Inside Strategic Coach: Connecting Entrepreneurs With What Really Matters

Four Factors That Determine Business Growth Are “M.E.L.T.”

Dec 20, 2023

Dan Sullivan and Shannon Waller discuss the rising costs of four crucial factors: money, energy, labor, and transportation. They explain why these costs are increasing and offer practical strategies for entrepreneurs to navigate the challenges ahead. The episode highlights the importance of alternative financing methods, leveraging cheap energy in the United States, and the impact of transportation on the economy. They also analyze the implications of decreased security guarantee and the return of history, emphasizing the need for entrepreneurs to strategically navigate obstacles to create value for their customers.

20:36

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Episode guests

Dan Sullivan

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Quick takeaways

The cost of money and investment, energy, labor, and transportation are crucial factors determining business growth that entrepreneurs need to strategically navigate.

Entrepreneurs should view the higher costs associated with the MELT factors as opportunities for innovation and problem-solving, using D.A.S. analysis to mitigate the negative impact and create value for clients.

Deep dives

The MELT Factors: Crucial Factors for Business Growth

The podcast episode explores the concept of the MELT factors, which are four crucial factors that determine business growth. The MELT stands for money, energy, labor, and transportation. Firstly, the cost of money and investment plays a significant role in economic growth, and entrepreneurs are advised to explore alternative financing options to avoid high debt costs. Secondly, the availability and cost of energy are essential considerations, with the United States being seen as the country with the most guaranteed cheap energy for the next 25 years. Thirdly, the cost of labor is predicted to rise due to a shortage of skilled workers caused by the retirement of the baby boomer generation. Lastly, the cost of transportation is expected to increase, with 5% of the final product cost attributable to transportation. These factors are identified as the new normal that entrepreneurs need to navigate and find solutions for to maintain productivity and profitability.

Introduction

2min

Factors and Strategies for Business Growth

11min

Visual Thinking, Abstract Workers, and Transportation Costs

3min

The Return of History and Navigating the New Normal

3min

Framework for Addressing Issues and Advancements in Nuclear Power

2min

Dan Sullivan and Shannon Waller cut through the predictions of unlimited business growth. They explain why the cost of four key elements crucial to business success are on the rise. It's a straightforward conversation about what entrepreneurs should anticipate, and practical steps you can take to navigate the changes ahead.

Here's some of what you'll learn in this episode:

Why we’re entering a working person’s market.
Why energy is going to be cheap only in the United States.
How the four crucial factors influence each other.

Show Notes:

90% of all transport happens on water. And the cost of water transportation is going through the roof right now.

Over the next 25 years, the only place where energy will be guaranteed to be cheap is the United States.

The four crucial MELT factors are money, energy, labor, and transportation.

The costs of the MELT factors are going to rise over the next 25 years.

It’s important to find a way to finance yourself that doesn’t involve debt.

You shouldn’t be giving up a lot of your company just to get your growth money or your survival money.

The U.S. is going to start using tariffs for foreign-produced goods.

We're now in a period where the whole world is going through the greatest loss of skilled knowledge and skilled know-how in history, and this period will probably continue for another decade.

It’s going to get more and more expensive to hire really great people.

The last three years have seen the fastest, biggest growth of new industry and new manufacturing in the history of the United States.

Entrepreneurs are successful to the degree that they solve the D.O.S.® issues (dangers, opportunities, and strengths) of their client base.

Automating what used to be strictly human work is a very slow process.

Resources:

Deep D.O.S. Innovation by Dan Sullivan

Your Life As A Strategy Circle by Dan Sullivan