Read, Fire, Aim : Zero to $100 Million in No Time Flat”
There is a whole section of the book that I have not reviewed: Stage 3, adolescence and Stage 4, maturity (7 chapters in all), simply because I believe that if you manage to bring your business to the edge of Stage 3, you will have had plenty of time to buy and read this book.
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Reading Ready, Fire, Aim has also been enlightening for me: for any company that is being created, finding its first customers and making its first sales should be the very first priority, and after those first sales I fully agree with the author that the company should devote 80% of its resources and time to selling. And that the majority of entrepreneurs make the mistake of not giving sales the priority they deserve and focus on other tasks – setting up offices, creating and printing brochures and business cards, creating their website – out of ignorance and fear of getting into sales.
What are the 4 basic principles that every entrepreneur must master as described in Ready, Fire, Aim?
Identify your target market;
- Quickly develop a product to sell in this market;
- Discover your optimal sales strategy;
- Sell the product.
And that according to him the three most important things in life are:
- What you do.
- When you do it.
- Who you do it with.
And that he has absolutely total freedom on these three points: he works when he wants, where he wants, and with whom he wants, doing only what he wants to do. That’s what he calls the best job in the world.
Part 1 – Being all you want to be
Chapter 1: Reaching the Next Level
According to Michael Masterson there are 4 general levels of development for a company, each with its own challenges and opportunities.
The first level is start-up. Moving from an idea to a successful and profitable business. From zero to 1 million euros.
- Main problem: You don’t really know what you are doing.
- Main challenge: Make the first profitable sale.
- Main opportunity: Reaching the minimum critical mass of customers.
The second level is the rapid development stage. Take your business from 1 million turnover (where there is often little or no profit) to one or two million annual profits. In terms of sales, this is the stage from 1 to 10 million.
- Main problem: You make just a little profit or you may even lose money.
- Main challenge: Create many additional profitable products quickly.
- Main opportunity: Increase cash flow and become profitable.
The third level is the teenage stage. Grow your business beyond the 10 million Euros turnover (which is difficult for many entrepreneurs) while having substantial profits ranging from 2 to 5 million. Turnover of 10 to 50 million.
- Main problem: Your systems are stretched and customers notice it.
- Main challenge: Turning chaos into order.
- Main opportunity: Learn how to establish useful protocols and manage processes and procedures.
The fourth level is the maturation stage. Increase your company’s turnover from 50 million to 100 million or even 200 million and more.
- Main problem: Sales slow down and may even stagnate.
- Main challenge: Become an entrepreneur again.
- Main opportunity: Make the business run on its own.
The author defined these 4 steps and the content of the book Ready, Fire, Aim for a retreat he organized for 30 entrepreneurs who paid $10,000 each to participate. He says that in order for the content of this book to work for you, you just have to give it your faith and time.
Chapter 2: Why the number of employees matters
Different ways to measure the 4 steps
Michael Masterson defined the 4 levels of growth of a company according to the turnover because most entrepreneurs reason by this when they think about the growth of their companies.
The number of employees is another important factor – scientific studies show that the effectiveness of a communication is inversely proportional to the number of people it must reach. The author has therefore designed his 4 steps according to the number of employees (the number of employees is given as a guide, the important thing is to consider the number of hierarchical levels that exist between you and the employees at the very bottom of the organization chart):
Step 1: You plus the first 7 employees
In this step, your employees understand exactly what you want because they are in direct contact with you. So the main problem you face is getting your flagship product or service sold.
In general, each of the 7 employees has very specific functions, then when the company moves on to the second step, each of them becomes the manager of his department, hiring a team of people to fulfill his obligations. Thus this first third of employees becomes the manager, and each time a second third employee is hired, the company’s ability to produce and sell products also increases.
Step Two: From 7 employees in the first third to 49 employees in the second third
By the time you reach 49 people, all of your employees in the first third and second third are fully occupied, yet there is still more work to be done. Typically, this stage is the fastest growing stage of the business, which means that you are facing problems that you haven’t faced before. One of the reasons is that the systems you had put in place before are no longer running as efficiently, because you are hiring new employees so quickly that these systems cannot be taught or monitored well enough.
These many problems are typical of companies that are about to hire third-tier employees and are reluctant to take the plunge. The reason for this hesitation is simple: the first third of your employees know everything you know, because they have been with you from the very beginning. Not only do they know their job very well (otherwise you wouldn’t have kept them), but they also know your ideas on how to develop the business by heart.
