SFR 153: How To Pay For Expensive Things With Your Business...
Boom, what's goin' on everyone? This is Steve Larsen and this Sales Funnel Radio.
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Today we are gonna talk about how to pay for expensive things with your business.
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I've spent the last four years learning from the most brilliant marketers today. And now I've left my nine to five to take the plunge and build my million dollar business.
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The real question is, how will I do it without VC funding or debt, completely from scratch? This podcast is here to give you the answer.
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Join me and follow along as I learn, apply, and share marketing strategies to grow my online business using only today's best internet sales funnels.
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My name is Steve Larsen, and welcome to Sales Funnel Radio.
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All right, guys, hey, I'm excited for this episode. This has been kind of a long time in the making. This is gonna be one of those episodes that have kinda been on my mind for a long time as something that I wanna \xa0share with you guys and teach you something really interesting.
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I wanna tell you a story, okay? We were planning Funnel Hacking Live 2017. I remember being on cloud nine, I could not even believe that I was in the planning sessions for Funnel Hacking. I was freakin' out about it, I was super excited. I was with Melanie, Dave, and Brent. It was just fun to be in the room. Russell's like, \u201cDude, what if we ask Tony Robbins to come?\u201d \xa0We're like, \u201cOh my gosh, that's crazy.\u201d So they started doing some research and reaching out to his team.
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Tony's team reached back out and said, it's gonna cost about this much. I am not privy to say the amount... I'm not even gonna allude to it... but I will tell you that it was a lot of cash. It was a butt ton of money. It was so cool to watch how Russell handled it\u2026There is a lesson that I picked up... I was watching him like a hawk. I always do.
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First of all he goes, \u201cOh my gosh\u201d, with this face. \u201cHuh, oh my gosh, huh, oh god, I feel sick, huh.\u201d What was interesting was what he did next...
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There was a moment where he freaked out, and that's appropriate and everyone can feel free to do that when you wanna buy something expensive. But then, he just said \u201cYes.\u201d
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Then he was very careful to structure the FHL event in a way that would pay for Tony. Isn't that interesting? The event literally liquidated the cost of Tony Robbins.
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If you go look at any time he's ever had someone really big on - that's how he structures it. That's really fascinating.
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We started doin' some pretty interesting things that were very expensive. Things like the Harmon Brothers.The Harmon Brothers, they're the ones who did the viral video...
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Hopefully you guys are cool with me telling all these stories? I wanna link it back to what I'm doin' right now and hopefully you'll take something cool from this.
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The Harmon Brothers, it's public knowledge, so I'm just gonna say it... they charge half a million dollars to do a video. One video! A three, four, five minute video. Half a million bucks. They're expensive, but they get results. They're really cool, so they can charge that money.
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Instead of Russell going, \u201cGah, are you kidding? Half a million dollars?\u201d Which was appropriate (and we all did that at first)... what he did was start figuring out a way to liquidate the cost with some kind of campaign, event, or product.
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So that at the end, he is left with both the asset and with his own cash in hand. Meaning he doesn't let his own cash out, he created something else to pay for the expense. Does that make sense? This is the smarter VC funding way.
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You guys know I'm pretty against things like VC funding, but it's because of this very principle right here.
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Think about a free plus shipping book funnel. A free plus shipping book funnel or even a webinar funnel... A lot of times in a webinar funnel there\u2019s a self-liquidating offer before somebody even gets to the webinar.
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There\u2019s a product to purchase even before someone gets to the webinar - that way, an average of 10% \xa0- 15% purchase the product, then it liquidates most of the ad cost. So everyone who comes and buys during the main product during webinar is actually pure profit. Does that make sense?
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That's how it works in a funnel, and the same principle can apply your business and the way you run it. This is the principle that I\u2019ve been \xa0applying to my business.
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I told you guys about the story at this last Funnel Hacking Live, someone was like, \u201coh man, maybe I can get a discount on the 2 Comma Club X Program. Maybe I can split it with a few other people!\u201d and I was like, \u201cNo, wrong question!\u2019 \xa0Questions invite revelation... \xa0So you need to change the question.
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Instead of asking \u201cHow do I get a discount?\u201d ask the question: \u201cHow can I afford the most expensive things in life?\u201d
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Solve that problem, not the question: \u201cHow can I get a discount?\u201d You'll solve either question... but most people don't ask questions with intent.
