https://www.ispeech.org
Content
1. Gaining Clarity
2. Focus!
3. Excuses
4. The win
5. How to make a profit
6. Excuses and the Inner Game
7. Permanent implementation
8. Private finances
9. Your decisions and results
10. Self-determination and freedom
Dear entrepreneur,
you have chosen this e-book. So your business finances are probably not in a great position. Or they are not permanent. So first and foremost, my appreciation for looking into it and wanting to improve it.
I promise you I will keep this e-book as short as possible. On the one hand, this is since this topic is really easy to understand - okay, I took an advanced math course and usually got around 13-15 points, so numbers are easy for me anyway. But I promise I'll keep it easy for you too. On the other hand, I will keep the e-book short because numbers are not my favorite subject. But I can handle it perfectly. If I couldn't do it and were still an entrepreneur, I would have to deal with numbers, and I wouldn't be able to deal with my favorite topic because of all the problems.
It's different for you. For you, in the next few weeks, your finances ARE your favorite topic. So that, at some point, you no longer have to deal with them and have time for your favorite topic. So that you don't have to keep phoning after defaulting customers and hiding from annoying suppliers.
Before we start, you might want to know what my favorite topic is. For me it is Being an entrepreneur is the hottest way of life in the world and an expression of freedom and self-determination. My favorite topic is to lead other entrepreneurs to real freedom and self-determination (The way to a successful entrepreneur, Thy will be done ). But that is not the issue here. Here we only create the conditions. For me, however, the following is central: This is not an e-book to read through, but you want to change something. So while reading, you will become a few, make decisions, and initiate actions.
If you just read the book like that, nothing will change. And if you decide to read the book first and then when you know everything, then read it again and then act, then nothing will happen either. You have then stumbled across a new e-book and read it instead of implementing it first. Believe me, I know what I'm talking about: I've read over 1,300 books on entrepreneurship. And you don't seriously think I implemented them all? 😉
So, before we go any further, you're going to make a decision:
Want to do whatever it takes to keep your business finances permanently in order? Yes or no? Well, not everything: you don't have to separate from your life partner and can still see your children in the future. But almost everything? Yes or no? Make that decision now! If the answer is "no" or "I want to read the entire e-book first so I know what I'm getting into," then stop reading. Now. Then this e-book would be a waste of your time! This e-book is written for entrepreneurs. Entrepreneurs decide quickly! And mostly without knowing the last detail of what to expect. Or did you know before you started your business what was in store for you? Where's that attitude you had gone now? This desire for adventure, for departure?
And entrepreneurs keep their word once they have made a decision. So again, will you do whatever it takes to permanently put your company's finances in order? Yes or no?
Your decision is "yes"? Excellent! But let's check that out! Do you have a friend or acquaintance that you respect? Then call him and tell him, "I have decided to do whatever it takes to get my business finances in order. I ask that you occasionally ask how far I've gotten with this.” Ouch, that feels hard, doesn't it? Perhaps you can already think of reasons why this is not possible right now. And that you might do it later. And that you want content now. Honestly, if you put that creativity into solving your financial problems instead, that would be better. You are an entrepreneur, and entrepreneurs stand by their word. So call Now.
OK, I'm assuming you've decided and called your friend. Then you have already taken two big steps. First, you have one clear decision and secondly, you would be quite embarrassed towards this person if you didn't get it right. Ultimately, this whole
The financial topic is just a topic of clear decisions. That's why we train your decision muscle here in the e-book. In the future, I will indent and italicize these decision points in the e-book.
Most entrepreneurs talk about their finances nicely. So let's do one first simple check: Where do you stand? Please keep the business reports for the last six months, the overdue invoices and tax debts that you still have to pay, and access to your company accounts available.
First, a question: If you have looked at the business reports or your account so far, what interested you first? And where have you looked more often? If you are like 98% of all entrepreneurs, you look more often at the bank account, and the question is: is enough coming in? With the business report, you look at the top line: Has my turnover increased? And in the last line: Is this value greater than 0? Is that so? Then, unfortunately, I have to tell you: First of all, these numbers are not the most important, and secondly, your standards suck!
The most important number is the financial reach! The financial what? Range! It's similar to liquidity, but the range is measured in days, weeks, months, and, for very few companies, in years: "If tomorrow's sales went to 0, how long would your company survive?” The relationship between financial reach and profit is like breathing and eating. You can go a long time without food, i.e. profit, but if the range is 0 days and you run out of air, you are dead. No matter how high your turnover is.
So how do you get to financial reach now? Very easily:
Take the business reports for the last 6 months. In each case, take the value of the line total costs! These are your costs without the cost of goods and external services. If the turnover would drop to 0, you wouldn't need any cost of goods either. Add this total cost for the last 6 months and divide by six. Then you have your average monthly cost.
Now add up the available amounts of all your bank accounts. For example, if you have a line of credit of EUR 100,000 and have already used EUR 78,000, you still have EUR 22,000 available. Calculate the total amount across all accounts. Divide the available amount by your average cost. The result is your financial reach in months. If the number is negative, then your company is dead. You just didn't know it until now. Contact your tax advisor and/or an insolvency lawyer!
In the case of investment-intensive industries, the line for the total costs would have to be corrected by the depreciation, because the depreciation represents an imputed value and not a cash-effective expenditure. On the other hand, the total costs have to be increased by the planned or necessary investments or interest payments on loans and an adequate period allocation has to be made here. In the case of service companies, these points are usually negligible.
OK, if the number is positive, that's good. However, the result is probably a number less than 1. Then multiply that by 30.
So for example...
Average cost: €43,259
Funds Available: €22,000.00
Means / Cost = 0.508 months
range in days 15 days
So far, it's just numbers. Numbers only become interesting when we evaluate them. So: is this good or bad? The answer: These are catastrophic numbers! The truth is probably even worse because part of this 22,000 is intended for the tax office or social security. If you have the figures right now, what you still owe these two nice institutions or what you have to pay soon, and what other bills are overdue, then subtract that from the 22,000 and do the math again.
Ok, but what numbers would be ok and what can I do now? Unfortunately, these are 2 questions at once! 😉
First to the first question: What would be ok I received a call from an entrepreneur in the first week of October 2008. 30 employees, 3 million annual sales, highly specialized software for banks, and 3 major customers. Lehman Brothers went bankrupt in mid-September, and the banking crisis began. All banks put the brakes on costs at the same time. In the last week of September, he was called by all 3 customers that they would no longer need his services for the time being. My objection was: But surely you have long-term service and maintenance contracts with your customers. The entrepreneur's answer: Yes, I told you that too. Her answer was: Then sue us. By the time you win, you're broke anyway.
My next question was: How long will the money last? His answer: 6 weeks. My answer: Then shoot yourself! Why? Well, he can fire any employee. With notice periods and severance pay, he is broke beforehand. Finding other customers is impossible in such a situation. And finding a strong, solvent buyer is impossible, too. At most, he waits until the software is available cheaply in the bankruptcy estate. So 6 weeks is not enough!
