Brian Tracy Business: URGENT: Do Not Launch Your Startup Without This Knowledge!

Summary

The speaker emphasizes that the primary reason for business success is focusing on high-impact activities and the primary reason for failure is focusing on low-impact ones. They discuss the importance of thinking, especially slow thinking for major decisions, and the need for focus. The speech covers key elements of business success, including great leadership, a high-quality product or service, a solid business and marketing plan, and excellent customer service. The importance of learning from failure and continuously improving is also highlighted.

Takeaways

• 😀 People are the number one reason for both success and failure. Focusing on things with high potential consequences leads to success, while focusing on things with low or no potential consequences leads to failure.
• 😀 Most of what is taught in entrepreneurship faculties is considered nonsense, as many successful businesses start without a business plan.
• 😀 Focus is the most important requirement for success, as highlighted by successful individuals like Warren Buffett and Bill Gates.
• 😀 The ability to focus can lead to doubling income and time off within 12 months, as demonstrated by the speaker's Focal Point Program.
• 😀 Slow thinking is crucial for making important decisions, as it allows for thorough consideration of potential consequences.
• 😀 Zero-based thinking involves evaluating current actions and deciding whether they would be started again knowing what is known now. This can help eliminate stress and unproductive activities.
• 😀 The principle of constraints suggests that identifying and addressing limiting factors within oneself and one's business can lead to significant improvements.
• 😀 Having a great product or service is key to business success. Investing in improving product quality can lead to increased customer satisfaction and business growth.
• 😀 Effective marketing and sales plans are essential for attracting and converting customers. A professional sales process can significantly increase sales and profitability.
• 😀 Providing excellent customer service ensures repeat business and positive word-of-mouth, which are crucial for sustained business success.

Q & A

What is the number one reason for success according to the transcript?

The number one reason for success is focusing on things that have high potential consequences.

What does the transcript suggest is the primary cause of failure?

The primary cause of failure is focusing on things that have low or no potential consequences.

What does the transcript imply about the effectiveness of business plans in entrepreneurship?

The transcript implies that business plans are often overemphasized in entrepreneurship education, with 49 out of 50 businesses starting without a business plan, including some of the most successful ones.

What is the importance of 'focus' in achieving success as mentioned in the transcript?

Focus is considered the most important requirement for success, as emphasized by Warren Buffett, Bill Gates, and Bill Gates Senior in the transcript.

Outlines

00:00

🧐 The Importance of Focus and Consequences in Entrepreneurship

The speaker emphasizes the critical role of focus on high-consequence activities as a determinant of success in entrepreneurship. They discuss the common misconceptions taught in universities about business planning and highlight the importance of learning from empirical studies on successful businesses. The speaker also underscores the value of understanding the right actions to build successful businesses, mentioning Carl Schramm's critique of entrepreneurship education and the importance of learning from practical experience rather than just theoretical knowledge.

05:01

🎯 The Power of Focus and the Concept of 'Thinking'

This paragraph delves into the concept of focus as a key to success, supported by a story involving Warren Buffett and Bill Gates. It stresses the importance of thinking as the most valuable work one can do, and how high-consequence thinking leads to success, while low-consequence activities often result in failure. The speaker shares insights on the impact of technology addiction on focus and decision-making, advocating for calmness in the face of crises to enable clear thinking.

10:02

🤔 The Distinction Between Fast and Slow Thinking

The speaker introduces Daniel Kahneman's concepts from 'Thinking Fast and Slow,' explaining the difference between fast, intuitive thinking and slow, deliberate thinking. They argue that entrepreneurs often mistakenly use fast thinking for important decisions that should require slow thinking. The importance of taking time to make high-stakes decisions is emphasized, as is the value of hiring slowly and thoughtfully to avoid costly mistakes.

15:04

💡 Zero-Based Thinking and Courageous Decision Making

The concept of zero-based thinking is presented as a method for evaluating life and business activities by asking if one would start a particular endeavor knowing what they know now. The speaker encourages having the courage to exit situations or relationships that are causing chronic stress or are not beneficial. This approach is positioned as a way to eliminate non-productive elements and move towards more effective actions.

20:04

🛠 Business Model Innovation and Embracing Change

The necessity for business model innovation is discussed, with the acknowledgment that current models may become obsolete. The speaker advises being open to new methods of generating profitability and to regularly evaluate business practices to ensure they remain effective. This includes considering whether current products, services, or team members would be re-initiated if one had to start over.

25:05

⚖️ The Principle of Constraints and Identifying Limiting Factors

The principle of constraints is introduced, which posits that there is always a limiting factor between a person and their goals. The speaker encourages identifying and addressing these constraints, especially those within oneself or one's business, to accelerate progress towards financial and personal success. The importance of self-discipline and learning key business skills is also highlighted.

30:07

🤝 The Seven 'Greats' of Business Success

The speaker outlines seven key components for business success: great leadership, a great product or service, a great business plan, a great marketing plan, a great sales plan, an obsession with numbers, and a great customer service plan. Each component is essential, and neglecting any one of them could lead to business failure. The focus is on learnability and the ability to improve in these areas to achieve high-profitability and sustainability.

35:07

📈 The Critical Role of Numbers in Business

The importance of understanding and focusing on key numbers in business is emphasized. The speaker discusses the need to identify the most important number that predicts business success and to track it diligently. They share a story of a company that turned around its financial situation by focusing on the net contribution margin, underscoring the transformative impact of understanding and acting on the right metrics.

40:09

🛑 The Pivotal Importance of Customer Service

The final paragraph underscores the importance of a great customer service experience as a bookend to the initial provision of a great product or service. The speaker argues that customer happiness should be the central focus of any business, as it leads to repeat business, rapid growth, and long-term success. They share examples of companies that have achieved significant success by prioritizing customer satisfaction.

Keywords

💡Entrepreneurship

Entrepreneurship refers to the process of designing, launching, and running a new business, which typically involves risk-taking, innovation, and considerable effort. In the video, the concept is central as the speaker discusses the importance of focusing on high-consequence tasks and the common pitfalls faced by entrepreneurs, such as the misconception that a business plan guarantees success.

