TES 002 - The 5 Keys to Mastering Your Business

Hey there, real quick before we jump into the episode, listen, if your earnings treadmill hasn't set you free yet, running faster won't either. Listen, hustle without principles just going to burn you out. So here's what I want for you. I want you to join me for my money machine experience Live. It is three free trainings. Deep dive into how to escape the treadmill and build a money machine that actually works for you. All right, grab your spot here by going to moneymachinelive.com and I'll see you in the free training. Hey there, I'm Mel Abraham and welcome to this episode of the Entrepreneur's Solution. And in a moment, we're going to take the time to talk about how do you master the basics of your business? I know some people look at it and go, oh, the basics, aren't they? What's the new thing? What's the new fad? What's the new thing on the street that's going to drive the business home? Is it Pinterest? Is it Facebook? Is it some other newfangled gadgets? And the fact of the matter is that business basics never go away and that will drive your business and escalate your business when you master it. When you look at athletes, they master the basics. When they master the basics, that's what makes them star athletes. And so it's the same thing here. So we're going to be right back after this brief introduction and we're going to talk about my framework on mastering the business basics so we can accelerate your growth in your business. Stay tuned.

Welcome to the Entrepreneur Solution where highly successful entrepreneur Mel Abraham becomes your entrepreneurial mentor. Here, Mel reveals his business building strategies and even gets a chance to answer your questions. Mel Abraham, a CPA by education, but an entrepreneur by exhilaration and a true believer in the entrepreneurial way of life. It's through entrepreneurship that we create community, support society and live our dreams.

It's where possibility meets reality again and you can have the life and lifestyle you want. One of freedom and peace of mind. Welcome to this episode of the Entrepreneur's Solution where it's time for you to be bold, dream big and live life your way.

Alright, welcome back. This is Mel Abraham, the author of the Entrepreneur's Solution and the founder of Business Breakthrough Academy, where we teach you how to design a business and create a life, a life of financial freedom and peace of mind. And welcome to this episode of the Entrepreneur Solution where we're going to talk about my framework, the framework that I've Used that I've grown to use, that I've learned and it's evolved over the years how to look at business. And in the last episode we did talk about this concept of above the line and below the line. We talked about the fact that we really need to manage two elements. Minimizing the downside risk and maximizing the upside potential and opportunity. And that's really done through making sure that we've got a good business model. It's the mechanics of business, it's the how and the what we do business. And we talked about the above the line stuff. This is the stuff that really dials it in. This is the stuff about creating your legacy and creating a lifestyle that you want to have that's created through the entrepreneur, the entrepreneurial endeavor, the business that you have. It's what's called meaning. And it's this umbrella of meaning that we talked about in the last session that allows you to make the right decisions in the how and the what in the below the line. So we're going to talk about my model for doing that, assuming that we've kind of looked at the different things as far as meaning goes. But you know, people will look at business and push it away. It's complex, it's risky.

It'S problematic, it's stressful. And yes, it can be all of those things, but it doesn't need to be. And there's basic fundamental principles about business that when you understand them, when you employ them, when you do them, they're in effect laws that will come to pass that that allow you to really, really build the business or build the business the way you want. Now, nothing is assured when you talk about business, especially because there's market dynamics, there's shifts in preferences, there's shifts in demographics, there shifts in legislation, there's shifts in tax law, there's shifts in economics that are completely out of your control and we need to be able to respond to them. But if we've built the foundation business on a strong, strong set of.

Pillars, then we're going to do alright. We should be able to navigate.

The down slopes and really take advantage of the upswings in business. So really, when it comes down to business, there's only five things, five things that need to be really figured out and dialed in and to make sure that your business is running effectively. And what these are is marketing. Clearly we need to do marketing with the business mechanics about the business. How do you run the business? We'll talk a little bit about these in more detail. The money part of the business, clearly we got to have money coming in. So what's the money part of the business? The mindset part of the business. And the model, the business model itself. And those are the five, what I call the five M's that you need to master in business. Marketing, mechanics, money, mindset and the model. And when those are dialed in, and you've got those dialed in, this is where you really start to accelerate your growth and scale your business. So here's the thing that I'm going to go through each of these. I'm not going to be able to go into as much depth as I typically go into in my multi day trainings, but I want to go in and identify what they are, what are the things you need to focus in on and.

