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- Herausgeber: John Wiley & Sons
- Kategorie: Ratgeber
- Sprache: Englisch
Practical wisdom on tools, concepts, and strategies to build, grow, and optimize your business
91% of small and medium sized businesses fail in the first 10 years. What is the other 9% doing to succeed? The 9% Edge is a highly practical guide to entrepreneurship and taking your business to the next level, no matter where you currently are in your build.
Developed from extensive research on businesses and their founders, combined with the 26 years of real-world, firsthand experience of author Candy Valentino, this book breaks down the core principles and concepts that are essential to bridging the knowledge gap between different stages of a build, and contains a wealth of tools and strategies, explained in plain English, that can be put into practice as soon as today.
Valentino went from a teenager living in a little white trailer on government assistance, to building, scaling, and selling multiple businesses in various industries and helping countless other businesses do the same in a consultant role.
In this book, readers will learn about:
- Expanding your customer base, strategically reducing costs without compromise, and measuring and evaluating critical revenue drivers
- Making data-driven decisions, implementing strategic financial and metric changes, and always moving forward with intention
- Achieving organizational transformation through revamping a marketing strategy, optimizing operational efficiencies, and restructuring finances
The 9% Edge is an essential resource for all business owners seeking to learn from someone who has run the gambit in entrepreneurial endeavors and knows from experience what has been proven to work.
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Veröffentlichungsjahr: 2024
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Table of Contents
Cover
Table of Contents
Title Page
Copyright
Dedication
Introduction
What Is This Book Really About?
Who Am I to Help?
Who Is This Book For?
PART I: More Revenue NOW
CHAPTER 1: Architecting an Intentional Business
Building with Intention
Architecting Your Intention
Your Business Shelf Life
CHAPTER 2: Common Entrepreneurial Landmines to Avoid
Entrepreneur Landmine #1: Self-Employed Sabotage
Entrepreneur Landmine #2: The Passion Paradox
Entrepreneur Landmine #3: Shiny Object Syndrome
Entrepreneur Landmine #4: Controlitis
Entrepreneur Landmine #5: Competency-sarcoma
Entrepreneur Landmine #6: Numberthritis
CHAPTER 3: Creating a Scalable, Sustainable, and Sellable Business
The Foundation of Financial Success
What the Numbers Are Saying
CHAPTER 4: Real-World Revenue Growth
CHAPTER 5: Sniper Strategies for Viability
The Science of Customer Acquisition
Building Your Customer Acquisition Formula
Convert Customers More Efficiently
Success Leaves Clues
PART II: More Profit NOW
CHAPTER 6: Measuring What Matters
Myth #1: Measure Everything!
The Big 10
Myth #2: Measure the Right Things and Business Will Grow!
Myth #3: Set It and Forget It!
Running Your Business with Intentionality and Focus
Which Metrics Are You Measuring This Quarter?
CHAPTER 7: State of the Union Meeting
How Numbers Talk to You
Financial Reports Are Just a Summary of the Data
Financial Report 1: Income Statement (P&L)
Financial Report 2: Cash Flow Statement
Financial Report 3: Balance Sheet
Financial Report 4: Statement of Shareholders’ Equity
Financial Analysis Is How You Look at the Data
The State of the Union Meeting
Financial Ratios Are How You Measure the Data
Important Business Metrics and KPIs
Momentum Method
How Two Hours Pays Dividends
CHAPTER 8: Uncover the Profit You Already Have
You Have to Dig Before You Build
Trim the Fat on Your Expenses
The Mechanics of Expense Optimization
Let Go of Bad Customers
Duplicate Your Top Customers
Create Your Blueprint
Financial Budgeting
Financial Forecasts
Expense Allocations
CHAPTER 9: The Players on Your Profit Team
The Game of Sports and Business
Creating Your Championship Team
The All-Star Players on Team Profit
Accounting for Profit
PART III: More Freedom NOW
CHAPTER 10: Four Exits Every Founder Needs to Make
CHAPTER 11: The Final Exit
Exit Principle #1: Your Exit Begins Long Before You Ever Go to Sell
Exit Principle #2: Your Exit Will Take Longer Than You Anticipate
Pre-exit Ramp: Prepare
Exit Principle #3: Your Exit Will Be Determined by Numbers, Data, and Metrics
Exit Principle #4: Your Exit Will Look Different Than You Think
The Different Routes to Your Exit
Exit Principle #5: Your Exit Will Likely Feel Different Than You Imagine
Notes
Chapter 1
Chapter 2
Chapter 3
Chapter 4
Chapter 5
Chapter 9
Chapter 10
Chapter 11
Acknowledgments
About the Author
Index
End User License Agreement
Guide
Cover
Table of Contents
Title Page
Copyright
Dedication
Introduction
Begin Reading
Notes
Acknowledgments
About the Author
Index
End User License Agreement
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Praise for The 9% Edge
“Candy is an entrepreneur’s entrepreneur! She does a masterful job of breaking down and simplifying complex business topics. If you are an entrepreneur, you need this book.”
