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How to Charge A LOT More & Increase the Amount Each Customer is Worth

One of the biggest mistakes people make is focusing too much on customer acquisition cost and not enough on driving down the customer lifetime value.

Although lifetime value is important so is the value per transaction and the short term value so we’re going to show you a bunch of fundamental ways you can radically increase your profit, increase your allowable customer acquisition cost and decrease the number of customers you need to hit your financial goals.

Less customers required of course means less work required and a general improvement in your quality of life not to mention a simpler life.


The First Step is Pretty Underwhelming

The first secret we’ll share isn’t going to surprise you…or maybe it is for its simplicity.

This is a HUGE mistake new business owners in particular and small business owners in general make namely charging too little.

When working with companies, we can very often enter and immediately increase their prices by 10% - 100% without affecting sales much at all and thereby radically increase their profits.

To give you some idea if you had a 50% margin previously and we raised your prices by 10% this is the equivalent of increasing your sales by 20%. If you had 20% margins this is the equivalent of increasing your sales by 50%!

The problem for new business owners and this was true for me as well, is we’re used to thinking in terms of how much we make working a job ie. “someone else would pay me $20/hr. so I should charge slightly more than that”. When in truth, you should probably charge 3 times that much (yes those are real numbers).

To avoid under charging when you’re starting, out my general advice is to charge whatever the market is charging or just slightly under (to capture market share) or over either to capture premium value (where you should normally sit as a small business).

Discover what your competitors are charging and base your prices off of this then modify based on your learning.

Bottom line, the first thing to do is simply to blanket raise your prices and you’ll almost always make more money.

The one exception is on what are called “known value items” where there’s a high degree of price sensitivity on these. It pays to price a little lower as loss leaders to attract customers, in order to get them on your more expensive items where customers pay less attention to price.


Who You Sell to Matters

One of the best ways to increase your transaction size and profit per transaction, as well as lifetime value, is simply to target higher end customers.

Look, if you’re selling accounting services to a business in Serbia you’re going to charge MUCH less than if you’re selling the same services to a business in London England. So go sell to customers who will pay you more!

How do you know who will pay more?

Look for prospective customers who are already paying a lot more for what they are buying. In other words, you’re selling to less price sensitive buyers.

This principle doesn’t just go for where in the world, though this is a valuable part of the equation, it also concerns who will find the most value in what you’re offering. For example, enthusiasts vs a casual audience or a corporate client vs an individual or small business client, etc.

Obviously, they need the money, but they also need the mindset to spend the money.


Where You Sell Matters

Not as easy as who you sell to, the sales environment makes a BIG difference.

Here’s a story to show the point.

A few years ago I was in Thailand where there’s knock off watches, bags, etc. everywhere.

As an exercise, my brothers and I thought it would be fun to go buy some then research on the internet how to tell the difference between the reals and the fakes.

Later, we decided to visit the stores of the authentic brands to see in person how the knock offs compared.

Many were awful but some looked good, felt good and here’s the thing…most buyers weren’t very sophisticated and couldn’t tell the difference anyway. They bought because of the brand but here’s the interesting thing, how did they know to trust the brand?

When buying the knock offs it would be some street vendors or little garage shacks crammed with merchandise from floor to ceiling in every corner on the side of a narrow street.

The big brands had beautiful stores in high end malls with few items on display surrounded by nice fixtures and well dressed staff.

It occurred to me that some of these street vendors could have been selling the real thing and no one would have believed them. While the big brands could have been selling high quality knock offs and no one would have questioned them.

It’s a powerful lesson about how the buying context affects the perception of value and in this case allows you to charge a lot more.


What More Can You Sell?

The next most popular way to increase the transaction size and consequently the profit is to ask “what else can I sell them?”

Then add-on, bundle it, whatever to increase the value of the sale.

The classic examples are at McDonald’s “would you like fries with that?” “would you like to make it a combo?” and “would you like to supersize it?”

Why is this so effective?

A big part of what erodes your profits is the customer acquisition cost but once someone is making a purchase you’ve already covered that cost so your margins on everything else you sell them are much higher.

In your business, what can you sell that’s complimentary? An add on? An upsell?

Along these lines can you offer a line of products with higher end versions to charge more?

Could you sell warrantees or some kind of support?

There’s almost always dozens more things you can sell to increase the value of each sale.


Bonus – Bigger Profit Not Bigger Sale

The final thing to do is to provide smaller quantities.

This is a great strategy employed by many successful businesses and billionaires.

Take the amount you were going to put into that container and reduce it thereby dropping your costs. Because the container is the same size, the perceived value remains the same so you sell for the same amount and make more profit.


Conclusion

There are literally dozens of general strategies to increase the value of each customer and each transaction, which combine into hundreds of permutations for your business.

If you’d like help exploring them please contact us.

Easily Shorten Your Learning Curve by 90%

Learning

What’s the most important factor in predictable success?

Well let’s see, the only thing we control (what makes anything predictable) are our behaviors.

So the key to our predictable success is simple…master the skills of knowing what and how to do what needs to be done to optimally bring us to our end result.

Simple but not easy.

I’m continually alarmed by how little focus people place on learning and in particular the skill behind it, you know which one? We’ll discuss in a moment.

All of the most successful people swear by a rigorous and aggressive learning practice.

The most successful organizations like Toyota, bake continual organizational learning into their processes.

So if learning is so important, what is the most important thing to learn?

How to learn faster of course since this will compound over and over in future learning.

Think about it, if you can learn twice as fast as someone else you won’t just learn twice as much throughout your life you’ll be able to benefit from the compounding effects of all that learning (probably about ten times more conservatively).

But it goes further, if you can learn to learn faster then you can compound how fast you learn and multiply it many times over.

So what’s the fastest easiest way to optimize your learning?

In the name of learning fast we’re going to keep this short…


What Warren Buffett Calls Coat Tailing

What do a high percentage of top performers spend at least an hour a day doing?

Reading of course. (No, this doesn’t necessarily mean you should be reading a lot we’ll discuss that in a minute).

What are they effectively doing when they read?

Learning from others.

Look, you could try discovering everything for yourself fresh and be slow or you could learn from others and speed your learning up dramatically.

This is the shortcut but we’re going to describe some specific ways to be ridiculously effective at it.

Start by realizing though if you need to learn something the best way is to start by looking outside yourself to an expert to learn.

Make a habit of asking yourself, “who would know about this?” “Who has mastered this?” “Who could teach me how to master this?” “Who does an amazing job at this?”

quote

Good artists borrow. Great artists steal.

– Steve Jobs

The first lesson to learn to be faster isn’t to start by trying to learn from others, it’s to outright copy them.

Let me give you some examples.

Want to design a great website?

You could hire a design team and spend a fortune, you could split test works, etc. and at some point you will but don’t start there.

You could look at a lot of other sites as reference to determine what to build for yourself.

Or you could do one easier you could tell your designer to copy exactly down to the last detail an amazing site someone else has built whose design you could use.

I promise you this will save you a fortune, save you tons of time, save you tons of headache and probably give you a better result.

Of course, once you’ve copied it exactly you’ll set about modifying it to suit your needs but start by copying.

This is one of the most common cases I run into with clients they’ll have say poor design, poor scripts, poor targeting, etc. and we speed them up a lot and enhance their learning simply by finding someone who does it well and copying them especially if there’s a great example in another market.


Get Someone Who Can Explain How It Works

Steve Jobs had an early mentor in marketing.

Warren Buffett had Ben Graham in investing.

You might say “these are mentors” but let’s get clear on what these individuals had in common different from some conventional mentors.

These were individuals who were able to explain HOW to do it.

See, you ultimately need to go beyond copying and learn what makes what it is you are copying successful. we call this modelling.

The limitation of copying is it’s contained within a certain context and if the context changes your results can evaporate.

What you want to do is understand the process and models behind the work of masters and copy that so you can extrapolate their results into other situations at will.

This brings us to one of the most important and under appreciated lessons:

Those who are great at something often aren’t great teachers.

There’s nonsense spread out there about only learning from or listening to people who have certain results but this isn’t accurate it’s a distortion.

If this was the case, Bill Gates wouldn’t be learning from anyone about business or money and Warren Buffett would only be learning from Gates but they both read constantly and learn from others constantly so they aren’t following this advice.

What’s much more accurate is a great teacher will build a mental model to help you understand how those who are more successful than you operate.