Your second third of employees are not in direct contact with you, but they hear about you through your first third of employees. They don’t always agree with your decisions, but they almost always relay your wishes to the employees of the second third party. The latter, even if their direct superior sometimes disagrees with you here and there, recognize that their main objective is, directly or indirectly, to satisfy you.
The third stage: From the 49 employees in the second third to the 343 employees in the second third
When your first 49 employees are completely overwhelmed, you do what you did last time: you allow your business to grow again, either by recognizing the problem and creating a new organizational structure, or by allowing your managers to solve problems the way they usually do: by hiring people.
But there is obviously a huge difference between the third third and the second third, and that’s that the employees in the third third report directly to the employees in the second third, which adds an extra level between you and them. When they look above their direct supervisor, they see the employees in the first third, not you.
What you want to do at this point is to increase the importance of customer service and product quality to make them as important as sales.
Chances are that during this process most of your first tier employees will not welcome the necessary changes with open arms, partly because they will have to focus on something other than what they’ve been doing all along: growth.
By defining a plan that balances growth and quality you can, if you are smart and hardworking, achieve both. And if you do, your company will get rid of all those management problems and can reach a new stage of development – slower than previous ones, but still growing.
The fourth stage: From 343 employees in the third third to unlimited growth
At some point, the growth in your third stage will be interrupted, and may even turn into a recession. When that happens, you will try to push your first third of employees, but you will find that they have already done everything you would like them to do. You will feel frustrated.
You’ll probably think about hiring a consultant because you really don’t know what to do. But there’s a good reason why your business is falling behind: the way it’s structured – the exact way that got it to where you are now – prevents it from going any further.
Many entrepreneurs get stuck at this stage. But if you get past it, then you can see your business grow and mature exponentially.
Chapter 3: Becoming a 5-Star Business Genius
Ready, Fire, Aim is about creating and developing multi-million dollar businesses, but it’s also about becoming a business genius. Because companies don’t grow and become profitable by accident.
According to the author, in order for a company to reach 100 million or even 300 million in turnover, it must be very good – even extraordinary – in five areas, which will be magic wands to become a business genius:
- Have new and useful ideas for new products.
- Sell your products profitably.
- Manage processes and procedures efficiently.
- Find great people to do the job.
- Keep people, processes, products and promotions flowing smoothly.
To start a business, you don’t need to know how to create a product or how to motivate people. You just need to have two basic skills: 1) you need to know how to make a sale, and 2) you need to be able to start the sales process.
Then you will have to develop 5 skills, which are related to the 5 areas in which your company will have to excel:
- The ability to have ideas.
- Selling products.
- Managing systems.
- Recruiting and managing superstars.
Chapter 4: The Supremacy of Sale
Stage 1: Early Childhood
Of all the functions in a company, the one you should always give the highest priority is marketing. The other functions are important, but without marketing you will not have sales, and without sales you will not have the cash flow to pay for the other functions.
The Number One rule of entrepreneurship is therefore:
Without sales, it’s very difficult to keep a business active
Before your business has made a sale, it is nothing more than a collection of unproven ideas that you have spent money on. Some of these ideas may be good and feasible, and some may not: you can’t know until you’ve tested them by selling your products.
For example, entrepreneurs who have just started their business should spend 80% of their time selling, starting immediately. But according to Michael Masterson, most do exactly the opposite: they spend most of their attention, energy, time and money on things like setting up their office, designing the logo, printing business cards, filling out forms, writing contracts, or improving the product. They think they do everything in order – when they’re just wasting their precious resources on secondary activities.
But when you start a new business, the sooner you make the first sale, the better your chances of success. So, rather than creating a beautiful and expensive website that costs you thousands of Euros, rather than spending time buying your office supplies and designing your business cards, rather than wondering if you need to buy a new car because you are afraid that the old one will break down when you go to a customer, SELL. And don’t fall into the trap that thousands of entrepreneurs fall into: believing that their product is so good that everyone will fight to buy it when it comes out. It’s arrogant, and it’s stupid. You won’t know if a product is going to sell until it does.
So here are the priorities for the company during Step 1:
- Make sure the product is ready enough to be sold, but not perfected.
- Sell it.
- Then, if it sells, improve it.
Chapter 5: Your optimal sales strategy and the 4 fundamental secrets for selling your first product
As an entrepreneur, you must become the number one salesperson in the business, even if you fear or hate the idea of selling. Selling in Step 1 is not optional, it is essential.
So learning to sell is an obligation, not a choice. But your goal is very focused: all you really want to learn is to sell a particular product – your company’s signature product, which will allow you to acquire new customers – to a market. So you need to become ultra-specialized in one thing: selling your product, and selling it very well.
