Ever had dreams of starting a business to become financially independent? Just to end up working for yourself and become stuck. In today's episode we talk about how starting a business is a great way to become financially independent. Tune in to find out how you can build a business to be able to work without you, and help you building that into a great asset.
Starting a business is a great way to build wealth. A Business enables you to think through solutions to problems and become a value-creator. However, what often happens is that people get stuck working in their own business and become ‘self-employed’. For a business to be classed as a real asset, it must be able to operate without you. Tune in to learn how building a business can help you to build monthly recurring income and reach financial independence.
Resources Mentioned In This Episode:
>> WT66: 6 Tax-Saving Tips For Business Owners
>> Download The Recurring Revenue Roadmap
>> WT37: Interview With John Warrillow
>> Join the WealthBuilders Academy
>> REGISTER HERE FOR FREE RESOURCES ACCESS
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Unknown Speaker 0:01
The purpose of wealth talk is to educate, inform, and hopefully entertain you on the subject of building your wealth. Wealth builders recommends you should always take independent financial tax or legal advice before making any decisions around your finances.
Unknown Speaker 0:20
Welcome to Episode 120 of wealth talk. My name is Christian Rodwell, the membership director of wealth builders. And I'm joined today by our founder and host, a co host, Kevin Whalen. Hello, Kevin.
Unknown Speaker 0:30
Hello, Chris. You've had a little bit of a holiday. I have a new bit of a spotty restart. But
Unknown Speaker 0:35
I'm a bit jittery this morning. I've been early early session in the gym. I'm still shaking. So
Unknown Speaker 0:43
glad to hear you've you come back from your holiday recharged with a new focus. And it was good. Good to have a game of golf with you recently as well. So yeah, good. Glad to see you're improving.
Unknown Speaker 0:56
Slowly, slowly, yes. Okay, so back with another episode today. And we're focusing on the business pillar today. So we know that of the Seven Pillars of wealth business is pillar number five, Kevin, and also know that it's your favorite pillar. So why don't we start with that? Why? Why do you find business so interesting?
Unknown Speaker 1:15
Well, I love business, because it enables you to think through the solution to problems and become a value creator. So it's the creation of business, it's looking at the very essence of what problems are you solving. And what what I found to be the most interesting and enlightening, as a business owner, myself is that when you do that work, and you do it seriously, you can bring change, you can bring transformation, and you can bring a better quality of life to people you serve. And what better calling is there than that? I mean, some people call it selling well, in the end selling is persuading people to do something better for themselves, and they do ordinarily. And in my experience, if you selling something, you're offering something. And if you carefully craft your offer, you're trying to find a way to give somebody a better outcome. And I think better outcomes is at the core of a business. And therefore, the returns are not linked to the quality and the performance of a marketplace like the stock market, the gold market, Bitcoin or anything else. It's entirely driven by your ability to create and craft a message, and then persuade other people that the message will serve their lives. And if they do that, your return on investment is infinite. There is no limit. But of course, like many people who get into business, they don't always command it from that place more often than not, is the E myth. The seminal book on this subject will tell us is most people get into business not to solve the problem of a customer, let's say, but to solve their own problem of being frustrated with the job they're in. So the What do you call it the technicians suffering from an entrepreneurial seizure. And of course, because the technician does the work, they're so used to doing the work. And therefore the whole essence of doing the work is to be rewarded for work, which is we'll hear from our guest today, the very opposite of what you should be doing, which is almost everybody who provides some kind of a service. I think that's the essence of his message today, Chris, is they charge an hourly rate, which is probably the worst thing you could do, by far.
Unknown Speaker 3:45
That's right. So we have invited Robin Waite today who's the founder of fearless business coaching, to talk about that very topic of how to stop trading time for money in your business. And we know it's a common mistake that people make Kevin, I know very well, having worked with hundreds of people in the escape the rat race community that people get fed up in a job. But like my story, you know, you sometimes Enjoy your job. But at the end of the day, you still have to turn up on time, you still get paid the same every month, you still have a boss. And so there's a point where for a lot of people, they say, Well, you know what, I've been doing this long enough, I've got enough experience, I could do it better myself. So I'm going to set up my own business. And that's the step they take. And then they find that instead of actually creating a business which we know a business as an asset, it has to work without you. They are purely self employed. So if they stopped working, the money stops coming in. And that's, you know, quite tricky, isn't it? Kevin? For a lot of people who don't have any business experience, they may be very smart and clever inside a company working as a as a part of a team. But when it comes to suddenly being a business owner and having to do all those different things themselves, they realize just how much hard work that is.
