Category: Podcast

IIP075: Austrian Conversion Optimization Prodigy Shares His Secrets

Note: Click here to download your free copy of The Human Conversions Guide

Episode Highlights: Conversion Optimization, List Building, and Audience Engagement

  • The difference between making money and being successful
  • Why focusing on your conversion rate is often the wrong decision
  • Good conversions vs. bad conversions
  • How building a small list that is worth more than gold is much more valuable than building a huge list that doesn’t care about you
  • Design 101: Design DO’s and DON’Ts that apply to any website and will help you make sure your readers will be more engaged and take more favorable actions rather than stare at their screen confused!
  • How your homepage would look like
  • The 3 most important pages that you need to patch up on your website — today!

Today’s Guest

Jakob Schweighofer

Jakob Schweighofer is an Austrian entrepreneur. In just a couple of years, he went from installing WordPress themes to becoming a sought-after expert in optimization of websites and conversions. He’s been involved in several projects that made incredible amounts of money in a very short period of time.

As it often happens in business, early stage partnerships don’t hold forever. Not long ago Jakob’s partnerships disassembled and now he’s turning the page and starting afresh.

“I heavily changed my definition [of success] in the last few months, from I-get-a-lot-of-money-out-of-it [to] success is doing the things I like with people I enjoy doing it and be able to live from it.”

I met Jakob at Tropical Think Tank 2014 in the Philippines and was blown away by his knowledge. Since then, I’ve been talking to him at least twice a month about my business and branding and I’m excited to starting to apply all of his ideas.

When it came to conversions, following his ideas has often tripled conversion rates for both Julie and me in our businesses. But more than that, I look forward to follow his advice on creating a strong online personal brand — something he was incredibly successful in creating for himself in the German and Austrian market.

Today’s talk about website optimization is unique, because unlike other experts – Jakob isn’t as excited as about finding that one little tweak, changing the color of a button in just one shade, moving a button by 10 pixels, or making a title a lot more shocking.

Jakob has grown tired of such internet marketing manipulations, and now he focuses on converting the right people the right way in order to build true and lasting brands and businesses for ourselves.

Is It Truly A Good Idea To Improve Your Website Conversions?

This might seem like a funny question. I mean — how could improving your website conversion be a bad idea?

All things being equal, of course you want the highest conversion rate possible.

But things are not equal, and here are some questions to consider:

  • How are you going to improve your conversion rate?
  • What kind of audience will you be attracting due to that change?
  • How engaged is that audience going to be, compared to your existing one?

All these questions affect the effectiveness of the work you’re about to put in improving your conversions.

Conversion Optimization VS Your Core Values

If improving your conversions means installing pop-ups that your audience will not like, e-mail gates that they will not appreciate, or changing the way you write in a way that doesn’t represent you and your core values — Jakob’s verdict is: It’s not worth it.

Think about it: If you could have a list of a hundred people that are absolutely rabid about what you do and buy every product you put out there, compared to a list of 10,000 people that opted-in for all sorts of lead magnets that don’t really represent what you are about and don’t give a rat’s ass about your e-mails and offerings after they got their opt-in magnet. Which one would you take?

Suddenly, the obviousness (let’s pretend that’s a word) of the equation “more conversions = GOOD” is put to doubt.

So what should you be doing to get more bang for your buck? How can you get more engagement and build your e-mail list without filling it with the wrong people? Read below to find out.

Website Design: Do’s & Don’ts

In today’s episode, Jakob covered his Human Conversions Guide Manifesto – how websites should be built in this day and age to create effective and engaging personal brands.

The information below is a quick summary of everything we discussed, but for more information, make sure you listen to the interview as well as download Jakob’s free PDF: The Human Conversions Guide.

Do: Stop Worrying About Conversions

If you read through this post up to this point, you must have seen this first commandment coming.

In order to create a personal brand that’s human, relatable and engage-able you need to put aside the internet-marketing-conversion-optimizing mindset, and think of your website as your meeting place with other human beings that might be interested in you and your services.

The less internet marketing tricks that you play on your audience, hell — the better!

Don’t: Write To An Audience

Following up on the previous commandment, this one distills the way of communication even further: Don’t write to an audience; write to a single person.

The way I achieve that, by the way, is by not writing at all:
I only outline the text I want to write, and then I go on a walk and record it, pretending I’m speaking to one of my readers. Then, my VA transcribes it and turns it into text format, but in case you don’t have your own VA — you can have someone from Elance do that for you for pennies. Or you can even transcribe it yourself!

