Do you know how you can build a better business? In this episode, Ben Fewtrell of Max My Profit shares his words on how people can build businesses that they imagine will give them more freedom and financial security through learning from an online hub. He also discusses why it’s so easy to
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Prefer to read 5 Steps for Building a Better Business? Here’s the transcript:
ANGELA:
You’re listening to the Business and Life Conversations podcast, with Angela Henderson, episode 27.
Hey there, you’re listening to the Business and Life Conversations podcast, my name is Angela Henderson, and on this show we talk about improving your business, life or both. By having amazing and rich conversations with brilliant guests. Who will inspire you and who will give you tips and tricks, to help you grow both in life and in business.
Hey there amazing business owners, Angela here, and welcome to another episode of Business and Life Conversations with me, Angela Henderson. I hope your day is going brilliantly well and that you’re ready to listen to another amazing episode of Business and Life Conversations. Today, I am super excited to have Ben from MaxMyProfit joining me today to talk about the five steps for building a better business. Welcome to the show, Ben.
BEN:
Hey. Thanks so much for having me, Angela.
ANGELA:
How’s your week going so far, Ben?
BEN:
Absolutely fantastic. It’s great to be alive.
ANGELA:
Yeah, and what’s one key thing you want to work on this week?
BEN:
This week, for me, we’ve got so much going on in our business but we recently franchised. I’m just helping to get my franchisees off the ground.
ANGELA:
Oh gosh. Well, that could be a whole other podcast in itself on how to franchise your business, but I try not to go too much into that today. Ben, whenever I bring on a guest onto the show, I always like to get to know you a little bit more one to one, so that again it’s not just business, I like to add a little bit of fun and flavour to it. I’d love you to introduce yourself, but the other thing I’d like you to say at the very end is what is your favourite destination and why?
BEN:
Okay, that’s easy. Well, as you said, my name’s Ben, a cofounder and author of the Business Accelerator Blueprint, cofounder of MaxMyProfit. I’ve been in the business, education space, since I was 28, so I’m 45 now so I’ve been doing this a long time. I’m very passionate about reducing this mortality rate of small business in this country, I guess worldwide but particularly in Australia, with so many business owner’s going broke. My favourite holiday destination is Fiji. I’ve been going there for about 25 years, pretty much every year, sometimes twice a year. I just got back a few weeks ago.
ANGELA:
Yeah.
BEN:
We’re already planning our next trip. I love it there because most of the places I stay, you can’t get phone reception and they don’t have televisions. Just totally disconnect and I go to the islands, there’s no roads so, just relaxing.
ANGELA:
Just rock and roll. Do you normally go there for a short time or a long time?
BEN:
The shorter side typically was about eight nights. The longest I’ve been there were 17 nights, so just depends.
ANGELA:
Yeah, and Fiji I used to live in Fiji and it’s one of the most beautiful countries the people are genuinely some of the friendliest people you’ll ever meet.
BEN:
Yes.
ANGELA:
The scenery, let’s be honest, the scenery and those blues of the ocean are magnificent.
BEN:
Just amazing. I think you’re right. The people, are what make it. I feel like I’m going to visit my family when I’m going back to the resort.
ANGELA:
Do you always go to the same spot or do you guys go to different locations?
BEN:
We typically creatures of habit, but we tried a new place because my kids are grown up so I went to an adults only place and we’re going back there again next year. That will probably become a new place to go every year.
ANGELA:
The new place super exciting. I was actually just in Fiji at the beginning of the year and there’s this one family. They been going to the same place and Fiji, which is the the Naviti hotel. They’ve been going there for 30 years. It was remarkable really to listen to their family history and their story and how every year it just brings everyone together. It’s quite a beautiful thing to see.
BEN:
Yeah and I think that’s, it is such a family-oriented place, so it’s a good place to take everybody.
ANGELA:
Again, family and again from young and old, like you said, you can still transition now that your kids are adults and still have just as good time as when they were little babies. They do a great job. Now tell me a little bit more about MaxMyProfit. What does that look like? So that listeners know a little bit more about, I guess your own business.
BEN:
Yeah. In a nutshell, what we do is we help business owners build a better business or build a business that imagined. If you think about it, when you ask somebody why they went into business, most of the answers will relate to freedom. Having time to do more with their life, spend more time with their loved ones, and then having financial security. Pretty much every answer you can think about, will come back to those two things. When someone starts a business, they imagined building something that’s going to give them more freedom and more money. The reality is for most, is that they typically have less freedom and less money. MaxMyProfit was started because it’s not hard, it’s simple to be able to build a business that gives you more money and more freedom. You just got to know how to do it.