As long as your reach is under 2 months, the alert level is dark dark dark red! You can no longer step on the cost brake in time. Just as a car doesn't stop immediately when you step on the brake, neither does your company.
The only reason I left that out in the first step was that most entrepreneurs don't even know these numbers and would not have gone any further. It is therefore better to calculate imprecisely than not to calculate at all!
If the range is less than 3 months, it is still a red alert. Why? You might be able to fire everyone and pay severance, but then you'll have a zombie business with no money, no people, and no customers. At best, you can start again from 0.
If the range is up to 6 months, the warning level is yellow. You have a chance for a fundamental change, a try. If this works, everything is fine. If it doesn't work, you're dead.
The range between 6-10 months3is cool. You won't believe how well you're sleeping all of a sudden! Because you know your business is financially healthy and you always have options to take action when things start to go bad. You have the foundation to no longer have to be the slave of your company. You begin to feel financially free.
If we do the math using the example above, then we would have reached the green area of financial reach if we had around €260,000 of available funds (€43,259 x 6 months). And these are not(!) there to invest or to buy you a Lamborghini or a property! They are simply there to ensure that you have a financially healthy business. 260,000 euros in cash! Preferably in a separate account that you never touch! Unless you have that reach, your business isn't financially healthy. It doesn't matter what someone tells you. We're not discussing it. Numbers don't lie. Healthy? Or not healthy?
Note 1: Your tax advisor will probably shudder at the calculation methods in this e-book and recommend that you never leave 260,000 lying around. You would have to pay taxes on that. Please just ask him how many financial companies he advises. Then you know who to listen to.
Note 2: If your company has grown in the meantime, then, of course, the limit for the financial reach will also grow with it.
So, at the latest, you should calculate your current financial reach and the highest amount in euros you should be able to spend with six months of financial reach. This is your goal!
OK, you already know the following: decide to do whatever is necessary to achieve this goal. Then email or call someone and let them know that you will build that financial reach. Yes, you still have no idea how to do this. And you don't know how long that will take either, but that doesn't matter. We had that before: Good entrepreneurs make decisions even if they have no idea how they will implement them. The solution is yet to come. So make the decision and share that decision with someone
If you are in an industry with extremely long lead times before an order is placed, such as power plant construction, then 6-10 months should not be enough, according to this concept.
see below for the rest of the criteria for financially healthy companies. Otherwise, you can stop reading. The further decisions will not be easier. And if you don't train your decision muscle with these simple decisions, you certainly won't do it later. Then this e-book is not for you!
We entrepreneurs usually have several things on the table at the same time. Customer projects, an employee wants something from us, we have new product ideas, we want to develop a vision, further develop the strategy or introduce new software in the company, etc.
I believe there is a sentence, originally from Bodo Schäfer, that reads: "Full effort is a full success; half effort is no success at all.”As long as you're taking care of all this stuff at the same time and you want to get your finances straight at the same time, forget it. You will always find distractions. It's not pleasant with your finances; otherwise, you would have done it by now.
If you want to get results, you MUST make finances a priority 1. As long as your financial reach is less than 1 month, you have no other choice. But if you want to achieve something, then you should make finances priority 1 up to the financial range of 6 months.
Getting your finances in order means changing your habits. Scientist Roy Baumeister writes in his great book"The Power of Discipline" that the will is a finite resource. If I had to exert my will for a task, I would have less discipline for the immediately following task. This is, for example, the reason why we tend to end up with red wine and chips after a stressful day at work. Related to our topic: If you want to change 5 things simultaneously, you will have less energy for each thing. Since changing habits takes a hell of a lot of energy, you're going to fail at every single thing. This isn't a deficit, it's neuroscience.
That means Leaving everything that is unnecessary for the time being. You don't need new business software now, a website redesign now, a vision now, or a new strategy with a range of less than one month. Why not? Well, none of this brings quick results. So leave it! Quite!
Incidentally, Roy Baumeister also discovered that our brain needs sugar for willpower. So when you're hungry, you'll be more undisciplined and find it harder to make decisions. In other words: If you haven't made any decisions in this e-book so far, then eat something first and read again from the beginning 😉 Well, that's only half funny. The other half is serious ☺ know there are a few of your favorite projects. leave them alone At least until you have reached your financial interim goal.
Now make a decision again: what won't you do until you've built a 2-month reach and a 6-month reach? Write a shortlist and send it to someone who can also check it.
By the way, the first practical step is always cleaning up. Make space in time. For more details, read my book"The Way to Become a Successful Entrepreneur".
Is the focus there now? For some, yes; for some, no. So one step deeper. I know many entrepreneurs who, at some point, are so soft-boiled by their financial situation that they no longer know whether they still burn for their company. "Maybe I'll do something completely different?" or"I have to find out what my real motive is before I continue here.". Or similar stuff. These questions drain your energy! Push her aside!
An example: In 2008-2010 I worked with an entrepreneur coach in the home office. At some point, the development stopped, but I didn't know why. At the same time, I was annoyed by the "bailout policy" for the banks and Greece. And I was always open to going to Switzerland at some point so that I would no longer be confronted with this narrow-minded German bullshit policy. At some point, however, I realized that the two were related. I wanted to be flexible and, therefore, not put down roots. And, of course, I couldn't rent an office without roots, and I couldn't grow without an office, either. So I decided: "I will stay in Germany, come what may. "And suddenly it was very easy to rent an office, hire employees, etc. My company grew again.
What I want to get out of these thoughts, such as "Maybe I'll do something completely different?" or"I have to find out what my real motive is before I continue here," block you and rob you of energy. You don't have to decide for all eternity at this point.
But one for the next 2 years would be good: "Do I want to run this company with everything that entails for the next 2 years? Yes or no?"If the answer is "No," sell or close it. Right away! If "Yes", then give everything. And you can't decide whether your company meets your real motive anyway. your company is your slave owner, and you are the slave. You are not free, and if you're not free, you usually can't make an informed decision about your motives anyway. First, make sure that your company serves you and no longer you serve your company.
So make the decision to either answer these questions or put them on hold and not think about it further. They just drain the energy. Make that decision not too complicated. Meet her now at this moment by your gut feeling! And, yes, again, share this decision with someone in writing!
So, let's make a short interim status. Half of the readers will have already made some decisions and have a clear goal in mind regarding financial reach. Also, this half created an environment where it would be pretty embarrassing not to do that. Congratulations! This half most likely belongs to the half that gets their financial situation sorted out. The other half read a few pages of the e-book and didn't do anything. This half will not implement anything and continue to live with their financial problems. Which half do you want to belong to?
