Donald Miller: How To Make Your First Million, 6 Steps To Grow Your Small Business in 2023 | E214
Donald Miller: How To Make Your First Million, 6 Steps To Grow Your Small Business in 2023 | E214
[00:00:00] Donald Miller: Nobody gets into business to run a business. They started a business because they loved their customers, they loved a product. They wanted to be financially free. If that business takes off, all of a sudden you're taken out of the sweet spot you were in when the business grew and you're put into a different role, and that role is running a business.
[00:00:33] You know what happens after that? You just you bomb. The rest of us though, we do something. We figure out how to install the systems, and processes that are necessary in order for a business to not hit the ground, but actually come back up and start climbing again. Those systems and processes are what this book is about.
[00:00:54] It will teach you how to run a business so that it is a predictable, dependable, revenue machine.[00:01:00]
[00:01:03] Hala Taha: What is up, Young and Profiteers? You are listening to YAP, Young and Profiting Podcast, where we interview the brightest minds in the world and unpack their wisdom into actionable advice that you can use in your daily life. I'm your host, Hala Taha. Thanks for tuning in and get ready to listen, learn and profit.
[00:01:35] Hey, Donald. Welcome back to Young and Profiting Podcast.
[00:01:39] Donald Miller: Good to be here. Good to be with you.
[00:01:41] Hala Taha: I love having Donald Miller on my show. He's one of my favorites guys. He's been on Young and Profiting podcast three times. This is his third time. If you don't know, Donald Miller is an author, public speaker, and a business owner who's widely considered one of the world's most entertaining and informative speakers.
[00:01:57] He's the CEO of Business Made Simple, and he's the [00:02:00] host of the Business Made Simple Podcast. He's also the author of several popular books, including the Wall Street Journal bestseller, Building a StoryBrand. And his most recent book How to Grow Your Small Business was just released earlier this month.
[00:02:13] Donald was on YAP for episode number 120, and he gave us the four 11 on storytelling as well as episode number 153, which was about how to be the hero of your own life. In today's episode with Donald, we're gonna focus on how to grow a small business. He's gonna teach us the six steps that any small business can take to double their revenue.
[00:02:31] We'll hear why you should think of your small business as an airplane, and we'll learn why most small businesses today are failing, and how we can get ahead of those missteps as business owners. So Donald, my team tells me your new book, How to Grow Your Small Business has already sold more copies in a presale, than any other book that you've ever written.
[00:02:50] So that's incredible. And I think it's a hot topic, right? The economy is not doing so well. I think a lot of businesses are struggling. So let's begin there. Why are so many small [00:03:00] businesses failing?
[00:03:00] Donald Miller: I'll tell you how it all started for me. And it started with failure. So failure is only a bad thing if you let it take you down.
[00:03:07] But if you let yourself learn from it, you can get somewhere. I actually, 11 years ago, lost all of my money, my entire life savings in a bad investment. I had paid off my house. I sold my house to buy another house. The other house sold. So I was sitting on a pile of cash, put it into an investment.
[00:03:22] Woke up one Monday morning and my entire life savings was gone, and it was devastating. 11 years later, I had a 17 million company with more than 50% profit, 30 employees. And life was very different. And one of the main reasons it was different, and one of the main reasons I think businesses either succeed or fail is I 100% took 100% ownership of my career and my life and my business.
[00:03:49] Everything that negative happened. I took ownership of everything positive happened. I took ownership of, I didn't trust other people to make me money anymore. And by that agents and speaking [00:04:00] managers and the market. None of that stuff. I took ownership of it. And so as you talk about the economy struggling, that's the economy.
[00:04:09] Your economy is different. So the economy has factors like trade wars with China, the war in Ukraine, all those kinds of things. Your economy is hardly affected by any of that. It might be slightly, but most of us is hardly affected by any of that. It's actually more affected by our attitude. And if we take ownership of our economy can do incredibly well.
[00:04:30] So as I went from $0 to 17 million, I did a rough count Hala. I think I did 572 things wrong and I did six things right? So the book, How to Grow Your Small Business is about the six things I did, right? So the book really walks through and I turn those six things into six steps, that you need to overhaul your business and optimize it for revenue and profit.
[00:04:56] And I just laid it out so nobody has to make the 570 mistakes that I made.[00:05:00]
[00:05:00] Hala Taha: And I love your work, Donald, because you always just tell things in a way that's easy to retain. You write so clearly it's no fluff. So I was reading through this book and I'm like, this is great. I wanna align like everything I do with my business, for this book, cuz I also have a small business.
[00:05:13] So I really related to it. Let's go back to this question of why businesses fail. You talk about an “S” Curve in your book and essentially it's a growth pattern that a lot of small businesses fall into. So can you explain to us what an S-curve is and what we need to look out for?
[00:05:27] Donald Miller: The “S” Curve explains why most businesses fail and they actually fail because they succeeded.
[00:05:32] And here's what I mean by that. Nobody gets into business to run a business. Nobody, not a single person in the history of the world has ever started a business because they wanted to run a business. They started a business because they loved their customers. They loved a product, they wanted to be financially free.
[00:05:47] That's why we start a business. If that business takes off, the business owner then finds themself doing something, that they never thought or never even imagined or didn't realize they were gonna have to do. And that's run a business. So the [00:06:00] “S” Curve is, You love this product, it starts taking off and you start going up and up, and then all of a sudden you're hiring people. You're firing people, you're trying to figure out healthcare benefits, you're dealing with customer service.
[00:06:12] All of a sudden you're taken out of the sweet spot you were in when the business grew and you're put into a different role in that role is running a business. And almost none of us have any education. Even if you've got a master's degree in business. You don't know how to run a business. Most master's programs train you to be chairman of the Federal Treasury.
[00:06:30] They don't train you to run a business. And so we don't know what we're doing and because we don't know what we're doing, customers realize it. Our products aren't as, the quality's not as good as it used to be. The relationships we used to have with customers are now strained. Because we turned those over to account executives. We ended up falling on hard times a little bit.
[00:06:46] So we ended up giving 90 day terms to a customer in order to get bigger profits. Then we ran into a cash flow issue, and you know what happens after that? You just you bomb. So that's the down part of the “S” Curve. Now that's where [00:07:00] those 65% of businesses, that's where they crash when they hit the ground.
[00:07:04] The rest of us though, we do something. We figure out how to run a business. We figure out how to install the systems and processes that are necessary in order for a business to not hit the ground, but actually come back up and start climbing again. Those are the 35% of businesses that actually make it and go on to make millions and millions of dollars.
[00:07:23] So those systems and processes are what this book is about. It's the six systems and processes that you need to install in your business in order to avoid crashing your business. It will teach you how to run a business so that it is a predictable, dependable revenue machine.
[00:07:41] Hala Taha: I love that explanation.
[00:07:42] Thank you so much for covering that. Before we get into the six steps. I wanna talk about your experience because we see you now. You're leading a $17 million company. Like you were just saying, you're hosting one of the most popular business podcasts in the world. You're a business guru, but when you first started your business, you were actually drowning in your [00:08:00] day-to-day.
