10 Things I Wish I Knew Earlier In Business

Here are 10 things that I wish I knew earlier in business. And knowing these things probably would have made me tons more money and, you know, helped me avoid many different mistakes. But that is life. So hopefully with this video I can convey these 10 things to you and save you a lot of time and potential money in the process. So the first is you only need three skills. And I really like this Bible verse. Do you see a man who excels in his work? He will stand before kings, he will not stand before unknown men. So one of the weirdest things that you hear, especially in comments and messages if you make YouTube videos like me for example, is how do I start a business with no skills? Their answer is, you don't. Right? But it's a question I get probably at least 10 times per day. So in fact, whether you are just starting out or have been in business for decades, all you really need to develop are three skills and the combination of three highly monetizable skills. You know, these are business skills. These are not like playing the guitar and, you know, doing a couple other things. These are business related three skills. A combination of these three will make you unique and will make it so you don't have to worry about making money ever again. And I believe that one or two skills are too few to build, you know, a very successful career business. Four or five or ten skills are just too many to develop and hone efficiently. But if you choose three skills and become the top 1% of all three of them, you can and you will make millions of dollars per year. I think this idea would have been very valuable for me starting out years ago at this point because when I was first starting, I was like everyone else. I didn't really know what to do. And if you can give someone else clarity, whether it's yourself, your employees, your contractors, or whoever else, that they only need to focus on three things and develop these three skills, I believe that you'll make progress like never before. So if you want to own your biz, your own business, the skill stack will usually look something like sales writing and then some sort of monetizable skill that's specific to your niche or service. It's going to be hard to start your own business or make it in general without some decent sales skills and the ability to write clearly. The third one will be whatever is needed. So if you're starting a Facebook ad agency, your service would be Facebook ads or your skill would be Facebook ads coming up with creatives. For example, if you are a lawyer, that would be the necessary legal related knowledge, the sales skills, the ability to write clearly are still going to be part of that. It's still going to be the two other skills in most cases. But whatever it is that's specific to your niche or service, you're going to have to develop that one as well. But that's not really able for me to include that in this video because that will just depend on so many different factors. In most cases, you're not going to be able to escape the fact that you have to sell others on your ideas at a minimum, even if you don't work in a sales specific role. For example, a lawyer probably doesn't work in a sales role, but they have to sell the jury, they have to sell their client on the defense, they have to sell the, you know, the judge, the courtroom, et cetera. And to do this, they have to be able to write and think clearly. That's just an example. The second one is what you're offering is 80% of the battle, 80% of the effectiveness of your marketing. Your actual result you get for the client, the sales process is going to be how good is the offer? And 20% is the rest. Took me many years to realize that the bulk of results, whether you're good or bad, is going to be dependent on the offer. The offer is most frequently related to your service and what you're offering, but it plays out in a smaller role in every other area of the business. So you have the main offer, that's your service that you're selling. The better it is, the more people will buy it. But you also have what you're offering in your ads, what you're offering in your cold emails, what you're offering in your partnerships, et cetera, a million different, you know, things in business. And quite simply, the better this offer is from a perceived value point of view. It could be great from an actual value, and it should be, but the perception of it is just as important, if not more, the more successful you will be. In my experience and opinion, the number one thing that you want to do as an agency is to latch onto clients that have a great offer that would probably be successful whether they worked with you or not. And I think that is the dirty secret of a lot of agencies, including my previous ones, and not really in a negative way, but their huge success stories have very little to do with how good the ads they create or emails they write or SEO or content or landing pages or CRO is, and very much have to do with how desirable and value filled the offer is. And the opposite is also true. If you own an agency, you probably want to avoid working with people who have a bad offer, if at all possible. I really like Alex Hormozi's value formula, and I Wish he was 10 years older and wrote those books 10 years before so I could have benefited them from when I first started. Because this took me way too long to learn on my own before he kind of came along. I think this is a great start. Whenever you're building an offer, the dream outcome times the perceived. There's that keyword again. Likelihood of achievement divided by time, delay and effort and sacrifice. If you want to stand out in your market and make your service less commoditized, so to speak, I think the number one thing that you can add to your service is helping them make a great offer. Let's say you do cold email. That's your service. You could really differentiate yourselves from all of the other people who do cold email, as well as help your