5 Strategic Disciplines to Build a $100 Million Company | Exponential Growth Secrets

0:00Want an A-grade business? You got to build A-grade people. You know, I often get people say to me, though, but Brad, what if I build them so good that they want to leave? I said, yeah, what if you don't build them and they stay? Because a big part of getting to 100 million is working out what you don't do anymore. We don't accept customers below this level. We don't sell any of those products anymore. Every$100 million company that I find excels in these five areas. The way I teach it, the way I'm going to teach it to you here today is do the work once, get paid forever. The five strategic disciplines of a$100 million company.

0:31In this episode, I'm going to go from strategy to mission and unpack the five core disciplines that define every$100 million exponential growth company and how to strengthen your weakest link. So there's five strategic disciplines to hit$100 million, okay? To be a$100 million company, which means you're a$100 million entrepreneur, you've got to learn these five core disciplines, then you've got to rate yourself now and then work out how we're going to get there. I'm going to teach you these five disciplines throughout this podcast. Every interview I do, every time I get on here with you, we're going to learn more about the five core disciplines.

1:04So every$100 million company that I find excels in these five areas. You miss one and it grows slow. Now, when I wrote the book on this, Pulling Profits Out of a Hat, Monty and I did two years to put that book together, studying our clients that had exponential growth, meaning they had year on year on year on year, exponential multiplied growth. And if you want that, then you got to stay tuned and follow these five core disciplines. Number one discipline is strategy. Okay, so what is strategy? I break strategy down into four things. And when you think about most business people have never been taught strategy, they've been taught how to work to focus on the product, focus on the service, marketing, that.

1:46But the strategy is more about the actual business model. What do I mean by business model? Well, franchising is a business model. Licensing is a business model. The rental business is a business model. Distribution is a business model. Multi-level marketing is a business model. Online, subscription, membership-based. These are all business models. Now, how do we break it down so that we can select the right business model for you? How do we get the right strategy? Four areas. The first two key areas will help us decide the business model. So what do I mean by that? Well, if I'm looking at a normal business, what I see in a normal business is that it's X times Y.

2:28What do I mean by X times Y? X is the main business. So let's use McDonald's as an example because Ray Kroc found McDonald's. He found the McDonald brothers had X. They had a model for a business that was designed by the McDonald brothers, the quick service system, which they also happened to have sold to Taco Bell and Burger King. So three of the biggest food companies in the world built off that one system from the McDonald brothers. So they had an X. X was a store. Now, your X might be a million-dollar business or a$10 million business. Y is in how many locations does it need to be in? I'll explain that a little further.

3:07If we go back and read Bent Flyberg's book, which is how big things get done, what he said was to build an amazingly large thing, you've got to modularize it. And so what's the module type thing? If you're building a, like when people do Olympics, they ran overtime over budget because they'd never done it before. It was the first one they ever did. But if I'm building, say, a roadway, it generally runs on time on budget because I lay this layer and then I lay this layer and then I do this. If I'm building a solar farm, I take a two inch by two inch solar panel. I click that together with another one and another one.

3:38And I, it's modular. When I build a hundred million dollar company or a billion dollar company, what I do is I modularize it, meaning if you're in one city and in that city you're doing 10 million a year type thing, let's say you're a construction business. In fact, two of my clients, Jay, those guys had a$40 million a year construction business. We did the research. Once a year, I invite 10 companies to Vegas and I have five days with them and I help them plan a billion dollar company. Well, Jay and Chris did the evaluation and we worked out because they're in Asheville, North Carolina, we worked out that there were 83 cities.

4:14When I say we, they did the research. I guided them on the research. They did the research and worked out there were 83 cities like their city, okay, where they could build$40 million operations doing construction the way they were doing it, building new homes and renovating old homes type thing. So when we did that evaluation, we worked out X was a$40 million operation. Y was 83 cities, well, 84, the one they're in plus 83 more cities. So you look at it and you go, well, hang on, they've got a three point something billion dollar plan because they've done the research. So strategy comes back to that.