💡Focus

Focus is the concentration of attention on a particular object or task. The video emphasizes focus as a critical requirement for success, citing the example of Warren Buffett, Bill Gates, and Bill Gates Sr. identifying it as the most important quality of success. The script discusses the importance of concentrating on tasks with high potential consequences.

💡Empirical Studies

Empirical studies are investigations that rely on observable evidence, often based on experiments or surveys, to draw conclusions. The video mentions the lack of empirical studies into what makes a business successful, criticizing the business education system for teaching theories not grounded in practical research.

💡Business Plan

A business plan is a formal document that outlines a company's goals, strategies, market analysis, and financial projections. The script challenges the conventional wisdom that having a business plan is a prerequisite for success, noting that many successful businesses are started without one.

💡Learning Curve

The learning curve refers to the relationship between the amount of time spent learning something and the rate of improvement in performance. The video discusses the desire to 'jump the learning curve' in entrepreneurship, implying the need to quickly acquire knowledge and skills to succeed faster.

💡Consequences

In the context of the video, consequences refer to the potential outcomes or impacts of actions or decisions. The speaker uses the term to differentiate between activities that are important due to their significant potential consequences and those that are not, which is a key factor in determining success or failure.

💡Thinking

Thinking, as discussed in the video, is the act of considering or reasoning about something. It is identified as the most valuable work one can do, with the quality of thinking determining the quality of life and business outcomes. The video emphasizes the importance of slow, deliberate thinking for important decisions.

💡Zero-Based Thinking

Zero-Based Thinking is a concept where one evaluates all activities as if starting from scratch, questioning whether they would be initiated again with current knowledge. The video uses this term to encourage re-evaluating business practices and eliminating those that are no longer effective or relevant.

💡Constraints

Constraints are factors that limit or restrict a process or system. The video introduces the principle of constraints, suggesting that there is always a limiting factor between a person and their goals, and that identifying and addressing these constraints is crucial for achieving desired outcomes.

💡WPO (Worst Possible Outcome)

WPO stands for Worst Possible Outcome, a concept used to assess the potential negative results of a situation and plan for their occurrence. The video suggests using WPO as a thinking tool to alleviate worry by understanding and preparing for the worst-case scenarios.

💡Customer Service

Customer service involves providing assistance and support to customers before, during, and after their purchase. The video concludes with the importance of a great customer service experience, stating that satisfied customers are the key to repeat business and growth, using the example of Zappos to illustrate this point.

Highlights

The number one reason for success is focusing on things with high potential consequences, while the opposite is true for failure.

The famous Drucker quote emphasizes that the worst use of time is working on something that doesn't need to be done at all.

Carl Schramm criticizes the focus on business plans in entrepreneurship education, stating that most successful businesses start without one.

The importance of understanding what actually makes a business successful is highlighted, as traditional teachings may not reflect real-world practices.

The concept of 'jumping the learning curve' to quickly reach a certain level of income is introduced.

Warren Buffett, Bill Gates, and Bill Gates Sr. all agree that focus is the most important quality for success.

The Focal Point Program's effectiveness in doubling income and time off by teaching focus is mentioned.

The story of a New Zealand entrepreneur turning his life around by learning to focus and identifying a profitable business niche.

The advice to 'focus and fail fast' as a strategy for quick learning and success is shared.

Thinking is identified as the most valuable and highest paid work that one can do.

The concept of consequences in time management is discussed, with a focus on high-consequence activities for success.

The dangers of technology obsession and its impact on the ability to focus are highlighted.

The importance of calmness in high-stress situations to enable clear thinking is emphasized.

Daniel Kahneman's 'Thinking Fast and Slow' is summarized, stressing the need for slow thinking in important decisions.

The principle of constraints is introduced, stating that there's always a limiting factor between you and your goals.

Zero-based thinking is presented as a tool for evaluating and eliminating activities that are no longer valuable.

The importance of business model innovation and the potential obsolescence of current models is discussed.

The concept of worst possible outcome (WPO) thinking as a strategy for worry reduction and proactive decision-making is introduced.

The seven 'greats' of business success are outlined: leadership, product, marketing, sales, numbers, business plan, and customer service.

The emphasis on customer happiness as the ultimate goal of business, leading to repeat business and referrals.