client get better results by helping them develop a cold email offer in addition to just writing the scripts and doing all that stuff. There's so few people on the planet that can create a great offer that if you make creating a great offer your maybe fourth bonus skill, you know, your periphery bonus skill, you can make a tremendous difference standing out in the market, getting better results, and it can turn the bad clients that you probably wouldn't want to work with into good clients sometimes. The third one is to incorporate the four types of leverage. So this is a concept from Naval Ravikant, and then Alex Hormozy has talked about it a bit, and it's the concept of the four types of leverage you can have in your business. So leverage can be defined for this purpose as the difference between what you get out versus what you put in. So if you put in one unit of X, Y and Z and you got 10 units out, that's an example of leverage. You're getting more out than you put in. So this is the key to growing larger, faster, and with less effort. And the focus should be on, you know, widening these two things. The difference between what you put in and what you get out. The more you can widen that, the more leverage you have. The faster you can grow. The bigger you can grow, the less. I wouldn't say less effort, but it seems that way for people who don't know, you know, the inner workings. So a lot of people, I would say most people have no leverage in their business at all. If they want to make a thousand dollars they need to put in $1,000 worth of work or effort. An employee. The reason that most employees, assuming they don't get stock options, don't, you know, make a lot of money is because they don't have a lot of leverage. If they make $25 an hour, to make $1,000, they have to put in 40 hours of work. And there's no way to improve that or do anything, really. You could get a 5 or 10% raise, but still. And the end goal in business is to, you know, do something like put in $1,000 of work and effort and get $10,000 of revenue back or more. And if you can do this, like, that is the key to growing a big business. So the four main types of leverage are media, capital, labor, and code leverage. Naval and Alex talk about this at more of a high level. So I'm going to go through some specific examples of what this might look like in a typical B2B company. We've all heard the quote, or most of us have heard the quote at this point. You know, give me a lever long enough and a fulcrum on which to place it, and I shall move. The Archimedes, famous ancient Greek philosopher, very, very, you know, that perfectly encapsulates what we're trying to do here. So the difference between companies that do okay, and companies that get into the top 0.01% are that the companies that are in the top 0.01% have all four types of leverage to a large degree and maybe even multiple different types of the same leverage. So these companies use so much leverage that the difference between the top 0.01% of companies and the top 0.1% of companies is far greater than the difference between the top 0.1 and bottom 99%. And this image really shows that. So these, you know, top 0.01% is one in ten thousand. Top 0.1% is one in a thousand. And bottoms 99.9% is 99. 999 out of a thousand. And the difference between, you know, these two is much different than, you know, the difference between these. Even though this is like the largest part of the market, it really isn't comparable. So let's talk about some of these leverage points here. So, you know, media leverage, the first one, this YouTube video, for example, making a YouTube video going over a specific topic of your industry is a form of media leverage. I'm making this video, you're watching once and posting it, and maybe thousands of people, maybe tens of thousands who knows, over the course of its existence will see it. I don't have to hop on a zoom call with every single person who watches this video and you know, basically recite this exact presentation a thousand times or 5,000 times, or 10,000 times, or however many views it gets. I just have to do it once. This is an example of leverage. I'm getting out a lot more than I'm putting in. The next example is capital leverage. So let's say you make an ad funnel, you test the creatives offers, landing page, all of that stuff until you find something that works. You spend a dollar on ads and you get $2 or more in return in revenue. That is an example of capital leverage. You're getting out more than you put in. An example of labor leverage. Let's say you run a landing page agency and you make conversion focused pages for e commerce brands. You think to yourself, who needs landing pages besides the brands themselves? And you come to the conclusion that paid ad agencies need landing pages too. Because if the landing pages that they're running their ads to are not good, their ads are not going to work and they're going to get fired. Right? If you reached out to and partnered with 100 different paid ad agencies, either through white label or referral, you are now taking advantage of the labor and resources of 100 different businesses, not just your own. You are one person business, but you're benefiting from the labor and the sales and all of that of a hundred different businesses, all of your partners, including yours. This is an example of leverage. You're getting out way more than you're putting in. The final one is code leverage. Let's say you wanted to cold email 5,000 people per day. In the past, you probably would have to hire 10 to 20 employees to find the emails, to copy, copy and paste the scripts in, follow up, et cetera. Now you can just use code, you know, software on a platform like Apollo, Export the leads you want to email in 10 minutes, upload them to a platform like instantly upload your script, turn it on and will automatically be done for you. All you got to do is reply to people who are interested. So the code and software is letting you do with one person what used to take 10 