4:49Here's the two main points of strategy that helps us define what business model will work for us. Number one, leverage. Leverage, my definition of all the mathematical formula is divide to multiply. Okay. So you divide something down into its small parts and then you multiply it up. When H.J. Heinz and company built the first ever production line, essentially what he was doing was dividing to multiply, divide the task up, multiply the end result. Now, that's the first way I learned leverage. The second way was ever more with ever less. The way I teach it, the way I'm going to teach it to you here today is do the work once, get paid forever.

5:25So do the work once, get paid forever. So if you want leverage in your business, you've got to get into a business where subscription, membership, there's ongoing money. You get a customer once and keep them coming back forever. If you use, say, Apple and Microsoft as an example, you got Microsoft over here. Bill Gates went and built a piece of software. He built it once and sold it millions of times, now billions of times, obviously. And in fact, they don't even sell it to you anymore. You have to pay a subscription or ongoing licensing fee to use the Microsoft products these days. On the other end of town, you had Steve Jobs who built a computer.

5:57Now, as a computer manufacturer, not a bad business, but you make it one time, you can only sell it one time. Once you've made it and sold it, it's sold. Steve Jobs went off, ran Pixar. What did he learn at Pixar? Well, amazingly, not only did he learn how to be a great manager and leader, but he also came back to Apple having learned leverage. Do the work once, get paid forever. You make a movie one time. Like they made Toy Story. They made Monsters, Inc. They made all these movies. And how many times could they sell it? Millions and millions. How many ways could they sell it? I call that the Disneyfication of a business.

6:30Disney's a genius at their stuff. like the mouse you think of how many ways disney sells you the mouse they sell it to you over and over multiple times subscription based with hulu and disney plus and espn disney is a genius at this whole thing of do the work once get paid forever in fact jobs he's a genius at it because when he came back to apple not only did he bring his software back because they needed that he cut down all of the things they were doing that were not necessary like 300 products down to like 10 or 12, I think it was, in the beginning. So core focus on what they needed to do, because a big part of getting to 100 million is working out what you don't do anymore.

7:08We don't accept customers below this level. We don't sell any of those products anymore. We don't do all the fluffy, stupid stuff that just, you know, 80 % of things have to go away if you want to make it to that 100 million or the billion dollar business type thing. So Steve Jobs come back, and this is why he's a genius and I'm not there yet Steve Jobs come back and says why don't we do the work never and get paid forever like they didn't make any music but they get paid for all of the music through their iTunes platform and people like well aren't they genius iTunes that well really what they did is Sony had invented the mp3 player they packaged it and marketed it properly that's how good marketing can be and we'll get to more of that in future episodes but on top of that they went and said well they got iTunes yeah it's amazing Napster take take the best of all of those things build it into something amazing and jobs here he is do the work never get paid forever to the point where they even went and bought beats because they wanted to subscription music with you type thing because Spotify was coming in and taking on the market so lots of lessons in all of that leverage second part scalability my definition of scalability is the next sale costs less and is easier.

8:18Next sale, cost less, easier than before. If it gets harder as you get bigger, you don't have good scalability in your business. Now remember, I have two-day programs on all of these different things. Jump on the website, follow through, get the knowledge, do what you need to do. If you want to scale to a million, jump on my million scale program. You want to scale to 10 million, jump on my 10 million scale program. You want to get to 100, jump on my 100 million scale program. You want to go for a billion, then apply to be in that program. That's application only on those ones. So leverage scalability.

8:50The two other parts of really getting yourself into a right business strategy is opportunity and marketability. Opportunity is the size of the market. There's no use, like you can't build a hundred million dollar business if the total market size is a hundred million and there's seven competitors type thing. You got to get into something where there's billions and you might have to take 10, 20 % market share to be able to get to your 100 million type thing. That's market's opportunity size. Marketability means the product or service sells itself. Like I was in the commercial cleaning business for a long time, great partners in that business.