Transcripts

number one reason for success is people

focus on things that have high

potential consequences number one reason

for failure

is people focus on things that have low

or

no potential consequences exactly what

joe was saying earlier the

famous drucker quote very worst use of

time is to

work entangling on something that need

not be done at all i've dedicated my

life

to being a small and medium-sized

entrepreneur

and i've devoted the second half of my

life to helping other people to be

successful

small and medium-sized business owners

and carl schramm

of the marion and ewing coffin

foundation the preeminent foundation on

entrepreneurship

wrote an article in the wall street

journal two days ago and what he said

was that

there have been very few empirical

studies into

what actually makes an is a successful

business that most of what is taught in

the entrepreneurship

faculties of the universities is

nonsense in fact if you he said that

there's

something at 1 687 professors of

entrepreneurship

and their primary focus is drinking

their own bath water

and telling that entrepreneurs have to

have a business plan

and if you have a business plan you'll

be successful and they spent two years

in their

faculties teaching people how to set

business plans and 49 out of 50

businesses are started without a

business plan

including some of the most successful

businesses in the world today

so we are now just starting to learn

what we really

need to do to build successful

businesses and what joe is doing here is

absolutely marvelous because

it can save you years of hard work and

hundreds even thousands of hours

of hard work to understand how to do it

much much faster

to shortcut we say there's always a

learning curve in anything and what we

want to do is we're going to jump the

learning curve

we don't want to spend years and years

learning what we need to learn to reach

a certain level of income and so i've

majored now in the last few years

on doing seminars and talking and books

and articles and programs

for owners and would-be owners of small

and medium-sized businesses

now i've got 45 minutes so i'm going to

have to condense what sometimes i share

in seminars

for days but i understand you're some of

the smartest people

in the world so that you can take a lot

of information in a short period of time

is that true did anybody not understand

the question

so i'm going to try to bottom line

several of the concepts

one of the first concepts which i

thought was interesting was

a little story that was in the papers uh

recently

warren buffett who is one of the richest

men in the world and bill gates who is

the richest man in the world

and bill gates senior were at a dinner

party and the three of them are good

friends and they were talking

and uh a gentleman came up to him and

said you know i was

looking at you and you gentlemen are

very successful what would you say

is the most important quality of success

and all three

according to a bystander all three broke

off their conversation and turned and

simultaneously said

focus focus is the most important

requirement for success in our fast

moving world today if you can

focus you can succeed and if you cannot

you cannot

it's almost a black and white thing well

i thought that was interesting because

the way joe and i met is i put together

a program some years ago called

the focal point program which basically

brought in

business owners like yourselves and

taught them to focus and we

spent three years going through every

single aspect of life get 82 exercises

that dealt with family and business and

marketing and product and service and

competition and

positioning and it was focus focus focus

and my

offer which is not as good as joe's but

my offer was that you will double your

income

and double your time off within 12

months or there'll be no charge for this

program

and i never had to give a refund in fact

many people doubled and tripled their

income

within 30 days just by learning to focus

and just by thinking in terms of focus

so it's really really important i read

an article

about myself it was a very successful

entrepreneur in

new zealand and the article was sent to

me last week i'm reading this article

he said the turning point in his life

was when he went to a brian tracy

seminar

and learned how to focus he was broke he

was unemployed he had no money

and he walked out of the seminar a

completely different person and he had

written goals

he then looked around and as it happens

he saw an article on coffee shops and

starbucks success in the united states

and it said coffee shops are good

business to be in because more and more

people like the idea of a specialty

coffee shop and if it has a wi-fi then

they go there it becomes a social

center and so on he knew nothing about

coffee

and before the dust had settled he owned

80 coffee shops

in australia and new zealand and then he

says he got into a divorce and

i had to sell it for 50 million dollars

to

share the proceeds with his wife but he

didn't sh did not share

he did not sell off the worldwide rights

to it so he's rebuilding

anyway his point was at the end of the

article they said well what would you

say to

aspiring entrepreneurs who want to be

successful

and he said just two things he said

focus and fail fast

focus and fail fast learn quickly try

something new

and i thought i'd just pass that on

because it's sort of what i have

discovered over the years

is the faster you fail and learn the

faster you succeed you actually learn to

succeed by failing

you know thomas j watson's famous line

if you want to

increase your rate of success you must

double your rate of failure

because success lies on the far side of

failure

well over the years i've done a good

deal of reading and i came across a

concept that i want to share with you

and

we were talking about this a little bit

earlier and the concept is

the question is what is the most

valuable and highest paid work that you

do

it's a really interesting question

because when i heard the question i

didn't know what the answer was what do

you think the highest

paid and most valuable work is that you

do

and the answer is thinking thinking is

the most valuable work

now i am the best selling author in the

world in time management

also on goals also on some other

subjects but

but i began studying time management

about 30 years ago and i came across a

word

in my studies and the word was

consequences and

what it basically said is that something

is important if it has big potential

consequences and something is

unimportant if it has low or no

potential consequences number one reason

for success is people focus on things

that have high

potential consequences number one reason

for failure

is people focus on things that have low

or

no potential consequences exactly what

joe was saying earlier the

the famous drucker quote very worst use

of time is to

work intently on something that need not

be done at all and one of the things

that

is holding back entrepreneurs business

owners is killing them by the way and

it's

wiping out an entire generation it's

this obsession with technology

i see people that are walking with their

phone it's almost like drug addicts that

are mainline they cannot

stop staring at their screen they cannot

stop pushing their buttons

i hate to say there are people in this

room that had that problem but

uh the fact is that this obsession with

looking at the screen and staying

connected

is killing people because it stops them

from focusing

you cannot focus if you are distracted

like an attention

deficit disorder dog so you're

constantly ringing and

responding to bells almost like a crazy

person in a

in a toy factory

and so so just as a quick aside if

thinking is the most important thing you

do

because of the consequences of thinking

determine the entire quality of your

life

then the quality of your thinking

determines the quality of your life and

so the more time that you spend thinking

and thinking well and thinking clearly

the more successful you are over the

years i've worked with some very

powerful people billionaires and

multi-billionaires

people who are on the forbes 400 list

repeatedly

over and over and i've had a chance to

be with them during crises

and what times where something was

happening that was serious it was a

it was a major problem and i noticed

that they all had one

quality in common is they all went calm

it's just they went people around them

were angry and upset

and worried about what happened and who

did it and so on

and they would just go calm almost like

like like a pond would go gone

and they knew and i learned later i

didn't know why this was i admired it

but i didn't know why it was

is that when your mind is calm your your

entire

cerebellum the thinking and deciding

brain functions at the highest level

like turning up all the lights on a

dimmer switch it's functioning like a