This skill of being able to break down and understand what someone successful is doing and compare it to what you’re doing to provide you with deep insights will dramatically accelerate your learning.


Being a Great Student

What sets those who get great results from mentors apart from those who don’t? (Research shows it’s not a universal advantage).

Simple, being a great student.

This leads us to the final three points:

  1. Apply yourself aggressively to implementing – not only will you get better results, but mentors love mentees who implement, it’s very rewarding.
  2. Don’t rely on the mentor but look to getting the answers yourself then bounce it off them to speed up the process.
  3. Build a mental model of how the subject works to get predictable results based on what you learn from mentors and observe from masters you are copying.

Let’s talk quickly about that last one as it is probably the most overlooked of the three and in fact the most overlooked in learning in general.

Reality works according to various laws there’s a degree of predictability to it based on cause and effect though sometimes identifying those cause and effect relationships is hard.

If you want to do exceptionally well you should go to the root of what you’re doing and understand those relationships.

This process requires reflection and it requires looking at a lot of sources to find what they have in common vs what they have that are different to determine patterns then come up with ideas of how it works and test them against the real world.

If you do this because so few other people do it, you’ll be leaps and bounds ahead of others. In fact, it’s what we’ve done to develop the Richucation curriculum and has given us such an edge over the learning of others so we can teach wealth building concepts fast, easier and more reliably than others.

If you’re looking for sources to help you understand and grow in the areas of wealth and business reach out to us.

If you’d like to learn more about learning faster check out our training on Value Mastery.

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Find The Right People To Join Your Team

Find the Right People

Your net worth is equal to your network.

Not totally true but the value of relationships in almost any area of life cannot be denied.

It’s a double-edged sword though.

People can be your greatest asset or your greatest liability.

The right aligned team can take you to the moon (literally) and the wrong unaligned team can kill you (also literally just ask Julius Caesar).

People come to us again and again asking “how do you find the most outstanding people?”

I’m going to give you a simple high level process to you.

Be aware as with any aspect of success it takes work.

It’s not like there’s some magical site you can visit post an ad and get superstars. If it was that easy everyone would be doing it and based on almost universal struggles and complaints in this field we know it isn’t true.

There is a method to make a HUGE difference though I’ve used to build an amazing network all over the world of high level people, hired some amazing team members and helped clients do the same.


Lesson #1 – It Actually Doesn’t Start With Them It Starts With You

For 7 years I ran a recruiting company.

At one stage we even had a USP “we can hire top people better than you can and to prove it we’ll hire you superstars and only get paid based on their performance”.

Sounds pretty good right?

Turns out not so straight forward for a range of reasons but I’m going to give you the biggest as it’s probably the single most important advice I can give you about attracting, retaining, and optimizing a great team.

What we learned working with dozens of companies in a multitude of industries and across many positions is this…

It was comparatively easy to hire great people for great companies and almost impossible to hire great people for bad companies.

To clarify by “great companies” I don’t mean “big”, “well branded”, “successful”, etc. often these are horrible places to work and often small unknown companies are some of the best.

A players like to work with A players.

They like a certain kind of environment.

This is mostly about the people and in particular about the leadership within the organization (note I said leadership not just management or ownership).

So you want great people? Start by being great yourself. Have a great project, work hard to execute flawlessly, develop your leadership and management skills, actually care about the people you work with (show and practice empathy and understanding) and care about and work intensely with diligence on your project.

Intensity is perhaps the best predictor of success in many areas of life but with people understanding is the best predictor of success so work on yourself.

There’s a famous law called the “Law of Bob”, which states “if Bob has a problem with everyone then usually Bob is the problem”.

In this case you are Bob. If you consistently have problems with employees then take a good hard look in the mirror and figure out how you can change because when you change everything will change for you.


Lesson #2 – There’s No Such Thing as Good People

Within certain circles we hear talk of “A Players”. For a while I believed this and preached it. Now after many years, many employees, many clients and situations I can tell you this isn’t true.

One of the most important lessons we learned through all our testing and analysis was:

Management trumps recruiting every time

This means you can hire someone “great” and you can destroy their productivity with bad management.

You can also hire someone horrible and develop them into someone great with the right environment, coaching and management (granted this is very hard in most cases and often not worth it but more on that later).

Here’s a couple of anecdotes.

A number of years ago my brother was hired by a glasses factory.

He’s a truly quality guy, diligent, dedicated, responsible, hard working…but traditionally a slow learner. I’m not sure why but whereas I’m a quick study he picks up things slowly.

He’s smart though he’s realized he might not be the fastest but he can persevere longer and outwork others.

Not everyone else knows that though and he’s introverted so has struggled learning to express confidence and communication with his team. He’s great at it now but back then he wasn’t.

What was the result?

They almost fired him in the first two weeks.

How big a mistake would it have been?

He went on to set the record for highest performer in his jobs within the company, stayed longer than almost anyone else, got promoted to team lead then went on to have the highest performing team in the company.

Two other important examples.

Back around maybe 2010 my recruiting company was focused largely on hiring sales people and we hired one lady in particular who did great and you might have figured this wasn’t surprising since she’d been a top performer in a previous position.

It’s not so clear though since early on in that position she did quite well then something turned. I can’t recall exactly whether it was changes in her personal life or health but she started to struggle and for almost a year she was a losing investment for the company.

She thanks the manager for continuing to persevere with her and believe in her because she eventually recovered and rose to top in the company.

We hired another similar sales person who had a history of crushing it in previous roles including #1 in the country for nearly 10 years at a major national brand, extreme success in a position very similar to the one we ended up hiring him for…

And he crashed hard making hardly any sales and eventually being fired with disappointment all round.

What was the difference? Same person dramatically different results. The answer in his case was environment. The factors present when he first succeeded weren’t there in the new situation.

I could give you countless examples illustrating similar principles from well known athletes to average store clerks.

What it’s important to realize is it’s not so much just about the right person as the right time, the right environment, the right management.

Very often someone who will thrive in one environment will crash and burn in another.

Someone who will thrive at one point in time will collapse at another.

So beware the idea that someone is amazing, the question is “are they amazing right now for the environment and situation you’ll be putting them in and what can you do to adjust those factors to maximize their success?”


Lesson #3 – Almost Everything You Know About Recruiting Is Wrong

Recruiting is one of the most statistically ineffective processes within any business or organization.

Not only are failure rates among new hires incredibly high extreme outperformance and success are the extreme exception rather than the rule.

All of this in spite of people selection, delegation and management being one of the oldest responsibilities in history including billions of instances with monumental amounts of data.

It’s so bad that most smart companies will realize they’ll have to hire several people in order to get one who works out really well or at best settle for mediocrity.

Organizations have done all sorts of things in an attempt to mitigate this such as complex lengthy hiring processes, psychometric testing, and precise systemization.

Most hiring processes are essentially a crap shoot where you might as well select a random applicant and run the odds in fact for certain positions within reason we actually advocate this process but generally there’s a better process.

For reference efficacy of recruiting processes (their success rate) tends to vary from about 10% - 40% for the best common processes out there.

To understand why this is and what to do about it it helps to have a bit of context around what you need in order to succeed.

Think of the people you’re hiring like different dishes (very depersonalized I known, bear with me) in other words different flavors. Imagine the role or position like the taste of someone eating.

You’re trying to match the best flavor with the appropriate taste except with dramatically more complexity.

What do you need in order to do this successfully?

First, you need knowledge of the taste of the person eating. Second, you need knowledge of the flavor being offered so you can match them appropriately.

Chances are you don’t need an exact precise match in most cases a few taste options will work.

You’ve got 4 basic leverage points:

  1. Be really good at the match – we’ll focus on this shortly
  2. Adjust the tastes of the eater to give you more workable options (say through management)
  3. Adjust the flavor being offered to improve the fit (say through training)
  4. Become more efficient to run through more options

In general we suggest you do all four.

For now though let’s dive into #1, why it’s so hard and what to do about it?


Lesson #4 – The 4 Things You Need to Be Great at Matching

There’s a simple set of reasons most people and most hiring processes fail miserably.

In order to do it well on a consistent basis you need 4 things every single time:

  1. Understanding of the success factors – in other words what will make someone great in this position? Most people fail from the get go here.
  2. A lot of data about who they are hiring – people are so broad we need to know about all the different aspects about this person that might make them thrive for flounder within the role.
  3. HIgh quality data about who they are hiring – it’s not enough that we have a lot of data the data needs to be of high quality or accuracy in order to be useful.
  4. Understanding of how to interpret the data – all the data in the world isn’t useful if you don’t know what to do with it.

