SFR 151: My Revenue Outpaced My Business...

What's going on everyone, this is Steve Larsen and this is Sales Funnel Radio. Today we are going to talk about what to do when your revenue outgrows your business.

 

I've spent the last four years learning from the most brilliant marketers today. And now I've left my nine-to-five to take the plunge and build my million dollar business.

 

The real question is how will I do it without VC funding or debt, completely from scratch. This podcast is here to give you the answer.

 

Join me and follow along as I learn, apply and share marketing strategies to grow my online business, using only today's best internet sales funnels.

 

My name is Steve Larsen and welcome to Sales Funnel Radio.

 

What's up guys, hey, I am very excited for this episode. So, when I officially left my job, just like the intro to this podcast says, January first, it's been five months. Five solid months now, five and a half-ish by the time this episode goes out, and five and half.. it's been fascinating to watch what's happened. So follow me here, this is what happened.

 

Okay, so I left, right, and I had this awesome idea, I vetted it, I knew it'd be successful and what I did is I went and I started launching, launching, launching, launching, launching and what started happening was over on this side was the sales. Sales, sales, sales, sales, revenue, revenue, revenue, revenue. Lots of money started coming in.

 

I was like "Whoa! This is crazy, "I've never had this much cash coming. "Whoa, my gosh, whoa!" And all this cash started dumping on in. And we did about 100 grand the first month and then it just continued.

 

Now it's 50 grand a month and that's where it's been for a while because I slowed it down ..

 

You guys might be like, "Hey, that's kinda funny, why would you slow it down?" I actually slowed it down because here's what happened; January, February, March was like sell, sell, sell, sell, sell, sell, and I'm selling, and we're making cash, and it's coming in, and we're at a 100 grand. You know, 100 grand, right... Boom, boom, boom, boom, boom, we're making... A lot of cash coming in...

 

What I started realizing was the actual, my actual business wasn't able to handle what was going on. I was like, "Crap, I never ever thought this would ever happen to me." And I say that because when I started building funnels for companies while I was in college and it always happened the same way…

 

The funnels that we build, they sell things very, very, very well. I don't think people understand how well the funnels work, and that actually creates a business problem NOT a funnel problem.

 

Here's what I mean:

 

I was building all these funnels for people in college and there's this guy I was building a funnel for…  I did the research, I ran ASK campaigns, and I figured out exactly what his customers needed. Then I went put those things together, and created funnels. When we launched them, boom! He made a lot of cash real fast.

 

He made 50 grand really quick. 50 grand in the first month, it something like that. I can't remember exactly, it was a long time ago now. But there was a lot of cash coming in and then it kept going, and going, and going.

 

It’s funny because Day #1 after launching the funnel, the business owner always comes and they're like, "Oh my gosh, look at all this cash coming in! "That's amazing, these funnels are so cool!"

 

Then Day #2, they reach back out and they're like, "Wow, this is really awesome. "Holy crap, that's still a lot of sales."

 

Then Day #3, they're always like, "Turn it off! Turn it off! "You're gonna bankrupt us, turn it off!"

 

I remember I was kind of laughing when they said that, I thought they were joking. I was like, "Why would I ever turn off this... " Why would I turn off this funnel? Who wants less sales? I've never heard anyone say that in my life ever and at the time, I was making fun of it... I just didn't know any better. I was like, "Aw, that's stupid, why would you ever want less sales?"

 

However, he’d run into a situation where the revenue was outpacing his business!

 

Funnels are not businesses, they're not. A funnel is a revenue arm. A funnel is a very effective way to sell stuff. A business, though, that's completely different.

 

A business is a series of systems - that's really all it is. It's a series of systems that fulfills on the funnel, that's really it. Okay, that's the way I define it anyway, okay?

 

If you don't have enough systems in place, it means that every person who purchases from you is being fulfilled on differently.

 

It means that every person who's coming in, right, and has a support question, you're treating it differently every single time.

 

It means for every single, you know, package that needs to get shipped out there's not a process in place.

