How to make a profit in 30 days with a credit card Ep 347

In a detailed discussion on business growth strategies, the host and guest speaker, referred to as Speaker A, share insights on achieving massive sales growth through a method called "client financed acquisition." Speaker A recounts their personal success story, turning $1,036 into over $120 million in sales without external investors, by ensuring that customer acquisition costs are covered by immediate customer revenue. This approach allows businesses to scale rapidly while maintaining profitability. Speaker A emphasizes the importance of this model across various ventures, including brick-and-mortar and software businesses, highlighting the key principle that early cash flow must be double the combined costs of customer acquisition and fulfillment. The episode concludes with an encouragement for entrepreneurs to adopt this self-sustaining financial strategy to overcome capital constraints and achieve exponential growth.

• Speaker A shares a personal success story of significant sales growth.
• The concept of growing a business without outside investment is introduced.
• Emphasis on the need to think differently when lacking substantial capital.

"That helped me turn $1,036 into over $120,000,000 in sales."

This quote exemplifies the dramatic sales growth Speaker A achieved, setting the stage for the discussion of their business strategy.

• Speaker B outlines the podcast's focus on customer acquisition, value maximization, and retention.
• The podcast aims to share experiences, including failures and lessons learned in business.

"Welcome to the game, where we talk about how to get more customers, how to make more per customer, and how to keep them longer, and the many failures and lessons we have learned along the way. I hope you enjoy and subscribe."

Speaker B introduces the podcast's theme, which revolves around strategies for business growth and customer management.

• Speaker A discusses the importance of equity growth without relying on external investors.
• The strategy involves changing the game's variables to maintain profitability.
• The goal is to make the business process enjoyable and less stressful.

"So this concept has been the central concept to how we've grown each of our portfolio companies with 100% equity without taking on outside capital or investors."

Speaker A stresses the significance of growing businesses using internal resources rather than seeking external funding.

• Speaker A introduces the concept of client financed acquisition.
• The model was successfully applied to grow a brick-and-mortar chain and a licensing business.
• Rapid growth was achieved, with facilities opening at full capacity and significant monthly revenue.

"And so the equation that I'm about outline for you is what I call client financed acquisition."

Speaker A is about to explain the client financed acquisition model that was pivotal in their business expansion.

• Speaker A details the expansion of their brick-and-mortar chain using the client financed acquisition model.
• The licensing business experienced substantial growth in a short period, reaching multimillion-dollar monthly revenues.

"And then twelve months after that, we're at 4.4 million a month."

Speaker A highlights the impressive revenue growth of the licensing business, demonstrating the effectiveness of the client financed acquisition model.

• Discusses the rapid growth of businesses and the importance of profit in a capitalist society.
• Profit is crucial for sustaining a business during challenging times.
• The concept of "client financed acquisition" is introduced as a business strategy.

Profit matters if you want to be in a capitalist society, because it's the only way that you're going to be able to weather the storms.

This quote emphasizes the significance of profit in ensuring a business's survival and ability to withstand economic fluctuations within a capitalist framework.

• Explains the process of having customers cover marketing and acquisition costs.
• The strategy involves using external funds ("the universe's money") rather than personal funds.
• The goal is to earn more from customer entry than the cost of acquisition.
• Achieving a negative acquisition cost means earning a profit from acquiring customers.

What this means, in plain terms, is get your customers to pay for all of your marketing and your acquisition costs, all right?

This quote simplifies the concept of client financed acquisition by stating that the goal is to have the customers' payments cover all costs associated with marketing and acquiring them.

• The speaker introduces a specific equation for successful business acquisition strategy.
• Breaks down the equation into three key components to be explained.

So it is two times.

This quote introduces the beginning of the equation, indicating that the cash generated in 30 days must be more than double the combined costs of acquiring and fulfilling a customer's needs.

• Breaks down the costs involved in the acquisition equation: the cost to acquire a customer and the cost to fulfill the product or service.
• Uses simple math for illustration.
• Explains that the 30-day cash must be greater than twice the sum of these costs.

So let's say it cost me $100 to acquire a customer. And that includes my marketing team. That includes my sales guys and their commissions. That includes the advertising or whatever method I did to acquire the lead.

This quote explains what is factored into the cost of acquiring a customer, which includes all marketing and sales expenses as well as advertising.

Now, let's say that for me to fulfill this thing, whatever the thing is, let's say it cost me another $100.

This quote explains the cost of fulfillment, which is the cost to deliver the product or service to the customer after they have been acquired.

• Understanding the cost required to fulfill and sell a product or service is crucial for small business owners.
• The goal is to make at least twice the sum of the costs to sustain the business.
• The term "30 day cash" is used to describe the net free cash flow to the business within the first 30 days of acquiring a customer.
• Initial sales, along with upsells, downsells, and future sales, contribute to the cash flow, but the immediate focus is on the cash available without the need for external financing.

"It's going to cost me to fulfill and sell this thing. These are my costs, right? And so the idea is I have to have two times the sum of this."

This quote emphasizes the need for revenue to be at least double the cost of fulfillment and acquisition to ensure profitability.

"Remember, this is in our little parentheses, all right, which means this is $400. That is what I must make, right?"