I don't want to blame you now. There are reasons for this behavior. We entrepreneurs want to be successful. And most entrepreneurs measure success by size, turnover, number of employees, customers, awareness, etc. But if you don't have a financial range of 6 months, you have a more or less large house of cards that can certainly collapse. And then everyone sees it was just that a house of cards. Above all, you have to admit it to yourself. This is often the hardest part: "I've been building a house of cards for 10 years and ultimately achieved nothing!" Push that feels shitty! You are ashamed of yourself and others. You feel guilty. Suddenly having to tell customers: "I'm sorry I couldn't do it. My company is broke.”Or employees. Or your life partner.
To avoid that, you hide it from others and even from yourself. Only, in truth, everyone knows. Maybe they can't put it into words, but they feel it. They sense that you are not free, you are not successful, and you have not built a working business to serve you.
Now, there's always a moment when you have to face that failure. This can be earlier or later. It was later for me. After six and a half years of building my first company - um, sorry, my first house of cards - in May 2003, I had to file for bankruptcy, and everyone saw that I had failed. Of course, I could already see that the company was not running smoothly. But then, I still acted according to the principle of hope. And that never works!
What was interesting was that the really important people in my life, from whom I had previously kept it a secret, did not reject me, but instead helped me after the bankruptcy. And I didn't need the others who didn't help in my life anyway. The insolvency or more precisely the openness in front of the other people brought clarity and energy. Since 2003 I have turned a profit every single year at my company. Because I was clear and stayed!
And honestly: You don't have to wait until bankruptcy. You can now go to the people around you who make you feel ashamed or guilty and tell them straight. That takes courage. But you gain clarity and energy. I've had enough entrepreneurs as customers who, over the years, have not dared to tell their partner because they wanted to offer her a safe home. And when they dared, the reaction was always the same: "I've known or suspected that all along."And after a short time, the reaction came: "It's great that you're facing this. How can I help?".
So, if you've listened to the half that hasn't done anything yet, feel inside yourself what feeling is blocking you, gather your courage, and do it! In my seminars, the implementation rate is 80%. I don't want to just babble on at you. I want you to do something. To meet one now brave decision, act! And then go back to the beginning of the e-book and make any other necessary decisions and act on them too!
So now, we have a goal, and you've committed to others.6 months financial reach. But how the hell are you supposed to get there? Let's take the example from above: You have available funds of 22,000, and the target is 260,000. So where is the almost quarter of a million supposed to come from? The answer: Out of profit! Of course, you can also search for an investor or a large customer with a superadditional turnover. But the truth is, 99% of the time, it won't work. An investor may not understand your company, but they usually understand numbers. If the numbers look like shit, why would he invest there? And the super customer won't come either. When you sit in front of him, he will feel you depend on him. And that will make him wary and suspicious. And then he will not buy. Yes, there are a few exceptions where one or the other can work. But hoping for it is like playing the lottery. And when a neighbor explains to you that he's getting rich because he plays the lottery every week, you also think that he's the one who's got the gossip. The odds are against him. And the odds are against the investor and the super customer. So don't waste any energy on it!
The quarter of a million (or whatever that is for you) has to come from profits. OK, you look at your last balance sheet and realize you've made a black zero after all. Approximately €2,500 after-tax profit. Then you only need a hundred years until you have the reach. Unless you're feeling like Softbank founder Masayoshi Son, who runs his company on a 300-year plan, then this probably isn't for you. So profit must increase. But by how much? What is healthy? What is right?
The only exception is that you have a healthy company with a healthy product and put all the profits from it into developing a new product, and unfortunately, you ran out of money in between. Then and only then might an investor jump in. However, the more intelligent solution would be to outsource the new development to another GmbH or UG to not endanger the first company. In any case, discuss this with a tax advisor and lawyer beforehand.
Most entrepreneurs have in mind: well if the profit is greater than 0, it's good. We just saw that:
€2,500 is NOT good! Then there are a few entrepreneurs who have found out what the average profit in the industry is (the savings banks have such industry comparisons). And then they focus on that. Much better. But how many companies in your industry have 6 months of financial reach? Probably less than 2%! In other words: If you orient yourself to the average, you orient yourself to average bad companies. That won't help you either.
That's okay, but if you don't know how much profit you need, how are you going to get there? Or, to put it another way, if you think that a return on sales of more than 0% is good, why should you start at 2.5% and change what? That's good. Yes, it may be a bit more, but it's okay. And then you think you can do other stuff.
So how much profit is good? Where do you set your standard? Fortunately, there is an unequivocal answer to that. First of all: We don't take sales as a starting point. We couldn't compare companies with that. A retailer is essentially just pushing stuff back and forth. If he gets a 1% return on sales, that's often a good thing. A software developer, on the other hand, has no cost of sales at all and then has a return on sales of 10-20%. That's not comparable. That's why we take the gross profit (i.e. less use of goods and external services) from your business reports as the starting point.
Now calculate your annual gross profit from your was. Either add up the gross profits of the last 6 months and multiply them by 2, or you can even add up the evaluations of the last 12 months. If you just started, use the target numbers.
Now I will show you a table and please fill it out for yourself. This table will show you where you are and where you need to go. Unequivocal!
is
Intended to-%
Target-Absolute
Sales volume
800,000
gross profit
600,000
100%
profit after tax
10,000
20%
120,000
profit tax
4,250
8.5%
51,000
entrepreneur salary
40,000
15%
90,000
remaining costs
545,750
56.5%
339,000
First, some notes:
All amounts refer to 1 year. I always take net amounts for sales, gross profit, and profit. In the case of entrepreneurial salary, on the other hand, I take the gross salary (including all bonuses, direct insurance, taxes, etc.). The remaining costs also include your salaries. Employees are included with the employer's gross amount, for example, including your share of wage taxes and social security.
I calculated roughly 30% as profit tax (i.e., about 15% each of capital gains and solidarity and trade tax). This can differ depending on the region and legal form. In any case, the goal is that your company must generate an after-tax profit that remains in your company of 20% of gross profit.
7. This is where the objection might come: I can't do that because... Please put it back. We'll take care of that later. First, it's about the goal.
Of course, the percentage of the entrepreneur's salary depends on the size of your company. Below 200,000 euros gross profit, the entrepreneur's salary should be around 30%, up to 500,000 euros gross profit 20%, up to 1 million 15%, up to 5 million 10%, after that 5% and less.
The rest is your remaining costs. That's why they are called that.
You can calculate the financial range for 6 months by adding the entrepreneur's salary and the remaining costs (column target-absolute) and dividing by 2. In the example above, that is €214,500. In other words, if you're making $120,000 a year, you'll need less than 2 years to build that financial reach. Two years is not tomorrow, but it is still a manageable time ☺ And then you can distribute this profit to yourself ☺
Now, you can enter your actual and target status (first of all, with the same turnover and gross profit). You can see the deviations. These are your fields of action for later.