 

It's literally different every time, and what's hard about that is that it makes it very challenging to scale.  Especially if you’re just starting out and you’re kind of a solo guy for a while. If you're a solo, individual person for a while and you're kind of running on your own, that's great. That's a great place to be, but eventually you're gonna get to a place where your revenue starts to outpace your ability to fulfill well, and that's what happened to me.

 

Funnily enough, right after, I graduated college and started working at ClickFunnels, we did the exact same thing to so many other people:

 

Day #1, we launch an amazing funnel. They're like, "Oh, my gosh, look at all the sales!"

 

Day #2,  they're like, "Wow, that is "still a lot of sales, oh my gosh."

 

Day #3, they're like, "Turn it off, turn it off, turn it off, there's no way... "Oh, my gosh, we're gonna die, you're literally gonna bankrupt us, we're not gonna be able to fulfill on all this stuff"

 

I remember the second time it happened it was for a funnel we’d built for... I don't know if I should say the name, but anyway…

 

Russell and I built this sweet e-comm funnel. It was amazing, they had tons of revenue coming in, and they spent the next two or three months simply upgrading, building, solidifying and putting in place systems inside of their company so that it actually could handle the revenue coming in. Isn't that funny?

 

For some reason I had never, ever considered that for such a long time, and so I ran into the same thing.

Part of my first role as ClickFunnels was to build funnels for Russell's personal clients. I built a lot of funnels for ClickFunnels itself, but (especially when I first got there there) I built funnels for his personal clients - building them, putting them together…

 

I have a marketing degree. In the business marketing degree that I got they do a lot on teaching ‘the business.’ The actual systems and the structure. They do hardly anything on teaching sales, right? Which is so funny.

 

It makes sense of why everyone goes and gets VC funding... because they build the team and there's no cash to freaking support it. You're like, "That seems backwards."

 

Anyway, so I started going through this very same thing. I started recognizing it coming up... I launched all my stuff and I was like... It was like, "Money, Money, Money, Money," and I was like, "Holy crap."  I was still the sole operator of my business. I was like, "Huh, this is interesting."

 

I knew what happened next; pretty soon it becomes so high, the tower gets so tall that eventually there's not enough foundation and it starts to crumble and you start getting refunds and people start saying bad things about you.

 

And I was like, "Crap, I don't want to hit that," and so I purposefully had my amazing ads person, (I will interview her one day and put her on here because she's incredible), but I had my amazing ads individual go and turn the ads down. We kept the ads tiny because I didn’t have the power to fulfill at the rate I was able to sell at.

 

Most businesses are the exact opposite. They’ve  got the sweet structure and they don't know how to get new cash in. “Well, I'm a funnel builder, baby. The cash part's not the hard part…” It's this other way around.

 

So, I guess I've been feeling the need to... You know, it's June now, to account,  to let you guys know what's been happening, and so for the first, like, three months there's been a lot of cash that came in. I was like, "Oh, my gosh, that's nuts. "Crap, I'm like the only guy!" I was pulling my hair out - stressed 24/7.  

 

I remember I was talking to... This wasn't an Inner Circle meeting, but I was talking to a lot of the members. We were hanging out at someone's house and they were asking, “What's going on?” and I was telling them, and someone said, “You know, you're probably gonna have to put the brake on just a little bit to go build this stuff up and then you'll be able to handle more cash coming in.”

 

I didn’t want that to be the answer. I really didn’t want him to say that. I was like, "sell, "sell, sell, sell, sell," but...

 

This year, I've been doing a lot of stuff. I'm one of the coaches for Two Comma Club Coaching X, the new 2CCX program, and it's going freaking incredible. I've gotten my own processes down and in place there now. I’m helping them fulfill; helping them do amazing stuff, helping everyone make money and put their funnels together. So, I've been doing that as well as actually my webinar  So, I've been selling, selling, selling, selling.

 

It's been tons of fun. Now I’ve backed off on the selling a little bit. I’ve put together a lot of systems - a lot of them.  I always thought that it was kind of like a drag, but I know now why.

 

Because without huge cash coming in why on earth am I building the system, right? That's what my mentality is like. I'm like, "What's the ROI of me building a system when there's not buttloads of cash to match it with?”

