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We're talking about leverage today. And the reason that we're talking about leverage is because this is the key for you to grow and scale beyond where you are. You can have a really nice, you can have a really nice $1 million to $5 million business depending on the industry you're in, or if you're in professional services.

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You could be a sole practitioner and do a million and a half, maybe even get up to $2 million a year in annual revenue, and be just fine on your own. And that's what we would call like a lifestyle business. But you'll never be able to sell it.

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So it would be really hard unless you had entrenched client relationships who are dependent on the service you provided. It would be hard to sell that business. And if you did sell it, your multiple would be in the one to two multiple of EBITDA range.

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Because when people buy a business, they're essentially buying future profit. And a business that requires you to be around is a business that's not very valuable once you're not around anymore. Makes sense, right? So leverage is the key to growth.

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So businesses that use leverage to scale reduce dependency on the owner. And there's all sorts of leverage, okay? And we're gonna briefly touch on them. And I have a worksheet for you to take back with you.

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And I also have some notes so that you can supplement the notes that you're taking. I'll pass those out in a moment. We're not gonna talk about financial leverage today.

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We're not gonna talk about raising capital. We're not gonna talk about using bank loans. We're not gonna talk about that sort of thing.

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But we'll talk about just about every other type of leverage that you can employ. I'm gonna ask you to select at least one type of leverage to work on employing in your business over the course of the next three months, okay? And the reason we're doing this right at the outset of this year, in my experience, if you do not work on employing leverage right from the beginning, it's a lot harder to do it down the road. Think of, you attorneys, think of it this way.

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You're practicing while you go out and get the big case, you work on the big case, and then you gotta go out and get the next big case, right? If you're working on the case and then chasing the next big case, what time do you have to teach somebody to work on the case that you're working on? So the best thing for you to do is figure out a way to employ leverage right up front in your business as early as possible. So I'm gonna pass these out. Take one, let me leave one for myself.

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There we go. Take one and pass it down. This is your CEO leverage worksheet.

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And there are 40 questions on here that Nicola and I have put serious thought into that you can ask yourself to determine which types of leverage you can and should employ in your business, okay? If you wanna sell your business or if you just wanna take a vacation, you need to pay attention to what we're talking about over the next two days. Let's start by talking about how you can scale your business by employing systems and processes. You all know that one of the 10 drivers of enterprise value is standard operating procedures.

(3:20 - 3:59)
Automating repetitive tasks is one of the key ways that you can employ leverage. Technology is a great resource for you in order to make some of the repetitive tasks easier for you to leverage in your business. All of you should take the workflows that currently exist in your companies and you should capture them either through video or audio recordings or by writing things down.

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You should capture all of the workflows so that you could use that information to teach someone else to do what you do. My process for doing this is I make notes as I'm doing it and then when I screw something up, I adjust the notes and then when I'm sure I've got something that works, I do a Loom video and I record it and I save it in a file. Those of you who are not familiar with Loom, it's a screen capture program that you can also use to capture your camera as well.

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So I do a Loom video of that process and then I have it and Nicola and I have an executive assistant who lives in the Philippines and I would say, what would you say, Nicola? Seven to eight times out of 10, she takes the notes in the Loom video and she can just run with it. We don't have to even spend time with her. Some detailed processes, we'll jump on Zoom and walk her through but capturing that process that way, make sure that we have it so that we can teach other people.

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Our lead generation systems, I'm in the process of capturing all of them and the ones that don't work, I'm refining them to make sure that I have the right steps in there and the reason I'm doing it is not so that I don't forget, it's part of it, I use that stuff as a flight checklist to make sure I'm doing what needs to be done but I also use the systems and processes that I'm capturing so that I have something when we bring a salesperson on that I can teach how to do this and I can teach them the right way and not the shortcuts that I know and that I've created. Other ways to scale through systems and processes are by outsourcing non-core activities. Who here has somebody else clean their home? You know, the number one reason to have somebody else clean your home is because they do it better than you do because it's their job and they wanna be there doing it.

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If they don't wanna be there, then you're hiring the wrong person but it's their job and they want to do a good job because they want you to invite them back to do it again. You don't wanna be cleaning your house so you're gonna do a half-ass job and you're gonna hate it the whole time you're doing it. Cleaning your house is a non-core activity, it makes sense for you to be able to outsource it and if you can't afford to outsource it, the faster you can outsource it, the more the return on investment, the greater the return on investment that you'll get and when it comes to systems and processes, that's the thing to think about, okay? If I implement a system or a process, will it increase the return on investment that I'm making in the system or process? And there's two things to think about.