9:25Thanks guys. That business I love because I don't need to convince you to buy commercial cleaning. You know your office or your gym or your hospital or your school needs cleaning type thing. You just got to decide who do I buy it from. So marketability means the product or service sells itself type thing. So that's strategy. That's number one. I'm going to race through the other four because I'm going to cover them in more details in future podcasts. Number two is biz dev, okay, business development. Here you've got to look at not only your marketing, you've got to look at your sales and you've got to look at your customer experience, okay?

10:00So how do we get leads and prospects to buy? How do we convert them? And how do we keep them coming back forever and ever? Never want to lose a customer again. How you onboard them, how you induct customers determines that lifespan of that. Strategy three is people, okay? The discipline of people. You got to recruit, induct, train, build A players, okay? You want an A-grade business, you got to build A-grade people. You know, I often get people say to me though, but Brad, what if I build them so good that they want to leave? I said, yeah, but what if you don't build them and they stay? Oh, you've got to build great players.

10:35I remember I did a speech in Ireland one time and I was the speaker and the speaker behind me was Sir Richard Branson. It was like, yeah, the Australian convict and then there's the sir. You know, it's like kind of fun. But he was asked a simple question. He said, don't you ever worry about building your people so they'll leave? He said, you've got to build people so they're good enough that they can leave. But you've got to run a company with a culture strong enough and the company with opportunity enough that they don't want to leave, that they want to stay. Very important part. Discipline four is execution.

11:07Now, execution comes into many things, but when you look at it, it's the finances, okay? Because the numbers are gotta be a big part of execution. It's the systemization that you have, very important part of it. You know, when you go to leadership, it's about, when you go to people, it's about leadership. When you come to the discipline of execution, it's about management. Remember, in my world, management is competency and productivity. Leadership is passion and focus, okay? They stay focused on those different aspects of it. And the fourth part of execution, so when we look at it, planning. Planning has got to be a big part of execution.

11:43Systemization, planning, finances, management. That's how you get execution to happen. I don't know what happened. Somewhere in the late 80s, early 90s, management became a bad word. And then all of a sudden, in the late 90s, early 2000s, we're getting all these books on execution. Why? Because we killed off management. I ask the average business owner, how much have you trained your managers? And they look at me like I'm stupid or something. What do you mean train my managers? Yeah, you've got to train them. Install a management system, which is paperwork and meetings. If you install a great management system, I have a great video on YouTube on this called Management Versus Leadership.

12:20Okay, there was a podcast and a straight to camera video I did on that. So look that up if you want to learn more. Discipline five is the discipline of mission. The word love has to be a part of your business. Do your people love coming to work and love what they get to do? And do your customers love transacting with you? Net promoter score will tell you how much your customers love you. And people, employee engagement score will tell you how much your people love being a part of your business with you. Now, execution, your profitability will tell you how good your execution is ultimately in the business.

12:50You know, when we start looking at these different aspects, your biz dev, you're going to see it in your lead flow and your sales. It's your customer attention numbers. These are some of the things that we got to do. Mission is all about having a purpose for what you do. Great companies today build on purpose. You didn't have to 30, 40 years ago, even 20 years ago. But today, great companies that execute well and grow, phenomenal result. All right. So think about rating your business in each of the five areas. Rate yourself as an entrepreneur. How am I doing in the discipline of strategy, biz dev, people, execution, and in the strategy of mission?

13:26Learn it. Study it. Read my book, Pulling Profits Out of a Hat, my great co-author, Monty Wyatt, on that one. Learn it, focus on it, study it, because you're going to become a$100 million entrepreneur. Thanks for joining me on the$100 million podcast. If you've got value from today's episode, make sure you've subscribed and share this with all of your friends. Never miss a strategy that could change your business and your life. Remember, the fastest way to scale is to learn from those who've done it. That's what this show is all about. See you on the next episode.

14:00Thank you.