 

So, that's all I would encourage you guys to do.  If you’re selling and you've got cash coming in and you're like, "Hey, this is going really, "really well, it's going incredible,"  but you're having a hard time blowing up, I want to tell you one thing that Russell told me...

 

Actually, I was sitting next to him, I’d only been working there for a little bit and I was keeping notes. I mean, I was sitting next to the dude, right? Would you not take notes? So I did.

 

I had a Trello board called "Brunsonisms" and "Russell Lessons" and I would write down things that I heard him say - things that were really profound. I was already fanatic about his content, but like, really profound things, and this is what he said... He was talking to one of his Inner Circle people and he goes, "Scaling from six to seven figures... " I'm gonna botch the quote, but this is the lesson. He said, "Scaling from six to seven figures is NOT a matter of MORE hours in the office.... Scaling from six to seven figures is about leverage."

 

So if you've got a product, right...  that’s done, like, 300 grand, something like that… What I've noticed is that you probably have a leverage problem.

 

You need to  put systems in place that let you expand, that lets you fulfill, that lets you, right, go grab another funnel out there, put something out there that brings more cash in, so things like that.

 

But specifically, right, it's a leverage problem. It's not typically a cash problem.

 

You guys will all notice and you'll all see, if you haven't already, which I know a lot of you guys are already rockstars and you're selling. You're making a boatload of cash already, right, but for those of you guys who are, like, just starting out, you'll see really quickly, right, it's typically...

 

When you go and you start, right, you're building, you're building, you're getting the revenue coming in. Awesome, and you should do that. Prove to the market that it's awesome. You’ll find that when you have an amazing product, right... Like, my product right now is so freaking awesome. (I keep adding some amazing... Oh, my gosh. I just added this really cool thing to it.) Another time, another episode, but oh, my gosh. And the success rate is just, like, skyrocketing because of it.

 

Anyway, when you actually figure out something really awesome, the path to a million bucks is not actually that hard.

 

I remember I was walking out, I think it was my last day at ClickFunnels, and Russell was like, "So, what's the goal, man?" And I was like, "A million bucks," and he goes, "You're gonna find out real fast that's not that hard," and I was like, "Oh, hahaha."

 

It's not that hard, let me just tell you right now. It's not that hard, oh, my gosh.  The funnel that I tossed out it was really, really quick, and revenue came in real fast. I was like, "Crap, I need systems to handle it," I don't want to become so systemized that the systems start outpacing the revenue…

 

I can feel it. I have an organization now. There's eight people on my team now. I have a full-time employee. I'm getting full-time support, full-time assistant. I'm setting up the structure so that I can go back to the funnel and be like, "Blow it up, baby, yeah, go, we're going to three." Does that make sense?

 

If you watch all these other Two Comma Club winners, they've gone through a very similar pattern. While we often study the funnel, which is great…  we study their marketing, which is great. Remember, though, to actually study their business and the structure of it.

 

When you're funnel hacking- you're not just hacking funnels, you're also funnel hacking the way they fulfilled on what the funnel was selling.

 

That's been part of what I've been doing heavily this last little bit. I mean, I've been studying my face off. I’ve got notes and papers all over the place, all over my desk right now. Because now I’ve got the revenue coming in,  I can build the actual systems and the processes to support even more revenue.

 

My structure as of two months ago couldn’t have handled much more. My structure now, though, it's getting a lot cleaner. I know that soon I'm gonna be able to just, like, scale, scale, scale, scale, scale.

 

What I've learned and what I've seen a lot of people do, is... If you look at the pattern of a lot of Two Comma Club winners, you'll notice that usually with a team of three to five people they'll run to a three million real quick.  

 

It’s different for every business, every industry, but the actual structure, the business structure allows them to get to that kind of place, usually pretty quickly with not many people on the team.

 

It doesn't take a huge team to do these things. Brandon and Kaelin Poulin, they just crossed 10 million dollars. They just had their first three million dollar month - crazy!  They've got 40 people on their team. However, it doesn't take these gigantic teams to make a significant amount of cash for your pocket.