Unknown Speaker 4:57
Hmm, it makes me laugh. Sometimes. I don't I don't mean this in a negative way, but I can remember doing a presentation A long time ago when I first set up their wealth builders. Chris, you you belong before you, we moved into a farm. There's a farm in Sussex in the 400 cows on the farm. And what was interesting for me is you think about businesses. You know, there there was a time when you heard about something called Bovine Spongiform Encephalopathy. Can you remember what that stood for? Chris? Yes, I do. Well, I remember the mad cow disease. Yes. It was mad cast. See. So you know, you've, you realize that actually, when you're in business, there's dangers and dangers around you. You know, like we had the floods, didn't we in February, we had COVID, which affected businesses in so many different ways. But the reason for the Bovine Spongiform Encephalopathy kind of parallel, is mad cows are one thing, but mad entrepreneurs or another. And I find most entrepreneurs are completely mad, they get so caught up in wearing the hat of the sales manager, the marketing director, the finance manager, the ops manager, the the you know, whatever job there's going, they've got it. And so instead of being freed, to be outstanding in their area of work, they get trapped in doing all the things that was provided by the company before. And therefore, you know, the the ability to think creatively about the business somehow gets stifled and enhances that fall back into, well, what's the hourly rate I was on? You know, how do I get more? Because I want more because I deserve more? And what are my competitors doing? And that's pretty much how businesses think about their solution rather than an alternative, which is really what is the guarantee? What is the solution that you're offering in the business? Not? How long does it take you to do it?
Unknown Speaker 7:04
Yeah, and as we've said many times before, really, it's about beginning with the end in mind. And that, again, is difficult to do when you don't have a business at the beginning to kind of know well, how's that going to look in five years, 10 years time. And that, again, is one of the reasons why it can really help to have a good business coach from an early stage because they can really help shape the future of your business and make sure that you don't get completely sucked into it. So you're just working twice as long for half the amount of money that you were when you were in a job. So probably a good point, Kevin, for us to head over to our conversation today with Robin wait. Robin, welcome to off talk. I so great to be here. I'm really excited about the interview. Yes, me too. We've actually been running a program for our academy members this week, Robin of you know how to validate your business idea. So the topic of business is really on point and your company fitness. business coaching is what we're going to be talking about today. And really just understanding obviously, how you came about to set the company up, and you know who you focus on helping and how you go about helping them. So why don't you start by giving us a bit of an intro to yourself, Robin?
Unknown Speaker 8:11
Yeah, of course. So founded fearless business in 2016. But I have I've run businesses for the last 20 years, believe it or not, I know some people look at me and think you don't look old enough. But yeah, run run businesses for 20 years. So what I did, prior to fill this business was actually run a marketing agency doing web design and branding for 12 years, very successfully. But I won't give the sort of full story but had sort of just fell out of love with that business towards the end. And, you know, we grew it to about a quarter of a million pounds and had a small, slightly dysfunctional team of four people working within it and just realized at that point, it wasn't really fulfilling me. So wanted a bit more of a challenge. But we were quite innovative in what was traditionally a sort of time for money based business have sort of selling hours to build, you know, buy time to build websites and do graphic design and things. We innovated in the last couple of years and started doing sort of one day branding workshops and things like that, and were able as a result to charge sort of significantly more for it. And the reason I ended up sort of making the transition into sort of setting up fearless business as a coaching practices because people saw what we were doing in our agency and they wanted to replicate it in their own business, not necessarily other agencies, but other sort of service client businesses. So we ended up I ended up exiting the agency altogether, we sold that off not for a huge sum, but enough to kind of for me to start up the coaching practice. And the rest is history. So now we focus on helping other sort of service client businesses who are maybe charging time for money, you know, likes of coaches, consultants, freelancers to package up what they do, and hopefully charge a bit more money for it.