Give you some basis from which to evaluate what you're doing. If you're in business now, how well you're doing it. If you're not in business, then how you're going to define it. Because that's the real key with doing this. And I'm going to give you a way to score yourself at the end of the session and a sheet that you'll be able to download to do the scoring to figure out where you are and where you need to focus your energy to build this. So let's just talk about marketing for a moment. Every business needs marketing. Marketing. And when I talk about marketing, I mean the marketing and sales process. Actually what I think about marketing is it's marketing and a connection process. Because I believe in what I call connection marketing. In today's environment, in today's world, that's what people are hungry for. That's what people are looking for. Marketing is the process in which you will reach out to your customers, reach out to the people that you can serve with your products or services or the different packaging packages that you have. And it's also the process in which you'll transfer it to them, you'll sell it to them. So when I talk about marketing in this context, it's the marketing and the sales process. It's about three things effectively. Your customers, who are your customers. And you'll hear this, you know, you'll hear this anytime you go into a marketing course or an advertising who's your customer Avatar. And I know that it's, it may seem, you know, I've heard this before, I've heard this before. And the question is, if you've heard it before, do you really understand it? If it's common knowledge, is it common practice? If it's not common practice. It doesn't matter that it's common knowledge because the reason you're hearing it so much is that it's important to identify who your customers are. Do you really know what your customers want? Do you really know who they are? Do you know what they do in the mornings when they wake up? Do you know what they eat, what they drink, what they think? Do you know where their pain points are? Do you know where they live? Do you know how they like to access your products or services, the information that you might have? Are they Internet savvy? Are they not Internet savvy? How much do you know about your customer? If you, if you look at it and you can't literally describe your customer and it's not women ages 35 to 37 that are.

You know, that have a bachelor's degree, you know, that's too generic. What we're talking about is something that's very specific, that if you described your customer, I literally can get a picture in my mind of what they look like, what they do, what their preferences are, and how you do that by being able to define your customer to that kind of degree, to that kind of detail, to that kind of specificity that's going to allow you to create messaging in a way that communicates with them, which is the next part of this marketing is about customers communication and connection. So the next part of this is creates messaging that allows you to communicate with them. Not to communicate with them, just from a logical space in their head, brain to brain, but from an emotional space.

In their body, in their heart, in their soul, saying where they look at it. And they say, wow, this person really gets me. They know who I am, they know what I'm about. They're in my head, they're understanding my fears. What I call when we talk about the nine ideals of legacy, what I call understanding their fears, frustrations and fascinations. That, that when you communicate, the message really drives home the fact that this is for them. And then the last C, which is called connection, is understanding how do I connect with them? How do I connect with them in a world where I think we've made the mistake of believing that contacts like texting and email and likes on a page means connection, and it doesn't. It means contacts. Contacts and connection are completely different. A connection means that we've got an emotional relationship with the person. We've got an emotional relationship with our customer. And that emotional relationship with the customer comes from connecting with them at a visceral, emotional level. By understanding what their fears, their frustrations and their fascinations are, by knowing their, how they live, by understanding what they eat, by understanding what they think, by understanding who's speaking in their ears and the things that they're saying, we can connect with them at a much deeper level. And when you connect with them at a deep level now, you build a relationship with them that's based on loyalty, that's based on, on that type of, that type of, that level of communication. So, so the marketing piece of this is extremely important. And we can talk about marketing tactics, we can talk about emails and direct mail and display ads and demonstrations. All of those things are marketing. But they're useless. They're absolutely useless and a waste of money and a waste of time if you don't understand who your customers are, how to communicate with them and how to connect with them. So the first things first is before you start spending any kind of money, before you, you spend any more money towards your marketing and your sales process, let's go back and let's make sure we understand who the customers are, how to communicate with them, and how to connect with them at a deep, visceral level. The next piece in my framework is marketing and then mechanics. Mechanics is about the roles, the rules, and the reporting around your business.

Now, many times when we talk about roles, it's really, what roles do you play? And when you're starting out or when you're a solopreneur, you know you're playing all the roles. You're the person that's the creator, you're the person that's a salesperson, you're the person that's probably the bookkeeper, you're the one that's doing the collection, you're the one that's doing the delivery. But at some point, at some point, those roles are going to shift. And the question is, what roles should you be playing? What roles do you need in your business? Do I need someone that's a creator? Do I need someone that's an implementer, someone that's a manager? Where do your. And these are going to be based upon the strengths that you bring to the table?

