- Dear Dan,
how do you build a business that scales?
- I believe most businesses they stay small
because they don't have the structure of an organization.
And in the beginning I didn't know
that I needed to structure either.
So I made the same mistake,
but business what it boils down to
you have actually maybe a core three or four functions.
Depends on the industry you're in
and also depends on what type of business that you run.
So the first function
that most businesses have is operation.
So under operation you will have your productions,
you will have your supply chain, right?
Operations and chances are when you grow a little bit bigger
your COO, your Chief Operating Officer
from your executive team, will be managing those, right?
The operation and day-to-day of the business.
Then you have what I call your finance.
Under finance, you will have your legal,
you will have your accounting,
you will have your HR, right, human resources.
So chances are when you get bigger,
you will have your CFO, your Chief Financial Officer
that's in charge of that from your executive team.
And then later on you have your sales and marketing,
right, sales and marketing.
Some companies they separate the two,
some they combine them together,
but very much so, this is in charge of revenue generation,
right, you might have your VP of marketing,
your VP of sales, right?
Sometimes customer support,
sometimes falls under sales and marketing,
sometimes it falls under operation, it's up to you.
Mine falls under operation,
because sales and marketing for us is such a big part
of what we do.
If you are in IT, if you're in pharmaceutical,
then you might also have another function,
what I call research and development, right your R&D.
That's where you develop new ideas, do your research,
and find out what the marketplace wants,
your research and development.
In the beginning when you are growing your little business,
it's very difficult to fill all these roles
at the same time simply because maybe your revenue
cannot sustain to hire all these people overnight,
but you could add them one at a time.
Now here's my recommendation.
Some people may disagree with it,
but this is what works for me.
In the beginning, I believe, when you a below a million,
you should focus on sales and marketing.
What brings in the revenue.
Nothing happens until a sale is made in business.
You need to focus on revenue generating activities.
Bring in the revenue, hire good marketing people,
hire good sales people, bring in the revenue first.
Then you want to take that money, now you're making money,
no you want to think about maybe you want to add that
general manager or that leader or executive or that VP,
whatever title it doesn't really matter for operation
or either for the finance.
I say finance first if you were to ask me.
Because you need someone to be looking over the money,
right you need someone to be able to advise you
how you do manage that cashflow.
Now you need to develop your ability
if you don't have the ability yet to read financials.
Because you need to know the pulse of your business,
how do you make decisions.
You want to make decisions based on data and numbers
and not just emotions.
I should do this, I should do that, no.
What does the financial statement tell you, right?
Then later on you can add the other functions
where you could then have someone who come in
just running the operation.
Then as the CEO, as the entrepreneur,
you're focusing on higher level strategies
or how to attract investors or how to attract key people
to help to run your business.
And that's how you go from a small business
that's doing a few hundred thousand dollars
to a million dollars a year, to two million, to five
to 10 million, to 20, 30 million, that's how you grow.
Given the fact that your industry actually
could sustain and support that kind of growth.
Now however, I don't believe
that you should raise money too quickly.
I always ascribe to the idea of customer-funded business
because when you raise money too early as a business,
you are diluting your equity right?
You're giving away a lot of equity,
if you could bootstrap, and I love bootstrapping,
if you could bootstrap
and not having to take outside capital,
but actually using sales and marketing
to fund your growth and you can delay raising money to
as further away as possible,
then you are in control of the business
and it's also, your life will be happier,
let's put it this way, right?
Whenever you raise money,
if you take money from a venture capital firm
or an equity partner, it's when you bring on a partnership
it gets a little bit more complicated
that you may not be able to create the way that you want
or the freedom that you want,
so that would be my recommendation.
And that's how you grow your business, bit by bit
and you fill each role the right person in the right seat
and before you know it, you've got a pretty healthy
growing organization.
Okay, does that help?
Comment below, until next time, I'll see you in my Bentley.
- Dan's a force of nature.
- He's improved arguably millions of lives
where they can provide themselves more money.
His materials are great, excellent,
he's at the top of his game.
- Everything he says has a purpose
and everything he does is done with heart.
- What I've seen from Sifu Dan Lok,
I didn't see it from anyone else.
He's done it, he's been there and he's still doing it.
- Because of Dan Lok my revenue when 30 percent up.
- Actually get like a clearer picture
of how I should run my business,
I can feel that he really for real
to really want to help his business.
- Start taking hold of more advanced strategies
on building our brand and creating content
and leveling up our team.
- An environment where I could actually be around
people that were going to support that, encourage that
and hold me to a higher standard.
- Dan is a great mentor
to get you not only in the right frame of mind,
but then to give you the know how, the tools,
the skills to get there.
- If we just follow his advice,
go step-by-step according to his blueprint,
you will achieve results more than you can imagine now.