Generate Sales During a Down Economy
Newer business owners, say less than 5 years ownership, don't always have the experience of sustaining during economic cycles.
Seasoned business owners understand the long game. There are always "up" seasons and absolutely "down" seasons. It's ignorant to believe there is an endless winning season.
I'll share one major tip that has saved countless businesses from going under, allowing them to weather the storm.
Consider temporary pricing adjustments on your inventory, in order to drive sales. This inventory could be products, or available service hours not being utilized.
I've seen too many businesses fail due to ego of the owners. "I'm not lowering my price! I know what I'm worth!"
That sounds great in theory, but if nobody is buying... your price might as well be $0 dollars. Because that's exactly what you're earning.
Many business owners get this mindset wrong. They incorrectly believe that business solely exists to create profit. They somehow think the business takes priority over the customers.
Wise owners put the horse back in front of the cart. A business exists to serve customers, period. Without customers there is no income. Without income, there is no business.
During recessions or stagnant economic times, as a CEO your primary role becomes ensuring the survival of your business. This isn't a growth period, and it doesn't make sense to scale if the market size has shrunk.
If you have products on the shelf, or manhours sitting idle and on standby, you should consider lowering your prices to get some sales inbound. How much lower? The answer is whatever it takes to create sales.
Here's the thing; You can sit idle on inventory, and suffer a BIG cost of doing nothing, earning $0 out of pride...
...or you can move products and service hours at a temporary discount, and experience a much smaller cost. Even if you take some small losses to push out inventory, it's still generating cash and you then only have a small fraction of overhead costs left to cover.
Anything coming in beats zero. That's how to survive the season. You can bet an upwards cycle will return again, and then you'll be busy enough to readjust pricing later on.
Don't fight the laws of economics. Learn to move with them.
-Tony
Business Lessons from Basketball
What business lessons could we learn from last night's NCAA Final Four game, Houston vs Duke? (Houston won by 3 points)
Prior to the game, Duke was heavily favored to win by at least 5 points and 71% favored on betting odds, even though UH had the top-ranked defense.
For nearly the entire game, Duke commanded a strong lead, even getting into the double-digits lead territory. The analytics showed Duke with a high percentage of victory.... until the final 19 seconds of the game, when Houston finally took the lead.
As a business coach, here are some lessons I picked up from watching the game.
🟩Resilience Under Pressure
Houston trailed Duke by 14 points with just over eight minutes left but staged a remarkable comeback. This resilience highlights the importance of staying composed during setbacks.
In business, unexpected challenges such as market downturns, supply chain disruptions, or competitor actions require teams to remain focused and adapt. Build a team culture and create processes that help you pivot and execute in stressful and challenging situations.
🟩Leveraging Strengths
Houston’s defense, ranked as the best in the nation, wore Duke down in the final minutes. Houston then leaned hard into their defensive identity to disrupt Duke’s rhythm.
Similarly, businesses must identify and double down on their strengths. Whether it’s superior technology, marketing, customer service, or operational efficiency, business owners need to know their strengths and when to turn up the volume.
🟩Teamwork Over Individual Stardom
While watching the game, you couldn't help but notice the announcers were constantly praising and focusing on Duke's player Cooper Flagg. He had an amazing game with 27 points and seemed to be in every big play, on offense and defense.
With Houston, no single player dominated or was consistently mentioned, but their collective effort prevailed. They seemed to play more balanced.
Businesses thrive when teams collaborate rather than depending on a single “star” employee or department. Owners should encourage cross-functional teamwork and shared accountability, so that the odds of success still exist even if one star or department underperforms.
🥰 Finally, go Coogs! (Class of '98)
Selling a Business is a Time Machine
Selling a successful business is a time machine.😮
During my group coaching call this week, I spoke about the relatively unknown game that is being played in business; Exits and acquisitions.
It's heartbreaking to have hundreds of conversations with owners who were seeking guidance on selling their companies... only for them to discover their companies weren't worth buying.
Data suggests that only about 20% of businesses are acquired, because the majority of them aren't building enterprise value that attracts a potential buyer. And for those that do sell, the average sale is only in the ~200K range.
I want to raise your awareness of this bigger game. For a moment, step outside of your focus on daily operations and think beyond your current phase of business. If you don't, you'll miss out on potentially life-changing opportunities.
