Before You Can Multiply, You Must First Learn to Divide
While in Asia, I heard a great expression, “Before You Can Multiply, You Must First Learn to Divide.” I now find myself using this saying nearly every day.
The idea is that if you want to grow your business, you must learn to partner with others – and give them a slice. This means you take a smaller slice of a bigger pie.
I have been doing this for a while now with my agent. He takes a percentage of my business in exchange for handling everything from negotiating, contracting, logistics, travel, invoicing, etc. I am convinced I make more money through this arrangement…and work less.
I recently had a conversation with a guy who runs a seminar business. When big name American speakers come to his country, he hosts a public seminar. His biggest challenge is getting butts in seats. When I looked at his business model, it was flawed. He has a lot of fixed costs, like advertising, printing (brochures) and postage. His customer acquisition cost is ridiculously high, and was often hit or miss. He could spend $5,000 on a newspaper advertisement and get only three customers paying $300 each. Even with 50 paying customers, he is still paying a 33% customer acquisition cost – assuming no discounts. My suggestion was to create a model where others make money only when he makes money. One example is to set up an affiliate program where he gives a large commission to people who get him paying customers. This moves his costs from fixed to variable. This removes his risk while encouraging others to take a vested interest in his success.
Yesterday I was at a board meeting for my local National Speakers Association chapter (I was the President last year and am still on the board). Over the last two years we spent a lot of time and money on something we call the “Visibility Initiative.” The idea was to get visibility for our members in order to help them get more gigs. We spent thousands on website development and marketing. If we use the “divide before multiply” concept, it would make more sense to get someone to do all of these activities for us. Speakers bureaus sell speakers to event planners. They already have the connections and already have websites. This is their business. Therefore, if we partner with a bureau (or two), they get their commission for every gig booked and we get greater results with less effort.
When I was on the Donny Deutsch show, a caller asked, “I am the owner of a business. How do I retain my top talent?” Donny asked what percentage of the business he owned. The caller said 100%. Donny’s response was (paraphrasing), “Wrong. As of today you own 80%. Go into the office of your top 10 people and tell them that they are now partners in the business. Give them 2% each. They will have a greater sense of ownership. Besides, this is probably the amount you would have given them as a bonus anyway.”
Where can you multiply by first dividing? Where can you give a slice of your business to someone else? How can you grow your business while creating more income for others?
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7 Things You Can Do To Save Your Job… Or Create a New One
Last night I was on “The Big Idea with Donny Deutsch” on CNBC. I was there to discuss how to save your job during a down economy. I had a number of tips prepared, but due to limited time, I was only able to give 2.
Here are my 7 “big ideas” for saving your job or creating a new job.
1. BE LAZY – Most people spend 60% – 75% of their time work on activities that do NOT create value for the business. Don’t! Be lazy and stop doing what you don’t need to do. Rethink all of your work and focus on the important activities. You’ll make yourself more valuable to the company and you will work less.
2. SEEK OUT OVERSEAS OPPORTUNITIES – Given the weak dollar, US products and services are bargains in other countries. Volunteer for an ex-pat job. Take on a sales job overseas. I will be spending more time overseas this year than I had over the previous 6 years combined.
3. ACT LIKE AN OWNER OF THE BUSINESS – If you think like the CEO rather than (fill in your job here), you will think more strategically. You will make smarter business decisions. Instead of just focusing on “what” you do, ask yourself “why” are you doing it. This will certainly impress your boss.
4. USE PERSONAL CONTACT RATHER THAN EMAIL – Deciding who to layoff is often more emotional than logical. Therefore, it is critical that you maintain a personal relationship with fellow employees and bosses. Email is impersonal. To help you break the habit, take my 30 day challenge.
5. PLAN FOR YOUR PINK SLIP – Assume that you will eventually lose your job or choose to leave. Therefore, be sure to build your resume, build your brand, and build your network of contacts outside of the company. Your career is your responsibility.
6. SOLVE PAINS – During tight economic times, people are more willing to invest in products/services that eliminate pains. Problem solvers are in big demand…always. My speeches on recession proofing businesses are more popular than those focused on innovation.
7. CHARGE MORE – Oscar Wilde once said, “A cynic knows the cost of everything and the value of nothing.” People equate value with price. Charge more and you will be valued more. Reducing prices makes you a commodity. Increasing prices makes you a luxury. Luxury items tend to do better in tough economic times.
P.S. If you want to see the complete list of 10 tips I had prepared for the show, go to the CNBC website. They also republished my article on “6 Ways Innovation Can Recession-Proof Your Business.” You can also check out the complete list of guests from the show.
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The Big Idea with Donny Deutsch
I just arrived back from Asia at 1am yesterday morning. My first stop while in the states?
“The Big Idea with Donny Deutsch” on CNBC.
In 2 hours we start taping the show that is scheduled to air tonight at 10pm.
Set your TiVo. Buy your popcorn. And get ready for the fastest-paced show on TV.
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Picture from My Bangkok Workshop
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Freedom in Bangkok
I am here in Bangkok and loving it. The people are so nice. The food is great. And the massages (legit ones!) are cheap.
I check email once, maybe twice a day. And I only respond to the urgent ones (like requests from TV stations and magazines here in Bangkok who want to interview me). I’m getting more work done in less time, because I can stay focused on the task at hand, rather than reading and responding to emails every 5 seconds.
I bought a cheap mobile phone and have both Malaysian and Thai phone numbers so that I can make local calls. But I don’t even carry the phone with me when I am out. It is for emergencies primarily.
This is freedom.
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