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If it's eliminating work from you, you immediately add the time that you're going to spend doing something else to be more productive to the investment in those systems and processes, right? So that it offsets that investment. So if it costs, what does it cost us? It costs us $300 to have somebody clean our house, okay? If I was to do that, it would be a terrible job and it would take me eight hours to clean the house times two, so that's 16 hours a month. During that 16 hours, if I sign up one client, I get a phenomenal return on my investment from that money that I've spent in investing and cleaning the house.

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So outsourcing non-core activities is a way to help you employ leverage to scale. And then scalable processes can help you handle increased demand. If I capture all of our systems and processes and I bring on one salesperson and I teach the salesperson how to do it and I've got the right training program done because I've captured everything, I can bring on a second salesperson and it'll be that much easier.

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My fifth will be even easier than that. My 15th will be even easier. In fact, my 15th, my first salesperson will teach the 15th person how to sell, so I won't even have to be involved in it at that point, okay? So systems and processes, fundamental, the basics, you should be capturing them.

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That will lead you to be able to scale, but that's the first point of leverage. Delegating tasks, I put up there to leadership teams. If you have people on your team, delegate whatever you can to those people.

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Our business is not about delegation, it's about who has the talent, skills, knowledge, and experience to handle specific things. Everything that's detail-oriented, including the financials, will be going to Nicola because it takes me twice as long to do it because I don't have an aptitude for it and I don't wanna spend the time on those sorts of things and they're just bogging me down and keeping me from using the skills, knowledge, and experience that I have. So delegating tasks, I think better than delegating is assigning tasks to people who have the talent to handle them is essential.

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And then hiring fractional executives or consultants. So you've got a 35-person, 40-person business, you realize that you're not in compliance with something, that would be the right time to hire a fractional CHRO who can spend two days a month with you and make sure you're in compliance with all that stuff. And then while you're talking to the fractional CHRO, the CHRO can tell you what you're not doing to leverage your human capital and maybe you add an additional three or four days a month with a fractional chief human resource officer.

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So hiring fractional executives or consultants is a great way to leverage people for growth. Businesses that do over $2 million in revenue are probably ready to graduate from a bookkeeper to a CFO, but you're not able to afford or it would be overkill for you to hire a full-time CFO. This is where the fractional CFO space is outstanding.

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So leveraging people for growth is the second system or process. Obviously, investing in employee training and development, utilizing virtual assistants and contract workers. Everyone, everyone should have a virtual assistant to help them with the miscellaneous crap because you can pay that person by the task or you can pay that person by the hour.

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I was reluctant for years. I didn't have a virtual assistant and then the year before COVID, my wife and I ended up hiring MJ who now supports Nicola and me. We went through six before we got to MJ.

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MJ works in the Philippines. She's absolutely phenomenal. My wife now has a big job.

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So she has her own assistant at work and MJ supports Nicola and I and she's in the Philippines and it's absolutely fantastic. I used to talk to her once a week on Zoom and like I saw by the look on her face, she was getting bored with our conversations. So then we moved to once a month.

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Now Nicola talks to her. I don't talk to her at all. I send her emails every day but Nicola handles MJ.

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So that's leveraging people for growth. You're gonna hear more about that later today but even if you're a sole practitioner of the virtual assistant, you guys know more about this than I do. Using technology to improve efficiency.

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I'm leveraging ChatGPT more and more. There's a handful of ways that I use it. CRM systems, if you're not familiar, you need one.

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We just switched from one back to an Excel spreadsheet because the one we were using didn't give us everything that we needed. This is on our list for this year. Getting a CRM system to manage your customer relationships.

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What I'm doing right now is I take notes in Evernote and I save folders for everybody because it's searchable. So I have a conversation with you. I write up my notes.

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I put them in Evernote and then I can go back and search. The other thing that I've done and we talked about structure, implementing structure in our business. I took my cell phone that everybody has and I now route it through our company phone system and the company phone system, when you hit the button to call me, it automatically records the calls and it makes the announcement that the calls are being recorded and I do it for two reasons.