to 20 employees. That is an example of leverage. You're getting out more than you're putting in. So the more leverage you have, the further you'll go when you see those businesses that they're called rocket ships or other cringe terms like that. Leverage is typically what's going on or the reason that they're growing so fast. They've harnessed one or more forms of leverage to huge degrees and that is propelling them forward at a very rapid pace. So without leverage, to make a billion dollars, you would have to put in a billion dollars of work with it. You might put in $100 million of work to make a billion dollars. And this is the, you know, essence of business and profit. When you see all those companies, you know their profit and loss, you know their revenue multiple. This is leverage. Put in a spreadsheet using dollars and cents. The fourth one is true success comes from 10x breakthroughs. So I have always been a big proponent of the 1% better every day rule, ever since I read Atomic Habits. The small incremental gains truly do compound over the long term and put you in the correct mindset. I think we've all seen this picture at some point now. But true success does come from the 10x breakthroughs. For many years I thought the 1% better way was the way to go. And while I still think that should be incorporated into every business, I tend to do this on the skill based level. For example, how do I make every YouTube video I make 10 or 1% better than the previous? Or how do I make every newsletter 1% better? Or how do I speak 1% clearer with 1% less stutter? Or how do I focus 1% more? Things like that. But I've come to understand that business success is built on large breakthroughs, that once they occur, none of it is or nothing is ever the same ever again. So an example of this is you make an amazing offer that crushes every other offer in your industry, including your previous one. That's an example of a 10x breakthrough that is going to just propel your business forward. The first time you make cold email campaigns that actually work, that's another 10x breakthrough. The first time you make a profitable ad funnel that's self liquidating and you can scale. That's another example of a 10x breakthrough. The first time you hire your big, you know, C suite level, executive level person that actually works out and can take a lot of work off your plate. That's another example of a 10x breakthrough. It's not unrealistic to say that if I was able to make a self liquidating ad funnel, I would be getting 10 times as many leads overnight as I could scale my ads with no risk. Right? It's self liquidating. I'm getting all of the money back right away. All things being equal, if I had 10 times the amount of leads, I would have 10 times the clients and revenue. And if we're measuring our success, you know, purely on revenue, that's a 10x breakthrough. The power and the secret sauce, if you want to call it that, becomes conscious, becomes being conscious of and correctly identifying these potential breakthroughs and then making a plan to achieve them. The fifth one is you need to price your services if you're at a B2B service company at $250 per hour or more. So one of the most important things I learned relatively early on in comparison to some of these other ones, and I did this, or I learned this from my very first mentor, was that when you price your services, you have to have them at $250 plus per hour. So if you charge, you know, $5,000 per month for X, y and Z service, this means that your company would need to take 20 hours or less to complete it. 20 times 250 is $5,000 per month. And the reason for this is after taxes, salaries, customer acquisition costs, the tools and software you need, miscellaneous costs, there's not much left over if you're charging under $250 per hour. So let's do this to show you this is actually true. Charging $100 per hour. So $100 per hour would be $50 or 50 hours of work per month for a $5,000 client. If you had to pay $1,000 to acquire a client, which is not uncommon, as you get bigger and you scale, you know that is worth a $5000 and you have to pay someone $40 per hour to do the work. That's $3000 gone out of the $5000 total, $1000 for the to acquire the client, and $2000 for the actual labor. Of course, the $1000 to acquire the client will go away after the first month because that you've acquired the customer and that, you know, you don't need to continuously pay this. But the thing you know, the point remains, and if you have to pay another $500 in software or miscellaneous costs, which is not uncommon either, you know, you're at $1500 left if you have to pay your sales team 10% of the sales value, which you know is your SDR, your closer, their base pay their commission, we're already down to $1,000. If we have to apply a 30% tax to this to account for, you know, the corporate tax, the payroll tax, you know, any other fees like this, we're down to just $700 now. And now if we have to take into account the roles and salaries that do not generate revenue, such as managers, hr, finance, et cetera. When you do start growing your company that you will need to hire, this $700 quickly dwindles even further to almost zero profit. So for context, if we charge $250 per hour, that would be 20 hours of work and we would have 30 hours times $40 per hour of wages saved, which would be an extra $1,200 in this example, instead of zero. Basically, we're at least $1,200 profit, and that's why it's so important. And you may argue that it is fine to price it less than $250 per hour when you first start and you don't have these, you know, payroll taxes, you don't have a lot of these huge software and miscellaneous taxes. You don't have, you know, the hr, the finance, that kind of stuff. You might argue that it's fine when you don't have that stuff, but I would argue against it as well because you might as well get in the mindset of designing a service and offer that can be delivered at $250 per hour, not the other way around. When you make