Dan Martell - January 31, 2022


Why Going Too Big Too Fast Can Ruin Your Company


Episode Stats

Length

11 minutes

Words per Minute

192.06525

Word Count

2,143

Sentence Count

72

Misogynist Sentences

1

Hate Speech Sentences

1


Summary

Summaries generated with gmurro/bart-large-finetuned-filtered-spotify-podcast-summ .

Transcript

Transcript generated with Whisper (turbo).
Misogyny classifications generated with MilaNLProc/bert-base-uncased-ear-misogyny .
Hate speech classifications generated with facebook/roberta-hate-speech-dynabench-r4-target .
00:00:00.000 There's this tendency that we do of not sharing because we don't want to have that
00:00:03.980 that feeling that that people don't believe in us and I get it.
00:00:20.400 Hey everybody, Dan here. I've got something on my heart. I do know this shirt is a little loud
00:00:25.880 but it's about going too big and too fast.
00:00:28.180 And I thought maybe this shirt
00:00:29.220 was going too big and too fast, but why not?
00:00:31.960 We're gonna wear it.
00:00:33.360 My videographer, Sam said, it looked decent.
00:00:36.360 So we're gonna go with that.
00:00:37.180 But anyways, I wanna talk about
00:00:39.120 when you have a vision for what you wanna create,
00:00:42.520 but sometimes you're getting advice
00:00:44.020 from family and friends
00:00:45.020 and it makes you feel like they don't support you.
00:00:47.960 Here's what I mean by that.
00:00:49.280 When I was building my company, Spheric,
00:00:51.440 I got advice from my dad, who I love.
00:00:54.000 He's my hero.
00:00:54.740 but man when I was starting off I felt like he was trying to cramp my dreams every time we talked
00:01:00.200 he'd always tell me about the hundred things that I was doing wrong or that I should think about or
00:01:04.660 you know and it just made me second guess everything one things he said was you know
00:01:08.820 you really got to watch your cash flow you really got to watch your cash flow and I was like
00:01:12.020 I had saved $70,000 at that point okay and I was only 24 I felt really like maybe unfounded
00:01:20.720 confident but i felt i felt like i'm doing all the right things why does he keep bringing this up
00:01:26.640 well i continued to build the company i hired four people from day one and we started doing
00:01:34.080 work with clients and we started to build the product and we started to generate revenue
00:01:38.000 and fast forward six to nine months i understood exactly what he was talking about essentially what
00:01:43.280 happened is because of the way we were working with clients and we would essentially i hired
00:01:48.320 people so all of a sudden cost day one i've got salaries then i bought them all you know new
00:01:54.560 laptops because they needed that we had to buy some servers we had to buy all this infrastructure
00:01:58.480 so 70 grand gets depleted really quick then we you know had to find these customers get the
00:02:05.040 customers on board and then eventually do some work invoice the customers and then they would
00:02:11.520 pay us but like they would pay us like 30 days after we did the work and then when they paid us
00:02:16.640 they paid us through a check that showed up in the mail,
00:02:19.740 and then we were in Canada, they were in the US,
00:02:22.160 so then there was like a three week delay there.
00:02:24.040 Oh, and then when I went to the bank
00:02:25.500 and deposited that check, the bank's like,
00:02:27.780 oh, yeah, it's frozen for 20 business days
00:02:29.980 because you're a new company.
00:02:31.600 And I'm like, literally the bank account went boop,
00:02:34.960 no money in, and I knew exactly
00:02:37.320 what my dad was talking about.
00:02:38.320 That's what he meant by cash flow.
00:02:39.980 And I ended up having to sell my receivable,
00:02:43.660 sell my essentially invoices to a business payday loan shark like you know those payday loans for
00:02:51.420 individuals they exist for businesses as well so if you need some cash before your paycheck and
00:02:57.260 they will they will 100 finance your receivables and they'll take 30 so i literally lost 30 of my
00:03:04.160 profit or revenue just because i didn't understand how to manage my cash flow now when my dad was
00:03:10.800 saying this to me it wasn't because he was not believing in my dream it's because he knew I
00:03:16.880 didn't have the experience to make financial decisions that were aligned with cash flow
00:03:22.560 because I was just looking at revenue so I want to share a few principles number one is to dream
00:03:27.540 big but start small but at least start okay so if I just want you to start I want you to get one
00:03:34.520 customer I want you to get 10 customers I want to get 100 customers but I want to make sure that you
00:03:38.980 keep your expense structure small and reinvest i don't want to stop you i want to encourage you i