Unknown Speaker 9:47
Yeah. And that's really what we're going to be talking about today is helping small business owners, you know, really understand the whole model around how to price themselves, their products and packaging things together. So we're going to dive into that in a short While but I've been kept busy this week, Robin because you sent me a lovely package of goodies, right and we're recording this interview on video, as we always do. So head over to the wealth builders Facebook page and the groups to see that video. But firstly sent me a lovely coin, like a very wealth building coin, which was just a little gift there. But accompanying that, of course, was copy of your book, take your shot, which we can talk about in a second. And also your fearless business client success pack. And on the very first page, I want to read this out because the reference is just so spot on in terms of wealth building, and you referring to obviously the richest man of Babylon store in arcades. He went on to become the richest man in Babylon and was invited by the Babylonian government to teach the top 50 teachers in Babylon on how to build wealth, so they could teach more people. So what is the secret and the secret you've put his wealth didn't come from earning more money, but in learning how to manage their money better? 100%? Yeah, so, you know, we obviously you've got the seven different ways to build wealth, but you're right, you know, it's about then how do you compound that and accumulate that and make that money work hard for you. So business is such a great asset. So let's talk about business a little bit more. And, you know, again, in your book, it's really a great short, short read, but there's some key points in there. So, you know, can you share with us maybe, you know, just a few of the key lessons you think, that are kind of relevant to the conversation we're gonna have today, Robin?
Unknown Speaker 11:30
Yeah, 100%, I'm going to build very quickly on that quote, because there's like a modern day version of that quote, as well now, which you can apply to any business, because the most common problem I hear a lot of business owners say is I've got a cash flow problem, okay? And the reality is, they never have a cash flow problem, because cash flows into the business, it flows straight back out. So the reality is, like small business owners really need to, yes, they need to focus on making more money, but the wealth build part of it is they need to have how do we keep that money? And how are we able to sort of reinvest that money back into our business or through our own personal finances, in order to then sort of, you know, keep on accumulating that wealth? Be I think, 99% of business owners that it's easy come easy go in, and it's out. And that's it, I've got a cash flow problem, but it's not, it's it's not nothing to do with cash flow. But yet in terms of the book, so we, there's kind of three really key takeaways in there. So probably the best place to start is around. Too many business owners start up the business because Mum, Dad, the brother, whoever says, oh, that would be really great idea for a business, why don't you go and do it, and they start doing this thing without much of a plan, you know, certainly when it comes to, like, you know, just running the business, but have absolutely no idea when it comes to the finances most business owners when they first start, so we have a very simple model around sort of how to set financial goals for your business, that ultimately creates a very simple business model for the business owner to sort of, to follow. And, and ultimately, that's then what leads on to sort of the the productization, and the pricing side of things. But just to give you an example, imagine if a business owner, and I know that with wealth builders, one of the things which you do is you you get people to focus on what's your what's your monthly goal for yourself, how much money do you need to earn in order to create financial freedom, okay, so it's a very similar principle that we teach in fearless about your business. So if, for example, you'd worked out that in order to have a sustainable business, you need to earn 100,000 pounds a year, and maybe the widget that you're selling, you know, whether it's a product or a service, but let's call them widgets for now, or 1000 pounds, where you divide one into the other. And it means that you need to have 100 units of capacity to be able to deliver those 1000 widgets in order to make 100,000 pounds a year. And it's, it's quite amusing. When I give people a very basic calculation like this, and they go, I can possibly deliver 100 units, that's just ridiculous. I don't have that much capacity, or time or money or whatever it might be. So very quickly, we've got a litmus test for how productive how successful that business is going to be in achieving its goal. And it's, it's at that point where we then start to get into sort of the nitty gritty of Right, well, if we can't sell 100 widgets at 1000 pounds, well, how do we sell 20 widgets at 5000 pounds? And and that's where we start to have a lot of fun.
Unknown Speaker 14:16
Yeah, absolutely. So okay, so you've touched on their pricing productization. And let's, we've got to pick, I guess, an avatar to kind of talk to now. So we're assuming someone's already kind of in business, right? They're up and running. But you know, things are not going as as well as they they want. So what are some of the first places that you sit down, you start diving in and start really understanding about how they've gone about pricing their products and how they're selling their time? Perhaps you know, whether they're selling their time by the hour still and is that a good idea or not such a good idea?
