- There's this tendency that we do of not sharing
because we don't wanna have that feeling
that people don't believe in us and I get it.
(upbeat music)
Hey everybody, Dan here, I've got something on my heart.
I do know this shirt is a little loud,
but it's about going too big and too fast
and I thought maybe this shirt was going too big
and too fast, but why not?
We're gonna wear it.
My videographer, Sam, said it looked decent,
so we're gonna go with that.
But anyways, I wanna talk about when you have a vision
for what you wanna create,
but sometimes you're getting advice from family and friends
and it makes you feel like they don't support you.
Here's what I mean by that.
When I was building my company, Spheric,
I got advice from my dad who I love, he's my hero,
but man, when I was starting off,
I felt like he was trying to cramp my dreams.
Every time we talked,
he'd always tell me about the hundred things
that I was doing wrong or that I should think about
and it just made me second guess everything.
One thing he said was,
You know you really gotta watch your cashflow.
You really got to watch cashflow.
And I was like, I had saved $70,000 at that point, okay?
And I was only 24.
I felt really like maybe unfounded confident,
but I felt like I'm doin' all the right things,
why does he keep bringing this up?
Well, I continued to build the company.
I hired four people from day one
and we started doing work with clients
and we started to build the product
and we started to generate revenue
and fast forward six to nine months,
I understood exactly what he was talking about.
Essentially, what happened is because of the way
we were working with clients
and we would, essentially, I hired people,
so all of a sudden costs, day one, I've got salaries.
Then I bought them all new laptops because they needed that.
We had to buy some servers.
We had to buy all this infrastructure.
So 70 grand gets depleted really quick.
Then we had to find these customers,
get the customers on board
and then eventually do some work, invoice the customers
and then they would pay us,
but they would pay us 30 days after we did the work
and then when they paid us,
they paid us through a check that showed up in the mail
and then we're in Canada, they were in U.S.
so then there was like a three-week delay there.
Oh, and then when I went to the bank
and deposited that check,
the bank's like, oh yeah, it's frozen for 20 business days
'cause you're a new company.
And I'm like, literally the bank account went
(sliding sound effect) no money in.
And I knew exactly what my dad was talking about.
That's what he meant by cashflow.
And I ended up having to sell my receivables,
sell my essentially invoices
to a business payday loan shark,
like, you know, those payday loans for individuals?
They exist for businesses, as well.
So if you need some cash before your paycheck
and they will a hundred percent finance your receivables
and they'll take 30%.
So I literally lost 30% of my profit
or revenue just because I didn't understand
how to manage my cashflow.
Now when my dad was saying this to me,
it wasn't because he was not believing in my dream,
it's because he knew I didn't have the experience to make
financial decisions that were aligned with cashflow.
'Cause I was just looking at revenue.
So I want to share a few principles.
Number one is to dream big, but start small,
but at least start.
So I just want you to start.
I want you to get one customer.
I want you to get 10 customers.
I want to get a hundred customers,
but I want to make sure that you keep
your expense structure small and reinvest.
I don't want to stop you, I want to encourage you.
I want you to dream big.
But you got to start small.
I had a friend, Julie, once and she had started a company,
a personal training company in her house.
She bought, converted her whole basement
into kind of a gym.
So emptied out the basement, bought gear, equipment,
et cetera, started her business, posted it on Facebook.
It's probably a year or 16 months after she started
that I get a call and she just said,
hey, I could use your advice.
You have some time?
And I went over to her house.
This was like 15 years ago.
And I go and I sit and we go upstairs to her office
and we're sitting her office and she goes, here's the deal.
Essentially, I got some money from my parents.
I got a line of credit we secured against the house.
I spent all the money on the new equipment in the basement,
my office, furniture.
She had letterhead, she had business cards,
she had branded swag.
She had everything.
And the problem was is she had no customers.
And this is normal,
this happens every day in business.
And maybe you're like, whoa, why did they do that?
Why didn't they, they start small and do workouts
in a park?
And then from a park they could, and I get it.
People say this all the time.
They're like, oh, you know, if you're starting a restaurant,
you should start at the farmer's market.
And then, you know, to the food truck and then eventually
a small location and then maybe pop-up shop or whatever.
And I've told people the same advice.
But I also realise that if you're not around other people
that maybe you just think that is
what business is about is the setup.
It's getting the gear to attract the customers.
And nobody's gonna wanna come train in my basement
on old gear or nobody's gonna take me seriously
if I don't have branded swag.
And I'm like supposed to be a business person.
But I really want to encourage you to not start too big.
I want you to dream really fricking huge,
but I want you to start small.