Like anything in life, you need the skills. We do this in several ways. We have some done for you services. To grow your business and to make sure it’s profitable, there are things that you’ll need to have done, whether it’s marketing, it’s financials it’s systems, etcetera. We have the done for you services. We then have a team of what we call business accelerators and those people are there to work with business owners one on one, like coaching to guide them through our five stage growth systems. We do have a five-stage business growth system and then we have a range of resources and training online.
We’re really big on using technology to reduce costs and being able to deliver our services to our clients. What we have is an online education hub they can log into 24/7, they can do online training and they can access a whole bunch of resources. We have over 500 resources. So whether, it could be a checklist on how to interview somebody, it could be a blog post, a template, it could be how to systemise your business kit. Whatever it is, synonymous across every business we’ve systemised it to make it easy for people there to do it.
ANGELA:
Really it’s a kind of like a one stop shop.
BEN:
Yeah, that’s the idea, is we wanted it to be a place you come to when you just want to grow your business and you want to grow your profitability.
ANGELA:
Perfect. When I was doing some research for the show today, some of the things that I, common threads I saw on the website, which I love because I’m very similar, is that sometimes people are over-complicating business and in fact you don’t need to over-complicate business, but I guess it’s also that saying, “You don’t know what you don’t know.” I also find a lot of people are always online kind of searching for that next freebie, trying to fill the void, I guess. When again if they understand I guess some of the systems that they need or some of the procedures that they need, they don’t need to be going from one freebie to the next.
Tell me a little bit about some of the clients that you’ve had in the past, those clients that might be listening on the show, what are some of the things that they’re potentially over-complicating to the point of overwhelming and why do think this is happening?
BEN:
I think, sometimes the over-complication comes from a lack of planning and so things become complicated. I don’t think that made to over-complicate them, but they certainly don’t plan things out pretty well. I think we see people who are successful and it doesn’t matter what industry you’re in. We’ve got clients, for example, I’ll use a client as an example, I won’t name them, but he’s an electrician, so he’s in the electrician space and he sees another electrical contractor who has gone and franchise and has 30 something bands on the road and doesn’t realise that actually took nine years to make it happen. They tend to want to jump into things too fast and that can really hurt their business because they’re not prepared for it.
They haven’t systemised things, they haven’t got their own business right where they have predictable marketing, they haven’t got all their service offerings to a point where they know that everything they do as profitable. They haven’t got their team trained properly to be able to deliver the service so they get an eight, nine or ten out of ten every time they deliver. There’s all these things that they’re not doing that turns into something more complicated than it needs to be because when you embark on something, whether it’s just growing your business or it’s franchising or going into a new market when you embark on that and you’re not fully prepared, it’s going to be harder than it needs to be. That’s what we find more so than anything else.
ANGELA:
I would totally agree. Again, with the content I’m working with, I’m all about the foundations, lay the foundations correctly and then you can grow and scale. You don’t have the foundations, things that potentially can go bad. I really like the sentence you talked about initially was about, I think you said the fatality to death or fatality to business. I think that does happen so often because again, people are looking all around them and wanting to be where others are and they haven’t actually gone through that business journey yet. Tell me a little bit more about what you mean by fatality by business.
BEN:
What I’m talking about the fatality rate of small business. I’m talking about the fact that eight out of ten small businesses, I mean statistically that they don’t succeed. Yeah. I’m talking about businesses not surviving and I mean this is just a byproduct of people not knowing what they don’t know. As you said before, and the thing is you don’t know what you don’t know until you know what you don’t know and that never changes. There’s always stuff you don’t know and as you grow your business you need to learn new skills and I think that’s where people go wrong and that’s why so many fail, is because they’re just not learning how to build a business. There might be great at their job.
Let’s say, let’s go back to that electrician for example. Fantastic electrician, awesome. He goes out to customers, they love him. He could diagnose issues, can install a light, really quickly, can wire a house up. Amazingly electrician decides to start a business. Now he’s done four years training to be an amazing electrician at TAFE and as an apprentice. He’s then done another six or seven years in the field as a tradesman being an amazing electrician, so over 10 years of experience. He leaves his employer and he goes, “I’m going to start a business,” and then wonders why in the first quarter he’s not amazing at it. Well, he hasn’t done any learning or training to be a business owner. We find that’s the key thing for most people is when they go into their own business, just because you’re good at what you do or just because you’re passionate about what you do, doesn’t mean you’re going to be successful in the business.