—Tom Hattan, founder and chairman of Mountainside Fitness
“I love the way Candy thinks. She shows you how to collapse time in a way the most successful people I know have done: breaking down business to the simplest form of the game to create success. This book should be required reading for every high school student, entrepreneur, or anyone who wants to turn the tables on their current situation.”
—Rick Steele, founder and executive chairman of SelectBlinds and PGA Trustee
“People who build real businesses and wealth do things differently. Not only does Candy understand this from her own experience, but she does a masterful job of giving the reader actionable steps to immediately put them on the path to business success. She has cracked the code, and if you’re looking to change your reality, this book is for you.”
—Todd Davis, retired founder and CEO of LifeLock, Inc.
“Candy has been a huge help to me and to so many other founders I know. Her knowledge has been invaluable in building an eight-figure business and has changed the way I scale my business and diversify wealth. Her wisdom, this book, and its message belongs in the hands of every student, every entrepreneur, and every person who wants to take control of their future, attain success, and create a massively profitable business.”
—Amy Lacey, founder of Cali’flour Foods and international bestselling author
“Candy Valentino is the real deal! She built massive companies and created practical systems to help entrepreneurs and business owners do the same. I highly recommend The 9% Edge to anyone who wants to build more revenue, more profit, and more freedom!”
—Rory Vaden, New York Times bestselling author of Take the Stairs
WALL STREET JOURNAL BESTSELLING AUTHOR
CANDY VALENTINO
THE 9% EDGE
THE LIFE-CHANGING SECRETS TO CREATE MORE REVENUE FOR YOUR BUSINESS AND MORE FREEDOM FOR YOURSELF
Copyright © 2025 by John Wiley & Sons, Inc. All rights reserved, including rights for text and data mining and training of artificial technologies or similar technologies.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.Published simultaneously in Canada.
No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, (978) 750-8400, fax (978) 750-4470, or on the web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748-6011, fax (201) 748-6008, or online at http://www.wiley.com/go/permission.
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Library of Congress Cataloging-in-Publication Data
Names: Valentino, Candy (Candy D.), author. | John Wiley & Sons, publisher
Title: The 9% edge : the life-changing secrets to create more revenue for your business and more freedom for yourself / Candy Valentino.
Other titles: Nine percent edge
Description: Hoboken, New Jersey : Wiley, [2025] | Includes bibliographical references and index.
Identifiers: LCCN 2024031457 (print) | LCCN 2024031458 (ebook) | ISBN 9781394152322 (hardback) | ISBN 9781394152346 (adobe pdf) | ISBN 9781394152339 (epub)
Subjects: LCSH: New business enterprises—Management. | Small business—Management. | Revenue management.
Classification: LCC HD62.5 .V327 2025 (print) | LCC HD62.5 (ebook) | DDC 658.15/54--dc23/eng/20240806
LC record available at https://lccn.loc.gov/2024031457
LC ebook record available at https://lccn.loc.gov/2024031458
Cover Design: Wiley
Cover Image: © phochi/Getty Images
Author Photo: Courtesy of the Author
To the millions of entrepreneurs
who dream big dreams, and take big risks –
May you find your edge and use it to create
an even bigger impact in the world.
Introduction
The whole point of starting a business is to build a machine that generates revenue and creates wealth, so you can stop trading time for money.
If you are an entrepreneur, business owner, or founder who has laid the foundation of your business and are now looking to grow, scale, and increase your profits – you’ve come to the right place.