making a service is easy, but changing a service is difficult. And if you make a service that you know is not, you know, it's very labor intensive, that's going to only make you $100 an hour when you start. Once you start hiring and you have a lot of other problems to solve at that point, you're not going to have the time or ability to change it. So you should get in the mindset of designing a service that can be delivered at $250 an hour, not trying to make it so your service can be delivered at $250 an hour after you've already started. It's subtle difference. It's completely inverse to what most people do, but it's very, very important. The sixth one is productized services are king. They're the best. So I define a product high service that is simply you pay X, you get Y. There's not much that's customer tailored and there are no negotiations or, you know, alterations for this very simple pay X to get Y. So I view these as the ultimate business model. Because when you do this, as opposed to offering tons of different services and a lot of customized work, all of your employee training is focused on this service, all of your systems are focused on it, all of your hires are focused on it, all of your assets and marketing and SOPs are focused on it, all your technology needs are focused on it and all of your goals and attention are focused on it. And I could go on and on about this. If you compare this with the traditional Full Stack agency who offers tons of services to tons of customer avatars, every single thing about the productized service is going to be better. So number one, you'll become more efficient, which means you can hire less people and you'll have higher margins. You can pair that with a Full Stack agency who left to hire a different person for every different service because no one will ever be good enough or have time to do them all. And it just eats into your margins. It's just a killer. The second one is you'll become better at fulfilling the service and you'll get a better result from the client because this is all you do, you know, all of your attention, all of your, you know, incremental improvements, all of your big breakthroughs will be all about this one particular service. And because it's better, that will lead to less churn and more referrals. You want to compare that with a Full Stack agency who has to learn and manage tons of different services and it's simply not possible to be the best at everything and more services. Split your focus. Third example here is you'll center all of your marketing assets, media and all of that kind of stuff around one main service and you'll be known specifically for this service. If you compare that with a Full Stack agency who offers 20 different things, they'll always have jumbled marketing messaging. They'll try to be all things to all people. And this also makes it very hard for people to refer to them because they're viewed as all things to all people. They're not viewed as, you know, my Facebook ad guy or my SEO guy. They're trying to be all things. And this hurts the ability to refer people to it. It might, you know, sound weird for me to say that in theory, but it does make a very big difference in reality. I could go on and on and do 10 different comparisons, but I hope you get the point. So the key here is to have two productized services, not one like I might have, you know, kind of, you know, said one at the start, but two productized services. One is, you know, a one time kind of intro offer that has at least $2,500 margin. And the goal with this is to cover all of your costs, your customer acquisition cost, the labor cost, the software costs, the miscellaneous cost, taxes, the cost of, you know, your non revenue producing roles. If you can get this service to cover all of those, then you upsell a percentage of those into your high price recurring service and this is where you make all of your money. The one time service can be viewed as a low risk trial or intro offer of your main service and once you prove yourself to them, it becomes much easier to sell them into a high priced recurring service that you wanted to sell them all along and they also churn a lot less. You're going to get a lot more leeway that. The seventh one is there always be three things that account for 90% of your success and this is one of the most important realizations. It's one of the worst and best realizations you'll ever make in business because that no matter what you do, just three of these things will account for 90% of your results. It's one of the worst realizations because it'll bring your attention and make you feel stupid for all the time you've wasted over the years. But it's also one of the best realizations because once you realize it the first time, you can never unsee it. And you'll be much more conscious on identifying and spending all of your time on these three things going forward and trying your best to delegate the rest. In most cases like these three things are going to be three things that build one or more types of leverage that we went over earlier. So for me example for a thousand x leads, making a YouTube video every day, improving the product, and writing a best selling lead gen book which is in progress are the three things that I can do today that will account for 90% of the success of a thousand x leads. So there are other things that people can do or that I could be doing, but those are, you know, my partner's responsibilities or our employees responsibilities, anything to free up my time so I can do these three things. The YouTube and the book will help me sell the product and if I improve the product every day, it's going to lead to a much better outcome for clients which will lead to more upsell opportunities, referrals and reviews. In comparison to these three things, almost anything else I can do is a waste of time. And one of the hardest things I'll have to do is to spend eight hours per day on these three things while delegating or saying no to the rest. The