The Resources Gap

 

Identifying what’s keeping you stuck.

If you missed Part 3, check out last week’s email.

Today, we’re talking about The Resources Gap.

So far, we’ve discussed Clarity, Belief, Alignment, Knowledge, and Skills. If you’ve identified and filled those gaps, I think the two remaining (significant) gaps you’ll find would be Resources.

The Resources Gap

When you don’t know how to execute the knowledge, you must accomplish your goal.

Here is what I think about the resources you have (or don’t) have to get to where you want to go:

1. Time
2. Money

When you’re scaling a business, both of these are necessary. Having a surplus of time and money means you have capacity. Cycles of capacity is what you’re always looking for when scaling. That’ll be another email.

Scaling from a lack of resources takes resourcefulness. Maximize everything you have at your disposal in a good way.

If a business continually lacks time or money to the point of exhaustion and danger, I’d say that’s an indicator that it’s trying to grow too fast or something is broken.

Properly utilizing the resources you CURRENTLY have is about properly allocating the resources you have, so let’s break it down. Also this can apply to your team as well.

 

Time

The precious resource that we all have the same amount of.

24 hours / seven days

Some people are way better at utilizing this resource than others.

A point I want to draw out here is perhaps becoming a better steward of the resources you currently hold, and then at that point, I believe it makes sense to discover how to increase these resources for further expansion.

If you “lack time,” there are a few options (which I believe originated from President Eisenhower):

• Do
• Delete
• Delegate
• Defer

1. Make a list of the things you’re doing
2. Attach a dollar value on everything you’re doing (are you doing something that is a $25/hr task or $1000/hr?)
3. Attach an enjoyment value
4. Attach a priority of “it needs to get done” (1, 2, 3, etc.)

Now that you have your list, which items are on top? What should you keep? You want to focus your energy on high value, enjoyment, and priority.

Part of how we lose the resource of time is we stay in a pattern of not “backing ourselves out.”

For example, a media buyer was one of my first hires in Traffic and Funnels. I was dedicating a good amount of my time to our sales opportunity. I needed more time, so I identified that it needed a big needle mover.

I call these “levels” (that’ll be a newsletter by itself). The thing still needs to get done. However, it doesn’t have to get done BY ME. I need to make sure it gets done.

I was maybe spending 20 hours a week on that responsibility. I brought in a qualified person and reduced that to about 2 hours, which went into coaching and managing the outcome through my “level 1”.

In scaling and expanding the business, you always seek ways to create more capacity. More time. More resource.

This comes through:

1. People
2. Processes
3. Productization

We have our list of things that need to get done.

We’ve already deleted or deferred things that aren’t highly important (via our audit) to find more time. Next, we’ll figure out what WE should do or what we should delegate.

After you have the “keep” list (your 80/20), ask:

1. Who do I need?
2. What process do I need to create?
3. How can I productize this? (that’s taking your IP and manual work and turning them into information, processes, and content that someone can implement mainly without you.)

If you feel maxed out on time in moving forward, expanding, or growing your business, this will help you.

NOTE: Do not try to “scale” if you and everybody else on your team are maxed out. You need capacity first. This is the way.

Follow these three steps:

1. Audit (what needs to be done / what am I doing)
2. Follow the 4 D’s
3. Utilize the 3 P’s

Filling the time gap is paramount in your next level of growth. I used this process to reduce my time in our businesses to 10ish hours a week. Now, there were things I missed/didn’t know that caused the colossal failure, but that’s a story for another day.

If you want custom help with this, reply to the email and let me know.

 

Money

Money is a resource. Nothing more and nothing less. That’s easier for me to type than to live, to be honest. Haha. But it’s true. We have so much emotional and mental attachment to money.

The more we can “let go” of money, the less attachment it will have on us.

If we’re “lacking” money for expansion, there are a few things I want us to consider.

1. Speed of growth (is it too fast)
2. Rate of money (is going out faster than it’s coming in)
3. Necessities (are they low, high, or just right)

Above is the process to consider (especially if you have a team).

On speed: Your speed rate will dictate how much money you need or don’t. The faster you want to grow means your speed of cash coming in needs to be fast.

Why? You have cash going out at a high rate.

For example, if I’m spending $100,000 a month on ads right now and I’m doing $350,000 a month in revenue, and I’m paying $275,000 on the team, and in 5 months I want to be at $600,000 in revenue then I’ll need to spend a bunch more in ads and theoretically on the team as well.

The desire for more revenue + a high rate of speed = higher necessity for cash (resource), therefore higher risk.

We tend to assume (especially in our online world) that it’s only going one way—-UP. 😁

We don’t consider that it could go the opposite direction: $100,000 – $300,000 in ad spend going out without recouping. That’s why I’m writing this.

All this to say: MIND YOUR SPEED of growth.

Your speed of growth will dictate your pace of money needed (resource). So, if you lack money, what is your development speed (or desired growth)?

This is precisely why many fast-growth companies take investor money because the resources required for fast growth are a lot.

If you have a steady and healthy speed of growth and your model is good, then you shouldn’t have a money-resource problem. Speed is a BIG dictator of this resource.

Slow your role. OR have a high tolerance, like I did. Until I didn’t. 🙃

 

 

Necessity. It’s easy to continually increase need without perfect reason and without being tied to healthy identity, values, and money rules.

I want you to consider and KEEP your necessity as low as possible. Again, this is nuanced and depends on many factors.

How to do this:

• What is my max monthly allowable for Personal needs?
• What is my max monthly acceptable for Business needs?

Create rules and stick to the rules. Maybe something like this. Our “bottom” is 20%. If we’re running a 20% net margin, we don’t scale. If we’re at 35%, we do scale. Again, these are generalities. I don’t know your business.

Just because you CAN spend the money doesn’t mean you should. Have and keep a scrappy, resourceful mindset when laying out cash.

My business was good at producing cash and bringing in money for a long time. Because of that, we would easily throw money at a problem rather than get creative to reserve capital. I also should have had better awareness of the money going out.

John Rockefeller was notorious for this. He knew where all the business money was going. He also didn’t spend money unless it was necessary.

In the online world, when we figure out how to make money, it’s easy to think it will always be like this. It could be the case. It also could be wise to act prudently and practice a healthy paranoia—your choice.

Reinvest into assets. Again, set rules. 😉

Things to consider when thinking about your money…

1. Create a healthy value system around money
2. Create healthy rules around how you spend money
3. Create healthy rules in how you invest (dang, I WISH I had this, ugh)

If your gap is the resource of money and your model is working, then I’d have you consider:

1. Descaling – turning the business “down”
2. Plateauing – staying level
3. Slow down

You should find more margin or cash here. Again, it’s not a one-size-fits-all. There are a lot of things to consider. But growing and scaling a broken model or business isn’t a good strategy.

The margin is there. I need to find it.

I appreciate you guys for continuing to show up every week! This is maintaining an excellent open rate, which I’m pumped about.

 

To the Overflow,

Chris

p.s. If you have any topics you want me to write about, reply and let me know your biggest challenge, and I’ll see if I can help you (and everybody else) via the newsletter.