The point here is not the process as much as the hack that I found to work for me to get out of the “I need to write a post for my site” state of mind and into a “Hey man, here’s some cool stuff I learned from my latest episode”.

See the difference? Your audience (sorry, people) will see it too.

Do: Avoid Complexity

The next thing Jakob tackles is complexity. As you might recall from my interview with Kary Oberbrunner “clarity attracts, complexity detracts”.

Here are just a few ways people are getting clarity wrong:

  1. Every single page on your site needs to have one single job.
    People (myself included) almost always get this one wrong.
    Whenever you write a blog post, ask yourself: what’s the one thing I want this page to do? Build my list? Educate? Entertain? Inspire? Encourage to join my list? Sell my product? Sell my event? It can only be one.

  2. Your homepage is one of the first pages people see.
    Traditionally, it was THE FIRST page that everybody saw, but with today’s social media, many people reach a specific post in your site. Guess what they do then? They go and check out your homepage.
    Here’s the job your homepage was hired to do: Quickly, effectively and clearly communicate who are you, what’s this website about, and what will I (the reader) find here (what’s in it for me?).
    Do that and you help every single visitor who gets to your site understand if you are a good match, and what’s the next action they should take.

  3. Stop giving people so many options.
    I get it, you want people to opt-in to your list. Who wouldn’t?
    So like many others, you think to yourself, “let’s put 5 lead magnets on the sidebar and then at least one of them would apply to every visitor.”
    While that might sound like a good idea, research shows that having too many options actually leads to anxiety, paralysis, confusion, and worst of all, to postponing the moment of decision. Unfortunately for you, that is postponing the moment of deciding to join your e-mail list… until they leave your site and forget about you altogether.

Bottom line:

  • Keep it clear
  • Remove as many elements as possible
  • Don’t bombard people with too many options
  • Make a clear path for visitors to walk through your site

(I really need to apply these for me site, too!)

Don’t: Ask For Stuff You Wouldn’t Do Yourself

Last but not least is the real deal breaker: Whenever you consider putting a new pop-up lead magnet ad, a new welcome gate, or replace your homepage with the only option to get past is for me to give you my e-mail address, ask yourself this:

“How would I feel about this? Would I be willing to take the action I’m being asked to take? How will taking that action make me feel? Do I trust this guy with my email at this stage?”

It’s easy to develop a blind spot and rationalize to yourself stuff people are willing to do – when in fact it might make them uncomfortable.

I’ve done that mistake with my Sign-up process to my membership site back in March 2014.

The solution to this blind spot was incredibly easy: Send it to someone else and ask them: What do they think? Would they opt-in? Would they take the action that is requested on that page?

Final Words

As I said, in the interview Jakob went into much more detail than this summary. For the full story and more information listen to today’s interview (there’s a player at top of the page) and download Jakob’s free PDF: The Human Conversions Guide.

I hope this has been useful for you. If you have any questions to Jakob or me, or if you think we got it wrong, leave your comments and thoughts below.

Mentioned Resources:

Click here to download your free copy of The Human Conversions Guide

I Need Your Help!

If you haven’t already, I would love if you could be awesome and take a minute to leave a quick rating and review of the podcast on iTunes by clicking on the link below. It’s the most amazing way to help the show grow and reach more people!

Leave a review for Meron’s podcast!

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IIP074: How To Manage Your Time Like An Entrepreneur Super Hero!

Episode Highlights: Time Management And Becoming An Effective Entrepreneur

  • Why time management won’t solve your time management problems
  • Why being productive or efficient doesn’t necessarily make you effective
  • Why the biggest difference between you and the most successful entrepreneurs is effectiveness — and how can you become an effective entrepreneur by spending 10 minutes a day (the right way)
  • The 10-Minute Get Clarity And Take Control Over Your Time Exercise — the only time management system you’ll ever need
  • Why doesn’t time management work and how time hacking solves it

Why Time Management Is An Entrepreneur’s Biggest Problem

Whether you are an experienced entrepreneur, a side hustler, or even only an aspiring entrepreneur, there are two resources that determine your chances of success. Running out of any of the two would mean the failure of your entrepreneurial business.

Can you guess the resources I’m talking about?

If you guessed time and money, you are correct.

Since money is what puts food on the table, it’s kind of obvious why running out of it would spell “game over” to your business. Time, on the other hand — is a pretty interesting resource.

The thing about time, especially for entrepreneurs, is that we always seem to be running out of it. No matter how much time we have it never seems to be enough to fit all the projects, tasks, errands, and obligations that we have.