[00:08:00] So I wanna do a little bit of comparing contrast. What was Donald like day one or like year one of his business? How did you spend your time? And then let's contrast to this, to Donald now with his six steps, all the knowledge, all these you've had so much experience since then and you have a whole framework around running a small business.
[00:08:17] So what was your day-to-day like, year one versus now?
[00:08:21] Donald Miller: About six years ago is when my business really experienced the transformational moment. It happened in my driveway, before then I'll get to the driveway in a second. But before then, I was what I call diving for dollars. We were just trying to find money anywhere I could get, if you paid me to speak, I'd go speak.
[00:08:37] If I could get a book contract, I'd get a book contract. I put out an online course and people would buy the online course. Anything I could do, I would do. And that started getting very successful. True to the “S” Curve, the initial rise in the “S” Curve, and we got to about three and a half million dollars or something like that.
[00:08:54] People were loving my marketing framework, the story brand framework. We were consulting with giant [00:09:00] brands, Procter & Gamble, Ford, Lincoln even the NSA in the government. We began cor, we began consulting with, everything was going really well. I had a mentor who is still a very good friend. His name is Bill.
[00:09:12] And Bill scaled up his company, his father's company, into the billions. And then took some of that money and bought other small companies and was mentoring some of those CEOs. He didn't buy my company, but he was mentoring me nonetheless, and I mentioned to him, I'd love for my business to get to a hundred million.
[00:09:25] We were standing in my driveway after having met for a couple hours and for the first time in my relationship with Bill, he just looked at me a little bit puzzled, and I knew that the a hundred million number was really big ,and he didn't think I was gonna hit it. That's the first time I'd ever seen that expression in him.
[00:09:40] As he looked back at me and I said, Bill, what's going on? He said, Don, in order to hit a hundred million dollars, you were going to have to quote professionalize your operation. That's what he said to me. Now, I'd never heard the phrase professionalize your operation before, but it rang absolutely true as it's ringing true to almost [00:10:00] all of your listeners right now.
[00:10:01] What it said to me was, what Bill said to me basically was, you're making it. You're making it up as you go along. And he also said this. He said, Don, if you leave this company, the company's going to go down because you haven't installed the systems and processes necessary for somebody else to come and buy this company and run it right.
[00:10:20] And that rang so true to me that I spent the next about three to four years, figuring out what the systems and processes needed to be, and how the company needed to run. And the framework that I came up with is actually really simple, and that's what was missing in the market. Everything was very complicated.
[00:10:38] It took more time to professionalize your operations through other systems, than it did to actually build your company. You spent more time working on your company than you did catering to clients, which doesn't work. You lose money that way. I wanted it to be really simple and the metaphor that I came up with after I did all this stuff, when I was trying to have a controlling idea to bring it all together.
[00:10:57] Was the metaphor of the airplane. And [00:11:00] every airplane has, every commercial airplane has six very important parts to it, and they have to work together. The leadership is your cockpit. The people in that cockpit need to enter data into the flight computer that says where this airplane is going. Everything is reverse engineered from that leadership in the cockpit.
[00:11:15] The right engine is your marketing and that marketing needs to produce thrust to get the plane moving. The left engine is your sales. It needs to produce more thrust to get the plane moving. Your products are your wings of the airplane. Those need to be in demand and profitable. The wings need to be big, light and strong.
[00:11:32] In order to get lift. The body of your airplane is your most expensive, heavy part. That's your overhead. And your overhead needs to stay lean. That's why when you get into a smaller commuter plane, you're ducking your head cuz they need that thing to be small and they're squeezing you into those tiny seats.
[00:11:48] And then the fuel tanks of your airplane are your cash flow. And if you can actually keep the six areas of your airplane in proportion to each other, you're gonna do just fine. And it's the same [00:12:00] with business. In order to get a business off the ground and keep it from crashing. You've gotta enter the right coordinates into your flight computer.
[00:12:06] Those are gonna be economic coordinates. You gotta clarify your marketing message and run a really good sales funnel, that's gonna get your right engine humming. You've gotta be able to invite customers into a story and close deals, and I've gotta formula for you to be able to do that. And your sales.
[00:12:19] You've gotta have products that are extremely profitable and in demand. Those are gonna be your wings. You've gotta manage your team so it's lean, efficient, and productive. Which is an incredibly hard thing to do that keeps your body the airplane small, and you've gotta get very clear optics on your cash flow so you never run outta cash or get surprised by a tax bill or can't make payroll.
[00:12:40] If you can do those six things, your business is gonna do just fine. Hala, you've interacted with as many business owners as I have. I'm sure there's times when you've walked into a business and they have a really nice facility and they're handing you all sorts of swag, and 20 minutes into visiting their business, you have no idea what they [00:13:00] do because they can't state it clearly.
[00:13:02] And you're asking yourself. How in the world are these people making money? And you realize they're not making money, they're actually just living off private equity or venture capital money, and all they're doing is living off somebody else's dollars and this plane is going down.
[00:13:14] It looks successful, but it isn't successful.
[00:13:18] I have zero interest in helping anybody listening to the sound of my voice look successful. I have no interest in that. I have enormous interest in you opening up your bank account and seeing a ton of money. That's what I'm interested in. And so these are the basics of how to actually run a successful business without lying to ourselves.
[00:13:37] This is how it has to be done.
[00:13:39] Hala Taha: And so back to my original question, I guess when you first started your business, before you had this six step framework, the business really revolved around you. That's why you were drowning every day.
[00:13:49] Donald Miller: Too much.
[00:13:50] Hala Taha: So what's the problem when you can't actually be pulled out of your own business and the business revolves too much around the owner?
[00:13:56] Donald Miller: The problem is your business isn't worth anything. If somebody comes to buy your [00:14:00] business, one of the first questions they ask is, what happens when you leave? What somebody wants to see? If you want to value your business at 4, 5, 6, 7, 8 x EBITDA is they want to know that you can go to Turks and Caicos and lay on a beach for two months and never answer your phone, and the business gets stronger.
[00:14:17] That's what they want to know. So the problem in my life at that time was this business depended completely and totally on me. I was the guy who was actually necessary for this business to, to go and grow. Today we have close to 800 certified facilitators, coaches, and guides who go out and teach these frameworks.
[00:14:37] Now, if I left, we would need a new host for our podcast, and that's about it. We would need a new host for the podcast. And quite honestly, I think we could find a better one pretty easily, but I'm not willing to give up the job at this point. So we are way further along than we were about four or five years ago.
[00:14:56] Hala Taha: So with this analogy of the plane. I'd love for you to explain the rule [00:15:00] of proportions. Why is it that we have to look at everything at the same time, and make sure we're being balanced and not just focus on one area and another area at a time?
[00:15:10] Donald Miller: Let's look at the airplane and talk about the airplane analogy as a decision making filter.
