The 4 Levels of Business Growth Explained

Every Level of Business in 14 Minutes – YouTube
https://www.youtube.com/watch?v=i1v6ZOI3ydE

Transcript:
(00:00) 15 years ago I came across an idea an idea that could have saved me 15 years of business mistakes and it’s that a business will never gr past the growth of the CEO and if you don’t evolve and grow past these four levels of business you will be the one holding it back level one is your first $1,000 is made from skills getting crazy good at what you do level two your first million dollars is made from hiring building an awesome team around you level three your first 10 million is from systems refining your process and operations
(00:30) level four your first 100 million is from building your people and coaching your leaders and I made mistakes at every one of these levels but today I’m going to share with you the eight simple business rules that got me to that $100 million level without working 100 hour weeks and hating my life starting at the 100K level with rule number one model then modify a lot of first-time entrepreneurs make this huge mistake they decide to get into business and create a product that’s never existed before and they try to make everything
(00:58) up as they go they think if I do it this way it’ll be Innovative the problem is if you don’t understand why certain things are done a certain way then you’re going to fail it’s like learning to play a guitar you don’t start by writing songs you start by playing other people’s music to understand how the notes work with each other if you don’t find a blueprint that’s worked before to give you that Foundation then adding Innovation on a sloppy foundation will only fail so here’s what you got to do find the people who have what you want
(01:25) and do what they did one of the biggest mistakes people make is thinking they have to be unique to to win even today at 100 million in Revenue per year I still call people to get advice on how to start something new because they’ve been there they’ve done it and I can usually get there three to five times faster copying somebody else’s process and trying to make it up myself but now that you’re up and running your attention will get sucked into new problems but before I share rule number two we’ve got a goal of hitting 1
(01:50) million subscribers so if you haven’t already take a second to hit subscribe which brings us to rule number two profit solves all problems often times when I’m coaching new clients I catch them working on things that are good for the business but don’t make them money it’s a lot of busy work creating systems creating content fancy funnels what they should be doing is whatever gets them to sell something anything other than generating revenue is just playing the game of business but actually not being a great entrepreneur Here’s My
(02:19) Philosophy if the problem can be solved with money then it’s not a real problem if you can pay somebody for the answer to your problem then you have to get better at making profit to solve those problems the other issue is that people confuse Revenue with profit that’s why every one of the businesses I’m involved in I focus on what’s called gross margin it’s not what I sell it for it’s what it costs me to make things that have 80% or higher gross margin like information or software are the best businesses because
(02:48) what’s left over after you pay people to operate the business is profit so a lot of people focus on Revenue which is Topline number but what they should do is focus on the profit what’s left over at the end of the day because I can’t pay bills with Topline revenue and I can’t pay it with invoices but if you want to reach level two at a million dollar you got to think way differently about hiring which brings us to rule number three don’t hire to grow the business hire to buy back your time after struggling for years and finally
(03:15) making it work at my third company spheric Technologies I thought I had to work 100 hour weeks I thought that my job was to keep all the plates spinning what I didn’t realize then that almost killed me was the fact that I should have took some of that profit and reinvested in hiring people to actually get me my time out of my calendar instead I just kept adding capacity to the business which meant I had more people to manage and I didn’t learn to let go so here’s a big idea if you don’t have an assistant you are one and you’re
(03:45) probably overpaid and honestly you suck at your job here’s why I say that everyone’s first hire should be an executive assistant because it’s the least amount of money you have to pay somebody to buy back the largest portion of your time if you look at your calendar where you’re doing things that don’t actually make profit it’s things more like calendar and inbox it’s not stuff you need to do what’s cool is I actually wrote about this in my book buyback your time on page 16 it’s called the buyback Loop that’s where we focus
(04:11) on Three core areas first we have to audit our calendar for time and energy number two we got to take the things that are taking our energy that we don’t want to do transfer it to somebody else that’s usually your executive assistant then we want to fill our time up with things that make us more money that we can charge for right now or go learn new skills to uplevel our abilities to grow the business business if you’re struggling trying to figure out what you should give your assistant then just find me on Instagram and message me the