Running out of time means we don’t get our projects done when they should be done, we don’t get them done to the quality want, we miss out on business opportunities, and then — when we finally have time for them — it’s too late.

Running out of time means we don’t sleep enough, we don’t function as well as we could, we can’t afford spending time with our loved ones and doing the things that actually matter to us the most.

While business acumen, marketing strategies, sales page theory, and social media marketing are indeed important for a business to succeed, when a business is run as successfully as possible in all of the above except time, the owner has no way to actually enjoy it.

This is why today, we tackle the biggest question entrepreneurs have been struggling throughout entire history: How do I make it happen with the time that I have?

From Time Management To Time Hacking

Time management is generally the title of all the systems, processes, and methods that aim at shaping the way you run your business, your calendar, your projects, and your tasks into a rigid structure that will supposedly would fix all of your problems, reduce stress, eliminate confusion, give you focus, and make you a master of your own time.

The only problem with that concept is that we are all adults. Whether you are 25, 35 or 55, it’s probably too late for you to change your habits and their triggers to fall into place with someone else’s system.

Let’s face it — most time management strategies were born because someone was doing something that worked for him, and when asked how they do that, they try to teach others to replicate the same.

Srini Rao and I discussed this on IIP023: Confessions Of A Corporate Misfit — the problem with spreading best practices starts when people follow them blindly instead of learning from them and customizing.

This is where time management comes into play. Instead of reshaping the way you manage everything in your life, time hacking is all about getting clarity, about what needs to be done, and then reshaping time to fit your goals, aspirations, and lifestyle.

At its very core, time hacking is inherently customizable. In fact, time hacking is more of an ideology or a framework rather than a method. And from New York Times bestseller to some of the internet leading entrepreneurs, it’s making huge waves right now.

Today’s Guest

Julie Sheranosher of The Time Hackers Podcast
Julie Sheranosher of The Time Hackers Podcast

Today we are joined by Julie Sheranosher; entrepreneur, author, ex-captain in the Israeli Defense Forces, and the creator of time hacking.

For full disclosure and in order to make sure I don’t annoy my friends in the Federal Trading Committee, I will also mention that she’s my personal time coach as well as my girlfriend for the last five years.

When Julie and I started dating, she was a captain in the Israeli Defense Forces, in-charge of systems that are crucial to the nation’s safety. She had a good dozen of subordinates that sought her guidance not only in their professional lives in the army, but also in everything else. As you could guess, she was quite busy.

The “I’m Busy” Syndrome

work desk

In fact, she was suffering from a severe case of the “I’m Busy” Syndrome.

We’ve all been there; we have so much work to do, whether it’s for our full-time business, our side hustle, or our corporate job — that we run around like headless chickens.

We don’t have time to answer e-mails, we don’t have time to spend with our families and friends, we don’t have time to take care of ourselves, to do sports, to eat right or to unwind. But the worse part of it is that we take great pride at being so busy (at least I did).

Being busy makes us feel important. In the western world, being busy makes us feel fulfilled. It’s not surprising that the being busy syndrome is the number one enemy of time hacking. As I mentioned above, in time hacking, there’s an emphasis between productivity, being efficient and being effective:

  • Productivity: The art of scratching things off of your to-do list, with no specific regard to their importance or urgency. Often the most practised skill of time management/time hacking as it simply makes us feel great.
  • Being efficient: Being efficient takes productivity to the next level, and basically means that not only we are crossing things off our to-do list, but we are actually doing it as quickly as possible while completing each task within the best context to get it done (for instance, using our commute time to answer e-mails, make calls, etc.).
  • Being effective: Being effective is the holy grail of time hacking and the one thing truly missing out of most “time management” systems.
    Being effective means you’re not only crossing stuff out of your to-do list, and doing that in the best context possible and in the shortest amount of time, but you are also doing only the right things (something James Schramko mentioned as one of the three key things to becoming a successful entrepreneur and running a successful business).

Mission Impossible

So as I mentioned, when Julie and I started dating she was a very very busy person. Working for 16, sometimes 18, hours a day, she couldn’t imagine herself leading her life differently. For her, she was doing everything right. Being honest, I wasn’t much different: I was running my software development business and probably working the same hours as her if not more.

Until one Friday, the accumulated stress of being over-worked for so many years in the army, being in a sedentary job with no time to take care of herself, broke Julie. Literally.

She herniated a disc, and instead of going to her soldiers on Sunday, she had to go and see an orthopedic. Taking a look at her x-rays and CAT-scan, the doctor had a simple piece of advice for her: “You need to start working four hours a day.”