ANGELA:
I think again, that comes down to some of the marketing and people. Again, I remember when my first website launched eight years ago with Finlee and me and I was like, “Okay, great where are the sales?” Again, you don’t know what you don’t know. I just thought that because I had a website now that meant that the sales would come and then that’s they’re like, “Well, do you have SEO?” I’m like, “Well, what the heck that SEO? Do you have good copy?” It was all these things but again, it was just I was I guess fortunate enough to not stop and keep going and find out what all that needed to happen. Many of my own clients, as I’m sure with yours is an example of electrician that they don’t know.
You don’t know that you need SEO, you don’t even know what that stands for. It is, a business can be a little bit deceiving I guess, that you think you’re just going to be successful, but as the other electrician you talked about it took him nine years to be able to get to where he is, probably through a lot of trial and error, I would imagine also along that line.
BEN:
Probably more error than they’d like.
ANGELA:
Yes. Today we’re obviously talking about building a better business, but how do businesses know that they need to build a better business? Have you noticed any common threads along the way when finally people do get to you and your partner, your business partner for help? Have you noticed anything in stats that you’ve collected? What are some of the elements to know, again, they need to change things?
BEN:
I guess it’s pretty simple and that’s the thing I love about this is we like to keep it really simple. If you’re working harder than you should be and not making enough money and you know, especially if you could go and work for somebody else and get paid more than you pay yourself, then your business isn’t working effectively and to me it is all about profitability and money’s not everything but when you build a business, no one goes into business to have sleepless nights worrying how they’re going to pay their bills. What most people focus on is sales and then expenses, and then if there’s a profit at the end of the year, they’re happy. What we say to people is focus on profit first, so budget for profit and then work out what your business has got to do to deliver that. If your business is not paying you a salary that is equal to what you should be getting as a manager or employee inside your business, plus the profits that you need to be able to achieve your personal goals, then you need to change something because nothing changes unless you change something.
When it comes to building a better business, I’m not one of those people that says you should 10x your business or you should franchise, or you should go global because it’s not my goals, it’s your goal and it’s about understanding that it doesn’t have to be difficult. If you’re struggling to pay your bills, you’re not sleeping at night, you’re working ridiculous hours, you’re not taking time out for holidays or to see your young kids get awards at school or whatever it might be that it’s important to you, a day on the golf course, a day at lunch with your girlfriends, whatever it might be. If you’re not getting to do those things then your business needs to be improved because your business should not consume your life, it just shouldn’t.
ANGELA:
100% agree but yet so often it is consuming so many people’s lives. I want to go one step back though. The people that you initially talked about, when they are saying business and they’re working harder than what they need to be and there’s not a less profit. Would you define them as small business owners or would you still say that they’re a hobby mode because they haven’t been able to transition to a profitable business?
BEN:
Well, it’s funny, I’ve seen people with 25 million dollar a year turnover that are not making any money and working crazy hours. I would say that some can be definitely small hobby businesses, but some can be bigger businesses where they just have not mastered the basic fundamentals. It’s easy to get caught up in this. Let’s grow a big business. I’ve seen many big businesses that don’t make any money. I’ve had one myself in the past, so it’s easy to get caught in that trap where you feel like you’ve just got to build something for the sake of growing something and because it’s good to brag about, the ego side it’s getting them, the pinning a badge on our chest to say, “Hey, I’m doing 10 million a year or 20 million a year.” None of that matters if you’re not making any profit. There’s some people that are doing a million a year and they’re making half a million profit. There are some people that are doing 20 million a year and they’re making $10,000 a year in profit. Which business would you rather?
ANGELA:
Well, exactly, and I know that one of the things I talk about, and I’ve learned that from my own coach, James Schremko, is around ‘What is your effective hourly rate?” So many times people will think that it’s one thing, but in the reality when they look at their expenses, the hours that they’re putting into, that some people will go, “Oh my goodness, I’m actually only making $10 an hour, I could make more at McDonald’s and do far less and have much more of a life.” Because again, so much of the ego is being driven, they sometimes don’t look at the numbers. Would you say that that’s a common, when you start working with people and they start looking at their numbers, do they somewhat get a bit of a shock?
BEN:
Yeah, absolutely. I think some don’t look at the numbers because they’re scared to look at them because they know that it’s not going to be good. Some don’t look at the numbers, they don’t know what to look at as well. So, that’s also another problem and some just are just focused on the wrong goals. They’re focused on turnover and building and there’s this common myth that you’re building an asset that if I work for nothing for 10 years, I’ll get my big pay day somewhere down the road and that’s the wrong way to think about it because no one wants to buy a business that doesn’t make any money.
ANGELA:
Oh my goodness, no. If I look at the books, you’d be very silly to be signing any contract that doesn’t show a profit margin at some stage.