 

So, real quick I'll tell you the roles and then my camera's gonna die…

 

Okay, so what I'm going for is, right, I am the main marketer, funnel builder, CEO, right. That's the position that I'm in.

 

I also have an affiliate manager. Right, that's my first full-time employee. Not support, right, not assistant. I want other cash generating people, right. That's all I want, right, where there's still structure. He's going out and he's my affiliate manager.

 

He's going out and he's creating relationships. We're doing another huge Dream 100 package drop. That's actually where he is right now. That's why he's not sitting there right now. He's at the post office, we're doing another big Dream 100 drop, and we got a lot of people excited to promote. He’s bringing in new blood. New blood as far as relationships goes.

 

Okay, so it's me as the funnel builder and marketer and attractive character. Right, that's the roles I'm trying to take on.

 

The next one, though, right, affiliate manager, and that actually was told to me by Russell. He said, "The next employee I would get, 100 percent man, go grab an affiliate manager and then grab an assistant, and then a support person."  Really that's it.  

If you're, like, shipping stuff out you might need a fulfillment person too. I'll probably maybe grab two support people so that they're almost around the clock.. That’s all I really need, right, as far as full-time people go.

 

've got six content people and I do have a bookkeeper, but those are like VA positions, they're not full-time on my books. They're on my books every month, but they're not W-2 employees. They’re 1099s.

 

As far as full-time W-2 employees that are actually like here with me I’ve got the affiliate manager and I’m  definitely gonna have a full-time assistant, and definitely gonna have full-time support. Because right now we're doing the support piece. He mostly is doing support and affiliate stuff, and that's kind of it. Those are the roles, it's really four roles that I'm going for for the business model that I love and am modeling. It's going great and everything's running how it should.

 

So, anyways guys, hopefully that was helpful to you? I just wanted to do a little bit of accounting so that you see where you are.

 

If you're feeling stuck, start  asking: "Is my funnel revenue outpacing my business?" - because they're not the same, right?

 

Or if you're like, "Hey, I've got this "sweet business and these cool systems "and structures and processes, but not enough revenue." Then go build a funnel.

There’s kind of this balance between one and the other. They're gonna have a hard time outpacing each other.

 

After a while the structure will get too weighty, you're not gonna have the cash to hold the system so the system will need to get leaner.

 

I don't like to build the business past the revenue. That's called debt and I personally am not a huge fan. I own my stuff. I don't want anyone else to own it. All right, hopefully this was helpful?

 

Just so you guys know what's going on with my team and how I'm actually building it out and actually putting it together....

 

My content team, they're freaking rockstars. I'm definitely gonna interview them so you guys all know who they are. Then over here on the W-2 side where I'm actually building out a full-time team, I backwards plan my structure.  I figure out how much money is that person gonna want a month? My hard costs right now are like 25 grand a month for my salary and my team’s salary. So hard costs right now, for the content team, for everything else, 25 grand a month.That's not bad at all. All right, sweet, done-zo.

 

So I've backed way off, built up the structures, got the systems in place- we're just vetting them right now. That's really all we're doing. Yesterday I talked to my amazing ads person and we're gonna go scale these ads like crazy and get them off the ground.

 

So, anyways, I just thought it would be kind of cool to show a little of the accounting so that you guys know what I've been doing, because my structure could not handle much more.

 

So, anyway, awesome stuff. The next road mark I fully expect we'll probably do the... This is me calling my shot, okay. Probably I think we're gonna hit the million by October at the latest.  I think we'll go to maybe 1.4, 1.5 by the end of the year.

 

That's me looking at where we are combined with the campaigns that we're putting in place, where I've seen them go before, where I've put them before. Anyway, we'll see what happens, but that's where I am right now.

 

It's kind of a different episode. I never realized that I would be in the role that I am as far as a systems builder, you know what I mean? I'm a funnel builder, but  now by necessity I'm also a systems builder - which has been great.

 

I'll talk to you guys later, please rate this podcast and review it, that helps me like crazy. I think that my podcast is one of the foremost podcasts on funnels, which is why I'm trying to push it hard and prove to iTunes that it matters.

 

So, please, please leave a review and share. That means the world to me, and I'll talk to you all in the next episode, bye.

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