For an entrepreneur, one of the most challenging things for an entrepreneur to do is to let go of control. Many entrepreneurs, and myself included, are control freaks. And we need to let go of control to allow the business to grow, to allow the business to scale if we're going to do that properly. And so the question is, what areas do we let go of? I want to keep. When I say let go of control. That doesn't mean that you close your eyes and you never face it again. You're still going to have responsibility, you're still going to have accountability, you're still going to oversee it, you're still going to keep tabs on it, but it just means that you're not going to do all of it. Now, you know, my philosophy is that if it's core to my business, I need to understand how to do it, then I may delegate it. So I've done everything in my business that everyone else has done and then I pick and choose the things that one, I'm good at, two, that I need to be really good at and I build from there and the rest I'll delegate out. It's the same thing with you. What role should you be playing? Are you playing the right roles? Are you in the right seat? Are you doing the right things? Are you spending a lot of time doing things that are unproductive, that are not revenue generating activities, that are not value creation activities, that are not customer connection activities? If you're not doing those, then maybe we need to start rethinking those roles and how to build the delegation process in place, the accountability process in place to allow you to move beyond that. Then there's the rules. These are the rules for playing the game. This is, this is about your tax structuring, this is about your entity structuring. This is about protecting your assets. This is about the rules of how the organization is going to run, whether you have, how the sales process is going to be documented and the accounting systems that are in place. All of those are the rules of how you play the game. And we need to understand those rules. And this is, this is a challenge, but this is one where you can bring in outside experts, bring in the accountants and the attorneys to help you understand the rules.

For your business. Now the rules in each and every state in the US are going to be different. In each and every country in the world are going to be different. So you need to look at the rules that are specific to where you're operating and make sure that you don't run into problems with that. And then the last piece of this mechanics is reporting. At some point we have to report everything. Whether it's just you, you need to understand, you need to understand, you know, how good the business is doing, what needs to be done, what reports you need to run. Do I want accounts receivable reports? Do I need profit and loss reports, that type of thing. But even more than that, as the business grows, you're going to have to report out to possibly shareholders, other investors, business banks, the taxing authorities, you're going to have to file tax returns. All of those elements are part of the business that I know. For creators, it's like fingernails on a chalkboard, but they're necessary. I can't tell you how many times I've seen entrepreneurs get into business and they forget the reporting requirements. They don't pay the taxes, they don't file the tax returns, and all of a sudden they have the IRS on their heels coming after them and shutting their doors and taking their house. And yes, the IRS can take your house if you're not careful. So making sure that the reporting requirements are in place, you're following the rules, and you've got the roles in place, extremely important about the mechanics of your business. So we've got the marketing, we've got the mechanics in place. The next piece is this concept of money. And a lot of times people say, well, money, shouldn't money be first? And actually, no, money isn't first. It's actually, if we look at it properly, it's the byproduct of everything else we do in business. If we do business correctly, the money will just follow. But we've got to do business correctly. When we talk about money, it's effectively about three things again, about the flows, cash flow in and out, the financials, understanding financial statements and what it means. And the finale. What is your end game? What is your end game? So let's just talk about flows for a moment. The first F in this, it's about managing your cash flow. Cash flow is the life's blood of a business. And so.

The real crux of what you're doing is trying to manage the cash in and the cash out, understanding that without it, it's like not having any oxygen, the business will die. So we need to understand what's driving our cash flow in the sense of product, sales, labor costs, rents and overhead, and how we can generate or minimize the costs and generate and maximize the revenues, the cash flow coming in, collections from the customer, sales to the customer, and that type of thing. But in order to do that, we need to understand the financial end of it, meaning that we need to understand the financial terminology.

We need to understand that when someone gives us a profit and loss statement, what does it mean? What do the terms mean? What does cost of sales mean? What does revenues mean? What is days and accounts receivable mean? All these ratios, return on equity, return on investment, that Investors and people will throw out. What do those mean and how will they help you manage the business? And so it's important for you to really start to understand how do I read the set of financial statements? In a financial statements, there's really three types of financial statements. There's a balance sheet, which is a picture of what I own and what I owe. There's a profit and loss statement, which is what I spend and where it goes. And then there's the cash flow statement, and that's the in and outs of the bank. Really important financial statement. Understanding how to read that and understanding what it's telling you. We'll go deeper into that stuff in a later episode. And then the finale piece. What do you want? Your end game? Is this a business that you're trying to build to sell? Is this a business you're trying to just build and continue to run, that you're going to pass on to your children, to a partner? Or is this a business you're going to run and then at some point you're going to get out and let it go away? And understanding that up front, it may change over time, but at least having an idea up front will change and shift the decisions you're going to make within the business. So that's marketing, mechanics and money. Now a lot of people will take their idea and wrap their idea with the marketing mechanics and money and they'll forget these last two pieces.