Building and selling a company for millions is a time machine for those of us that didn't grow up rich, or have a trust fund.
I didn't realize this until after I sold my first company in 2007. It wasn't even a thought I considered, because I didn't know anyone with the experience, and nobody was sharing this perspective with others.
With a 5X multiple on exit valuation, some inexperienced owners only see that as 5 years profit placed in their hands, in advance. While 5 years is good, they've not understood the complete time travel aspect, yet.
Prior to the sale, I enjoyed a healthy multi-6-figure annual income for several years. But even at that income level, it would have taken me 20+ years to maintain the lifestyle I had, and also save up an additional 7-figures in my bank account.
Don't believe me? How many decades do most people have to work with a 6-figure income, in order to save up a million in 401K? It's a long, long time.
💥Boom! 20 Years of time travel in terms of financial liquidity standings. I actually estimate that every million is worth about 20 years for a 6-figure salary earner.
Then you have the time freedom aspect to consider. If you own a profitable business, you can keep working another 5 years doing the same routine, or you could sell it and earn your 5+ years in profit in one day. What could you do with another 5+ years in your life?
💥Boom! Instantly 5+ years of your time that you would have spent working, returned back to your life. When our average age of death is 80, every year counts.
Time and location freedom are more valuable than most will understand. You can't fully understand the value of these, until you experience them for yourself.
Consider this; Your goal isn't just building a business. You need to start thinking of it as building a time machine. The more profitable the business, the bigger the time machine it is.
I've been enjoying this time travel for nearly 20 years now. I love helping others build their own time machines.
-Tony
Scammers & Frauds Won't Like This Article
Let's expose the tactics that frauds and scammers still use 😮
With all the recent Federal fraud busts in the entrepreneur and marketing space (see my post from yesterday) I'm going to share some tips to help you protect yourself. Feel free to add to the tips.
I spend a lot of time and energy on this subject, because I've been a victim of theft. I also put a pause on my mission to coach business owners for 18 months, because I knew I'd be stepping into the pool of sharks, and I knew I'd be compared with them until proven otherwise.
It's been nearly 20 years since I sold my first company. When you have money, you can count on opportunists and grifters to try to get into your circle. Now I have 20 years experience of observing these frauds, and see their patterns and repeated habits.
Here are my red flags. 🚩
1) Money Bundlers. These people are always talking a big game, always asking for money from other people. They always talk about "capital raises" and their investment opportunities. If you have an audience, they want to get in front of it. Good leaders protect their audience, they don't sell them out. The REAL successful people in this arena rarely ask for money in public. Investors KNOW they are successful, and approach and ask them to get into their deals.
2) Religious Marketers. There isn't anything wrong with being religious, but you should be on high alert if someone is using religion as part of their personal branding, to sell you a course or investment "opportunity". Many of these unethical frauds will purposely use religion as a smokescreen, to hide their lies. Red flag.
3) Get Rich Quick GooRoos. This group is by far the largest of them. Any time I see someone promising you 6-figures this or 7-figures that, while telling you it's passive and that you don't have to work... all bullshit. Bonus bullshit points if they have some "10-Step" program or cookie-cutter one-size fits all "framework" to success. Their keynote speeches talk about "prosperity" and "millionaire mindset". Red flag.
So how do you protect yourself? 🛡
Do your research. You have zero excuses now that the internet exists. Look past their hype marketing and focus on reality.
Most of these frauds have no long-term history of success. I'm talking 10+ years of proven success. Scroll back far enough on their social media, and you can usually see where the Lambo first arrived for their guru pics. Check the dates. Look for actual evidence of their lifestyle going back over a decade.
Don't be fooled by their follower counts. On every platform you can purchase fake followers, fake post comments, fake likes, fake subscribers, fake podcast downloads. Use tools like SocialBlade(.com) to see spikes where they bought thousands of followers in a week. People that want to argue about this are usually guilty, themselves. "I didn't know better." Bullshit. You knew it was fake when you swiped your credit card.
Use paid background check apps. There are several options. This shit is pure comedy! You'd be amazed at some of the BIG names that you admire, and how fraudulent they are. These background checks reveal criminal history, bankruptcies, divorces, restraining orders, name/alias changes, and even show their residential address and what vehicles are registered to them. With that info, you can use Google Maps to view their "mansions". Some of these gooroos don't even show up on searches... because they aren't using their real names. Red flag!
