The Most Effective Way To Grow Your Business In 2021 (Part 2), With Roland Frasier

You're listening to Business Lunch with Roland Fraser. This is your seat at the table. Welcome back to Business Lunch with Roland Fraser and thank you to all our new listeners for checking us out. We're so glad you're here. My name is Darren Clark and I'm the producer of the show. And on Mondays we do a snack size episode. Today's is a great one with a continuation from last week which was part one. So Roland unpacks several more strategies today that you can use to grow your business in 2021. So be sure to check out episode 232 if you haven't already and then listen in today. All right, here's Roland.

The next place that we're going to look is we're going to look at how can we increase the margin? How can we make more profit from these people that we're already selling things to? So margin is basically the difference between the money that we receive for our product and service and, and the cost that it costs us to deliver the product or service or to fulfill the product or service. So what we're going to look there is we're looking to increase margin and this is going to be by consolidating our supply and distribution chain. Right, consolidating our supply and distribution chain. So how are we going to do that? We're gonna say we want to either acquire our suppliers or our distributors. So what that means is even if you're selling an E commerce product, you're selling an E commerce product. It's a great example. Okay, so if we're selling an E commerce product, then we have to acquire the product from some place that is going to be manufactured or if we're manufacturing it ourselves, we have to buy raw materials to manufacture that product. Then we have the product and we have to sell it. And we might sell it through an Amazon channel or something like that, but we might also sell through affiliates or digital stores or things like that. So if we can actually acquire the manufacturer of the ingredients that go into our thing, or the component parts that go into our thing, or the wholesaler that is selling us the things that we're selling, or the drop shipper that's drop shipping it for us, then we will capture the margin that they're right now making on us buying the product for them. And then if we're selling through a third party like an independent retailer or an affiliate, then we can acquire the affiliate or the independent retailer and then we pick up that margin as well. So that allows us to increase our Margins. That's what we're talking about. There is, we want to say, what can we do to acquire our suppliers or our distributors so that we can acquire their margin? So now we've done a few cool things here, right? We've acquired the leads by having media. We've acquired additional infrastructure through teams and systems. We've increased our lifetime customer value by adding additional products and services to the business. And then we're increasing the actual profitability or our margins by consolidating our supply and distribution chain. And your supply and distribution chain might be different for different businesses. It could be outsourced companies, right? So maybe you are outsourcing your customer service, or maybe you're outsourcing your sales right now or something else. So maybe you're outsourcing content production, or you have an agency that is helping you create ads and manage your ad spend. All of those can be acquired as well. And acquiring any of those things entails also acquiring the margin, the profitability of those businesses as well. So let's look at the next section of things that we can do. Let's say that we want to figure out how can we actually innovate? Can we innovate and adapt, and what's the best way to do that? Well, the easiest thing to think about doing that with is to get other people's intellectual property. Because there are people out there all the time that are going to invent and innovate circles around us because we're focused on our business. So we want to keep an eye out for what's going on there. And then when somebody has something that's a breakthrough or innovation that we like, we can acquire it. How do we acquire it? We simply acquire the intellectual property, right? So that's the next thing that we can acquire. Then we talk about how can we get more market share. So let's take a look at that, right? If we want to acquire additional market share, then we can simply look to acquire our competitors, the people that already have the business that we want, the customers that we want. So it's different from leads, leads we need to acquire media for. But if we want to just go on and skip the whole lead part and acquire customers that already exist, then we just buy our competitors. And keep in mind that there are lots of different types of competitors. And there are direct, which are competing head to head with you. There are indirect, which might be other things that your customers would buy that are substitute, and then there are replacement. That just means that sometimes people will look at your brand and say this other company sells the same thing. I'm looking to buy a coffee cup. And this company sells coffee cups as well. That's a direct competitor. An indirect competitor might be someone who provides something, maybe a complete coffee system. Right. So, but part of that coffee system is that they give you a coffee cup with that. And in a replacement product would be maybe somebody doesn't want to drink coffee because it's got caffeine and or other things that they don't like, or they don't like the taste. And so instead they drink tea. So tea would be a replacement product for coffee. Right. So we want to think about maybe acquiring those things as well, because it's the same type of customer that is going to be buying that, and those are things that are potentially going to take away sales from us. And then, last but not least, I want to talk for a minute about capital. So we're looking here at how can we get the money that we need to operate and grow our business? Well, the thing that you want to do, to do that is you got to get a good valuation. And so you can do all of the things that we've been talking about so far to help increase the valuation. The more leads you have, the more sales you have, the more the lifetime customer value of your customer increases, the more infrastructure systems and teams that you've got, the more margin that you're able to make, and the more that you can consistently innovate around the changing circumstances that we're always facing, the more your business is going to be worth and the more capital you'll be able to get. And the easiest way to generate that capital to increase that valuation is to go to some sort of monthly recurring revenue. What we're going to do now is we're going to shift over and say, what are some specific examples of these things? So I'm talking about consolidating the supply.

And distribution chain to increase margin.

There are a lot of examples we can use. You could actually acquire your manufacturer, your supplier, or your agency that's doing your digital marketing for you. You can acquire your affiliates or the people who are your distributors currently as well. Also, retail stores and E stores would be example of the kinds of things that you could acquire as well. And all of these things are going to go to help you increase margin. Right. That's our goal here. How can we increase our margin? And then the next thing that we want to move to would be the innovation, the acquisition of intellectual property. So remember we talked about for innovation and adaptability we want to acquire ip. The things that are most commonly acquired here would be patents that people have already received for inventions, other people's copyrighted or registered trademark works, their trade secrets also SaaS. Software as a service. Software as a service is a fantastic thing to acquire. The valuations on software as a service is right now crazy, crazy high. Internet of things, a very, very up and coming thing. Platforms as a service, content as a service. Also another really cool thing that you can acquire are these zombie brands. That's these brands that have big followings that people have invested tens or hundreds of millions of dollars into, but then either they were acquired by another bigger brand that decided that they're not going to use this particular brand anymore, or they've gone bankrupt. One of our friends, Tai Lopez, has done a great job of acquiring zombie brands that have gone out of business, including Dress Barn, Radio Shack, Pier one. Right. A lot of big acquisitions of these companies that almost everyone has heard of. But right now they are zombie brands because they no longer have physical storefronts. So what Ty does is he acquires those brands and then starts e commerce stores around them. You can do the same thing with logos and brand names. Then what can we do to get increased market share? Well, the easiest, most obvious thing, as we mentioned before, would be to acquire your direct competitors. So we're looking for market share here to acquire competitors. But as I mentioned, there are substitute competitors, replacement competitors, and we can look at competitors in different geographic territories, different price tiers, or in completely different markets. These are all things that can help us acquire more market share. And then the last thing that we talked about was capital, right? So capital. One of the things that will help you increase capital the easiest is to get people to buy from you more frequently. And one of the simplest ways to do that is to create what we call monthly recurring revenue. So there are several ways to do that. Here are quite a few. You can go with an auto ship of something you've already got. You could start a box product. You could have some sort of status membership like the American Express Black card or Platinum card or Gold. You can have those kinds of memberships. You can have a service membership where people get access to your services either on a credit based system or an all you can eat kind of basis. You can also do software. Software as a service we mentioned is doing very, very well. You can acquire affiliates that will allow you to sell again and again. And you can also start a content membership. So these are together a fantastic way for you to have all of the ways that you need. All of the different things that you need to grow a business. More leads, more sales, more infrastructure, more profitability, more innovation and adaptability, and more market share. All while getting more capital.

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