This is the guide to growing your revenue, increasing profitability, and creating a business that you can scale (and even potentially exit).
However, that is much easier to say than it is to do. The fact is that 91% of all businesses fail in the first 10 years. This staggering statistic had me questioning why. Was it the wrong business model, a declining market, just bad timing, or was it the founder?
I started to dive in and search to find all the reasons why businesses fail. This led me to a four-year research project with data from thousands of entrepreneurs and their businesses. I was determined to find out if there was a clear correlation in the research.
Turns out, there is. And the reason 9 out of every 10 businesses close their doors before their 10th anniversary may surprise you.
It isn’t because they don’t have a great idea, or a great product.
It isn’t because they don’t have a brilliant, Ivy League–educated founder.
It isn’t because they didn’t master the latest marketing trend or decode the latest social algorithm.
And it isn’t due to lack of connections, lack of network, or lack of followers.
The number-one reason businesses fail is summed up in three words: lack of profit.
If we expand just slightly on that, the research uncovered these top three reasons: lack of profit, declining sales revenue, and lack of cash flow or funding – aka not enough money.
With this information, I was curious and posed a second question. If we know why 91% of all businesses fail in their first 10 years, can we identify what the 9% who succeed do differently?
Can we pinpoint, and more importantly duplicate, the patterns of successful, sustainable businesses – and their founders who build them – in order to stack the odds for success in our favor?
The answer is yes, we can. And that is the crux of this book.
Becoming part of the 9% is going to require taking an honest look at your decisions, behaviors, and habits. It’s going to require the understanding that what you know now might not be the knowledge that you need to get where you want to go because some of the skills and habits that got you here won’t get you there.
Building a successful business will require different talents, strategies, and skills to go from startup to growth, to scale, to optimization, and to exit. The skills you developed that helped you start in business are not the same skills you need to sustain in business.
The sooner entrepreneurs understand and apply this principle, the faster you can achieve whatever it is you are after.
What Is This Book Really About?
This is not a flashy book. It’s a foundational book. I won’t come at you with just theory and concepts. I’ll give you tools, principles, and strategies needed to grow, scale, and even exit.
Because if there’s only one thing that’s true in business, it’s that your ability to increase revenue, and ultimately your profit is – and always will be – a primary function and should be a key focus for founders and entrepreneurs.
Your success hinges on your ability to acquire customers, to generate sales, and to maintain profitability, consistently. Growing your revenue and increasing your profitability is not about working harder; it’s about working smarter by identifying and implementing key strategies that have a direct impact on your bottom line.
In this book, we’re going to dive into all of the details and intricacies of exactly how to do that.
During my 26 years of experience, I’ve built, scaled, and sold multiple successful businesses in numerous industries. I have also had the pleasure of working with businesses of all sizes – from those making their first couple hundred thousand in revenue, to those doing $200 million, going after an IPO, and creating a unicorn.
The most fascinating thing is that regardless of where you are in your current growth cycle, the principles of creating a scalable, sustainable, and sellable venture remain virtually the same. There are endless ways to architect your build, but when it comes to growth and scale, everything gets boiled down to a handful of core principles.
No matter where you are in your build, all of us entrepreneurs have one seemingly simple thing in common: we want to increase our revenue, keep more of the money we make, and reclaim our freedom in the process. I say seemingly simple because simple doesn’t equal easy. If it was easy, more than 9% of us would succeed at doing so.
So whether you’re scaling your company, just starting in business, or really ramping up your growth cycle – understanding how to increase your revenue, maintain profitability, and create a business that can sustain through the evident challenges that arise is essential to create your edge.
Starting a business is one thing, but consistently growing your revenue and maintaining profitability will require a completely different set of skills.
Throughout this book, we will explore key areas proven to drive business growth, and fundamental principles like expanding your customer base, enhancing average order value, boosting the frequency of purchases, strategically reducing costs (without compromising on quality or service), and how to measure and evaluate the critical revenue drivers in your business.
This book is not about quick fixes or overnight success. It’s about applying consistent, focused efforts to strengthen the core aspects of your business. Whether you are looking to fine-tune your operations or need a complete overhaul on your finances, the insights shared here will give you the edge and secure your place within the 9%, making your success not just possible or probable, but predictable.
