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That helped me turn $136 into over $120 million in sales.

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Welcome to the game where we talk about how to get more customers,

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how to make more customers, how to keep them longer,

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and the many failures and lessons we have learned along the way.

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I hope you enjoy and subscribe.

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In this video, I'm going to explain the single equation

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that helped me turn $136 into over $120 million in sales.

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And right now, our portfolio company is about $85 million a year.

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So this concept has been the central concept to how we've grown each of our portfolio

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companies with 100% equity without taking on outside capital and investors.

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And so the key here is if you don't have a lot of money,

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you have to think different and play the game differently.

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Most people, when they try and play the game, when they get the investors from outside,

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or they have some sort of seed capital of their own,

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they think, I'm going to have to take two or three years before my business

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is break even or positive.

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And that is definitely a belief that you can have,

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but not necessarily one that you have to have, right?

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And so I prefer to, you know, change the variables to the game that we're playing,

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to try and figure out a way to make money all the time, right?

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Because it's like, well, if I could make money the whole time,

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then that would make this definitely more fun and a lot less stressful, all right?

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And so the equation that I'm going to outline for you

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is what I call client-finance acquisition.

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This is how we grew our first license, you know, shoot.

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I grew, I went from zero to six locations at my brick-and-mortar chain

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in three years, the 26-year-old, and I was able to open up

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each of those locations at full capacity, except for the first one, obviously.

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But each of the ones after that, once I learned how to do this, on day one.

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So that's not normally common.

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So we open up each facility at complete, completely full capacity.

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And then I did this at 33 other locations over the next few years, all right?

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After that, we transitioned to our license business,

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and we used the exact same model that I'm about to show you.

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To go from zero to $2.5 million a month within, I think it was like 12 or 14 months,

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and that's per month, not per year.

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So I went from zero to 28 million top line, right?

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And then 12 months after that, we're at 4.4 million a month, all right?

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And the second business that added that up went from zero to 1.7 million a month

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in four months, all right?

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The third business we started, our software business,

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went from zero to also 1.7 ironically within six months, all right?

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And so this equation matters, all right?

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Profit matters, if you want to be in a capital society,

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because it's the only way that you're going to be able to weather the storms, all right?

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So this is the writer downer, all right?

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This is called client.

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This is an equation, but it's a process, all right?

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Client-financed acquisition.

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What this means in plain terms is get your customers

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to pay for all of your marketing and your acquisition costs, all right?

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And so what that means is if you can plug into the universe's money, not your own money,

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but you plug into the money of the universe,

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you can pretty much cash flow anything you need, because you can make more money

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getting someone to enter your world than it costs you to get them there.

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And if that is your case, and you still have all the lifetime value that you're going to collect,

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but if you can do that in the first 30 days, and you can pay the cost of fulfillment,

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and still have money left over, then you have what is called a negative acquisition cost,

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all right?

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It means that you make money getting customers, all right?

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So this is the actual equation, all right?

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So it is two times.

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All right, now there's probably, you know the number two,

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but then there's three things in here that you may or may not understand.

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And so I'm going to break down each of them.

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Let's call this number one.

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Let's call this number two.

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Let's call this number three, all right?

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So if I were to read this in plain language,

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you would say 30-day cash, whoopsies.

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I usually write this the other way.

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30-day cash must be greater than

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two times the cost of acquiring customer

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and the cost of fulfilling that customer, okay?

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So what this means is cost of acquisition, all right?

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So let's say it cost me a hundred bucks to acquire a customer.

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And that includes my marketing team.

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That includes my sales guys and their commissions.

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That includes the advertising or whatever method I did to acquire the lead, okay?

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So let's say all in it cost me a hundred bucks.

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I'm just using simple math here.

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Now, let's say that for me to fulfill this thing,

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whatever the thing is, let's say it cost me another hundred bucks, all right?

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So that's $200 that's going to cost me to fulfill and sell this thing.

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These are my costs, right?

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And so the idea is I have to have two times the sum of this, all right?

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Remember, this isn't our little parentheses, all right?

