How to Build a Business That Thrives Under Pressure

How to Build a Business That Thrives Under Pressure

Friends…

Howzabout it’s MAY already.

We are inches away from the halfway point for the year. It’s always appropriate when nearing these ‘leverage’ points (first of the year, mid-year, etc) to pause and get clarity on progress. Or lack thereof. 

I’m happy to report we are exactly on pace for our current year schedule. 

I remember a couple years ago, Chris and I got serious about setting our companies up for antifragility (I’ll explain that in a second).

We created a plethora of new holding companies, LLCs, insurance policies, and a host of other services to bulletproof our current trajectory upwards. 

Antifragility is a system’s tendency to thrive under pressure. A high antifragility system would become more prosperous as more chaos and/or stressors were added, whereas a low antifragility system would operate less effectively as the pressure and stressors increased.

At the beginning of Traffic And Funnels our goal was less volatility, less chaos, less stress. NOW, our goal is creating sustainability regardless of volatility. In this issue we’ll break down a few decisions that would be good to think about to create your own high antifragility and – as always – we’ll dive into some nitty gritty private stuff ;)… 

FIRST…

I’m writing this to you from the gorgeous Dominican Republic. 

My writing spot for the morning pictured above 🙂

Why are we in the Dominican Republic? 

We came off of a strong quarter. So we booked a trip with some of our top sales staff and opened it up to a few clients to come learn about our sales methodology.

This is 90% stuff I’ve never taught outside of our internal team before… 

Yesterday we went for about 8 hours and there were people in this room who do several hundred thousand dollars a month (and one person who sold over $80 million last year) say this was some of the best and most advanced sales & persuasion training they’ve gotten to be a part of… 

I didn’t get his permission to use this post so, forgive me for blurring out his name. All you need to know is that this was FIRE, me and this elite sales pro spent 2 days sharing our most coveted arsenal and people were (quite literally) in shock. 

BIG DECISIONS

Part of your benefit to reading and sharing this blog includes ever-increasing access to our operation as we scale in building our business, deal with problems, solve them, scale again, etcetera. 

When we started getting good at paid advertising, one month as a company Traffic And Funnels  exceeded 7-figures in revenue on about $70,000 in NET advertising costs. That’s pretty cool.

In the nature of total transparency, we fronted about $240,000 in ad spend to create this 7-figure revenue stream…

But 70% of that was “liquidated” via product promotions. Liquidated simply means, we recouped the cash outlay immediately so we didn’t totally “feel” it. If you spend $100k and liquidate $120k that would be 120% liquidation. 

So that month was about 70% liquidation. I also had a baby the month prior, and 2 events… can someone say CHAOS? A huge part of my own personal antifragility is this system (The Productivity Pack). We have over 70 employees and several hundred clients using this system now and it’s pretty amazing…

The whole system is designed not necessarily to help you get more done (though it will improve your output tenfold) but to create extreme awareness around what’s actually important.

Anyways… 

Back to the changes (regarding antifragility) we started making last year… here are some of those changes and I’ll share them with a basic caveat: if you want help with any of this let us know…

A few of these things (like liquidation) are not going to help you if you’re under 7-figures. A few of the others (like business insurance) will be helpful regardless of what size your business is. 

1.. SEPARATION OF ENTITY INCOME

2 years ago we had the following corporate structure: 

• One LLC generating income
• One bank account (in the LLCs name) holding funds

It’s actually crazy to think how dangerous that was; we were a multi-seven figure company with one LLC and one bank account and no business insurance.

Today: 

• 5 entities
• Money paid & loaned back and forth (for tax purposes)
• Holding company that is not named anything you would know or think of
• 4 main bank accounts
• A giant business insurance policy on the HOLDING company that protects everything underneath. 

We have made significant strides towards legitimizing our operation and this is something we have also developed training on.

2.. ASSETS (non cash but cash-producing)

6 months ago we had 2 sources of serious income and both of them required us to work for it. Now we have 4 and two of them require no effort. Also — there’s a lot to be said for creating an ally out of time here. This is a big deal. 

When I study really wealthy people, people who are worth billions of dollars, the thing they all have in common is they’ve created a friend out of time. Simply the passing of time makes them more wealthy. You cannot stop time. No economy can stop it. No recession can stop it. 