[00:15:15] We know that we've got a good sales team. There's a couple people who are selling a lot of stuff for us, it's really great, but we've got this product that, and we're getting many calls. Customers can't figure out how to log in or something like that, and the sales team is answering those calls.
[00:15:27] That's a common problem a small business. So we decide, okay, we need a customer service representative. The customer service representative is for a really good one. You're gonna pay between 60 and $80,000. You're gonna be right in there. You want somebody who can grow and run a management, manage a customer service team.
[00:15:43] So you're gonna go ahead and spend a little more money on that. That money, you've gotta say, okay, is that money going to the right engine, the left engine, is that money going to the wings or is that money going to the body of the airplane? A normal customer service, they're gonna save you some sales.
[00:15:58] They're certainly gonna save you [00:16:00] some negative chatter, but it's pretty hard to put that money on the wings or the right engine, the left engine. So what we're gonna do is we're gonna say we're gonna pay you a base salary of $50,000, but we're gonna give you some incentives for every retainer purchase, that is a subscription service that you sticks around who we know calls you and talks to you, or emails you or chats you.
[00:16:24] We're gonna give you 10% of that and we think you can save X number of sales a year. Which is gonna get you to between 65 and $85,000. What did we just. We just put a big chunk of that person's salary out of the body of the airplane, and out onto the right and left engine, and we can spend a lot more money on the right and left engine than we can on the body of the airplane.
[00:16:47] Whenever you go into a business and they've got this great facility with really beautiful furniture and all sorts of great swag. Everything that I just mentioned is the body of the airplane and what really what you're looking at. And you can see it within [00:17:00] about 10 minutes of a conversation with a business owner, what you're looking at.
[00:17:03] Imagine Hala, let's say that you and your friends are gonna do a great week in Hawaii and you buy the plane ticket and you're at the airport and you walk out on the tarmac, and that plane has a giant body, two tiny little wings, some little rubber band propellers on each of the wings. And fuel is pouring out of the fuel tanks onto the tarmac.
[00:17:26] Are you getting on that airplane? No. That's what so many businesses look like, and people don't realize it's happening. I hired my uncle. We clearly need a new logo and some swag. Let's create this website that isn't very clear and doesn't actually close sales and is passive aggressive.
[00:17:40] All those decisions are how you engineer a really horrible airplane. If you look at every single business in history that has crashed. What you're looking at is an airplane that wasn't engineered very.
[00:17:51] Hala Taha: I love this analogy. It really does help you get, give a framework to think of it intuitively.
[00:17:56] And I'm sure that as you're making decisions, if you learn this [00:18:00] framework. You'll start to remember these things and not try to make your plane crash, and do everything you can to keep it flying.
[00:18:06] Donald Miller: That's right. I agree with you. That's how we got there. And 17 million, there's a lot of people listening who have a bigger company than that.
[00:18:12] We're still very committed to growing this one to try to get to that a hundred million. But the way that we will get there is we'll continue to engineer a really great airplane. If you are on my sales team or my marketing team. You're probably gonna be paid a little bit more than if you're in the body of the airplane and even anybody in the body of the airplane.
[00:18:27] We're trying to figure out how to incentivize you to actually have you participate in the profitability of this business so that you can make more money.
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[00:21:31] So let's dive in. You gave a great overview of the six steps. It's leadership, marketing, sales, products, overhead and operations, and the last step is cash flow. So let's dive into some of these steps. I wanna dive into leadership, which you say is the cockpit of the airplane, and leadership is basically in charge of getting everybody to an end destination.
[00:21:51] Your business needs to have a clear mision and so a lot of people, they don't have a clear mission, right? That's something that they're missing when they first started. Like I'll [00:22:00] give myself for an example, I have a company, YAP Media, we scaled to 7 million in three years, and this year we're on track to do 8 million, which is amazing.
[00:22:09] And so my company's doing great and when I first started it was a team of volunteers and we were so tight and everybody had a mission and I was hand training everyone and everything was great. And then year one it was like boom, we blew up to 60 employees. And it's like all of a sudden like things weren't as smooth anymore.
[00:22:27] Like we're still running a great business, but it just wasn't like before, like things used to just happen, like magic because we were still aligned. Everybody had the same values, all that kind of stuff. And so now I'm actually resetting my organization. I just went through a whole workshop where we set up new core values.
[00:22:43] We are having a new mission. All these things that you talked about in your books. I'm like, my gosh, this is just so relevant to everything that I'm doing right now. So let's talk about mission statements first. You say there's three components that make up an effective mission statement. I love this cuz I'm literally developing my new mission [00:23:00] statement now, and the first component you say is containing three economic objectives that you can actually measure.
[00:23:06] So I'd love to understand why three. Is it only three? Can it be more than three? Why three? And why do we need to have some measurable objectives in our mission?
[00:23:15] Donald Miller: I think the best formula for a mission statement is we will accomplish X by Y because of Z. We will accomplish X by Y because of Z. If you can write that down, cuz it really will align your entire team.
[00:23:29] The X we will accomplish X are three economic objectives. And the challenge is we've gotta figure out the three ways that we make money the most. What are the three ways that we make the most money? Most businesses somewhere fall in line between in that Pareto principle of 80% of their money comes from 20% of their products, 80% of the money comes from 20% of their audience.
[00:23:50] It's almost true for every business out there. Those 20% can usually be defined with three economic objectives. Now I only give you three, [00:24:00] not because you only have three or because I only want you to have three. I give you three because the human brain has a limitation, and it's usually three priorities.
[00:24:08] It's very hard for a brain to prioritize more than three things. It can do four, it cannot do five. So three is very important, not because any other reason other than your brain's just not gonna focus on any more than three things. So you wanna figure out what are the top three ways you make money. Then you wanna have numeric goals.
[00:24:27] So when I say we will accomplish, here's my, here's our actual mission statement at Business made Simple. We will have 500 certified coaches, 900 certified marketing guides, and 18,000 people inside of our online platform. That's it. Buy January 1st, 2024 because every small business owner deserves an education and growing their business.
[00:24:48] So here's what's really cool about the three economic objectives. The second we stated and wrote in our mission statement. The three economic objectives, we had a filter. It was the next day we were in a meeting and we were about five minutes into [00:25:00] talking about an initiative, when somebody raised their hand and said, Hey guys, this doesn't have anything to do with our three economic objectives.
[00:25:06] Do we still wanna do it? And everybody in the room just went, actually, no, we're wasting our time. Because those are the three ways that we make the most money. We're talking about something that's actually not gonna make us much money at all. We just had a customer bring it up and we're trying to answer the customer question.
[00:25:19] We need to just answer the customer's question saying we actually we're, we've decided not to do that. So you get a filter. That alone will cause a massive sort of forward thrust in your organization, cuz now everybody in the organization is trying to support three things. Then the Y, we will accomplish X by Y because of Z.
[00:25:36] The Y is actually your deadline. I recommend setting a two year deadline. You can go three years. Anything beyond three years is not gonna motivate anybody. So we set our goal over a year ago and now we're about what, 10 months away from hitting it and we're on track to hit it. So what a deadline does inside of a mission statement creates a sense of urgency.