We are going to go deep in all the ways you can increase your revenue NOW, what levers you can pull to increase your profit NOW, and ultimately how to buy back your time and create more freedom NOW.
Who Am I to Help?
Well, here’s the thing. If you want to learn from someone with an MBA or a PhD, or a dozen other letters after their name, that’s not me. I don’t have a business degree, I didn’t come from a wealthy or educated family, and quite honestly I don’t use perfect grammar or sentence structure (drives my editor nuts!). I’m not a writer, I’m not a professional speaker, and I’m not some online marketer. I’m an entrepreneur – just like you.
I’ve taken risks, I’ve had huge successes and massive failures, and have figured out a lot over the last two and half decades. What I lack in institutional education, I make up for in real-world application.
I didn’t invent a market-disrupting idea, I didn’t reengineer an industry, and I didn’t perfectly time a vertical roll-up. Instead, I simply had the willingness to try, the commitment to continue, and enough leverage to keep showing up, even when I didn’t want to – and the beautiful part is that these are all things you can do, too. All these things are within your ability and your control. Because success, my friend, is far less about what resources you have, and far more about how resourceful you are willing to be.
So whether you read my words, hear me speak, or tune into The Candy Valentino Show, you know that I don’t teach from books, from theory, or from regurgitated information I heard from someone on the internet. I teach from experience, from exploration, from trying and failing, from being relentless in the pursuit of knowledge and growth. And if I’m really good at any one thing, it’s actually just identifying patterns, understanding numbers, and simplifying complex topics. That’s it. No earth-shattering inventions or genius IQ here.
Prior to all the businesses, the investments, and the books, I was born in a single-wide, little white trailer parked on the outskirts of a small town. My parents, teenagers when I was born, relied on government assistance to make ends meet. My early years were marked by the hardships of poverty and abuse. With no option for childcare, I spent my afternoons and evenings in my father’s small auto repair shop, witnessing the struggles of entrepreneurship firsthand.
Most of the kids I knew had after-school routines of learning the mechanics of some sport, dance, or gymnastics. I, on the other hand, was learning the mechanics of small business – inside the walls of a greasy, grimy little garage. My mom cleaned houses, my dad turned wrenches (as he called it), and I witnessed the immense amount of hard work it takes to put food on the table.
I worked with my dad every day until I turned 16. Immediately after high school, recognizing that the traditional route of college would not fast-track me to where I needed to be, I secured an SBA loan with a six-week run-rate and launched my first brick-and-mortar venture.
My journey didn’t stop with that first successful enterprise. I expanded into product manufacturing, launched additional businesses, created additional locations, scaled service and consulting businesses, launched an SaaS company, acquired and consolidated businesses, successfully exited three companies, and built a significant real estate portfolio in the process.
The important thing is this: I didn’t have connections, resources, money, or a corporate background filled with talents and skills. But that’s the best part – because success is truly here for all of us. Regardless of your childhood, your background, your level of education, or your reality right now, with an intentional plan, determination, and commitment to continue, and the knowledge and understanding to architect your build – truly anything is possible.
For me, those efforts allowed me to create a nonprofit and donate a building to the organization in my early 20s, marking the beginning of my long-standing commitment to philanthropy, which I’ve continued over the last 20 years. Financial success can be a catalyst to create real impact in the world.
Who Is This Book For?
The strategies and insights I share in this book are not theoretical musings, but lessons from the real business world as experience from doing has been my greatest teacher. In business, we only learn one of two ways: from mentors or from our mistakes. My hope is to save you from the latter by sharing this knowledge and research with you.
I’ve helped multiple businesses turn around from the brink of failure to revamp their financial structure and create a path toward profit. I’ve consulted with others who were stable, successful, and ready to scale to their next revenue benchmark. Each case was unique, yet the underlying principles remained consistent and the outcomes have been transformative.
Along with my research, these experiences have not only solidified my approach to business, but also deepened my commitment to empowering others. The essence of this book is not just to share knowledge, but to offer you actual tools and strategies that can elevate your business to a new level of growth and success – all aimed at helping you increase profit, achieving more freedom, and finding your edge to become part of the 9%.