Just one thing: We're starting to think completely differently here. So far you have made sales and paid your costs and what was left was your profit. Since your standard was in your head: profit greater than 0 is good, nothing was leftover. Or at best a little. And the entrepreneur's salary was probably also tearful. I've had enough entrepreneurs in my seminars who made 2 million sales and paid just 1,000 euros monthly.
Now let's turn this around! We assume a certain turnover and from this, we pay FIRST the profit (and the tax) and then the entrepreneur's salary with the aim of a 6-month financial range. The cost is what is left. Tony Robbins describes this very well for private finances: At the beginning of the month, for example, transfer 10% of your income to a savings account. So pay yourself first. And then live with what's left. Very easily. The trick is: Pay yourself first! It's not mathematics, it's psychology. Give your kids two pieces of cake, and they're gone. Just give them one, and it's gone, too. And if you object that you then have to pay animal taxes, I can reassure you. Yes, you have to pay taxes. If you pay taxes, you do something right. If you pay a lot of taxes, you do something even better. Only losers and cheaters don't pay taxes.
That our politicians spend our taxes on utter bullshit instead of the things that matter is another issue. However, this must not lead to you making less profit THEREFORE to punish the politicians. In truth, you are then punishing yourself!
only one is there, they are also happy☺I know, I know, everything is different in your company. You need all the expenses. We'll get to that...
Let's first state that we now have the following goals.
I want a financial reach of 6 months in the company. That's ______ euros for me
To get there, I increase profit.
I aim to achieve a 20% after-tax profit based on gross profit. Based on the current gross profit, this means an annual profit of _______ euros.
I still want an entrepreneur's salary of ___% (insert your value here).
To achieve this, I pay myself first.
A company that cannot achieve these goals is not financially healthy. And in a financially ailing company, you are always the idiot who has to pay for everything and is not self-determined and free.
So, now it's time for a decision again! Do you set these goals or not? If so, send someone! Commit to it! And this time write the goals and the numbers on a piece of paper as well and hang them next to your workspace!
Ouch, but what if my employees see how much salary I want? And the profit? They certainly want more salary... Honestly: THAT is not the problem! If your employees come and wonder, now you can explain to them what a financially healthy company is and why those numbers are there. You make this mind carousel yourself! You don't allow yourself this salary and this profit yet! Honestly? If you have built a company with a turnover of 800,000 euros, as in the example above, you have earned it! It's a question of the self-worth you ascribe to yourself. Think about it!
Right? OK, so now decide on these goals and take your actions!
Finally, something nice:
Are you aware that you are real for the first time clarity about how much reserve you need and what profit you need to make? First, you can make a clear decision: Do I have a healthy company? Yes or no?
8. More on the subject in my other books and seminars.
And then imagine how you will feel when you have achieved this goal! You have crystal-clear criteria for when you have a financially healthy business. You will never again be chasing sales or being denied in front of people who want money from you.
You can make clear decisions and don't have to grudgingly agree to any impositions made by price-pressing customers. You will finally feel free and self-determined again. Now please design your picture and a reward for yourself. Maybe a wonderful holiday with your family in the most beautiful place in the world or whatever...
Now that we have the goals, let's get to the action! To make a profit, you must be solely on2 factors regard:
Be the first in the minds of your (potential) customers in a clearly defined target group that you love for their most burning problem.
Spend less than you earn.
It doesn't need more. Once again: IT DOES NOT NEED MORE! Why am I saying this? So you keep the focus! And we're going to simplify it even further in a moment.
I have no control over sales. Only the customer has control, whether he buys or not. I can only influence it. Either through a clear strategy or outstanding sales.
A clear strategy is more efficient in the long run than outstanding selling.
Why? Because with an outstanding strategy, the customer wants to buy on their own and I don't have to invest any more energy in the sale. With an outstanding strategy, I have to invest the energy primarily at the beginning, with outstanding sales all the time. Selling without a good strategy is constant stress. But you already know that. So you need an outstanding strategy.
The only catch is: You need time to develop these. Once in a while much time! It took me 3 years to develop the strategy behind the idea of Entrepreneur Coach. So from the first idea to the point at which sales increased by a factor of 6 within 2 months. In other words, unless your financial reach is at least 6-8 weeks, don't even start with it. It distracts you from the part where you get quick results. So, if your financial reach is less than 6-8 weeks, then best skip this section immediately!
What makes a strategy outstanding?
By being the first in the customer's mind at the time of purchase. To use Google I don't have to think. When it comes to searching, Google is the first thing that comes to mind for most customers. Going to Bing or Yahoo would be a conscious decision and usually energy-consuming. Customers don't like energy expenditure. I am a BMW driver and recently went on holiday. There I got a C-Class as a rental car. Even after a week, my brain was still throwing up that the circuit is where the windshield wiper lever is normally and I still didn't understand the navigation system. I think this car is useless. BMW is number 1 in my ranking and although my BMW is in the workshop right now, it has been even more stable at number 1 in my head for the past week. The BMW dealer no longer has to sell me anything because I want to buy. And the Daimler dealer can't sell me anything because he's not number 1 in my head. And if he wanted to do it, he would have to invest enormous amounts in sales. And that incurs costs. And more costs mean less profit. If you are the first in the mind of your customers, you automatically make more profit, because everything becomes much easier.
So the crucial point is: Know your target audience as well as possible. Know the most burning problem of your target group better than anyone else. And create the best solution for it. Place this at the point where the customer is considering a purchase.
Since we have small businesses and the marketing budget is limited, we should also have a very small target group to choose from: We can achieve this better than the whole world.
The advantage of a(!) small target group with a(!) clearly defined solution is also: You get good at this very quickly. And that also means efficiency. And efficient means: low costs. And low costs mean high profits! Most entrepreneurs carry a vendor's tray around with them. Vendor tray means: we do many different things. To do this, we need many different tools, methods, and skills. You may be so brilliant that you can do all this, but your employees usually aren't. Recruiting and managing employees is becoming extremely difficult. And that, too, incurs costs. And half the time, tools go unused. If you're a programmer who also does graphics from time to time, then you need Photoshop. You buy a license for 69 euros per month. And you only use the thing for 2 hours because you're programming the rest of the time. This means that in these 2 hours you pay 34.50 euros to Adobe. A clear, focused strategy reduces costs!
It's all pretty simple in principle. With a book or two("The big 1x1 of the success strategy", "The art of loving your customers" ) you have strategy methodically up your sleeve. Why isn't this happening anyway?
Because it's ongoing work. I have to keep in touch with the customers. I have to listen to them. I need to build a positive relationship. I have to keep questioning what their most burning problem is and keep tweaking the solution. In this respect, growing sales and profits are a habit.
Namely the habit of constantly working on my strategy and implementing it. (Or: make consistent top sales).