For Julie, and probably for you too, switching from a full-time job (or an over-time job like Julie had) to four hours per day is simply impossible. She thought the doctor used four hours as a figure of speech. “I thought he meant I need to work like all the normal people, like nine hours per day.”

And so Julie started working only nine hours a day and trying all the time management techniques she could find to try and fit her 18-hour workday into 9. It didn’t quite work.

Time Management Not Working

clock

Trying as hard as she could, it didn’t work. Julie started failing on deadlines, on projects, feeling she’s failing her subordinates and her commanders. For almost any workaholic that I know this is a terrible hit to the ego and to the self-confidence. Unfortunately, she would have to fall even lower before she’d find a solution.

Mission Impossible II

Three months after her first injury, Julie herniated two more discs. By then she needed help to get off the sofa and into the shower. She was in constant pain, unable to enjoy neither time at home and especially not at work.

Back at the doctor’s office, he told her: “You might have misunderstood me. When I told you you need to work four hours a day I meant no more than four hours a day. That is, unless you want to reach the age of thirty in a wheelchair.”

Working 4- hour shifts are completely unheard of in the Israeli Army, and probably in any major corporate around the world. Suddenly Julie became the ugly duckling, the one that people talk about behind their back, whispering and pitying. And she felt that she was failing more than ever. If she couldn’t get eighteen hours of work done in nine, how can she ever get them done in four?

Giving Up

Frustrated with failing and facing the impossible, Julie just gave up.

She gave up on her dream of becoming a great, acknowledged and respected commander. She gave up her dreams of promotion and prizes. She gave up everything she thought she had to offer.

Out of complete frustration, and trying not to lose herself, she decided to toss aside everything she knew about managing her time, her job, and her life, and focus on one simple thing:

Choose the one thing that has the biggest impact every day and do only that.

Understanding she’ll never get the job done, Julie put aside the to-do list and started living by this new mantra. She would get to the office, do the one thing that was most important for her that day, the one thing that she felt would put a dent in the universe, and only after that try to do anything else.

Suddenly things were changing: A few weeks later, she was sitting in front of a computer on a Tuesday morning, realizing that she completed all of the tasks that she planned for that week. For her that was the beginning of time hacking. For us this is the beginning of becoming an effective entrepreneur.

Finding Success Through Failure

Following the surprising finding, Julie started documenting everything she was doing: What kind of tasks was she completing, at what times were those tasks, working the best for her, what was her attention span, what stuff was she getting far time quicker in the morning rather than in the afternoon. Slowly but surely she figured out her personal time hacking framework.

This is why time hacking is nothing like any time management framework you’ve seen. It’s 100% customized to the time you actually have to the way you work and with what’s available to you. It builds upon your strengths rather than having you fighting yourself around your weaknesses.

In today’s episode Julie shared the first step you need to take to become a time hacker and your own master of time. It’s a 10-minute exercise that will help you get clarity and learn how to prioritize your goals, project, and obligations and make time work around them instead of you chasing after time.

Listen to today’s episode for the full story of how to make it happen, or simply check out Julie’s Daily Planning Toolkit on her website.

Mentioned Resources

I Need Your Help!

If you haven’t already, I would love if you could be awesome and take a minute to leave a quick rating and review of the podcast on iTunes by clicking on the link below. It’s the most amazing way to help the show grow and reach more people!

Leave a review for Meron’s podcast!

Affiliate Disclosure: Please note that some of the links above are affiliate links. There is no additional cost to you, and I will earn a commission if you decide to make a purchase.

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IIP073: How To Build Your Business With Speaking Engagements

Everybody knows that “build it and they will come” doesn’t really work. And thus, for the last few years, every entrepreneurship podcast worth its salt has discussed ways to get “them” to come.

On today’s episode we discussed an exciting way to quickly build your credibility, reach, and most important — bottom line: speaking engagements.

As you’ll see today, speaking engagements create the perfect opportunity for you to be seen as the expert, deliver value, solve problems — and get paid for it.

Business Building Strategies We Discuss In Today’s Episode Include:

  • How to use speaking engagements to deliver value, help your audience, AND make sales
  • How to create your speaking engagement opportunities
  • How to become a speaker at the conferences that matter the most to your audience
  • How to pitch yourself as a speaker, and more important — how to follow up!
  • How to steer clear of the “friend zone” when speaking, and maintaining a professional presentation… without boring people out their minds!
  • How to sell from stage without being a douchebag

Today’s Guest

Joleene Moody
Joleene Moody of JoleeneSpeaks

Today’s guest is Joleene Moody, an expert in breaking into the world of paid speaking and entrepreneurship. For a former TV reporter and anchor, she turned into a transformational speaker, a business coach and an author.