BEN:
Yeah, I mean we’re seeing some, I guess some anomalies where big companies have been sold for millions of dollars, like I think Skype was sold and was making a loss and some of that, like Instagram might’ve been making a loss when it sold to Facebook, but they’re.. we’re talking about a huge tech companies with big databases of users and they’re soaking them up into another platform that needs users to grow. That’s their acquisition strategy, but for a small business owner, if you’re building your little shop or your little business in the hope that one day you can sell it and that’s when you’ll make your money, people buy businesses a multiple of profitability. That’s how they typically buy it. The more profit you’re making, the more you’ll get come sale day.
ANGELA:
Yes, hands down. Let’s be honest. It’s going to work in their favour. One of the quotes that I saw on your website, and I guess we can talk about for those that are listening going, “Oh, I might really want to stick around to listen to the five steps to building a better business because this is definitely gonna help me,” but I’ll rewind a little bit in this that you said, “You cannot change the past but you can start to change the future.” That was a quote that’s from Jim Rohn. I think it was..
BEN:
Yes, a hundred percent. Yes.
ANGELA:
And I love this quote because it is true. For those of you who are listening going, “Oh, I really like what Ben is saying in the conversation that Angela’s having and I need to make some changes”. We can’t change the past, people and so often will dwell on the past. What I’d love for you to start talking to us, Ben, is a little bit about these five steps to building a better business and what does this look like for the listeners out there?
BEN:
Yeah. Great stuff. I think and I love that saying, Jim Rohn was a great mentor of mine, unfortunately passed away a few years ago, but you can still access a lot of his workshops and retreats online and you can go listen to them, an amazing man to listen to it. For me that was such an important quote because I was dwelling on the past, but you can’t change what’s happened in the past. We can only learn from it and if you think you might go and you might even be listening to this podcast and go, “Geez, I’ve wasted the last 10 years of my life because I’m still in a business that’s not making any money, hoping I was building some asset and I’m just working crazy hours and not making any money”. But you can’t dwell on that. All you can do is learn from the past and go, “Okay, well what I’ve done in the past didn’t work so doing that same thing is probably not a smart move”.
Let’s focus on the future. What I’ve discovered, I’ve been in this game for 20 years and in 20 years I’ve worked with thousands of businesses and I’ve discovered that every single business has five clear distinct stages of growth and it doesn’t matter what industry you’re in, these five stages will apply. Even not-for-profits got me, “But we don’t need to make profit”, but the answer, even not-for-profits need to make money because that’s how they buy stuff to give away or support things. The first thing, I mean you mentioned the word before is foundation. The first part of the five steps is getting the foundations right and there’s five areas to foundation.
One is what we call financial foundation. That’s understanding your numbers, being able to read a profit and loss statement, having a budget that you follow, having a cashflow forecast so don’t run out of money because that’s how most businesses go broke. Knowing your break-even point. Understanding at what point you start to make profit because every business has the basic costs associated with running it that’s got to be covered first and just having your financials to a point where you can understand them, now you don’t need to be an accountant. You need to go and get a good accountant, make sure your books are up to date, and you need to look at those numbers on a monthly basis. That’s part of the foundation.
We then talk about planning a foundation and that is making sure that people have a plan in place because that’s the next step because once you know your numbers, if you don’t have a plan in place, I always say to people, “Where are you going?” The answer is, “I don’t know”. You wouldn’t get in the car without knowing where you’re heading or if you do, you’re going to end up who knows where. You’ve got to have a plan in place. You’ve got to have KPIs, which are key performance indicators. You’ve got to have a way of measuring your progress as you go through the phases of building your business. You have to make sure your business is structured for growth, and I’m going through this pretty quickly, but this gives you an idea of some of the key things in foundation. What I’m talking about structured for growth, you have to be able to scale your business without it breaking down because you do all the work.
You have to have a way of being able to leverage yourself as your business grows. Is a classic small business grows in sales, when the sales grow the business only gets busy because they’re doing all the delivering. The sales then drop and then they panic and they have to jump back into marketing and so they never get past that glass ceiling. Structuring your business for growth means that you’re able to be able to then catapult it to the next level. That’s the foundation. You get all those basics right then you can focus on the marketing side.
ANGELA:
You would say step two would be marketing.
BEN:
Yeah. Our step two is growth, so once you get the foundations right, then step two is growth and that is about having predictable marketing. Understanding who your target market is because you’ve done your numbers, you know what your most profitable products or services are, they’re the ones you’re going to market. Understand what you can afford to spend to get a customer. It’s called acquisition cost. You need to know how much you can put into your marketing for each customer that you get. You have to then also work on your things like your conversion rate. It’s one thing to be great at generating leads, but if you don’t have a sales process that allows you to consistently convert those leads into customers, then you’re going to struggle to scale. As a business grows, one of the things you’re going to have to do is you’re going to have to hire another salesperson.