Ask around. Speak with former clients they've worked with. Speak with former employees of their companies. Speak with former leaders of their groups. So many of you skip this, and defend these frauds until they turn against you. "Well, he/she treats me fairly, so they are okay" Bullshit. Recognize patterns, they keep repeating. You'll be next.
That should get you started. Hell, try these searches on me! 😘
-Tony
The Hard Truth About Men
Some hard truth for the men.
Driven men are hardwired to pursue money in their 20s and 30s. It's how society has programmed us to earn status and prove ourselves. We sacrifice our health. We sacrifice our relationships. We sacrifice our time.
The wiser successful men around age 40 begin to see the bigger picture. With our experience and skills, we realize we didn't have to do it like we did. We were stuck in the loop of trading our units of hours for their units of dollars. Need more money? Work more hours. Need more money? Work overtime. Need more money? Pick up a 2nd job. We don't value our time when we think we have unlimited time.
You can be filthy rich, have all the fancy cars, the big home and all the material things you desire. But, if I look at you and your physical fitness is severely lacking, your relationships with friends and family have a history of being weak, your integrity and character are questionable, you aren't contributing to the betterment of society... then you've failed up to this point.
A few of you will read this and feel defensive about something. I challenge you to look into an actual mirror and be honest with what you see.
"But Tony, it isn't right to judge others!"
I believe we are all judged. Every single day, by every single person. It's playing make-believe to think otherwise. It's a false, idealistic belief to think we are not judged. YOU even judge others. That's normal. It's human behavior. This is the hard truth that most are uncomfortable with. It's easier to pretend we aren't judged, so we can continue with our destructive behaviors, actions, and words.
The good news is that you can fix this. Most won't. Few will. Become the right man that embraces being judged, because you are being judged as a winner in all areas of life.
-Tony
Most Don't Know This About Speaking Events
You probably don't know this about speaking events😮
Before I became a speaker, I wasn't aware of the different types of business models that events use, to create profit.
I also wasn't aware of how many different ways a speaker can earn income from events. I also didn't understand the different ways that speakers end up on a stage.
Most people assume the traditional business model. Sell a bunch of tickets, exceeding the cost of the venue rental and support, and pay the speaker fees. Mix in a few corporate sponsors, and profit is made. Usually no pitching or selling from stage. This is the "paid speaker" path, which I prefer.
Next up, there is the pitch-fest type events. This is when an event host invites speakers who have a high-dollar offer to sell on stage, and they agree to share a percentage of the sales with the host. Sometimes the speakers are there for free because of the potential sales, sometimes they even pay to get on that stage to pitch. This is the "pay to play speaker" path.
Now for the one you may not know about; The false influence events. These are events where the host pays a few recognizable names to speak, and then inserts relatively unknown speakers in between the main names. These unknown speakers pay $2K-30K each to get on that stage. That money pays for the celebrity speakers, and covers the cost of the event. The lure is hopeful recognition, having the ability to say you "shared a stage with (star)". It's clever marketing.
Then you have the recruitment events. These are often disguised as large events with hundreds of attendees, with dozens of speakers that you've never heard of. In most cases, those speakers are members of a group, and the event is hosted by the group leader. They created the event to give members stage time, but they also pitch membership and usually do the "buy a ticket and bring a friend free" offer. That free guest is hopefully the next recruited.
There are a several variations of these events. I hope this post raises your awareness, and saves you some time and money. As a hopeful speaker, you'll also understand the game better.
-Tony
Style vs. Execution
An observation of similarity between entrepreneurship and skating.
Whether we're talking business or carving bowls, there are two important things to consider; Style vs Execution.
I've been skateboarding almost two years now, and I continue to improve. Along the way, I started noticing the shift in levels.
At first, I was solely focused on execution. I didn't have the capacity or awareness to even think about style, because I was so focused on not falling down and eating concrete.
I'd study the lines and paths of better skaters, seeing where I could improve. I'd look for where I was losing speed and momentum. I'd worry too much about where my feet were placed on the deck.
