One of the biggest mistake coaches make in their business. I’m going to share that with you right here.
If you’re a trainer have you ever had somebody say, “I’d love to work with you but I’m going to go get in shape first and then I’ll hire you.” I want you to think about that for a second. It doesn’t really make much sense because you hire a trainer to get in shape in the first place.
Your Business Is Like A House
So one of the biggest mistakes I see coaches make, and this is a prime tell if they’re going to do well in their business, and I know that’s a generalization, but listen, I’ve been doing this a long time and I can kind of see what leads to success and not success.
So the big mistake here is — I will invest in whatever when cash is in the bank. Big rookie mistake. Here’s why. Let me give you an analogy.
Would you buy a house all cash? If the answer is yes, it’s a dumb move financially. But most likely the answer is no. Why is that? Let’s say the house is a million dollars. You spend a million dollars on a house, cash, you’re out a million dollars. The opportunity costs you have just given up is you don’t have a million dollars in your hand anymore. So you could’ve done stuff with that money outside of just letting it sink into a house.
So what most people do is they put a down payment and they pay a mortgage. 20% down. Let’s say you put 200,000 down and you have the mortgage of let’s say $4,000 a month. So you have $800,000 that the bank is essentially just lending you for the next 30 years. And a lot of people have this weird notion of like, “I’m going to pay off my mortgage.” Why? The bank is giving you a loan at three, four percent on $800,000. It’s a steal. Do something with that money.
In your business, your business is like a house. If you only use cash to grow your business, it’s not a good move. When you look at a lot of investors, a lot of investors are very intelligent because they understand that they don’t want to use their money. They want to use other people’s money to invest in whatever deals or assets they’re creating. So when you’re a business, instead of using cash, you use a credit card. A credit card is here, take some money and just pay me back in 30 days.
Do You Believe In Yourself?
The reason most people don’t do this is because they don’t believe in themselves or their business. It’s as simple as that. So if you’re thinking to yourself, “Hey, I’m going to wait until I have all this cash stockpiled away,” the reality is you don’t believe enough in your business to generate the income to even pay off the credit card “debt” that you would have accrued if you used the credit card.
And what that implies is that your business is not built on a smart model for generating business. Also known as you have a job, not a business. I know I’m kind of being really in your face here, like really like get up in your face. You need to hear this though. You have to hear this. If you are someone who thinks I’m only going to take action when I have cash ready to go, you’re not using a really powerful word called leverage.
If I had to wait for cash to sit in the bank before I ran all of my Facebook ads, I’d still be waiting. So here’s what I do on a monthly basis. I say, “Hey, Amex, I’m going to run a bunch of Facebook ads. I want you to loan me that money for the next 55 days.” Which is generally the extent of when I have to pay it back. And in the meantime I’m incurring a lot of expenses.
Is Your Business Leaking Money?
If you don’t have a model for generating revenue, and you’re just leaking money, obviously that’s going to be a problem. That’s the issue. But here’s why I can do that and here’s why I give Amex a lot of money, and in return they give me many, many points. I know that if I give Amex, let’s say $150,000 in Facebook ad spend, or if Amex loans me that money to spend on Facebook ads, I know I can do that because I know that in that given the amount of time I’m going to generate more than enough revenue to cover that in the next 30 to 55 days. That’s what it comes down to.
And if you don’t have a system in your business to do that, you need to figure out how to do that. Because if you’re always waiting for the cash to be there, it’s never going to be there. I promise you. It’s something called Parkinson’s Law, which means demand meets supply and supply will meet demand. If you need $5,000 to do something, listen, that $5,000 is going to come and it’s going to go very easily if you don’t manage your money properly, if you don’t manage cashflow properly. But I can promise you if you put money on your credit card, you’re going to figure out a way to pay that back.
And this is what separates, again, successful entrepreneurs who are a little bit more tolerant to risk versus those who move very slowly because they don’t want to make any mistakes. And God forbid they should lose a little bit of money. So they stockpile all of their cash and they then invest it in whatever they want to invest in for their business, for coaching, whatever, and then they hope for the best. That’s a very safe way of doing things, but it’s not a very leveraged, scalable, and fast way of building your business.
Listen, if you want a better system for getting clients and getting clients that pay for your business investment, then go to WorkWithYuri.com. Let’s book a call. Let’s look at what you’re doing. It’s probably not working if you’re waiting for all the cash to be there before you do anything. Let’s look at why you’re doing what you’re doing. And we’ll show you how to do things properly. We’ll show you how almost all of our clients come to work with us. And they don’t have a “budget” for marketing or advertising because we help them build out a process that gets them clients and those clients pay off their investments or their Facebook ad spend, if you will, before they even have to pay off their credit card.
If that’s of interest to you and you want to scale your business and get more clients where the clients are essentially paying for your investing in your business, then go to WorkWithYuri.com. Let’s book in a call. Let’s see what’s up. Where do you want to go. And we’ll see if there’s a good fit to help you out. If there is, cool. We can talk more about what that looks like. And if not, at least you’ll have a lot more clarity about what to do instead. Sound good? Thanks for joining me. Hope this makes sense and see you soon.