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  • "What should I spend on that new computer?!"
  • "What salary should I give pay the new secretary?!"
  • "What should I invest in that new product?!"

Don't fret; here's one solution:

  1. Define your expected return on the investment.
  2. Divide that return with your current profitability margin.
  3. You now have a budget for the investment! YAY!

Peep Example

If your company has a profitability margin of 25%, an investment should return at least a specific amount so that it won't drain that margin.

That is:

  • Investment's Expected Return / 25% = Budget amount!

YAY!

For instance:

  • A computer that costs $2000 should generate an additional $8000 in sales to maintain your profitability margin.
  • A secretary that costs $50,000 should return an additional $200,000 in sales.
  • A new product that costs $100,000 in R&D should generate at least an additional $400,000 in sales.

And if you suck...

Generating anything less than your current profit margin tells you this:

  1. "We could've used that money to put it in something else!"
  2. "We just left money on the table by throwing good money after bad!"
  3. "We would've made so much more $$$! OH NOES!"

You expect your dollars to at least produce the same return as before; otherwise, you drain $$$ down the tubes by weakening your position.

Say NO! to the Outlandish

Financially unoptimized-sucky-suck business folks think:

  1. "Hey! we have so much new money!"
  2. "Let's spend! Spend! Spend!"
  3. "Let's buy frickin' chairs for $1,000 each!"

Would that chair return $4,000+ compared to a cheaper one?

It might make you and your team feel a little more comfortable; and, if you're working with big purchases, it might just be worth it.

But for most folks, spending $1000 on a chair = bad!

Remember:

  1. Invest your dollars according to expected returns.
  2. Invest your dollars according to expected returns.
  3. Invest your dollars according to expected returns.
  4. Invest your dollars according to expected returns.
  5. Invest your dollars according to expected returns.

If you haven't defined an expected return before you make a purchase, sense TROUBLE!! OH NOES!!

The Good Model

Before you spend chunks of cash on something, ask yourself:

  1. What's the potential return I see on the investment? (>90% confidence)
  2. Budget accordingly (i.e., Multiply the potential return by your profitability margin %).

You'll see yourself budgeting where your dollars can achieve the most bang for your buck.

Some More Examples

Here's one:

  1. "I expect an additional $5,000 return on an upgraded computer."
  2. "So, I should spend no more than $1250 on a new computer."

Or another sex-ay one:

  1. "I expect an additional $100,000 return on a new assistant."
  2. "So, I should spend no more than $25,000 on the assistant's new salary."

Or one more:

  1. "I expect an additional $40,000 return on a new software system."
  2. "So, I should spend no more than $10,000 on the software system."

Freakish win.

And:

"What if I don't return what I expected?!!!!!"

  1. Slap yourself.
  2. Tell yourself: "It's okay!"
  3. Then, repeat: "I will not make the same mistake by investing that much in that piece of @^^% again! FREAK."

You'll gradually make smarter and smarter investment decisions until you're like super smart. Hooray for you.

For every item your company buys for the rest of eternity:

Budget based on expected return.

Posted on July 02

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  1. You want to accomplish a lot of things today.
  2. You've set yourself up for a big ol' productive day.
  3. "Today's the day that I excel!" you tell yourself.

But then:

  1. You do the first task, trying to perfect it.
  2. Lunchtime hits.
  3. You start on Task ^2.
  4. You end the day still trying to perfect Task ^2.
  5. You don't get to the rest of your tasks until weeks later.

Scope creep. BOO!

How to Start Your Day

If an overweight-inebriated ostrich held a gun to your face and said:

  • "Accomplish your today's tasks in 30 minutes or else! ROAR!"

What'd you do?

You'd probably do something like this:

  1. Finish Task A in 5 minutes.
  2. Finish Task B in 5 minutes.
  3. Finish Task C in 5 minutes.
  4. Finish Task D in 5 minutes.
  5. Finish Task E in 5 minutes.
  6. Finish Task F in 5 minutes.

"DONE!" you'd scream at the ostrich.

You get high-fives all over the place.

Let's Analyze That Mofo

Did you perfectly rock Tasks A, B, C, D, E, and F?

Oh no, you didn't.