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Number one, I then have that call through Zapier go right into the transcript, goes right into a folder based on the phone number in Evernote and Evernote has an automatic transcription feature. So does our phone system and I can take that if I want to drop it into chat GPT and say summarize this call and I get bullet points of exactly what we discussed on the call if I want it. Second reason I did it is because we're gonna hire a salesperson hopefully this year and I want all those calls to be recorded because I want to be able to coach them up.

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I want to be able to train them. So if somebody has something confidential they want to say, I can stop the recording at any time but it's incredibly helpful for me and this will eventually go right into our CRM system so that I know what we talked about so that I don't let you down if there's a deliverable that I have to give to you. And I'll tell you that people are used to having their calls recorded now.

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If you go on Zoom there's 15 different apps that record and transcribe everything on Zoom as well. So you just got to tell them in advance that you're recording. There has to be an automated message or you have to say it.

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David. I haven't had anybody tell me no. Here's what I think is happening though.

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I think people are desensitized to the announcement. So the phone rings and it's my voice that says you've reached the offices of Exit Success Lab and the Inside BS Show. Press any key to speak to a live person.

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They press the button and then the announcement automatically comes on, calls a recorder for quality and training purposes and it's the standard voice that you hear when you call your bank or whatever. I think people are just desensitized to that announcement. 99% of the conversations that I have with my clients there's nothing in there that they would be concerned about recording.

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Nobody's giving me their passwords or their social security number or everything. 100% of the conversations I have with Nicola I don't want it recorded. So we don't do that.

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Good podcast, Cody Sanchez, Mainstreet entrepreneur. She buys Mainstreet type businesses. I can't remember the name of her podcast but she is the quote unquote Mainstreet entrepreneur.

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Cody Sanchez, C-O-D-Y. She said something the other day that really stuck with me. She said all these people are worried about AI taking their jobs.

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AI is not gonna take your job but somebody who's using AI is going to take your job. And that's exactly the point you were making. I will tell you that the podcast, like if you look at, by the way, Paul Romo was on the Inside BS show this past week.

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If you look at the show and look at the show notes, those show notes were done by ChatGPT. I transcribed the show. I take the transcript.

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I upload it. I built my own GPT that does the show notes the way I want them. I uploaded the transcript and I said, please write me show notes for Paula's show based on the template we've created.

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And I cannot tell you how much time that saves me. You know, I used to have MJ transcribing the shows and then say to her, write a summary for this. And then I'd have to go through because the summary would be like this long.

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I'd have to go through and cut down the summary. Now it's like 30 seconds or less. Even if I have to fix it, it's 30 seconds.

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So we're doing a podcast a day now and the ones that I do, it never takes me more than an hour. And the hour is spent thinking about what to talk about. 30 minutes is thinking about what to talk about.

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And then 20 minutes is actually talking. And 10 minutes is the transcript. I don't post the transcript on our website.

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I use the, the transcript goes into the podcast distribution system, which we use transistor.fm. And it does that, number one, it does it for accessibility purposes. So it's behind the scenes, people have to click. And it also uses that to determine what the keywords are in there.

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So I'm not doing it for searchability purposes. We, I did that when ChatGPT first came out, Ask Nicola, I was a freak. I was going through creating SEO articles, generated almost like 60% with ChatGPT.

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And then I would go in and humanize them. And Google figured it, like within four months, Google figured it out and degraded 40% of the content that I put up there. Here's the big debate with Google.

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And I don't wanna, I don't wanna take up a lot of time with this, but I'm happy to discuss it at a break if you want. The big debate with Google is, Google's mission is to serve you the content that you're looking for, right? Why would Google give a crap, whether it's created by AI, if it's accurate, or if it's created by me? If I'm the aggregator of all content on this topic, and I've gone through and verified that it's all accurate and right, why should I be penalized because I used AI to put that content together in one place for somebody so that they can go from one of my articles to the next, to the next, so they can be fully informed? Why are you, as Google, penalizing me because I aggregated all of this content? They don't have an answer for this right now. It's just like with video.

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When video first came out, Google had some artificial intelligence that wasn't great at determining what the video was about, so they had to go by the descriptions, and people were gaming the descriptions. So they figured out how to diagnose when people were gaming the descriptions. Now, their system is so good, the descriptions mean nothing in YouTube videos now.

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They can take the spoken word, determine what that topic is all about, and they surface content from the YouTube search algorithm based on what the person is looking for based on spoken word. So if you look at Mr. Beast's YouTube videos now, he doesn't even put a description up anymore. No description, no keyword.