[00:25:58] You say Don, mission statements don't have [00:26:00] deadlines. You're right. Most large corporations don't put deadlines and mission statements because those corporations have mission statements written by lawyers on behalf of shareholders. You don't have a team of lawyers and you don't have shareholders. You have the luxury, and it is a crazy luxury that you should take advantage of writing a new mission statement every two or three years, and usually in your mission statement, all you're gonna do is adjust X and Y, and that's really it.
[00:26:21] If you don't like it as a mission statement, just call it a goal statement and let these two statements be parallel to each other. Finally, the Z, we will accomplish X by Y because of Z. Z is the Y. It's the reason that you're in business and it's usually customer centric. We are doing this. We're gonna accomplish these three things by January of 2024 because.
[00:26:42] And then you wanna state the problem that your customer has and how you're gonna solve it. That mission statement aligns your team. And first of all, it's memorable. Every single member of my team knows that mission statement. Where most people write a mission statement and nobody remembers their mission statement.
[00:26:56] Even the person who wrote it can't remember it. If you've forgotten the mission [00:27:00] statement, you've forgotten the mission. So that mission statement is really key. And it's the first part of your leadership. Those would be the economic coordinates that you're entering into the flight.
[00:27:09] Hala Taha: I really like this framework because I think giving some measurable things that people can align to, it helps people understand their progress. Like guys, we are way off our target and we have only am this amount of time to get there, and we better hustle and step on the gas. So I feel like it gives people a measuring stick in terms of how they're doing towards the mission.
[00:27:29] We're usually, like you said, missions are usually like vague and fluffy. They're just like directional. This is like very specific, which I think anything more specific is gonna get people closer to an actual goal.
[00:27:41] Donald Miller: That's right. And then you align your team around those objectives, and people know whether or not they're winning or losing.
[00:27:46] When you actually state three economic objectives. Your whole team knows in real time whether or not you're hitting them, whether you're behind them, whether you're ahead of them. And by the way, if you're behind them, it bothers everybody, which is exactly [00:28:00] what you want. You want this bothering everybody.
[00:28:02] So they're gonna come to you and say, Hey, can we either adjust the economic objectives or what's our plan to fix them? Or if you didn't have economic objectives, nobody would even know that there's anything wrong with the business, and you wouldn't have those. The instrument data on your dashboard to be able to know that you're actually flying upside down and heading straight toward the ground.
[00:28:21] So those three economic objectives are, you're not always doing well with them, but if you're not doing well. They still serve you because you know you're not doing well and you're not confused.
[00:28:31] Hala Taha: So this is really good advice. How about getting this mission statement to stick within the organization?
[00:28:36] Let's say you've got over 20 employees, you're not able to one-on-one. Explain it to everyone. What are the ways that you can distill this information to get it to stick with your workers?
[00:28:47] Donald Miller: One of the absolute hardest things to do is to get a team aligned around the economic objectives of the organization.
[00:28:54] And we have a framework, it's actually on chapter five of the book to help you do that. And the [00:29:00] framework is five meetings that you wanna have with your team, and some of the meetings will happen every week. Some of that meetings happen almost every day. Some of the meetings happen once a quarter. Those five meetings are the all staff meeting the department stand up. The personal priority, stand up the quarterly performance review, and then you will have an occasional revenue meeting.
[00:29:21] Also, the three economic objectives and the mission statement need to be talked at about during every all staff meeting. You actually open up the all staff meeting with that, those three economic objectives, that happens on Monday once a week. Then the next meeting is your department standup. The three economic objectives get repeated at the department standup, so you are instilling these economic objectives in every single team member.
[00:29:46] Then also at the department standup, the five priorities of that department which have to serve the economic objectives are also discussed, and the team in about 15 minutes discusses whether or not they're hitting their five priorities, so that we can hit these economic objectives. Not only that, but [00:30:00] in the personal standup that every single employee has with their department leader for about 15 minutes. They discuss their five priorities that serve the department.
[00:30:09] Five priorities that serve the three economic objectives. So you are constantly meeting, talking about what the economic objectives are, what your department is doing to hit those objectives, and what every person is doing to hit those objectives. And if you actually install those meetings into your organization. It's impossible to forget where we're going and why you're so important to actually help us achieve where we're going.
[00:30:31] Hala Taha: What about the business owners who are scared of being like transparent? Because I could imagine that there's a lot of business owners that are like. I don't wanna talk about our financial goals or what we're making, especially with like maybe the lowest level employees, and things like that. What would you say to them?
[00:30:46] Donald Miller: I am personally am a fan of not hiding the numbers, not hiding how much money we're making, not my hiding, how many orders came in. I don't wanna hide any of that. The reason that small business owners don't like [00:31:00] exposing the numbers to their team members is because it exposes the fact that the company's making millions and the team members making $40,000 and that all they see is that disparity.
[00:31:09] But the way you actually get around that, or get over that, is you actually give the entire team a really great economic education. So you actually say, look, we're making 2 million this year. Our overhead is about 1.2 million. That means there's 800,000 left and we're gonna give half of that to the government, so that's $400,000 that's left.
[00:31:31] We have to put X amount in our rainy day fund. So at the end of the day, this is about what I make and this is about what you make. But if you can help us make more, and if you have ideas to help us make more. Your salary will go up as well. And I just love teaching all 30 of my employees how a small business really works.
[00:31:52] They, by the way, know they pretty much know exactly what I'm making, which is a lot of money. They also know that we are incredibly generous [00:32:00] with that money. They know that we bought a building that houses the business. That building is incredibly expensive. Yes, it's an asset that my family will be able to own 50 and 60 years from now, but I don't get that cash.
[00:32:12] I bought that building so that we could all live inside of this building. I just don't hide the numbers. And then if somebody gets upset about that and resents that they don't belong on my team, or if they get upset about that and resent that, I sit them down and I say, would you like to run a business?
[00:32:28] Because if you leave me and you run a business, I will do everything I can to help you because I want you to experience this too. Let me tell you what also happens. Everything stops with you. If that business fails, it's your fault. The government doesn't come for my employees. They come for me. If I don't pay taxes, somebody slips on a banana peel in my parking lot, they don't sue you, they sue me.
[00:32:49] And I just want you to know there's an enormous amount of risk in starting a business, but if you can make it work, it's worth it and I will help you do it. But at this point, you work for me [00:33:00] and I need you to produce. And that conversation, why not just tell 'em the truth? I think one of the reasons that Americans feel like victims, especially the generation behind me, and the generation behind them, are not gonna make as much money as their parents is because they don't actually understand how money works.
[00:33:18] And I want to teach everybody I can. This is how money works, and I don't want anybody excluded from being able to participate. It's high risk, it's high stress. But if you wanna go for it, I'm all for you. Let's go for it. I'll help you.
[00:33:31] Hala Taha: Preach, Donald Preach. That was great. So let's talk about core values sticking on leadership.
