Okay, you’ve come this far, so what’s the secret?
Drum roll, please….
It’s called Building a System!
WAIT! Don’t click off!
Okay, I’ll admit that this isn't a very sexy topic, and sure we might have purposefully not said upfront what it was about, which yes some people might consider a fib. But you know what? A fib isn’t a lie, particularly if it’s for your own good. So, just like your mother making you eat your veggies, let’s talk about the 3 systems you need to get you to a new level which will have you working less and making more (Shoot, you might get so used to the easy money you’ll run for political office).
So, what are the 3 systems? I’ll give you a condensed version and then one that's a bit more detailed
So let’s talk about:
Hire Slow… Fire Fast
I’m sure this has been around for some time, but I first heard this on a Tony Robbins Podcast (shoutout to Tony). This requires you to take a deeper dive into any candidates you might have.
Those are all questions you should be asking yourself before you pull the trigger on hiring. I’d say that hiring a “project” is more problematic in the long term than waiting for the right person EVERY TIME. Now, just like there is no perfect soulmate out there, I mean except for Darian of course...sorry, I thought she was comin upstairs!
Anyways, just like there isn't a perfect person out there doesn't mean you shouldn’t hire anyone. See what things they need help working on and see if those are things you're willing to compromise the time you’ll be spending on your training to do.
Now, let’s say that this person seemed like the absolute perfect fit. You know, the type of person you already see making the 2nd head of your future multi-million dollar company, but after a little, while they just don't get it. They return assignments late, always seem to be busy, aren't communicating, and just generally doing a crappy job.
Well, then you need to ask yourself two questions
If the answer to both of those questions is a yes, then it might be time to “allow them to be happy somewhere else”.
Train Your People And Check In Often
This isn't micromanaging, but the phrase trust but verify fits incredibly well here. Especially in the beginning phases of someone's employment and particularly if they are messing with money.
You can think of this as their teenage years, they are growing up and you can't quite trust ‘em with your Mastercard, but they at least made it past the stages where you’re banging your head on the wall every time they ask “why?”.
It’s important to have lofty goals but low initial expectations. You shouldn’t be barkin orders at them and the first time they do something incorrectly start saying “ If you can’t do this right, I’ll have to find someone else”. Not only do messages like that make you seem like the tail end of a donkey but it hurts the worker’s morale. They don’t leave excited to come back, they are heading home and looking at job postings.
The easiest way to combat this is to allow them to take a few steps after you’ve trained them and then explain what went wrong along the way. I remember at my old corporate office, I overheard one of my sales reps tell a client that a project would be done within the week. They were so excited about closing the sale that they committed a grave sin “over-promising and under-delivering”.
See this rep knew that at the earliest we’d get it to them within 2 weeks after the customer left I asked him about it and his response was a simple “I figured one of the managers would handle any issues if they came up.” Well, right then and there I had him pick up the phone, call the client and tell them that his timeline was mistaken. The client canceled the order and the sales rep was upset.
Now I know there are a few sales managers reading this that are pulling their hair out asking “why would you do that?” Simple, this guy always had someone to smooth over any customer issues and was willing to say anything to close a sale.
By allowing him to close the sale, not interrupting, and then making that phone call and canceling the order himself he learned that it wasn't all about money, but about truthfulness, and relationships. He learned that he wasn't going to be able to pass the buck regardless of “whose job it was to deal with customer complaints”.
I trained him, allowed him to make a mistake, corrected the action, explained myself and the company's core value system and from then on never had another incident like it.
I’d rather lose a sale and sleep easy then dread work the next day knowing that I’d have my sales staff and managers dealing with angry and irate customers every day.
Trust their skillset and don't constantly micromanage
Now, you might be saying “Julio, doesn't this go against what you were just talking about? First, you told me to trust, but verify and now you’re telling me to just outright trust ‘em?”
Listen, you hired them for a reason and they have made it past all the hurdles and grown through the growing pains. Just like a parent at some point, you need to let them go, but also let them know that you're just a phone call away. If you want to grow your business at some point your focus needs to be on bigger picture plans.
You need to know that you’ve trained, re-trained this person and have experienced this person's growth. They need to know that the buck stops with you, but that they shouldn't be calling you for every little thing and that you’re not looking over their shoulder every time you pass by. Allow their confidence to blossom, praise them in public and deal with issues in private. This will gain you loyal and hardworking employees.
Remember, at the end of the day you might have a bunch of initials after your name or some sort of appointed title (and they should respect that) but you need to remember that employees are people and people want to be trusted, loved, respected, and feel useful. Treat them as if they own a piece of the company because the truth is that they do.
Create A Proper Sales Funnel
Creating a funnel is more than just creating a few boxes and pointing arrows to them. A good funnel will allow you to see not only your customer's journey but also where you can improve. How you get customers should be top of funnel thinking (organic or paid ads), from there you want to see what you're saying and when you're saying it (email marketing, sequential/retargeted ads). From there you want to have a strong CTA (strong doesn't mean forceful) that’s persuasive. This is why Copywriting and learning about customer personality types are so important. In business Sales Are King, and the best way to increase it is to know not just what to say but the tone in how to say it.
Start with your goal in mind and work backward
This is one of those tips that you hit yourself on the forehead and say “duh” when you’re told what to do. It’s a simple yet powerful way to break down what you need to do to get to your sales goal.
Start with the end goal- want to make $100k? Okay, a great goal! Now take one step back and ask yourself “what did I do to get here”, once you figure that out you continue to work backward until you’re at the point you're at now.