Her expertise are: how to convert the room to high-paying clients, how to generate sales and profits through speaking engagements, how to create your own speaking engagement opportunities, and how to become a better closer.

In today’s episode Joleene shares her journey from TV anchor — bored out of her mind and feeling she’s not serving her purpose — to a purpose-driven entrepreneur bringing change to the world and helping others create the freedom they always crave for.

From Sedentary To Extraordinary

Joleene’s journey from sedentary to extraordinary wasn’t easy (and in today’s episode she shares many of the struggles that she faced, as long as documented them in her book, Memoirs of Normalcy: Journey from Sedentary to Extraordinary).

While many people think that being a TV anchor is an incredibly exciting job, in reality, according to Joleene, things could not be more different. Worst of all, Joleene felt she’s not living up to her calling and potential. She didn’t have the fulfilling life she wanted, nor the freedom she craved for.

First Time On Stage

While Joleene had many opportunities to be on stage in her previous career, in all sorts of professional conferences and gatherings, the first time she was on stage as an entrepreneur was truly memorable. Unfortunately, it was memorable due to how bad it went.

A few hours before her first-ever speaking gig as an inspirational coach, Joleene pass a kidney stone. “I couldn’t even make it to my first speaking gig. I thought I blew up my speaking career even before it started!”

Today, Joleene has been a speaker for over five years, and the first three of those were not easy. The only way she made it work was to carry on, show up and do the work.

I felt the same about my first business engagements (whether it was speaking gigs, webinars, or creating my own video course): things don’t go that well the first time (and thank God I didn’t pass any kidney stones!).

Reflecting on all guests on the show so far, it truly happens to everyone. The one thing separating the successful from the unsuccessful is showing up again the next day.

Creating Your Own Speaking Opportunities (And Making Money On Stage)

Creating your own opportunities

In today’s episode, Joleene outlines several ways you could create your own speaking opportunities right now. These include:

  • Retreats
  • Speaking at conferences
  • Speaking at networking group/events
  • Hosting a live webinar
  • Hosting a live teleseminar
  • Etc.

For one of her first retreats, she simply picked a date and contacted personally the people she thought would make a good target audience. She charged a few tens of dollars just to cover Facebook ads, renting the place for the day and food/beverages.

She kept the event at 15 people, and most of her expenses were covered by the Signup fees. She ended up selling in services and products throughout her retreat and making 5-figure profit from sales of products and services throughout and as a result of that day.

That’s why Joleene challenges every listener of the show to open the calendar, pick a date three weeks from now and just invite a couple of people that would be interested to learn about your services.

If people show up to the event, she explains, they have a problem that they think you can solve. It’s your responsibility to show them how you can solve their problems. Sure, you might feel awkward about taking their money, so focus on the serving instead of on the selling.

Would you accept the challenge? Comment below and let me know!

Podcast Starter Kit

As mentioned in today’s episode, I’m really excited to announce my new free course: The Podcast Starter Kit.

The Podcast Starter Kit is a 7-day video course that will take you from knowing nothing about podcasts, to planning, recording and launching your successful podcast show, ranking in the top of Apple New & Noteworthy ranking, building your list, your brand, and your authority in whatever niche you’re in.

Click here to get immediate access to the Podcast Starter Kit.

Mentioned Resources

I Need Your Help!

If you haven’t already, I would love if you could be awesome and take a minute to leave a quick rating and review of the podcast on iTunes by clicking on the link below. It’s the most amazing way to help the show grow and reach more people!

Leave a review for Meron’s podcast!

Affiliate Disclosure: Please note that some of the links above are affiliate links. There is no additional cost to you, and I will earn a commission if you decide to make a purchase.

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IIP072: How To Make Great Business Decisions As An Entrepreneur

What Is Business Acumen?

Business acumen is incredibly important to entrepreneurs, but why?

From a detailed survey that I conducted this morning, by asking the first 3 people I saw online (okay, maybe it’s not that detailed…). It turns out that many aren’t sure what exactly the word means. To be honest, I wasn’t so sure myself. I knew it’s important — I just didn’t know how important it is.

Acumen: the ability to make good judgements and quick decisions in a particular domain.

When presented this way, I don’t need a survey to know that every entrepreneur would understand the importance of having the ability to make good judgement and make quick decisions in business.