Based on this simple but crucial concept, you need to determine your optimal sales strategy for your company. This is done by answering these four questions:
- Where am I going to find my customers?
- Which product will I sell to them first?
- How much will I charge for this product?
- How will I convince them to buy
To determine your optimal sales strategy you need to answer these four questions, not just some of them. Let’s look at them in detail
Where am I going to find my clients?
That may be harder to answer than you thought. Let’s say you want to start a business selling a new type of golf ball.
There are many possibilities to find your first customers, for example:
- At the cash registers in specialty stores, when they’re queuing up thinking about their next swing. Renting this location will allow you to make many sales.
- On the back cover of a golf magazine. Or in the pages of a magazine. There are dozens of golf magazines, each with different print runs and subscribers.
- On television, running an ad during a golf tournament.
- By renting mailing lists, to do a mailing or emailing.
To find out what everyone is doing, start by looking in all the obvious places where your future customers are. For golf balls, you could go to a newsstand and look at ads in golf magazines, look in more general newspapers to see if there are any golf ads, watch golf tournaments on TV and golf related websites, and take a look at the advertisers and the products they promote.
Then call the marketing managers of all the advertisers you have identified (your future competitors). Say you’re a marketing student interested in learning what they do (and of course you are!) and ask if they’ll agree to “a 15-minute informational interview”. You’ll be surprised at how much they’ll tell you, how long they’ll stay with you, and all the wonderful and interesting things you’ll learn.
There is nothing more important in marketing than the location chosen for your communication. Excellent advertising placed in the wrong place will not bring you any sales. Conversely, poor advertising placed in the best place will bring you sales.
Which product will I sell them first?
Starting a business with only one product is risky. For every story in the media about an entrepreneur who risked everything to launch a single product and succeeded, a dozen others have failed. The media don’t report them because their story is too depressing. To avoid falling into the trap of arrogance – only arrogant people refuse to consider the possibility that their idea might be bad – the savvy entrepreneur remains flexible about the details of his product idea: if one version doesn’t work, he has many other ideas in mind that might work better.
Nevertheless, to start a successful business, it helps to have a successful product. You can’t know if a product will be successful until you’ve tested it – but if you’re prepared to test many product ideas rather than just one, you’ll increase your chances of success.
Here are 5 simple steps to create a successful product:
- Find the products that are trendy in your market and sell like hotcakes.
- Determine if your product idea follows this trend.
- If it does, you can launch it. If not, follow steps 4 and 5.
- Get my own ideas for different trendy products as well.
- Enhance them in some way by adding features or benefits that are missing from the originals.
As with the previous steps, your price should be the one commonly used in your market. You will be able to test a higher price when you have reached a sufficient volume of sales at the standard price. In general, a higher price should reduce the number of sales. The question is: by how much? If the decrease is small and the increase large, you may have better profitability, fewer customers to manage, and more quality customers ready to spend money on your products later. If you set your price too high, however, sales will drop dramatically. It’s easy to see, and easy to fix.
How am I going to convince them to buy?
Your optimal sales strategy includes the medium you choose, the product you decide to sell, the price of that product, and how to put it forward – the big idea behind your advertising campaign, with all the words and images you’re going to use to sell your product.
The difference between a well-designed ad and another can be a difference of 100% or more in terms of customer conversion rate, and can therefore make the difference between a business that doubles in size every year, and one that stagnates and then dies.
An insurance company tested these two hooks:
“Car insurance at lower rates if you’re a safe driver.”
“How to turn your safe driving into money.”
The first hook was 1200% better.
The best way to find out how to showcase your product is to test different approaches, different teasers, compare them, pick the best one, and then take it as a reference by testing it against other ideas.
Chapter 6: Mastering the editorial aspect of the sale
As the head of your company, creating advertising is an important part of your job. But you don’t need to be a specialist in the field – a copywriter – you just need to know how it’s done and what effective advertising looks like.
You can learn the basics very quickly. To be able to write effective advertisements or sales letters and work intelligently with great copywriters, there are four marketing concepts you need to learn:
- The difference between wants and needs.
- The difference between functions and benefits.
- How to set up a Unique Selling Proposition
- How to sell USP
Let’s look at these concepts one by one:
The difference between wants and needs
Today, the overwhelming majority of the products and services we buy are wants, not needs. Our needs are really minimal compared to our desires, and include air, water, food, shelter, transportation (sometimes), clothing, and the tools necessary for our job.
