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whether you're a freelancer trying to
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start a small business or a business
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owner looking to build something you can
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sell your goal is the same you want a
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business that runs smoothly without you
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when your business runs on its own it
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becomes a valuable asset you'll have
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choices you can take vacations explore
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new hobbies or just relax freedom is
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something that every small business
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owner dreams of including myself while
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looking for ways to get that kind of
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freedom in my business I found this book
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built to cell creating a business that
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can Thrive Without You by John wo John
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shares his lessons through the story of
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a small business owner named Alex
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Stapleton I will share 11 of those
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lessons that really stood out to me meet
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Alex Alex owns a company called the
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Stapleton agency he offers lots of
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different advertising services and has
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plenty of clients but there's a big
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problem Alex is doing almost all the
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work himself because his clients only
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want to deal with him
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Alex is tired he's always running from
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one problem to the next his employees
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they're below average they're not good
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at what they do and then there's the
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money one month he's making good money
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and the next he's struggling to pay the
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bills when Alex started his agency he
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dreamed of hiring the best people paying
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them well getting bigname clients and
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one day selling the business for a lot
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of money in reality he's dealing with
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average employees tough clients and
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stress that never goes away his income
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it's all over the place up one minute
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down the next Alex was frustrated and
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tired of all that and decided to sell
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his company he turned to Ted Gordon for
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advice Ted was a family friend and a
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Serial entrepreneur who had started
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built and sold four successful
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businesses if anyone could help it was
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Ted they made an appointment and Ted
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asked Alex why he wanted to sell his
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business Alex talked about his problems
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with his clients his average team and
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how clients always wanted to deal with
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Alex himself he also complained about
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his inconsistent cash flow Alex was
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shocked when he heard what Ted said next
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Ted said that his business was worthless
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and he wouldn't be able to sell it Alex
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was devastated he'd spent eight years
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building Stapleton agency and now the
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man he most respected in the business
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told him it was worthless Ted explained
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that the number one mistake
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entrepreneurs make is to build a
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business that relies too heavily on them
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as a result many business owners find
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themselves trapped in an unsellable
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business customers constantly ask to
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deal with the owner the cycle repeats
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and the owner stays stuck a business
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reliant on its owner is unsellable even
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if it's profitable but Ted added that if
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Alex wanted to create a business that
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could run and Thrive without him he'd
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need to make some changes it wouldn't be
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easy but Ted could help him Ted asked
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Alex if he was prepared to follow his
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advice Alex said yes and they agreed to
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meet every Tuesday at 9:00 in the
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morning Ted's first tip isolate the
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product that has the potential to scale
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Ted gave Alex his first assignment he
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asked him an important question a
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question every entrepreneur needs to ask
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what kind of projects are you really
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good at the reason Ted started with this
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question is because the first step in
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creating a business that can Thrive
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without you is identifying the right
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product to sell and the right product is
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the one that has the potential to scale
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scalable products meet three key
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criteria they are teachable valuable and
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repeatable teachable means you can train
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others to build and sell them valuable
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products are something your customers
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will pay for because they solve an
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important problem for them repeatable
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means customers come back for it again
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and again just like their favorite brand
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of coffee often you'll find that the
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most teachable products are the ones
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that customers value the least
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alternatively products your customers
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value the most are the least teachable
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this is normal when Alex met with Ted
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the following Tuesday he was ready with
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his answer Alex had thought about it and
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realized that their best work was
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designing logos they had a system they
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followed clients liked their work and
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they could charge good money because
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clients know a product logo is something
