One way to think of a business is how does money flows from your customer’s pockets to your bank account. That’s what the DFL Money Flow Framework will explain.
With all the videos on how to make money on YouTube, it’s easy to get overwhelmed and to miss important points. Today I’m going to introduce a simple way to understand it you can’t afford to miss.
There are 5 million 200 and 77 thousand videos on YouTube on how to start and run a business. And that doesn’t include ones on how to grow a YouTube channel or social media following.
Where do you start?
Today I’m going to give you a tool to more easily think about business. Most videos are about tactics but this series is about understanding the pieces of your business.
Did you know you can make lots of sales and never have any money in your bank account? This is what my friend and advisor call “Entrepreneurial Poverty.”
You can have everyone in the world watching and reading your stuff but never make any money.
It is easy to talk about how to make a great sales funnel, but that doesn’t matter if no one is going there.
So I’m going to give you a framework today you can use to examine your business. You can also use it to hang things on if you are still in the planning stages of your startup.
The first thing you have to do is get Attention. Everyone in business knows that “If you build it they will come” is BS.
No one will even think about buying your stuff if they don’t know it exists. Nor will they let you explain it to them if you don’t first get them to notice you.
We have more ways to get people’s attention than in the history of humankind, but so does everyone else and that makes it hard.
Desire & Trust
After you get their attention, you have to build Desire & Trust. Once you have their attention you have to build a desire for your product in them.
People only buy what they want. This is a key distinction. If they don’t want it, they won’t buy it. So you need to convince them they want it. You have to build desire.
A related distinction is people: don’t buy what they need, only what they want.
Once people want your product or service, you have to convince them you can and will deliver. That is trust.
Now that you’ve got their attention, and convinced them they want your product, you need to get them to buy.
If you’ve done Desire and Trust right, this is the easy part. Mostly it is about not making mistakes. Here are the two biggest mistakes when it comes to buying.
Not asking for the sale, and making the process too hard. We’ll go deeper into that in the deep dive episode.
Now the part of money flow no one seems to talk about. The part where the tools are the weakest and the part most business owners spend the least on.
The Internet Marketing crowd is the worst at this. They are so focused on getting attention, building desire, and closing the sale, that what happened afterward is secondary.
That’s why they build super slick sales funnel software, with a mediocre membership back end. Delivery includes the entire process after the sale.
What you actually give them, how you deliver it to them, how you onboard them to your service, and how you support them after the sale. We’ll go over all of this in the deep dive.
Now the last missing piece. The one that most contributes to “Entrepreneurial Poverty.”
How cash flows through your business.
The other big lie out there is that if you make a lot of sales, you are making a lot of money. People often say they have a 2 million dollar business, but when you look at their lifestyle, you wonder how that can be.
It is because revenue is not money in your bank account.
Take for instance a real estate agent. They may say they sold 2 million dollars in real estate last year, and you think they are a millionaire. But in reality, they got at most 2-3% of that number.
I know a number of people who own a business and never get paid. They pay everyone else first and money from sales never goes into their personal bank account.
I’m going to give you an introduction to the Profit First system that I use in my business and encourage all my proteges and students to use it. If you want to get ahead of the game on this one, you can buy the book of the same name.
Question of the Day: Where in this flow do you have the biggest struggle?