Failing to properly understand the success factors in the role is the first major gap in fact most people don’t deeply consider what the role is, what skills are required, etc. to create a proper profile.

#2 & #3 explain how come the traditional hiring process of:

  • Review resume
  • Conduct interviews
  • Do reference checks
  • Make decision

Is almost a complete waste of time.

After all, you’re asking someone who wants the job if you should hire them. In a sense giving them a chance to sell you rather than really digging in to research whether it’s a good fit.

Candidates are NOT a reliable information source about whether they are a good fit.

For the most part highly reliable hiring processes should almost entirely disregard what candidates state about themselves and focus instead on external unbiased indicators.

Finally, none of this matters without an understanding of how to interpret what you hear and in particular this requires getting past cognitive biases.

The challenge is not simply doing all of this but doing so relatively efficiently so you’re able to achieve a positive ROI.


Lesson #5 – The Method of Putting It All Together

Of course none of the above matters if you don’t have any candidates at all.

The great news is there’s one method with higher statistical efficacy than any other achieving all of these at once and we’re going to look at how to supercharge it.

We call this the Climbing the Ladder method and I’ve used it for years in networking and putting deals together.

Where does the method start?

With something we’re all familiar with…getting referrals.

Notice the difference between getting referrals and asking for references.

If you ask someone for a reference about someone specific they’ll generally not want to provide a negative reference so it’s hard to get good quality information.

By contrast if you ask “is there someone you’d recommend who is amazing” they’ll simply not mention someone they might have wanted to avoid giving a negative reference to.

How does this premise work?

Your best data initially is regarding people you know and have relationships with but you only know so many people so you expand this by an order of magnitude by asking the people you know who they know and would recommend.

Here’s the simple math of how it expands your reach. Let’s say on average you know 200 people (most people know a lot more than this but with whom you have decent relationships this is probably reasonable for most people as a topline average).

Of these 200 very few might meet what you’re looking for but each of those 200 might know another 200 so this a total of 40,000.

Naturally, there’s overlap so it’s not close to that many but might be 10,000 or so. In other words in a small town almost everyone in connected through a maximum of 3 degrees of separation (you know someone who knows someone who knows someone).

Again most of those 10,000 people won’t be a fit but who knows if they might be a fit?

Those who have long personal relationships with them and plenty of experience.

So your recruiting process starts by going to your network with two questions:

  1. “Who do you know who might be a fit?”
  2. “Who do you know who might know who would be a fit?”

This will almost invariably generate a series of referrals as a starting point.

You’re now able to quiz these people about those they are recommending before you go to them:

  • “How do you know them?”
  • “What are they like?”
  • “What makes you recommend them?”
  • “What makes them better than others you’ve worked with?”
  • “What’s their style?”
  • Etc.
  • Etc.
  • Etc.

You climb the ladder by going to those who were recommended and repeat the process:

“So and so recommended you as someone who might be able to help. Who do you know whose amazing at this or who do you know who would know?”

In cases such as these people don’t want to look bad so they aren’t going to recommend someone who they don’t think will make them look good.

Because they have direct personal experience and don’t have an incentive to lie they’ll give you higher quality data about the person than the person themselves would.

Because they’ve known the person for a long time you’ll get more data from them in a shorter time than you could ever gather in an interviewing process or test task where you’re limited to a few hours to a few days of experience, a very small context.

Super simple but super effective.

There is of course a lot of advanced strategy regarding how to do this if you want to get really into it that will help you dramatically improve your odds and your reach but this is a strong starting point to give you a dramatic edge over the traditional methods.

If you’d like more information reach out to us or check out some of our trainings.

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Powerful Communication That Turns Leads Into Loyal Buyers

Powerful Communication

Marketing is all about communication.

  • How you communicate
  • When you communicate
  • With whom you communicate
  • About what you communicate in order to monetize your product or service and convert it into profit.

The most personal portion of this communication is the actual communication driving them to buy, which we sometimes call sales.

For years I sucked at sales and for years I struggled to get people to buy. Then, I had a few key breakthroughs and eventually discovered the step by step process of buying. This will massively increase your conversion rates.

This is what we call “The Anatomy of a Transaction”. How a transaction naturally takes place mirrors exactly how you should communicate whether in person or through written or visual communication.


  Step 1 – Communicate To Their Demand

Eugene Schwartz one of the greatest copy writers in history pointed out we do not create demand we can only channel it to our product or service.

What is demand? Quite simply it means someone is in one state and they’d like to shift to another. This is what drives their behavior.

If you want a lead or prospect to buy from you the process starts with communicating to them that your product or service (what you are offering for them to buy) will move them from where they are to where they want to go.

This is alarmingly simple at the core. For them to trust you they need to feel understood and feeling understood is going to come from you communicating to them your understanding of where they are and where they want to go.

For example, if I was promoting a recruiting company I might say “stop wasting time on candidates not showing up for interviews and only receive amazing reliable pre-screened applicants who fit exactly what you’re looking for”.

This speaks to a pain or frustration they might have (scheduling interviews and having applicants not show up).

Your initial communication to the prospect should identify where they are at and where they want to go. It should identify the key benefit and/or fear/frustration of your prospect.

Note, some of this communication might be implicit. For example, think about the famous Apple ad for the iPod reading “a thousand songs in your pocket”. The benefit statement in this case implies what you don’t have as well as what you’d like.

Consider the famous offer from Domino’s “Pizza hot and fresh delivered to your door in 30 minutes or less or it’s free!” We’ve got a strong benefit statement here (implies an after state) along with what your current state is (you’re hungry and want food fast!)

We’ll return to both of those examples soon.

Bottom line in sales we need to first understand what our client’s desired after state is and communicate to them that we’ll provide it for them. When communicating live we can ask probing questions to understand their needs but in advertising we need to have identified this in advance.

Start by either identifying that you will take them where they want to go by labeling where they want to go (not what they are getting but the state they’ll have as a result). You could start with where they are at now for example “suffering from crippling back pain?” but this needs to lead to the after state.

Two powerful questions we often ask ourselves at this stage are “what are they really buying?” and “why are they really buying it?” The first identifies the after state and the second identifies the story going on in their life providing the emotional drive to take action.


 Step 2 – Crossing the Believability Gap

As soon as you communicate that "I can get you to the state you want to be in” the immediate subconscious question that arises is “how can I believe/trust you?” After all, a lot of people will tell you they can meet your demands in order to get you to give them money but many can’t deliver.

They will not buy if they don’t believe you…if you don’t transfer to them the expectation that they’ll reach the after state.

Somehow through your communication you need to answer this question. This is part of the reason articulating their before state is helpful because it builds some of this trust.

In our training we teach about The Trust Pyramid. To simplify down though the easiest way to build this trust and cross the believability gap is to show rather than tell.

Lots of people will tell others about what they’ll do, their credibility, etc. but none of these make it real for them the same way showing them does.

So how do we show? We might explain step by step the process so they can see how it works, why it works and that we know what we’re doing.

We might provide testimonials and case studies of how we’ve done it before over and over.

We might give them a free trial or similar direct experience of the product, so they know and believe.

The important thing is don’t tell them about how you can do it show them how you’ll do it.

At this stage a helpful question to ask is “why are they not buying?” as the answer helps us to focus on where to improve. The answer will also inform the next few steps.


Step 3 – Negotiating Value

Even if they believe you can deliver doesn’t mean they’ll buy…how come?

Well there’s the question of price for one.

In order for a transaction to happen what they are ​paying needs to be more than what it’s worth to you and what they are getting needs to be more valuable to them than the money they are paying.

As a result, you need to communicate value and negotiate the price.

Note, this process might take place in the aggregate through the market or it might come down to good old fashioned haggling.

This process essentially involves minimizing the price while increasing the value especially from an emotional standpoint. Ironically, although some strategies might include listing a higher price then discounting down, you might also do the opposite and charge more to increase the perceived value.

To do this, you need to really understand the hot buttons of your prospect and communicate to those, while using strategies to minimize the comparative price. Help them to envision how great their life will be with your product and how much worse it is now.

Here you might also utilize risk reversal strategies such as money back guarantees.