But as I said, many entrepreneurs tend to have one tray, so do everything for everyone. This is the opposite of strategy. How come? You might have a strategy at the beginning. Customer 1 wants service A. You do that well, so customer 1 asks if you would also do B. A quick look at the empty account leads to a clear nod: Let's get it done! That works too. Customer 1 tells customer 2 about it and he thinks man, that's similar to C. We can do that too - a look at the empty account helps us with this assessment - of course. After some time we have 5 customers and 30 different services. Voila! Strategy entropy has struck and we have a vendor's tray. What is the reason? Quite simply the fear of failing without these orders or the curiosity to do B, C, and X as well. The only way to avoid this is to regularly reflect on his feelings. So again a habit!
What most entrepreneurs do instead, however, is to deal with yet another strategy method, such as the Blue Ocean strategy or positioning. And then another one like Business Model Canvas or Design Thinking. Or another. But they won't help either, because that's not where the problem lies. The problem lies in one's feelings and the attempt to avoid dealing with them.
To put it bluntly: Sales growth is a habit. Here comes the objection: But what about a troubled industry? If I am a turntable manufacturer? Well, a few top manufacturers have survived and are reaching a few enthusiasts. Most of the others are dead. You have to see that very clearly and then draw the right conclusions: sell in good time or close while there are still assets. Converting the turntable manufacturer into a manufacturer of CD players or iPods or a streaming service provider usually doesn't work: the inertia in the company is too high. To be able to react adequately and in good time, I need inner independence from my current company. Ultimately, I have to reflect on my feelings again, and that brings me back to the habit.
One final word on the revenue side–but even that only from a financial reach of 6 weeks or more: You need2-4 so-called leading indicators. What is that? Well, these are indicators that tell you how much revenue you expect to make in 6 months.
If you have a seasonal business, then the calendar months are certainly part of it. Otherwise, depending on the business model, this includes, for example, the number of your newsletter recipients or the number of offers created in the last month. At Entrepreneur Coach, we measure visitors to our website, newsletter list size, and Amazon sales rankings for my books. From there I know pretty much exactly how my sales will develop over the next few months. Others measure the number of incoming calls per day, open offers, or whatever. That gives security. But please no more than 2-4 such indicators - you don't want to keep yourself unnecessarily busy and confusing.
Let's move to the second factor to make a profit: Spend less than you earn! The key point of this sentence is this: I have no control over the revenue side. I can only influence them. But on the spending side, I have - leaving aside unexpected legal and other catastrophic events -full control. And I can now9act. That means: Cost is our central – and only – approach to getting quick results.
You're probably getting sick right now because you know that you're dealing with some expenses that you've grown fond of and that you feel are necessary. But don't worry: that's just the third hardest exercise. The two hardest ones come later 😉
What does cutting costs mean now? Go back to your spreadsheet above and look at the Remaining Costs row. Subtract the value "target-absolute" from "actual". In our example, the result is €206,750. This is your goal for your annual savings. Okay, you're sick now. But how do you go about it now?
If your financial reach is less than a month, only the brutal method will work. It's very simple: You take the bills for the last 3 months. Including salaries and everything. 3 months is a quarter of a year, so divide the above amount by 4. In our example: €51,687. And now form 2 piles with the calculations:
On the one heap come the necessary bills. On the other hand, the things that you will no longer be able to afford in the future and will therefore no longer pay for. You do this until the second pile has a total of almost €52,000. It does not work? There is bound to be at least 1 financially healthy company in your industry. It works! Honestly, you don't need the super office! One size smaller is also possible. And the luxury coffee machine was also unnecessary. And probably you are
Now someone is bound to get the idea: Yes, but what about my 5-year lease? We'll get to that later! Now only this much: An outstanding entrepreneur would only conclude such a contract under certain conditions. Such a tenancy agreement was one of the reasons for my insolvency in 2003. I didn't get the costs down in time and the landlord didn't want to negotiate. Since then, I have never signed a rental agreement with a notice period longer than 3 months overinsured. And the web designer also sent decent invoices. And... Scratch that!
So now there are things you can just do without like the coffee maker. Then there are long-term contracts. And then there are the employees. The former is easy. The latter renegotiate or try to get out of the contracts altogether. Where do you get the strength to do this? Well, if you don't do it, the insolvency administrator will do it at the latest. Believe me, I've beaten the game once. It feels less shitty to take action now than to let the manager take action you couldn't get.
employees
Let's get to the hard part. You will probably not save 52,000 euros per quarter without firing employees. From where do I know this? Because most small businesses carry far too many employees around. Again, as with financial reach and profit, let's set a clear goal. For most companies that don't work, labor costs are around 70% of gross profit. Or even higher. Do the math for yourself! Take the personnel costs line from the business report, subtract your entrepreneurial salary, divide the result by the gross profit and multiply by 100.
When I founded my second company after my insolvency - an IT service provider - I defined clear target figures for myself. I wanted to spend a maximum of 40% of the gross profit on personnel costs. With my first company, I was much higher! I didn't think that was possible. But that was my requirement (and that of my coach at the time). And so I finally found ways. I can tell you: it works! Over the years I have seen many companies. Those that are really functioning and financially healthy are all around30-40% of gross profit for staff costs(employer gross). The companies with very well trained people tend to be around 40%, the others around 30%.
So, and now we come to the second hardest exercise and decision here in this e-book: Set yourself a percentage between 30-40%. And write someone - better not an employee - that you will only spend this percentage on personnel in the future! Make yourself aware again: You are now faced with the central decision. Either you make a tough decision now and create a financially healthy company and a free and self-determined life. Or you continue to run your company to the bitter end. As a slave to your company. You have the choice. Now!
How do you do that? First: no salami tactics! I did that in my first company. It wasn't going too well and I had to lay off a few people. And a few more two months later. And then some more. Each time, you further demotivate your people. And every time they believe in you less because you obviously can't handle it. And after the second time, they know there will be a third time as well. And that's why the best ones will look for a new job of their own accord. And the worst will cling to their place with all their might, trying to make others madder so that they can become better themselves appearance. You can close a company with such a culture right away. She has no chance of survival!
So suppose you have 10 employees. And 4 of them have to go10. Then you identify the 6 best and most loyal. They stay. Then you go to the best employment lawyer you can find and clarify the procedure. Unfortunately, we have laws in Germany that force you to make social selections if you have 10 or more employees. And these are usually not the best people at the same time. But you want to keep the best. Find ways with your lawyer. If it costs severance pay, then so be it.
Then pick out a confidant or two that you can rely on and tell them what you are going to do tomorrow and that you need them as you are resigning 4 people one by one and then releasing them immediately and they do the handover and exit have to organize at work. And that they have to keep tight until tomorrow.
For example, you schedule a meeting at around 10:00 the next morning. From 8 a.m. to 9 a.m. you do the 4 termination interviews and make sure that they leave the company by 10 a.m. Of course, everyone else will be uneasy. That is normal. At 10:00 you go to the meeting. You explain that your business didn't work. That you didn't know every month if you could pay the salaries at the end. That caused enormous stress and everyone in the company felt the pressure accordingly. Everyone knows that anyway – they felt the pressure themselves. In a company that is not financially sound, employees are rarely happy. Your 6 employees must be able to emotionally connect to your description with their experience.