Unknown Speaker 14:52
Gosh, there's about six questions in there. Right? I work through them piecemeal as best I can. So one of the first mistakes that I see people making as they look at their competitors. So whether irrespective whether it's a product or a service based business, so I want to make this relevant to as many people as we can, they'll like and by the way, it's the right thing to do go and look at your your competition, see how much they're charging, but the mistake is assuming that how much your competitors are charging is actually going to work for your business. Because it might be that those people are maybe charging below market value. And if you charge the same, you could end up losing money as a result of it. So if you're at the cheaper end of the spectrum, and, and obviously, the goal in business is to make profit, it's not, we don't want to be running a business at a loss, because I'm going to go out of business fairly soon. So if a competitors that are all, you know, scrapping at the bottom, charging as little as they can, because they think that's how to attract clients, that business model may be fundamentally flawed for ourselves. how this plays out, though, for service based businesses, when you start to move into the time for money sort of trap is that, well, I have a belief that actually charging by the hour is fundamentally unethical. Okay. And the best way to explain this is go back to my agency days with web design. And I'll give you an example of three different web designers. Okay. First one is guy called Dave comes along, and he's like, I'm going to build you a krisztian, the best website I possibly can do, I reckon it'll take me 20 hours, and I charge you 50 pounds now and you go, Okay, that sounds reasonable. off he goes, he comes back three months later, because he's not charging enough. He's used up all his capacity, it takes ages. You look at the site and go, well, hang on. Dave, you said you were going to put a blog on there and a shopping cart? like where are those things? Sorry, Christine. By the way, I've used up your 20 hours. So if you want those on there or cost you another 10 hours at 50 pounds now, is that okay? You're thinking, no, I'm not so happy with that. Right? So. So that's Dave. Steve comes along, right? Steve's brilliant at building websites for doing it for years. But he doesn't know what Christine and Robin know about pricing. Okay, so he's also charging 50 pounds now. But he's brilliant at what he does. So in a week, he comes back and he says, Here's your website's got the blog, it's got the shopping cart on it. And this will generate your reckon, you know, five to 10 leads a month, no problem at all for your business. But it only took him 10 hours. Hang on a second. So he's getting paid a third of what the less experienced, poor quality website guy is delivering. Like that just doesn't make sense. It's like unethical because like, Steve should be getting paid not a third of what this guy's getting paid, but triple what he's getting paid because he gets better results. And then we have the third person right? Trisha comes in Trish has like a website ninjas doing it for years, she has guaranteed results and what she does, she could not listing out the park in 24 hours, within 30 days, it will be generating 50 to 20 leads for your business guaranteed, okay. And if she can't deliver that for you, Christine, she's going to give you a full refund, plus, she's going to pay you 1000 pounds for wasting your time. Okay, now ask me how much Trisha is websites are?
Unknown Speaker 17:55
Well, how much would that cost Robin? That 10k? Hmm. Well, there's a pretty solid guarantee that comes with that, right? So now she delivers,
Unknown Speaker 18:04
you get the money back. And you can go and spend it with Dave or Steve, if you want to. Okay, so and this is where a lot of people get caught out? Well, first of all, you can see that hourly rates just don't work, it's much better when you can, you have a product which delivers a really clear and specific outcome over a clearly defined period of time. And that's like the art of productization, when you can articulate your value to that degree of like specificity. All of a sudden, it's like, it's completely transformative. Also, Tricia needs a 10th of the client's as the other two, right in order to make the same amount of money. Okay, so now, Trisha has so much more time to deliver a better quality product, and spend time putting into like being coached learning about websites learning about all the latest and greatest trends. She could afford people to come in and work in her business because you know, who may be a better at her than doing her own job. So she has more time to live is better quality product, which produces better results and more money at the back end of it. So it's kind of like why wouldn't we all charge that way?
Unknown Speaker 19:07
Yeah, absolutely. And, you know, obviously, for for a business to be a true asset, it needs to be able to work without you. So by packaging up product, productizing it, as you say, you can leverage other people and systems to be able to do that work, and it's not sitting on your shoulders. So yeah, that's the true art really, of crafting a business, isn't it that that will generate a recurring income month after month?