Let's do this together:
You want to make 100k a year in net profit. The first thing you need to do is find out what your expenses are (more on that later). For this exercise, let’s assume you spend, on average, 30k on education, subscriptions, equipment, marketing, etc. each year.
Now that 100k has become 130k to cover your expenses and make a profit of 100k. Let’s start working backward.
130k per year = 10,833 per month = 2,708 per week = 387 per day = 48 an hour if you work an 8 hour day.
Whew! My brain hurts, how about you? Sorry about that, BUT this was 100% necessary. What did we just learn?
We learned that you need to be charging at least $48 per hour and work 8 hours per day (this doesn’t include weekends or vacation days so, you know, maybe up that a little) in order to hit your goal of 100k a year in profit.
If you’re a service-based business or a coach, this is where you start to figure out how many clients you need to fill that time to hit that goal. If you’re a product-based business, this gets a little tricky so let’s take a different angle.
If you know you need to make $387 per day to hit your 100k annual goal, it’s time to take a look at the products you sell and the profit margin on them. How many products do you need to sell a day, a week, and a month to hit this goal?
So the big question is… how do we meet those goals? We plan our year, we put money into advertising, networking, and affiliates; and we put effort into understanding who our customers are, what they want/need, and how to give it to them.
Figure out this year's promotions (loss leaders, discount, flash sales, etc)
E-commerce, in particular, is going to have to deal with the issues of sales and promotions. It’s human psychology that we like a sale, and are more likely to buy because of it. It hardly matters if it’s $10, $100, or $1000 off, it’s about the savings and the feeling of accomplishment we receive from our simple little cave brain.
Want proof, Black Friday is a great one! People tackling each other, punching, kicking and scratching all for some things that are marginally less expensive.
Want another example, well just look at this:
Those are people shopping in HUGE crowds during the Covid-19 (Corona)Virus Pandemic. These are people that are happily risking their health and possibly their families, friends, and neighbors' health for 25% off a pair of jeans.
Discounts are not the only thing you can give. If your ticket is high end, give the gift of...well, gifts. Stores do it all the time! Pens, Bags, Champagne, Massages, Exclusive events, etc.
Those are all additional expenses that the company must account for, but it certainly helps ease the thought of that $500 Balenciaga baseball cap and massage the ego of the people that are willing to spend it. For those that buy that a salesperson saying, “Well, if you buy today ma’am I’ll give ya an extra 10% off, whaddya say” does absolutely nothing. But if you make them feel special, make them feel like they are the cream of the crop and those that shop there with them are all part of high society, well… you just made yourself a million-dollar business. At a certain point, it’s not about money it’s about power and influence.
Okay, the final piece of the puzzle, a system for finances! Now, don’t worry, this one is gonna be short and sweet so do me a favor, blink a few times and make sure that glassy look that came over your eye when I said finances is completely gone.
Okay, let’s get started:
Keeping track of expenses
One of the easiest ways to lose money is by not keeping track of your expenses. Take Mike Tyson for example. He at one point had 100’s of millions of dollars (and that was in the mid-’80s when a carton of a dozen eggs averaged .80 cents). He ended up flat broke, not only due to his own lavish spending but from others around him spending and stealing his money. Mike didn't have an accurate way of seeing how much he was spending, this is a tale as old as time.
I know we’ve fallen into that as well, although with us it was a far cry from pet tigers, supercars and mansions. It was just a few years back when we were making a neat little sum that we bought multiple vehicles cash, bought our house with 80% down as our payment, bought entire living room and bedroom sets for our family. Bought our 2 yr old son a king Tempurpedic on vibrating, adjustable bed frames and of course went out to eat 2 times a day. Luckily we pulled ourselves back and realized that the wealthy invest and save, not spend every penny as soon as they get it.
Now, I won’t preach to you about how to spend. Everyone’s budget is different. However, I will recommend using a platform like QuickBooks or a budgeting app like Mint in order to set up spending limits and to see a breakdown categorically of what you spend your hard-earned money on.
Maintaining or increasing your profit margin
This is another one that a lot of business owners get wrong! They make their product, put a price on it, add a discount code and watch the sales come in. Yet, when they file their yearly earnings, their net income (what you make after expenses are taken out) is far from their gross income (what you make before any expenses). Why?
Simple, they aren't taking into account the many things that chip away at your profit margin. Here are a few things that do:
If I really racked my brain, I’m sure I can think of about a dozen more. As you can see, there are A LOT of things you need to consider when it comes time to actually sell your product or service.
Annual and quarterly goals and details on how to achieve those
Finally, we have Goal Setting.
You need some sort of system in place to manage your goals and see how you’re tracking. The more specific the goal the better. Don’t just put 100k in big bold letters on your dream board. Instead, map out exactly what it’s going to take to get there. What sort of numbers do you need to hit monthly, weekly, and daily? What can you do to increase those numbers? Where are you from last year? This is just talking about numbers, but you can do this for everything. How can you cut costs compared to last year? How can you improve outreach? Etc.
At this point, you should have a pretty good understanding of what systems you're excelling at and what systems you need to work on. I won’t pretend that this is the end all be all, but then again what were you expecting? This is just a blog post after all. If you feel like you need help planning, or implementing any of the points we made today, please don’t hesitate to contact us. Make sure to sign up for our newsletters where we give you great information like this all the time.
Final Thoughts: Systems are just one of those things that many entrepreneurs don't think they need. They like the idea of being able to fly by the seat of their pants and their success in doing that is largely anecdotal and rarely are they excelling at multiple things. A system that helps you and your employees understand what to do, and when to do it is vital not only to growth within your industry but to a cohesive and well-operated company.