  1. You didn't sit there waiting to perfect Task A until you were perfectly content with it; that'd get you shot.
  2. You did what you could get by with, then moved on as quickly as possible -- avoiding the dreaded scope creep, and keeping your day productive.

Accomplishing stuff that you can "get by" with matters infinitely more than perfecting Task A.

Completing tasks you've set for today super-rifically quickly lets you:

  • improve build on top of "Version 1" of the various tasks throughout the day
  • have a security blanket; if you somehow suck the rest of the day, you've still got something that lets you flow with

Start thinking:

  1. Execute first.
  2. Perfect that execution progressively over time.

That is:

  1. Finish today's tasks freakishly quickly (e.g., 30 minutes).
  2. Perfect those tasks throughout the day.

Quickly complete; then, beautify.

Posted on July 01

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A business needs two kinds of folks.

  1. Those who bring in business.
  2. Those who fulfill that business.

That is, you have a sales dude, and a task dude.

Without the ying and yang, your business: Kaput.

Now, you're thinking:

"Who in the mofosoko should I hire?!"

When you start your business, you either do it because:

  • You're one talented rainmaker.
  • Or, you create awesome stuff.

So, ask yourself:

  • "Am I a salesperson?"
  • "Or, am I an operations person?"

In other words:

  • What do you prefer to do?
  • What excites you?
  • What motivates you to perform?

Likewise:

  • What do you dread doing?
  • What bores you?
  • What scares you?

Choose the former; get help for the latter.

Your Todo List

Depending on who you are:

  • If you're a rainmaker, get a doer.
  • If you're a doer, get a salesperson.

Balance The Bizo

  • A company run by two folks who are awesome at building Project XYZ will suck if it can't sufficiently generate enough sales to sustain business.

  • Likewise, a company run by two people who can bring in business in droves will suck if it can't fulfill that business for their customers.

Rock both sides. Thrive.

Complement the other half.

Posted on June 30

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Try this; compare how much time you're:

  • Working on client projects.
  • Working on your own business project.

"What in the mofo?"

  • Client project: helping fix Freddy Lee's car.
  • Business project: building your actual business.

You have two choices how you spend your time:

  1. work on Freddy Lee's car
  2. work on your own business

Do more of one, and the other suffers. Do both equally, and you get mediocrity.

"What should I do?! OH NOES!"

When you work on Freddy Lee's car:

  • your business project becomes ignored
  • your business becomes stale
  • your business transitions into the long-lost-f.u.g.l.y.-step-child

Yet, switch it:

What happens to Freddy Lee's car when you work more on your business?

  1. Yes, you ignore Freddy's car.
  2. But, you can teach others to fix it.
  3. You can create a little user's manual on how to service different errors.
  4. You can hire potentially awesome folks to take over your master job.

BAM!

What just happened?

Magic just happened. @^^% magic in this form:

  1. You rock your business project 100%.
  2. Your employees rock the customer projects 100%.
  3. Your business grows. You help more people

(Bonus: Your employees helps out on the business project through feedback frequently too.)

Win for all. The best of both worlds. Ta-da.

Let's mother-@^^%^ skip like we ugly children.

Ultimately, you give yourself this:

  • time to build your ridiculous business only your uniquely whimsical freakish imagination knows how

Result: You build the business of your freakish dreams.

A business that:

  • continuously provides value to tons
  • employs passionate freaks
  • generates constant innovations
  • services customers like Santa @^%^ Claus
  • gradually becomes the pinnacle of your industry

You start creating that vision you had when you just started.

At the end of your day, ask yourself:

  • How much % did I spend working on Freddy's car?
  • How much % did I spend working on my own biz project?

BAM.

Focus on Your Business. Help More People.

Posted on June 12

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Do this mofosoko:

  1. Understand the big picture in 10 seconds.
  2. Grasp more of that picture using another minute.
  3. Progressively expand your knowledge of that big picture in follow-up quick increments.

Ta-da!

You've just learned what people take exponentially days/months/years/decades to understand.

Why the big picture?

The big picture helps you put every succeeding thing you learn into context.

It helps you synthesize the information, and make more sense of the topic/argument/thesis/yadda quickly and efficiently.

