How to get unlimited funding to build your business in 30 days...
Summary
TLDRIn this video, the speaker explains a powerful equation that helped him transform $1,036 into over $120 million in sales. The key concept is 'Client Financed Acquisition,' which involves getting customers to pay for all marketing and acquisition costs. By ensuring that the money made in the first 30 days is greater than twice the cost of acquiring and fulfilling a customer, the business can grow without external capital. This strategy enabled the speaker to rapidly scale multiple businesses, emphasizing the importance of thinking differently and leveraging customer funds for growth.
Takeaways
- 💡 The speaker's strategy revolves around a single equation that helped them turn $1,036 into over $120 million in sales.
- 🚀 The core concept discussed is Client Financed Acquisition (CFA), which means getting customers to pay for all marketing and acquisition costs.
- 💰 To succeed without outside capital, it's crucial to make more money from customers in the first 30 days than it costs to acquire and fulfill their orders.
- 📈 The speaker emphasizes that if 30-day cash flow is greater than twice the cost of acquisition plus fulfillment, the business can grow without capital constraints.
- 🔄 By using this approach, the speaker opened six brick-and-mortar locations at full capacity within three years, then scaled to 33 locations.
- 🛠 The equation and process outlined can be applied to any business to achieve rapid growth, as demonstrated by the speaker’s success in multiple ventures.
- 💳 The speaker highlights the use of credit cards to finance customer acquisition, emphasizing that interest-free financing for 30 days can be leveraged for growth.
- ⚖️ Profitability is crucial in a capitalist society, and the CFA strategy ensures that acquiring new customers is never a limiting factor for the business.
- 📊 The speaker grew their portfolio to $85 million in annual revenue without taking on outside capital, relying solely on customer-financed growth.
- 🔗 The video encourages viewers to think differently about acquisition and to use CFA to grow their businesses without relying on external funds.
Q & A
What is the central concept that has helped the speaker grow their portfolio companies?
-The central concept is 'client financed acquisition', which involves getting customers to pay for all marketing and acquisition costs, allowing for business growth without outside capital or investors.
How does the speaker define 'client financed acquisition'?
-Client financed acquisition is defined as making more money from a customer within the first 30 days than it costs to acquire and fulfill that customer, ideally leading to a negative acquisition cost.
What was the speaker's initial capital when they started their entrepreneurial journey?
-The speaker started with $1036 and managed to turn it into over 120 million dollars in sales.
What was the speaker's approach to opening new locations for their brick and mortar chain?
-The speaker opened each new location at full capacity, learning how to do so effectively from the first location, and applied this knowledge to open 33 other locations.
How did the speaker transition from a brick and mortar business to a licensing business?
-The speaker used the same model of client financed acquisition to transition to a licensing business, growing revenue significantly within a short period.
What is the significance of the '30-day cash' term used by the speaker?
-'30-day cash' refers to the net free cash flow that can be collected from a customer within the first 30 days of their engagement with the business.
Why is the 30-day period important in the context of client financed acquisition?
-The 30-day period is significant because it represents the interest-free financing period typically offered by credit cards, allowing businesses to leverage this time frame to collect funds without immediate costs.
What is the minimum requirement for the '30-day cash' to be considered a successful client financed acquisition?
-The '30-day cash' must be greater than two times the cost of acquiring the customer plus the cost of fulfilling that customer.
How does the speaker suggest overcoming the belief that it takes money to make money?
-The speaker suggests changing the game by focusing on client financed acquisition, which allows for business growth using the customers' money rather than relying on personal or outside capital.
What are the potential constraints a business might face when using client financed acquisition?
-While client financed acquisition can alleviate capital constraints, businesses may still face operational and hiring constraints that need to be managed effectively.
How does the speaker describe the process of using client financed acquisition to grow a business?
-The speaker describes it as a process where the business collects more money from a customer in the first 30 days than it costs to acquire and fulfill them, allowing for continuous reinvestment in customer acquisition and business growth.
Outlines
💰 Client Financed Acquisition Strategy
The speaker introduces a key business equation that transformed a small initial investment into substantial sales, emphasizing the importance of thinking differently when capital is limited. The central concept is 'client financed acquisition,' which involves using customer payments to cover marketing and acquisition costs, thereby allowing for continuous business growth without external funding. The speaker shares personal success stories from various businesses, illustrating how this strategy was applied to achieve rapid growth and profitability. The equation is simplified to a formula where 30-day cash must exceed twice the cost of acquiring and fulfilling a customer, leading to a positive cash flow and the potential for exponential business expansion.
