CashFLOW is King

Would you rather receive $1,000,000 upfront or 1 penny doubled each day for 30 days?

Most of us would take the cool million today; few would give the penny much thought.

Immediate gratification is hard wired into us all to some level. 

The eyes see the 0’s after the 1 and it’s hard not to take that deal.

Business is no different; many models are built to be transactional in nature; primarily driven by markups and volume (for products) and commissions and fees (for services).

Indeed, transactions bring in cash, cash pays bills today, keeps the lights on and the business humming; anything left over at the end of each month/quarter/year (after taxes) becomes profit.

Business is good as long as new sales keep coming in each month to cover the overhead.

When things slow down (as they inevitably do) business gets harder; cash gets tight and eventually tough decisions need to be made.

We’ve all heard the saying “Cash is King” - I would offer a slightly different version - CashFLOW is King.

See, it’s my experience that cash itself doesn’t solve long-term issues. 

Big Rocks First

Several years ago I attended a seminar where the instructor placed an over-sized jar on the table.

Next to the jar lay a few large rocks, several smaller stones and a bag of sand.

He went on to say that the large jar represents each us of and our capacity (time, energy etc).

The few large rocks were to represent activities, events and the people most important to us.

The stones represent the matters, activities and people important to us.

And finally, the bag of sand was to represent everything else.

The instructor then asked us to take a few minutes and think about what we would classify as big rocks, stones and sand in our lives.

It was a profound exercise.

I went deep into my mind and thought about what my big rocks were.

Naturally for me thoughts of family, close friends, health and professional accomplishment came to mind. 

Also, at the time I wanted to complete an Ironman, start another venture, help my friends with their business and begin a charitable initiative. There were so many big rocks.

As if on cue the instructor began again… how many big rocks can fit in the jar?

“Not many”…I thought privately to myself…”just a few”.

Story Selling

Whether you like professional football (American) or not, chances are very good that you know what the Superbowl is. 

The first one was held back in 1967 in Los Angeles California, pegging the Green Bay Packers against the Kansas City Chiefs. 

Nowadays this event attracts an estimated 184 million viewers spending more than 14 billion dollars on food, drink and athletic wear etc. according to The Oregonian.

The Superbowl is also well known to be one of the most expensive pieces of real estate, both as an attendee and as an advertiser. 

According to Forbes magazine, the going rate on a single 60 second spot will set you back a cool 8 million dollars. 

Ouch…  Amidst all the tailgating, all you can eat ribs and beer flavored everything you must stand back and appreciate what the league does to market this event and command such a price tag.

Small Wins

The baseball season is very long.

Preseason starts in February and goes until the snow melts (here in Canada anyways). 

The regular season then starts each April and 162 games later, it comes to an end. 

Postseason, AKA the world series run (not including the wild card match) starts late September and can add another 20 games.

Approximately half those games are played as “visitors” in far flung places across Canada and the US.

That is an incredible amount of time to spend in transit, in different hotel rooms and away from friends and family.

On the field itself the average player makes approximately 600 “plate appearances” per year (these are opportunities to hit).

The average pitcher throws upwards of 3000 pitches per season (many clocking in at 90+ MPH).

To top it all off the players log countless hours training and perfecting their craft between all the travel and games.

…So how do they stay motivated and energized, season after season?

Buckets & Pipelines

Nearly 15 years ago I read a story in one of my favourite business authors books (Robert Kiyosaki) that had a profound impact on me. 

It was story that was passed on to him early in his career and I’d never forgot it since discovering it myself.

It was about a growing village with no water anywhere nearby.

It bid out the water rights in an attempt to create a steady supply; 2 men volunteered and in the spirit of competition the town awarded them both a contract.

The first man quickly rushed out and bought two buckets and began the long walk back and forth from the nearest lake. 

He started earning money right away and the demand for his water was high. As business boomed, the first man had to hire several people to help carry buckets to keep up.

The second man disappeared for months and most people, including the man with the bucket business thought he was gone for good. 

The water supply from the buckets was inconsistent and sometimes came with some dirt in it but all in all the village people appreciated that it was there.

One day, the second man returned with a team of engineers and builders and announced his intentions to build a pipeline system that he promised would make water more affordable, cleaner and readily available. 