Take a Book

You're no chump; you don't read a book from page 1 to page 300 chronologically.

No way!

Here's what you do:

  1. You get the very big picture: the cover's flaps/intros -- to get the book's thesis statement.
  2. Then glancing at the intro/conclusion chapters..
  3. Then identifying the individual chapters' theses..
  4. Then scrutinizing the indiv. chapters' intros...
  5. Then glancing over the entire book

Every progressive step expands that balloon of knowledge (i.e. the big picture) you got initially.

That helps you:

  • dramatically cut your learning time
  • viciously boosts how much you comprehend

World-class learner: You.

First, start with a big pic.

Then:

Progressively expand that balloon like You = Rockstar.

Posted on June 11

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  1. Prospect once.
  2. Win project.
  3. Finish project.
  4. "No more work! Boo!"

What happens?

No more business happens.

You banked on a referral, but the client could find nobody for you.

  • You drain cash.
  • You hang on for survival.

The solution:

  1. Prospect every-freakish-day like tomorrow's not coming around for your shiny boo-tay.
  2. Then, nurture those prospects you find.

How Streams of Clients Come

Generating customers is like this:

  • You have a bag of popcorn.
  • You steadily grow the sucker.
  • And then Kabooooooooom! You start seeing a stream of customers explode into your laps.

That is:

  1. seed
  2. watch your business's potential grow with every new prospect formed
  3. POP!
  4. "Uh-oh. Here comes the @^^% herd of clients, y'all!"

How to Prospect

Everyday, try this:

  • Initiate a new relationship.
  • Seed somebody.
  • Give value to somebody new.

If at the end of your work day you haven't initiated a new prospect for your business:

  1. slap yo-self
  2. tell yo-self: "I will message/phone/email somebody new before I can sleep."

Your company's future becomes freakishexier with every new seed planted.

How to Nurture

Once you've initiated the prospecting, start nurturing that relationship by:

  • providing as much value to the prospect as you profitably can

Help the prospect live/eat/work better.

  • The more value you provide, the stronger you'll build the relationship.
  • (e.g., staying in contact every two weeks = good)

Hint: build your frickin' email newsletter list.

The result over time: The Herd.

Win. You.

Prospect daily. Nurture constantly.

Posted on June 10

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Choose struggling client. Run struggling business.

Choose successful client. Run successful business.

Stamp that @^^% to momma's forehead.

How Bad Clients Destroy You

Struggling clients:

  1. have freakishly f.u.g.l.y. budgets
  2. incur vicious debt
  3. are crazily tight on their finances

So, they:

  • become super-demanding of your services
  • micro-manage the freak out of you
  • make you work exponentially harder
  • drain your team's morale
  • probably won't pay you on time (or at all)
  • likely won't buy much more from you

Peep this gem: The clients a company chooses determines its fate.

  • Bad clients: will gradually run your business to the ground.
  • Successful clients: will help your company thrive.

Rock your fate by selectively choosing your clients.

The Value of Good Clients

The successful:

  • are lower-maintenance
  • have bigger budgets
  • buy more from you
  • refer you to more successful clients
  • are freakish joys to service

Ultimately, they'll help your company thrive.

The more successful the client you attract, the more successful you'll become.

Collect more of them = See a more thriving business.

BOOMSHAKAH.

Seek the successful.

Posted on June 09

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  1. You want to close a freakish sales deal.
  2. You escape at the first sign of stress.
  3. You end up staying stagnant.

Every positive change in your life won't happen unless you experience some struggle.

  1. Want to sell to a big client? Prepare for the nerves/unknown/fears/chaos.
  2. Want to become the best in your industry? Prepare for the grueling practices.
  3. Want to win over your crush? Prepare for the anxieties/jitters/angst.

The Rule: You will not change your life/business unless you struggle through something.

Think of Sports Movies

The typical sports movie:

  1. Start with a sucky sports team.
  2. End with a championship-winning team.

Between the first step and the last step, what happens?

  • A dramatic change happens.
  • People dramatically change their ways of living/talking/eating.
  • Peeps experience the exhaustive hours of reprogramming the way they work.
  • They stress their abilities -- as if they're stacking a ton more weights on their lifts.