Unknown Speaker 19:30
Yeah, 100%. And the other thing as well is that a lot of people get caught up with this, just like they see having one core product and they put all of their time, energy and effort into that. But that's that's only part that's like half the solution. And one of one of the ways to kind of build a sustainable business with recurring revenue coming into it, obviously, is to then have some kind of logical next step, a follow on product that where possible, doesn't require as much and geographic or input in order to kind of maintain it. So, again, I'll stick with the website theme, just because I know you know very well for my old agency days, you know, you build, you buy a website and the first time, but then you have to have some kind of a care plan to kind of maintain it and update it and things like that, make sure it's still secure. And what happens is over time, that creates something called customer lifetime value. And you could, because what happens is, if you didn't do the care plans, and you just focused on that one product, you end up in something called the sales cycle of doom, okay, sell, deliver, sell, deliver, sell, deliver, sell, deliver, and, and then it's like, because you're just constantly having to get new clients in order to kind of keep you know, maintaining some money in your business. And then you know, you three that you get, you probably get burnt out, or you have to take holidays periodically. And then so sell deliver stop ups, you stop burning money, you get better, you come back from holiday, deep breath, and then off we go again on the same cycle. And so when you start to build in a follow on product, that's where you create sustainable, you know, recurring revenue, which you can then feed back into the business. And, typically, so I mean, just throwing numbers out there, a good follow on product will quadruple the customer lifetime value of the initial product. So if you sell a product for 10k, you should be able to generate over the next 345 years, it varies from business to business, but a further 30k on top of that. And, and that's that's where you end up with this, I call it like the espresso machine model of the business, okay? where people are paying in little enough Linde to one part of the business and then they have this espresso machine. And so to explain this analogy, if you look at Starbucks, next time you go in to one of their shops, you'll you probably just gone in and bought your your latte, or cappuccino or whatever it whatever it is, there may be a cake off the store and off you go. But Starbucks know that they have this, this small, solid set of raving fans, okay, who one day one of them walks into the shop, and then just happens two or three times a year, maybe a bit more often. And they they want a latte, they want a bag of beans and they go oh, can I love that I want the Starbucks experience at home, can I have that espresso machine, and they keep them on the counter. Now those espresso machines produce as much net profit as about 3000 cups of coffee, he mentioned how long it takes to deliver 3000 cups of coffee. So we actually need this like super expensive product and their espresso machines. By the way, I like double the price of if you went to get one from john lewis even or someone like that, because they know that it's got the Starbucks badge on it. So this is a branding thing, that's probably a completely different conversation. But most business owners they are lacking so much in confidence, their money mindset is one of the better word poor, it's so poor. That they they kind of would like they like the idea of selling super expensive, especially espresso machine and their business. But they're just way too afraid of it because of all of the beliefs, you know, the money blueprint, which was drilled into them as a child and the constant like people telling them that they're not worth enough. And that all comes through in their business when they try and sell things. So yeah, a lot of the work, which we end up doing is like we give them confidence around packaging up their core products, we get them focused on building like recurring revenue through sort of customer, you know, follow on products, customer lifetime value, then we start to introduce this concept, this super expensive product, and all they have to do is just like Starbucks do pop it up on the shelf, when somebody asks about it, they tell him about it, it doesn't have to be fully built fully formed as an idea. It's just an espresso machine that when somebody wants it, we sell it to somebody.
Unknown Speaker 23:37
Yeah, really good point, sir Robin, and, you know, obviously, we know that so many people to you know, get into business for, as you said different reasons, right? Maybe the business is handed down or, you know, they had a great idea. And, you know, it's just evolved and these things are not thought about from day one, are they so you can be so embroiled in the way that you are doing business that I can imagine, it's quite difficult sometimes to go in and try and unpick and unravel it. And, you know, I can I can see why looking at certain things like lifetime customer value rights, so important there. And you mentioned about like the profit boosters, just having like the espresso machine or something there that, you know, will just almost be complete profit on top of what you're already generating. But the The other thing about a lifetime customer in a knowing the lifetime customer value, is it tells you how much you can spend on acquiring a customer at the front end, right. So this comes back to the marketing piece, because probably most business owners really got no idea actually how much they can spend to acquire a customer. So any other points around that at all Robbie?