eighth thing is taking something from other industries and applying it to your own business is much better than taking it from competitors. Three quotes and they're all from Jay Abraham probably the person who's made the most impact on me as far as someone you know, I don't know personally. You know, an amazing thing, the human brain, capable of understanding incredibly complex and intricate concepts, yet at times unable to recognize the simple and obvious. As soon as your mind opens to doing things differently, the doors of opportunity practically fly off their hinges. And the final one that's most relevant to this, and the first two are kind of primers for this, is what is common as dirt in one industry. When distilled and introduced to an industry that doesn't know it can have the effect of an atomic bomb. And if you can combine multiple filaments from different industries, it's off the charts. So everyone always wants to copy the competitors and keep an eye on what their competitors are doing, which is reasonable, right? Fair enough. You may learn a thing or two that you can use for your own business, but the true exponential gains come from taking great ideas that are common standard in one industry and bringing it into your industry that doesn't do it. And the results of doing this properly are truly stunning. And this is why I believe reading is so important, especially, you know, autobiographies of people who have done it before, have built a successful business before because a lot of the time the number one reason that this will get in your way is you just don't know like what's possible. So an example here, you know, appointment setters are very common in online business, but if you brought them to things like plumbing and roofers who, you know, don't know this tactic, if you want to call it that, it'll be a truly novel, novel concept that likely explode the results. Likewise, you know, high performing Facebook ads are the standard for ecom brands these days. But if you took the same quality and automation and sophistication and landing pages and creatives and copy and offers and you did this for a local business, that would be a truly novel concept likely to explode. Cold email is very common for legion and service companies. But if you took cold email and applied the same volume sophistication, you know, appointment setting, you know, sequence strategy to e commerce brands looking to get into retail, that would also be a truly novel concept likely to explode. Number nine is if you really want to do something special, 80% of what you do has to be new, while 20% can be standard or, you know, common practice in your industry. One of the most important things to understand is that most people do the opposite. You know, 80% is standard, 20% is new. And this is very you know, that's perfect, that's fine. You can very much build a better mousetrap, you know, just outperform your competitors, do more, do it better, and you can build a very nice business this way. But if you really want the exponential gains, huge and fast scale, you know, the type of ones you read about, and just say, wow, that's awesome, you're going to need to do 80% of things new, and 20% can be standard or old or common. It's kind of like the quote, you know, the definition of insanity is doing the same thing over and over and expecting a different result. If you just do what's normal or ordinary in your industry, you're going to get normal and ordinary results. So 99% of people are totally incompetent, even the ones you think that are rich and successful. And you need to get over the phase where you admire them and copying your competitors, which is the most common application of this is in most cases, like the blind leading the blind. So you don't really want to fall victim to the zerp entrepreneurs, you know, the ones who built their entire business with zero interest rates and free money and a booming economy. What worked for them is not going to work for you. Times change and you need to innovate. 80% of it is going to have to be new if you really want to get that kind of exponential result. And the tenth thing is you get rich off equity, not income. One thing that I didn't understand for years and years is just this. You get wealthy based on equity, not on how much money you make. Even if you, you know, do $5 million per year in profit, you're going to need to reinvest in your business. And when you take it out, you're probably going to pay 25% to 50% in taxes, you know, unless you live in Dubai or something. And, you know, maybe even more of this if you learn live in certain European countries, you know, in addition to that, the more you make, the more you spend. And it is inevitable, even if you're frugal, even if you're not a big spender, it just happens, okay? So you get rich off equity. You get rich off building a business with value or selling it. And this is what this is like, took me so long to understand. And this is significant because when you understand and realize this, you may choose a different business model and, or you may build the business differently so that it can be sold one day. This is one of the things where knowledge is power and being aware of this will completely change how you operate your business. If your goal is to get a significant net worth and make a lot of money, it's not really to say that you only get rich off selling your business. Like, you can make a high income, be smart with it, and invest it into assets that, you know, real estate, you know, cash flow producing assets, you know, invest in companies and achieve the same effect. There's more than one way to do everything. But the problem with this is, you know, people just make a high income. They get lifestyle inflation, or they make bad investments and lose it all, or they don't invest in real assets in the first place. And it's very hard to get wealthy without assets. So this is the end of the video, and I hope you learned a thing or two, and I'll see you in the next one.