“Cash is king… and NEVER forget that!” Those were the words that came from my Harvard MBA trained adjunct professor’s mouth the first day of class. I can remember thinking to myself, “thank you captain obvious”. I mean do you really need a Harvard MBA to tell you that if you have no cash — you’re screwed?
According to the U.S. Census Bureau, 2,356 Americans decide to go into business for themselves everyday. Statistics show that 50% of small businesses fail within two years and as high as 80% fail within 6 years.
I’m of the opinion that one of the reasons so many businesses fail is because they forget to focus on the fact that you are in business to generate cash — lots of it! Later as I got older and started my own businesses and got a few scrapes and scars of my own, I began to really realize what he meant by that.
The Wrong Mindset
I can’t tell you how many times I have spoke to prospects and clients and they tell me about the 10k website they just built or their fancy business cards they had printed BEFORE THEY EVEN MADE A SALE.
InfluenceOlogy is approaching our 3 year anniversary and to this day I have never used a business card. I’m not saying that business cards are bad or a waste of money, I’m just saying don’t waste your time and energy on creating the world’s best business card because it’s NOT going to make sales for you (unless used as lead generation mechanism). If you don’t believe me, ask yourself this question…when was the last time you saw someone’s business card and was like, “Wow this is a really cool business card — I think I’m going to call them and do business with them.”
From day one we have focused on two types of business — the now business (cash now) and the later business (cash later). When we first started out we focused 100% on the cash now business. Since we are still a relatively young company we still focus a good amount of our time and effort on the now business — but it’s shifting. And as our company continues to grow and mature we will start to shift more of our focus and decisions based on future business.
More Important than the King?
Cash can solve most of your business problems. And on the other hand, if you have no cash you might as well pack up your bags and go home.
Cash is the end result… it’s an instant way to know the score — no money means no bueno!
But if you really want to know the two metrics that best predict whether or not you are going to be swimming cash or not — or even in business for that matter — are the number of leads and conversion rates.
Although cash is king, leads and conversion are the army that protects the kingdom.
Cash is a function of leads x conversion rate.
If you focus on those two numbers and manage those numbers on a weekly basis, you will generate more cash.
There are literally a million different ways to generate leads. So many in fact that people don’t even know where to start. So at a very minimum I recommend you create a lead generation program for what I call the Lead Gen Trio (LGT).
The Lead Gen Trio are:
- 1 lead system for offline marketing.
- 1 lead system for online marketing.
- 1 lead system for referrals.
Here’s what I suggest you do: For each one of these mediums, online, offline, and referrals create 1 lead generation system and focus like crazy on generating leads from each system you set up.
I’m not saying to ONLY HAVE ONE LEAD generation system. What I’m saying is start with one from each medium and master it — then move onto the next one.
For example, for your “offline” lead generation system, you might develop a editorial direct response flyer and have it canvased to all your neighboring zipcodes. A letter and brochure before customer contact can increase business. An IBM study concluded that selling time can be reduced from 9.3 to 1.3 total hours with direct mail advertising. A Sales and Marketing Executives International Study showed salespeople went from eight orders per 100 cold calls to 38 orders per 100 when direct mail was used.
We prefer to use group presentations and public speaking as our primary ‘offline’ lead generation system. We will go speak somewhere for free or paid in exchange for the opportunity to sell or acquire leads to enter into our sales funnel.
For your online lead generation system, you could create a Facebook ad laser targeted for your exact demographics.
For your referral system, try adding a step to your sales process offering a discount in exchange for the name or emails of friends that might need your service.
Like I said there a ton of different ways to generate leads and that’s the problem. Entrepreneurs are always jumping from one advertising strategy to the next without completing the first.
Don’t move on to the next lead generation system until you have fully implemented and optimized your first one. Once you have that lead generation system firing on all cylinders then move onto to creating and implement another one. Once you have implemented and optimized that one THEN move onto another one — the whole time focusing on leads and conversion.
Over time, if you follow my advice, you will create a lead generating machine that you can simply turn on and off whenever you like — a real predictable business!
Loving, Giving, Living Large,