As we get into the core strategies and practices to business growth, remember this: the principles I share are universal and proven. So whether you’re aiming for your first $100,000, navigating your first couple million, or pushing past $30 million in revenue – this book is for you.
By the time you finish reading this book, you’ll have a new level of clarity, a greater understanding of your financial picture, and the practical steps to take next. All of this will make building a business easier, faster, and more profitable than ever before.
So get ready – you’re on the verge of more revenue, more profit, and more freedom, NOW.
Let’s get started.
PART IMore Revenue NOW
CHAPTER 1Architecting an Intentional Business
If you are not intentionally building a business, you will accidentally build yourself a job.
No matter how good you are, and no matter how long you’ve been at this, the reality is that 91% of all businesses fail within 10 years.
According to the US Small Business Administration (SBA), around 66% of all new businesses make it to the two-year mark, only half of all companies survive past five years, and more than 90% fail within 10 years.
And it’s not just small businesses that suffer this fate. I almost fell off my chair when I learned that 88% of all the Fortune 500 companies that existed just 50 years ago are gone. They have either gone completely bankrupt, crashed, or been eaten up in a merger, and even those few that still exist are no longer a Fortune 500 company.1
Steven Denning, a Forbes senior contributor, pointed out that 50 years ago the life expectancy of a Forbes 500 company was 75 years.2 Today, it’s less than 15 years!3 This means you will likely outlive some of the biggest companies that exist today.
That was a lot of data, but stay with me. This is all-important for you and your business.
In his study of hundreds of startups, Harvard Business School professor Tim Eisenmann found that while business owners may have the right acumen and decision-making skills, a whole host of issues can lead to the demise of a small business. One of these issues is the philosophy of “just start” – a message I see shared over and over again on social media. And while there is truth to starting before you feel ready, there is also truth in not starting before you’re actually ready.
Hear me out. You’ll never feel fully ready to do anything. There will always be a feeling of needing “one more.” One more year to prepare, one more degree on the wall, one more person more capable than you, one more pass at the manuscript to make it better – oh wait, that one was me. ;)
Entrepreneurs who blindly follow the advice of “just start” will often skip crucial elements needed to build a successful business. They miss establishing key components like market research, investigating customer demand, ideal customer demographics, and job markets for hiring employees, to name a few.
I find that startup entrepreneurs are so eager to get started that they set themselves up to fail (or fizzle out) before they even launch.
Being strategic and having intention about what you’re building is more important than starting at all. Without proper planning, you could wake up one day realizing you built a business you hate, or a job you have to show up for.
Building with Intention
Every business is unique, even within the same industry, same vertical, same market, or even the same town. The business is as unique as the founder’s fingerprint, making the path to success unpredictable. But when you combine a few key principles – which we will break down throughout this book – you can start to change the odds in your favor. The first principle is always building a business with intention.
When your business has a clear purpose, and you are deeply intentional in your build, you will have better beliefs, which will create better decisions, which will create better behaviors, which will create better habits, and in turn that will create better results.
Starting with a clearly defined purpose and deeply intentional plan is like the difference between being busy and being productive. You can be really busy and achieve nothing that matters. You can be really excited and achieve nothing that matters, or at least doesn’t propel you closer to your ultimate goal. You can work endless hours, and still fail. You can join all the groups, learn all the latest marketing hacks, create an audience, customers, products, and funnels, and still fail.
Why? Because not all action is created equal. Setting goals and achieving them creates momentum. But not all momentum is valuable. Undirected momentum is reckless. Setting intentional goals and directing momentum – now that is rocket fuel.
in·ten·tion·al·i·ty
4
/inˌten(t)SHəˈnalədē/
noun
the fact of being
deliberate
or
purposive
.
the quality of mental states (e.g., thoughts, beliefs, desires, hopes) that consists in their being directed toward one object or state of affairs.
A study from the Journal of Small Business and Enterprise Development5 observed entrepreneurs as they developed their businesses to evaluate and better understand what they consider motivating factors in their decision-making. Over 600 entrepreneurs participated in the study. I analyzed the findings of this study and four others completed in prior years. I added my own research from evaluating, working with, and researching entrepreneurs and included the data points here.
I found that there are four main Entrepreneurial Triggers (what causes someone to become an entrepreneur). One, however, was exponentially larger than the other three.