And then explain that you don't want to go on like this anymore and you can't either. You have made a decision. You want a financially healthy business. A company in which employees do not have to worry every day whether they will still be there tomorrow. And that's why you go at it fundamentally. Not in slices. You calculated that it works with 6 people. You want to tackle this together with everyone. You want everyone to stick together as a team and turn your juice shop into a hammer company that everyone can be proud of.
Then solve the immediate problems together(!): Who does the tasks for customer X that one of the dismissed people has done so far? What's the quickest way to stop Project Y? Etc. 10
Oh yeah, the idea of dodging layoffs and giving everyone a pay cut sucks too. I've tried it before and it doesn't work.
Not even if you set a good example and forgo your salary completely. You want those who are left to be fully motivated!
How are they supposed to be after a 20 or 40-percent pay cut?
You keep the afternoon completely free for one-on-one discussions. You actively approach each employee and ask how they are doing now. what he needs. What ideas does he have to make it better? It's not so much about the operational side, it's almost all about the atmosphere!
And let your employees organize themselves (with your support) and do the work. As soon as things are going reasonably well a few days later, you do another meeting. First, you let something jump (pizza or something) and praise them for doing such a great job. But to make progress in the long term, you have to become more efficient with your most important and most frequently requested service and continue to save costs (of course no longer on staff). And then you brainstorm. The idea behind it: Praise and active involvement in finding solutions. You're not the only one with great ideas!
Now I've said before that if your financial reach is less than a month, you absolutely must use this brute force method. But what if you are at 6 or 8 weeks? Then you can take it to step by step at the normal cost11. But the employees still make one tough and clear decision. The demotivation caused by the salami tactics doesn't change. So you have to avoid these at all costs!
Cost Structure
At the beginning of this section, I said that you have full control over the cost structure. That is not completely correct. In the beginning, yes, but over time we limit our control: through fixed rental and leasing contracts, through interest payments on loans, etc. We can rephrase the phrase spend less than you earn: Always give yourself enough freedom to adjust your costs to fluctuating sales in good time at any time. And then do that too!
That now means the following: There are business models whose sales can fluctuate greatly: project business, for example. Or capital goods that are not initially purchased in economically bad phases. Or gardening in winter. And other business models have more stable sales: subscription models, rental income, etc. In the first case, I have to keep my cost structure more variable to be able to adjust it promptly. For example, it is better to work with a virtual assistant than with a permanent assistant: the costs are more flexible in the first case.
What should I do? Look at the sales structure and the minimum turnover (worst case) work out. Then set my cost structure according to the above table and the percentages and adjust the part of the costs that I cannot or do not want to cut below this minimum. Finally, regularly look at my numbers and adjust the costs. So always keep your fixed costs below the line of available costs in your worst possible month. Complete! That's how you always make a profit☺
So in practice, you do it by defining profit targets for the next 3 months. If you're at a 5% return on gross profit now, set a goal of getting to 8% next quarter, and so on.
beliefs and emotions
Those are the methods. Simple, clear, transparent, and unambiguous! In practice, the principle of hope suddenly comes into play again: But things can get better again! There is still a super-big prospect who might still be able to buy. I'd better wait with the layoffs. Or: I don't want to throw my long-time employee out. Or: What will my employees think if I reduce costs? Or: If I do that now, it's an admission of my failure. Or… So here we are: The methods are simple. But we have to take care of our emotions.
Be honest with yourself: Have you taken the cost-cutting measures just described, or at least planned them? No? Then you know what I mean. The real difficulty is not in the methodology but in the inner game. How do you deal with yourself, your feelings, and your beliefs?
The difference between successful and unsuccessful entrepreneurs is not that the former have any special magic methods. The difference is that the successful ones face their fears and their shame and guilt and confront their beliefs and then act.
Let's take an example: According to Tony Robbins, T. Harv Eker, Bodo Schäfer, and many others who write about finances, there is one difference between wealthy people and poor people's set of beliefs. One of them is: Successful people believe"Money is more important than stuff”. Poor people think stuff is more important than money. If stuff is more important than money, then no money will be left. All money will turn into stuff. And you'll think you need all that stuff. That is connected to emotions. One is happy when he has bought something new. new stuff☺The successful one is happy when he didn't buy something and knows that the money will now end up in his profit account (and not(!) to buy any stuff from there).
So there are many beliefs and feelings and you have to face them over time. But now we have a problem to solve! And you can only solve that by taking action, NOW! As soon as you convince yourself
“I have yet to change my beliefs”, then this is a guarantee that nothing will happen (see my specialist article “The “I still have to…” disease” ).
So: Decide on the next steps in your cost reduction including dismissing excess employees and restructuring the cost structure. Commit to someone again. And then act! And then (!) deal with your beliefs!
Project controlling/pre- and post-calculation
Most entrepreneurs don't have the faintest idea of what they're making from a project or assignment or product sold. And if so, then half will be forgotten: so to Example of a webshop. There are tables for 200 euros to buy and your purchase price is 100 euros. Then most say that they have now earned 100 euros. Unfortunately, there are still inquiries from customers beforehand, then the thing has to be packed and shipped. There are questions. And some customers don't like it and send it back. In addition, you first have to negotiate the deal with your supplier, put the product on the webshop, etc. All of this costs working time and since most small companies are not efficient and therefore almost every one of these processes still produces queries, quite a lot of working time. And quite a lot of working time costs quite a lot of money. What if the working hours cost an average of 120 euros, for example? Then you make a turnover of 200 euros with every table sold, but a loss of 20 euros.
The same applies to projects. The project development time is calculated there. But the sales and concept costs? And the change requests? And the support afterward?
And if I go further: What percentage of an employee's working time is used productively in the interest of the customer? And what percentage of the working time is swept, the workplace tidied up or the website embellished?
As long as you don't have any numbers, you only have a gut feeling that something isn't particularly efficient. But you don't know exactly. And even if you then change something, you have no idea whether that change was successful. So you don't know whether the change effort will ultimately pay off. And, most importantly: You can't have a sense of achievement either, because without clear numbers you don't even know whether something was successful at all. And activities without a sense of achievement are quickly abandoned.
I can't give you any specifications here - every business model is different. Control in a restaurant will look different than in online trade and different again than in an advertising agency. What is crucial, however, is that you and your employees have a one-time recording as accurate as possible to have. Let me record every activity with time in Excel for 1 week, stand by with the stopwatch or whatever. And then ask yourself which of these times are paid for by the customer and which are not. If the result is less than 80% for employees, then action is required. And then add up these times, all material costs, and the proportionate investment costs (you know, the Photoshop program from above, which is only used 2 hours a month). Then calculate the costs that will be incurred anyway (rent, webserver), etc., and add them proportionately. And then see if you end up with the target costs calculated above. If not, you need to optimize somewhere. What is crucial, however, is that you have clarity with the numbers as to where you need to optimize.