While business acumen is traditionally something spoke of in large corporate and MBA programs, I believe it’s time for entrepreneurs to catch up. And this is what today’s episode is all about.

Business Concepts In Today’s Episode

In today’s episode we will cover:

  • The 5 performance metrics that drive all Fortune 500 companies, and how they apply to every entrepreneur.
  • How to build your business acumen without getting an MBA and without spending tons of time on it.
  • How to become the CEO your entrepreneurial business needs.
  • Why growth can sometimes be the worst thing for business.
  • A free giveaway of my guest’s book.

Today’s Guest

Kevin Cope of Acumen Learning
Kevin Cope of Acumen Learning

Over the last 12 years, Kevin and his company had helped 18 of Fortune50 companies train and educate their employees on business acumen — on understanding what makes a business succeed, on what makes a business work, what makes a business money.

I don’t even remember how Kevin and I got talking, but I have seen Kevin’s latest book titled “Seeing The Bigger Picture”, and I have seen some reviews about it, saying that it’s a 180-page MBA. And I thought, “Maybe that’s a great idea for the Inspiring Innovation Podcast.”

If you’re anything like me and you never had an official business school education, I thought you could benefit as much as I could from having Kevin on the show doing Business Acumen 101 and just walking us through the basic and different things that we should be monitoring and paying attention to just like major companies do.

While we might not be a CEO of a corporate, we are the CEO of our own entrepreneurial business.

Unlike corporates that have their investors’ money, the money that we have is our own — it’s our own savings, our own family’s support or whatever it is — and we need to make it work. We need to be good CEOs to our entrepreneurial businesses.

So this is what today’s episode is all about.

Free Giveaway!

If you’re interested in developing your business acumen, Kevin has generously contributed 5 copies of his latest book to be given away to listeners of Inspiring Innovation.

How can I win a copy?

All you have to do in order to receive one of the free copies, is leave Inspiring Innovation Podcast a 5-star review on iTunes (you can do that at iipodcast.com/itunes) and then e-mail me at [email protected] to let me know you’ve done so. The first 5 listeners/readers to complete these steps will receive a copy free of charge.

For those interested in a more detailed approach, Kevin has also made his online course available to listeners of Inspiring Innovation at a 50% discount that you can claim here: http://seeingthebigpicture.com/innovation/.

But I’m An Entrepreneur! Do I Still Need To Develop Business Acumen?

I would argue that in most cases, being an entrepreneur means that business acumen is actually more crucial to you than it is for a corporate employee. While lacking business acumen will slow you down in climbing the corporate ladder and would limit how high can you climb, lacking business acumen as an entrepreneur increases the risk you take and hinders your chances of success.

I’m not saying you need to get an MBA in order to become a successful entrepreneur, but it does make sense to know the 5 key metrics every business, whether it’s your corporate job or your entrepreneurial business, should be paying attention to.

After all, while your corporate employer has the backing of banks and investors, your backing is your savings, your checking account, and perhaps some help from family and friends. For me that makes the best case why every entrepreneur needs to spend the time understanding how companies make money.

The 5 Performance Metrics You’ll Need

In today’s interview, Kevin shared the 5 performance metrics that you’ll need in order to get the full picture of how your entrepreneurial business is performing financial-wise. While many experts would recommend 5, 10, 15 more metrics to monitor, the following 5 are the most crucial and simple of them all, according to Kevin.

  1. Cash
  2. Profit
  3. Assets
  4. Growth
  5. People

As you’ll soon see, these 5 metrics are all interconnected. Affecting one of them always affects the others, but often in unexpected ways (at least until you think about it).

For instance, many entrepreneurs believe that more growth equals more cash and bigger profit. Not necessarily so: Depending on the engine of growth, growth may actually be achieved by spending more money on marketing, which immediately cut cash and profit.

If the growth is too fast, quality of service might decrease, causing a further loss of sales and existing customers and making the business take a hit in cash, profit and people (in this case customer).

If I mentioned people already, rapid growth might also take a hit on your employees, who might become too overloaded with work and provide a work service or simply leave. Employees are another aspect of the people metric. And in fact, rapid growth is what caused the people of my first software business, in that case me and my 2 employees to burn out and leave.

Cash

Cash

When it comes to cash there are two measures you’ll want to pay attention to.

  1. Cash-on-hand
  2. Cash flow

Cash-on-hand, basically means the amount of money you currently have on your savings or checking account. That’s the amount of money your business have in order to run. I don’t believe I need to explain in detail why this is a key metric since it’s pretty obvious that when cash-on-hand goes negative, the game is over.

