$treet $mart$ (vol. 33)
After literally thousands of conversations and consultations with entrepreneurs, it has become clear that most of us don't know how to tactically engineer our business. And candidly, once upon a time, I didn't either.
There is a reason why so many entrepreneurs struggle to get above $1M in gross revenue, fail in the first 2 years, waffle around for 6-7 years until they finally have a breakthrough, or never take off.
The reason: Because they take a passive approach to their business. More specfically they are not engineering the sales, marketing, people, processes, and systems that allow the business to run with out them.
Engineering an exit simply means you have options and options are a good thing. Options like exiting the day-to-day, buying more businesses, re-capitalizing the business, franchising, or selling.
The biggest difference between those entrepreneurs who never get above a small business and those that do is simple.
- Small business owners take a passive approach - letting the business "grow" naturally. This approach kind of works, but it will never lead to lead a meaningful exit. And more often than not it leads to a glorified job. Most entrepreneurs don't own anything. Rather their business owns them.
- But those who successfully engineer an exit intentionally architect, engineer, and build a business in a way that doesn't need them.
Exit Optionality Blueprint
Here is the step-by-step blueprint that I have used for myself and my clients. I call this the Exit Optionality Blueprint.
▶️ Phase 1: Startup
- Objective: Vision, Brand, Revenue, Trust.
- How: People who Know, Like & Trust you.
- Why: Trust is built on integrity, intent, capability & results. Therefore, these people already trust you about 75% or more, because they have a personal connection with you; and have seen you succeed in other walks of life. Therefore it's easier to give you a shot at delivering the result. And if you fall short, they know you well enough to trust you will make it right.
- Marketing: Reputation, Content, Brand, Cold Reach Out
- Goal: Get revenue, get feedback, optimize the product & offers, refine the target customer, and convert success into reviews that can be used with future customers outside of your inner circle.
📈 Phase 2: Growth
- Objective: Horizontal Scale.
- How: Growing topline revenue by way of more people (Team), Marketing, and Partnerships; while documenting processes & Developing Training.
- Why: The expansion of your team typically includes sales and delivery people. Each new person brings a network of trust and can generate more sales from their natural network while selling and delivering on new leads generated by way of marketing & partnerships.
- Marketing: Reputation, Content, Brand plus Introduce Paid Media to include: Retargeting, Paid Search, and Cold Audience Look Alike campaigns in your niche.
- Goal: More Revenue, refining the marketing campaigns to consistently generate leads, and documenting the processes so that each successive team member can duplicate.
*This phase can happen very quickly, with a tactical focus. However, this is the hardest phase to overcome because it's hamstrung by cash flow and an ability to recruit & develop duplicatable/repeatable processes.
Understanding how to leverage cash flow to tactically generate leads that convert revenue, liquidate your lead cost, and accelerate cash flow or structure contracts to generate revenue that can be leveraged is the crux of breaking out of this phase.
🚀 Phase 3: Expansion
- Objective: Vertical Scale
- How: By Way of Technology, Automation, Expansion of the leadership team (executive suite), and financial engineering of the business
- Why: Enhance the relative effectiveness of each individual within the organization so that they can do more with less by leveraging technology. Automate mundane and low-leverage takes, to give people more time on revenue activities. Delegate core functions (finance, operations product, service, sales, marketing) to other leaders in the organization. Elevate to the Growth & Executive Officer Level.
- Marketing: Reputation, Content, Brand, Paid Media to include: Retargeting, Paid Search and Cold Audience Look Alike campaigns. Maximize current channels, and expand exponentially into relevant mediums across social.
- Goal: You have achieved mass-market saturation, therefore you can expand beyond your niche to tap adjacent markets at scale.
*Vertical Scale is about generating more revenue per headcount, without adding more people in order to generate the revenue.
🦉 Phase 4: Maturity
- Objective: Acquire More Businesses, Franchise, Sell, Tap into new markets, or Hire a CEO and Exit the Day to Day
- How: Mergers & Acquisitions and Research & Development
- Marketing: Reputation, Content, Brand, Paid Media to include: Retargeting, Paid Search and Cold Audience Look Alike campaigns, social, add brand marketing to the platform. These include sponsorships, commercials, experience-based marketing, etc.
- Goals: The market knows who you are, therefore use excess cash to keep the business evolving.
*This is an incredible milestone, but also a danger zone because this is the stage when businesses lose their scrappiness and innovation. The original founders are gone and the Vision has been achieved. It is at this stage that a new vision must be set, in order to prevent the market from passing you by.
There are plenty of businesses that have grown massive topline revenues through brute force, I know this well because I was part of one that went to $100M. That said, scalability and exit optionality is not only tied to the amount of revenue you generate. Exit optionality is more closely linked with how profitable a business can be without your involvement.
There is a lot more detail than what's provided in this email, and there is nuance to each business. But in general, every business will move through these 4 phases of maturity. That said if your business is stuck and you would like to chat about how you might fix it, I'm happy to spend 30 minutes discussing it. You can book some time here
⚙️Automation Tool Tip:
After you develop and document an antiquated, manual marketing system that works, it's time to scale vertically. To scale vertically you must leverage automation to create more volume, in less time, without the need to hire more people. The caveat is you must maintain quality. Automation is not an excuse for doing the hard work to figure out what works, but it is designed to augment what already works.
Here are 3 tools that we are using to scale our outreach & automate our touch points.
- Phantom Buster: PhantomBuster lets you streamline your lead generation, with over 100 automated actions across all major websites and platforms. Read More
- Lemlist: Lemlist is an email management solution that helps businesses streamline processes related to optimizing sales engagement, sending personalized emails, managing follow-ups, and more on a centralized platform. Read More
- Active Campaign: ActiveCampaign is a cloud software platform for small-to-mid-sized businesses that uses automation to create better customer experience through transactional email, email marketing, marketing automation, sales automation, and CRM categories. Read More
🎧 Listen to The Most Recent Podcasts:
- Ep. 29 Marcus & Brett | Just Stick With It
- Ep. 30 Andy Neary Keynote | How to go from Unknow to Unstoppable
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