The people cheered and anxiously awaited the completion of the pipeline system.

Upon hearing this news, the first man invested in buckets with lids,

Grind

100 calls per day.

Everyday.

That’s what it took to be #1 in my world.

100 calls meant 10 people would show up to the presentation.

For every 10 people that showed up 3 were interested in a meeting.

For every 3 interested, 2 met with me; 1 became a client.

25,000 calls +

100’s of events +

Over 500 meetings + (in every type of coffee shop, diner, hotel you can imagine.)

= 250 clients

There is no secret to success. Just the grind.

The grind has always shown me what I need to learn by actually “doing” and “testing” assumptions.

It’s still the best teacher I know.

It provides instant, honest feedback.

It hones your skill set, forces focus and instills discipline.

Granted, your grind (activity) might be different but 1 thing remains constant.

Grind = Results

To your success,

Marcin Drozdz

For more content you can follow Marcin on twitter @mdrozdz or visit  www.gofundcapital.com .

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The information contained herein is not intended to sell securities or to solicit funds in any jurisdiction. This correspondence and the information contained herein do not constitute an offer or solicitation for the sale of any securities. They are provided for general guidance on matters of interest only. This correspondence and the information contained herein are not intended to provide you with any advice on financial planning, investment, insurance, legal, accounting, tax or similar matters and should not be relied upon for such purposes. Neither GoFund Capital Partners Inc Inc nor any of its employees or agents are financial or tax advisers. You should assess whether you require such advisers and additional information and, where appropriate, seek independent professional advice. GoFund Capital Partners Inc, its subsidiaries and affiliates, are not responsible in any manner for direct, indirect, special or consequential damages however caused arising from your use of this correspondence and the information contained herein. GoFinancial is a marketing name of GoFund Capital Partners Inc.

20/20 Vision

Several years ago a partner and I started a business. 

We started on a simple premise; we would buy homes that needed some TLC in blue collar neighborhoods, fix them up and put them into a “rent to own” program.

An “RTO” program allows people with bad credit or no credit to move into a home they want to own, start/restart building their credit while a portion of the rent they pay goes toward a future down payment.

We partnered with several investors, found some humble office space and put together a motley crew of contractors. We started with a few homes and steadily grew the business.

Meetings at the office were easy to follow, clear and concise. 

Less than a year into it however we thought to ourselves…look at all this other business that we’re helping create as a result of the RTO program. 

There was mortgage business, debt consolidation, property management and even construction business.

At the time that our core business really started taking off (and needing us most) my partner and I began taking meetings with people that worked in all those other areas we were now interested in.

Within weeks our core business began to grind to halt. In our quest to expand we stopped doing the things that made the business a success in the first place.

Drive To Chicago

Just shortly after turning 21 I applied to volunteer at a weekend seminar. It was the 2000’s and the US real estate market was on fire. Donald Trump wasn’t running for President yet; he was busy firing people on TV and doing keynotes at a series of “Learning Annex” events.

The latest event at the time estimated over 50,000 tickets sold with Trump and several other accomplished entrepreneurs scheduled to make an appearance. This event was going to be “HUGE” and I had to be there.

At that time in my life I was finishing up college and speculating on smaller investment properties. In my spare time I would attend local seminars on anything to do with business. 

Local chambers of commerce breakfasts, evening mixers, there was even a period there were I learnt about nearly every MLM opportunity in Canada it seems. It didn’t matter. It was the only way I knew of to meet people and grow.

Granted I did learn a fair bit through those experiences (particularly on how not to do business) however I was beginning to grow frustrated. 

All anyone wanted to do was sell me something, there would be no ongoing learning or mentorship.

Time Vampires

Early in my career I was extremely eager to please and would go to almost any extent for a potential client.

Drive out several hours to meet? Absolutely.

Invest entire evenings to assemble very specific information only relevant to them? No problem.

Re-explain a concept half a dozen times every time we met? Most definitely.

It worked. Most of the time.

Quite quickly however I realized that not all of the people/prospects I encountered were being straight with me…shocker I know.

I remember one gentlemen I was prospecting for quite a while invited me to visit with him after months of back and forth on my proposal. 

