most banks how long? 2 to 5, 3 to 5. Typically 2 to 5 years before you make money in a business and depends on the kind of business I understand. Here's what I tell you the reason why it's red because that'll get you into the red. If you do 10% marketing, why do you think People stay here. Comfort zone. Okay? This is comfort zone. This is comfort zone. And also because most entrepreneurs are not business people. Most entrepreneurs are technicians. The plumber, who was a great plumber, left his job with somebody, has now gone out to start his or her own business. They're a plumber, not a business owner. Some of them make it. Very few do because they get stuck in this area. And they do very little of these two. Very little of these two, because this is comfort zone. And also what I call the technician zone, where technicians like to hang out. Let's get into the other column. Let's do black, because black numbers are amazing. What percentage of time in product, in production, in your business? 40. Just have to produce it, okay? It doesn't really change. Here's the big change. Now that's a huge change. Because when you put in 65% of your time in sales and marketing, some of you might challenge me and say, colin, if you do this, this will start to suffer. Operations. Well, here's my thing. I'd rather be doing this and have a challenge because once I got enough money, I can hire those people here I'm going broke because I'm not doing enough marketing. This is a challenge. This is a really good challenge, a healthy challenge for your business. Because the more sales and marketing, this is getting out of your comfort zone and getting into doing more sales and marketing for your business. The more sales and marketing you do, the quicker your business will grow. Profitable sales and marketing. Let's go back to that. Profitable clients. Not just clients. Really, really important. How many of you know you need to increase the amount of sales and marketing you do? Be honest, critical. Because at and of those of you who put your hands up, how many of you know that you're going to start doing it tonight or tomorrow? Good man. Okay, good. Because that's the key thing, is if you keep on doing it the same way, you're going to get the same result. And I look at so many people, they say to me, colin, I want to get to the next level. I want to get there quickly. Well, you need to make changes. You cannot keep on doing the same thing expecting a different result. Really important. So this column here to me is what I call the jail column. It puts you in jail. It puts handcuffs on you. And I really mean it. I don't mean it from a bad light with the banks. The banks are great there. They support many business owners. They're great at what they do. But the one thing I wish they would do more of is getting really great people to train banks, to train their clients so their clients are more successful. Really, really important. Because this is not really called a line of credit to make your mark. What do we call it? Who remembers? We don't call them lines of credit because that's a real sick name for them. We call them power education funds because when you take them out, you should learn something from them. You know, whether it's in personal life or in business, line of credit has such a negative connotation to it. A power education fund is what am I doing with that money? To grow business or grow my life or whatever it is. Because many people have them in their personal lives. But what is that doing for you? Your personal life? Wise to grow your business or grow your personal situation. So how many of you are going to do more marketing? Just give me a hand. Show of hands again. How many of you. Absolutely, absolutely Commit to doing more marketing? Starting when? No. Great. So you're going to be at a midnight networking. Okay, now I call out, are you going to be at some midnight? No, maybe not.