Don't tackle this topic until you've completed the cost-cutting action above. But then in the same way. That is, call someone and tell them that you will present them with a controlling Excel spreadsheet in the next 10 days. Don't mess with the table. It's all about finding out where the problems are so you can fix them. Not more!
Until now, you've been chasing every sale you could get because it solved your empty account problem. Unfortunately, you have often only postponed your problem to the future. You now have 200 euros, but in the above example, this costs you 220 euros. That's bad sales.
Then we talked about the strategy above: You should solve a problem for a target group. So you specialize. Specialization gives you learning gains, so you become more efficient. And specialization means you don't have to invest as much because you're doing fewer different things. And the stuff you invest in is less likely to sit idle. So specialization brings you a cost advantage. The further you push the specialization, the greater the cost advantage. So far clear?
Okay, so now comes the hardest part of the whole e-book. This part will make a big difference if you do it! Unfortunately, it is also the hardest part. For most entrepreneurs even more difficult than the one with the employees.
You must have a few customers that you like. The cooperation works well and they pay on time. And there are a few other customers who call about all kinds of shit and usually just annoy us because they didn't read the instructions properly. As a rule, the first customers are also the ones who bring 200% of the profit. You read that right: 200%! Because the others cost so much time and trouble and thus bad energy in your company that they cost 100% of the profit again.
Your task: Kick out the latter customers one by one! Pooh! is he crazy I need sales! terminate customers? That's not possible! Where does he live? The answer is: Up to now you have only ever looked at sales because it was easy to measure and recognize. But if you look at the profit instead and make it visible through appropriate controlling, then you have a list that looks like this:
Customer A: 30% profit
Customer B: 50% profit
Customer C: 0% profit
Customer D: -30% profit
So, now you realize that customer D is hurting your business. And customer C too. You want 20% profit after tax! You now have two options. Either you call customers C and D and tell them you have a problem and find solutions to make those customers better customers. Or you part with these customers. You use the free time to find more customers B.
As an aside, this is something you can do gradually: First, you can stop marketing that attracts new C and D customers. Then you throw out your worst D customer. You will find that this alone will give your company a jolt. And you gain new energy. And a new B customer appears relatively quickly. As soon as this shows up, you throw out the next D customer, etc.
When I terminated a customer for the first time, I was scared at first. But immediately after that arose a sense of real freedom: I don't depend on you! I have the freedom to choose my favorite clients.
And this new energy somehow magically increased my radiance and suddenly new customers came who I liked and with whom I made money. Today I throw out customers who want to negotiate prices with me: They don't seem to see the value and that will only cause trouble later on.
The longer and the more often I do this, the more I focus automatically! This also leads to a much more specialized strategy.
Your task: Identify a (smaller) customer (a (small) group of customers in a mass business) that just annoys you, with whom you have endless effort, and with whom you don't earn any money. Disconnect from the customer or customer group! Do this again in a month until you only have favorite customers who also bring something to your company.
So you got this far? Did you implement everything? Then congratulations! Then you have the hardest decisions behind you☺Everything that comes now is easier.
You played with the numbers a bit above. Let's say your goal is to use 40% of gross profit for staff costs. Suppose you do software development. And you need skilled programmers. You will hardly get that for less than 40 euros per hour gross from the employer. Then your gross profit must be at least 100 euros per hour - you only want to spend 40% of the gross profit on salaries. And since the programmer works a maximum of 80% productively and the rest goes to meetings or something else, the productive hour must cost the customer (with 0 costs of goods) at least 100 divided by 80%, i.e. 125 euros per hour. oops. But what if you only ask for 80 euros so far? Then you go broke! Okay, with 3 employees you might be able to handle that, by working as an entrepreneur 100 hours a week with a salary of 0 euros. But you don't want to do that anymore and with 10 employees everything will fly in your face anyway.
So if you have this situation, then you can save costs as long as you want, but it still won't work. From now on you have to raise your prices. It does not work? Because of the competition? Or because of state regulations (e.g. health care)? Or because you don't dare?
The answer is: it always works! Examples: A hairdresser complained that all customers would come to her personally and not to her employees and that she was therefore not making any money overall. My tip: only increase your price. Leave your employees alone. Chef treatment is more expensive. And the customers for whom that is too expensive just go to an employee. At first, she didn't dare. Then she increased by 20% and just as many customers continued to come to her. In other words: it was too cheap before! As a result, it increased by 20% for all female employees and by a further 20% for herself. There were about 5% fewer customers. Cool! Less work and more profit! What could I want more?
State regulation of physicians. Do you happen to know Dr. streak? He has written a few books and gives lectures. It's about dietary supplements, which he also happens to sell. Are you interested in health insurance billing? The answer is "No". Does he earn more than his peers? The answer is yes.
Do you make any offers? For example as a roofer? And you have some cheap competitors? Then you always make an offer with 3 prices in the future. The lowest price must be cheaper than any competitor. You offer used bricks and send unskilled workers from Wallachia. Of course, you don't want to sell that. The price is only there to kill your competitors. Then there is a middle offer. You want to sell that. This is a good deal with a good price that also aligns with your target size. And then there is the super offer with gold-plated tiles and complete sensors that warn you on an app if even a little moisture gets into the roof. You don't want to sell that either, but it does make the middle range look cheap.
And one in a hundred also wants the gilded roof tiles and brings you another real profit 😉
Every industry has its way of raising prices. Okay, from a certain point you also need a good strategy, but you can usually take the first steps of increasing the price without a strategy. And if you don't dare at all, then start with the services or products that you don't want to do in the future anyway. Increase by 20% or 50%! At worst, you'll have 20% fewer customers who pay 20% more, freeing you up to do what you'd rather do.
Now, sit back and make a decision: In what way do you want to increase your prices, and by what amount? Recommit to a friend or acquaintance.
Okay, we have now initiated a lot of measures. But maybe your financial reach is only 1-2 days or even negative (a lot of unpaid invoices are already in the dunning process). Then you need some emergency measures. Please always clarify this with your tax advisor and/or insolvency attorney beforehand. If you make mistakes there, then it may be delaying insolvency. This is a criminal offense and can be punished with imprisonment. So ALWAYS consult a lawyer in such a critical situation! 12
What can I achieve with emergency measures? Well, 6 months before my bankruptcy, the company was almost broke and I tried to save it. In 2 days I made about 80 phone calls and after that, I had an additional 100,000 euros in the company and enough payment deferrals to continue again. But that means letting your pants down completely.