🚀 Leveraging Customer Capital for Business Growth
This paragraph delves deeper into the 'client financed acquisition' model, explaining how it enables businesses to grow without capital constraints. The speaker describes the process of using customer payments to fund new customer acquisitions, effectively creating a self-sustaining growth loop. The focus is on achieving a 30-day cash flow that is greater than the combined costs of acquiring and fulfilling a customer, which not only covers the initial investment but also provides surplus for further growth. The speaker encourages breaking away from the belief that capital is necessary for business success, instead advocating for a mindset shift towards leveraging customer capital for business expansion. The narrative concludes with a motivational call to action, urging viewers to adopt this strategy and overcome financial limitations.
Mindmap
Keywords
💡Client Financed Acquisition
💡Equity
💡Portfolio Companies
💡Acquisition Costs
💡Fulfillment Costs
💡30-Day Cash
💡Negative Acquisition Cost
💡Capital Constraints
💡Bootstrapping
💡Interest-Free Financing
💡Lifetime Value
Highlights
The speaker shares a single equation that helped turn $1036 into over $120 million in sales.
The portfolio company currently stands at about $85 million a year.
The concept discussed is central to the growth of portfolio companies with 100% equity without outside capital.
The speaker emphasizes the importance of thinking differently when starting with limited funds.
A challenge to the common belief that businesses need 2-3 years to break even.
The introduction of the 'client financed acquisition' concept as a key to business growth.
The speaker's personal experience growing a brick and mortar chain to six locations in three years.
Opening facilities at full capacity from the first day, a rare occurrence in business.
The transition to a licensing business model using the same growth strategy.
Achieving $2.5 million a month within 12-14 months using the client financed acquisition model.
Scaling to $4.4 million a month within 12 months in the second business venture.
The third business venture reached $1.7 million a month in just four months.
The importance of profit in a capitalist society for weathering economic storms.
The equation for client financed acquisition is detailed: 30-day cash must be greater than twice the cost of acquiring and fulfilling a customer.
The concept of '30-day cash' as a term for net free cash flow within the first 30 days of a customer's engagement.
The strategy of using credit cards for interest-free financing to acquire customers.
The potential for unlimited customer acquisition and growth without capital constraints.
The speaker's journey from $1036 to an $85 million portfolio without outside investment.
Encouragement to challenge the belief that money is required to make money, and to adopt the client financed acquisition model.
Transcripts
in this video i'm going to explain the
single equation that helped me turn 1036
dollars into over 120 million dollars in
sales and right now um our portfolio
company is about 85 million a year
so this concept has been the central
concept to how we've grown each of our
portfolio companies with 100 equity
without taking on outside capital or
investors right and so the key here is
if you don't have a lot of money you
have to think different and play the
game differently
most people when they try and play the
game when they when they get the
investors from outside or they have some
sort of seed capital of their own they
think i'm going to have to take two or
three years before my business uh is
break even or positive and that is
definitely a belief that you can have
but not necessarily one that you have to
have right and so i prefer to you know
change the variables the game that we're
playing uh to try and figure out a way
to make money all the time right because
it's like well if i could make money the
whole time then that would make this
definitely more fun and a lot less
stressful and so the equation that i'm
going to outline for you is what i call
client finest acquisition this is how we
grew our first uh lice you know shoot i
grew i went from zero to six locations
at my brick and mortar chain uh in three
years as a 26 year old and i was able to
open up each of those locations at full
capacity except for the first one
obviously but each of the ones after
that once i learned how to do this on
day one so that's not normally common so
we're going to open up each facility at
complete completely full capacity and
then i did this at 33 other locations
over the next few years after that we
transitioned to our licensing business
and we used the exact same model that
i'm about to show you
uh to go from zero to two and a half
million dollars a month within i think
it was like 12 or 14 months and then and
that's per month not per year so went
from zero to 28 million top line right
and then uh 12 months after that we're
at 4.4 million a month the second
business that added that up went from
zero to 1.7 million a month in four
months all right the third business we
started our software business went from
zero to also 1.7 ironically within six
months all right and so this equation
matters profit matters if you want to be
in a capitalist society because it's the
only way that you're gonna be able to
weather the storms all right so this is
the writer downer this is an equation
but it's a process all right
client financed acquisition what this
means in plain terms is get your
customers
to pay for all of your marketing your
acquisition costs and so what that means
is if you can plug into the universe's
money not your own money but you plug
into the money of the universe you can