Cash flow basically stands for how much cash is coming in minus how much cash is being spent. Most businesses end up launching with a negative cash flow. This means that every month, the amount of cash-on-hand decreases steadily.

One of the key things every business strives to achieve is a positive cash flow. In the startup world as well as in entrepreneurship, we need to achieve positive cash flow as fast as possible before you ran out of cash-on-hand.

But even if your cash flow is positive, you’ll still want to be monitoring it to see how you can make the cash flow bigger, which means you’re making more money compared to what you are expending.

Kevin outlined 5 quick ways to increase positive cash flow.

  1. Sell more
  2. Reduce expenses
  3. Better manage your inventory (if that applies to your kind of business)
  4. Pay slower — negotiate your payment terms to allow you to pay slower and reduce the negative cash flow.
  5. Get paid faster — if your business is going under, and you have customers owing you over $10,000 (as I had), it’s not hard to understand that paying more attention to your account receivables and being more proactive in collecting the money you’re owed, can make a huge impact on the success of your business

Profit

Profit

Not too different from looking at cash flow, profit is how much money being made on sales minus how much money is spent on expenses. An interesting metric to look up when it comes to profit is your profit margin. This is basically a percentage of how much more money you’ve made out of each sale compared to the business cost of making that sale.

According the Kevin, a typical profit margin across major companies is around 9% and he has found that to be the case in many other industries as well.

A benefit of monitoring your profit margin is that it’s an indicator of the financial risk you’re taking in your sales. Often, growing companies take a hit at their profit margin and sometimes they go too far.

Your profit margin metric will make sure you’re not only making enough money to float, but actually make enough money to grow. In fact, you’ll find many entrepreneurs you’ll read and hear recommends a profit margin of at least 8% to 12% for an entrepreneurial business.

Assets

Assets

Your house, your cash savings and your investments are all assets that you own. While none of them necessarily is used to produce revenue, they do support a certain standard of living and allow you to pursue your lifestyle and personal growth.

Likewise, your entrepreneurial company has assets that should be used in its growth by producing revenue and profit. Without the right assets, no business can grow; it simply cannot be profitable.

Your assets might be an inventorial product, your laptop/desktop that you bought, or the workroom at your home where you’re building your business from. Assets might be transportation you use, etc. Your account receivables (the money people owe you) are also an example of an asset. Intellectual property and your knowledge can be an asset.

When it comes to assets, there are two metrics you’re looking at:

  • Asset strength
  • Asset utilization

Asset Strength

When it comes to asset strength, you’re looking at 2 factors: Liquidity and the nature of the asset (particularly, can these assets be used to generate revenue versus those that can’t).

Liquidity means how easy it is to quickly generate more cash in order to solve unexpected problems or writing out down market using the assets you have.

The second factor, the nature of the asset themselves, is pretty self-explanatory. You want to have as little amount as possible of assets that aren’t used to generate revenue.

Asset Utilization

Asset utilization. Accumulating assets, even if they are liquid aren’t necessarily very helpful. At the end of the day, explains Kevin, if your accumulation of assets, whatever those assets are, does not directly contribute to making a bigger revenue is probably assets you don’t need.

Growth

Growth

Second to cash flow, growth might be the most discussed metric. I’m assuming that I don’t need to explain in too many details what growth is. At the end of the day, it boils down to are you more sales and getting more customers.

But one caveat that Kevin mentioned in today’s interview is this: A few years ago, Toyota was hard on focused on growth while losing sight of their quality control. When the quality suffered and they have to issue recalls, their bottom line suffered heavily.

Another example is the dot-com era: So many companies were solemnly focusing on the growth metric alone that completely lost sight of their profit margin, of their cash flow, and worse of all, on their cash-on-hand.

Rapid growth can be expensive and focusing solemnly on growth while ignoring its effect on the other metrics, can mean a deadly blow to your business.

People

Rose, Julie, Meron in Manila
Team Inspiring Innovation

The last but not least metric is people. These include both your customers and your employees. It’s pretty obvious the importance of the customers metric: Are they happy? Are they satisfied? Is your customer service quick and efficient?

Are your employees satisfied? Are you helping them grow? Are you treating your employees as well as you’d like them to treat your best customer? Neglecting either your customer’s happiness or your employees’ happiness can bring down the most financially stable company.

So these are the 5 metrics Kevin recommends you to pay attention to. I’d love to hear in the comments section what’s your take on each, and if there’s any metric you really think you should start paying attention to

Podcast Starter Kit

As mentioned in today’s episode, I’m really excited to announce my new free course: The Podcast Starter Kit.

