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in this video i'm going to explain the single equation that helped me turn 1036 dollars into over 120 million dollars in sales and right now um our portfolio company is about 85 million a year so this concept has been the central concept to how we've grown each of our portfolio companies with 100 equity without taking on outside capital or investors right and so the key here is if you don't have a lot of money you have to think different and play the game differently most people when they try and play the game when they when they get the investors from outside or they have some sort of seed capital of their own they think i'm going to have to take two or three years before my business uh is break even or positive and that is definitely a belief that you can have but not necessarily one that you have to have right and so i prefer to you know change the variables the game that we're playing uh to try and figure out a way to make money all the time right because it's like well if i could make money the whole time then that would make this definitely more fun and a lot less stressful and so the equation that i'm going to outline for you is what i call client finest acquisition this is how we grew our first uh lice you know shoot i grew i went from zero to six locations at my brick and mortar chain uh in three years as a 26 year old and i was able to open up each of those locations at full capacity except for the first one obviously but each of the ones after that once i learned how to do this on day one so that's not normally common so we're going to open up each facility at complete completely full capacity and then i did this at 33 other locations over the next few years after that we transitioned to our licensing business and we used the exact same model that i'm about to show you uh to go from zero to two and a half million dollars a month within i think it was like 12 or 14 months and then and that's per month not per year so went from zero to 28 million top line right and then uh 12 months after that we're at 4.4 million a month the second business that added that up went from zero to 1.7 million a month in four months all right the third business we started our software business went from zero to also 1.7 ironically within six months all right and so this equation matters profit matters if you want to be in a capitalist society because it's the only way that you're gonna be able to weather the storms all right so this is the writer downer this is an equation but it's a process all right client financed acquisition what this means in plain terms is get your customers to pay for all of your marketing your acquisition costs and so what that means is if you can plug into the universe's money not your own money but you plug into the money of the universe you can pretty much cash flow anything you need because you can make more money getting someone to enter your world than it costs you to get them there and if that is your case and you still have all the lifetime value that you're going to collect but if you can do that in the first 30 days and you can and you can pay the cost of fulfillment and still have money left over then you have what is called a negative acquisition cost right it means that you make money getting customers all right so this is the actual equation you know the number two but then there's three things in here that you may or may not understand and so i'm going to break down each of them let's call this number one let's call this number two let's call this number three so if i were to read this in plain english it would say 30-day cash oopsies i usually write this the other way 30-day cash must be greater than two times the cost of acquiring customer and the cost of fulfilling that customer okay so what this means is cost of acquisition all right so let's say it cost me a hundred bucks to require a customer and that includes my marketing team that includes my sales guys and their commissions that includes the advertising or whatever method i did to acquire the lead okay so let's say all luna cost me 100 bucks i'm just using simple math here let's say that for me to fulfill this thing whatever the thing is let's say it cost me another 100 bucks all right so that's 200 that's gonna cost me to fulfill and sell this thing these are my costs right and so the idea is i have to have two times the sum of this all right remember this is in our little parentheses which means this is 400 that is what i must make right that has to be less than what i make in 30-day cash which is a term that i use that i've never really heard anywhere else i'm sure there's a fancier word for it but i call 30-day cash which is the amount of money that i can collect in net free cash flow to my business within the first 30 days of a custer customer entering our world now we may have upsells and down sales and continuity and future things that we're going to sell but none of that matters to the small business owner who doesn't have cash and so the reason it's 30 days is because that's the amount of time that you can get interest free financing all right so if you have a credit card people will extend your money for 30 days interest free that means if you paid off in the first 30 days you can you can pretty much take unlimited money all right for the most part now you pay your stuff off you get bigger limits whatever but the point is and this is literally how i started my second business is that i would use my cards i'd put the money on the card to acquire the customer so on my card there'd be 200 because that's what's gonna cost me to fulfill and acquire but i would have made 400 on that and the reason it has to be greater than this is because i have net right because we have to take out the 200 that we lost here right minus 200. so i have 200 left over what a coincidence that's the exact amount that it's going to cost me to get another customer and fulfill that customer which means that i'm going to get you guessed it another 400 from this customer and we play the game again which means that you have unlimited power to acquire new customers which means you get unlimited money which is why if you if you play the game this way and you choose to think about acquisition in this manner you can grow your companies without capital constraint now it doesn't mean that there won't be constraints there will be you'll have operational constraints you have hiring constraints of other things but if you play the game this way getting new customers and making sales will never be the thing that is limiting your company it will be only you and this is what we've done over and over and over again is design a process in every business that we can figure out where the amount of dollars that we make in the first 30 days is greater than two times the cost to acquire plus the cost of fulfill and that works in any business in the world all right and now ideally i don't want to be just twice it just has to be more than that if i can make this you know 10 times right then it's even better all of those uh make it just even easier because then i'm getting multiple customers and i still have cash flow to go invest in other things but this is the minimum requirement for cfa or what we call client financed acquisition and so right now if you don't have money or you don't have capital and you think it takes money to make money you just keep believing that beautiful lie and let everyone else go win while you keep complaining all right so keeping awesome mosey nation i know you're not that type of person um and so we can beat all those people who have those limited beliefs um but i had a thousand thirty six dollars in my bank account five years ago all right right now the portfolio we do does 85 million dollars a year i took no outside money to do that which means if you can learn how to play and multiply and multiply and multiply and not use your own money because i'm using my customers money to finance all of the growth in this business if you enjoyed this if this if you found value in this uh click subscribe i'll see you next video i know this is a little bit more tactical um i'll talk about more uh managing people and and scaling the company side but this is the this is the stuff right this is this this is the these are the things that actually grow the business all right so anyways love you all keeping awesome buzzy nation i'll see you guys next vid bye