This is where you’ll use discounts, package deals, confusion pricing, comparative pricing, payment plans, etc.

Note, you won’t go through this stage suddenly after crossing the believability gap, you’ll be building value throughout the process so when you reach the point that you make an offer “I’ll give you X in exchange for Y” it’s a no brainer.

Of course it helps if it actually is a no brainer.


Step 4 – Be Different in a Better Way

You could do all the above and still not get them to buy how come?

What if there’s someone offering all the rest better than you?

To really win the sale you need to be better than others or at least come across that way in their mind.

A big part of this is yes of course being different, being better. Note being better doesn’t have to mean better in every way, you might offer a lot less in certain respects much like how a car offers a lot less than a plane but might still be a better option for you.

Domino’s did this well with their offer how? By changing the conversation from selling pizza to selling pizza fast and then backing it up with their offer of it being free. This changes the focus.

The other side of being different that’s relatively easy to accomplish is to understand them better and speak to their needs/concerns better than your competitors.

I’ve done this many times in my businesses. 

For example, in international structuring many people help form foreign companies, we’ll talk to them about the complexities of legal tax structuring. When they come wondering about legal tax structuring comparing us to others I talk to them about the complexities of banking and how it all works together.

These are very real challenges and pains they go through that communicate our expertise, set us apart from the competition and communicate a sense of understanding of the customer’s needs to them.

Ideally, you understand your customer better and tailor your service to serve them better so you win in both regards.

One way or another though find something that matters to the customer to talk about and emphasize that you do well that others do not or find some other way to speak to their demand and the process of fulfilling the demand in ways others aren’t and you’ll end up with a lot more sales.

This in a sense answers the question “why us?”

Note, it isn’t always a tangible difference so much as a communication difference show them you’re the experts make them feel it.

Again this differentiation in a better way should be a demonstration that takes place through the entire process.


Step 5 – Taking it Away

And finally, you could go through all those steps and still not make the sale…how come?

They might want it you might be right, it might be the right fit but they might delay and not do it now.

So, to finish off you might need to give them a little push to take action immediately.

In other words, this section answers the question “why now?”

This is sensitive because you don’t want to pressure them come off as salesy and lose the sale.

What you ideally want is for them to want to complete the sale now.

The way this happens is by stressing the pain of not taking action now and of course the joy and benefit of taking action now.

The key word is NOW.

An example is in one of my companies we help clients with tax savings so as part of the analysis we find out how much tax they are paying and point out what each day of not taking action is costing them in additional taxes.

The idea isn’t always to close the deal now sometimes the client isn’t ready and pushing them will just put them off, that’s fine.

In other cases they want to take action but their personality is such they need a bit of a push and assuming the sale is helpful to get them going.

If you’ve done your job and they aren’t ready to buy now they’ll come back when they are and you can schedule some follow up.


Conclusion

That’s it the 5 definitive steps that make up the anatomy of a transaction.

On final thought. If you do this and do it well, not only won’t it come across as salesy, since it’s simply a natural communication process mirroring the buying process, it will also build loyalty and referrals because you’ll have educated the client through the process on your differentiation and built incredible trust.

Go through your own sales process and sales material to see how aligned you are.

When you’re ready contact us to start learning the specifics of exactly how to communicate each of these in your business based on whatever medium, message, product, service, etc. you’re offering.

Want to PREDICTABLY Become Rich (vs by luck or not at all)?

Michael in Dubai

I set out to become wealthy not because I cared about the money, in fact to this day money isn’t a major concern for me in and of itself.

For me what was important was the lifestyle I wanted to live and the projects I wanted to be able to fund.

Oh sure as a young boy the idea of being rich felt synonymous with being significant, important, and someone with personal power to shape his own destiny and the destiny of the world.

But as I grew older the first constraint to really affect my life was simple. I wanted to be able to travel, I wanted to be able to experience great restaurants and experiences around the world I’d dream of and I couldn’t afford these let alone the time off to do so.

Michael at the Sheikh Zayed Mosque in Adu Dhabi

Michael at the Sheikh Zayed Mosque in Adu Dhabi

Why do I tell you this? Well I imagine you can relate but more importantly because I believe the objective always informs the process. 

In this case because the goal wasn’t to make a lot of money but rather to enjoy the fruits of the money at an early age it meant three things:

  1. I had to do it relatively fast
  2. I had to do it in a way that created freedom of time and location not merely financial abundance
  3. I had to be able to do it predictably (no point in putting in all that energy just to fail)

So the question becomes how do you do this?

At the time I didn’t get it of course but there’s a basic logic I’m going to explain to you and it will make tons of sense to you.

The Simple Logic of Becoming Rich

In your life you do things and things happen to you and these have consequences. These consequences either add to our lives or take away from them.

For example, we might get a disease or be in an accident. Part of this we can influence and part of it is out of our control. What is out of our control we call luck.

So, for example how we drive or whether we practice proper sanitation we can control but what others do around us or what nature does this is mostly beyond us. The best we can do is to adjust what environment we place ourselves in savvy?

Because there are forces beyond our control, an environment having an influence on us we’ll always be somewhat affected by the vestiges of luck.

lightening

There’s some probability involved in all of this. For example, if you break the law you might not get caught but over a sufficiently long timeline this will tend to have negative consequences.

On the flip side if you’re good with people playing win-win (not letting them take advantage of you but honoring your commitments and dealing fairly) then over time this will tend to work in your favor as you develop a good reputation.

The important lesson is CONSISTENCY not with anything but with things we can do, which on average will work in our favor.

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Consistency is only great if there’s a favorable probability to positive outcomes.

Again, why do I tell you all this?

Because we don’t have certain results on any particular timeframe, things can always happen for or against us but we can get predictable results over time by doing the right things much like how if you keep rolling a pair of dice you’ll eventually get a 12.

Rolling Dice


I’m sure you get it pretty obviously there are two important things for us if we want predictable wealth:

  1. Doing those things with consistency that will get us FAR ahead with HIGH probability
  2. Changing our environment (you might add to this learning to respond effectively to your environment the “if life gives you lemons make lemonade” logic)

This is one reason I’ve become critical of a lot of the businesses and tactics people take. Because even though they might be getting good results now the probability is over time this will break down for them.

Does it mean they shouldn’t take advantage of a short-term opportunity? Not at all, it simply means they should learn to protect their gains and ideally given the choice should pursue something that will work in their favor more with time vs less with time.

To have power over our lives we must accept certain key beliefs:

  1. Different behaviors have different consequences and although there are external factors these behaviors have relatively predictable consequences so we can learn to do better behaviors to get better results (in Richucation we call this developing skills)
  2. Not all aspects of the world have the same input to output ratio and as a result we can find places with better outputs for lower inputs (optimizing this is what we in Richucation call “The Dream Life Ratio”)

Let’s start with the consequences of the first since it’s the root of all personal change.

We Change Our Lives Predictably Through Skills

If you think about any field of sport, of art, of science, etc. we can gain knowledge and we can translate this knowledge into our bodies, so we consistently apply it in real time and this gives us an advantage.

The reason this works is because the universe is governed by various laws of physics, of chemistry, of biology, etc. so it doesn’t matter if you’re the great golfer Tiger Woods or not if you hit the ball at the same angle as him with the same force as him assuming the same environment (wind, etc.) it’s going to go to the same place.

To me this is super empowering and exciting because it means I can figure out the formula and I can get results accordingly. 

The challenging part is figuring out the formula or how to apply it (it’s not just measuring the angle and speed Tiger hits the ball it’s developing the muscles, precision, and muscle memory to consistently hit it in this way and even more knowing in the moment how to it the ball from one place on the course to another). 

With some rare exceptions anyone can do this. Have you ever met someone who knew the right things to say? Were you capable of saying those things? Of course you were! You just needed to learn what those things were. 

Becoming rich, building wealth, etc. is no different. Some people consistently make lots of money and invest well, other people consistently lose lots of money. With the exception of environment, which we can also change gradually you could do the same things if you knew what they were.

In other words it all comes down to developing skills and our mission at Richucation is to help you develop the particular skills no one is teaching in school or life, the ones not devoted to making you a good welder or doctor or musician but instead make you successfully financially.

This brings us to our second belief about inputs and outputs.

The Dream Life Ratio will literally give you your “Dream Life”

What does it mean to be rich?

Rich = abundant in other words to have a lot.