The next piece is really about mindset. Now, mindset we touched on meaning. This is Mindset is really about why we do business. It's what establishes the culture in your business. It's what will create loyalty from your team, from your employees, from your customers, from your vendors and everyone. It's what really drives the decisions and the choices in your business. And it's about three things. Identity, influence and impact.

Really looking at it and saying, who are we and what are we going to stand for in the marketplace, in the employment marketplace, to our employees to look at businesses such as a Zappos and a Tony Hsieh and how he's established that business to have a specific identity in the marketplace.

And.

Allowed people understand what that identity is in the marketplace. And really looking at saying, we're here to deliver happiness, we're here to deliver happiness both to our team, to our customers and all of that. And then the next piece is influence. Influence is about understanding the dynamics between people, interacting people, whether it's your customers or your team members or your significant others and the people, the vendors. And how do we bring influence in there to influence them to move in the direction and support what we want to do. Not from a manipulative standpoint, but actually from a place where they're coming from a self actualization that we have the similar set of values and they're moving towards their values, which is fulfilling our values. And then the last I here is impact. And impact is all about the higher purpose of having a great impact with your.

Products, your services, beyond just the products or services. This is about.

Creating something that, that is mission driven, that is, that affects the community. Remember I said that businesses are there to support society, create community and live your dreams. So by the same context.

Our blessings that come to us by being entrepreneurs, by having successful businesses, we should be making a difference in our society, a difference in our community. So you look at things like a Toms Shoes, even a Zappos or Clif Bar, you know, Clif Bar for instance, gives their employees time off to do community services, community service types of events and allows them to get paid for that. So it's about having a greater impact and creating a culture of that. And so that's really what mindset is about. It's the culture, it's about identity, influence and impact. With respect to that. Then the last m, you know, we've dealt with the marketing mechanics, the money, and now the mindset. The last mistake is the model, the business model that you choose. Now the interesting thing is here is that most business failures are one of two things. One, it's failure in thinking or two, it's a failure in your business model. And so we want to get your thinking right, which is what we talked about in the context of the meaning piece as well as the mindset piece, which we're going to go deeper in in some of the other episodes. But then you want to get your business model right. It's about and business model. A lot of people, when you say, oh, business model, that's how I make money. It's not how you make money. Business model at a very basic barbaric level is how you make money. But you will not make money if you don't create value. So your business model is how you create value. And actually it is how you create value. It's how you capture the value, it's how you campaign the value, and it's how you cultivate an environment of value creation. So your business model is all about the kind of value you create. And now here's the other thing is that most of the time when we talk about business Model. We talk about value creation, we talk about it in the context of being customer centric. And that's a fallacy also in the sense that we need to be more holistic, more inclusive. Inclusive in the context of how we create value. And it's about creating value certainly for our customers. And we think about it in the context from our customers, we create value by giving them the products and services. But customers, if all they're coming to us for is the products and services, then really we're dealing at a commodity base. And so what we really need to do is.

Find something beyond that. That's what creates additional value. That's what creates the loyalty. And there's a couple of other elements to creating value aside from the products and services. It's about the purpose. What's the higher purpose of the organization? Because your customers and your team and everyone will get behind that purpose. The second is the next piece is about the passion. You may be passionate for it, your customers may be passionate. Maybe it's a green activity, maybe it's, I don't know, vegan, you know, animal, you know, non animal products, non GMO products. There's a passion there, there's a mission, there's a movement there that people will get behind. And then the last piece, which a lot of companies and businesses fail to realize, so, so important is.

It'S about the promise.