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So what I said to him was: \u201cLook, go figure out how to pay for the most impressive, most expensive things in life, and at the end of it, you'll be left with the thing that you wanted that's very expensive, and you'll be left with a paying asset.\u201d
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If \xa0you just go out and say: \u201cOh man, I guess maybe we'll have to get someone cheaper\u201d or \u201cI guess we have to take this cheaper option over here.\u201d What ends up happening is you get a much cheaper experience and there's no asset!
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Usually you end up paying out of pocket. Does that make sense?
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So start thinking about how to liquidate costs... this is something most entrepreneurs end up getting pretty good at as they go down the road.
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I would watch Russell, and it's \xa0an active theme. He goes and figures out what he wants to do and then figures out what he can create to pay for it.
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And so I started applying this strategy too.
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About two years ago I launched a funnel explicitly to do this. What eventually started happening was I started making more money off that funnel than I was getting paid at my job.
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In essence, I replaced my income with this funnel that was running on the side while I was working at Clickfunnels. Isn't that interesting? I'm always looking for some kind of asset to do that.
When I finally left ClickFunnels, I didn't take a paycheck from my business for almost three months. We were living on savings through March. It wasn't until April that I got paid. It was fine - we had cash, it was just I wanted to make sure the funnel was awesome. I wanted to make sure the business had enough cash flow. So I was like, well, \u201cHow do I remove the cost of me?\u201d
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I launched my funnel, I got it off the ground. Things are doin' awesome. It did a lot of money.
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Grant Cardone says \u201cCash is King.\u201d But in reality CASH FLOW is king. Cash flow is king. Cash is NOT king, Cash Flow is King.
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If you think through your business and you think about how much do you pay yourself right now? \xa0Or do you have a business you're actually paying yourself from? I make it a consistent amount so I can count on it. And then I ask the question, \u201cHow can I replace that cost?\u201d
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I pay myself eight grand a month before taxes, before costs - and I have people that work for me, I have a team, then I need to liquidate those costs.
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At the beginning I asked: \u201cHow do I remove eight grand a month?\u201d Boom, I'm gonna start a coaching program. I went and launched the coaching program and that removed the cost of me taking money from my main product. Does that make sense?
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All I want \xa0is for my main product to scream it to a million bucks. Structurally, the way that I'm doing this is that instead of me getting paid out of the profits from my main product, I take money from this entirely separate thing over here - from coaching or something else.
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Then the product can just roll on itself. We can spend a crap ton of money on ads and get a lot of people in there fast. Is this making sense so far? This is how I've structured it from a money standpoint. From a cash flow standpoint I can pay for expensive things like my content team this way.
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In the last episode I talked about my content team which is 26 grand a month in hard costs before I even think about ad spend. \u201c26 grand, oh my gosh,\u201d \xa0right? \xa0
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Back in the day, I made 18 grand during my first year of marriage... only $18,000. \xa0And it was loans - so I wasn't even making it! We were living on students loans, guys. \xa0
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So I\u2019ve gone from $18,000 my first year of marriage to 26 grand a month on hard costs that are not direct cash flowing things! It blows me up... that's a lot of money! \xa0$26,000 a month on the team as an ongoing cost.
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So I was like: \u201cOkay, okay, how do I remove that cost from my main product?\u201d My main product could pay that cost... but I don't want it to. So what I did is I upped my coaching. I increased my coaching availability. I increased my consulting.
A lot of people have reached out lately and asked: \u201cWill you fly out for a day? Just come in and work through our offers with us, work through our funnels with us. We're not asking you to build 'em. We just want you to come double-check, look over the top of it... \xa0How much is that?\u201d
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I'm like, \u201cSweet, well, 10 grand a day... Fly me out and we'll do that... I'll dive deeply through your stuff with you. I'll teach you. I'll show you what to do and how to put it together. I\u2019ll critique and tweak, or build it straight from the ground up and design your marketing with you.\u201d
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So that's what I've been doing. I\u2019ve been going through and figuring out different opportunities to remove the cost of the team, my salary, the hard costs that I have. I want to completely remove them and liquidate them from my main product.
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With my main product, we've kept the ads tiny because I've been testing stuff. \xa0As of yesterday... I'm actually really excited, it\u2019s the first full day that our self-liquidating offer was up on the webinar. It's doin' well.
