This is a transcript from the Business Secrets Podcast With Robert Kanaat. Click here to view and subscribe on iTunes.
What’s up everybody? Welcome to another episode of Business Secrets. My name is Robert Kanaat – founder of wanderlustworker.com, the premier online destination for all things inspirational and transformational.
I wanted to thank you for being with me here today – whether it’s morning, noon or night. Wherever you are, I appreciate you tuning into this podcast, and I appreciate you listening and being a faithful subscriber. I wanted to share with you something that I believe a lot of entrepreneurs like us struggle with, and that is scaling your business. What are the secrets to scaling your business? That’s the question. How do you go from the point that you’re at, to the point where you want to be? What does that look like to you? Is that an exit? Is that some form of investment in your business? Is that going public?
I’ve taken a company public, and let me just tell you – it’s definitely not the most glamorous thing. There are a lot of hurdles. It wasn’t like your standard IPO, it was – we basically created a shell. This was a long time ago. I met this guy in Canada, and was building a software company. We basically created a shell in the very, very beginning. Funny thing is like usually you build up a business, and then you take it public – after it’s like big and you want like to IPO and get a big amount of cash investment.
There’s this other side of the world where people are creating something called shells. Shells is just basically an empty public company. Costs you about 30 or 40 thousand dollars to – maybe a little bit more, depending on how you structure it to create a shell. Then you can reverse merge any company into a shell. The shell market is pretty interesting actually. If you know nothing about it, shells can sell anywhere from like hundreds of thousands of dollars to over a million dollars. Depending on the different FINRA rules, and like at the time – the hurdles that exist in the market. How many shells are for sale.
My point in telling you that story is it’s not really that glamorous going public. Anyways, maybe if you’re operating a massive, massive business. But there’s so many auditory regulations and so much paper work that you have to do, it’s crazy. But my point is, figure out what is the end goal? That is actually the first step to scaling your business. Because a lot of us think we have something in mind. We want to scale because we want to do – we want to sell for a billion dollars. We want to go public or whatever it is. You have to figure out what you want. You have to approach things with the end in mind.
I personally don’t really believe in starting a company just to exit. I feel that if you’re not passionate about whatever it is that you’re doing, then you’re really wasting your time. I don’t really even think an exit is possible. You have to be passionate about it. But let’s just say, let’s put all that aside. Let’s just say that you are passionate about it. What is your end game? What’s your end result? What do you want?
The only way that you could actually scale – and this, I say this all the time when I talk about setting goals. If you search anything about business goal setting, daily goals, daily goal setting – I’m pretty sure I come up like number one for almost all of them on Wanderlust Worker. I always talk about – you have to write down your goal, no matter what it is. Like when it comes to scaling your business, if you do not have a goal written down, totally wasting your time.
You want to scale your business to x amount of dollars by when? Don’t just say like, “Hey like two years from now, I want to sell for a billion dollars.” Or, “Five years from now, I want to go public,” whatever. You have to write down the exact date. I’m serious. Write down the exact date on the exact month of the exact day of the exact year. Write that down. You can’t scale a business if you don’t have a realistic date in mind.
When you set down a date, so many things start happening around you. It’s really interesting. A lot of us fail to set dates for our goals, and that’s really where we do ourselves a huge disservice. Because if you’re not setting the actual date, you’re totally wasting your time. Because it’s almost impossible to achieve a goal if you do not write it down.
If you do not get specific about it. When you get specific about it, we’re talking about like setting a real date on the calendar. Not just like, “Hey, I want to do this a year from now.” Okay, that sounds great – but if you don’t pick an actual date on the calendar, than your chances are slim of achieving that goal. Because it’s more abstract, as opposed to specific.
The first secret to scaling your business is to figure out what you want to scale to. What is your goal? If that goal doesn’t scare you, then you’re setting the wrong goal. It should scare you. It’s okay, right? If you want to sell your business for a billion dollars – write it down, and write down the date of the calendar two years from now. The exact specific date, two years from today date. Write that down. That’s the first goal to scaling any business.
Then you have to work backwards. And so you need to figure out like what are the milestones that you need to achieve to get to that end goal. What are the people and the resources and the customers and the sales channels and like whatever? What are you going to need to get there? Do you need a CRM? Do you need to change this? Do you need to change that? Do you need to get bigger office space? How many employees will you have?
Think about all this stuff. Even if it scares you, think about it. You need – the second step would be to figure out all of the milestones along the way. Let’s say for example, you had a goal to sell your business for a billion dollars two years from now. You need to work backwards. If that’s 24 months, you can easily break down two billion dollars into 24 months. But that’s not necessarily a sales goal. You wanting to sell your business for a billion dollars might mean that your 8 x revenue or 5 x revenue – great. What revenue do you need to sell your business for a billion dollars? Write that down.
