10xTalk With Joe Polish And Dan Sullivan

Episode Summary

Joe Polish and Dan Sullivan reveal key strategies for scaling a profitable business and leveraging marketing. They discuss the importance of starting small, building financial reserves, and avoiding common Entrepreneurial pitfalls. Listen for powerful insights on creating long-term business success.

Here’s a glance at what you’ll discover from Joe and Dan in this episode:

The Real Business You’re In: Discover why Joe says that every Entrepreneur is actually in the “arithmetic business” and how understanding your numbers can transform your profitability, regardless of your industry.
From Productivity to Profitability: Learn Dan Sullivan’s critical distinction between productivity and profitability, and why efficiency doesn’t matter if your bottom line is in the red.
The 90-Day Profit Rule: Uncover Dan’s unique approach to ensuring profitability within 90 days for any project, and why he believes in building a system around this principle.
Fast Filter Projects: Delve into the strategic tool Dan uses to maximize his daily impact with only three key tasks, ensuring every action taken is filtered for maximum profitability.
Lessons from Failure: Hear the fascinating story of how Dan turned a million-dollar software project failure into a valuable lesson on when to cut losses and refocus on profitable ventures.
Understand why both Joe and Dan emphasize creating powerful customer experiences over selling mere products or services, and how this shift can significantly boost your profitability.
Gain insights from Dan’s 50-year coaching experience on the importance of having a year’s worth of reserves and how this financial safety net can keep your business afloat during economic downturns or unexpected events.

If you’d like to join world-renowned Entrepreneurs at the next Genius Network Event or want to learn more about Genius Network, go to www.GeniusNetwork.com.

Show Notes

The Profitability vs. Productivity Debate:

Productivity is about using resources efficiently, but without profitability, it’s meaningless.
Dan explains that at the end of the day, businesses are in the “arithmetic business”—if the math doesn’t work, neither does the business.

Defining Profitability:

Profitability means earning more than you spend, which Dan reflects on by sharing how Strategic Coach has had 33 profitable years out of 35, despite challenging times like the 2008 recession and the COVID-19 pandemic.
Dan’s approach includes building systems focused on profitability and keeping daily tasks to three impactful actions.

Strategic Coach’s “Fast Filter” Tool:

Dan introduces a time-saving tool called the “Impact Filter,” which helps him focus on what truly matters before taking action. It ensures that he spends his time on projects that will lead to profitable results.
Dan emphasizes the importance of planning three fast filter projects a day, which only take 15 minutes each to outline and optimize for maximum impact.

Improvisation in Business:

Both Joe and Dan share their affinity for improvisation, explaining that over-preparation can sometimes hinder performance. They thrive in dynamic environments, adjusting as they go along—a philosophy that mirrors the way businesses must adapt to ensure profitability.
Joe gives a lighthearted anecdote about the band Journey and how they perform without rehearsals, drawing parallels to how he and Dan approach their podcast and business ventures.

Delegation and Specialization:

Joe humorously admits he’s never used a spreadsheet, pointing out that profitability isn’t about doing everything yourself but focusing on the essentials and delegating the rest to the right team members.
Dan echoes this sentiment, sharing how he uses his team to handle tasks that require systems, like spreadsheets, while he focuses on vision and strategy.

Key Components of a Profitable Business:

Always start with profitability in mind: Dan recommends defining a target (like 20% profitability) before starting any project.
Projects should pay for themselves within 90 days; this time frame ensures resources are directed toward profitable initiatives.
Joe brings up the concept of knowing when to cut your losses, sharing a past experience where Dan canceled a million-dollar software project because it wasn’t yielding results—a testament to stopping the bleeding on non-profitable ventures.

Kathy Kolbe’s Profiling System:

The hosts touch on the Kolbe system’s four action modes: Fact Finder, Follow Through, Quick Start, and Implementer. This system helps individuals and teams understand how they naturally take action to achieve results, providing a valuable framework for identifying strengths and improving profitability in business.

Lessons from Personal Failures:

Both Joe and Dan candidly share personal stories of business failures that taught them critical lessons about profitability.
Dan recounts going bankrupt twice due to receivables and how it shaped his current philosophy of requiring upfront payments to avoid cash flow issues.
Joe reflects on his early years as a carpet cleaner, when a mentor pointed out that if others in the same industry were making money and he wasn’t, the problem was with him, not the business. This realization spurred Joe on his journey to Entrepreneurial success.

Practical Advice for Entrepreneurs:

For those struggling to achieve profitability, the hosts stress the importance of focusing on sales and creating value for customers who will keep coming back.
Joe advises that if you’re not making money in a profitable industry, you need to identify and fix your bad business habits.

Start Small, Scale Gradually

Dan Sullivan emphasizes the importance of starting with a simple, profitable business model. He shares his journey of beginning with one-on-one coaching and gradually scaling up to group workshops.
He notes that the key to sustainable growth is to ensure profitability at each stage before expanding. Start small, then multiply by ten.

The Power of Leverage

Joe and Dan explore various ways to leverage yourself in business.

Marketing as Leverage:

Replicate client-generating activities through marketing and advertising to scale more efficiently.

Hiring as Leverage:

Hiring the right people is another form of leverage, allowing you to scale without personally doing all the work.

Challenges of Investing in Startups

Joe shares his painful lessons from investing in startups, cautioning that many fail due to a lack of clear profitability. Startups often rely on external funding to figure things out, leading to high failure rates.
He emphasizes that giving money to Entrepreneurs without a track record is risky, and often leads to financial loss.

Avoiding “Cruel Optimism”

Dan introduces the concept of “cruel optimism,” where motivational programs falsely promise easy success if you follow a specific formula. This mindset can be damaging, as it doesn’t account for the hard work required for real success.
Joe humorously reflects on the amount of work involved in becoming successful, saying, “If I would have known being successful was this much work, I would have stuck with being a loser.”

The Importance of Reserves

Dan shares his philosophy on maintaining a year’s worth of reserves in business to ensure survival during economic downturns or unexpected events like COVID. He attributes his business’s resilience to having these reserves.
Joe echoes this, reflecting on how his childhood experiences with instability made him prioritize having financial security.

Lessons from Failure and Bankruptcy

Both Joe and Dan talk about how their failures, including Dan’s experience with bankruptcy, were essential learning moments. Dan notes, “You haven’t learned anything unless you can laugh about it,” underscoring the importance of learning from mistakes.

Upcoming Events and Recommendations

Genius Network Annual Event, happening in November 2024.
Dan promotes his book, Cash Confidence, offering listeners a deep dive into the mindset needed for financial success.

Resources

Genius Network Annual Event

A premier event for Entrepreneurs, hosted by Joe Polish, featuring top-tier speakers and networking opportunities.
Event dates: November 8-10, 2024.
Details: GeniusNetwork.com

Book: Cash Confidence by Dan Sullivan

A guide to building financial reserves and maintaining profitability in business.
Available at: StrategicCoach.com

Strategic Coach

Coaching programs for Entrepreneurs to help them scale and succeed in business.
More info: StrategicCoach.com

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To go deeper with 10XTalk, access your FREE COPY of the “8 Transformations of a 10X Entrepreneur”, go here: http://tenxtalk.wpengine.com/8-transformations-of-a-10x-entrepreneur/.