The second thing is to really know your numbers.
And if you want, one of my favourite books
on this topic is called Simple Numbers by Greg Crabtree.
He's a friend of mine.
He's done all of our financial modelling
and it's just probably the best entrepreneurial
financial book out there because he's a accountant
that doesn't act like an accountant.
And if you ever get frustrated with the accountants,
you know what I'm talking about.
I love ya, thanks for doing all my financial stuff
and helping me with my taxes.
But man, you guys, your reports are complicated.
And the whole argument is that revenue is for vanity.
Top line revenue, it's sexy, it's awesome.
It's like people talk about how many employees you have
or they say, well, this is our revenue.
You know, we're at 10 million.
We're at 1 million.
We're at five and they're really proud of it.
So that's interesting.
So revenue is for vanity, profit for sanity, right?
You might hear this profit meaning like, okay,
at the end of the month, how much profit do we make?
The one thing you'll learn in business,
if you've been doing it long enough,
is that what your account calls profit is not
what you think profit is.
You, I know me, I like to look at cash,
not profit 'cause a spreadsheet or a balance sheet,
a P&L, whatever you're using
for your accounting software,
the profit number does not equal dollars
I can then go and spend.
It just means I got to pay taxes.
So profits for sanity, but cash is king.
Cash flow, what you have left over at the end of the month
from a cash point of view,
after you've paid off your credit cards
and your lines of credits and your wages,
and your vendors, et cetera,
that is the most important thing.
And most entrepreneurs don't understand
how to do projections and they don't understand
how cash flow is created.
So if this is news to you, again,
it's on my heart to share this.
Can you please, please spend some time learning about this?
This is a non-negotiable fundamental aspect about business
that if you don't know how this all works,
you will catch yourself in a bad spot.
Number three that I wanna share that I think is
really important is share your decisions
with other people that have been more successful than you.
And this is what I mean.
I have so many friends, okay?
Family members, cousins, you know,
friends in my community that I find out after the fact
that they made a big decision to buy a business,
to start a business,
to invest their life savings into a business
when they could have shared that with me prior,
but people in the early days, you're just like,
well, I don't wanna,
you get into the spot where you're worried that if I share
my vision and they don't buy into it,
then I'm gonna feel deflated.
And there's this tendency that we do of not sharing
because we don't want to have that feeling,
that people don't believe in us.
And I get it.
But I'm telling you if you're making
big financial decisions,
don't necessarily go to your parents who've never done
this before, who've never maybe executed their dreams
at the level that you're going to do.
And that's totally fine, no judgement ,
but go to people that have had that kind of success.
If you have any friend that's been in business
for five years and you're starting a business
and you are not sharing your decisions with them,
just saying, hey, here's some big decisions
we're making, this, this and this.
A new business partner,
I'm deciding I need to raise some money.
We're moving locations, whatever it is,
just get in the habit of sharing your decisions
to get feedback.
Now you don't have to take any action on it,
but at least you're gonna be informed.
At least you're gonna have somebody doing
a check and balance on you.
And I'm telling you, if you're wanting to go big,
then these are the things that are non-negotiable to allow
you to stop the potential downside of making bad decisions.
And to really put a bow on everything,
I wanna share this belief that I have
when people are comparing themselves to others,
they see, you know, a big company do this
and they're like, well, they're doing this.
Or they see an individual doing something,
they're like my friends doing this, so this must work.
Here's here's the caution.
Which is all of this wrapped up into a bow.
Don't compare your chapter one to their chapter 13.
Or their chapter 27.
If you have never had a business in the past,
and a side hustle when you were 17 selling something
at the farmer's market, doesn't cut it.
Unless you were supporting yourself a hundred percent
financially by your business
and you've had some success,
then you don't have a chapter one.
You don't have one year of education.
And when we compare ourselves to the 32 year old,
that's making 25 million a year,
and you don't realise they've legit been running
their business since they were 15.
Meaning that from the age of 15,
and I have friends like this,
they have been self-sustaining their income
off of business activities.
So they're on chapter, what would that be?
17, and you're looking at their decisions and comparing
your chapter one to their chapter 17.
Biggest, biggest fallacy that you can make in business,
which is, and why for a lot of people that go way too big,
too fast, they don't have that understanding.
So that's what I have on my heart.
If you like what you've shared,
and you want to follow along in my journey,
be sure to subscribe to my newsletter, link's below.
Be sure to leave a comment on the channel.
This helps with engagement.
Subscribe, like, let me know what is the number one thing
you took away based on what I shared today.
And I hope this video finds you incredibly well.
And we'll talk soon.
Peace, later.
(energetic music)