Then break that number down into milestones. Milestones are like monthly, weekly, daily. It’s far easier to imagine a daily goal when you break it down from a yearly goal, or like a two year goal or a five year goal. It’s way more consumable. It doesn’t scare us as much. Even though the number might still be big, that’s okay. You should definitely dream big. There’s nothing wrong with that .That’s the thinking, that’s the way that you have to approach it.
When you set your specific goal and create your milestones, you have something in place – that’s great. But how are you going to achieve that? How are you going to get there? How are you going to find the money? Are you going to get an investor? What does that look like to you? Are you going to get a business loan? You going to get a bridge loan? What are you going to do? You need to think about those things.
If it’s an investment, how much are you willing to give up? How much equity are you willing to give up in your company? You have to think about all of those things. Let me just tell you, it’s not very glamorous to take investors’ money. Because most investors are going to expect a 10 x return. You are going to have pressure from investors. It’s never going to be like somebody’s going to hand you a check for a million, 10 million, 100 million dollars – and they’re just going to say, “Bye bye, good luck.” They’re going to be on you.
You need to think about where is the money going to come from? Because how can you scale a business if you don’t have money? Yes, you can build a sales funnel, you can scale organically, you can run ads, run traffic, do organic stuff, post on social media. I don’t know, like whatever – you have a lot of strategies. But if you want to reach a big goal, money loves speed. If you’re serious about scaling, normally that means that you need more money, you need an injection of capital.
That’s not to say that you absolutely have to take an investors money. If you are growing organically, and you’re growing at a big scale, great. If you’ve plateaued, then you need to change some things. You need to figure out what those changes need to be. That is how you get there. Every individual business is definitely different, but I assure you – by taking this approach, by getting really, really specific about what you want. Breaking that down, breaking down what you want into bite sized pieces, milestones – it’s going to be far easier to approach this goal.
But that’s not it. There’s one last little part of this equation. Maybe the secret sauce, if you will. If you want to really, really scale your business – if you really want to achieve that big goal, you know what you have to do. I’m going to tell you. You have to write down why. When I was with Dean Graziosi in Scottsdale at his 100K group – and that’s the $100,000 Mastermind. He had a guy names Joe Stump show up. Joe Stump talks about something called seven layers deep.
He says that we all have reasons for achieving something, but it’s often superficial. The real reason lies seven layers deep. This is how it works. When you go seven layers deep, you ask yourself, “Why do I want something?” Often the answer’s not really what you want. When the answer equals the question, that’s when it’s really what you want.
It’s like – I want to sell my company for a billion dollars so I can buy a 30,000 square foot mansion. Well that’s not why you want to sell your company for a billion dollars. Sure, like a big house is great, but that’s not why. Why do you want a big house? Why do you want a 30,000 square foot mansion? Well that’s going to be plenty of space to house me, to house all my things. I’m going to feel really, really proud of having that house, and it’s going to make me feel like I’ve arrived, I’ve achieved something big.
That is also not the reason why you want a big mansion. You have to continue going deeper, seven layers deep. Maybe you’ll achieve the answer before seven layers. At the end of the day, why do you want a 30,000 square foot mansion? If you ever stopped and asked yourself, “Why do you want a 30,000 square foot mansion? Why do you want a McLaren P1? Why do you want a super yacht? Why do you want a private jet?”
It’s not the thing. It’s never the thing. It’s always the emotion, the feeling that we’re chasing. “I want a big house, because I grew up in a small house, and my family always struggled when we were kids,” or something like this. That’s interesting, because that’s going deeper. It starts going from your mind, almost into your heart. When I say, “your heart,” it’s a sub-conscious, right? There is a sub-conscious layer to, makes you who you are – the person that you are, the entrepreneur that you are.
Going deeper, really at the end of the day, it involves a few things. it involves freedom. Freedom, security, family, love. Those are at the deepest level. Until you figure out like, “Hey, I want a 30,000 square foot mansion because I want to feel safe and secure. A place where my children never have to worry about having to move from city to city,” whatever. It’s the love of family. That’s a big driver. “For my kids, I want to do it for my kids.”
Go seven layers deep. Scale your business. It sounds maybe like kind of a contrarian approach. But I assure you – when you figure it out – when you figure those things out, you shoot to the moon. That’s what I have to say today, and I hope you enjoyed what I shared. Please like and subscribe on iTunes. Comment. I read all the comments. Share it with your friends. Until tomorrow, until next time, I will speak to you guys soon.