christmas tree but when you get upset

and angry what happens is your thinking

reverts to your limbic or emotional

system and your ability to think clearly

diminishes dramatically and you make a

lot of mistakes

that's why when you are facing a

difficult situation

you have to use every skill trick game

whatever it is

stay calm and that's why they teach you

to meditate

and they find that meditators in

business are far more successful

because they they can automatically

trigger their mind into the calm

of meditation when they're facing a

crisis it enables them to think

with greater clarity now a couple of

years ago a man named daniel kahneman

a very fine man from from reading him

uh who won a nobel prize in psychology

and neuroscience

uh wrote a book called thinking fast and

slow and this book it was a very

esoteric book and i don't recommend

that you read it it's 500 pages of hard

slogging i will give you the essence of

i will give you the essence i do the

reading pass it on

i will give you the essence of the book

he said that there are two types of

thinking there's fast thinking and slow

thinking

fast thinking is intuitive it's

instinctive it's automatic it's

reactionary

it's i think of it very much as how you

would drive through busy traffic

you're not giving a lot of thought

you're just interacting he said the

other type of thinking is slow thinking

and slow thinking is where you just slow

down the thinking

and take time to think through

issues now if an issue has little or no

consequences

then you can think quickly you know what

do you have for lunch what do you

pick up on your plate from the buffet uh

where do you park your car

these are the the the consequences of

these decisions are

almost non-existent but if it's a major

issue then you say wait a minute

this requires slow thinking here is his

contention that made the book a

bestseller

is that the biggest problem that people

have is that where they should use

slow thinking they use fast thinking and

entrepreneurs are extremely

guilty of that as we make important

decisions that

have long potential consequences in

turning including

affecting the lives of people and

costing money and even leading to the

bankruptcy of a business

we make those decisions with fast

thinking when in reality we should be

making them with slow thinking

now i'm a great drucker fan as many

people are

and mike was saying something about

hiring the right people

and hiring the right people to work with

you is very important and the biggest

mistakes you make is hiring fast

you hire people quickly the best the

best decisions you make are we really

take your time

to hire slowly and peter drucker said

that fast people decisions are

invariably wrong people decisions hiring

an important person for an important job

has tremendous

potential consequences so therefore you

need to take a long

time one of the things i teach which is

in my book how to hire and keep the best

people

is a simple rule that will increase your

hiring accuracy to 90

and i've taught it to fortune 500

companies and they make it a rule within

their companies

to use brian's rule is to this is the

you cannot hire

except by doing this and i didn't invent

it i just studied

the hiring practices of the companies

that hire the best people

and keep them the longest and they all

at the beginning

have a certain process that they follow

and they follow it religiously

no exceptions and so their accuracy in

hiring

goes up to 90 or or better um because

they think more

then the interesting professor at the

university of san diego last year wrote

a book on

sort of not sort of thinking fast and

slow but it was on decision making

what he said is the longer that you take

to make an important decision the better

the decision will be

the higher quality decision and lord

acton once said

when it is necessary when it is not

necessary to decide it is necessary

not to decide in other words he the

professor said

buy as much time as you can for a

decision put it off if you can put it

off for a day

a weekend a week a month put it off

some of the best decisions that you make

will be decisions that you will allow to

steep for a while like water and tea

so thinking is the most important thing

you do we call it thinking fast and slow

so remember anything that is important

that has long-term consequences

is a candidate for slow thinking

discussing it with other people

sitting quietly going for a walk letting

it ruminate in your mind

sleeping on it you know they say if it's

a big deal sleep on it

so there's three thinking tools i want

to give you and then seven ideas so the

three ways of thinking which i start off

the first way i start off every seminar

is what i call zero-based thinking and

everybody who knows me for any period of

time

knows that i harp on this zero-based

thinking

is comes from zero-based accounting

where you instead of increasing an

expense

in the next accounting period you ask

should we be

engaging in this expense at all now with

zero-based thinking you look at your

entire world and you ask this question

knowing what i now know is there

anything that i am doing that i would

not start up again today

if i had to do it over this is one of

the greatest thinking tools i've ever

learned

because in a time of turbulence you

always have an answer for this question

each person has an answer some people

have multiple answers

there's lots of things that they're

doing today that knowing what they now

know

they wouldn't get into today they

wouldn't start them up products they

wouldn't offer

people they wouldn't hire investments

they wouldn't make

and these are the greatest drags in life

these are sort of like a sea anchor you

know that you drop it and it drags it

slows down

the boat well how do you tell if you

have a zero-based thinking situation

and many of you were asked to write your

problems challenged as opportunities

the answer is stress is whenever you

experience chronic

stress it's something that buzzes around

when joe's talking or

somebody else is talking you're busy

thinking about that you drive around and

you think about it

keeps you awake at night it's something

that pisses you off

it's something that irritates you and

angers you and frustrates you

whenever you have chronic which means

ongoing continuous

this is a candidate for zero-based

thinking so you ask yourself the

question

if i was not now in this situation

knowing what i now know

would i get into it again today if the

answer is no the next question is how do

i get out and how fast

how do i get out and how fast if ever

the answer comes back that i would not

get into this again today

it's too late to resolve it it's over

the only question now is how long do you

suffer

how much how much emotional suffering

how much financial suffering do you make

before you walk and so the most

important requirement for practicing

zero-based thinking

which a lot of people don't like to

practice is courage i call it the c

word you need the c word you need to

have the courage to look at every part

of your life and say

is there anything that i'm doing that

knowing what i now know i wouldn't get

into

now the starting point of zero-based

thinking is always with your

relationships

and those are both personal and business

whenever i give in this talk by the way

within a short period of time divorces

take place all over that city

people go home and say geez if i hadn't

married this person i would never marry

them again today

and that's what's making me miserable

and many people are working their heads

off on the outside

to achieve success but inside they're

frustrated and unhappy because they're

in a situation

that knowing what they now know they

would never get into so i call this a

quick analysis and i'm going to ask you

to do this for the rest of your life

and to help other people do it k-w-i-n-k

knowing

what i now know do a quick analysis on

everything

do a quick analysis in my company what

they we say is

we look at every single person and on a

regular basis and we say

if we had not hired this person and they

walked in today to apply for their

current job

knowing what we now know would we hire

them if the answer is no they're gone

that day there's a little rule by the

way that

in one of my books it says the first the

best time

to fire a person is the first time it

crosses your mind

and because after that it's only pain

and suffering and if

the longer you keep them in place the

more likely they are to sue you

and the longer they sue you the more

it's going to cost so therefore if you

if you find that you've made a mistake

belly up to the bar have the courage to

admit i made a mistake

and cut your losses there was a great

book by um

an author called the zurich axioms some

years ago and it was principles of

success

and anybody who's in finance has

probably read the book because a very

successful new york financier

and he was talking about the gnomes of