All of it was focused on being able to make a few laps around the bowl, without falling down. I fell down a lot! Hundreds of times by now. It always hurts.
As I improved, I began feeling more of a flow state. Even though I was traveling much much faster, time seemed to slow down and I could anticipate and plan my lines, while reacting in real time with the surface of the bowl.
With enough practice and reps, I don't even think about minor distractions any longer. The execution is there, so now I can work on style. Making the run look smoother, higher, and more stylish.
In business, far too many get this backwards. They focus too much on style and looking good, rather than focusing on execution and achieving actual, earned results.
You can't fake it till you make it on a skateboard. Style won't fool anyone once you drop-in and they see how you execute.
You also won't fool anyone in business, except maybe actual fools. Those who've earned actual results can always see the fakes and those who pretend.
In business, focus on execution first. Focus on the core fundamentals, while also learning new things. Fail a LOT. Earn the scars that provide priceless lessons. Become proven at operations and delivering for your customers.
Then worry about style.
How to Decide Which Business to Start
My thoughts on business types.🤔
When people ask me for advice on which business type they should start, they usually expect a specific response. Maybe even a list of business ideas that are "hot" or worth considering.
The reality is that there isn't a perfect answer for everyone, because everyone has different interests, skills, needs, and goals in life.
Only you can determine which business model works for YOU.
Here's my own thought process on evaluating businesses for myself. It's based on decades of discoveries, mistakes, and wasted money and years of time.
I start with the end in mind.
1. What do I want my lifestyle to look like?
2. How much time freedom will I be able to realistically create from this business idea? Does it require set business hours and 40+ hour weeks?
3. How much location freedom will it allow; Will I be able to work anywhere in the world, or will I have to show up to an address each day?
4. Does this business idea have the potential to scale to arrive at my own financial goals? How much do I need to profit in order to live my desired lifestyle?
5. Does this business model carry enough profit margin to sustain economic cycles going up and down? Is it something that potentially thousands of customers need, and will always need?
6. Most importantly: Will I be happy and fulfilled doing what I do? Is this something I'm actually passionate about, and have a lot of energy to pursue? Is there purpose behind my performance?
Most business owners start something without truly asking themselves these questions. The majority of them I've spoken with, pursued something primarily to earn enough money to avoid having a W2 job for themselves.
Too many start businesses that will never be able to scale in order to reach their financial goals, or their time freedom goals. They are self-employed but run a company that has no value if they ever wanted to sell it.
Others start businesses within industries that have a razor thin profit margins, working insane hours weekly just to keep their head above water. They can't ever seem to get ahead. Business feels like a trap.
Some start businesses around their hobbies, only to discover the financial limits and time restrictions a couple years into the business. They didn't think far enough ahead...
There are endless ways to make money. There are only a few that do so, while also creating enterprise value and keeping your sanity, and potentially your time freedom.
If the business idea passes the sniff test on those initial questions, I'll then assess the idea with these further questions:
7. Is this business idea within a growing industry, or at least a long-term stable industry that won't easily be replaced by technology or shut down due to risky govt regulations or changes to laws?
8. Is there potential to operate with a prepaid, positive cash flow business model? Bonus if there is monthly or annual recurring revenue (MRR or ARR).
9. Does the potential exist to scale profit at a higher percentage than increasing overhead costs? Meaning, does it scale profit faster relative to adding employees? Few employees, higher output.
There are other questions to consider, but these are where I start when it comes to assessing ideas. If it doesn't make it past the first group of questions, I'm not interested. If it makes it past the second group, I'm increasingly interested.
Tony
The Common Mistake Of New Entrepreneurs
This is one of the biggest mistakes new entrepreneurs make.😮
If you're building a business, profit is what matters most. Don't fall for the guru speaking about "7-figures" in sales revenue. I've known plenty of 7-8 figure business owners that lose money each year.
7-figures, 8-figures, etc... don't mean anything if a business is barely staying in business, or bleeding cash each month.
So how do you maximize your potential to achieve more profit?
Sell expensive things.
As a business owner or hopeful entrepreneur, you've already accepted the fact that you'll have to sell something. That's business.
I see waaay too many of you wasting way too much time promoting and selling tiddlywink little knick-knack products and services that only earn a few bucks per sale.
