1. How Important Is It to Know Your Why?
So for me, a lot of people will say “What’s your why?” A lot of times a lot of people think along the lines of “Oh, my why is I want to feed my family, or I want this car.” And over the years, I had approached what I was doing with the why in mind, and I had varying degrees of success. When I really transitioned from entrepreneur to business owner, an asset that would grind out cash whether I was there or not, the big transition for me was thinking along the lines of my needs, and mapping my needs.
If you’ve ever seen in psychology Maslow’s hierarchy of needs, Tony Robbins also teaches his version of it, and it kind of dawned on me one day where you have certainty, variety, significance, love and relationships, growth and contribution. As entrepreneurs, we see something in the marketplace that we can get involved in, that we can fix or improve or sell or whatever. When we see an opportunity, we harness our strength and we go after it. We say “I’m good at this and this and this, so now I’ll go create a business around that.” That’s great in the beginning, so it traps.
A lot of people talk about delegating their weaknesses, I don’t really think they’re delegating their weaknesses correctly, but that’s another topic altogether. Most people will never achieve their outcome because the real why undercurrent of what’s going on is they’re not delegating their strengths. So what I mean by that is they’re fulfilling their personal human needs, one or all six of the human needs, it’s fulfilling them personally, a lot of times significance.
They don’t want to delegate their strength because somebody could do it better, or they won’t get the acclaim for example that they were getting before, they won’t be getting the feeling of being important in their business or in front of other people. And really, the why is why are you in business? Is it to blow up your ego, or is it to grind out cash? Is it to have a liability of a business that relies around you, or to have an asset of a business that you don’t need to be there all the time or not.
So, really, one of the exercises I put people through is mapping out their needs within their business, their actual actions within their business, their strengths and businesses, map them to various needs, those six needs, then deliberately thinking “Ok, how can I start migrating those needs from the personal to getting them out of the business and fulfilling my personal needs in my personal life” and getting my significance from being in business, not getting my love and relationships from my employees, getting it from my real family, getting my variety and my adventure through skydiving, not from blowing something up in my business and having to fix it for the 50th time.
Really, certainty is what you want for your business, I think most of us do if you want to be a true business owner with time freedom. That certainty from your business by means of consistent predictable cash that goes in your pocket month in and month out, year in and year out.
So if I was to sum that up, your why’s are tied to your needs, your needs of cash are being fulfilled in your business, and all your other needs as many as possible in your personal life.
2. How Do You Identify Market Opportunities That Have Potential?
That’s a pretty broad question. All I can really do is say is […] that made a couple of million dollars in revenue for one of my companies. Into the solar industry I got in kind of late, and I barely knew how to use a hammer when I started my construction company, so it’s all about identifying opportunities. It’s really easy to go down with what you think is a good idea as a business owner because it’s your idea, rock-star achievement. I knew that I wanted my company to grind out cash. When you start to think about it in terms of where’s the greatest amount of potential with the least amount of liability and risk, where can I go that has as little competition as possible?
I’ll give you an example. When I started the construction company, we were doing retrofit windows and insulation for homes, then we started doing other things. I knew I wanted to get into solar, and I steered us into it with our customer lifetime value. So our initial customer lifetime value was $2800 per customer. So I made strategic decisions that would allow us to find more customers cheaper, serve them better, lifetime value over time. I used data to kind of steer this ship where we wanted it to be.
We served southern California within a sixty-mile radius, so that’s a huge amount of the population. And we added product after product. As I began to do solar, I saw our customer lifetime value going up and up. So with the 80-20 rule, we did more solar-centric advertising and then complemented it and we used the other products to get in the door for the solar.