Three of the four main Entrepreneurial Triggers are:
Existing negative conditions:
I don’t like my job, don’t like my boss, don’t like my co-workers, or the job was boring (18%).
Future potential outcomes:
I had an idea, I saw a problem to solve, I saw a market/need for this business (12%).
Current circumstantial challenge:
I inherited a business, joined my family’s business, or a loved one passed away (8%).
But almost two-thirds of the entrepreneurs studied (62%) fell into the fourth and largest section of Entrepreneurial Triggers. This Entrepreneurial Trigger is based on the need for personal freedom, control of schedule, desiring more fulfillment, realizing true potential, achieving a dream, and a yearning for personal and professional growth.
I call it the Freedom, Flexibility, and Fulfillment Triad.
So when reading through all the research that the team and I uncovered, I posed this question: If we can find the commonality in why businesses are started, can we also show why (and more importantly, how) businesses succeed? The answer is yes.
Since 91% of all businesses fail and only 9% succeed, what does the 9% do differently? One factor between 9% and the 91% is the presence, or absence, of intentional behavior.
Entrepreneurs who chose to actively further their knowledge, increase their skills, and be intentional with their behavior guided themselves to make choices with the end in mind rather than making decisions based on where they are right now. Those decisions based on future projection radically shifted their current (and future) behavior, which created drastically different habits, which in turn gave them extraordinary results.
On the contrary, the entrepreneurs who chose not to increase their knowledge, increase their skills, and be international with their decisions exhibited erratic behavior, keeping the entrepreneur stuck in busy work, operating more like a hamster on the perpetual entrepreneurial wheel than a builder who carefully and strategically architects their master plan.
Either way, you choose. And if you don’t choose, remember you still choose. Choices you don’t make are still choices – they are just choices that are made for you. Because if you choose not to act on building a business with intention, circumstances beyond your control will force you to act anyway.
Remember, businesses run on a system that has internal logic, form, and function, and follows its own momentum. Whether a business will grow or whether it will eventually fail is at first determined by the intentionality, or lack thereof, of its founder.
Architecting Your Intention
Without a clear strategy and intentional plan, it’s easy to find yourself trapped in a business that demands your constant attention, time, and focus. Many entrepreneurs fall into the trap of effectively creating a self-employed job, and not a scalable business.
So how can we avoid this?
In my book Wealth Habits I cover the importance of starting with the end in mind, regardless of what goal you’re after. I call it REO (which always makes me think of REO Speedwagon, but I digress) – Reverse Engineered Outcomes.
Unlike the common and conventional ways of dealing with problems, REO starts with the end in mind and how what we believe, how we think, act, decide, and behave is in alignment with the desired end result.
By focusing on the desired outcome and reverse engineering the target, we are able to better create the results we want with efficiency and with greater speed.
The most successful companies, athletes, inventors, and Olympians all leverage reverse engineering to achieve significant results. Leveraging pattern recognition, creativity, strategic thinking, and skill arbitrage helps us look beyond the surface and find the hidden structure. In doing so, you can achieve just about anything, and do so with greater speed and efficiency.
Let’s look at the eight steps to Reverse Engineer Outcomes.
These eight steps make the REO method an extremely productive and practical way of progressing toward your desired outcome, giving you the ability to condense time and move forward with speed.
One example of a successful REO was Southwest Airlines. The company was experiencing an expensive problem with their planes. It took them approximately 40 minutes to refuel each airplane. With more than 700 aircraft operating over 4,000 flights per day, this inefficiency created a very costly problem.
When first addressing this problem, the Southwest leadership teams asked, “Why are these planes spending so much time on the ground?” They went on to discuss all the reasons why the planes took so much time to refuel. Because of the way they posed the question, they were unable to find a solution.
When they changed their approach and framed it in a way that aligned with their desired outcome, they asked one simple straightforward question: “How can we get the planes to spend less time on the ground?”
The ideas began to flow like jet fuel. This change in approach led Southwest to adopt a new solution that took refueling from 40 minutes to 12 minutes. This shift drastically reduced expenses while increasing profitability and efficiency, as well as operational performance and customer satisfaction.
