Let's talk a little bit about financial management skills
for the entrepreneur.
Basically I want to talk about when your business is growing.
You've got a couple customers you have sold a few deals and
now you're wondering now what what do you do once your business
has started to succeed it has gotten to the very initial
stages of success.
This video is brought to you by email 10K.
Learn how to book meetings with billion dollar Brands and
take your company to the next level and email 10K.com in
today's video.
I want to answer that with a five step process your five
things. I recommend once your business starts growing number
one is you need a war chest.
That means at least three months of expenses in your business
bank account at minimum before you start taking massive profits,
and I know it's tempting and I've made this mistake before
where you make a bunch of money and then All of a sudden
you want to pull money out the problem with that is your
business has just started to succeed just because you sold
x amount.
This one does not mean you're going to sell that same amount
the next month and you need to be in Risk mitigation mode
because if you run out of money and you're at zero again
now all of a sudden, you're just starting out you have the
opportunity now that you've made some money to start thinking
bigger and if you lose that money you lose that ability to
think bigger.
So save at least three months of expenses in your War chest
and that means keep your salaries Louis.
Possible.
You should be running a lean operation not hiring not doing
anything in this period while you build up that war chest
do the work yourself.
I know it's tough.
I know we talked about Outsourcing a lot of the work do not
do that in this period of your business save your money just
because you're growing Now does not mean you'll be growing
forever or even the next month your sales could dry up tomorrow.
So make sure you have some cash to last you through the lean
Times by staying Lee what you're doing here is using your
momentum to buy yourself time.
Then the second thing you do.
Number two is higher once you have that war chest.
You can use the new money coming in to Outsource one task
that you hate doing.
That's the quick note here is do not Outsource sales right
at this moment.
I'll talk about that later in this video but sales is the
last thing you should Outsource its to important at this
point when you're just starting a business you need to be
on top of Revenue generation because it's so fickle.
It will go away in a second.
If you don't stay on top of it in the early day, then once
you've hired a couple tasks that you don't want to do so
your time is freed up to focus more on sales.
Then number three is you want to Invest in growth and what
does that mean?
What channel are you allowed to grow?
Is that cold email?
Is it advertising?
How do you know the channel That I recommend growing is the
one that got you to this point if you have three clients
and your business is growing and you got all three of those
from cold email spend money on cold email if you got them
from Facebook ads spend more money on Facebook ads.
If you got it from conferences go to another conference invest
in the channels that are already working for your business
and I recommend spending at least 30 percent of your revenue
on growth using channels that already work for And that will
mean that it's not money wasted if you're already getting
ten clients from cold email and then you decide to spend
thirty percent of your revenue and are able to drive that
to a hundred clients.
Guess what your business is now in the scale face, it's not
in the early stages anymore.
So you're not exploring at this face.
You have something that works.
Even if it's something like you're getting all your clients
from upwork invest more in upwork optimizing your profile
may be hiring a consultant to look at what you're sending
get your rates up invest in what is already working and you
can win here once that's done once your business is growing
and You have your War chest then it is time to hire sales.
Now that you're grown consistently hire a director of sales
so that you don't have to deal a hundred percent with the
selling and your Revenue should be at a point where you don't
have to worry you have the war chest even wear if the director
of sales fails for the next three months you can still put
the pieces together.
So the risk of hiring an Outsourcing your sales is way lower
at this point and that's why we waited this long to Outsource.
This number five is research and development.
Once that's done in your growing consistently.
You can spend the rest of the money on Research and development
and let me give you a couple examples for marketing that
means finding new growth channels.
So let's say cold email was the way you're getting most of
your clients.
Now, you're spending money on Facebook ads try to see if
that works or Google ads or maybe you're investing in a conference.
You're trying other things to try to open up new channels
so that you can scale those later if its research and development
related to your product.
That means you are binding new services to offer you're finding
new products to offer to customers you're innovating on the
product side.
What can you offer to new customers?
What can you offer to Current customers to increase your
revenue on the product side.
And finally that's Improvement in the other areas.
So you're finding incremental ways to improve your business
on all sides, whether it's better customer service or adding
a better refund policy or serving your customers to find
out what new products to even create.
So Innovation around the marketing the product and incremental
Improvement. So your business is growing and now what do
you do you need a war chest number 1 then you hire then you
invest in growth higher sales and finally you do a bunch
of research.
And development.
This video is brought to you by email 10K.
Hey, are you still thinking about investing in Facebook or
Google ads to grow your business?
Well, I just did and it took me ten thousand dollars to break
even so unless you have that to drop before you see any results
at all.
I highly recommend you look into cold email because it's
a better and cheaper way to kick start your business.
And honestly, I wish I would have invested the 10K and cold
email. I would have seen a much bigger return and have in
the past hop in email 10K and watch the free presentation.
Thanks for watching the video.
Feel free to subscribe for more business.
Videos like this.
We do a ton of these on this channel check out our course
email 10K.
If you want to learn how to grow your company by booking
meetings with billion dollar Brands.
It's a great time to invest in a course like this a lot of
opportunity out there like this video to encourage this type
of content and comment below.
Is there something we missed would love to get a conversation
going. Thanks for watching.
I'm Alex Berman