One of the main professions that fail or the people that you’ll hire will be a salesperson. It’s because you hire somebody who has got sales experience but you don’t give them a system to follow. They have to try and work it out for themselves. That’s always, that’s destined for failure. What we say to people is before your hire a salesperson, make sure you’ve got a documented sales process. All the steps are laid out, you have sales scripts, questions to ask what’s makes a qualified lead, understand how to convert a customer. The other thing in the growth phase is also then maximising the lifetime value of a customer. Understanding that once you get someone to buy from you once, it’s six times easier to get them to buy again than it is to get a new customer.
What other products or services do you offer that they could be buying from you or how can you compliment the current services that you offer to be able to upsell them or cross sell. I mean, McDonald’s is a classic of this. You go in there and they try and give you a bigger burger or they try a bigger meal or they try and give you fries or something with it. The reason they do that is because when they asked the question, three out of ten people say yes and it makes them millions of dollars. You can employ the same strategies in your own business.
ANGELA:
Often I do, again, this is what I always say about that post sale nurturing, so many people will nurture, nurture, nurture up to the sale, they get the sale and then they don’t do diddly squat, post sale, and then they again they’re always having to find new people, new people, new people were if you continue to nurture that relationship. But equally have other products that you can up sell or cross sell like you’ve talked about. Again, it’s that cashflow will constantly continue without having to work so much harder. Which again is the whole reason, one of the reasons we had spoke about earlier on in the conversation was that you don’t want to have to be working harder if you don’t have to.
BEN:
Yeah I think, I mean one of the things that’s important, people, if I said to most business owners, “What were your sales last month?” They’d be able to tell me. If I said to them, “What was the average lifetime value of your clients last month?” They wouldn’t be able to tell me. I think that’s a more important number than what sales did you get. What is the average lifetime value of a customer? Because once you understand that, you can then start to work on it. I think even like conversion rates, most people don’t know their conversion rates, they’ll guess at them, and they’re usually drastically wrong in their own favour. Those all going to conversion rate to 80% when it’s probably eight percent.
ANGELA:
80, you’d have to be very, very spot on, I’d say.
BEN:
A lot of people overestimate because it feels bad to say, “I’m not succeeding”. When we look at that second stage, it is all about growth. It’s putting all the systems in place in the business to make it so the business can grow. You can spend a thousand dollars on marketing and know that you’re going to get, you know, 10, 20, 30, $40,000 back.
ANGELA:
In return.
BEN:
That’s the key, because once you work that out, business growth is easy because that’s the most difficult part is really unlocking, “How do I get new customers?” And I’m not talking about any customers, I’m talking about the right customers. You want the ones that are most profitable. Once you unlock that key, the rest is easy to do because you can create cashflow whenever you need it.
ANGELA:
Yes. And I know I’ve just come back from the Maldives and we were talking about for my own business mastermind and one of the things we were talking about was Facebook advertising and when do you max out and a gentleman there, he spends about a hundred thousand dollars a month on Facebook advertising, but he obviously makes an enormous amount post that. What he’s learnt though is being able to find, again, so many of the things that we’ve talked about, how long has your customer going to stick around for? How many people are there in the market?
He’s very Australian, New Zealand focused. He’s tried to do a hundred and fifty thousand dollars a month on Facebook ads, $200,000 a month on Facebook ads, but what he found was once he hit that threshold of a hundred thousand, that’s where it, he started to lose money versus make the money back. He had to go through that process, but going through that process has allowed him to grow at a rate where again, he’s profiting versus just throwing money out in the world of Facebook land, which will happily take some people.
BEN:
Absolutely. As will Google Adwords, as will most digital marketing agencies, they’ll take your money. I mean this is one of those things that, that foundation is about having the KPIs and having your numbers so you can look and go, Okay, what marketing is working?” Because that’s a big area for business owners where they really do lose a lot of money is, they put money into stuff, but they don’t know whether it’s working or not.
ANGELA:
Again, I just ran my launch, my signature program myself and I had to fire my first lot of Facebook guys because after $11,000 and asking multiple questions, they weren’t able to deliver. One of those things that I say is if you are putting money up there to, always give yourself permission to ask as many questions as you need in order to understand the process in order to be able to go back and say yes, this was a good exercise, this wasn’t, this helped a profit, this damage, whatever you’re trying to measure. Always be willing to ask questions.
BEN:
Such a good thing to, a good bit of advice.