Unknown Speaker 24:41
Well, you're absolutely on the money and I go the whole rabbit hole. We could go down here from a marketing perspective, but just in terms of like, think of it it's a bit like I'm gonna see if I find this analogy in the right way. It's a bit like if you when you find a tenner on the floor on the pavement right? You get the endorphins kind of kick off, and it feels like it's like, I don't know, like, an eight out of 10, I'm really happy or, you know, I'm quite happy about this. If somebody then comes and takes that 10 pound notes out of your hand, you Converse the to that feel much worse than how happy you feel, all of a sudden, it's like, you know, when somebody takes something away from you, it's like a 12 out of 10. So how this works from a marketing perspective, where you're talking about how much it costs to acquire a client, most people just cannot get their head around the concept of being in debt almost to acquire each client. But knowing like, So say, for example, if it costs us, maybe we're selling a monthly subscription to something, okay. And we're charging 50 pounds a month for it. But so we're gonna get 50 pounds a month back time and time again, and maybe they stay for three years. So, but it costs you 200 pounds to acquire that client, you're kind of in debt for four months until you've earned the money back, and then you start earning on top of it. Most people just can't get their head around being in debt to acquire clients, they just don't, they don't get it. And there's a lot of work to do to kind of unpack that. So, but but again, there's there's kind of ways around that, especially in the service industry as well. So I mean, SAS products, subscription products is one model, you've got traditional sort of physical products, you know, on Amazon, businesses, for example. And going into shops, and service client businesses, though, there's, there's a way that we can kind of overcome this. So if we can get used to selling as a super expensive products, most service business, let's let's say we had a, I'm throwing out some random numbers. So apologies if people aren't keeping up with the numbers. But let's say for example, as a coach, I were to sell a program for 3k. Okay. And that's a six month coaching programs, the mistake most people make is they just take 3000 pounds and divide it by six. But if it's costing 900 pounds to enroll that client in the first place like that, again, that debts there. So actually, what we do is we Front Load the investment for that client. So we might take 1500 pounds as an enrollment fee. So we're immediately cashflow positive. And then we space out the rest of the the other 1500 pounds over, say, five months. And again, like you can get when you start to understand how money works. And especially in a business you can get really creative about. I call it reducing friction in the sales process. And this isn't just for the customer, it's also for the service provider, you can get really creative about offering payment plans and things like that, and how you get people committed to how you get more committed clients and things like that. Think about it, if somebody is paid 50% upfront for a service, they're going to be really committed to getting the best results out of it. Because if they try and walk away partway through, they're walking away from a big lump of cash. So again, it's like, there's so much when it comes into sort of money, managing money within the business,
Unknown Speaker 27:52
and money mindset as well, which is a whole different conversation, which maybe we can revisit another day. But, you know, mindset is absolutely step one in our roadmap where we help people to, you know, become financially independent in their thinking in anything, right? Where do you believe you can really believe you can't you're right is, is generally where the starting point is. So another person that I know, we both admire and follow john warrillow, he wrote the automatic customer, he was a guest actually on wealth talk as well back in Episode 37. And again, coming back to this whole productization of, you know, you've really got to think of how you can take what you do package that up and create a product from that. And again, I mean, I think you know, we want to stress that point enough today Don't be that, you know, that really is the way forward if you want to release yourself from the day to day, you know, running in working in the business as opposed to on the business.
Unknown Speaker 28:44
That's john john warrillow talks about three levers with a product when you when you move sort of with with the service when you productize it that and there's tons of other examples, well rich Lippmann in the coaching space talks about exactly the same. So what they say a product should do, it should deliver a really clearly defined outcome or results. So really specific outcome or result for the client over a clearly defined period of time and for a fixed fee. And the trouble is that this is where you start to then tip the balance into the mindset side of it. A fixed fee for a six month coaching program. 3000 pounds, for example, sounds like a big number to a lot of people. And how we how we sell services products is reflected often in how we buy it. So if when we hear 3000 pounds, we think that's a big number we get really petrified of saying that big number. So where I kind of start to shift on from sort of john barrows, were thinking around productization is that we have to pick numbers, not that are just inside our comfort zone, but just outside it and start to validate those, those numbers. So to give you an example. Again, I'll stick with the web design example. So if Somebody was going to spend, you know, sell sell a website for 20 hours at 50 pounds an hour, they'll they'll say that it's 50 pounds now because 50 pounds is small, it's a little number, it's not that big a deal to most people say save 20 pounds, 2020 hours at 50 pounds an hour. So the first step is we say, right, well, you need to get comfortable saying the big number. Okay? So when you go and pitch the next time, the next 10 people you pitch to you're gonna pitch it 1000 pounds. Now the price isn't any different. Okay, it's no different at all. It's just getting comfortable with that big number. And it's normal. It's just a number. It's just money. It's like an ethereal thing doesn't exist. Like, why are you giving it so much power? Why are you being so afraid of it? And the reason we go just outside our comfort zone is because as we all know, you don't grow unless you're just outside that comfort zone, like growth comes through pain, you know, and fear, like overcoming those fears. So