(04:35) word YouTube EA and I will send you my internal executive assistant Playbook that has the principles the process the agenda it is the most complete system out there and it’s my gift to you for free but having the right people can make or break your business which brings us to rule number four culture over cash a long time ago I was operating my business and everything was going great until I realized I had people I was working with that weren’t aligned with my vision it got me so upset that after weeks of feeling like I was starting to
(05:04) hate interacting with my team members I decided to do something crazy I went into slack and wrote this post this is the vision I’m after these are the kind of people that are going to support that Vision if for whatever reason you don’t feel aligned with that feel free to resign and I will pay you $155,000 cash no questions asked just resign as soon as possible now the essence was there the execution could have been done better the unfortunate part is that people that I love actually decided to take the money cuz
(05:32) they were concerned why would he say this what I learned in that moment is that if you don’t focus on creating the culture of your business you may wake up one day and hate the company you’ve actually built so My Philosophy today is hire for the Soul Train for the role most people will say to me how do you find these great people first off you need to be the person that they would want to work for you have to sell the dream you have to have Vision many entrepreneurs are just scared to State it because they don’t want to scare
(05:59) their team or or they don’t want to be held accountable to having to build something big and massive but the truth is if your dreams aren’t big enough for your team’s goals and dreams to fit inside of they’ll find somebody else where that is true so to do it right we want to make sure that we hire people that have the skills that’s why I always do a test project I call it the test first hiring method essentially it’s a 10-hour project that they have to do that simulates the actual work they’ll be doing on the team and we pay them for
(06:25) that so it doesn’t feel like paid Consulting but it is a lot cheaper to pay somebody for a test project than to make a bad hire the other thing I like to do is to interview people in person recently I was hiring a revenue leader and he was like Mr Chad you know Mr success sales guy LED teams and we went on a hike and within 3 minutes he couldn’t keep up and I was curious to see if he would try to keep up and unfortunately a third of the way up he started falling back he fell back into the arms of my general manager who then
(06:55) dropped him again so if you think that somebody’s going to be the head of Revenue can’t fight to keep up to the CEO of the company or to the general manager who’s involved in irum that person was never going to succeed in our culture but this next one will save you years getting to the $10 million level which brings us to rule number five dry which stands for don’t repeat yourself I first learned this concept in my teens as a software programmer cuz anybody that’s ever written code knows that the best code is dry I also take this
(07:25) philosophy and apply it to my life and my business where if I make a decision I want to make it once and never repeat myself doing it twice just makes the whole business slow and inefficient so one of the core principles for me is principles versus process see everybody knows what a system or a Playbook a checklist looks like but what if you go one level above and think about what’s the principle that drives that outcome what’s the philosophy around the work teaching people how to think in principles is more scalable because then
(07:55) they’ll have a framework to look at their work that applies to multiple different areas the other idea is I like to use budgets and allocate amount of money that I’m willing to spend per year per month on different things on a personal level I might have a travel budget on a business level I might have a marketing budget that way the team can operate within that and they never have to come to me asking for approvals for every little decision they know what their budget is they operate within it and then that way I make the decision
(08:22) once at the beginning of the year or the quarter and never again it saves me so much time if you’re the bottleneck because you haven’t created the principal or the budget for people to operate within you’ll always hit the complexity ceiling in revenue and never get to 10 million but without this next one you won’t actually know if your processes are getting results which brings us to rule number six what you measure expands so often I have people message me because we’ve added 3 million followers in the last year on our social
(08:49) media and they asked me how we did it my only question to them is how many followers have you add in the last day what are your views in the last day most of them can’t tell me that answer shows me they’re not measuring their revenue they’re not measuring your social media they’re probably not even measuring their profit what I learned a long time ago is that a scorecard measured daily will get you results here’s a big idea if you don’t measure something you can improve it most entrepreneurs would rather live in this like fun land of
(09:15) creation and Innovation but the truth is is for you to improve any aspect of the business the Precision of measurement and the frequency if it goes up the revenue goes up that’s why for me it’s all about being visible I have it on dashboards all over the office we have spreadsheets at full access we even have these things called sensor think about like a water sensor in your basement of a house if it goes off it shuts off the water so you don’t flood your whole basement we do this for every Department in our business so that if there’s an