Recognizing that you are in the desire business will help you become a better marketer and a better salesperson, because you will understand that you need to create desire in the hearts of your customers. Many novice marketers make the mistake of creating advertising campaigns that are logical and rational and simply describe the X number of reasons why their product is better than the competitor’s product. This may work if your product is really a need, but if it is bought out of desire, you need to stimulate the emotions of your prospects – the emotions that will help you sell your product.
The difference between functions and benefits
A function is a logical and objective description of the capabilities of a product. A benefit is what it actually brings to the customer, and this can be completely irrational, depending on the customer’s beliefs.
To clearly differentiate between functions and benefits, let’s take the example of a wooden pencil – commonly used in sales courses:
|Is made of wood||Easy to carve|
|Has a specific diameter||Easy to hold|
|Contains a graphite setting||Creating impressive features|
|Has an eraser at the end of it.||Makes corrections easy|
The list of benefits of such a pencil goes much further. During the sales seminars he conducted, Michael Masterson identified more than 200 different benefits. So don’t stop at the first benefits you find for your product: look very, very deeply.
You can therefore create a difference between your product and the products of your competitors from scratch, but it is obviously preferable that your product really has an additional benefit compared to the competition.
Having a good USP can make the difference between the success and failure of a product launch. A strong PUV that has a good chance of success meets all three criteria:
- The appearance of being unique. The feature you decide to promote in your USP does not have to be unique to your product, but it must appear to be.
- Usefulness. The unique feature of your product must be desirable, otherwise no one will want it.
- Conceptual simplicity. If your product’s USP is hip, it’s almost certainly simple too. Very few complicated things become trendy.
How to sell the USP
Once you have established your USP, you must sell it. All effective sales efforts have 4 components:
1 – The Big Idea
The Great Idea is the main idea to sell our product. The Great Idea should come from the USP, but it is not the same thing as the PUV. The PUV applies to your product. The Big Idea applies to marketing promotion. You generally cannot use your PUV as a header in your ads. You need something more striking and interesting.
So look for an idea – something that excites you. That’s where it all starts. For example, for the Confucius website, you can research him, dive into his writings, and come across a quote you like, like “The man who speaks well has the power of 5 men”. It’s an idea you like, it will become the Great Idea behind your entire communication campaign.
2 – The Great Promise
Now you are ready to work with a professional copywriter who will create your letterhead. You certainly have the Great Idea – speaking well increases your personal power – but that’s not enough: you must have a Great Promise. So you need to spend some time looking for a Great Promise and ask yourself what your Great Idea can mean in terms of how it improves your client’s life.
3 – Specific statements
This is the stage where you put on your idea hat and work with your copywriter to come up with statements to use in your ads – all related to your Big Idea. For ours, we might ask ourselves, “what could a person do who quintupled his personal power do? He could potentially quintuple his income, quintuple his chances with women, quintuple his chances for promotions, etc.
Brainstorm all of these statements by writing them down on paper as you have them, regardless of whether they are interesting or not. You will sort them out later. Then make these statements as specific as possible. Instead of saying “Five times your income”, say “Turn $35,000 into $175,000”.
4 – Evidence for these claims
Here your copywriter’s work stops. At least in his mind. It’s your job, he thinks, to find evidence for those claims. But he’s wrong. You pay him to do the hard work, so insist that he does it, and give you real, concrete examples of people who have gained wealth and fame through their ability to express themselves well. They should look for historical as well as anecdotal evidence, and should collect testimonials whenever possible.
When he or she has finished, you can sort through the results, making sure that each statement has reasonable evidence, and rejecting those that do not.
Chapter 7: The secondary – albeit important – priorities of Stage 1 of your business
As we have seen, during the first Step, you should spend 80% of your time and that of your employees to sell. But what to do with the remaining 20%? Buy office supplies, create business cards? No, I don’t.
1 – Have a mentor and be a mentor.
Everyone’s big problem when starting a new business is ignorance. New entrepreneurs don’t know how the business should work – where to find customers, what price to charge for the product, how many customers are needed for the business to be profitable, etc.
The solution to ignorance is learning. And there are two main ways to learn how to be an entrepreneur: 1) by going to seminars, taking programs (such as Act & Succeed) and reading books, and 2) by talking personally with people who are in the business and gleaning first-hand advice from them.
You can absorb 20 years of experience in 1 year by regularly contacting your peers and mentors to talk to them about each of your important marketing and product decisions. To do this the author of Ready, Fire, Aim recommends :
- Don’t be afraid to ask questions. As a young man, Michael Masterson was always afraid to ask questions because it revealed his ignorance. He preferred to pretend he had no weaknesses. Don’t be like him: ignorance is only a temporary weakness if you ask questions, and often your mentors will be delighted to answer.