zurich zurich and whoever they are

and the rules that they go by and he

said the number one rule for success

in in business personal lives cut your

losses

when you realize you made a mistake bad

investment

bad hire bad relationship cut your

losses quickly and

what do they say in las vegas you know

cut your losses let your winnings ride

so in life that's what we do and the

faster you cut your losses fail fast

the faster you can start doing things

that are much more productive

the other the second area has to do with

every part of your business

joel and i were talking about what i

think is a revolutionary new field

though it's not revolutionary

and it's not new but it's business model

innovation

and it's based on the concept that

whatever business model you're using

today is probably obsolete

uh if you're in any kind of a business

that

uses technology to market especially an

information based business

knowledge based business consulting

services training anything else

chances are your business is obsolete uh

the way that you and

and visit and the business model is your

method your step-by-step

process of generating profitability now

there are some companies that struggle

along struggle along struggle on then

find a new business model

and the next year their business is up

five or ten times profits are just

overwhelming

they're living in big houses on the hill

driving cadillacs and flying private

jets and you say

what on earth did they do they changed

their business model and if you don't

change your business model if it's the

wrong business model

two things are going to happen your

competitors are going to come up with a

new business model

and eat your lunch and or you're going

to go broke

so it doesn't mean that your business

model is wrong

it just means that you must be open to

the possibility

that your business model is obsolete and

that just means that there is a

better business model there's a superior

business model and your job is to find

it

and uh again there's no fixed answer to

it

but i think that this is a great area of

thought

i think this is a great area and it's

sort of like a tool for you to have

i wonder if i need to change my business

model which is your way of generating

sales producing and delivering products

and services getting

payments and achieving profitability

well so coming back to the second

is look at anything in your business

look at your products look at your

services look at your people

look at the way that you advertise

market and ask is there anything that

you're doing today that knowing what you

now know you wouldn't

start up again today and the only

question that you ever ask is does it

work

does it work does it work if it's not

working

and you and you can tweak it then that's

fine if it's not working have the

courage to admit this isn't working

and abandon it now the third area has to

do with investments

in zero based thinking investments of

time which people hate to lose someone

said earlier

that people hate to lose it's one of the

greatest emotions we hate to lose time

if we've invested a lot of time

in a course of action a project a

business a relationship

the second is is emotion if we put a lot

of emotion into a course of action

a product course of study a relationship

or money

we hate to admit that we made a mistake

and that what seemed like a good idea

at the time has turned out not to be a

good idea and knowing what i now know i

wouldn't get into it

and have the courage to cut your losses

and run now the reason i teach this

first

is because you can't make any progress

unless you clear the decks unless you

get this

800 pound gorilla that's holding you

back out of your life

and then many companies that i've worked

with literally transformed became

multi-million dollar companies

when everybody said all right we're

going to go through and do a quick

analysis on this whole company

and realize that half the things we're

doing and half the people working here

are not the right people for us at this

time and half the products that we're

offering aren't selling

and never will they've been replaced by

better cheaper faster products in the

marketplace

so cut your losses what happens when a

big big company gets into trouble

they bring in a quick analysis man and

he comes in with a chainsaw

and he shuts down all the factories and

all the stores that are not profitable

and the company goes from profits to

losses in one year

anyway the second thinking tool that i

teach people

is a wpo thinking which is worst

possible outcome

in everything that you're doing always

ask yourself what is the worst possible

outcome

of this course of action and what and

can i survive it if it were to occur

and uh if not what could i do to make

sure it doesn't happen

one of the number one reasons that we

worry about anything in life

is because of fear and when you ask

yourself what is the worst thing that

could happen in this particular

situation

and then if you could say all right if

that happens i'll live with it

then your worry goes away and your mind

goes clear and calm

and now you say now what can i make do

to make sure that the worst does not

happen

and then you become proactive and you

take charge of your life

the third thinking tool i hope i'm not

going too fast for it

the third thinking tool is called the

principle of constraints and it's one of

the most important thinking tools ever

discovered

it says between you and anything that

you want to accomplish

there is always a constraint a limiting

factor or a choke point that sets the

speed

at which you accomplish your goal so and

i was just talking

doing a teleconference and a few minutes

ago so the question i said is let's

always set the goal of doubling our

income

i'm going to double your income okay

want to double your income

then why isn't your income already twice

as high

now in business we don't think of

doubling our income we think of doubling

our profitability

what we're concerned with is net cash

flow we're going to concern with the

amount that we take home

to our family at the end of the day not

the gross

but the triple net so we say if i want

to earn twice as much and everybody in

here

can and can and will earn two three four

five times as much

sometime in the future if i wonder twice

as much why aren't i already earning

twice as much

and the number one reason for for most

people is distraction

so uh they're so distracted they're

doing things of low or no consequences

but we found the 80 20 rule applies to

constraints 80 of the constraints that

are holding you back

from achieving your financial goals are

within yourself and within your business

they are not on the outside they are not

the competition they are not the market

they are not the people in washington or

the taxes or regulation

80 are within yourself so the mark of

the

superior person is whenever they have a

problem they say what is it

in me that's causing this problem mike

and i know

this very very clearly what is it in me

that's causing this problem

uh in in illness by the way 85 percent

of illness is psychosomatic

as dennis waitley said it's not what

you're eating it's what's eating you

it's causing the problem uh and so the

starting point and the

first thing a doctor will tell you or a

psychologist is what is it that you're

not dealing with

and you go back to zero-based thinking

what is it that you have in your life

that

that you if you that if you had to do

over you wouldn't do it

so ask yourself what's holding you back

and usually it's the quality of

self-discipline or it's a skill

now one of the things that changed my

life forever was when i learned that all

business skills are learnable

you don't have to be a genius to learn

any business skill

you can learn any form of technologies

mike has proven that with

with his products you can take a person

who's basically shoveling shoe polish in

chibokan

and teach them how to be technologically

sufficient superior enough to earn a

living from it

every business skill is learnable and so

i say what

one skill if you are absolutely

excellent at it in your business would

help you the

most to double your income what one

business skill

if you could wave a magic wand and wake

up tomorrow morning superb

in this area what skill would it be and

you know when you ask that question

everybody knows the answer

they know what it is but here's the

challenge you don't like the skill

because it involves it rejection

embarrassment ego potential failure

loss you've tried it in the past you

haven't been good at it

but nobody asked you what would be an

easy skill to learn

they just asked you what skill would

help you the most to double your income

and here's what we have found is that

most of us are only one skill away from

doubling our income

and all business skills are learnable

and if you study the people who go from

the top to the bottom

in the fortune 500 or fortune 1000 they