We were kicking around southern California, we were in Orange county, when all of a sudden, one of our canvassers went into Anaheim. Now Anaheim is now Disneyland, it is a pretty famous city. For all intensive purposes, it should have been hit by every other company on earth. The homeowners were like “there’s huge rebates but you can’t get it because it’s a lottery and no one can get it.” So there was this gossip that was going on, there was these beliefs going on inside of the market. I went to finance companies, my competitors with whom I did business with also, and also different people and they all said “stay out of Anaheim” and they gave me stories why to stay out of Anaheim. I asked the product manufacturers, same thing. Well we were setting leads remarkably there cheaper than anywhere else for solar. Now I could have listened to the stories and the gossip, or I could let the data and say to myself “wait a second, I’m meeting a ton of leads in volume at a very low cost, maybe I want to invest into this.” Don’t listen to the gossip, don’t listen to what other people think is a good idea or a bad idea. Get data. Once I have data, I went to city hall, I investigated for myself and I found out that all the gossip was not true. People had been burned one time five years ago and they fixed that within the city and there was a huge amount of money available for people to get these kinds of solar systems and rebates.
Once I knew that, I started marketing, tested, I did 12 jobs or something in the first three-bay window and they all went great. The competition is not measuring shit effectively, they’re not measuring their processes, they’re not measuring their activities, they’re just kind of shooting into dark holes, and if they are measuring, they’re probably measuring the wrong things or not effectively. So why I say that is in doing that they’re totally blind to the real opportunities that are in the marketplace. By me ignoring the gossip, focusing on data and getting my own results, I think $1.8M in solar and a few hundred thousands with other products over 16 months. All that is get really good at measuring the activities, your processes and your people, and the market will show you these opportunities that other people are overlooking.
3. What is the Importance of Processes and Systems?
An analogy that I love about why it’s so important to put processes and systems in place, most entrepreneurs they go out there, they know what to do, but unfortunately their employees, their team, customers, whomever, they’re not telepathic, they don’t know what they’re supposed to be doing. Usually, I love the quote “the bottleneck is always at the top of the organization.” If it’s locked into your brain and other people don’t have access to it then that’s going to slow down your organization, you’re gonna get stuck. And at best it will slow it down, at worst it can put you out of business, have very sporadic results within your company, and the outcome for us is consistent predictable results in our business.
You can’t get predictable results unless you have really clearly mapped out your processes. You want to map out your processes, then bring your team to do that consistently. For example, canvassers are the toughest people on earth I’ve ever worked with. The reason is a lot of them are alcoholics, drug addicts, they have prison issues, you name it, they have every issue under the sun. We were exceptionally good in knowing exactly everything that we wanted somebody to do when they came to our company, we were able to track everything, they knew what to do the moment they were training, our team knew what to do to support them with standard operating procedures. I could literally run an ad in craigslist and know exactly how many leads I would get. Our hiring process, onboarding process, training, we had it very dialed in.
If you want to have consistent predictable results in your business, they got to be built and structured, and you got to be able to measure them, most importantly. And this comes back to opportunity. When you have awesome processes in place, you’ll be able to measure them accurately and correctly. If you get the insights as an entrepreneur or a business owner, there’s a moment of liberation. If you have processes that are undocumented, you’re trusting willpower, you’re trusting memory, you’re trusting discipline, those are not characteristics […] Talent is very expensive, to just magically work within your business, and you’re trusting your staff that they’re going to be actively engaged, and the majority of employees are not. Processes mapped out, you’re measuring it, your team and these activities, you’ll get phenomenal better results and only then will you be able to have time freedom as a business owner, which I think is the outcome for most people to be able to do what they want when they want. When you have those processes in place, you’ll get feedback, you’ll get reporting so you know what’s working or not so you don’t get blindsided.
The purpose of the processes is that consistent predictable outcomes and to be able to measure them and know what’s working or not within your business.