[00:33:36] So like I said, I'm doing a lot of core values work. We just came up with our new values at YAP Media. So we're scrappy hustlers, we're obsessive with excellence. We step on the gas together, we win. We have all these different like headlines that we created for our core values, and we did a lot of work around it and I'm really excited to roll it out.
[00:33:52] And you talk about similar things in your book related to core values and how everybody needs key characteristics defined for your team members. [00:34:00] So why do you think core values can help United Team, and how can they help leaders actually make decisions more quickly as well?
[00:34:07] Donald Miller: One of the great things about core values, I think, is it helps you define an aspirational identity.
[00:34:12] This is who we're going to be. We're gonna be people who love our jobs. We're gonna be people who care about each other, have each other's backs. Those are core values. And so when you point to core values, you're basically pointing to what's expected if you are going to work here. Now, one of the downfalls of core values is they're always vague.
[00:34:29] And if somebody says, our core values is integrity, if you caught a bank robber in mid bank robbery and you said, explain to me why you're doing this, they're, I promise you, they're gonna defend their integrity. These rich people have all the money and I'm taking it to whatever. They're robbing a fricking bank and they think they have integrity.
[00:34:48] So it's just too vague. I like core values, but more than that, I like two other things, key characteristics and critical action. Now key characteristics are the characteristics that you need to [00:35:00] have in order for us to hit our economic objectives. If I run a pet story, I need you to love pets. If we run a software company. I need you to obsess about the easy, simple user interfaces.
[00:35:13] And so now I know who to hire. I'm not just hiring somebody with integrity. I'm somebody hiring somebody with integrity who loves animals. So those key characteristics are more true to your team, than they are to anybody else. It's where you actually dial down into the uniqueness of your culture.
[00:35:30] Now, critical actions go even further. Critical actions are the things that we are all going to do together to hit our economic objectives. If I have a restaurant, and one of my economic objectives is we are going to sell 35% for every client, for our customers to come to the restaurant, 35% of them are gonna get a dessert.
[00:35:50] We're at 15%. So what we're gonna do is we're gonna say, our critical action is we ask every single person eating, have you tried our world famous brownie? We're [00:36:00] gonna ask every, and as soon as you make that a critical action, guess what's gonna happen to your brownie sales? They're gonna go way up.
[00:36:06] So if you have three core values, three critical actions, and three key characteristics, your entire culture changes. If you go to Chick-fil-A, a fast food place in the American South, and they're spreading all over and you say Thank you, they say, my pleasure. That's a critical action. When somebody says Thank you, the critical actions, you say, my pleasure.
[00:36:25] And you position yourself as the servant of the person that you're actually talking to in a humble way. Those are the sorts of things that create a culture. And you need at least three critical actions that one, stimulate your bottom line and help you achieve your economic objectives. And two, actually support and empower your culture to be defined.
[00:36:47] Hala Taha: You say there's three kinds of leaders that you normally find at the top of successful small businesses. The artist, the operator, and the entrepreneur. I thought this was fun cuz I have three main executives on my team and I thought we each fit in those buckets and I [00:37:00] thought that was exciting.
[00:37:00] So tell us what those mean.
[00:37:02] Donald Miller: That's why you're doing so well.
[00:37:03] Normally if your business gets past four or 5 million. You need to have three people, three personalities, and they're very different helping you run the team. So once your business gets past, again, three or 4 million, these three personalities are necessary in order for the business to actually grow.
[00:37:21] And this is what, if there's three people on your leadership team, I hope you have one of each, and one is the artist. And by artist, I'm not talking about like a poet or a paint. I'm talking about somebody who obsesses about products. They love the products, they love making them, they love supporting them.
[00:37:38] They love marketing them. They love talking to customers about them. They love improving them. The artist, my guess is Hala, that you are an artist. I am also an artist. Now, the other personality that you need is actually the operator. The operator's not gonna help you make any products. They're just not.
[00:37:53] What they're gonna help you do is manage the team. They're gonna help you manage the priorities and manage the people and make sure everybody's [00:38:00] working really hard because the artist normally doesn't like to do that. They wanna obsess about the product. And then the third personality is the entrepreneur.
[00:38:08] And the entrepreneur is, looks at what the artist did and looks at what the team is capable of doing and says, how can this machine make more money? Period. If we segment an audience and send 'em this sales funnel, then we can make more money with this. If we actually run a live webinar, we'll collect more leads and we'll do this.
[00:38:26] The entrepreneur is thinking up that way. If you have an artist, an operator, and an entrepreneur on your leadership team, you are going to win. And here's what's actually very interesting. It doesn't matter if the artist, the entrepreneur are the operator is actually the ceo. It doesn't matter any of those.
[00:38:43] If you look at somebody like Tim Cook, he's an operator. Somebody like Steve Jobs would be an artist. The company has done extremely well under both of those, but I guarantee you surrounding Tim Cook are really good operators, and are he's a good operator. Surrounding Tim Cook, are really good [00:39:00] entrepreneurs and really good artists.
[00:39:02] So you need those three personalities in the cockpit of your airplane using the metaphor of an airplane to run your small business. You need those three personalities in order to really scale the company and reach its full potential.
[00:39:14] Hala Taha: I really like that analogy. It's really cool. So the second step is about marketing.
[00:39:18] We're not gonna cover that guys. If you listen to episode #120, which I'm gonna replay on this podcast, me and Donald cover the seven step story brand framework in detail. So it'll be right on the feed for you guys. Easy to find episode #120. It'll be a YAP Classic. So check that out. And we're gonna move on to sales because offline, Donald told me that, Hey Hala, we gotta talk about sales.
[00:39:39] He said, I can really help your audience if we talk about sales. So you said step three, left engine of the plane is the sales step. And in this step, you got, you have to make the customers a hero during the sales pitch. And so from my understanding, you actually didn't like selling when you first started your business, so why didn't you like selling and then [00:40:00] how did you learn how to sell more effectively?
[00:40:02] Donald Miller: I didn't like selling, and I've learned to like it because I basically stopped selling and I started inviting customers into a story. And I realized I didn't have to sell anything. All I had to do was make my offer extremely clear and I sold a lot more of whatever it was that I was selling.
[00:40:16] The problem with sales training and sales education is you don't get adoption. Big companies play millions and millions of dollars to bring in sales trainers and up to 70% of their Salesforce will ignore it. They're only getting 30% adoption if that, and so I don't love the idea of sales training.
[00:40:33] What I love though is to teach all sorts of sales account executives, all sorts of small business owners. I love teaching them a formula to do one specific thing, and that is this. Write a follow up email to a customer that will close the deal. So let's say you spent a day with a customer. Maybe you were at a workshop and customer, there were 5,000 people in the audience and a bunch of them gave me, gave you your [00:41:00] email address, whatever it is.
[00:41:01] What you wanna do is you actually wanna go back to your hotel room or go back home, open up your computer, and you want to email. Whoever you just had a conversation with, a email, and this is what the email needs to do in order to close the sale. First start with the problem. Earlier today we talked about how we all struggle with X, and I know that can be very painful.