found in 25 years of research

these people learn one skill at a time

like climbing the ladder of success on

the ladder of income

like sniper one shot one kill they don't

try to learn 50 skills they learn the

one skill

focus the most important skill and they

get their company focusing on the one

skill

that can help you the most to generate

sales and profitability hey i hope

you're enjoying this video and i want to

let you know that i have a new book

that's come out and if you'd like to get

it

absolutely free there's a link below

in the description or you can wait till

the end of this video or you can simply

go to joesfreebook.com

and you can get a copy there i talk

about what i call the greats the seven

greats in business

the the their and actually my three-day

seminar has the ten grades

but the seven the seven greats in

business i'll give you briefly first of

all

successful companies have great

leadership and

leadership is the ability to get results

but it's also the ability to allocate

resources

which means it's the ability to make

decisions and to make hard decisions

because if it were easy decisions

everybody be a leader and everybody to

be rich

so making decisions using thinking slow

thinking

using long-term thinking is the

critical job of the leader drucker says

the first job of the leader is to ask

what results are expected of me

and then i add to that of all the

results that are expected of you as a

leader what is the most important result

that you need to get to achieve the

sales and profitability for which you

are responsible

one of the rules what we learn in

business we never complain about

anybody or anything in our business

because we're the boss

we're the ones who decided this we don't

complain about your staff because you

hire the person

if you don't like the person get rid of

them don't complain about them you just

sound like an idiot

you know it's it's it's like or it's

like

picking up food from the buffet down

there and saying i don't like this food

well i never have liked this food i've

always hated this food well why did you

pick it up

well i don't know the fact is you never

complain about something in your

business if you're in charge of it

if you don't like it change it if you

don't want to change it shut up

[Laughter]

now which which allows me to jump

actually forward

is is one of the marks of superior

entrepreneurs is that they're intensely

solution oriented

is whenever something goes wrong they

immediately go calm and they say all

right what's the solution

what's our next action what mediocre

people do is they say who did it and

who's to blame

how did this happen they're going to

witch hunt and of course that makes them

become angry and frustrated but superior

executives when something goes wrong

problem with a customer problem with

money problem with bills problem with

product delivery or defects they say

okay all right how do we solve this

what's the solution now here's a

wonderful thing is your success in life

will be determined by your ability to

solve problems

my friend colin powell said leadership

is the ability to solve problems

success is the ability to solve problems

and how do you become really excellent

at problem solving i just finished a

book by the way called creativity and

problem solving

that amicom is publishing in new york at

the end of this year

it's because i did years of research on

the subject here's the point is the way

that you solve problems is

simply to think about solutions what are

all the possible solutions

be intensely solution oriented don't go

allow yourself to get bogged down

negative upset unhappy about the problem

and who did it

focus on the solution and the actions

that you can take and when you start to

think about the solutions

remember helen keller's wonderful line

when you turn toward the sunshine the

shadows fall behind you

when you start thinking about solutions

we could do this look at that and you

could do this and i could do that we

could do

when you start thinking about solutions

your mind goes calm your creativity

turns on

uh like lights you start to have more

energy

you start to feel more confident and so

on are you with me so far

thinking about problems makes you

negative and shuts down your brain

thinking about who's to blame is even

worse but thinking about what you can do

and the actions you can take

put you back in charge well the second

principle and i talked about

the second the second grade is having a

great product or service

and this to me was wasn't is a

revelation

and it's so simple it stares you in the

face but 90

of your success will be in business will

be to have a great product in the first

place

and this is something that many people

miss they think if i have a good product

and i when i pay thousands of dollars

and go to uh

really clever seminars they'll teach me

some marketing gimmicks and tricks

so i can con people into buying it and

they and they spend enormous amounts of

time and money

trying to advertise or market what is a

mediocre product

and i had a good friend mitch

and mitch owned three first-class

restaurants

and he did no advertising for the

restaurants and the restaurants were

always full

and when people said where do you want

to go for dinner let's see if we can get

into one of those restaurants

and so i asked him i knew him very well

because we worked in the same

organization

dr allard my mentor owned the three

restaurants and and mitch was a part

owner and he ran them

and he could just start an excellent

restaurant i said what is your

secret to promotion how come these

restaurants are always full and he said

we always put it on the plate i said how

do you mean he said we put

superb food at good prices on the plate

and just stand back

and the restaurants are full all seven

days a week

and i always thought that's the key to

success in business put it on the plate

put it on the plate put the quality put

everything into the product or service

now the ink magazine does a story on the

inc 500 the 500

fastest growing companies in america

taken over a three-year period and every

year they update it

the last uh edition which came out a

couple of months ago

was showed that the number one fastest

growing company

was it grew forty two thousand five

hundred percent

forty two thousand five hundred percent

unbelievable it grew so fast uh others

grew

5 10 15 20 30 50 times

in two or three years all new companies

are reasonably new companies all

companies started by people

like the people in this room and they

grew 5 10 50 20 100 times

wow what was the key so they went back

and they did had outside researchers

analyze it

and you know what they found is all the

companies

put it on the plate is every one of them

was obsessed

with quality and obsessed with quality

as

their customers defined it and they were

close to the customer they were

they were they're locked tight to the

customer as i i was sharing

um uh uh

his um idea about um

what was it called what was your wtc

what did you say about customers well

joel yeah

think like a customer sharing that on my

conference today think like a customer

the very best companies think like a

customer what do customers want what

customers need

and you know the key to success is make

your customers happy and then make them

happier than your competitors

and then every single day wake up and

think how can i make my customers

happier

and they went and they interviewed the

ceos of the four of the 500 fastest

growing companies and every one of them

was obsessed with customers

they thought about customers they talked

about they visited customers they called

customers

they went and saw customers they

personally responded to customer

complaints

they were just obsessed with it which

again repeats

that 90 of your success will be

the quality of your product or service

now how can you tell if you have a great

product or service well it's a very

simple test and this is the test that

predicts your future more than any other

test

for the rest of your business career how

often how many people

after they have used your product or

service turn to another person and say

geez that's a great product jesus a

great service

geez that's a great company jesus are

great people

and how many people say this is a great

product what percentage

50 percent 40 percent average in america

is about 30 percent 35 percent

top companies that companies like apple

that come out with an ipod and iphone

and an ipad

people consume the product the next time

they come out with an iphone

they sleep on the sidewalks in rows of

hundreds to be the first purchasers they

come out with an

ipad they sleep hundreds are sleeping on

the

sidewalks to buy it and pay outrageous

amounts and then they start showing

everybody else

isn't this a great product and then they

have apps look at this ah look what you

could do with this app

how many people have an ipod 5 an iphone

5.