You won't achieve financial success by focusing on selling low-buck things, unless you've mastered the tactics of generating high volume sales. That means you'll need to spend tens of thousands (maybe hundreds of thousands) per MONTH in advertising in order to generate the typical 10-15% net profit.
The only other alternative here is to have built a huge personal brand with a huge audience of willing buyers. That's great if you've achieved this, but it's not the norm. It's probably not you.
Selling is selling. It's literally the same skillset if you're good at it. It's definitely a skill you SHOULD invest in, and become great at.
It takes the same amount of effort to sell an expensive item or service, as it does to convince some cheap bastard to buy your cheap product or service.
Here's an example I figured out 20 years ago, with one of my own businesses; selling custom wheels for cars.
Back in 2003, I thought it was a good idea to carry a range of wheels, from entry level (then about $999/set) and top-level forged wheels (then about $3000/set). More products the better, right?
Wrong.
Within a year I learned I was wasting much more time on the phone and in emails with the cheap buyers. They were obviously price-shopping, and didn't care as much about service or my knowledge. They'd get info from me, and go buy elsewhere based on price.
Those $999 wheels only created about $150 in profit per sale (15%).
The expensive wheels created $750 in profit per sale (25%).
I would have to sell five sets of the cheap wheels in order to equal the profit of only one set of expensive wheels. Same amount of sales effort for both, actually more effort with the cheap buyers.
I stopped selling the cheap wheels. My business grew faster. I focused on serving only the highest quality brands and my marketing focused on service and expertise. Things high value customers respect.
If you want the potential to earn more profit, look at selling the most expensive things you can. Become an expert in those subjects. Quit competing in the bottom market, with all the others who are too lazy to specialize in a higher product level market.
To those of you with already established businesses, you are likely earning 80% of your profit from only 20% of your best products or services... while wasting time on the other 80% of your products that barely move the needle. Don't be afraid of dropping products off, especially low-performing (non profitable) ones.
-Tony
How To Know If You're In a Business Cult
How to know if you're in a business cult 😮
1. The leader is charismatic and attracts attention. Usually has a level of intrigue or mystery about themselves. Can be unpredictable at times. They'll sometimes label themselves as prophets or that they have almost God-like characteristics or skills.
2. The leader knows how to grow an audience of followers. They understand that it's easier to get people to join when they are in a financial struggle or they feel lonely.
3. There is a defined business model that generates huge profits for the leader, and some of the Lieutenants that report directly to him or her. There are usually defined levels within the membership, starting from a low-priced base, a midrange level, and a top level. Each of these levels seems more prestigious than the level below it, and serve to make members aspire to level up (thus, spend more)
4. The psychology of "Us vs Them" is deployed heavily within the organization. The leader teaches the members to distrust anyone outside of the group. The leader makes the members feel they are part of an elite private club, and that they are better than other people outside of the club. Think about how odd this is, especially if you understand most in the group are struggling or lonely, not actually "elite".
5. The leader introduces "insider speak" within the community. These are trite little phrases or sayings that are often repeated by the leader, and show up in the external words and writings of the members. This insider speak is a way of signaling to other group members that you're in the club. It's the "IYKYK" handshake.
6. Members are manipulated to remain in the club through gained notoriety and acknowledgment within the club. They are led to believe they are better members if they contribute more money and time to the group. They are made to believe they are part of something much bigger than themselves, and that it's unsafe to leave the group. People fear the potential backlash of leaving, so they remain.
7. The leader accepts no criticism, and dissent is punished publicly. Naysayers or skeptics are removed immediately, by shunning or banning them. Those who remain in the group are encouraged to no longer associate or support former members. On social media, they'll block or unfriend you. A former member's stellar reputation may experience a smear campaign, especially if they are a whistle-blower.
8. Each cult has regular gatherings and ceremonies. These are opportunities to publicly praise the best members, encourage more donations or leveling-up ranks by investing more, and to allow the members to visually see they aren't alone. Expect "insider speak" in most member conversations, especially from the leader on stage.
9. The leader eventually earns enough to invest in real estate, a formal gathering place or compound. A place where they can teach others to enroll more members, have private gatherings, and indoctrinate their beliefs into members and staff.
There are other tactics being used, but these are the main ones to identify. If you've found value in this article, share it with others.
-Tony