https://www.youtube.com/watch?v=DpbXWP8fLbc

1 00:00:00.000 --\> 00:01:00.000 in this video i'm gonna 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 i have nothing to sell you so this concept has been the
central concept up 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

2 00:01:00.000 --\> 00:02:00.000 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 uh on day one so that's not normally common so we're
gonna 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

3 00:02:00.000 --\> 00:03:00.000 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 and
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

4 00:03:00.000 --\> 00:04:00.000 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 hundred bucks all right so that's 200 that's going to
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 it 30-day cash which
is the

5 00:04:00.000 --\> 00:05:00.000 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 refinancing 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 and put the
money on the card to acquire the customer so on my card there'd be two
hundred dollars because that's what's going to 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

6 00:05:00.000 --\> 00:06:00.000 here did you 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 gonna get you guessed it another four hundred dollars 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 have operational constraints of 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

7 00:06:00.000 --\> 00:07:00.000 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
1036 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

8 00:07:00.000 --\> 00:08:00.000 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 i make these videos i have nothing to sell
you click subscribe i'll see you next video i know this is a little bit
more tactical i'll talk about more managing people and scaling the
company side but this is the this is the stuff right this is the stuff
this is the these are the things that actually grow the business all
right so anyways love you all keeping awesome as a nation i'll see you
guys next vid bye