[00:41:21] Start with a problem. Step two, position your product as the solution to the problem. Nobody has to deal with this anymore because we have created X, and if you buy X, your problem will be solved. That's step two. Step one, define the problem. Step two, position your product as the solution to the problem. Step three, give them a three step plan to buy it.
[00:41:42] Now, three step plan. Don't overthink it. In order for you to engage this, all you need to do is have an intake session with me where we talk about it. Second, I'll give you a custom strategy on what I think you should do, and three, if you wanna move forward, you and I can move forward. You wanna remove the cognitive dissonance by giving [00:42:00] people baby steps.
[00:42:01] Then step four is actually to paint the negative stakes. I don't want to see you struggle with this anymore, and I know if you don't buy my product, you're gonna keep struggling with it. And a month from now, a year from now, this is gonna be even more painful. Let's deal with it now. So step four are negative stakes.
[00:42:18] Step five is positive stakes. However, with my product. This is the life that you're going to experience and here's how great your life will be. And then finally, step six, ask for the sale. I think you should buy this product today. It's the right product for you. Click here and enjoy this special offer.
[00:42:35] Let me just summarize it. Start with the problem. Position your product as a solution. Give them a three-step plan. Paint the negative stakes, take the positive stakes and call the customer to action. If you write that follow up email, you will close way more sales. Not only will you close more sales, but you will have just learned how to sell.
[00:42:54] And the way you learn how to sell is you find out what the customer's problem is and you position your product as a solution. If you [00:43:00] do it five times in an email, you will never have a sales conversation again. That's the same. For instance, if you work at a mattress store, cuz we work with Tempur Sealy to train some of their sales people.
[00:43:10] You don't wanna go up and say, what brought you in today? You know what brought them in today? They're looking for a mattress. You wanna go up and you say, Hey, welcome into the store. Let me just ask you, what do you hate about your current mattress? If you say, what do you hate about your current mattress?
[00:43:21] They're gonna say it's too soft in the middle, or, it's hurting my back, or it's too warm at night and whatever. And you say, great, I've got three things, three mattresses here that will solve that. Let's take a look at 'em cuz they're at different price points and they have some different things.
[00:43:33] You are a mile into the sales conversation and when you ask, what brings you in today, you're nowhere. You're absolutely nowhere. They're gonna try to avoid you. That's how you sell and it's all you need to know.
[00:43:45] Hala Taha: We'll be right back after a quick break from our sponsors. This episode of YAP is sponsored by Elo.
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[00:46:17] Donald Miller: You know what's interesting? Hala, I just spoke to 250 sales reps for a big, probably $1.4 billion company, 250 sales reps in the room. And I said, Hey, raise your hand if there's a customer that hasn't made a decision yet, you've been interacting with them, but they're sitting the fence. 250 hands go up.
[00:46:35] That's a sales rep's job. So everybody in the room had that. I said, open your computer. We are literally going to write them an email right now. We spent the next hour formulating 250 emails. I said hit send. And then I needed to get off the stage cuz I had a flight. So the chief revenue officer got up, said, Don, thanks.
[00:46:52] And I rolled my bag outta the back of the door. Got a call two days later to my staff. Chief revenue officer, said, I've never seen anything like it. We closed [00:47:00] 2.4 million worth of sales in the room.
[00:47:03] Hala Taha: Wow!
[00:47:03] Donald Miller: And it's not because we coerced the audience into buying anything. It's not because we manipulated anybody.
[00:47:09] What those customers were doing were sitting the fence because they didn't fully understand why they needed that product. And every sales rep in that room made it clear. And now they tasted that success. I'm sure they've made tens of millions now cuz that was over a month ago. And they're starting to have very different sales conversations, and sending out very different proposals and giving very different presentations.
[00:47:31] That formula works for follow-up emails, works for in-person conversations, works for keynote presentations, works for elevator pitches, works for proposals. That's the formula you want to use to close sales.
[00:47:42] Hala Taha: This reminds me of something that Erica Dhawan came on my show and she's a workplace productivity expert, and so much of our communications are digital now.
[00:47:49] So much of what we do in our work is reading screens, reading slack, reading email, and she says that writing clearly is the new empathy. It used to be that speaking [00:48:00] clearly was the new empathy and listening was zoom. Now it's writing clearly is the new empathy.
[00:48:04] Donald Miller: You can't write especially a response email if you've already started a conversation with somebody.
[00:48:09] You can't write a good email without having done a very good job listening. If I said Hala, you and I had a great conversation, congratulations on your 8 million. I think that's incredible. I heard you when you said you have 60 employees and things have gotten more chaotic. I felt your pain. Chapter five of my new book will walk you through five meetings that will completely revolutionize your staff, and when in about three months you won't feel that pain anymore.
[00:48:32] If you run these five meetings. That's me listening and saying here's the part of my product that would solve Hala's problem. You start doing that, you're gonna sell a lot more books and a lot more leashes for dogs and a lot more nutritional supplements, or whatever it is that you sell.
[00:48:45] You're gonna sell a lot more of 'em.
[00:48:47] Hala Taha: So let's talk about the language of sales a little bit. Why do we need to think in story and how do we speak in story. When we're trying to sell to potential customers?
[00:48:55] Donald Miller: Story is the universal language, and when you're having any kind of [00:49:00] conversation. Whether it's getting together with a friend to catch up or it's a sales conversation, or even if it's a conversation with your therapist. What your brain is doing the entire time is trying to organize events into the structure of story.
[00:49:12] Your brain is subconsciously figuring out who the hero is, what the problem they're up against is, how they're gonna get outta that problem. What the happy ever life will look like if they do get outta that problem. Because most people are not actually very good communicators. It's very hard to figure out what the story is actually about, but if we actually lay out our communication in the form of story. The person that we're talking to doesn't have to use any mental bandwidth in order to understand what we're talking about.
[00:49:40] And that gives the brain a really pleasant feeling because the brain doesn't have to work hard to organize the information. We tend to follow leaders who are able to do that, and we tend to buy products from account executives who are able to do that.
[00:49:54] Hala Taha: Can you give us an example in terms of speaking in story versus not, like just, I don't know if [00:50:00] this is too hard to do, but if you were to sell something, trying to sell it in a way that's not with a story versus one that is.
[00:50:06] Donald Miller: We've worked with a number of politicians on the Republican and Democratic side. I'm not a Republican or Democrat. I find myself pretty much squarely in the middle and don't really like either party cuz I think they're destroying the country. But we have, I've gone in and I've helped some folks and, few elections ago, Hillary Clinton's tagline was, I'm with her.
[00:50:25] Okay, if I'm with her, the story is about her. It's not about me. I don't know where we're going. I'm with her, but I don't know where we're going. I don't know what we're trying to accomplish. I don't know what's in it for me if we get there. In fact, I don't even know where there is. She did not effectively invite people into a story.