But, how does Typical Businessperson Billy B attempt to change?

  1. Try X for the first day.
  2. See no dramatic results.
  3. Quit. Then, blame "the system" for making him suck.

It's as if Billy B want to go from sucky to glory without going through that vital intermediary vicious struggle.

Boo!

Don't be Billy B.

Be freakish Rudy Ruttiger.

How to Revolutionize Yourself/Your-Fab-Company

Remember, dramatic change happens only through dramatic struggles.

The magnitude of how much improvement happens with your business correlates with how much struggle you experience with your business.

Every struggle makes you stronger -- growing your skills, confidence, and rockability.

How Change Happens

For instance:

  1. You have only experience working with X-size clients.
  2. You push yourself to the core to work with your first Y-size client -- changing the way you work, changing how you approach and serve clients, and changing how you manage your team to rock clients' goals.
  3. You gradually become more confident/skilled/content working with Y-size clients.

Woo-frickin-hoo!

Prepare for freakish struggles before you can dance the funky chicken at your company's $10 MM revenue milestone par-tay.

The Template

"Before I can experience this milestone _ , I will have to struggle through this _ ."

Struggle before glory.

Posted on June 05

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The more your experiment, the more you'll succeed in business.

  1. Great products aren't formed by one magical idea.
  2. Magnificent designs aren't conceived by one magical spark.
  3. Thriving businesses don't thrive on one magical business plan.

Instead, to succeed in business, it takes:

  1. Experimenting.
  2. Experimenting.
  3. Experimenting.

Every experiment gets you more:

  1. knowledge of what the market wants
  2. understanding of what influences human peeps
  3. insight into what you can exploit to rock the world

How Something Becomes Great

The process to making anything great:

  1. You start with something totally sucky.
  2. You make it suck less.
  3. Then less.

...until you're gradually releasing/selling/developing/building something totally coooooooooool! Hooray!

But, when do you know specifically how to make something suck less?

You'll know after:

  • Experimenting.
  • Experimenting.
  • Experimenting.

Every experiment gradually gets you closer to your ultimate goal.

Why Can't You Plan These Things?

If it's possible to tell the future, fortune-tellers would be rich and we'd all be their little b@^ches.

But the fact is:

  1. Amazon still fails.
  2. Google still fails.
  3. Steve Jobs still fails.
  4. Sequoia Capital still fails.
  5. Your momma still fails.

We can't tell the future. We can't really know what works.

But, we can have a clearer insight of what works.

How?

  • Experimenting.
  • Experimenting.
  • Experimenting.

Every experiment gets you a better insight of what will work.

Result: You make freakish progress to your ultimate goal.

Yay! Hooray! High-five!

The Steppers

  1. Choose your ultimate goal.
  2. Experiment like a mofokoko to discover the best path to get there.
  3. Win!

Experiment like a drug-induced ostrich who just discovered he can't fly.

Posted on June 04

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  1. You're super-freakishly happy.
  2. You think you're all badass.
  3. You end up earning less than Schmo.

Why?

  1. Happiness makes you complacent with $$$.
  2. Instead of trying to improve yourself, you settle for "This is who I am! I am so proud of myself!"
  3. So, you continue doing what you're doing -- never really improving on how you financially live your life.

Boos all over the world to you.

Are you crying?

Good.

You're one step closer to being financially successful.

Hooray!

How Happiness Destroys Your Pocketbook

Research says people who rate their happiness a 10 earn less than those who rate their happiness levels at an 8 or 9 (peak earners).

10s tend to:

  1. overspend
  2. save less
  3. pile on debts

The conclusion:

  1. Yes, you can be super happy.
  2. But, don't blind yourself with superficial happiness.

Even if you're financially awesome, you can still (1) cut costs, (2) earn more, and (3) boost that mother-kereffen bottom-line for you/your-company/your-world.

Winner!

The Action Plan

Try this:

  1. List out all you/your-company's expenses.
  2. See how you can save 5% this month.
  3. Repeat for subsequent months.

Grate those costs like mutha-effin' swiss cheese that's dying to shred itself like a two-headed ostrich.

Win.

Live like you suck.

Posted on June 03

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