we go just outside that comfort zone. Now when I've got a client's to a point whereby they're comfortably pitching 1000 pounds, right, we're ready for step, the next step, okay. And it's, it's super simple, all I do is an auction with them, okay? To establish where their next level of fear is. So we'll go 1200 pounds, 1500 pounds, 1800 pounds, and they might wink or do a tick or a towel or something like that, at that point. It's his body language, like, like you see in poker, you know, everybody has to tell, so I know when they've hit their limit. And so okay, 1500 was just inside your comfort zone. 1800 was just outside it. Now go and pitch 10 people at 1800 pounds, or I'm not sure I can do that. Okay, well, let's work 2000 Why isn't going to work at 1800. Okay, and I have a really fun game at this point, which I play with my clients. And it always makes people laugh. So I say to the list, if you go and pitch it to 10 people at 1800 pounds, because I only take on clients, I really believe in the products or their services that they're selling. I don't take on clients for anything, I can help them or I just don't get their products, right. So I would always bind my clients products. I said, Listen, if you pitch 10 people, you can prove that you pitched 1800 pounds to 10 people, and nobody buys it. I'll buy coffee, so at least you got one customer off the back of it. And like straight away, they're like, Oh, well, it's no problem. There's no jeopardy. nobody's taking the tenner away from them. It's like it's a win win. At that point. It's got nothing to lose. Have you had to buy any yet? No, never turned 50 clients through the program. And we've not yet had to pay somebody for that for their services? Well, I have but only out of choice because I want to work with them to get him to help me with something. So So and what typically happens as well, like clients are like buses. So you can't predict whether, like, you know, and they'll sell to three or four out of the 10. So 20 to 30% conversion rate, right. But you can't predict whether it's going to be the last three or the first three. So we just have to get them to like stand firm like Braveheart, you know that seems like hold, we have to get them to stand firm at that price point until they get their first Yes. And it's remarkable the amount of times I've heard, Robin, you'll never guess what somebody said, Yes, I can't believe how easy it was, I've already put my prices up. So I didn't even have to hold them to like because because this process happens quickly, like most business owners will have leads coming in and inquiries coming in if they're doing the marketing correctly. So they'll typically have 10 or 20 pitches in the first four to six weeks, so that they're validating at a higher price point. And that's, that's the third step we validate. So great, we've got somebody to say yes. And then we iterate every four to six weeks, let's put the price up, put the price up, put the price up until the needle fall somewhere in the middle of about a one in five to one and three conversion rate. And then as their confidence grows, the conversion rate increases. And then we go over the one in three. And I'm like, right, put your prices up. And we just keep on playing the game of business
Unknown Speaker 33:38
just really is a combination of different systems, isn't it? You know, you've got just small 1% increases here. And there. It makes that difference to the the overall output. And yeah, the more I learn about it, the more it is just about systemization processes. And yeah, it's having fun with it is there it's about having some fun as well. And so the final point I want to pick up on is something I know we've talked about as well. And that's where people place discounting. What are your views and take on that then Robin?
Unknown Speaker 34:12
Yeah, so um, so my view on discounting is like you never discount your core product that you're selling and the reason or even the following products and the reason for that. So the Chartered Institute of Management accounts looked at a whole huge amount of, you know, sort of hundreds of 1000s of businesses and that their data and they worked out that because most people assume if you do a 10% discount, you've only got to sell 10% more of the same thing to get the same net profit. But actually it's the money trickles down through the profit and loss account. So with overheads and expenses, your costs. There's actually this compounding effect which happens and you'd need need need to speak to a chartered accountant to for them to explain it probably in more detail. But the reality is a 10% discount actually means for the average business you've got to sell 25% more of the same product make the same net profit So there's this and that and you then go up to 15% discount, all of a sudden, it's, it's 50% more, by the time you've hit a 20 25% discount, you've got sell double the amount of stuff, imagine doubling amount of effort to make the same profit on the bottom line. So discounts are incredibly like they erode profitability massively. There's one caveat to this, though, because I say this because you mentioned it earlier about the cost to acquire a client, okay? You can discount an attraction offer. Okay, so let's take coaching, for example, if if you had like an event that you were selling normally 400 pound a ticket, you could do an attraction of where you'd sell that for like a 50% discount to get somebody through the door, that costs you 50 pounds, okay, so it's not terribly expensive. If you know how much each client is worth to you, great, you know, you're going to be in the profit if you know your numbers. Whereas conversely, if and this is what a lot of unfortunately, a lot of service businesses do. They think if I sell more coaching sessions, I'll offer a discount on that. So imagine a three, again, a 3000 pound coaching product, right? Where you offer a 10% discount, because they bought six months in advance rather than per session. Okay? That's just cost you 300 quid, right. And then if you've then now anchored them to that price, they expect that discount ad infinitum, there's like expectations going on here. So, so never discount your core product, because it just erodes massive chunks of profitability. Because, you know, 300 quid is a lot of money, you know, you put that into a compounding, you know, dividend yield over 10 years, and you'd be surprised at how much that gets back for you, for example, or into a new marketing campaign to get more clients. It's like for a business that 300 pounds is a lot of money, versus 50 quid to acquire a client, like it makes sense to discount to attract, but not only core product.