pretty much cash flow anything you need
because you can make more money getting
someone to enter your world than it
costs you to get them there and if that
is your case and you still have all the
lifetime value that you're going to
collect but if you can do that in the
first 30 days and you can and you can
pay the cost of fulfillment and still
have money left over then you have what
is called a negative acquisition cost
right it means that you make money
getting customers all right so this is
the actual equation you know the number
two but then there's three things in
here that you may or may not understand
and so i'm going to break down each of
them let's call this number one let's
call this number two let's call this
number three so if i were to read this
in plain english it would say 30-day
cash oopsies
i usually write this the other way
30-day cash must be greater than
two times the cost of acquiring customer
and the cost of fulfilling that customer
okay so what this means is
cost of acquisition all right so let's
say it cost me a hundred bucks to
require a customer and that includes my
marketing team that includes
my sales guys and their commissions that
includes the advertising or whatever
method i did to acquire the lead okay so
let's say all luna cost me 100 bucks i'm
just using simple math here let's say
that for me to
fulfill this thing whatever the thing is
let's say it cost me another 100 bucks
all right so that's 200 that's gonna
cost me
to fulfill and sell
this thing these are my costs right
and so the idea is i have to have two
times the sum of this all right remember
this is in our little parentheses which
means this is 400
that is what i must make right that has
to be less than what i make in 30-day
cash which is a term that i use that
i've never really heard anywhere else
i'm sure there's a fancier word for it
but i call 30-day cash which is the
amount of money that i can collect
in net free cash flow to my business
within the first 30 days of a custer
customer entering our world now we may
have upsells and down sales and
continuity and future things that we're
going to sell
but none of that matters to the small
business owner who doesn't have cash and
so the reason it's 30 days
is because that's the amount of time
that you can get interest free financing
all right so if you have a credit card
people will extend your money for 30
days interest free that means if you
paid off in the first 30 days you can
you can pretty much take unlimited money
all right for the most part now you pay
your stuff off you get bigger limits
whatever but the point is and this is
literally how i started my second
business
is that i would use my cards i'd put the
money on the card to acquire the
customer so on my card there'd be 200
because that's what's gonna cost me to
fulfill and acquire but i would have
made
400
on that
and the reason it has to be greater than
this is because i have net right because
we have to take out the 200 that we lost
here
right minus 200. so i have 200 left over
what a coincidence that's the exact
amount that it's going to cost me to get
another customer and fulfill that
customer which means that i'm going to
get
you guessed it
another 400
from this customer
and we play the game again which means
that you have unlimited power to acquire
new customers
which means you get unlimited money
which is why if you if you play the game
this way and you choose to think about
acquisition in this manner you can grow
your companies without capital
constraint now it doesn't mean that
there won't be constraints there will be
you'll have operational constraints you
have hiring constraints of other things
but if you play the game this way
getting new customers and making sales
will never be the thing that is limiting
your company it will be only you and
this is what we've done over and over
and over again is design a process in
every business that we can figure out
where the amount of dollars that we make
in the first 30 days is greater than two
times the cost to acquire plus the cost
of fulfill and that works in any
business in the world all right and now
ideally i don't want to be just twice it
just has to be more than that if i can
make this you know 10 times right
then it's even better all of those uh
make it just even easier because then
i'm getting multiple customers and i
still have cash flow to go invest in
other things but this is the minimum
requirement for cfa or what we call
client
financed
acquisition and so right now if you
don't have money or you don't have
capital and you think it takes money to
make money
you just keep believing that beautiful
lie
and let everyone else go win while you
keep complaining all right so keeping
awesome mosey nation i know you're not
that type of person um and so we can
beat all those people who have those
limited beliefs um but i had
a thousand thirty six dollars in my bank
account
five years ago all right right now the
portfolio we do does 85 million dollars
a year i took no outside money to do
that which means if you can learn how to
play and multiply and multiply and
multiply and not use your own money
because i'm using my customers money to
finance all of the growth in this
business if you enjoyed this if this if
you found value in this uh click
subscribe i'll see you next video i know
this is a little bit more tactical um
i'll talk about more uh managing people
and and scaling the company side but
this is the this is the stuff right this
is this this is the these are the things
that actually grow the business all
right so anyways love you all keeping
awesome buzzy nation i'll see you guys
next vid bye
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