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they'll use for a long time and once
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they nailed One logo they had their foot
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in the door clients often came back
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asking for more logos as they launched
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new products Ted asked Alex to explain
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the system and in the end they came up
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with a five-step logo design process
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step one visioning step two
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personification step three sketch
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Concepts step four black and white
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proofs step five final design Ted
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recommended Alex to focus his business
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only on logos logos were something
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Alex's company was good at plus it was
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scalable Ted's tip number two don't
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generalize specialize once you find the
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right product focus on that Alex didn't
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like the idea of focusing only on logos
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he explained that he couldn't build a
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business on logos alone
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his biggest client didn't even use
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Stapleton Agency for their logos and
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most of their other clients needed many
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other types of projects Ted didn't
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sugarcoat it that's the problem Alex
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you're trying to do too many different
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things that means you need Specialists
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but you can't afford them so you're
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stuck with a team that's just average at
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a lot of things but not great at
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anything and that's why your results are
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weak if you focus on doing one thing
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well and hire specialists in that area
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the quality of your work will improve
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you'll Stand Out Among your competitors
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and you will become more efficient in
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delivering your product efficiency and
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Improvement come when you are focused on
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one thing for example there's a reason
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Southwest Airlines only uses the Boeing
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737 airplanes this way their crew can
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learn one piece of equipment and
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maintenance teams can quickly spot
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problems with one diagnostic routine to
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recap tip number two don't generalize
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specialize focus on selling one product
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or service Ted's tip number three
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diversify your client base Alex still
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wasn't convinced if they did just logos
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they'd have to stop working for mny Bank
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his biggest client Ted explained that
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relying on mny would provide cash flow
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but it would make it difficult to sell
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the company nobody wants to buy a
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business where 40% of the revenue comes
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from one company it's too risky Ted told
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him that if he wanted to sell his
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business Alex needed to have a diverse
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group of clients where no one company
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made up more than 10 to 15% of the
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revenue Ted suggested that the Stapleton
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agency become the world's best logo
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design shop he told Alex to write down
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the five-step process and start talking
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to prospects about his offer he told him
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not to fire his other clients yet but to
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start talking about the five-step logo
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design process to new prospects he
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instructed him to create a one-page
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description of his approach to creating
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logos and find 10 people to pitch it to
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Ted come back next week and tell me how
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you've made out back at the office Alex
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focused on Ted's assignment he created a
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one-page sheet and emailed it to 24
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clients he hadn't spoken to in a while
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the next week Alex reported to Ted and
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said that from 24 emails he got six
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meetings and made one sale Alex was
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super happy about the sale he added that
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he also felt more confident pitching his
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new process he felt like an expert to
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recap Ted's thirdd tip relying too
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heavily on one client is risky make sure
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no one client makes up more than 15% of
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your
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Revenue Ted's tip number four own a
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process become a product company not a
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Service Company Ted explains that when
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you own a process you're in control your
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unique process becomes your product Alex
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but designing logos is still a service
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Ted your unique method for designing a
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logo is your product you're not
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customizing your approach to solve every
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client's problem your product is your
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process which isn't dependent on
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Specialists or you a service company is
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simply a collection of people with
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specific expertise who offer their
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services to the company good service
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companies have some unique approaches
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and talented people however as long as
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they customize their approach to solving
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client problems there is no scale to the
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business and its operations are
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dependent on people this is why you need
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to own a process and become a product
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company to recap tip number four owning
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a process makes it easier to pitch and
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puts you in control this shift from