You have a lot through three basic processes:

  1. By getting a lot
  2. By keeping a lot
  3. By having this lots grow into more lots

It works like this in life each day we get plenty some earned such as our wages and some mostly unearned such as good wealth or good family or good health.

Some people get more than others, which is due in part to luck but in large part to what they give in return and to whom they give it in return.

In other words, it’s not luck that a doctor makes more than a plumber, a doctor is doing a more technical job and saving lives, while the plumber is doing a relatively simple job and saving you from bad smell.

So, we can do different things to get more out, HOWEVER, there’s almost always an input as well.

For example, the doctor has to go to school for a lot longer than a plumber (higher input).

You might say there’s a price we pay in life. The ratio between the input and the output determines how “profitable” it is to us. We want to maximize profit by finding places where there are lower inputs and higher outputs.

Almost the entire Richucation training, coaching, community, etc. is dedicated to helping you find ways to improve this ratio.

This is how we get a lot more.

Some of those inputs are necessary for the outputs but then a lot usually are not such as travel, leisure, partying, etc. so this determines how much we keep.

Why is what we keep so important?

Because it protects us from when things go wrong AND it allows us to reinvest it, which creates a compounding effect and in essence gives us more.

Very simply here’s how it works. Say you did something and earned $1000 for this effort. If you spend it you earned $1000. But if you could invest it and it grows to $4000 it just increased your output dramatically by meaning in a sense you just made 4 times as much for the same input.

You multiply your outputs by reinvesting them.

What Skills?

This leads us to the final question. If behaviors are how we influence our financial destiny and skills are the mastery of those particular behaviors so we get better results then what are the skills we need in order to become rich?

It turns out there are 6 essential financial skills that will move the needle for you and in combination give you predictable results:

  1. Getting Deals – if you can pay less for things then you keep more of what you get so you automatically end up further ahead than your peers. There’s 3 basic sets of skills for getting all great deals.
  2. Profitable Customers – in other words getting more people to pay you more for what you’ve got to offer is the biggest predictor of financial success since it plays a massive role in answering the question “how much do you get?” We call this process marketing. There are 7 models of marketing to understand to get the most
  3. Grow Impact – after you’ve achieved a level of profitability you move the deal by scaling up, doing bigger deals, affecting more people, etc. This is where most people, entrepreneurs, and small businesses get stuck…how do you go from thousands to millions?
  4. Leverage Team – you need to be able to offer something to others and you can only do so much yourself so in order to grow big enough you need others. Of course people can be your greatest benefit or your greatest liability so mastering how to find the right people and work with them to get the most out of them is where the real skill lies.
  5. Multiply Ownership – this is where you learn to have what you’ve got grow into A LOT more. It’s one of the key areas involved in buying your freedom.
  6. Value Mastery – in order to do anything and in order to develop not just these skills but the skills you’ll offer to others you need to answer two questions: what is valuable? And how do I learn it as fast as possible and at as high a level as possible? This is a whole skill set in itself.

There’s one more very important point to consider, which we see as the most common mistake people make in pursuing wealth or really success of any kind…SEQUENCE. The right thing at the wrong time is the wrong thing so you need to know what order to do.

Here are some of the starting points of sequence:

  1. The Wealth Building Sequence
  2. The 5 Stages of Business
  3. The Golden Path – Sequence to Increase Your Income
  4. Waterfall Money Management Sequence

Real Example – How to create a $20k/mo. income

Decisive Analysis Video

Follow along step by step as I show you with a real example how to break down your financial goals so you actually get there

play

To receive the Action Sheet described, please enter your name and email to download it now to follow along step by step on your own goal.

Goal Breakdown Structure

Did You hit your business/financial goals last Year?

If you did bravo!

I know for many years I would fail at is consistently and I work with clients all over the world who do as well. There's a process to do something about this.

I'm going to show you step by step how to reach your financial goals this year if you're willing to follow along.

Is you financial goal worth it to you?

What difference would it make in your life to earn as much, to realize as much profit as you're targeting? Year after year, setting some goal and it seems like the next year comes and the same goal is there over again.

You know what? It's frustrating and disappointing and humiliating to the point where some people tell me they don't set goals since they won't hit them anyway.

What a sad way to live. What are we here for if not to aim for something amazing in our lives?

But it's not enough just to aim high, life is here to be lived!

quote

It’s not enough to aim high, life is here to be lived so let’s achieve it!

So, why do we fail and what can we do to actually live the life we dream of?

If you ask people why they fail they’ll list some common answers:

  • Didn’t act
  • Got distracted
  • Don’t know how
  • Lack of self confidence
  • Etc.

We’ve got a principle at Richucation the answer usually lies “a level deeper”. ALL of the value is in depth and by going a level deeper we start to get answers.

In other words, I know you didn’t act my question is “why didn’t you act and what can you do about it?”

A few years ago, I started to crack the code and not only become much more successful but also help others do the same.

There’s a process I’m going to teach you. I’m going to expose to you the obstacles that get in the way and what to do about them.

What it’s going to give you is more than just a blueprint to hit your goals it’s going to give you a system of thinking you can apply to magnify success in all areas of your life.

It started from a year end review. Each year I’d review my goals and progress from the previous year to see how I did and what I could do better aiming to be really honest with myself and then set the next year goals.

My initial step was to go from setting goals to making a plan.

Did you know research shows if you simply think of an action item you’ll take towards a goal you are 56% more likely to act?

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Research shows you’re 56% more likely to act if you’ve thought of an action step towards the goal.

This wasn’t a magic bullet though and I didn’t hit the goals though I made slightly more progress.

The real progress came when I started to consider what got in the way.

I didn’t act - why not?

I got distracted - how come?

I tried affirmations for a while, vision boards and all that other nonsense... it doesn’t work. 

More importantly, let me ask you this. Have you ever had something you wanted with a burning desire and you actually achieved it?

Did you have to affirm to yourself each day that you were doing it or create a vision board? Of course not! The desire was deep inside of you. If you need a vision board or something like it to remind you of your goals they probably aren’t very real goals for you.

So, start by getting honest about what you actually want. 

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Start by getting honest about what you actually want.

For example, for me I learned I didn’t actually care to be a billionaire. This might sound obvious or vain or something, but about ten years ago this was an ego goal for me and year after year I failed at it while achieving other things.

Now, I’m not going to tell you some nonsense about “if the why is strong enough you’ll figure out how” and “you’ve got to get clear on your why”.

I’ve been around a lot of seminars and books and courses on this stuff and I’ve NEVER seen that stuff actually work. People go through these processes to uncover their why and end up in the same place they did the previous year.

Then again there are simple things where they don’t have a burning why they do accomplish.

Think about it, ever year you do dozens of things and you accomplish a lot without vision boards without some fancy why process, etc. And yet tons of things you tried to apply these fluffy techniques to, didn’t materialize. What gives?

I realized there are two types of goals and we achieve them in completely different manners. The first type, most people have a pretty easy time with, it’s the second where we get stuck.

Type 1 Goals – Essentially To-Dos

The first type of goal is where you’ve already got everything you need in order to get it done you just have to do it.

These are relatively straight forward you make a list you commit a bit of time and you do it.

For me these were things like hiking up a mountain near where I lived or getting a new computer.

Chances are you don’t need help with these goals. If you do here’s a simple process:

  1. Make a list of what these things are.
  2. Get someone to do them with you.
  3. Set a time/space/resources to do it so it’s booked and committed.
  4. Go do it.

If you’re struggling chances are it’s a type 2 goal.

Type 2 Goals & the Law of Procession

Type 2 goals are goals where you DON’T have everything you need to accomplish them.

In other words it’s not as simple as “go do it”.

This is why people get stuck on the action piece and this is where I’m going to show you exactly how to hit your financial/business goals and the principle applies to others as well.

Let’s say my goal is to run 100 m in 10 seconds. I probably won’t accomplish it. Why not?

Because it’s not a matter of going and running 100 m. If my goal was “run 100 m” it would be easy. I go outside, I’d do it, I’d check it off I’d be done.

The problem is I don’t have the physical conditioning or even the knowledge of how to physically condition myself to hit this lofty target.

In other words Type 2 goals are goals where it’s not a direct A to B relationship you’ve got to do A to B to C to D to E to F or any number of other steps.

Here’s the key…you often don’t know what B, C, D, etc. are.

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One of the top reasons people get stuck is they don’t know what to do or how to do it.

