How to get unlimited funding to build your business in 30 days...

Summary

In 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

00:00

💰 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.

05:03

🚀 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.

Keywords

💡Client Financed Acquisition

Client Financed Acquisition (CFA) is the central concept described in the video, which refers to a business strategy where customers effectively pay for the company's marketing and customer acquisition costs. It is integral to the video's theme as it underpins the speaker's approach to business growth without external capital. The speaker illustrates this with examples of his businesses, where the revenue generated from customers in the first 30 days exceeded the costs of acquiring and fulfilling those customers.

💡Equity

Equity in this context refers to ownership interest in a company, which the speaker mentions as being 100% in his businesses, indicating no outside investors. This is key to understanding the video's narrative of bootstrapping growth, as it emphasizes the speaker's strategy of growing businesses without diluting ownership through external funding.

💡Portfolio Companies

Portfolio companies are the various businesses that the speaker has built or is involved with. The term is used to describe the collective group of companies under the speaker's management or ownership, which have grown using the CFA model. This term helps to contextualize the speaker's experience and success in applying the discussed business strategy across multiple ventures.

💡Acquisition Costs

Acquisition costs are the expenses incurred to attract and convert a potential customer into an actual one, including marketing, sales efforts, and commissions. The video emphasizes that these costs should be covered by the revenue generated from customers, which is a core aspect of the CFA strategy the speaker advocates.

💡Fulfillment Costs

Fulfillment costs are the expenses associated with delivering a product or service to a customer after the sale has been made. In the video, the speaker explains that these costs, along with acquisition costs, should be offset by the revenue generated within the first 30 days of a customer's engagement with the business.

💡30-Day Cash

30-Day Cash is a term used by the speaker to describe the net free cash flow that a business can collect within the first 30 days of a customer's involvement. It is a critical component of the CFA strategy, as it must be greater than twice the sum of acquisition and fulfillment costs to ensure profitability and sustainable growth.

💡Negative Acquisition Cost

Negative Acquisition Cost is a concept introduced in the video where the revenue generated from a new customer in the first 30 days not only covers the cost of acquiring and fulfilling that customer but also leaves a profit. This allows for a self-funding growth model, which is a key message of the video.

💡Capital Constraints

Capital Constraints refer to limitations in a business's growth due to a lack of funds. The speaker argues that by using the CFA model, businesses can overcome these constraints and grow without needing external capital, as they use customer revenue to finance their operations and expansion.

💡Bootstrapping

Bootstrapping is the process of growing a business using its own revenue rather than external funding. The video's theme revolves around this concept, with the speaker sharing his experiences of growing his businesses to significant scales without taking on outside investors or capital.

💡Interest-Free Financing

Interest-Free Financing is mentioned in the context of using credit card payments to acquire customers without incurring immediate costs. The speaker highlights this as a method to leverage 'the universe's money' to fund business growth, emphasizing the importance of paying off these debts within the 30-day period to avoid interest.

💡Lifetime Value

Lifetime Value (LTV) is the total worth of a customer to a business over the entire duration of their relationship. While the video focuses on the initial 30-day cash, it also acknowledges the importance of LTV, suggesting that businesses should consider the long-term profitability of customers beyond the initial transaction.

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