Call all major creditors and arrange payment deferrals. And, the most important currency in such a case is distrust! If you call your landlord and agree to be 3 months in arrears, never be more than 3 months in arrears. So only agree on things that you can keep 1,000%. If people help you and then you smack them, that's pretty uncool and they let you feel it! Oh, not calling your landlord until you're already 3 months behind schedule isn't cool either.
That also means communicating openly and clearly with customers. If you have thrown 4 out of your 10 people, then one or the other customer project can take longer to be implemented. Communicate this to the customer beforehand. Ask him for understanding and support. But also ensure trust. If you get 10 days more time, then make sure you only need those 10 extra days. And not 12!
So it's better to take some time before you promise anything!
In such an emergency, please never add private assets! Especially not the money borrowed from friends or a mortgage on grandma's house. Most cannot even assess the risks. Certainly not your grandmother. And if the company then goes bankrupt, all this wealth disappears, including grandma's house in the big black hole! Oh yeah, and those people aren't your friends after that. Then after the bankruptcy, you are not only left without money, but you are also rid of your family and friends. But you carry a bundle of guilt with you. So never do that!
You must be clear about this: You and your company are two different things. If your company goes bankrupt, your life still goes on. It's not easy, but it's easier than you think. I founded my second company one day after my bankruptcy. And I didn't have to sleep under the bridge either.
A little hint: Every entrepreneur should ALWAYS have a few thousand euros in cash on hand to be able to pay the lawyer in such cases.
Never rely on the principle of hope! Firstly, this is extremely dangerous because you delay necessary measures. "The big order XY could still come and then we need the capacities". . .
Second, you radiate it outward when you're cornered. Through body language, the way you argue, and even your smell. You might be able to cover that up a bit. But your counterpart will still perceive it subconsciously. And "something" will stop him from buying from you. Even if it works out exceptionally with a large order, then you are in the same place 3 months later. Over 1 to 3 years, that wears everyone down.
Leasing: If you have major assets in the business, it's a good idea to sell them and lease them back. You should also do this as soon as possible.
Supplier credits: If you have large suppliers for whom you are an important customer, supplier credit or longer payment terms should usually be included.
Hidden Money: There is hidden money lying around in many companies. That can be lifted.
There are 2 main areas here:
1. Payment terms: Take a look at how many bills are currently unpaid or which bills you could have written but haven't written yet. Calculate the amount. Divide it by your monthly sales and multiply by 30. So how many days do you lend your money to your customers on average? Think about how you can effectively reduce that! Shorter payment terms, clear, consistent dunning process, prepayment for partial services, factoring, etc.
2. Warehouse: I have met entrepreneurs who had to file for bankruptcy with annual sales of half a million and a stock value of 350,000. Reduce your stock as much as possible. Ideally, you no longer have a warehouse at all, but get the necessary goods or raw material just in time. You may not be able to do this immediately with all raw materials, but step by step you can release money here. And maybe you can immediately sell a larger lot to someone else. Then he has the problem.
To put it bluntly, you are currently extending money to your customers. Take Apple as an example. When they deliver a cell phone, they pay for the components of the cell phone on average 7-10 days after(!) they have received the money for the cell phone from the customer: Suppliers and customers are still lending money to Apple (around 6 billion from Apple through this alone additional liquidity!!!). Don't be stupid and do it the other way around.
Never give personal guarantees for banks and loans. If you've already done it, try to peel them off over time.
If you only have a few days of financial reach, do everything I wrote in the previous e-book at least twice as fast as all others. It's best not to think about it at all - just do it! Otherwise, you can save yourself that too...
More on this in my 10-year-old document “Collected tips against the crisis” in your workspace.
You now know everything(!) you need. Nothing else is needed for the first steps. Of course, there's a lot more knowledge out there, but if that mattered, business professors would make the best entrepreneurs. But they are not.
Of course, none of this is 100% accurate. That's not what it's about; Your tax advisor or accountant can take care of that. But it is 100% effective! Of course, you could also calculate contribution margins and all sorts of things. But what good does that do you? The crucial question is: Did you do what is here in the e-book? No, then you don't need a contribution margin calculation either. You wouldn't draw the consequences from it either.
The inner game is crucial13as an entrepreneur. What do I mean? Again: Have you made the necessary decisions that are described herein in the e-book and implemented everything? Or at least committed yourself to others and initiated the first steps? For most, the answer will be "no". And not because the methodology was not understood. The answer is no because you shy away from the consequences and the emotional pain that comes with it.
And this recoil can take many different forms:
You may just feel overwhelming shame or guilt and not dare to admit the situation to yourself or anyone else, especially people you love.
You talk yourself into the situation with the hope of a superorder.
You are insecure, afraid and out of reflex, you want to know more.
You find excuses why you can't fire this employee right now.
I also teach this inner game in my seminars and especially in our entrepreneurship training. I call this inner game based on the martial arts Entrepreneur Budō. And that is exactly what is trained in entrepreneur training: two years in which you become an entrepreneur.
If you have read one of my books, then you may be very clever and have already handed in specialist tasks. And if you were to fire people now, you would have to do these specialist tasks yourself again.
You'd rather hand the job of finances to a manager because you don't enjoy it.
You've invested in a new area, but it's not running. And instead of admitting the losses, you keep cramming in more money.
You don't dare stand in front of your employees and throw a few out.
...
The list is endless. If all the creativity that mankind invests in finding excuses was invested in finding solutions, all known problems of mankind would be solved!
Of course, I could take apart every single point. But I don't have to. In truth, you already know yourself that it's an excuse. So leave that for the future.
Instead, ask yourself who you are! Are you a brave entrepreneur who takes things into his own hands? A person who thinks in solutions? A person who inspires those around him through his actions? A person who creates secure jobs and space for the development of his employees? A person who takes responsibility? A person who lives his life according to his ideas? A person who faces reality?
Or are you a person who avoids reality? A person who does not have the strength to draw the necessary conclusions? A person who lies to others and himself? A man who has become the slave of the enterprise he created? A person who no longer – please, dear entrepreneurs, forgive me – has the balls in his pants to solve the mess he created himself? Who does not dare to say: "Hey guys, I've screwed up before, but now I'm going to change it seriously."?
Please realize how your life will go on if you belong to the second type of entrepreneur. What kind of person will you end up becoming and what will you have achieved (or not achieved) if you don't change anything now? What will become of your family if you don't change anything?
If you haven't taken a single action in this e-book yet, then just do this one thing: write down honestly—with pen and paper, not on a computer—how your life will go on if you remain the second entrepreneur.
Write: "I, John Doe, will then continue to be my company's slave for the next 20 years. The best employees will leave me because they don't want to work in a mess like this. My partner will gradually lose all respect for me because I can't pull it off and it's obvious to everyone. Not only will I have given away the last 10 years of my life, but I will also give away the next 20 years. I'm an idiot for wasting my gifts like this..."
If you only do one thing in this e-book, it's this! For once, be honest and don't tell yourself shit again! And then let this write-up sink in and start the e-book all over again.