The speaker is clarifying that the target revenue ($400) must be achieved to cover costs effectively.

"That has to be less than what I make in 30 day cash, all right? Which is a term that I use that I've never really heard anywhere else."

The concept of "30 day cash" is introduced as a unique term for the cash flow generated within 30 days of customer acquisition.

• Cash flow is critical for small businesses, especially those without access to significant cash reserves.
• Upsells, downsells, and future sales are important but secondary to the immediate cash flow needs.
• The speaker highlights the importance of generating sufficient cash flow without relying on future sales.

"Now, we may have upsells and downsells and continuity and future things that we're going to sell, but none of that matters to the small business owner who doesn't have cash."

This quote underlines the importance of immediate cash flow over potential future earnings for small businesses with limited cash on hand.

• The podcast grows through word of mouth, without the use of ads, sponsorships, or sales.
• The host encourages listeners to share the podcast similarly to how they discovered it, fostering organic growth and community support.

"The only way this grows is through word of mouth. And so I don't run ads, I don't do sponsorships, I don't sell anything."

The speaker emphasizes the importance of organic growth for the podcast, relying solely on word of mouth.

"My only ask is that you continue to pay it forward to whoever showed you or however you found out about this podcast that you do the exact same thing."

This quote is a call to action for listeners to share the podcast, contributing to its growth and creating positive karma for entrepreneurs.

• Interest-free financing through credit cards is a strategy for managing cash flow within the first 30 days.
• The speaker shares a personal anecdote about starting a business using credit cards to acquire customers.
• The process involves using credit to cover customer acquisition costs and then generating enough revenue within 30 days to pay off the credit and reinvest in acquiring more customers.

"And so the reason it's 30 days is because that's the amount of time that you can get interest free financing, all right?"

This quote explains the significance of the 30-day window for utilizing interest-free credit as a financing strategy.

"But the point is, and this is literally how I started my second business, is that I would use my cards, I'd put the money on the card to acquire the customer, right?"

The speaker shares a personal example of how they leveraged credit cards to fund customer acquisition for their business.

"So on my card, there'd be $200 because that's what's going to cost me to fulfill and acquire. But I would have made $400 on that."

The speaker breaks down the cost versus revenue scenario, showing how they doubled their investment by using credit to acquire customers.

• The speaker emphasizes the potential to grow companies without capital constraints by focusing on customer acquisition.
• A successful business model is described where the revenue in the first 30 days is double the combined cost of customer acquisition and fulfillment.
• This strategy is applicable to any business and is referred to as a repeatable process.

And we play the game again, which means that you have unlimited power to acquire new customers, which means you get unlimited money.

The quote highlights the cyclical nature of the strategy that allows for continuous customer acquisition and financial growth.

And this is what we've done over and over and over again, is design a process in every business that we can figure out where the amount of dollars that we make in the first 30 days is greater than two times the cost to acquire plus the cost to fulfill.

This quote outlines the core principle of the business model, where the short-term revenue significantly surpasses the initial expenses, ensuring profitability.

• The concept of CFA is introduced as a minimum requirement for sustainable business growth.
• The speaker suggests aiming for a return greater than double the acquisition and fulfillment costs, ideally tenfold.
• The speaker's personal success story is shared to illustrate the effectiveness of CFA, growing a portfolio to $85 million annually without outside funding.

But this is the minimum requirement for CFA, or what we call client financed acquisition.

This quote defines CFA as the foundational strategy for the speaker's approach to business growth.

Right now, the portfolio we do does $85 million a year. I took no outside money to do that, which means if you can learn how to play and multiply and multiply and multiply and not use your own money, because I'm using my customers money to finance all of the growth in this business.

Here, the speaker shares their success as evidence of the CFA strategy's viability, emphasizing the use of customer funds to finance business expansion.

• The speaker challenges the belief that money is required to make money, positioning it as a "beautiful lie."
• A call to action is made for the audience to overcome limiting beliefs and succeed where others may not.
• The speaker encourages the audience to subscribe for more content, teasing future topics on managing and scaling a business.

And so right now, if you don't have money or you don't have capital and you think it takes money to make money, you just keep believing that beautiful lie and let everyone else go win while you keep complaining.

The quote confronts the misconception about the necessity of capital for success, suggesting that success can be achieved through strategic customer acquisition instead.

I had $1,036 in my bank account five years ago, all right? Right now, the portfolio we do does $85 million a year.

The speaker uses their personal financial growth as a testament to the effectiveness of their business strategy, despite starting with limited funds.

• The speaker expresses a desire to add value to the audience without selling anything.
• A sense of community is fostered with the term "mozzie nation," and the speaker expresses affection for the audience.
• Future content is promised to cover topics related to managing people and scaling businesses.

But anyways, if you enjoyed this, if you found value in this, I make these videos, I have nothing to sell you. Click subscribe. I'll see you next video.

This quote serves as an invitation for the audience to engage with future content that will focus on different aspects of business growth.

I know this is a little bit more tactical. I'll talk about more managing people and scaling the company side, but this is the stuff, right? These are the things that actually grow the business.

The speaker acknowledges the tactical nature of the discussed content and foreshadows the discussion of broader business management topics in upcoming content.