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customizing your approach for every
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client to offering a unique and consist
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method helps you move from a service
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company to a product company Ted's tip
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number five make the business
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independent of you when people are the
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main assets of a business the business
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becomes dependent on them and therefore
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not worth very much because these people
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can come and go Ted told Alex that what
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he needed to do next was train people to
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handle each of the five steps of the
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process so he wouldn't have to be the
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only guy piecing every project together
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from scratch Ted don't become synonymous
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with your company
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if buyers aren't confident that your
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business can run without you in charge
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they won't make their best offer this is
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why your job is to build the Stapleton
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agency up to a point where the business
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is independent of you to recap tip
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number five don't become synonymous with
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your business make it independent of you
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Ted's tip number six charge upfront Alex
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was worried he was expecting a big check
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from his biggest client mny and they
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were late he needed money for rent and
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payroll and a couple of weeks Alex's
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concerns seemed like music to Ted's ears
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Ted Alex these are all the more reasons
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to think of your five-step logo design
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process as a product when you have a
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product people expect to pay for it in
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advance when you go to a store to buy an
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orange don't you have to pay for it
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before you eat it we're used to paying
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for products upfront and services after
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they've been done the last time you had
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your windows cleaned the service was
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performed first and then you paid your
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bill right products are paid for before
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you use them Ted told Alex that now that
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he was offering a product instead of a
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service he needed to start charging
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Upfront for it when someone buys a
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company they look at the amount of
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capital they need to tie up to buy the
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business if your business generates cash
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they'll be willing to pay more because
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they don't have to invest more of their
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own money to run the business Ted told
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Alex that right now he had a negative
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cash flow on a typical project it takes
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four to 5 months to get paid Ted If you
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charge up front you'll get to use their
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money while you're doing the work
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imagine you have 10 clients for your
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five-step logo design process now you
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have $100,000 of your client's money to
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finance your business Alex realized that
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the more logos they sold the more cash
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they'd accumulate they'd never need a
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loan Ted and a potential buyer will look
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at your business as a Cash Generator
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rather than a cash suck had then offered
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his instructions for the week he told
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Alex to keep pitching his five-step logo
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design process this time he told him to
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include the price on the cell sheet with
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the words build upon signing letter of
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agreement when it's your product you get
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to decide how and when to get paid to
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recap tip number six avoid the cash suck
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once you have standardized your service
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charge up front to create a positive
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cash flow cycle Ted's tip number seven
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don't be afraid to say no to other
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projects the next time Alex met with Ted
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he reported that he had eight meetings
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with prospects and Spring Lake homes
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agreed to a logo for their new
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condominium project Alex added that an
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old client had also asked for a proposal
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for an advertising campaign Alex was
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tempted to accept the advertising
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campaign but Ted was strongly against it
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Ted Alex if you're going to commit to
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creating a business that can run without
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you and can be sold you need to stop
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accepting other projects even if you
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need the money clients will never know
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you're serious about your five-step logo
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design process until you say no to other
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work if you're going to be the world's
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best logo design shop you can't also
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sneak in a few ad campaigns it's why
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heart surgeons don't set broken ankles
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Ted explained that if Alex turned down
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other projects and favor of promoting
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his five-step logo design process he'd
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instantly become more referable when you
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offer a general service like advertising
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or marketing people will have trouble
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describing why you're special because
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you'll be just like everyone else if
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however you're the world's best logo
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creator you'll be memorable and
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referable Ted assured him that for every
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advertising project he turned down he'd
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win a logo project to recap tip number
