The Method Episode #31

How To Add $50k To Your Bottom Line This Year

TL.DR:

How I’m saving my business lots of money with simple automation tools.

Thirty years ago, running a million-dollar business meant something.

Today, thousands of kids like Pieter Levels are traveling the world building one-person million-dollar businesses from their laptops.

The secret ingredient is automation.

Peter and co can achieve with a couple of pieces of code what used to take thousands in wage costs and endless back and forth conversations.

Check out this chart. That’s how much time you can save by automating a job across five years – based on how often you do it and how long it takes to complete.

Web platforms like Shopify or Xero make building businesses infinitely easier and cheaper.

The best thing is that these tools are built for people like you and me. And we’re stupid if we don’t take advantage of them.

Using these tools, I’m saving my gym at least $50,000 in wages yearly, and so can you.

All I do is write down the daily and weekly jobs I do.

Like ‘I create a new Facebook post each day’ or ‘I send a thank you email to customers after every order.

Then I go to google and enter a search using my job description from above.

Google then suggests a list of software platforms and other tools to do that job.

I pick a solution and try it.

Most software/tools will give you a free trial and have good onboarding experiences that’ll hold your hand through the learning process.

If you’re worried about how much time it will take you to learn that new tool – refer to the table above, the upfront learning cost will almost always be worth it.

As you get used to using these tools, each new one will be easier to learn how to use.

If you want, there’s an in-depth guide on how I do this here.

Key Takeaway: You can employ software to work for your business at a fraction of the cost of staff.

What To Do With Setbacks – Try Again

TL.DR

A recent setback I’m facing and how to deal with them.

I spent most of May looking for an administrator for my gym.

Creating a job description, advertising on social media, booking interviews, running interviews, etc.

Then I spent weeks onboarding them to the business. And a few weeks later, they resigned due to personal circumstances.

That’s roughly ten weeks or a hundred hours of work wasted.

There’s a saying that goes something like the only thing you can plan for in life is for life not to go to plan, i.e. setbacks.

They suck because it’s not always obvious that I did anything wrong and can learn from the experience. Sometimes sh*t just happens.

Not too long ago, I used to take this bad luck personally and micro-quit in these moments. I didn’t want to repeat my effort in case I ended up with the same un-ideal outcome.

But quitting is obviously not the right thing to do.

• When you quit in these moments, you lose momentum.
• You make your setbacks permanent, not temporary – so they become losses.
• And If you quit in these moments, you set a bad example that others will follow.

I also had to re-framed my thinking here.

I had to realise past efforts don’t matter. That’s a sunk cost fallacy. If my gym needed an administrator last week, it probably still requires one now. It doesn’t matter whether my previous efforts failed or not.

The easiest way to stay on track in these moments is to recall your priorities.

We started hiring an administrator because that became an urgent need for the business. If that’s still a priority, I should keep going until that job is done.

Key Takeaway: Luck plays a part in all business outcomes; sometimes it’s good, sometimes it’s bad. Take the good and work through the bad by working with clear priorities.

“If you are depressed you are living in the past if you are anxious you are living in the future, if you are at peace, you are living in the present.”

~ Lao Tzu

Where We’re Learning

Founders Podcast-> This guy reads autobiographies of famous founders and breaks them down into key-takeaways podcast style. This is my favourite podcast at the minute.
100 Days Building An Underground Hut
-> Nothing business-related here. But it’s crazy to see how much you can achieve with persistent effort.

The Sweet Spot Of Business Growth

TL.DR

My theory on finding the right speed for business growth.

I think running a business is a lot like surfing.

You need a particular set of skills, knowledge and equipment to surf certain conditions.

Ex. I tried surfing a big (for me) swell this week and almost drowned.

We all want our businesses to grow but based on our skills, knowledge and systems, we can only handle soo much growth before it causes problems.

Too much input, i.e. customers into a business with limited capacity for more, will cause it to break and sometimes fail.

Take my gym, for instance. Last year we grew about ~35%, and for the most part, I felt in control. This year we’re growing close to 100%, and in some ways, it feels like we’re barely holding on.

I’m now purposely slowing us down.

We don’t have the skills, knowledge and systems to keep up, and soon we’ll start pissing off and losing customers at a rate that is hard to turn around.

Whereas at our Ecom company, 100% YOY growth feels pedestrian. Because the business is predominantly software-reliant and highly automated, we can easily handle much higher throughput.

There are three factors I look out for – to see where we’re sitting.

• Fire-fighting – If I’m spending more time putting out fires than building my business – I’m in trouble.
• If my team’s energy is low and they seem burned out. I need to slow us down or hire help.
• The business is becoming less efficient if we’re growing, but our margins are shrinking. So we need to take a few moments to adjust course.

Key Takeaway: Not all growth is good. I try to keep my businesses at a sustainable level by monitoring tell-tale signs of unsustainable growth.

You can get more actionable ideas like this in our email newsletter. Each week,we share the frameworks, methods and mental models we've used to build multiple 7 figure businesses.

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