And when we think about business, when we think about products, when we think about services, it's about finding a place in the customer's hearts, in our team's hearts, in your own heart, to be aspirational, to be a bigger purpose that's going to allow them to say there's a promise greater than just getting a product or service in this. So when we talk about, so when we talk about value, it's about your product, certainly, but it's also about your purpose, your passion, and the promise that you create. And when we, and the last piece about this value and business model be creating value is really understanding that it's not just value to the customers, as I said, it's more holistic. How are you creating value for your team, for your employees, for your staff, for your management, for your executives? How are you creating value for your investors? How do you create value for your vendors and how do you create value for yourself? And if we are successful, when we are successful in understanding and creating a business model that builds value and creates value on all of those levels. So it's holistic. Now all of a sudden, the whole business, the business success becomes the byproduct when we're value focused and we're in a value exchange economy, when it comes down to anything that we do, any exchange that happens is typically a value exchange. In other words, the person's going to need is going to give up something in return for getting something in return. And what they perceive is what they're getting in return is far greater in value than what they're giving up. Otherwise, the transaction, the interaction, will not happen. So how do we create value in exchange for value and do it that way? And so your business model needs to be focused on value creation and value creation not just for the customer and not through just products and services, but through purpose, passion and promise also. And then also to your team and your employees and your staff, then also to your vendors, and then also to yourself and also to the significant others and everyone that comes in touch with you. And so that's really what my framework, or what I call the Business Mastery Roadmap framework is. It's about understanding and really building your marketing, your mechanics, your money, your mindset, and then the business model, the model around it. And so here's the thing that I want to do for you is I want you to consider is, is if you go to, if you go to the this session's website, which is www.melabraham.com session002. Okay, melabraham.com002, you're going to be able to download a worksheet and here's what you're going to do in that worksheet. It's going to give you the instructions there, but you're going to score yourself on marketing. How are you in your marketing with your customers, your communication, your connection? You're going to score yourself, then you're going to score yourself on your mechanics, where are you at on your roles, your rules and your reporting. Then you're going to score yourself on the money. How are you with respect to understanding and managing your cash flows, understanding the financials and the finale. And you're going to score yourself on mindset, which is about identity, influence and impact. And score yourself on the model, which is about creating value, capturing value, cultivating value, and campaigning value in that context. So it'll give you a chance to look at your scores in each of the five areas of the Business Mastery Roadmap to see where you need to focus first and where you need to start to build. And if your scores are below certain levels, so go ahead and go to that link, download it, do the work, do the exercise. I hope that you found this of value. This is the fundamentals. We're going to go deeper in each of these areas in later episodes. In fact, we're going to spend a bit of time in the business model and all these different areas in later episodes. But I just wanted to introduce it to you and get you used to what it is we're talking about here. Hope you found this of value. And in this case, this is what the basics of your business are. This is what's going to going to really start to drive your business. Master the fundamentals, master the basics, and you're going to see you'll be able to navigate not only the downslides, but you're going to be able to take advantage of all of the up the up the upswings in business. You're going to be able to maximize the upside potential in your business by making sure that you have the fundamentals and the basics in place. So again, if you haven't yet, make sure you subscribe to the show so you get notification of the next episode and you continue to communicate with me. If you have any questions, please feel free to put your comments and questions below or even send me a question by going to askmelnow.com that's w www.askaskmelnow.com and you can leave me a voicemail with your question. We'll make sure that we get that question on one of our upcoming episodes to make sure that your question gets answered. Remember, I want to be your entrepreneurial mentor. You're not out there alone. This is about building your business at the level that you want to create the life that you want and bring your dreams to life. So go ahead and share this with your friends and I look forward to seeing you in the next episode. And until we get a chance to see each other again and talk again, may your vision be grand, your journey epic, and your legacy significant. See you soon.

We hope you enjoyed this episode. Make sure you subscribe so you get access to all of Mel's business and success tips. And if you like this episode, share it with with a friend. If you have a specific business or success question, you can ask it at www.askmelnow.com. remember, it's all about being bold, dreaming big, and living life your way because the world needs you. Until the next episode, may your vision be grand, your journey epic, and your legacy significant.

And that's it for this episode of Building your Money Machine where we help you learn how to master your money, eliminate financial stress and live a life of choice. If you found this valuable or helpful to you, here's what I'd love for you to do. If you do me a favor, go to Apple, Apple Podcasts, or wherever you're listening to this podcast and rate and review the show. It helps us tremendously to keep us at the top of the list so we can continue to get this information and this message out to people. Because I truly believe that financial freedom is your birthright, and I want to help each and every one of you claim it. Thanks so much.