Another company that displayed immense intention to reverse engineer their desired outcome was Tesla. Elon Musk reverse engineered the technology used by companies that created the batteries for laptops. This approach allowed him to see how a similar design could potentially work in electric vehicles and gave the company massive insight to create a product that was more efficient. Asking the right questions and being intentional with architecting a plan put them on a path of innovation and success that’s been unparalleled in the automotive industry. Taking time to craft their model and refine their path in the beginning avoided the endless challenges and delays in getting to market and made their path to success seem like it happened overnight.
Reverse engineering can both decrease your costs and increase your efficiency drastically. The time, discipline, and intentionality of launching took years. Had Tesla followed the common phrase on social media “just start!” they would likely have been “dead on arrival.”
When you are looking to reverse engineer a goal, an outcome like Southwest did, or even a product like Tesla did, here are some thought-provoking questions to ponder:
What patterns can you identify from established businesses and leading companies within your industry?
What techniques do industry leaders use to increase revenue, attract high-level talent, streamline processes, or have better functionality?
How can you effectively apply the knowledge you found or have gained to improve your business, your revenue, or your products?
Your Business Shelf Life
Every business has a shelf life. From the day you open the doors to the last day you close them, every business starts and eventually ends. Even if you build a scalable, sustainable, and sellable business, and become part of the most viable and long-lasting businesses in the country – with the likes of JP Morgan, Colgate, Jim Beam, and Cigna – your time within that business will still end.
Whether it fails and closes its doors for good, whether you pass it on to your children or your family, or whether you sell it, merge, or are acquired – the harsh reality is this: every founder will exit their business at some point. Whether you get paid for it or not is up to you, and ultimately the intentionality you have with its build. Architecting with intention can be a significant factor that determines not only your ability to have a capital exit, but how much you get paid for it in the process.
The hard truth is that more than 75%–80% of businesses will never be acquired, meaning you have an almost 8 out of 10 chance that your business will not be an asset and that you need to invest wisely so that one day you can retire – or at least make work optional since most of us don’t ever really want to retire.
If your goal is to build a company that is an asset, one that you can eventually cash out at the exit, how different would your decisions be now with that plan in mind?
Imagine how you’d handle situations and choices if you framed each decision through the lens of an eventual exit or acquisition. How would you answer that question, how would you make that decision, who would your next hire be, and how important is understanding business finance? How would you show up differently in your business if you had the intention of building a business you could exit?
For the first 15 years of my journey running multiple businesses – leading teams, more locations, industries, and real estate investing projects – I kept myself on the entrepreneurial hamster wheel. Because even though I had people, profits, and processes in place, I still didn’t think I could leave my businesses. So I never went on a week’s vacation. I’d take long weekends, but never full weeks. The thought of leaving would give me anxiety because I knew the overwhelming workload that would await my return. Returning to the office after four days was a nightmare and I couldn’t imagine the chaos a week off would create. Initially, I didn’t realize that I essentially built a cage for myself, the exact opposite of the freedom and flexibility I desired.
I knew I could go on a vacation, but looking back I simply didn’t want to. Buried in work, wearing the badge of busy, can be a great place to hide. My conscious decision fueled by some unconscious wiring kept me on that hamster wheel so long that 15 years in, I found myself burned out, stressed out, and utterly exhausted. I ran so hard and so long that I ran myself straight into the ground.
Many entrepreneurs I work with get caught in this trap, too. Instead of following the trigger that made them want to be an entrepreneur to begin with – the freedom and flexibility to spend time with family, to control their own schedule, to be able to casually visit their favorite coffee shop on a Tuesday – they got caught up working almost entirely in or on the business, and they found themselves not having the time to do what they originally envisioned, or feeling guilty when they did.
So I want to ensure you’re extremely intentional about what you want to build so that you can avoid the number-one mistake entrepreneurs make – where you think you’re creating a business, but you inadvertently create a job. Unless you’re planning to work forever, you need to establish a system that generates income, brings in consistent revenue, and builds wealth – so you can have what everyone ultimately wants: freedom.
So now that I laid the foundation of why it’s important to do this, let’s discuss how to do this.
Having built multiple companies and businesses, and working with thousands of entrepreneurs, I’ve identified a consistent through line pattern with what it takes to construct a scalable, sustainable, and sellable model regardless of the industry or vertical you’re in.