People let not knowing stop them rather than programming themselves to get curious and find out how.

Anything is possible if you break it into small enough pieces

The solution is to figure out how to break it into small pieces each of which can become a simple to-do style Type 1 goal.

In other words, you want to achieve your big complex goals? Simple, figure out the small doable next step and make it your new goal.

Don’t worry I’m going to show you how to do this for any financial goal.

There’s two other reasons you’ll run into obstacles to hitting your goals and we’re going to cover them in a moment as well.

First, let’s dive into the Financial Goal Achievement Framework showing you exactly how to get from where you are to $20,000/mo. or whatever other target you’ve got (the principle is the same for $100k/mo or $1 million/mo).

The Framework of EVERY Financial Goal

If you haven’t done so already now would be a great time to download the Free Worksheet we’ve created for you so you can follow along with your own goals here:

Goal Breakdown Structure

There’s a basic formula to achieving any financial goal we’re going to use to take your complex goal and turn it into simple to do action steps.

The basic thing to start by realizing is all bigger financial goals are made of individual transactions.

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A transaction is any case where you do something for someone in exchange for money.

This might be providing a consulting session, doing a plumbing job, selling them a phone or clothing, etc.

Each transaction has a certain value associated with it. For a simple example I'm going to use the numbers of a client we went through recently on a $20k/mo. goal.

In his case he’s got a small business helping gyms and personal trainers and he put them into a program he runs where they pay him $500/mo.

Action Step -  For yourself figure out what your average dollar transaction is

This might be the value of a customer per month if they engage with you on an ongoing basis or it might literally be the average amount someone spends with you when they visit your store or website, etc.

Take your total goal and divide by whatever this number is. For example, in our client’s case the number is $20,000 divide by $500 = 40 transactions required to hit his target goal.

In other words, your new goal isn’t to make $20,000 it’s to do 40 transactions…much more actionable but we’re still not there yet because the question is “how do you do these transactions?”

If you’d like to learn some ways to charge more and otherwise raise your average dollar transaction so you don’t need to do so many transactions click here.

The next question is what is your conversion rate on your sales activity to successfully get one transaction?

This might sound like gibberish so let’s make it clear. Say people call you to inquire about working with you. What percentage of those who call (or meet with you, or walk into your store, or visit your website or attend your seminar, etc.) actually buy?

For example, in the case of this client if he did calls with 5 people 1 of them on average would become a client.

This is a number you’ll need to measure in your own business. If you aren’t measuring right now you should be but for now you can guess. Be aware your guess is almost always optimistic so I’d suggest cutting whatever you guess it is at least in half.

Action Step – measure and record your sales conversion rate

If you’d like to improve your sales activities so you get a higher conversion rate and don’t need to do as much sales click here.

Take your number of transactions and divide it by your conversion rate this will tell you how many sales activities (again a sales activity might be number of people who call inquiring about your service, visitors to your website, sales appointments you do) you need to do to hit your goal.

We call each of these people you’re interacting with for a sales process “leads” or “prospects”.

Not only does this tell you how much sales activity you need to do it also tells you how many leads you need to get through the process we call “lead generation”. Lead generation is also sometimes called “prospecting”.

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Lead generation is just a fancy term for getting someone to express interest in your product or service.

In the case of our client 40 transactions divided by an approximately 20% conversion rate (1 in 5) equals 200 leads he needs to have sales conversations with.

His new goal is therefore to have 200 sales conversations with prospects. It doesn’t end here though because in his case this is where he would really get stuck.

How do you get those 200 leads?

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You get leads by distributing a message to an audience

Once again, you’ll have a certain % of the people who receive the message who will actually be interested in what you have to offer so we need to figure out what that % is and work backward to determine the audience size.

Action Step – measure your lead conversion % and record it

Once again your conversion rate is probably lower than you think it is and this is ok the idea is to get accurate numbers to figure out what’s needed to hit your goals.

If you’d like to learn how to improve your lead generation so a higher % of your audience become interested in your product or service click here.

This lead conversion % will tell you how many people you need to distribute your message to, we call this your list size.

In other words to get x number of leads, which with the right sales activity will result in a certain number of transactions you need to distribute your message to a certain number of people.

Action Step – record the number of people you need to distribute your message to (list size)

Very often the gap we see in working with clients is they aren't distributing their message to enough NEW people.

If you’d like to learn how to get a HUGE list of TARGETED prospects so you can generate a flood of interested buyers click here.

This is the final piece of figuring out the overall actions.

You should now have the following numbers:

  • Goal expressed in dollars per period (usually month or year)
  • # of transactions required for the goal
  • # of leads necessary for this number of transactions
  • # of people on the distribution list necessary to get this number of leads

We’ll now get into the real meat of making this happen.

Gap Analysis of the Framework

The above exercise was hopefully pretty easy for you if you’ve got questions please send us an email and ask your question.

On it’s own the high level plan isn’t enough though. We need to dive into specifics to figure out where you might get stuck and build around it.

The first common gap is skills.

Note the difference between skills and knowledge, between knowing what (like you’ve read about it) and knowing how (having actually done it).

There is no more important skill than learning to learn and since you need to learn to predictably change your life you benefit a lot from learning to learn better and faster.

If you’d like to learn to learn much faster and easier click here.

Do you know how to fulfill on those transactions? We’ll get more into how this becomes complex as you grow and what to do about it.

Do you know how to successfully complete the sales activity? If you could use improvement on how to communicate with prospects to get them to buy click here.

Do you know how to communicate a message to cold prospects to turn them into leads? If you could use improvement in your lead generation communication click here.

Do you know how to identify and build the list of enough people to hit your goals? If you could use help in identifying and building the list of the ideal target customers click here.

If you lack skills in any of these areas you need to identify it so you can make developing one skills one of your new goals to reach the big goal. Good news is you only have to learn once so each time this will get easier.

Action Step – record any areas where you could use improvement in your skills to reach your goal

Next, let’s break down from the bottom up each of the things you’ll need to take action on each step of the process:

  1. Building the list – do you have the list? If not then getting it needs to become one of your new goals – note this comes after learning how to get the list in case this was a gap.
  2. Message & content to communicate to the list – how are you going to communicate with them and what’s going to be communicated how? This might include bullet points of a script, images, documents, written information, recordings, etc. If you don’t have this creating it needs to be one of your new goals – again this comes after learning how to create it if you don’t know how.
  3. Process & content for sales communication – what and how are you going to communicate with prospects during the sales/conversion process? This might be a website, it might be a sales process, it will definitely include an offer and a process of being able to accept their payment. Do you have all these things? If you don’t then these need to be your new goal – as always these come after learning how to do these things in case learning is a gap.

At this stage you should have a list of any of your gaps in materials to reach your goal and also a list of skills gaps.

Let’s dive briefly into how to address those skills gaps because not knowing how to address them could be an issue.

Addressing Skills Gaps

Richucation is largely designed to help you with this so in most areas contacting us is a simple starting point.

Beyond contacting us you should have some action items to address those skills gaps as follows:

  1. Identify someone who has done it successfully, so you can copy and possibly learn from them.
  2. Identify some reason (might be a person, book, video, course, article, etc.) to help you learn and overcome this challenge – naturally Google, Youtube & Amazon are great resources here.

Expert tip – when you don’t know get in the habit of asking people “who would know?” They might not know but eventually asking enough people will lead you there.

What if you try something and it doesn’t work? Simple, you cycle back to the learning to figure out how to overcome this challenge. Learning should take place through a combination of: asking/copying, trying, thinking about how to do it better in a nice cycle.

Resource Gaps

At this stage you’re getting close to the end (not so hard right), you’ll soon have converted a Type 2 goal you weren’t likely to achieve into a Type 1 goal you can easily achieve.

But first we need to address one more gap that could get in your way.

You’ve now got a list of things to do, which should be prioritized in order as follows:

  1. Things to learn along with action items you can take to start learning them.
  2. Materials to get to fulfill on the list, lead generation, and sales to make it happen along with action items to get them.
  3. Actual transaction, sales, and lead generation activities required to hit the goal.

Note you should be starting at #1 and progressing to #3. Most people skip #1 & #2 and go straight to #3 and get stuck because they can’t achieve what they want to achieve, which is demotivating and they slow down or quit, get distracted and forget about the goal for the next several months maybe till the end of the year.