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It has an 8% purchase rate right now, which is okay... I'll keep tweakin' it and making it better and better. But it's a good starting place, right? It tells me at least that there's need for it. That it\u2019s actually working\u2026
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I'm liquidating my ad costs, so now everything in that webinar purchasing process is pure profit.
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The whole principle of this entire episode, what I'm trying to say (and I know I've said a lot of things, and hopefully you've followed it), is that you need to find a way to liquidate \u2018your costs\u2019 from your main product so that you can keep enough cash flow to scale your product fast.
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I was talkin' to somebody and they're like, \u201cI'm gonna go get off the ground here, I'm just gonna quit my job immediately.\u201d And I was like, \u201cDuh, don't do that.\u201d
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I had active cash flowing funnels... I had active cash coming in from another source before I ever did that. We had savings and security - you know what I mean? The waters were well tested.
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I'm a risk taker, but I'm a calculated risk taker. It took a lot of time to actually put that stuff together and get things rockin' off the ground.
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I\u2019ve got an SLO in my funnel. It\u2019s liquidating the ad costs. Awesome! If it's not always break even at least it's always like nothin' now. So when it's all said and done, the cost is really, really tiny to acquire a paying customer.
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Then the business side, I'm like, \u201cSweet, how do I remove myself from the books of that product specifically?\u201d I don't wanna get paid from the profits of that product. So I remove myself from the books with coaching consulting and speaking.
I'm speaking in loads of different places recently. It's been a ton of fun and I\u2019m liquidating all the costs of the business which means I can get a sweet content team together and publish way more.
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I\u2019ve liquidated the cost of my content team, my salary, the people workin' for me without taking any money out of my business.
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Don\u2019t ask, \u201cUh, how do I get a discount on stuff?\u201d It's a bad question! You'll answer it\u2026 You just don't want to answer that question. It's the wrong question.
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So the next thing I want is a super ninja support team. \xa0If you guys didn't listen to my deep dive on webinars... it's in two parts\u2026 \xa0it's a few episodes ago. It's probably 10 episodes ago... It's worth listening to.
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One of the things that I've been seeing other guys do on webinars is have live support. So now I want to toss in support on my automated webinars too... \xa0This represents a new cost coming in.
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Watch how I'm gonna handle it. We already have awesome support, but I want 24/7 support. I want three people in eight hour shifts. Sheesh. A good support person, you can typically get good ones, maybe I won't say numbers, but it's not gonna be cheap. So how do I replace that cost?
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So I thought, okay, what if I do this? If my webinar is what the main revenue generator is right now, it's like the big product that I'm pushin' out the door\u2026 how do I make it so that it further replaces the support person cost?
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I wanna beef up support and I wanna get a full-time assistant. Those are the two positions that I'm looking at right now. So how do I remove that cost and not bankrupt the company, which we're not close to at all, but like, right? How do I make it so that I don't have a negative month?
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I don't wanna have my first negative month - I wanna keep goin' up. How do I do that? So this is what I'm thinkin'... Follow me on this\u2026
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On the broadcast page for my webinars, the replay pages, right underneath, I have a cool chat box, but now I wanna have live support on the page while they\u2019re watching.
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If someone's has a question, who's gonna fulfill those support tickets? Support. Who's gonna fulfill that live chat when they're on the webinar? Support.
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A lot of people just have a last question or two before they actually purchase something from you. If they don't get it answered they won't buy it. It's that important to them, even if, in hindsight, it's a really small question\u2026
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This is what I'm gonna do. I'm gonna add in a live chat box element - so \xa0that when they click it opens up Facebook Messenger right there. Then they can chat with one of my three support people tight there on their profile.
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If a support person closes that person, number one, it brings in more cash... Number two, I'll give that support person some affiliate commission. That way they\u2019re motivated to close people when they do write in. Isn't this interesting?
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If support answer a few extra questions and bring in the cash, it will probably liquidate the cost of my support team. Will it actually make extra cash? Probably not, but it will probably remove the cost of the support person. Does that make sense?
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Anyways, that's what I'm doin'. Maybe this is a little bit too crazy for me to go into on a actual podcast episode... but that's what I've been doin' lately, which is kinda interesting.
