I went out for a run extra early this morning.
It was pitch black and I had to use the light on my phone to light the path.
I made it to the running track and began putting some laps in.
There was another guy on the track who was clearly a well-seasoned athlete.
He was absolutely flying!
Eventually, he caught up next to me.
“What are you training for?”
I replied with a big smile on my face.
He looked back at me confused as he put his foot on the accelerator.
I don’t think he got me at all.
But, I will explain it to you here.
In business, and wealth-building you are going to experience challenges and discomfort.
There are times when business will be incredibly hard.
There are times when you won’t enjoy it.
I have taken some massive hits on the journey and I have never met a good business owner who hasn’t.
Something I wish someone had told me earlier though…
Dealing with challenges and discomfort is something that can be trained.
It’s a muscle.
Why I have taken up running is to improve my ability to deal with challenges and discomfort.
Dealing with the challenges of running is making me stronger at handling challenges life throws at me.
I want to be ready for whatever life throws at me.
I’m building my ability to handle challenges and discomfort.
This is also why we see many good athletes ending up being good business owners.
They have spent years pushing their ability to handle challenges and discomfort.
The skills translate across.
This is an incredibly powerful concept and something I hope you will take on board.
Prepare yourself for what life throws at you.
In this week’s episode:
○ Is your current network holding you back?
○ Is cost-cutting the best way to drive profits?
Prefer to listen or watch?
You can hear Grant and I discuss these topics in more detail on the podcast
Click here to tune in: https://linktr.ee/businessandinvestingcom
Is your current network holding you back?
This question came in via email.
(Just a reminder, you can reply to our newsletter to submit your questions for the show.)
This reader sent in his concerns that the network around him is holding him back.
○ they are playing small
○ they don’t have the results he wants to produce
○ they are negative people overall
He feels like every time he brings an idea or opportunity to his network they shoot it down.
They tell him all the reasons it won’t work.
To me, this is the description of the network you don’t want.
(And you should avoid people like this.)
But, how do you go about building a good network?
One that propels you in the direction you want to go in life.
If I could pass on one thing that has worked for me it’s this…
Pay to be a part of masterminds, communities and events with the people who have matching goals to yours.
The people who pay to be in masterminds, communities and at events are the serious ones.
(Likely the ones you want to connect with.)
You will become who you spend time with.
If you want to be good at golf, pay to be a part of a good golf club.
If you want to be a stronger business owner, pay to be a part of a mastermind with strong business owners.
If you want to build wealth, pay to be a part of a group of people who have built wealth.
Now, you might have to try a few of these to find the one that’s right for you.
But, when you find the right one it will be worth it.
Something I wanted to mention here also.
As you and your goals change, so will the network you require to succeed.
If you haven’t changed some people in your network in a while, it is likely you need a change.
Be very careful of holding onto a network that no longer supports you and that you outgrow.
Hear more about how I build my network and build value with them on the podcast.
Is cutting costs the best way to drive profits?
What a great question!
I want to use an example to explain this one.
Let’s pretend you have a business that does $1,000,000 a year at a 33% margin.
$1,000,000 at 33% margin = $333,000 per year of profit.
Now if you cut your expenses by $100,000 a year.
Your profit grows to $433,000.
A direct $100,000 increase in profits.
Every dollar saved goes straight onto profit.
But, What happens if we grow revenue by $100,000, instead of cutting costs by $100,000?
Your profit only goes up by $33,000.
Why? Your business has a 33% margin.
You would need to grow this business by $300,000 just to produce the same amount of profit that $100,000 of cost-cutting would produce.
That’s what makes cost-cutting such a powerful driver of profits.
And why having a bloated business is so dangerous…
Now before you get too excited and start cutting costs across the board.
It’s critical you don’t cut the wrong costs!
And I see this one all the time…
The most notable ones.
Marketing and Team
When you cut marketing, your business brings in less work.
When you cut the team, your business delivers less work.
If you cut too aggressively in those areas you will shrink the size of the business and might reduce revenue and also your profit.
In general, you don’t want to cut things that get customers or keep customers.
I’ll share a few of the areas I focus my cost-cutting efforts on.
(I share more on the podcast!)
1) Replacing Software
There are continually newer, better and cheaper software solutions coming out.
Many business owners get comfortable with the tools they are using and never look for new options.
Just this month I replaced a software that was costing me $1,000 per month with one tool that we are already using.
As the tool we were already using released a new feature, which removed the need for the other software.
That’s $12,000 of savings that turns straight into profit!
2) Enhancing team
This one is counterintuitive.
I’m happy to spend money on things that make my team more efficient.
If my team is more efficient, then I need fewer overall people to deliver the same result.
Enhancing the team is a cost-cutting measure!
3) Insurance, phone services, utilities
It’s surprising how much of a difference switching providers can be.
You can often get the exact same insurance, phone services or utilities from another provider at a VERY different price.
I will acknowledge it’s painful to do this but, swapping providers can be an incredibly powerful way to cut costs.
Make sure you jump onto the podcast to hear more about how I keep my business lean and profitable.
Be on the lookout…
Next week, we have got a special guest coming on.
I won’t share too much besides he is one of my ‘go-to’ people to understand what is happening in the markets right now.
And because he is a business owner and an investor, his insights are even more powerful.
So, be on the lookout for that one.
Anyway, that’s it for this week.
All information we share is NOT financial or investment advice and is purely intended for entertainment and educational purposes only. Always seek professional advice before acting on any financial decision.
00:00 Welcome to Business and Investing
01:28 The value of having a great network
06:17 Growing your network
12:48 Finding your niche and building rapport
21:40 Hey takeaways for improving your network
28:41 Cost-cutting to grow profits
36:23 Effective metric for managing expenses
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