okay how many of you showed other people

the panoramic thing

how you can take panoramic pictures

isn't that a great concept

you know it used to cost thousands of

dollars to have panoramic cameras

that could take a panorama and now

you've got it in your iphone as one of a

100 or a thousand different things you

can do so people who buy their products

become their preeminent sales people

they're running around

grabbing people and bothering them and

showing them the product

or bragging about the product in a movie

by the way the movies

companies only have enough advertising

for the one weekend they could take

big ads for one weekend to get people

into the theater quickly

after that the movie will either grow or

die by word of mouth

and your movies that are successful by

word of mouth everybody's talking have

you seen that movie if you said you got

to see that movie

honey i just heard about this movie at

work let's go tonight you weren't even

planning to go to a movie and you go

there on tuesday night the theater is

full

have you had this experience you say and

everybody's talking about it

the most important key to our success so

go back to the ink study and i'm looking

for

corroborations in the ink study they

did had researchers say what is the very

best place for a company to

invest if they want to increase their

sales and profitability

and the answer came back after looking

at everything else is

invest in improving the quality of your

product

invest in improving the quality of your

product make the product

better and better and better make your

customers happier and

happier make your customers so happy i

say that the key to success is to

get your customers to buy from you first

rather than from your

competitor to buy again because they are

so happy and to bring their friends

and if that becomes your operating theme

we could talk about this all day

is get them to buy from you buy again

and tell their friends then you're going

to be

successful you're going to be wealthy

you're going to be respected

and more than anything else you're going

to be just as happy as you can be

as nothing gives us greater joy than to

make our customers happy

number one is is become a great leader

which means set clear goals be decisive

take responsibility for results

number two is offer a great product and

never be satisfied with the quality of

the product

it's constantly strive to make it better

in the eyes of your customers

and here's one of the great revolutions

in marketing which i think is so

important

is the very best companies the four

stages of the epiphany

the lean startup are going to their

customers and saying

how do you define a great product would

you buy this would you pay for it do

what you want more of what would you

want less of

what can we do to improve it they're

even doing this with what they call the

minimum viable product

idea is they take a product idea to a

customer before they even make the

product

and they work with the customer shoulder

to shoulder to develop the product so

the customer says this is a great

product

then they produce and market the product

so number three

is you want to have a great business

plan but a great business plan

simply requires that you think through

on paper

the critical aspects of your business

and especially you analyze what it's

going to cost

what you can sell it for what kind of

profits you can make

who are the people that you will need uh

there's a

there's a great story of napoleon's

generals all around this

large table with maps of europe spread

out and this is when his the french

armies were conquering everywhere

and they were talking about what cities

are what what uh

municipalities what duchies that they

were going to attack with the army

uh next time and napoleon would come in

from his office which was nearby

and he'd say what are you doing he said

we're talking about we're going to move

the army from here we're going to move

it to there

and so on and he'd say well gentlemen he

said i'm afraid that we can't do it

we don't have the horses and you've

heard the expression

we don't have the horses it comes from

napoleon and what he was saying was that

the entire army was driven by horses

cavalry

and horses to pull the wagons with the

supplies and everything else

and they could get more men by

recruiting on the march as they did they

recruited as they went through a village

they recruited people

join the army see the world that sort of

thing during the arm you see the cannons

but the horses those were scarce and so

the whole

success of the army was was determined

could they get the horses that's why

when

when mike talks about getting the right

people is where do we get the horses we

got the ideas

we've we know what needs to be done but

where do we get the horses so

these are the things that you think

through in a business plan what kind of

technology will you require

and what will it cost to set it up and

who's going to run it and operate it

what kind of advertising publicity

promotion will you require

how much will it cost what kind of

returns will you get so a business plan

and there's

many people i'm sure you have lots of

business plan models that are quite

common

is a business plan forces you to think

long term and to think slowly

and you'll always make better business

decisions if you think long term and you

think slowly

the fourth area has to do with having a

great marketing plan

and a great marketing plan is what you

talk about all the time

but there's a rule in advertising i used

to work for a large advertising agency

and the rule is the fastest way to kill

a product a bad product is to advertise

it

or to market it is to find because if

you market it what happens

more people use it more people use it

and are angry

about it then they tell more people and

the product dies so the fastest way to

kill

a bad product is to promote it and many

people think oh no the way i can get my

money back

is i can sell it to people before they

enough people

know how bad it is no do we have confu

we have the internet today

everybody in the world can know how many

troops appeared on the streets of

the crimean with the balaclava mass on

their face and they know that in three

seconds

i was just in russia where in russia

they control all the media

and they tell people that they that they

were attacking

the ukrainians backed by the cia

are behind all the problems in the

ukraine and the russian

poor russian people just are are being

sacrificed so i'm just sending in some

of my troops to help protect our i said

to my friend sergey i said sergey

it's nonsense not a word of what you're

saying is true

it's totally false the only people in

the world who believe what you're saying

are people within russia who have no

access to news on the outside

anyway so i'm getting off track

my point is that marketing means how do

you attract people

uh to your product or service there's a

difference between marketing and sales

you know what it is imagine that i were

to say to you

at midday this group i say is is anybody

here hungry

raise your hand all right that's

marketing i'm interested in your product

or service i'm interested in the product

or service

generally but anybody here like to save

money make money lose weight be happy

pick up girls you know whatever it

happens to be then the second part is

now i have a restaurant let me tell you

why you should come to my restaurant

to satisfy your hunger rather than to go

to the competitors

so those are the two it's the marketing

is to attract people

who raise their hand who are interested

in the benefit that your product or

service offers

and selling the conversion is to get

them to buy from you rather than from

your competitors

so they are very different functions you

can't sell if you can't attract

interested prospects so marketing is a

very complex process and you guys talk

about it all the time

so you need a great marketing plan how

can you tell if you have a great

marketing plan

the answer is you have a steady stream

of interested prospects

who are calling you emailing you coming

in your door sleeping on the street

in front of your business each night to

get to be the first ones to come in

in the data number five

is you need a great sales plan

and a great sales plan of course is a

sale that consistently and predictably

converts customers or converts

interested people into customers

now here's the rule if you have a