He lived out of town but encouraged me to visit because he was finally ready to discuss business. 

Easy Does It

A few weeks ago I needed to take my car in for service. 

I called the dealership that I'd been going to for quite a while to make an appointment.

The gentlemen on the other end of the phone was great at giving me all of the reasons why they couldn't service my car. I actually chuckled to myself and was convinced that I called the wrong place...

He informed me that they didn't have the parts and that they couldn't commit to a specific appointment time. The gentleman wouldn't even estimate how long the job would take. 

I hung up and called another dealer.

The other dealer seemed to face similar challenges but instead offered to pre order the parts, firm up the appointment and even arrange transport for me while the work was to be completed. Much simpler.

Same "problem" yet one dealer lost a client for life while the other gained a new customer and generated nearly $2,000 in immediate revenue.

This experience reminded me that most people (myself included) seek out simple solutions in nearly all aspects of their lives. 

If you run a business any larger than a lemonade stand it's pretty easy to get caught up in the complexity of what actually needs to happen to service a client.

Beached Whale

Early last week a financial advisor we’d been working with reached out for advice. (We’re fortunate to have relationships with advisors all across Canada as some of the businesses we’re introduced to requiring funding come from advisors.)

This particular call was different though.

The advisor felt stuck with his “whale” (biggest prospect).

He attended several meetings with the whale and related stakeholders, spent weeks assessing the situation and building a strong case.

He worked tirelessly to present a custom made solution.

That was several months ago and since then...nothing...no movement. We have a beached whale.

Sensing that it was a large case, I asked the advisor what indecision was costing the client. The advisor came back with a number that could cover most peoples monthly mortgage payment – daily.

Then silence.

I could hear the advisor counting the days that his prospect had delayed doing what needed to be done. The opportunity cost likely added up to the equivalent of a large down payment on a home.

Burn Your Ships

From about the 8th century to well into the 11th century the Vikings raided much of Europe, Asia, the Mediterranean and even Northern Africa. 

They would set sail from their Scandinavian homelands and arrive at the shores of their “enemies” ready to do battle. 

Once on terra firma the men would proceed to burn their ships to the ground and march on their victims. 

The crackling and smoke served as a reminder to the Vikings that the only way home was through victory. The men were committed. Few opponents stood a chance. Many fled even before the Vikings arrived.

Nowadays (in many parts of the world) this type of threat for physical violence is a non issue. Aside from blood, the Vikings primarily plundered for profit and nearly 1000 years later one key lesson continues to ring true.

The one most committed will eventually win.

The salesman that commits his days and consistently keeps his activities high wins.

The inventor that stubbornly continues to refine her creation wins.

The entrepreneur that remains focused, keeps learning and pours her soul into her purpose wins.

In 1968 Dr. Spencer Silver spent his days and nights in a laboratory attempting to develop a super strong adhesive. Instead he accidentally invented a “low tack”, reusable adhesive formula. 

Our Favourite Business Model

Each week we’re inundated with requests for funding. 

Business owners all across North America reach out to us in search of growth capital. Everything from new technology, medical devices and even military grade equipment.

Upon some initial due diligence some of these businesses appear quite exciting however they don’t fit our mandate. 

Different groups have different requirements. We’re primarily interested in:

Reoccurring Revenue Business Model  

This could be either through a subscription model or contract. These types of businesses have the potential to create significantly more value.

Hit By The Bus

A few weeks ago I was fortunate enough to attend a private equity conference in Toronto where one of the speakers shared a story in good humor about literally being hit by a bus days before the event. 

When asked now what happens if he gets hit by a bus, he simply answers “I get up and get back to work”.

This humorous exchange prompted me to reflect on our business and the businesses we’ve worked with over the years.

Hire When It Hurts

How many people work with you?

...the bigger the number the more impressed people typically appear. 

A big organization implies that you’re running a credible, even powerful business. Outsiders looking in assume that you’re going places and that things are really moving. But are they?

S.T.A.K Your Sales

You can make the process of building a client base straightforward or painfully complicated. In all my years of building businesses I can tell you that the simple ways have always worked best. 

Start Less. Finish More.

A new:

At any given moment there are literally a 100 different projects or initiatives that you can start working on. The question is… which ones will you actually finish?