[00:50:41] And so it's not that people liked Donald Trump more. It's just that they didn't show up in the polls to vote for her. She had an incredibly low turnout. Donald Trump also wasn't all that much better. He also had an incredibly low turnout, but he just had more people than she did. And then you have Joe Biden later on who's running against January [00:51:00] 6th.
[00:51:00] He's running, or he's running not against January 6th, he's running against the spirit that led to January 6th. He's running against, he had all sorts of villainous things that he could point out that he is running is, it was a clearer narrative. And so it's very important that we understand, unless we're inviting people into a very clear story in which they get to be the good character winning the day to experience a better life.
[00:51:24] People are gonna tune you out. You will see examples of that everywhere. Now that I just said it.
[00:51:29] Hala Taha: So then the main principle of this step, Donald, is to make the person that you're selling to the hero of the story. Can you just talk to us about that a little bit of like how you position somebody as a hero when you're selling?
[00:51:43] Donald Miller: Yeah! The reality is you probably talk to people Hala. And I may have been one of them at some point because I'm not perfect, but you probably talk to people and it felt like the story was all about them and it really wasn't about you. And we might call that person a narcissist or something like that.
[00:51:59] [00:52:00] That's because they see life through a prism. And the prism is they are the hero trying to win. But the reason that rubs us wrong, cause it really shouldn't rub us wrong, but the reason that it rubs us wrong is because them winning is not helping you win. In order to sit here and listen to this person who's all about them, winning means that you don't get to win.
[00:52:18] And it's not a win-win scenario. It's not a mutual thing. What we're actually looking for is somebody who enters into our story and helps us win. So lemme give you an example. Let's say you're at a cocktail party and you meet two people who do the exact same thing. The first person you meet, you say, what do you do for a living?
[00:52:35] And they say I'm an at-home chef. I come to your house and cook. You'd probably say something like really? Where'd you go to school? Where'd you learn to cook? And have you ever cooked for anybody famous? And what are your favorite restaurants? You'd make casual conversation and you would, at the end of the day, you'd think that's a really kind person.
[00:52:49] Two hours later you meet somebody and they do the exact same thing, charge the exact same amount of money, and have the exact same quality food. And you say, what do you do? And they say you know how most [00:53:00] families don't eat together anymore because they don't have time. And whenever they do eat together, they don't eat healthy.
[00:53:05] I'm an at-home chef. I come to your house and cook so your family can sit around the table, look each other in the eye, actually connect. And at the end of the meal, you don't have to clean anything up and you don't have to feel bad because what you ate was actually really good for you. And it also tasted good.
[00:53:20] Who's gonna do more business? Chef one or chef two?
[00:53:22] Hala Taha: Chef two, of course.
[00:53:24] Donald Miller: Chef one told their story. Chef two invited the customer into a story in which they could play the hero buying their product in order to experience a climactic scene, that is always going to win.
[00:53:36] Hala Taha: So one last question on sales and then we're gonna close this out.
[00:53:39] So something that I read in your book that I thought was really interesting, and it reminded me of something that Jay Samit taught me a long time ago, or Jay Abraham actually is the one who taught me about it. He's like a big marketing guru, and you actually turn down customers, whose products and services they wanna buy them from you, but you actually feel like it's not a good fit for them.
[00:53:59] You'll [00:54:00] actually not sell something even though you can sell it. Why do you that?
[00:54:04] Donald Miller: I do that to protect my reputation, and also that's the selfish reason I do it. The other reason I do it is because they're not gonna get any value out of this to bring me in for a day. We do these things called strategy sessions. Where I either come to you for a day or you come here to Nashville for a day.
[00:54:18] They're really expensive. And they're expensive because for me to take a day and not write a book. The opportunity cost on that is very high, so what we promise people is that, look, I will only do this if we really believe that easily. You can make a 10 x return on your investment. So if you're gonna pay me X amount of dollars to be here. We need to talk on the phone and make sure you can make a 10 x return on their, on your investments.
[00:54:42] That means do you have email, a list of emails that we can email? Is your website pretty messed up so that we can fix it in a day? Can we write some emails? Can we come up with the three economic objectives? We need to get a massive return. I've never had to write anybody a check, but I do guarantee, you're gonna get this 10 next return, or I'm [00:55:00] gonna give you your money back.
[00:55:01] So there's two things that I do. One is if we have that call, and I don't think I can make you a pretty enormous amount of money. I just say, listen, I'm not your guy. I just don't think we can do it. Sometimes, the reason I don't think we can do it is cuz you're already doing so incredibly well. It's like I can't improve on what you're doing.
[00:55:16] You're doing well. Or you haven't released the product yet, or it sounds like you've got dysfunction on your team or whatever. But if I look at it and go, you've got a great email list. Your website is very unclear. We're gonna make a ton of money when we clean that up, we're gonna write five emails.
[00:55:29] They're gonna make you a truckload of cash. Let's go. Then we do it. So there's people who I say, I can't do it for you. And people who I say, look, I'm gonna do it. You got an honor system here. All you gotta do is call me and say, Don, we didn't make our money and I'm writing you a check and I'm gonna write you a check for whatever you paid me.
[00:55:45] And the main reason I'm writing you is I never ever want anybody to say I lost money on Don Miller. I just don't want him saying it. So I'll give you your money back. So you can never say that. I think that's one of the ways I've built a little bit of trust in the business community, cuz the bottom line is the bottom.
[00:55:59] We've gotta [00:56:00] make you money. And I'm in the business of making you money. I think you do that to protect your reputation. And also I just think there's plenty of money out there, and there's plenty of people who have the problem you solve. So you know, your job is to find the people who have the problem you solve and sell them something.
[00:56:14] And if you find somebody who does not have the problem you solve and they wanna buy something from you, I think it's our responsibility to sit down and say, I don't think this is going to work for you. And I never ever want anybody to buy my product and not have it work.
[00:56:27] Hala Taha: It's all about integrity.
[00:56:28] And by the way, when you have clients that are unhappy.
[00:56:31] Donald Miller: They talk.
[00:56:32] Hala Taha: They talk and it's just it's a drain for everyone. But then on the other hand, if you have a perfect fit client where you solve all their problems, they're so happy. They're telling all their friends, they're referring. It's just such a more positive experience also for everybody on the team.
[00:56:45] So I really think it's a great point that you made. Donald, thank you so much for coming on the show.
[00:56:50] Donald Miller: It's always wonderful.
[00:56:51] Hala Taha: It's always such a good time. Where can everybody get How to Grow Your Small Business?
[00:56:56] Donald Miller: Get it wherever you buy books. If that's on Amazon, grab it on Amazon. If that's at [00:57:00] Barnes Noble, grab it.
[00:57:00] Barnes and Noble, keep your receipt. They email you a receipt and if you just copy that number. That receipt number, and go to growyoursmall business.com and enter your receipt number. We have a bunch of free bonuses that we're giving away. One of them. Past the online sales script where we will actually, you can type in your sales follow up email and I will color code it for you so that you can see where you're talking about the problem. Where you're talking about the product as the solution to the problem, where you're talking about the three step plan, negative, positive stakes and call to action.