By nature, there is a conflicting duality with “cash on hand” (COH). First, you can’t really operate well without having a good amount of COH and you need to combat the natural tendency to “retreat” by having plenty of money to not fear risk. But then, past a certain point, having a bunch of COH doesn’t create an ally out of time. 

In fact, the passing of time weakens your position (due to inflation obviously but also a dependence on markets & economic relations). We’ve begun to ‘cap’ our COH position and anything over a certain point gets placed into strong assets that get more valuable with time. 

The problem with this is, it requires time. The great benefit with this is, it uses time. In the last 30 days we’ve completed the acquisition of 10 properties and have 15 more in process to be closed on the first of May. They pay for themselves. They get more valuable every month. And we forget about them. 

3.. LOCATION & REDUNDANCY

In 2019 we moved into a 7-figure office deal and are relocating all of our team to Nashville. Why? 

Location impacts energy. Also, management is infinitely easier when you can see someone’s face and sense the room. You’ve probably already seen pictures of this office, but it is bangin’! 

We are relocating all full time employees and quite a few of our contractors as well. This also allows us to create something inside our culture that was very difficult before: redundancy. Redundancy in every area… but a few obvious ones: 

• Energy (no longer is it dependent on you to create your own energy, you can borrow from us)
• Focus (far fewer distractions when you’re surrounded by a group pushing in the same direction)
• Responsibility (explained below)

There are two people who can do everything. And we’re training everyone to always be thinking about training someone — the goal here is safety for individuals, and safety for the company. What’s best for the person is usually best for the company, and what’s best for the company is usually best for the person.

There are no zero sum games here… if our sales coordinator wants to ever have a vacation, she better have someone who can do what she does while she’s out. This idea gets 100,000x easier when training someone consists of walking over to their desk. 

4.. LIQUIDATION

If you are under 7-figures following this advice will not be helpful. If you are under 7-figures you need someone who can work hands on with you to make the necessary tweaks and get you over 7-figures. I know a company who does this very well (wink wink – hop on a call with my team to discuss how we can unlock hidden revenue opportunities in your business). 

If you are nearing or surpassing 7-figures in annual revenue, this is something you’ll want to pay attention to. You probably have a lot of content, right? If you’re over 7-figures in annual revenue you likely have trainings, teachings, maybe even an event or two every now and then — and there’s likely a way for you to take your current content and put a premium on it. 

Here’s how we do it: 

• 10,000 leads come in
• 3,000 of them will invest into one of our front end products, like News Feed Authority
• 1,000 of them will invest into Turbo Templates
• 500 of them will invest into a training I did on Productivity 

Blah blah blah…

All along the way people say “Wow this is really good! It was only $49… bet the expensive stuff is even better.”

Not only does this liquidate your traffic costs, it generates incredible goodwill with your marketplace. For instance, the productivity pack we released, I spent a million dollars on that thing. I have been through every single productivity system on the entire planet… 

And in the last 3 years I’ve just taken bits & pieces and created my own specifically for entrepreneurs with entrepreneur brains. Our whole staff (of like 40) are all using this. And we do more than a million dollars in monthly revenue…

And then we gave it away for like $49 or 79 bucks or something (I don’t even remember). That is incredible! We are basically giving away a gift — it might as well cost nothing. This is goodwill…

The downside of this is, if you focus on this before you have a machine pumping out 7-figures (annual) you will get distracted, won’t have the team or capacity to do it, and you’ll have to pay your bills off of $100k in annual revenue (which is basically nothing, let’s be honest). 

Don’t do that. Focus on the dirty first, which is the main machine… 

5.. GIANT A$$ BUSINESS INSURANCE 

Just do it… in fact, we are getting as much insurance as we can in almost every area (not just business). Insurance gives you a peace of mind and allows for fear displacement. 

There’s nothing quite as reassuring as having a huge chunk of cash on hand set aside — except, perhaps, as having a huge a$$ insurance policy protecting that cash.

We only pay about $10k a year for this insurance that will cover over SEVERAL millions of dollars worth of legal fees etc etc… it’s bulletproof. 

“Taylor why are you getting insurance, are you expecting bad stuff to happen?” 

The point of growth is to be able to not just “advance,” but to PROTECT the ground you take. Insurance is something we’ve never really messed with up until about 6 months ago, and thankfully we haven’t had to use it…

In fact if you never have to use it, that’s great. But it’s there if you need it and that’s the point. We are doing a private ELITE intensive soon where we’ll be talking all things operations & protection (business insurance, who we use / how to get it, employee contracts, buy/sell agreements, etc). 