In order to ensure you actually do these things though we need to make sure you’re able to do so.

If you’ve got the skills why might you not be able to do them?

A lack of resources.

This comes to one of the most important breakthroughs I had in going from simply setting goals to actually achieving them…identifying the price and resolving in advance to pay it.

I’ve often had employees who are shocked and demoralized when something doesn’t work or takes a long time, etc.

I’ve discovered something powerful though. This is only a problem if you don’t expect it. If you go into it in advance with the attitude that “this will take many long hours spent over several months” or “this is going to cost me $5000 in learning costs” then it’s no big deal when the learning curves and challenges come up.

Similar here.

You need to identify what you’ll need in order to do all these things: the learning, the content & process building, and the actual activities to hit the goal.

The best way I’ve found to do this is to look at each activity and determine where it fits on a per unit basis with what we call in Richucation The 6 Resources.

Briefly, the 6 resources are:

  1. Time
  2. Money
  3. Expertise
  4. Relationships
  5. Reputation
  6. Assets

In this case we can clarify a few points:

First, Time also needs to account for timeframe. What is timeframe? This is the period over which something happens.

  • For example, you might have 40 hours of work to do but this doesn’t mean it will get done in 2 days it will probably take at least 5 days because you only work 8 hours per day. In fact probably with all the other things to do it will take at least 2 weeks. 
  • So you need to account not just for the 40 hours (time) but also the 2 weeks (timeframe) depending on people’s schedules and when things come back.

Second, expertise is always expressed in terms of someone’s time since it takes time to utilize expertise.

Third, assets can include: space, equipment, infrastructure, etc. These also need to be expressed in terms of units of time since you can only occupy space for certain periods of time without interfering with the space others need. Likewise, for equipment and sometimes infrastructure.

The resources are the “price” you’ll pay to hit your goal.

For example, returning to our client and their ability to fulfill on those 40 transactions they require a little under an hour per week per client/transaction so for easy numbers let’s say fulfilling on 40 transactions requires 150 hours per month.

You could also describe this in terms of expertise since it’s not a purely mechanical task.

Next, he needs approximately 1 hour per sales call, which as you recall was 200 calls so this is 200 more hours in a month bringing the total time to 350 hours.

Then the lead generation activity requires spending money on advertising as well as some time spent monitoring the ads.

His small business is relatively simple but for other businesses this could be much more complex. For example, another client provides oilfield services where pumps, fluids, trucks, fuel, hotels, wages, etc. are all required to deliver to clients.

Bottom line, go through your list of activities and for each activity figure out all the resources necessary to complete this volume of activities. If you’re unsure then estimate high. Budget for these in advance in terms of time, money, space, etc. and be willing to pay them, later you’ll be able to optimize by trying to get those numbers down.

  • A note on money – this might include the ability to pay wages, pay for inventory, rent, equipment, supplies, etc.
  • For example, in my one company we imported products from China and we needed to be able to have enough in inventory to sell to customers but also have enough on order for it to arrive by the time inventories ran low. This meant we needed large amounts of cash to cover the inventory between the time of ordering and selling. 
  • Some of our clients have to pay their bills before they get paid by their clients so they need money to cover the cashflow gaps. Be sure you account for these.
    If you’d like to learn about how to raise money click here.

Take the totals and compare to your actual resources available:

  • People
  • Time
  • Space
  • Equipment
  • Infrastructure
  • Relationships
  • Money
  • Etc.

Identify any gaps between what you have and what you’ll need.

In many cases what you’ll see is your goal as you’ve projected it is unreasonable because you don’t have the resources to deliver on the goal in terms of time, etc. This is actually GREAT news because you’ve identified the gap and now can work around it.

How do you deal with resource gaps?

The same way you deal with expertise gaps. Addressing them become your new goal, which you record as action items within your plan.

What are the action items?

Resource gaps are pretty much always addressed in three ways:

  1. Develop better expertise so you require less resources
  2. Develop and reach out to relationships to help you address these – this might include employees, partners, investors, financiers, friends, and community
  3. Start small and accumulate resources you can use to buy more resources so you gradually build up what you need – this will take longer and you might not hit your goal but at least you’ve got clarity in how to get there

That’s it now you’re ready for the final step in making this all come together.

Schedule of Action

If you’ve followed along properly you should now have a list of action items with associated resources attached to each of them including actions to develop expertise and to overcome any resource gaps, which of course also take resources.

These actions are essentially to-dos or Type 1 Goals.

Using this information your task is now to go through and schedule these activities. At Richucation we say “what gets scheduled gets done” so pull out your calendar and start blocking off when resources are assigned.

This might include the calendar for your staff members as you delegate to them (hopefully you scheduled time for management if this is the case as it’s very important, or recruiting if you need to add people to your team to hit your goals).

If you’d like specific proven strategies to find and recruit the best people to your team click here.

Finally, make sure you schedule reviews into this process and resolve to pay the price (time) to review and correct.

Leverage relationships to work with you on this and hold you accountable. Set consequences for yourself to that person if you don’t follow through to keep yourself on task and reward yourself when you do well.

That’s it!

You’ve now gone from a goal to a plan.

You’ve overcome the challenges of not knowing so you don’t get stuck.

You’ve accepted in advance what it will cost and resolved to pay the price along with figuring out what you’ve got, what you need and the actions to get it.

You’ve scheduled the actual activities to get them done.

Now it’s up to you.

If you haven’t done so already I encourage you to download our free worksheet to go through this process on your own either by printing it or on your computer. Not only can you fill it out it includes instructions to help you.

Goal Breakdown Structure

If you enjoyed this article please share it with your friends and people you know who would benefit on Facebook, by email, etc.

Reach out to us if you might be interested in going to the next level in your business.

The 6 Skills Every Billionaire Has Used To Become Super Rich

“Millionaire isn’t cool.  Do you know what is cool?  Billionaire” – The Social Network Let’s face it in a world robbed of royalty billionaires and celebrities are all we have left and billionaires literally can buy celebrity or the presence of celebrities.  It’s like the gold medal of business so how did they get there? […]

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The Importance of the Rules and Dangers of Breaking Them

There’s a harmful statement many entrepreneurs are fond of listening to “rules are made to be broken”.  If that’s the case you’re following the wrong set of rules.  Effective rules are designed to give you the best results.  Consider traffic laws if you started driving on the opposite side of the street what would happen?  It would create chaos and slow everyone down, it might work in a small situation but on average respecting and following the traffic rules helps traffic to flow better for everyone.  The same is true for business and investing.

At Richucation we make a point of teaching the universal rules.  Lots of sources preach rules that are a bit like “don’t put your elbows on the table”, they might be conventionally accepted by they aren’t truly important in the modern age at least not in most situations.  But there are essential rules in business and investing, rules designed to ensure you are consistently growing and making money, you can break them now and again and get away with it but it’s unwise because in the aggregate you’ll end up losing out.

All too often I’ve made this mistake, allowing an employee to do something that breaks the rules to encourage them to take risks, unfortunately they were risking my money not their own, we lost money and I should have intervened.  Getting involved in a business whose foundation wasn’t solid, at first it seemed great, the lie I’d allowed myself to believe, and ultimately it lost money.  Skipping the process of acquiring security on an investment relying on the integrity of the participants and strength of the venture to move forward.  Or failing to put something in writing for mutual agreement, or proceeding without getting an agreement signed and then discovering the terms I expected weren’t honored.  The list goes on, the point is rules such as these, unwritten and even unknown though they might be for most are designed to facilitate success and it’s unwise to violate them.

What are some examples of these rules?

  • Buy/engage with a margin of safety
  • Don’t get involved in something you don’t understand, increase expertise to expand where you operate
  • Test small then scale
  • Get great quality data and use it to make your decisions

As you explore business and investing, wealth building, you’ll learn there are certain foundational essentials and that you shouldn’t avoid these.  Don’t get involved in a non-repeat business.  Get involved in businesses based on growth first, only then consider price, people with high integrity have no problems putting agreements in writing.  The list goes on, suffice to say there are rules, but more importantly you must stick to these rules, at times there will be emotional pressure or perhaps a sense of rebellion to break them but don’t, they are meant to be followed not to restrict you, but to enhance your success.  When you don’t follow them, the tendency is to lose time, opportunity, and money, you might gain a little in some way that’s easy to rationalize, but it’s nothing compared to what could have been gained if you’d just followed them.