professional sales process and all

100 of all successful companies have a

professional sales

process if you speak to the salesperson

and working with an international

company that has a branch

in warsaw and if you speak to the sales

person in warsaw or the salesperson

in los angeles or the sales person in

johannesburg

100 of them use exactly the same sales

process

the first contact will be a telephone

contact to offer you a benefit

and to try to set up an appointment and

the words will be word for word

the reason this company did this is

almost went broke because everybody was

selling their own damn way

they would say whatever fell out of

their mouths whenever they ran across a

prospect

and they realize that without a sales

process we have a great product which

they do

that's killing them so they systematize

the sales process their sales went up

thousand percent

if it's been proven that if you go from

random selling

to a proven sales process and of course

you have to debug it

you increase your sales 500 with the

same number of prospects

i've seen people get their closing rates

from 1 out of 10 to 9 out of 10

by simply improving the sales process

and so selling is really important

it's one of the things we focus on now

there's two more points that i want to

talk about in terms of grace

one is generate great numbers and this

is one of the most important parts of

business

all business activities and results can

be expressed in numerical form

everything right down to the number of

telephone rings or number of seconds it

takes for a person phony

to make connection with a person who can

help them

jeff bezos who as you see got best

entrepreneur businessman of the year

both forbes and fortune

they're obsessed with measuring every

single activity

and they look at the seconds the number

of seconds that it takes when we first

bought from

amazon they would advertise five to

seven days ups

today they offer one to two days max in

cities like san diego where they have

warehouses you can order in the morning

it's delivered in the afternoon

books tapes courses clothes it's

zappos overnight they can deliver

overnight because why is because they're

obsessed

with shortening the amount of time it

takes to make customers happy

and the short of the time customers

really value speed

and they'll pay top dollar for someone

who'll make them happy faster

it's just a they've they've determined

that so look at the numbers what are the

and

the question is what are the most

important numbers in your business what

we teach in our longer courses about 35

numbers

in any business some of them are

unimportant some of them are

extremely important and there's five to

seven of those 35 numbers that are

the a numbers and then there's one

number that's the most important number

of all

and we call this or jim collins who

wrote good to great calls it

the economic denominator and when i

started doing my

coaching programs with entrepreneurs one

of the first things we taught was to

identify your number

what is the most important number in

your business the number that

most accurately predicts your success

and your future

and most people get that get it wrong

the first three to five times

what is your number what is your most

important number the number that you

just basically obsess with

all the time and uh one one

uh company went from for whatever

struggle

written up in in in entrepreneur

magazine

went from struggling to bankruptcy and

then a friend of his asked him

what was your number what was the number

you were focused on well we weren't

focused on any number in particular we

didn't even hardly keep track

so they were just selling by gosh and by

golly and at the end of the day they

were bust

he had to go home and live with his

mother the age of 26.

so he said no you have to pick a number

so he sat down and he said hmm and he

picked a number and it's called net

contribution margin in other words

exactly how many net dollars and cents

do we make from each sale

and then we compare those sales that's

after 100 of every expense of cost of

customer acquisition and lead generation

and and delivery and everything else

and then they compare those against the

others and they re-emphasize in other

words

net contribution margin at this year

they'll hit 100 million dollars in

business

and he's laughing he said changed our

whole life

to finally figure out what our number

was

so question i always ask people what is

your number do you know

do you know the most important number do

you know what most entrepreneurs say

sales sales everybody knows that just

sales really

what if you're losing money on every

sale then the more sales you make the

faster you go bust

and you know that many companies are

losing money on every sale because they

don't

they don't add in all the costs of the

sale

they leave out their own labor they

leave out rent they leave out utilities

they leave on

delivery costs they leave out defects

they think about packaging

theft and so there's boy are we selling

a lot yeah well how come you're

losing more money every month did you

see these companies by the way

um that's announced they had 11 billion

in sales last year they lost 3 billion

and you see them all the time it's how

could you how could you

lose 3 billion if you sold 11 billion do

you know why

it's because they don't know the numbers

and what they're doing is they're

probably working harder and harder to

sell more and more products at which

they're losing more and more money

and nobody sat down and done the

attributable cost

okay the last of the seven and this is

the one i love and this is the future by

the way

the front end of business the first

bookend is having a great product or

service to start with

the last is to have a great customer

service experience

and i cannot tell you how important this

is this is what joel and i have worked

on

all of our lives make our customers so

happy at the beginning and so happy with

the product

and happy afterwards it's the key to

repeat business it's the key to rapid

growth

every successful company without

exception is obsessed

with taking good care of their customers

once they get them and if they have a

customer complaint the head of the

company doesn't sleep at night

they are so so upset about customer

complaints

they'll go out and personally visit them

because the company president will phone

an unhappy customer and talk to them

because they consider

customer happiness like tony shea to be

the most important thing in the world

what tony says is that we're not in the

shoe business we're in the customer

happiness business we just happen to

sell shoes

and if we were selling something else

we'd still be in the customer happiness

business

what was that worth to tony sold it for

his idea

translated into zappos sold it for 1.2

billion dollars and took home 350

million

not a bad idea make your customers happy

does it work

yes how often does it work 100 of the

time so you'll find that the very best

companies the ones that you really like

and want to go back to

are the companies that make you feel

happy they make you feel good as a

result of having done business with them

they take good care of you and as a

result you go back over and over again

and you bring your friends so those are

the seven greats that we talk about here

great leadership great product or

service great marketing plan great sales

plan

great numbers great business plan and a

great customer service plan

and if you have those here's the

interesting thing is if you're missing

one of them

it's like dialing a seven-digit number

if you

miss one of them your company go broke

miss any one of them you get or get them

wrong

get the wrong answer or miss it

completely then your company goes broke

so now we know scientifically basically

more and more

of exactly what you have to do to build

a high profit business

and the wonderful thing is it's all

learnable you can learn

any one of these skills anything i just

explained to you

is as simple as ditch water all you have

to do is just say ah

and what is it you think like yeah i

could do that i could do more of that i

could improve that we could do that

okay i hope you found that video awesome

and useful so if you want to get a free

copy of my book i want you to click here

and if you want to watch some more

videos that will be useful and awesome

click here go ahead they're over here do

it now

come on thank you watch