[00:57:34] You'll actually look at it in four color to see where you're talking about all these parts, to make sure it's a perfect email that's gonna close the deal. That's free when you buy the book. Just grab the book and then go to growyoursmallbusiness.com and gimme your receipt.
[00:57:48] Hala Taha: I think this is gonna be one of those classic business books, so I highly recommend that you go get it.
[00:57:52] I'm gonna be digging in way deeper than I have. I've really only read it like high level, so I can't wait to really go deep on this [00:58:00] book because I know it's gonna be filled with so many gems. Donald, what is one actionable thing our Young and Profiteers can do today to become more profiting tomorrow?
[00:58:08] Donald Miller: Set three economic objectives.
[00:58:10] We talked about it at the beginning of the podcast. What are the three ways that you're gonna make money this year? And give me numbers. We're gonna sell 400 of this, we're gonna sell 80 of this, we're gonna sell 25 of these, whatever it is, give me three economic objectives and then reverse engineer your entire strategy to hit those.
[00:58:27] Hala Taha: Awesome.
[00:58:28] And what is your secret to profiting in life?
[00:58:31] Donald Miller: Profiting in life? Five o'clock, actually more like four o'clock. I go home and I spend time with my daughter and my wife and I don't think about work. And my wife and I talk about work for probably an hour a week. And that's it. I have a life outside of work and I love it.
[00:58:48] Hala Taha: I know you put family number one by far. It's one of the things that I respect most about you, Donald. And where can everybody learn more about you and everything that you do?
[00:58:56] Donald Miller: If you wanna see pictures of my daughter, who's [00:59:00] incredibly cute, and my wife, who's incredibly beautiful, and my dog, who is a feisty pain in the rear end, who keeps us humble?
[00:59:06] Donald Miller is my Instagram handle. I'd love to see you guys there.
[00:59:10] Hala Taha: Awesome. Thank you so much, Donald. Always a pleasure.
[00:59:13] Donald Miller: Thank you so much. Hala, wonderful to talk to you.
[00:59:15] Hala Taha: YAP fam, Donald Miller always brings the value, and it's a good thing he did today because 65% of small businesses fail within 10 years. Now that we understand the six key parts of a business. Which Donald compares to the parts of an airplane, we can fly far and fast. To recap today's episode, I'm gonna read an excerpt from Donald's book about his six key parts of a business to really make it stick for you.
[00:59:45] The cockpit of an airplane represents the leadership. Essentially, the leadership is in charge of getting the airplane to its destination. The pilot or the pilots have to know where the plane is going, and reverse engineer its safe arrival. To grow a business, you'll need to know how [01:00:00] to unite a team around a clear economic mission.
[01:00:03] This is step one. The right engine represents the marketing effort, which directly contributes to the airplane's thrust. When the marketing engine runs efficiently, the business sells more product and moves the business forward. This movement in turn contributes to lift. To grow a business, you'll need to clarify your marketing message, so it produces a considerable amount of thrust.
[01:00:24] This is step two. The left engine represents sales, which increases the thrust of an airplane even more. Even if you don't have a sales team, you are likely involved in countless sales conversations. Unfortunately, most of us hate to sell. Nevertheless, when we learn to invite customers into a story in which our products or services solve their problems, sales go up and the thrust that moves the plane forward increases.
[01:00:48] To grow a business, you'll need to sell by making the customer the hero. Most people talk too much about themselves when they sell. Stop. Mastering sales conversations, that invite customers into a [01:01:00] story will increase the thrust of an airplane even more. This is step three. The wings of the airplane represent the products or services you sell.
[01:01:08] If the products or services you sell are in demand and profitable. They will give the business lift and support the weight of the airplane. Thrust is provided through marketing and sales efforts, but the wings profitable and in demand products make the airplane fly. To grow a business, you'll need to know how to optimize your product offering so the airplane gets maximum lift.
[01:01:29] This is step four. The body of the airplane represents overhead and operations. If your overhead gets out of hand, the belly of the plane will grow too big and the plane will crash. Your largest expense is almost always your payroll. Whether you're only paying yourself or a small staff, payroll will crash a business unless you and your team are running a management and productivity playbook that ensures maximum efficiency.
[01:01:53] To grow a business, you'll need to run a management and productivity playbook that ensures every team member is contributing to the [01:02:00] overall economic priorities of the business itself. This is step five. The fuel tank represents cash flow with fuel. Energy is transferred to all the moving parts of the airplane without fuel, the plane crashes, no matter how well it's designed.
[01:02:15] The same is true of cash. For a small business, cash must be managed, so there's enough money to operate, plus plenty of extra cash in case the plane has to circle the airport a few times. To prepare for an emergency landing, to grow a small business, you'll need a method for managing money that is simple and easy to use.
[01:02:32] This is step six. There you have it. That's a recap of the six Steps to Grow Your Small Business and Donald Miller's new book, How to Grow Your Small Business out now, almost nobody is better suited to give you business advice than Donald Miller, so I highly recommend that you check this book out.
[01:02:48] He's one of my favorite authors and one of my favorite businessmen. Thank you so much for listening to this episode of Young and Profiting podcast. If you listen large and profited, be sure to share this episode with your friends and family and [01:03:00] drop us a five star review on Apple Podcast. If you like watching your podcast videos, you can find us on YouTube and you can also find me on Instagram @yapwithhala or LinkedIn by searching my name.
[01:03:11] It's Hala Taha. Big shout out to my amazing and hardworking YAP team. Thank you for all you do behind the scenes. This is your host, Hala Taha, aka the podcast Princess signing off.
[01:03:38] Darius Mirshahzadeh: Hope you enjoyed this episode. I'm Darius Mirshahzadeh, host of the Greatness Machine and part of YAP Media Network, the number one business and self-improvement podcast network. So what's the Greatness Machine? The Greatness Machine. We are a badass podcast and we're about two things. We're while people are living their passions and those are creating greatness in the world and doing so despite the odds.
[01:03:55] Cause we know that creating greatness is not necessarily an easy road. What do I do in [01:04:00] all my interviews and episodes? We're gonna be diving into origin stories. What makes people tick and why they did what they did to get where they're going. I interview some of the greatest minds in the world turning their wisdom.
[01:04:10] And their experience into learning and advice that you can use in your life, so that you can level up and you can create some massive greatness in your life. You're also gonna get to hear solo episodes. This is like my greatest life learnings, the things I wish someone had taught me. Join me as I go deep with guests like Gabby Reese, Amanda Knox, former FBI negotiator, Chris Voss, Stanford Behavioral psychologist, BJ Fogg, and my boy NHL, hall of Famer and Olympian, Chris Pronger, and so many more.
[01:04:37] You could find the greatest machine on listening platforms everywhere, so be sure to check it out. We launch episodes Monday, Wednesday, and Friday. Listen now.
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