- Have multiple mentors.
- Ask questions at all levels. In addition to your permanent mentors, you can have “temporary” mentors by asking your colleagues – or ex-colleagues – and employees your questions. In fact, anyone who might have something useful to say.
- Maintain relationships by being grateful. The right and proper way to reward people who spend time with you to help you is to thank them frequently. You can send your mentors an email or a personal note, and an occasional gift will certainly be appreciated!
- Make your decisions and accept your responsibility. The ultimate responsibility for whether or not your business is running smoothly rests with you. No matter what you do with the advice your mentors give you, you always make the final choice.
Once you have gained some experience, take it upon yourself to mentor someone else.
2 – Teaching
When you start, it’s much better to recognize that you don’t know what you don’t know and tell each person on your team that their job is to do what you tell them to do, which will be all that’s needed to discover your Optimal Sales Strategy and attract enough qualified customers.
Assure them that as soon as your company has reached a certain size – Step 2 – you will give them specific functions, and that an organization chart will be drawn up that tells you exactly who does what.
Teach them everything you learn. This means of course that you trust those Step 1 employees.
3 – Defining corporate objectives
Your employees in the first third should be motivated by your vision. And your vision should be to build an exciting, fast-growing, quality company that will enrich their lives.
The author of Ready, Fire, Aim recommends not focusing too much on financial goals, although he acknowledges that many successful entrepreneurs will disagree with him, and that this can be helpful. Rather, he recommends that although the focus of Step 1 is clearly on selling, the focus should be on making customers happy. He knows that this may sound vague and a little silly, but he believes that in the long run, companies focused on customer satisfaction have greater prospects for survival and growth than those focused on shareholder returns, because well-treated customers tend to stay loyal longer, buy more products and recommend your company to their friends and colleagues.
Chapter 8: A quick review of the problems, challenges and opportunities faced by the entrepreneur in Step One
Starting a business (or a product) is like making a train move when it is stationary: it takes a lot of energy to free it from its immobility, but once it is moving, acceleration requires much less effort and energy.
Starting a business or a product requires a lot of hard work and effort. Don’t worry if this prospect frightens you: being afraid of hard work is natural and intelligent. Smart people become entrepreneurs precisely because they want an easier life. No entrepreneur the author knows has ever said, “I’m going to start a new business so that I can work until I get sick of it and I don’t see my family anymore.”
But that hard work and effort is necessary to get your business or your product off the ground. Once it gets going, the rest will be much easier. And your hard work and effort should go into sales, not everything else. To use the metaphor of the train, to get it moving, it is better that you concentrate on getting it to move – sales – so that the steam provides the energy to break its immobility, rather than polishing all its pistons – office supplies and other design brochures – so that it shines brightly.
Here is what the author considers to be the most important ideas to consider for the first stage of your business:
- Don’t waste your time on image marketing. And, don’t get lost in the fun of creating design brochures, business cards, trendy websites or any other type of image marketing material.
- Don’t spend your money on things invisible to your customers like your office, supplies, equipment, etc. Get the most out of these things by asking, borrowing or recycling. You can update all these things later.
- Don’t be fooled by phony business experts. Many business experts have never set up any business before they set up the one that allowed them to sell their consulting services.
- Be proud of your sagacity, but don’t be arrogant about the particular ideas you develop about your business. Make sure your ego is not attached to a particular product or company. Make sure your ego is attached to the process of creating successful businesses.
- Ask smart people for advice.
- Never think you know more than the market. You may have experience and good instincts, but never risk most of your capital on an untested idea.
- Make sales the number one priority of your business.
- Learn all you can about sales and marketing. In your spare time, take courses, talk to experts, sign up for training, read books.
- Discover your company’s Optimal Sales Strategy – the particular combination of media, price and positioning that will bring you your most qualified customers.
- Give your marketing team one main goal: to bring in a certain number of qualified customers.
- If possible, use mailing or emailing to find out your Optimal Sales Strategy. Direct marketing is the best way to test new ideas because it is fast and inexpensive.
- When testing prices to determine your Optimal Sales Strategy, favor the lowest ones. In the long run, your profits will probably come from selling products in the high price range to your best and most loyal customers. But in the beginning you want to focus on volume in order to reach the critical mass of qualified customers as quickly as possible.
- Don’t invest much in inventory until you have discovered your Optimal Sales Strategy.
More in the next episode 😉 . Click here