4. How Do You Fill Your Pipeline with Leads?
You’re going to have two types of businesses out there. Most of the time, you’re gonna have entrepreneurs and you’re gonna have businesses. I keep going back to that because it’s two completely different mindsets and identities. And most entrepreneurs rely on hustle. They rely on grinding, they rely on luck, they’re gonna go out there and somehow magically to find the next customer next month in order to eat. For me that seems remarkably risky. I had the most success when I had true control over cause and effect within my business. So I knew that I had 20 salespeople in my real estate investment company that could go out and get investors. Or I knew that I had 13 canvassers setting appointments. I knew that if two or three fell off I could get more, so I was at cause. It’s also like cold traffic online. I know that if I do X number of facebook ads, I’ll get Y number of leads submitted, which will result in Z calls requested to work with me. Be at cause in your business, to generate leads and prospects and opportunities and customers, to be able to scale it very effectively. Be at cause, then you can see the effects, you can optimize it and improve it. So more than just getting leads is getting leads that you didn’t have to hustle for, or getting leads that you’re getting because you have a process in place and you’re at cause. And if you have a process to get leads, you’ll figure out and ask good questions like “Hey, how do I get a different kind of lead? How do I go from this county in California where the average home value is less and people will spend less on their home, to a different county where their homes are worth more and they will spend more.” You just start asking more and more good questions on leads that are coming in.
I had to learn this the hard way, because I was very bad at this for a while. Most salespeople are not marketers, they’re not advertisers, they’re terrible at it, they’re sales people. They’re selling them via a direct email or they’re selling them via hitting them up on facebook or they’re selling them face-to-face through word of mouth. Advertising and marketing is much more about the customer and in order for you to appeal to the customer in a correct way, you gotta be in their mind. You gotta understand their situation and look at it from their shoes. Most entrepreneurs don’t that because they’re sales people. And that’s what I was for a long time until I finally […] For me one of my outcomes I only wanted to achieve leads from human-based methods, meaning I didn’t want canvassers anymore, I wanted to be able to turn on a fosset, pay facebook and have facebook deliver my ad whether it’s raining or snowing or 100 degrees outside, and then communicate to them in a way in which resulted in a relationship occurring and engaging with them in business.
I would say that most entrepreneurs are not gonna take, it’s not simple, it’s not an easy one, but there’s definitely people out there who can do it, who are the real deal, and I would highly advise beginning to invest in that mindset because once you become a marketer, or an advertiser, and you learn it, you’ll get leads consistently. You take cold traffic and turn it into warm leads.
5. How Do You Convert Leads Into Paying Customers?
There are certain conversion points. When I got started in construction, I had just lost everything that I owned, I was a hot mess personally, drinking, drugs, I fell into the industry because that’s the industry that would take me at the time, I didn’t have much confidence, and so I didn’t have skillsets, I didn’t have product knowledge, I just kinda thrown out into the wolves. I had a huge amount of success in the past with sales, but it wasn’t translating at that moment. It’s one of those things where without talent or memory or discipline is probably not going to succeed and be replicable. I did some consulting for the industry on the marketing side of things. I gotta a little better at the sales process, and then one day I went to my wife and said I’m starting a construction company. She kind of went “Oh my god, what are you doing?” because I wasn’t the world’s best salesperson. Basically you got science and you got art.
Art is when you cannot really put your finger exactly on what makes it amazing. Raw talent is art in business.
Then you’ve got science, and science is very ordered, very duplicatable, and it’s very consistent. So my outcome when I really started to do the sales in construction is you have to walk into a home, they have very little interest at all, and then you need to walk out with a check with $50,000 the same day you met them two hours later. So that is a remarkable talent to have, and unfortunately most people can’t do that.
So the art of the sales process and turning it more into science. And the way I did that is to consistently find out what the person wanted – find out what they want and then give it to them. Then I would analyze the objections that would come up. We had presentations in my company.
And so when I would sit there, I would be with the homeowner or one of my employees, and they’d hit the right arrow key, and I knew that the presentations were good when you got to the end and “So, is there any reason why you wouldn’t want move forward with AGILE Remodelers as company?” or “Is there any reason you could think of not doing business with us?” We would this in chunks in the presentation in different parts. And I knew the presentation was right, we iterated enough times, to where we would get to the end and they would say “Nope.” “Is AGILE Remodelers somebody you would consider doing business with?” I’d do a negative question then a positive test close. They’d be like “Yes, we’d consider doing business with you.” That would be at the very beginning, so very light commitment. Listen to customers, hear the things that they want and need, and also hear their objections. Kill the objections before they even come up. When you can do that is when you have taken talent and converted it into science. You can get that to any number of salespeople throughout terrible talent and they’re gonna close one or two out of ten.