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seven don't be afraid to say no to other
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projects even if it's very profitable
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prove that you are serious about
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specialization by turning down work that
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falls outside your area of expertise the
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more you say no to people the more
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you'll get referred to those who truly
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need your product or service Ted's tip
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number eight two sales rep are better
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than one Ted explained that if Alex
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wanted to show that he had built a
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valuable company he would need to show
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that he wasn't the only one who could
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sell logos Ted told Alex that he needed
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to hire two sales reps to start he
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explained that salespeople are
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competitive and will compete with each
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other and this meant more money for them
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and for Alex plus two sales reps would
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signal that you have a scalable business
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model not just one good sales rep Alex
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wondered how he could find one
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salesperson with experience selling
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logos no less two of them Ted's tip
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number nine hire people who are good at
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selling products not Services Alex
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interviewed two prospective sales reps
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the first one was Blake he had attended
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a prestigious University and for the
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past two years worked at a big
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advertising agency he also interviewed
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Angie Angie had been a top salesperson
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selling mobile phones she reached the
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top 10% of sales reps nationally the
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next time he met with Ted he described
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these two candidates had recommended
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that he hire Angie Alex wasn't convinced
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Blake was well educated his father knew
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many CEOs in town and he worked at one
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of the top agencies in the country Ted
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explained that Blake was used to working
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in a service business he was good at
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Custom Tailoring Solutions Blake would
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try to convince you to tailor the
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five-step logo design process to meet
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each client's unique needs Angie however
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was used to selling products a product
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salesperson doesn't have the luxury of
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changing their company's product to suit
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a customer's need instead they try to
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make their product fit the needs of the
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client Ted that's exactly the kind of
00:14:35
person you want selling your product he
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hired Angie who recommended another
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sales rep she had worked with before
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Sheamus together they made a great team
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soon Angie had sold her first logo Alex
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was thrilled not only had he built a
00:14:50
process others could deliver but someone
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else other than he could sell it later
00:14:55
that week Alex told his biggest account
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that he would no longer accept projects
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other than logos it was a big decision
00:15:02
but he felt it was the way to go if Alex
00:15:04
kept doing work other than logos he
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wouldn't be giving his new process a
00:15:08
chance to thrive time proved him right
00:15:11
the next month Alex reported to Ted that
00:15:13
Angie and Sheamus had sold 27 logos to
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recap tip number nine hire people who
00:15:20
are good at selling products not
00:15:22
Services Ted's tip number 10 estimate
00:15:25
your Market potential Ted explained that
00:15:27
to sell his business Alex needed to
00:15:29
demonstrate to a buyer that he had a
00:15:30
sales engine that would produce
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predictable recurring Revenue to do this
00:15:35
they had to figure out how many sales he
00:15:37
needed to drive his sales engine they
00:15:39
also need to know how many companies are
00:15:41
in their target market Ted did a little
00:15:43
research online and discovered there
00:15:44
were 210,000 businesses within a 100
00:15:47
mile radius he figured that about 58,000
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of them earned enough to afford Alex's
00:15:52
$10,000 logos until now Alex had closed
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two out of the 80 prospects he'd
00:15:58
contacted this represented a 2.5 closing
00:16:01
rate with a closing rate of 2.5% and a
00:16:04
market potential of 58,000 he could sell
00:16:07
1,450 logos assuming One logo per
00:16:10
company which is conservative given that
00:16:12
most companies create logos for new
00:16:14
divisions and products regularly Ted at
00:16:17
$10,000 per logo that's $14.5 million in
00:16:22
Market potential here in town and we're
00:16:24
not even counting how big you could grow
00:16:25
if you opened offices in other cities
00:16:28
Alex smiled Ted explained that potential
00:16:31
buyers would want to see the model for
00:16:33
his sales engine including how many
00:16:35
opportunities he had and his historical
00:16:37
closing rate Ted was sure they'd love
00:16:39
these numbers to recap tip number 10
00:16:42
determine how many prospects typically
00:16:43
turn into sales this figure is crucial
00:16:46
when selling your company as it helps
00:16:48
potential buyers estimate the market
00:16:50
opportunity Ted's tip number 11 use
00:16:53
product oriented language in the next
00:16:56
meeting Alex reported that things were
00:16:58
going quite well an old client Natural
00:17:00
Foods had returned for a logo for their
00:17:02
line of organic chocolate milk Ted
00:17:05
there's something I want you to think
00:17:06
about I noticed you used the word client
00:17:09
to describe Natural Foods I want you to
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replace the word client with the word
00:17:15
customer when you talk about the
00:17:16
companies that buy your logo process
00:17:18
Alex why does that matter Ted explained
00:17:22
that service firms refer to their
00:17:23
customers as clients and product
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businesses refer to them as customers
00:17:27
using words like client signals that
00:17:29
Stapleton agency is a service business
00:17:32
rather than a product business with a
00:17:33
standard and repeatable process a
00:17:36
product business is more valuable and
00:17:37
sellable buyers no processes are in
00:17:40
place and the company can run without
00:17:42
you this will get you more money when
00:17:44
you sell it Ted also recommended that
00:17:46
Alex stop calling the Stapleton agency a
00:17:49
firm and start referring to it as a
00:17:51
business instead Ted said it was
00:17:54
important to communicate to a buyer that
00:17:55
Stapleton agency is a real business not
00:17:58
just a collection of service providers
00:18:01
this was the last tip I learned from
00:18:03
this book in my opinion of those 11 tips
00:18:05
we just discussed the most important and
00:18:08
the hardest one to implement is tip
00:18:10
number five make the business run
00:18:12
independently of you until you achieve
00:18:15
that you don't have a business you just
00:18:17
have a job and it's the worst kind of
00:18:20
job if you want to make your business
00:18:22
run like a well-oiled machine then check
00:18:25
out the video you see on your screen
00:18:27
it's the summary of a book titled the
00:18:28
the emth Revisited thanks for watching
00:18:31
and I hope this was a useful video
