Many years ago I went through a ‘rebirth’ phase of my business.
I was in a unique situation. All my products had been taken off the market, so I had nothing for sale. However I still had my blog and my email list, which I continued to nurture even when I was selling nothing.
In some ways this felt like starting a new business. I had to decide what to sell, make sure my audience wanted it, and plan out what order I would do things in.
However unlike someone starting from scratch, I began with an audience and cash in the bank from previous years running my business. This of course makes things much easier, but it creates new ways to make mistakes (which you will see in a moment, I certainly made!).
Sometimes having resources means you waste time and money doing things you wouldn’t do if you were bootstrapping and just getting started. The pressure to get cashflow (money coming in) gives you a narrow pathway towards a goal. When you have money to spend, it’s easy to waste it on things you don’t really need.
The Biggest Mistake I Made
I believe we can learn a lot from where other people go wrong, especially in hindsight when bad choices become so much more obvious over time.
In the spirit of helping you avoid my bad choices I want to share with you what I see as my biggest mistake when I went through this rebirth of my business.
Today as I write this, it is very easy to see where I went wrong. Pretty much every little mistake I made stemmed from this one big mistake…
I spent way too much money and time focusing on elements of my business that are only relevant for some time in the future.
Instead of focusing my efforts on what I needed to do immediately as the next step forward for my business, I believed if I could get a few things running at the same time, I could grow faster.
It sounds good in theory: Why not build out other parts of your business while you work on the core things you need to focus on?
Unfortunately it doesn’t work out that way, and in fact will slow you down even further, unless you do it at precisely the right time. I’ll explain when the right time is later in this article.
They Seemed Like Good Ideas At The Time…
To make this more tangible, here are some of the specific mistakes I made during this period, which I thought would speed things up, but ended up slowing me down…
I hired people to do the following for me (wasting money):
- Write emails for email sequences I will need in the future but can’t use until other things are done (like having certain products on the market already)
- Create new traffic assets, like a magazine and an app, so I could increase how many new people I reach
- Manage my projects for me so I could focus on other things (but I chose a poor candidate who ended up taking more time from me than freeing up my time)
I wasted time by doing things like…
- Studying resources that relate to things I might do in the future
- Paid a lot of attention to other people who were teaching things that are not relevant to what I am focusing on RIGHT NOW
The thing is, all these activities are beneficial, when done correctly at the right time.
In my case I was excited about doing many different things at once, all of which I could see helping to grow my business.
Because I had cash to spend and all my time to myself, I figured it made sense to start many projects at once.
What I didn’t really understand at the time, or perhaps on some level decided to ignore and just try and push through, were some fairly significant problems…
Problem 1: You Have To Factor In Communication Time
Whenever you hire someone to do something for you, it’s never as simple as just saying “I need this problem solved or this thing created and you go do it“.
You need to communicate with them, instruct them, train them, respond to their ongoing questions and make decisions in response to their prompts.
Often these interactions serve to break your concentration and flow, because you have to stop whatever you are doing and re-focus on what they are doing.
Even the best people who can work relatively autonomously and make good decisions on their own require some initial guidance. You have to at least explain the job to them and then fill in any gaps in their knowledge as they work through your project. You won’t be able to find someone who already knows everything about what you do.
Let’s not forget the hiring process itself. You have to write criteria, put up job notices, vet applicants, run tests, do Skype interviews, and even after all this they may not be the right person, so you have to go through it all again.
Problem 2: Progress Changes Your Direction
In the example I gave of hiring a person to write emails for me, that is a great idea to gain leverage in your business, when done at the right time.
The mistake I made is hiring a person to write content that I couldn’t actually use yet because I hadn’t set up the systems that come before that content.
Then later as I go about creating the systems, I realize I need a completely different set of emails to what I paid someone else to write, so I have to re-write them.
If I hired someone to write something I can use immediately, that make sense. I know what I need for the current situation and I can immediately roll out the content and get a result.
Plus let’s not forget, as per problem one, you have to communicate and train the person you hire to write content. You need to be sure that is the best use of your time at that given stage of your business. It was not for me.
Problem 3: Bright Shiny Ideas And Cool People Distractions
There are a lot of successful people online who share what they do. Their information is great and very likely can help your business too.
The mistake is studying things that are not directly applicable to what you are doing now.
If your immediate need is sourcing traffic and the best solution for you right now to solve that problem is podcasting – then that is the only time you should focus on podcasting experts and their training. If you don’t need to know about podcasting now, don’t waste time on that subject.
You should only use your precious study time and attention on things that address your immediate needs.
Make Your Decisions Based On What Stage Your Business Is In
I have made it pretty clear that timing matters.
Deciding your immediate next step should only relate to what you need to do immediately. That makes sense.
But how do you know what you need to do immediately?
This decision ties into the stage of development your business is in.
Here are the stages:
Stage 1: Momentum Creation
At this stage everything is about attracting customers to establish cashflow.
If you are running a startup, you might get investment funds as your initial cash source, but bloggers and information marketers do not follow the angel/venture capital startup path. It’s smarter to bootstrap a blogging business.
Your only goal at this stage, which is your immediate problem to solve, is…
How can you get customers so you have cash to keep growing?
(Plus you learn more from customers than any other form of research.)
You can’t reach the next phase without cashflow to spend on things like better technology and hiring people.
At this stage it’s always a smarter decision for you to do most of the work yourself because it will be a quicker path to income. You don’t have to train anyone, just get out there and serve customers. Chances are you won’t have the funds to hire people anyway.