(09:43) issue with a customer or a funnel it catches it early so that we can address it fix it and then turn back on the traffic if you don’t do this the time between an issue happening and you finding out is so long that it cost you time and energy what you want to do is figure out what are the 5 to s metrics you need to monitor in your business and then put those up on a screen put it where everybody can see it because what that does is it brings attention to it or I like to say sunlight and what happens with sunlight it sanitizes all
(10:11) problems it fixes things before they ever become an issue but the path to 100 million will only happen if you build leaders which brings us to rule number seven teach don’t tell when I was in my 20s I used to run around and tell people what to do the problem is that created a bunch of people that sat back waiting to be told what to do to do so if I didn’t show up that day cuz I was busy with clients nothing in the business moved forward what I’ve learned since then is a completely different process and the big idea behind this is your ability to
(10:40) scale depends on your ability to work through people so the old way where I was the bottleneck is a thing called transactional leadership what I used to do is I tell people what to do I check that they got done and then I told them what to do next which sounds logical that’s how my boss did it with me when I started off but a better way is what’s called transformational leadership and that transformed my whole business business I start with outcomes where I’m clear about the vision or how this thing gets done and it feels complete then I
(11:05) talk about the measurement we’re going to use to let the person know are you making progress if people don’t know how you’re going to measure success then how can they make better decisions day-to-day to improve their activities the third part is if I see anybody off course I write it down and I use our one- ones to coach them up so I could teach them how to think about overcoming that problem that way the more I coach them the higher level individual I’m developing in the goal is to build the people and the people build the business
(11:33) that’s why for me I do a weekly leadership training where I’m writing down things I see in the business that apply to the most people that if resolved would make me the most money then every Monday afternoon I have a chance to upgrade and Coach the team up so they can get better week over week the reason why this works to get to 100 million is one it removes the emotional shrapnel you might feel when you’re frustrated with your team not performing two it codifies your thinking and shares with your team what you’ve paid other
(12:01) people to coach you or you went to seminars to learn or you read in a book it allows you to take that and transfer it to them so they can feel like they’re learning and third when your team feels like you’re investing in them they will show up excited growing learning how to use these new skills you’ve taught them but you don’t even get close to 100 million if your team isn’t motivated which brings us to rule number eight dream for your team recently I was on a call with one of my private coaching clients and I asked them tell me
(12:29) specifically what your executive leaders want to achieve in their life over the next 5 years and they said well they want to make more money said that’s not what they want so what are their personal goals what are their personal dreams what do they want to achieve in their life what kind of impact do they want to make outside of the business see if you can’t tell me those direct reports dreams and goals then you can’t lead them your goal is to figure out where they want to go and map where you’re going in your business to making
(12:56) those things a reality these are non-negotiables number number one is you have to know your team’s goals you need to know the personal and professional goals I always ask this question on first interview doesn’t matter who I’m interviewing for whatever role even if they never report to me see financial goals are simple what I’m more interested is the personal ones I want to know what is the title you want to have in 5 years where do you want to live what kind of work do you want to create if I can get you clear on that
(13:22) and connected emotionally then everything else gets so much easier because you’ll be intrinsically motivated to push yourself forward then you have to map their goals to the work they’re going to do in your company that way they’ll be motivated to do the work to expand to grow so that they can get ready to maybe do their own thing someday or get in a position where they can grow and I also believe how you lead is how you will teach your leaders to lead and the best thing you can do is not only do this for your leaders but
(13:49) encourage them invite them to ask their team if everybody on the teams know what everybody else want to do personal and professional where they want to end up they will just feel like a cohesive unit building and creating their future together and it just makes it so much easier these rules will save you years of mistakes but it won’t actually get you the freedom you’re looking for if you want to learn how to build a business that runs itself click here and I’ll see you on the other side