Unknown Speaker 36:48
Well, thank you for clearing that up. And I think there's probably a whole heap of stuff, we could continue talking about Robin. But we're coming towards the end of our conversation for today. And I really enjoyed it. Thank you for sharing some of your insights. And we mentioned your book at the beginning, Robin, take your shot. And I can see behind you you've got more than one book on the shelf there. But there's some great nuggets in here and you've offered wealth builders wealth talk listeners, a free copy. So how would someone go about getting a copy of this Robin?
Unknown Speaker 37:18
Yeah, absolutely. So just for your listeners, they can head on over to fearless dot biz forward slash anti white s for take your shots or click on the Resources tab. And if they're based in the UK, I'll send them a signed copy of it as well. If it's overseas, sort of outside of the UK or just be PDF but hopefully there's still a ton of value in getting hold of that PDF but yet Phil stop is for slash t y s
Unknown Speaker 37:40
Excellent. Thank you for that and I highly recommend you go and grab a copy of that. And if someone wants to just check you out online Robin and kind of follow you on the socials. Where should they head?
Unknown Speaker 37:50
Yes, I'm showing up quite a lot in clubhouse at the moment. So you can just go and search for me Robin Waite and clubhouse and or Instagram connected me on LinkedIn as well. I'm there regularly. The only thing I don't tend to do very often is my email. So that's the worst place to go to me. But Instagram LinkedIn clubhouse, definitely.
Unknown Speaker 38:06
Fantastic chatting with you today, Robin, and we'll catch up again really soon. It's an absolute pleasure, Christine. Thank you. Right, okay, lots and lots of different points that were discussed there. So good sort of overview of all the different ways that someone can stop trading time for money in their business, Kevin. So before we start dissecting that and pulling out some of the wealth building points, let's head on over to trustpilot. And one of our latest reviews is from DOM and Dumber said peace of mind and money saving advice. Having listened to wealth builders podcast for a few months, I decided to take action and review my foundations and roof. I had always thought I was on top of my bills and costs, changing insurance providers regularly. However, one thing I hadn't done was review my life cover versus what was actually needed. My wife and my life cover was a decreasing policy on our old house, I think he means his wife and his life cover there. And so they took out more appropriate cover over two and a half times more and have still saved money. So some valuable free advice. Thank you from Don,
Unknown Speaker 39:15
there you go. So you know we're we're quite comfortable if people pick out lessons and then apply those lessons themselves. But as we know, compounding is the real key to wealth building. And compounding means taking lots of different actions, planting lots of different seeds all of which will lead to future fruition. So what will be interesting from DOM is saving the money is one thing but what did he do with that money that helped him build wealth now good. Always good to get any insurance that you need and not waste money on insurance you don't need and that's definitely covered in debits. The area we talk about a lot in wealth builders, but there's also an E You'd probably signpost this, Chris, for those who are business owners, and Robin, his message is really predominantly business owners that business owners themselves can get live cover with the premiums paid for by the tax man. So in other words, the company pays the cost, and then you get tax relief on the on the cost. And on average, it's about a 50% reduction, which means, you know, if you need live cover of x, you can get to x for the same price because the tax man's paying in so that's something called relevant life to specialist type of insurance for business owners. Definitely, if you're a business owner, and you're not heard of that, get in touch with us at wealth builders, because we've got a guide to that question. I'm sure you could sign posts and podcasts about that as well.
Transcribed by https://otter.ai