Of course you have a cap on your capacity if you do most of the work yourself and it’s not the ideal business model long term, but it’s the right one short term.
Your key first goal is to generate enough initial cashflow to quit your job, which will immediately increase your capacity without increasing your costs, since without a job you don’t have to work on anything other than your business.
You will hit a ceiling at some point working by yourself, but you can make six figures a year without hiring help.
Once you reach a point of positive cashflow, you can focus on stage two activities…
Stage 2: Tighten Up Processes And Automate With Technology
Once you have some income from your business powered by a system that is reliable, your next job is to reduce friction, optimize and automate parts of your system.
Technology is key at this point.
However you don’t purchase a more advanced tool like Ontraport just because you think you should. You will know the advanced things you want to do, and you will already have a working business. A tool like Ontraport will enhance what you already do, it’s not something you get ‘just to have’.
Phase two has a lot less ambiguity than phase one.
Phase one is about learning about your customers and generating some income streams as a result. Phase two is about taking what you learned and gaining leverage through technology and selective outsourcing.
At this stage you can hire people to do tasks that are mandatory parts of your business, but not areas you should focus on personally.
Jobs like customer service, web design, setting up and maintaining membership platforms, editing and formatting documents, graphic design – all the ancillary parts of your business that make your core value proposition better, but are not critical parts of it – can be given to other people to do.
For example as an information marketer, your core values are the ideas you create and teach. That is what people pay for.
How you deliver those ideas in terms of formatting, content distribution platforms and use of graphics can enhance your product, but it’s not the core value.
In phase two you can hire people to help make what you already do present better and reach more people. You enhance your core value, not try and create completely new core values.
You shouldn’t focus on tightening up in phase one, because it slows you down from reaching cashflow. If you spend too much time tweaking your blog design, or learning about which is the absolute perfect membership script to use, you are not focused on what matters most for that stage. You are slowing down everything.
Phase two is when you can review how you make money and start to automate certain parts of the process.
For example, during phase one you might have done a lot of sales manually, sending emails back and forth on the fly, making phone calls, private messaging through social media and apps, all to communicate with potential customers.
In this phase you begin to tap into the power of automation so these sales related communications are structured.
In phase two you set up more detailed marketing processes that occur automatically, so customers come to you more qualified. For example, creating a three part video series to presell your product, or creating a one week email sequence designed to upsell a customer on a next level product.
Now instead of relying on constantly producing new things like podcasts, blog posts or videos, or doing product launches, you can create a system that keeps selling for you all the time. You guide all your new visitors through that process using technology. This in turn frees you up from having to work so hard to close a sale.
You can realistically make multiple six figures and up to a million dollars a year with just you and a handful of contractors and a good system. This might be as far as you want to go.
If you want to grow further, you move on to phase three…
Phase 3: Exponential Growth Through Full Time Employees
Phase three is when you move away from being a product and content creator and change your focus to being a great manager and hirer of people.
Hiring A-Players multiplies everything you do well already and gives you leverage to open up new channels of marketing. You can hire full time copywriters, designers, developers, content creators, marketers and ad buyers.
This extra capacity allows you to not only tighten up everything you do to the extreme, but you can replicate it horizontally, taking your existing marketing channels and rolling them out in new places, creating new products and attracting new customers.
For example, you can implement campaigns on YouTube, podcasts, blogging, affiliate marketing, CPC ads, retargeting, display media, press – everything you can think of.
In phases one and two it’s impossible to do this because you don’t have the capacity. Once you have the cashflow and a dependable money making system with metrics you know convert, you can open up any channel you want to and potentially bring in thousands of new customers.
However it’s a mistake to move to this phase before truly mastering the previous two phases. Hiring is a full time job and if you still spend a lot of your own time doing things to keep cashflow coming in, you are not ready to make this change.
Phase three can take you from a million dollars up to hundreds of millions and even billions if your market is large enough.
Bear in mind, your job significantly changes at this stage – you are not doing the same things you do in phase one and phase two. You go from creative content creator, to CEO, overseeing a team who does a lot of the jobs you used to do.
You may never want to enter phase three, but if you have ambition to create a seven or eight figure business, chances are you have to.
Make The Right Choice For Today’s Business Goal
Many of the choices I made when I was recreating my business were mistakes because I was going after things prematurely.
For example, I learned that you shouldn’t attempt to open up new channels of traffic unless you can profit from them, and don’t hire people to create content for you that you can’t leverage immediately.
These problems stem from mindset and strategy issues.
If you’re not clear on your target market or what you should sell you are going to have some latency (gaps) as you test things to figure out what works.
Latency results in making mistakes to figure out what is not a mistake.
One of the reasons I made the mistakes I did is I had money to spend. Having money meant I felt like I should use it to expand my business. However I didn’t do it in the right way, so I ended up wasting money.
Sometimes it’s better when you don’t have money because it forces you to focus on only what immediately delivers what you need — money!
As a result of these experiences, in recent years my focus became much more simple. I stopped trying to expand in ways I didn’t need to. Instead I focused on what was already working and looked for ways to grow there.
I also used this strategy when hiring people, focusing on finding help to solve immediate problems and leverage what already works in my business, and not hire people just because I want to do something new.
In hindsight this seems so obvious.
Over the years I’ve read many books that reinforce the idea of focusing on your strengths or core competency (Jim Collin’s Good To Great and the Hedgehog Concept for example). I teach this idea myself in much of my writing and programs, yet even so it’s still hard not to be distracted by the constant desire to ‘do more’.
Hopefully through my story in this article you will find greater focus too.