The Podcast Starter Kit is a 7-day video course that will take you from knowing nothing about podcasts, to planning, recording and launching your successful podcast show, ranking in the top of Apple New & Noteworthy ranking, building your list, your brand, and your authority in whatever niche you’re in.

Click here to get immediate access to the Podcast Starter Kit.

Resource That Will Help You See The Bigger Picture

I Need Your Help!

If you haven’t already, I would love if you could be awesome and take a minute to leave a quick rating and review of the podcast on iTunes by clicking on the link below. It’s the most amazing way to help the show grow and reach more people!

Leave a review for Meron’s podcast!

Affiliate Disclosure: Please note that some of the links above are affiliate links. There is no additional cost to you, and I will earn a commission if you decide to make a purchase.

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IIP071: Buying Businesses & Life In The Entrepreneurship Fastlane

IIP071 quote

“Emotion doesn’t make money; Logic does.” Click to Tweet

Episode Highlights:

  • How to join the entrepreneur fastlane by buying successful businesses and making them better rather than building from scratch
  • How my guest, Jock, turned a $10,000 investment into a multi-million dollar business
  • The behind the scenes of online business brokerage
  • How to valuate the worth of your online business, and how to quadruple it
  • The most important entrepreneurship lesson you can teach your children or yourself
  • Creative ways to finance online businesses that you might have never considered

Today’s Guest: Internet Entrepreneur & Online Business Broker

Jock Purtle
Jock Purtle, CEO and President of Digital Exits

We are joined today by Jock Purtle, founder and CEO of Digital Exits — a business brokerage firm focusing on buying and selling online businesses.

Jock, 24 years old, grew up in Sydney, Australia in an entrepreneurial family. His family has a brokerage business and they made him a part of it by the time he was 8 years old. The foundation that he got from being in the family business, learning how to evaluate the worth of goods and how to resell them for profit, has proved to be extremely helpful for the rest of his career.

At 2009, he bought his first online business for $10,000. That website made most of its money with ads. A few months later, he made his money back and resold the business (website) for just shy of $18,000. From that point on, Jock repeated the process each time with a bigger deal, leading him to 2014 where he expects to complete between 20 to 30 deals, each one with a transaction value between $100,000 to $4.5M.

The Beginning

In the interview, Jock shared how grateful he is for his mom and dad taking him when he was young to every business meeting, sharing the profit and loss sheets, and teaching him how the business works.

He remembers at one time when he was young, he wanted to buy something that cost about a thousand dollars. When he asked his father to buy it for him, his father refused. A few days later, he came back and gave him five hundred dollars: “If you can take these five hundred dollars and turn them into a thousand, you can buy whatever you want with them.”

That exercise taught Jock about the power of putting money to work for you and reshaped his mindset for the rest of his life. In fact, he believed it’s a truly crucial exercise for anyone to do, whether for themselves or giving it to their children. “It doesn’t need to be five hundred dollars or a thousand, it can be as little as twenty. It’s the idea of putting the money to work for you, by investing in something that will yield more than the investment in return — that is the key.”

Today

Today, besides running Digital Exits, Jock also hosts a podcast covering the subject of buying and selling online businesses — whether as a buyer or as a seller or as a broker, frequently writes content for his blog about the same subject and has also released several free e-book guides on the subjects that you can find in the mentioned resources section.

Podcast Starter Kit

As mentioned in today’s episode, I’m really excited to announce my new free course: The Podcast Starter Kit.

The Podcast Starter Kit is a 7-day video course that will take you from knowing nothing about podcasts, to planning, recording and launching your successful podcast show, ranking in the top of Apple New & Noteworthy ranking, building your list, your brand, and your authority in whatever niche you’re in.

Click here to get immediate access to the Podcast Starter Kit.

Mentioned Resources

I Need Your Help!

If you haven’t already, I would love if you could be awesome and take a minute to leave a quick rating and review of the podcast on iTunes by clicking on the link below. It’s the most amazing way to help the show grow and reach more people!

Leave a review for Meron’s podcast!

Affiliate Disclosure: Please note that some of the links above are affiliate links. There is no additional cost to you, and I will earn a commission if you decide to make a purchase.

Don’t Miss an Episode! Subscribe Below:

Click Here to Subscribe via iTunes
Click Here to Subscribe via Stitcher Radio
  • Subscribe in podnova
  • Subscribe with Feedly
  • Add to netvibes
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Using something else? Copy this address:
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