00:03:45.300 want you to dream big okay but you gotta start small i had a friend julie once and she had
00:03:51.080 started a company a personal training company in her house she um bought you know converted her
00:03:57.020 whole basement into kind of a gym so emptied out the basement put bought gear equipment etc started
00:04:04.500 her business, posted it on Facebook. It's probably a year, 16 months after she started that I get a
00:04:09.160 call. And she just said, hey, I could use your advice. You have some time. And I went over to
00:04:14.320 her house. This was like 15 years ago. And I go and I sit, we go upstairs to her office and we're
00:04:20.700 sitting in her office and she goes, here's the deal. Essentially, I, you know, got some money
00:04:27.480 from my parents. I got a line of credit. We secured against the house. I spent all the money on the
00:04:34.140 new equipment in the basement, my office, furniture.
00:04:38.240 She had letterheads, she had business cards,
00:04:40.260 she had a branded swag, she had everything.
00:04:44.420 And the problem was that she had no customers.
00:04:46.940 She just, and this is normal.
00:04:49.340 This happens every day in business.
00:04:51.980 And maybe you're like, whoa, why did they do that?
00:04:54.020 Why didn't they start small and do workouts in a park?
00:04:58.280 And then from a park they could, and I get it.
00:05:00.320 People say this all the time.
00:05:01.320 They're like, oh, you know, if you're starting a restaurant,
00:05:03.380 should start at the farmer's market and then you know to the food truck and then eventually a small
00:05:07.780 location and then maybe a pop-up shop or whatever and I've told people the same advice but I also
00:05:13.040 realize that if you're not around other people that maybe you just think that is what business
00:05:18.440 is about is the setup it's getting the gear to attract the customers and nobody's going to want
00:05:23.500 to come train in my basement on old gear or nobody's going to take me seriously if I don't
00:05:28.180 have like branded swag and I'm like supposed to be a business person and I but I really want to
00:05:32.700 encourage you to not start too big I want you to dream really freaking huge but I want you to start
00:05:37.420 small the second thing is to really know your numbers okay and if you want one of my favorite
00:05:41.900 books on this topic is is called simple numbers by Greg Crabtree he's a friend of mine he's he's
00:05:47.100 done all of our financial modeling and it's just probably the best entrepreneurial financial book
00:05:52.740 out there okay because it he's a accountant that doesn't act like an accountant and if you ever
00:05:57.740 get frustrated with accountants you know what I'm talking about I love you thanks for doing all my
00:06:02.060 financial stuff and help me with my taxes.
00:06:04.660 But man, you guys, your reports are complicated.
00:06:07.380 And the whole argument is that revenue is for vanity, okay?
00:06:12.300 Top line revenue, it's sexy, it's awesome.
00:06:14.820 It's like people talk about how many employees you have
00:06:16.820 or they say, well, this is our revenue.
00:06:18.340 You know, we're at 10 million, we're at 1 million,
00:06:20.020 we're at 500, and they're really proud of it.
00:06:21.980 So that's interesting.
00:06:22.820 So revenue for vanity.
00:06:24.840 Profit for sanity, right?
00:06:26.260 You might hear this, profit meaning like, okay,
00:06:29.180 at the end of the month, how much profit do we make?
00:06:31.580 The one thing you'll learn in business
00:06:32.840 if you've been doing long enough
00:06:33.800 is that what your accountant calls profit
00:06:36.040 is not what you think profit is.
00:06:37.660 You, I know me, I like to look at cash, not profit.
00:06:42.160 Because a spreadsheet or a balance sheet, a P&L,
00:06:46.040 whatever you're using for your accounting software,
00:06:47.920 the profit number does not equal dollars
00:06:49.940 I can then go and spend.
00:06:51.600 It just means I gotta pay taxes.
00:06:53.400 So profits for sanity, but cash is king.
00:06:57.340 Cash flow.
00:06:58.860 What you have left over at the end of the month
00:07:01.400 from a cash point of view,
00:07:03.040 after you've paid off your credit cards
00:07:06.140 and your lines of credits and your wages
00:07:08.620 and your vendors, et cetera,
00:07:10.860 that is the most important thing.
00:07:13.080 And most entrepreneurs don't understand
00:07:15.420 how to do projections
00:07:17.020 and they don't understand how cash flow is created.
00:07:21.000 So if this is news to you,
00:07:23.580 again, it's on my heart to share this.
00:07:24.860 Can you please, please spend some time learning about this?
00:07:27.620 This is a non-negotiable fundamental aspect about business