ANGELA:
All right, so step one, we’ve got our foundation, step two, we’ve got our growth. What’s our step three?
BEN:
Step three is optimise and this is an area that helps you then really streamline the business and it’s about automating all the repetitive tasks. We’re in such a beautiful time now for automation. It’s so easy and accessible for just about any business to be able to get software to help them automate. It’s not just software, but software plays a big part in it. For example, things like a CRM, you can buy CRMs now, you talked about after sale nurturing, you can buy products that do that for you or a lot of the work for you. Accounting packages now that are very automated, very systemised, project management tools, so you can work better with people who are, maybe if you outsource some work where you have remote employees or contractors. There’s so many different things you can do now to make it so it’s systemised.
Then things like that might happen in your business. I’ve got a bit of a saying or an id or but if something happens more than once in my business and I don’t systemise that, I feel like I’m destined to do it forever. If you asked me the same question twice, that tells me I’ve got to systemise. If you get frequently asked questions from your client’s, systemise it. When you get the question a third time you say, do this or you could prevent the question from happening because you haven’t systemised why it’s happening. That’s what the optimised stage is about, is identifying all the repetitive tasks in your business and automating them as much as you can.
ANGELA:
Again, I was just actually working with a client yesterday in our one to one session just about this and she’s like, “I feel like I’m working harder.” I’m like, “All right, but what is it that you’re working harder about?” We had to really kind of like extract all of that because she was like, “No, but I liked doing the tasks.” I was like, “Just because you like, it doesn’t mean that you can’t automate it.” There’s also that big, almost like some people become attached with that task. I’m like, “No.” What her little homework was, write a list down of every task and every time you do that task again, put a check mark beside it. Then when we catch up next time, I want to be able to assess that and say, “Okay, you did this task ten times in the last two weeks, do you see where I’m going with the fact that you should probably be automating this? Which frees you up more time to be creative or do more sales or train more staff, etcetera.” She was attached with some of those tasks.
BEN:
Yeah, absolutely. I think it’s a big challenge for people is to, sometimes we have got to get out of our own way so people do love doing the work sometimes so, or they convince themselves they love doing the work, so they don’t outsource it or don’t systemise it. It’s a trap. Definitely a trap.
ANGELA:
It definitely is. All right, step three optimise, step four?
BEN:
Step four is transition, which once you’ve optimised and systemise things, it’s easy to delegate. I always, when you speak to somebody in business you might say, “How’s your day?” They’ll say, “Busy.” I always say to people, if you’re saying you’re busy, then you’ve got to look at why you’re doing that because a lot of people think being busy, is valuable as we’re, I don’t work many hours in a week, yet I get a lot done and the way that I get a lot done is I have an amazing team around me and I’ve trained them, what’s called the transition. The transition from working into working on. The difference is an employee mentality versus an investor mentality. When you make this transition as stage four, you’ve got, if you can think about the steps we’ve gone through, we’ve got the foundation right, we’ve got all that growth systems in place so we’re maximising our lead generation conversions, a lifetime value of a customers, we’ve then optimised everything, so we’ve gone in and we’ve looked at all the repetitive tasks and we systemise it.
My next step is to transition so I don’t have to work in the business. I can if I want to, but what I want to do is I want to be able to get other people doing the work so my clients are delivered, whatever it is I do from a team of professionals that I’ve hand selected and trained that I’ll oversee them, so I become the manager if you like. But what it does is it frees me up with a lot more time to work on the business and we find that this point is where most businesses really accelerate in their profitability because as a business owner, I can take half a day out and I can just watch what’s going on. I can look at the numbers. I can make decisions better. I can meet with other suppliers. I can develop new products and services. It’s very important that at that point you take that approach to taking that step where you get out of working in the business and you start working on the business.
ANGELA:
I can definitely relate to that in my own business. At the moment that I heard a podcast just a few weeks ago from Amy Porterfield about her becoming the visionary or I guess you could say the CEO in her hiring someone who’s the integrator. The integrator isn’t actually the person who’s doing it. She’s just kind of like, you could also say a project manager, but she’s the one that’s overseeing all those other employees, or contractors etcetera, to help make the business grow and that. Amy has felt that over the last little while she’s probably been more in there doing the doing versus being able to see her strategy for growth. Even though she is a highly successful business owner. She believes she could even be more successful if she removed herself from some of those doing roles.
I’ve hired my own project manager and I do think that again, it’s giving me opportunity to reflect on how I’d probably not sabotage on purpose. Because again, you don’t know what you don’t know, but sabotaging the growth for your business, yourself and your family by continuing to work in it versus on it.