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Doesn't care, just puts the title. Because the minute it goes up, they do a total search to determine if it can be ad-supported, and they determine what ads should be served based on what the content of the video is. And they know, within two or three minutes, what ads they should serve up based on the content in that video.

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Okay, when it comes to expanding reach and impact, we touched on content marketing that will help your inbound leads, automating lead generation and follow-up. Between Paula and I, we could talk about this for hours and hours. I built my business on the back of a weekly email newsletter that people opted into themselves, either when they saw me at a speech or through online, and then optimizing digital advertising and your SEO strategies.

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My thought process is, if you're working with Paula for advertising, you should be creating your own content anyway, and that's gonna help you for SEO. Turning expertise into saleable assets. Believe it or not, this is leverage, and this will help you with recurring revenue.

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Developing proprietary methods and frameworks. If you haven't learned that from Yovan, Randy, Ray, Susan, I can't help you. I mean, that is what it is.

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Protecting your intellectual property. Again, creating educational content. What I don't have on here, because it's a whole separate session, is licensing.

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Licensing can provide you with an enormous amount of leverage. Every business has the opportunity to license something, but in order to license, you have to be doing this first, okay? So I want you to think about ways that you can create content and use content as leverage from a marketing standpoint. Standing here in front of 12 of you, I could be doing this for 120 people, right? Or I could be doing it in a one-on-one setting.

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It's better for me to do 12 than it is to do one-on-one. It's better for me to do 120 than it is to do 12, but you can be sure that this presentation, this is not the only time I'm going to share this information with people. This information will be shared with larger audiences.

(20:48 - 21:03)
It will be shared with another master's group, probably next year. It'll be broken down, and one of the slides will be, at least one of the slides will be a podcast, will be podcast content. I could take each of the slides and make them a separate piece of podcast content.

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I could take information from this presentation and use it when I'm interviewed on another podcast. And to this point, I'll tell you a handful of things that we do. So for content creation purposes, I use the podcast, the 10-minute segments that I'm doing every day.

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I use that to shape my content. I use it as my lab so that I can get my thoughts together. When I listen back to it, when I edit it, I always modify it before I deliver it to an audience as a live speech.

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But I also take podcasts where I am interviewed, record it on my end with the host's permission, and I cut that up and I use those segments as podcast content as well. And when the host asks me a good question that really resonates with me, and I hear that question more than once, I know I've got a topic that I can use for you or that I can use for other podcast shows because audience members will want that stuff. So the more content you create, the more you learn about your industry, the more you learn about your target audience, the easier it is for you to make a connection with them in addition to using it as leverage.

(22:16 - 22:39)
Okay? Maximizing customer lifetime value. The easiest way for you to move to a recurring revenue model is to create some sort of a subscription process or service, even if that's a subscription for them to spend a half hour talking to you about their intellectual property or their HR strategy. Developing loyalty programs to increase lifetime value.

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I've worked with hundreds of restaurants over the years, and the first thing we do to increase revenue in a restaurant is we start a loyalty program. And we have two hours during the weeknights when only their members are allowed to make reservations if it's a popular restaurant. And we send their members bounce back coupons so that they can come back for a 50% discount.

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Every business can develop a loyalty program and reward people for working with them over and over again. And then creating a network or a community around your business. We will be doing a whole session on this.

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ESL is a community, but all of you should be able to create communities in your business where you connect people together so that they can benefit from it. One of the reasons why I like ProVisors so much is the community aspect of it. For us, ProVisors has already rounded up a bunch of people.

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We just need to skim the cream off the top for those that we wanna work with. It would take us twice as long, three times as long to find good people. ProVisors has already collected a lot of good people.

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We just need to pick the ones we want from it. So creating a community or a network is valuable for a number of reasons. Maximizing efficiency and focus.

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This is more personal. The 80-20 rule is 80% of your results come from 20% of your activities. I feel like that's pretty much true.

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Sometimes it's 70-30, sometimes it's more 80-20. You can get rid of 80% of the stuff you're doing and it will have absolutely no impact. And if you don't believe me, go into your inbox and delete 80% of the emails.

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Nobody's gonna call you. There's nothing in there right now that's really that important. I guarantee you, you think it's important.

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It's not important. You can just delete it. Leveraging your personal strengths.