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Which means this is $400.

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That is what I must make, right?

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That has to be less than what I make in 30-day cash, all right?

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Which is a term that I use that I've never really heard anywhere else.

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I'm sure there's a fancy word for it, but I call it 30-day cash.

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Which is the amount of money that I can collect in net free cash flow to my business

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within the first 30 days of a customer entering our world, all right?

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Now, we may have upsells and downsells and continuity and future things

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that we're going to sell.

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But none of that matters to the small business owner who doesn't have cash.

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Real quick, guys, if you can think about how you found this podcast,

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somebody probably tweeted it, told you about it, shared it on Instagram, or something like that.

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The only way this grows is through word of mouth.

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And so I don't run ads, I don't do sponsorships, I don't sell anything.

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My only ask is that you continue to pay it forward,

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whoever showed you or however you found out about this podcast that you do the exact same thing.

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So if it was a review, if it was a post, if you do that, it would mean the world to me

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and you'll throw some good comment out there for another entrepreneur.

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All right, and so the reason it's 30 days is because that's the amount of time

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that you can get interest-free financing.

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All right, so if you have a credit card, people will extend you money for 30 days interest-free.

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That means if you paid off in the first 30 days, you can pretty much take unlimited money,

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all right, for the most part.

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Now you pay your stuff off and you get better, your limits, whatever.

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But the point is, and this is literally how I started my second business,

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is that I would use my cards, I'd put the money on the card to acquire the customer, right?

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So on my card, there'd be $200, because that's what's going to cost me to fulfill and acquire.

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But I would have made $400 on that.

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And the reason it has to be greater than this is because I have net,

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right, because we have to take out the 200 that we lost here.

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Do-do-do, right, minus 200.

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So I have 200 left over.

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What a coincidence.

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That's the exact amount that it's going to cost me to get another customer and fulfill that customer,

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which means that I'm going to get, you guessed it, another $400 from this customer.

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And we play the game again, which means that you have unlimited power to acquire new customers.

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Which means you get unlimited money, which is why if you play the game this way,

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and you choose to think about acquisition in this manner,

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you can grow your companies without capital constraint.

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Now, it doesn't mean that there won't be constraints.

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There will be. You have operational constraints, you have hiring constraints, you have other

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things. But if you play the game this way, getting new customers and making sales will never

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be the thing that is limiting your company. It will be only you.

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And this is what we've done over and over and over again is design a process in every business

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that we can figure out where the amount of dollars that we make in the first 30 days

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is greater than two times the cost to acquire plus the cost of the fill.

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And that works in any business in the world, all right.

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And now, ideally, I don't want to be just twice.

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It just has to be more than that, right?

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If I can make this, you know, 10 times, right, then it's even better, right?

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All of those make it just even easier because then I'm getting multiple customers.

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And I still have cash flow to go invest in other things.

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But this is the minimum requirement for CFA or what we call client-financed acquisition.

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And so right now, if you don't have money or you don't have capital and you think it takes

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money to make money, you just keep believing that beautiful lie and let everyone else go,

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wait a while, you keep complaining. All right.

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So keeping awesome, Mosy Nation. I know you're not that type of person.

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And so we can beat all those people who have those limited beliefs.

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But I had $1,036 in my bank account five years ago.

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All right. Right now, the portfolio we do does $85 million a year.

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I took no outside money to do that, which means if you can learn how to play and multiply,

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and multiply, and multiply and not use your own money.

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Because I'm using my customers' money to finance all of the growth in this business.

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And so if that makes sense to you, I've used to making ads.

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I was going to say, click, click subscribe.

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But anyways, if you enjoyed this, if you found value in this,

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I make these videos, I have nothing to sell you.

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Click subscribe, I'll see you next video.

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I know this is a little bit more tactical.

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I'll talk about more managing people and scaling the company side.

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But this is the stuff, right?

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This is the, these are the things that actually grow the business.

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All right.

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So anyways, love you all, keeping awesome as a nation.

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I'll see you guys next video.

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Bye.