BEN:
Yeah. Well, I’ll use property as an example. Most people who have property investments don’t manage them themselves. They hire a property manager, so if you can look at your business as a property, as an investment property that you’re just expecting an ROI out of, but you don’t want to have to spend your time managing it, then this is a natural step for most people when they’re investors. That’s why it’s going so because most of us, when we start a business, if you’re think about it, we’re creating our own job, that’s what we’re doing, right? All of a sudden we’ve got to sack ourselves. It’s a very uncomfortable thing to do. I’m not going to work in this business, I’m going to hire someone else to work in it and I’ve got to trust somebody else. A lot of people that are listening to this will be going, “Oh, I couldn’t possibly trust somebody else to run my business.” I would agree with that if you didn’t go through the first three stages. If you’ve done the foundation right, you’ve got all the KPIs laid out, you’ve got the reporting set out, you’ve got your growth, all the systems are developed so the business can run without you having to be in the business. Then it’s easier to hire somebody and hold them accountable, get weekly reports and know what’s going on.
ANGELA:
Yeah, and that’s all really, and that’s what I’m looking at is every Monday I just want to report from Aerlie who’s my project manager integrator, and then I can just review it. I don’t want to have to be in their emailing people asking for it back and forth. I just want the report and make a decision and then move forward. It doesn’t mean that I’m still not going to be accessible to people. I just said it’s a different type, new boundaries are being liaid again.
BEN:
Yes. So important. Good step. Congratulations.
ANGELA:
Thanks for that. Now step five. Hit me with the home run on this one.
BEN:
The home run is to diversify and this is where you really can capitalise on the cashflow from your business. Once you’ve made a profitable business that does not rely on you having to be in there doing all the work, you can then take the cashflow and you can diversify. Most people that I’ve meet that fail in business, they’ve tried to diversify too early. Diversifying means opening other outlets, new products or services, investing in property, shares. It means taking that money and your time and going building some other worlds somewhere else. It could be associated with the business. It could be a totally new business. It could be just property, it could be unrelated to business, but it’s about taking that next step because if you remember, the reason you got into business was for your own financial freedom and time freedom.
At this point in time, you’ve now got a business that doesn’t rely on you being there, but provides profitability. Even if you’re not working in it right and you’ve got to pay a manager to run it, you should still be getting the profits. Take that profits and now you invest that somewhere else where it’s going to make more money. You can leverage off of that money. That step is so critical and so many people just don’t get there.
ANGELA:
Is it they don’t get there or do they kind of freak the heck out when they get there or maybe a combination?
BEN:
I think some people think they’ve got there and they go, “Oh, but Ben, I’ve got to put this money back into my business.” I think that’s a lie you tell yourself just to stay in a business that is not profitable. When a business is truly profitable, you’ll have money and you’ll be going, “Okay, what am I going to do with this money?” I’ve been working with a client. I don’t work with many. I’ve got a guy who I’ve been working with the last couple of years. He’s doing really well and I met him. he just had a lot of money in the bank. I said, “That money is not working for you in the bank. Let’s go and invest that somewhere and build a property portfolio or put it into a managed super fund or do something where long term it’s going to give you your lifestyle when you’re ready to give everything up.”
Because no one wants to work forever.
ANGELA:
No, let’s be honest.
BEN:
Yeah and some people go, “I don’t want to do nothing either, I don’t want to retire,” but wouldn’t it be nice that you didn’t have to go into work five days a week or six days a week? Wouldn’t be nice if you could just work on the things you want it to work on, that you enjoy doing, whether it was your hobby or things that didn’t matter if they went belly up? Maybe you’re an entrepreneur that loves trying new things and you’re happy for a few businesses to fail. There’s nothing wrong with that, but you got to be able to fund it.
ANGELA:
Yes, funding is important.
BEN:
Absolutely.
ANGELA:
The diversifying again, can you give the listeners an example of someone who great, they’ve gone through those initial four steps, the foundations, growth, they’re optimised and transitioned, they’ve got, not a bucket, but they’ve got some money in the bank. What are some of the options that you would say like three ways that they could diversify?
BEN:
Okay, great question. One is, let’s say you’re a service-based business, put another van or two on the road, start expanding your fleet. By diversifying and going into, so that’ll put you into other geographical areas. Let’s say you’re a trade services business and you’re very local, maybe you then expand the reach of the customers that you can deal with by putting another van or truck on the road.
ANGELA:
Perfect.
BEN:
Second option could be a bring in new product lines. Identify what else your customers might be buying. Let’s say you’re a removalist and you’ve got your business so well systemised, you’re not in the business anymore, but you know that every customer you deal with, before they move in or move out, they want to get a house clean done, go and buy a cleaning company.