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I finally got this. Like after 30 years of working on my own, I realized that the businesses that I built that were really big, I had people who worked with me who were able to compensate for the areas where I wasn't strong. And then I struggled when I was on my own to get over a million two in revenue being a sole practitioner.

(24:49 - 25:15)
And it was because I wasn't leveraging my strengths all the time. I was probably using my strengths 20-30% of my time. Now, I would rather give up half of my revenue and have a business that is 100 times bigger than my business and work exclusively in my areas of strength and have somebody else be really happy working exclusively in their areas of strength that are complimentary to mine.

(25:16 - 25:28)
Both of us be happy with what we're doing every day than bang my head against the wall, trying to go through and code the expenses every freaking month. Like I would rather stick pins in my eyes. It takes two things.

(25:28 - 25:43)
It takes self-awareness and it takes your ability to surrender some of the activities that you normally wouldn't be able to surrender in order to leverage your personal strengths. I learned all about this at Gallup. They wrote, Gallup's written the book, Now Discover Your Strengths.

(25:43 - 26:06)
First break all the rules was the first one and then Now Discover Your Strengths was the second and their strengths finder assessment is the platinum standard, right? But before I worked at Gallup, I worked in Marriott. I started a corporate housing business and we were using outsourced cleaning companies to clean the apartments that we rented to these executives and people were getting ripped off. Like the housekeeper, shocking, in New York, they were stealing from people.

(26:06 - 26:22)
Can you imagine, right? There's gambling at Bushwood, no. So it was shocking that they were stealing from people. So we insourced housekeeping, but I had literally 800 apartments on the Island of Manhattan alone and then another 600 in the outer boroughs.

(26:22 - 26:42)
And I was like, what am I gonna do? How are we gonna figure out how to get, I got 300 housekeepers, but I can't be sending people to Suffolk County and then expecting them to come back to Manhattan to clean these apartments. And so I had season tickets to the Jets and my buddy who I was at the Jet game with worked for Coke at the time. Coca-Cola.

(26:42 - 27:07)
And he was telling me about this new route planning system that he developed for how they were able to distribute Coke in the five boroughs more efficiently and they were able to cut the number of trucks they had on the road by a third and it was gonna save them like a bazillion dollars. And so I'm sitting there with my friend, this is another guy I grew up with and I'm drinking a beer and I'm like, wait a minute, you did that? He's like, yeah. And I said, I didn't know you knew how to do that.

(27:07 - 27:33)
He's like, yeah, I guess I just have some sort of an aptitude for that. Well, within four weeks, I had that guy in my business and he had completely route planned all of, like I hired him, he became my chief operating officer and he route planned how each housekeeping team would get to each place, made it more effective and efficient and we were cleaning the apartments for half of the cost of the people who we outsourced it to and we weren't stealing. So we had that.

(27:33 - 27:50)
But this was a strength that this guy had that I never knew he had. He was able to, it was like, he's the guy that can look at the, you know those mazes that are in like, they used to be in the newspaper, like you would just do them or you could buy a book with mazes. He could look at the maze and go from point A to point B. You could just see it and figure it out.

(27:51 - 27:56)
He did that in two weeks. He had that whole route planning system down. It was an innate ability.

(27:56 - 28:08)
It was an innate strength that he has. You know, Nicola has the enormous ability, incredible ability to assimilate large amounts of information unbelievably fast. There are some days I think she's a droid.

(28:08 - 28:23)
Like I share stuff with her and she immediately has it like down cold and she can deliver the material as well as I could and she's only looked at it for 24 hours. Like that's just an innate ability. That's just a talent that she has that not everybody else has.

(28:23 - 28:39)
So you have to first have the self-awareness to know what you don't have and then you have to be able to recognize it in other people and be able to leverage it. All right, so the final point on this. Every successful business uses multiple forms of leverage.

(28:40 - 29:02)
Identifying gaps in leverage is what's gonna increase your growth. So my question for you is where can you apply leverage? So you've got this CEO leverage worksheet in front of you, okay? Take it out. You'll see there are 10 areas here and each of the areas corresponds to one aspect of your business that will add value.

(29:03 - 29:27)
Your homework, pick one of these areas, one of the 10 areas and tomorrow during the master's portion of our meeting, when you talk about the issue you wanna talk about, we're also gonna talk about how you're going to employ one of these forms of leverage in your business.