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What if the question is not: \u201cHow do I do this?\u201d... but: \u201cWho knows how to do this?\u201d Go listen to that podcast episode from Russell if you haven't\u2026
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Maybe the question is not, for example:\u201cHow do I build a funnel?\u201d \u2026 but \u201cWho knows how to build a funnel?\u201d
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If you don't know how to build funnels, you could go learn... or you could find someone who already knows how to do it. Go find the right \u201cwho\u201d with the know how and your speed increases. And that's I've been focusing on lately.
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Going from six to seven figures is not a matter of more hours in the day spent in the office, it is a matter of leverage. And so that's what I've been figuring out.
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I've been getting this team, and I've been putting people together. I'm getting these support people, and it's been awesome, you guys. All of its been awesome. I've been able to liquidate the cost of my team through the coaching and other stuff.
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Next episode, stay tuned, I wanna show you the other way that I'm gonna replace them again with more revenue. I'm very, very excited to go through and share that thing with you.
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Anyways, I'm excited. Hopefully this episode made sense to you? It's just a recap. I know I kind of went deep with all this stuff\u2026
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Just the same as I would create an SLO or some kind of self-liquidating offer that pays for ads in a funnel\u2026 I\u2019m doing the exact same thing in my business now.
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I've removed \u201cme\u201d completely from the cost of my main funnel profits. I've removed my team completely from my main funnel profits. The more people I put in, instead of figuring out: \u201cCan the business handle it?\u201d (The answer's yes, but I don't wanna ever go negative on my revenue or my cash flow)... Instead, I ask: \u201cHow can I remove that cost from my business?\u201d
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I'm getting a few more support people and I'm just plugging them into the closing process. So I'm getting support people, a little bit more aggressive support people... People who know how to close a little bit.
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Support people who know just even the smallest amount of closing techniques, so they can come in and answer and close people. People who can answer support questions and support tickets when they come in, but who can answer any kind of closing questions too.
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That's kinda the thing I wanna go build team-wise. I wanna to put that together. I'm really, really pumped about it. I hope it makes sense.
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What's funny is that when you start asking and answering these sort of \xa0question, your speed's gonna increase like crazy.
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I've never met anyone who made a ton of money just on their own. It always takes a team. Everyone benefits as the entrepreneur and the business move together.
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So just start answering these questions: \u201cHow do I attract the right \u2018who\u2019?\u201d - \u201cHow do I liquidate the cost of the right \u2018who\u2019?\u201d
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Russell was a \xa0room with a lot of brilliant people... I think it was at the Genius Network, but I'm not sure. Anyway, someone said:
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\u201cDon't figure out how do I do this, how do I do that.. That route takes you forever... Yes, you'll become a renaissance man - which means you're really gettin' good at nothing.\u201d
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Instead of asking, \u201cHow do I do this?, ask, Who knows how to do this?\u201d
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I was on a coaching call, I'll end it with this\u2026
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I was on a coaching call with another amazing mentor of mine and he was telling me, the one question that I should start learning how to answer is: \u201cHow do I hire people that I can't afford?\u201d And if I can answer that question, everything blows up.
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He asked me to start thinking about that probably about six weeks, eight weeks ago, and I've been answering that question. It's the reason why my team and my business is accelerating is because I have learned how to hire people and bring people in that I can't afford.
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How do I do it? I do it by creating a liquidating asset that covers that cost.
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I still have one funnel. I still have one thing that I'm doing, that's it. My focus is there, is absolute. However, on the cost of the actual business itself, to start really leveraging the speed of the team, I need to go create something else that pulls in and liquidates the cost of that person.
That's the question I wanna pose to you: \u201cHow can you hire people that you can't afford?\u201d And when you start doing that, oh my gosh, it's crazy. There's so much expertise that will get brought into your company and your business, it's ridiculous.
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I don't even know all the stuff that my team do for me - it\u2019s insane. It's really cool. Problems get solved that I didn't even know existed. And they get solved in an expert way rather than a just good enough way.
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All right guys, hopefully this was helpful to you, and I will see you on the next episode.
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Please get a chance to rate and subscribe and review this podcast. And please share it.
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I would love to be able to share my message with people who are kinda just starting out and haven't quite made it yet. Or people who have made cash, and they're trying to figure out how to scale. That's where my expertise is - in offer creation and the storytelling.
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Anyways guys, thanks so much. Have a good one, and I'll see you in the next episode. Bye-bye.
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Hey, thanks for listening. Please remember to rate and subscribe. Got a question you want answered live on the show? Head over to salesfunnelradio.com and ask your question now.