ANGELA:
Okay, got you.
BEN:
The third example I’ll give you is probably myself, as you know with franchising.
You could franchise your business and we’re doing that because for me to be able to scale as fast as I’d like, I need a lot of money to do it. Franchise is a great business model to be able to diversify because really, I’m selling my business several times.
ANGELA:
Yes.
BEN:
At the same time I’m building my business much bigger and going into new regions because every time I sell a franchise, we open up another office. That’s another way but there’s no way I could’ve done that if I was doing all the delivery and we’ve got hundreds of clients. I work with two of them. If I didn’t have a team doing all the delivery, I wouldn’t have had the time and I underestimated what effort would take, when it comes to franchising a business or licensing your product or service. That’s..
ANGELA:
It can be a little bit tricky at the beginning, but I think again, that you’re going to have to probably go through your own steps, the five steps again to work out, you’re going to get the foundations for the first.
BEN:
Correct.
ANGELA:
You’re going to get all that. You’re just kind of going from starting from on that new adventure through the steps again.
BEN:
Yeah. Another thing I’ll give you a fourth one just as a bonus, go and buy some property. Like it is probably the, in my opinion, it’s one of the safest investments anybody can make in Australia, in particular. It’s an easy way for you to get into growing wealth passively because it just works.
ANGELA:
Yeah, it works. Again, if the money’s there, then a lot of times, again, it’s just what comes in is going out like you’re, but yet the value of your property will always continue to go up, for the most part.
BEN:
Yeah. I think always, because even really badly performing property goes up in value every ten years.
ANGELA:
Yeah. Eventually it will come around. We haven’t luckily enough, we haven’t been in the U.S. when the recession hit and the property went down. Let’s hope that doesn’t happen to us here in Australia.
BEN:
Yeah, let’s hope.
ANGELA:
Now listen, so awesome tips and again, very, what I love about you, Ben, is that they’re very simple again, that obviously there’s a few layers within each of them from the foundations, to the growth, to optimising, the transition and diversify. Again, I would say to businesses, and I’m sure you would potentially agree, is that just take one step at a time, do those steps well, and then once you’ve really mastered that one step, move to the next one. Because would you agree that sometimes people are skipping steps and that’s when we find troubles happening?
BEN:
100%, well 300% I agree. Because when a lot of people come to us, they’ve skipped the foundation so they’ve gone straight into the growth because if you think about Maslow’s hierarchy of needs, we’ve got to survive. Surviving is a roof over our head, food in our tummies and water, the fresh water to drink and that’s the basics of survival. They go out and they do the marketing side, which you’ve got to do first, but they forget to go back and fix the foundation so..
ANGELA:
I don’t know how many times I see clients where they’re like, “I’m spending x amount a month on Facebook, but when I get them back to my website and this and then the other, it’s not converting.” I’m like, “Oh my goodness, but you didn’t like, why are you spending that much that you didn’t know your financial numbers that you did all that?” Yet it is. It’s gets a bit out of control, you could say, and then we’ve got to strip it back. So, no.
BEN:
Yeah definitely. Skipping is a big no-no.
ANGELA:
I couldn’t agree more with you on that one. Now tell me if businesses want to connect or learn more about you and your business partner, where can they find you, Ben?
BEN:
The easiest way is go to www.maxmyprofit.com.au . It’ll feel good as you’re typing that because it’s what I do, www.maxmyprofit.com.au . If you love podcasts, which you must if you listen to this, I have a podcast called Business Brain Food, which you’ll find in all the podcast players, including iTunes. We’re up to about episode 200 and it’s been going for a few years and some great interviews on there, if you love learning by listening, which is what I love. But otherwise, yeah got to www.maxmyprofit.com.au heaps of freebies there you can download, we’ve got a very active business blog and lots of cool things there that you can then engage with to learn more about growing your business.
ANGELA:
Well, Ben, thank you so much for being on the show today, I appreciate that.
BEN:
My pleasure.
ANGELA:
And for those of you out there, my team and I will also be putting together the whole transcription for this episode at www.angelahenderson.com.au and of course, I cover all sorts of business related topics and life topics inside my Facebook group, The Australian Business Collaborative. We’re almost hedging up to 4000 different business owners in there. So, feel free to drop on by, I love connecting with you on there.
But that is everything for now, I look forward to connecting with you guys in the next episode of Business and Life Conversations with Angela Henderson. Have an awesome day.
Thanks for listening to the Business and Life Conversations podcast with Angela Henderson, Building a Better Business. www.angelahenderson.com.au.