00:07:30.960 that if you don't know how this all works,
00:07:33.900 you will catch yourself in a bad spot.
00:07:35.680 Number three that I wanna share
00:07:37.540 that I think is really important is
00:07:39.620 share your decisions with other people
00:07:41.820 that have been more successful than you.
00:07:43.880 And this is what I mean, I have so many friends, okay?
00:07:48.260 Family members, cousins, friends in my community
00:07:53.800 that I find out after the fact
00:07:56.080 that they made a big decision to buy a business,
00:07:59.120 to start a business, to invest their life savings
00:08:01.400 into a business when they could have shared that
00:08:04.440 with me prior, but people in the early days,
00:08:06.480 you're just like, well, I don't wanna,
00:08:08.020 you get into the spot where you're worried
00:08:09.840 that if I share my vision and they don't buy into it,
00:08:14.060 then I'm gonna like feel deflated.
00:08:17.120 And there's this tendency that we do of not sharing
00:08:21.120 because we don't wanna have that feeling
00:08:23.340 that people don't believe in us.
00:08:25.480 And I get it, but I'm telling you,
00:08:27.380 if you're making big financial decisions,
00:08:30.260 don't necessarily go to your parents
00:08:31.660 who've never done this before,
00:08:32.600 who've never maybe executed their dreams
00:08:35.880 at the level that you're going to do,
00:08:37.980 and that's totally fine, no judgment,
00:08:40.000 but go to people that have had that kind of success.
00:08:43.380 If you have any friend that's been in business
00:08:45.480 for five years and you're starting a business
00:08:47.460 and you are not sharing your decisions with them,
00:08:50.060 just saying, hey, here's some big decisions we're making,
00:08:52.400 this, this, and this, a new business partner,
00:08:55.040 I'm deciding I need to raise some money,
00:08:56.620 or moving locations, whatever it is,
00:08:58.560 just get in the habit of sharing your decisions
00:09:00.880 to get feedback.
00:09:01.720 Now, you don't have to take any action on it,
00:09:04.000 but at least you're gonna be informed.
00:09:06.180 At least you're gonna have somebody
00:09:07.900 doing a check and balance on you.
00:09:09.440 And I'm telling you, if you're wanting to go big,
00:09:13.820 then these are the things that are non-negotiable
00:09:16.340 to allow you to stop the potential downside
00:09:19.580 of making bad decisions, right?
00:09:22.060 And to really put a bow on everything,
00:09:26.260 I wanna share this belief that I have
00:09:28.560 when people are comparing themselves to others.
00:09:31.080 They see, you know, a big company do this
00:09:33.740 and they're like, well, they're doing this
00:09:34.740 or they see an individual doing something.
00:09:36.740 They're like, my friend's doing this, so this must work.
00:09:39.340 Here's the caution, okay?
00:09:41.300 Which is all of this wrapped up into a bow.
00:09:44.220 Don't compare your chapter one to their chapter 13, okay?
00:09:49.220 Or their chapter 27.
00:09:51.060 If you have never had a business in the past
00:09:53.280 And a side hustle when you're 17,
00:09:56.640 selling something at the farmer's market, doesn't cut it.
00:10:00.120 Unless you are supporting yourself 100% financially
00:10:02.600 by your business and you've had some success,
00:10:06.040 then you don't have a chapter,
00:10:08.100 when you don't have one year of education, right?
00:10:10.320 And when we compare ourselves to the 32 year old
00:10:14.160 that's making 25 million a year,
00:10:16.880 and you don't realize they've legit
00:10:18.820 been running their business since they were 15,
00:10:21.280 meaning that from the age of 15,
00:10:23.200 and I have friends like this,
00:10:24.300 they have been self-sustaining their income
00:10:26.780 off of business activities.
00:10:29.060 So they're on chapter, what would that be, 17,
00:10:33.500 and you're looking at their decisions
00:10:35.680 and comparing your chapter one to their chapter 17.
00:10:38.400 Biggest, biggest fallacy that you can make in business,
00:10:41.700 which is, and why for a lot of people
00:10:44.500 that go way too big too fast,
00:10:45.760 they don't have that understanding.
00:10:47.200 So that's what I have on my heart.
00:10:49.180 If you like what you've shared
00:10:50.340 and you wanna like follow along in my journey,
00:10:52.680 Be sure to subscribe to my newsletter, links below.
00:10:55.160 Be sure to leave a comment on the channel.
00:10:57.820 This helps with engagement.
00:10:59.600 Subscribe, like, let me know
00:11:01.340 what is the number one thing you took away
00:11:02.760 based on what I shared today.
00:11:04.700 And I hope this video finds you incredibly well
00:11:07.320 and we'll talk soon.
00:11:08.620 Peace, later.