Speaking of, this is one of the best ways to get behind the scenes (including monthly invites to our offices, quarterly “big” meetings, and monthly intensive training)…

You cannot “buy” a ticket to this in person office day — it’s something we do only for ELITE clients… ELITE is 6 months, and in my opinion it is the best mastermind combination available to business owners using the internet to grow. Hit us in the FB group or call us to chat about it if it’s something you could benefit from. 

Recipes for LONG Term Winning

I can’t think of another way to put this… but most people are losing because they’re trying to win right now. 

If you’re familiar with Robert Greene (his work on “Strategy” is particularly useful, which you can find in 33 Strategies for War) he has a term “Grand Strategy.”

Grand Strategy is the ability to see all the way to the end of the line… 

In war, there are many battles. There is such nuance here, so lean on this. Generals who are stuck in the big picture all the time, who only think about the “big war” and ignore the battles, they lose all the battles and ultimately it costs them the war. 

Generals who are stuck in the weeds and just want to obsess over the little nuances of the battle, they can’t see the big picture and will can be drawn into fights they should’ve left alone. An imbalance in either direction (too big picture, too micro) can be fatal, as it will open you up to traps and fatigue. 

The key is two fold:

1. Know your outcome (big picture, “grand strategy”)
2. Focus on the interim (aligning “today” with “tomorrow” via today’s actions)

Let’s put this in practical terms… 

We will assume that your grand strategy is to create 8-figures in revenue and accumulate 7-figures in cash over the next 3 years (we typically operate in the following time intervals: 1-year, 3-year, 10-year; but 10-year is almost impossible to see and most big players have it as a loose vision but aren’t tied to it)…

Someone asks, “is it right to acquire this company for $500,000? It produces $1,000,000 per year in revenue with 15% profit margin.” Whether it’s a good deal or not doesn’t matter… 

The correct answer here is, can you fit this into our grand strategy? 

Can the business be doubled? 

Can we increase the profit margin to 25%? 

Can we run a promotion to one of your other businesses to recoup the cash outlay? 

If the grand strategy is 8-figures in annual revenue, and 7-figures COH, then these questions must all be answered “YES” in order for this to make sense. 

A great business deal could be BAD — for you… it all comes down to your grand strategy. In this instance, this is a great acquisition (most likely). At these margins, the business will pay for itself in 3 years. A typical real estate deal takes 7 years to pay for itself. 

This isn’t a bad deal at all, but the answer would be a resounding no, IF we can’t double the cash flow, increase profit margins to 25% and /or run a promotion to immediately recoup the acquisition.

Why? 

• 8-figure run rate
• 7-figure cash on hand

That is the outcome, and this business cannot take us there in time on its own… and it will cut our cash on hand goal by 50%. 

You’d be better off putting $500k into ads if your current business produces profit with reasonable margins. 

Great business strategists understand that all business is CONTEXTUAL… and this is the large difference between amateurs and true masters: 

Amateurs only think in terms of ‘rules’ and ‘tactics.’ Masters think in terms of context. They understand the rules but the rules exist to serve the ultimate outcome…

This is why I believe this newsletter is one of the best ‘tactical’ AND ‘strategic’ uses of your time (and money) each month: these ideas turn your brain into an arsenal or a toolbox that you can use to configure strategies for different target outcomes. 

Back to the original point though: long term requires grand strategy…

Here are some closing thoughts on building a business that thrives under pressure:

1.. When given the opportunity, sacrifice today to win tomorrow. 

Everybody wants their sh*t now. Today. But the best cakes can’t be baked in a microwave.

If you can develop the habit of seeing tomorrow first, today second, you will make way more money and you’ll probably be a lot happier as well. 

2.. The mind is the greatest targeting device of ALL time, use it. 

Missiles take advantage of advanced targeting tech to make hundreds of “micro-adjustments” every second… the only way to hit a target is first knowing the target, and second knowing current trajectory in relation to that target (which allows for adjustment). 

Your mind’s ability to adjust and track progress is second to none. BUT most people don’t look at their targets enough so they CHANGE THEM or forget about them. Pick up a copy of Psycho-Cybernetics. Start writing your goals out each morning…

And if you’re feeling really good — hunt down a copy of the Morning Formula training and build yourself one 🙂 that’s the ultimate weapon for seeing the long term.

In your service,

-Taylor Welch and Chris Evans