Have a question about the fundamental rules of business and wealth building?  Want to run a question, thought or idea by us?  Feel free to contact us by clicking “Ask a Business Question” in the lower right corner of the screen.

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Hiring Case Study: Resumes are a waste here’s what’s better

As crass as the above image is it hits the nail right on the head. At the end of the day as business owners we must take responsibility for everything that happens within our business. I personally was sick and tired of hiring the wrong people for mine. What I’m about to show you has saved me thousands of dollars in outsourcing to the wrong outsourcers or hiring the wrong employees as well as countless hours of frustration, resentment and basically everything that makes me procrastinate and hate what I do.

Have you ever hired someone to build you a landing page or a website? And instead of making your life easier it just made it harder? and instead of saving you time and money it made things more expensive and consumed more of your valuable time? This used to happen to me all the time. Keep reading on as I show you the EXACT processes and systems I developed for screening and hiring employees till it reached the point of minimum effort and maximum gain (Typically called the Pareto principle but you get the idea).

The most commonly used methods to screen applicants when recruiting and hiring are also the most useless yet somehow most companies persist in this idiotic behavior.

You don’t need to be like them, you can improve your hiring results and decrease your time spent extremely easily through some simple changes to your process.

Today we’ll explore one of them – the alternative to resumes.

I should mention in advance this particular technique is designed for low and medium skilled positions.  Although it can in theory be applied to high skill and executive positions the application there serves a different purpose.

We’ve used this method successfully to screen:

  • Labourers
  • Sales people
  • Engineers (electrical, mechanical, geotechnical, etc.)
  • Trades people (welders, machinists, mechanics, etc.)
  • Technical people (computer programmers, technicians, etc.)
  • Many others

 

You can grab our whole step by step process with examples by downloading our recruiting process templates

 

Background – The Screening Problem

bad hire

I owned a recruiting company for 7 years we screened tens of thousands of applicants, often we’d get literally hundreds applying for a single job.  There’d also be times where we wanted to go back into our database to find someone who fit what we were looking for…how do you do that when you’ve got literally tens of thousands to weed through?

This was an exhausting process to say the least.

Let me do some quick math for you.

If you sit down and review resumes thoroughly say they are on average 2 pages and you read 1 page per minute that’s 2 minutes per resume to read it over.  Frankly, some are longer and you probably won’t be giving much attention to detail but consider what this does to your hiring costs.

2 minutes per resume multiplied by say 200 resumes is 400 minutes of time…just screening resumes.  That’s over 6 hours!  And that’s without accounting for distractions, etc.

If your time or the time of the person screening is worth $50/hr (it’s almost certainly more by the time you consider operational overhead, etc.) that’s over $300 you’ve spent and for what?  You’re not going to remember most of those, at best you’ve got a very long short list.

What’s the alternative?

Most people develop biases that allow them to screen resumes faster.  I’d train our staff to screen a resume in about 20 seconds each looking for very specific things based on the position.

What’s the problem?

The biases are almost always at least partially wrong, things like “do they have a university degree” becomes a way to screen because you’ve got to do something to narrow the candidate list even if a degree has absolutely nothing to do with whether they’ll make a good hire.

The other solution involves technology.

Software can parse the resumes and make them searchable, decreasing how much time you spend opening files and reading through information.

The problem?  The resume itself is the problem!  It doesn’t matter if you can parse it, it rarely includes the information necessary to properly screen the person for the next step.  Search works based on keywords and a great applicant might through no fault of their own not use the keyword you’re searching for.

Why?  Because they don’t know what you’re looking for.  The candidate has created a form resume designed to be submitted to dozens of possible jobs so it’s generally generic and often includes irrelevant information while missing key points that matter to you.

What often ends up happening is whoever is screening the resumes doesn’t look through all the applicants but just settles for one near the top meaning they could be missing someone way better but because they don’t have the time to go through them all they’ll never know.

I’m as guilty of this as anyone and it felt bad to know that the squeaky wheel would get the grease or someone really good was missing out because they weren’t as aggressive in following up.

 

Resumes are Irrelevant

 

There are some voodoo consultants who claim to have magical powers to determine candidate fit from resumes.  It’s rubbish.  Complete and utter nonsense.  Here’s why:

  1. Often resumes aren’t even written by the person applying for a job they might have used a template or gone to a third party resume writing service so what you think you’re gleaning from that resume might have little to do with them.

 

  1. Often the best candidates have poor resumes because they aren’t used to having to write resumes because they are busy doing great work, they are throwing one together quickly to apply when they are otherwise busy. By contrast some of the worst candidates are professional job seekers who might have great resumes.

 

  1. A good resume is designed to sell you not give you objective information about whether the candidate is a good hire so it’s at worst lies and at best highly filtered data, neither of which tells you accurately whether the person is a good candidate or not.

We tried all kinds of fancy voodoo, language profiling, NLP writing analysis, learning for different personality patterns in the writing, etc.  We consistently got the same result…frustration as what the resume said or how it was written failed to correspond to on the job performance.

Think a spelling mistake or grammatical error means the person is a poor candidate?  First, in the real world a spelling or grammatical error is rarely high impact, second, anyone can make a mistake and it doesn’t prove anything as much as you’d like to think it does or should.

These are the kinds of biases people form reading resumes.

Bottom line isn’t to bash on resumes it’s to point out that they are a waste of time…quit wasting your time.  You’re literally throwing money down the drain unnecessarily.

 

The Disqualification Process

The goal of the resume or what we’ll call the application process isn’t to select someone to hire it’s to decide who not to move to the next step in the process.

Ideally, this step helps you build an easy to reference database and gather some market data.

The way to do this is to determine your “disqualifiers”, which are objective in nature and then screen out anyone who doesn’t meet them as quickly as possible.

Please note, these disqualifiers should be data driven, meaning there’s no interpretation involved.  A huge part of the problem with resumes is they are so open to interpretation that you can out think yourself.  You want to eliminate thought from the process and make it robotic.

What does this accomplish?

It means you can outsource this step for $2/hr. saving thousands.  It means it can be done extremely quickly saving thousands.  And it means you can make better quality decisions, which will likewise save you thousands.

 

If you’d like you can download our disqualification templates here.

 

The Resume Alternative

We generally refer to the resume alternative as a disqualification email simply because we deliver it by email but it could just as easily be an application form you have applicants fill out on your website or in person when applying (less practical today).

What you’re aiming to do here is to reduce your cost per hire and decreasing the time to hire while simultaneously increasing your quality of hire.

Bottom line your objective here is to improve your hiring ROI.  Remember everyone you hire should be making you money not costing you money and the less they cost you including the cost to hire and manage them the better off you are.  Literally, hiring can be a huge competitive advantage.

When we started doing this it felt so much better.  It’s more efficient, it’s clearer, and more organized for the future.

Process wise what you’ll do is have everyone who applies fill out this form you’ll create for them.  Literally you’ll never read an email they send or look at a resume those are both a waste of time.  On your website or in your ads you’ll encourage them to fill out the appropriate form and if they send you a resume you’ll reply with this instead.

It’s highly efficient and actually will allow you to give better service to the candidates, which they appreciate.

Literally, for the initial point of contact you can use an auto-responder or templated email.

Download a sample in our copy and paste recruiting template pack here.

 

Disqualification Form

Really it’s very simple.  You’re going to ask them for every objective piece of information you’re looking for rather than relying on them to guess what you need to know.

You’re going to remove emotion from the screening process by standardizing how you gather the information.

The key here is to ask for OBJECTIVE information.

In other words, you’ll never ask something like “are you a hard worker?” or “are you a team player?”

You’ll ask about whether they have particular certifications and ask them to provide a copy or a certification #.

You’ll ask logistical questions like what schedule they are available to work.

You’ll ask about experience only in an objective manner like “please name 3 projects of such and such type that you’ve worked on” or “please list the heavy equipment you’ve operated”.

The idea here isn’t to provide perfect screening on the quality of how well they’ve done it only to establish with relative accuracy that they have done it so it’s worth your time to screen further.

These questions should be tailored to the individual position you’re hiring for and not be generic though of course you’ll have some overlap between positions.  What this should also do is match

What you’ll end up with is a form you can fill out that corresponds to the position profile you created so you can see at a glance the quality of match.  It all works perfectly together.

To get a copy of the position profile, disqualification form template, etc. download our copy & paste recruiting template swipe file here.