From: alexhormozi

Achieving financial growth, such as making a first million dollars, relies on a blueprint that begins with understanding who you are and progressively building essential business skills [00:00:01].

Fundamentals: Building Blocks for Growth

The foundation of wealth creation starts with an individual’s knowledge, skills, motivation, and environment [00:00:23].

Essential Skills

Skills are the actions an individual knows how to perform [00:02:39]. Often, seemingly inherent traits like confidence or charisma are bundles of underlying skills [00:02:55].

The skill of sales is a fundamental capability that can alone lead to millionaire status [00:03:33]. Sub-skills of sales include:

Building upon sales, marketing is essentially sales performed “one to many” [00:03:42]. Marketing skills include:

Possessing both sales and marketing skills enables customer acquisition, which is a foundational capability for business growth [00:04:17]. The more skills acquired, the more valuable previous skills become [00:04:25]. It’s crucial to orient effort towards high-return skills like sales rather than low-return ones [00:04:59].

Level 2: Getting Customers to Buy

Find Out: Advertising and Lead Generation

Getting customers to buy involves two primary steps: first, they must find out about the product or service, and second, they must decide to purchase [00:21:41].

There are eight methods to let people know about your offerings [00:22:02]:

The Core Four (Done by You)

  1. Warm Outreach: Informing people who already know you about your offering [00:22:30].
  2. Cold Outreach: Informing strangers about your offering [00:22:32].
  3. Content: Informing people who know you, but on a one-to-many basis (e.g., social media posts) [00:22:36].
  4. Paid Ads: Informing strangers, but on a one-to-many basis [00:22:43].

The Four Lead Getters (Done on Your Behalf)

These methods leverage others to perform the “Core Four” on your behalf [00:23:03].

  1. Customers: Existing customers can promote your business through reviews, word-of-mouth, or content [00:23:07].
  2. Employees: Your employees perform the Core Four on your behalf [00:23:28].
  3. Affiliates: Businesses with existing customer bases that align with yours can refer clients in exchange for reciprocal referrals or compensation [00:23:43].
  4. Agencies: Specialized businesses that focus on one of the Core Four methods, such as content, paid ads, or outbound agencies [00:24:11].

For beginners, warm outreach and content are the easiest and most cost-effective ways to start generating leads [00:24:48]. A simple initial offer is to provide free service for a few hours in exchange for the opportunity to present a paid offer later [00:24:55].

Get Them to Buy: The CLOSER Sales Framework

After potential customers know about the offering, the next step is to close the sale [00:26:48]. The CLOSER framework provides a repeatable process for sales [00:27:28]:

  • C - Clarify why they are there: Understand why the prospect has engaged with you [00:27:46].
  • L - Label them with the problem: Articulate their current situation, their desired situation, and the gap or obstacle between them [00:28:24]. The business positions itself as the solution to this “monster” obstacle [00:28:52].
  • O - Overview past pain: Explore their previous attempts to solve the problem, highlighting why they didn’t work and how your solution is different [00:29:35]. This step amplifies their motivation by reminding them of their deprivation [00:29:46].
  • S - Sell the vacation: Focus on the desired outcome and benefits, not the intricate details of the product or service [00:30:44]. Use a three-pillar pitch, with each pillar explained through analogies or metaphors that relate to what the prospect understands [00:30:56].
  • E - Explain away their concerns: Address objections, which typically fall into categories of circumstances (time, money), blaming others (decision-makers, past experiences with other products), or avoiding decisions [00:33:07].
  • R - Reinforce the decision: Post-purchase, immediately set expectations and fulfill promises to prevent buyer’s remorse and ensure a smooth onboarding process [00:34:27]. This includes booking subsequent meetings and passing notes between teams so customers don’t have to repeat themselves [00:35:14].

Get Them to Buy More Times: Increasing Customer Value

To maximize financial growth, focus on increasing the value of each customer [00:36:50]. There are eight specific ways to do this:

  1. Increase the price: Charge more for the same product or service [00:37:10]. A beginner strategy is the “five to five to five model,” where the price is bumped by 20% after every five sales [00:41:03].
  2. Decrease costs: Lower the cost of production or delivery while maintaining the same price, increasing profit margins [00:37:24].
  3. Get them to buy more times (Subscription): Implement recurring purchases or subscriptions [00:37:41].
  4. Sell something else (New/Different): Offer complementary or new products/services (e.g., fries with a burger, phone case with an iPhone) [00:37:53].
  5. Increase quantity: Encourage bulk purchases or higher volumes of the existing product [00:38:20].
  6. Increase quality: Offer a premium version of the product or service at a higher price point (e.g., sirloin burger instead of mystery meat, priority support for services) [00:38:41].
  7. Decrease quantity (Downsell): Offer smaller, more affordable options to convert “no” into a “small yes” and build towards future larger sales [00:39:33].
  8. Decrease quality (Economy version): Provide a lower-cost, reduced-feature version of the product or service to capture a wider market segment [00:40:02].

For beginners, focusing on raising prices, encouraging repeat purchases, and increasing purchase quantity are the easiest and most impactful strategies [00:42:24].

Level 3: Sustaining and Enhancing Growth

Keeping Your Advantage: Leveraging Efforts

As a business grows, maintaining an advantage requires leveraging efforts [00:56:44]. Leverage means getting more output for what is put in [00:57:01]. Forms of leverage in business growth include:

  • Brand/Reputation: A strong brand leads to higher click-through rates, higher conversion rates, and the ability to charge higher prices for the same product [00:57:51].
  • People: Hiring employees extends the business’s capacity and expertise beyond one individual’s lifespan and experience [00:58:27].
  • Code/Products: Creating something once (e.g., software, a book) that can be used or sold millions of times without further effort [00:59:22].
  • Skill: Developing expertise allows for greater efficiency and results per unit of effort [00:59:58].

The relationship between work, volume, and leverage is critical: Work = Volume x Leverage [01:00:10]. In the beginning, with low leverage, individuals must compensate with high volume to build skill, which in turn increases leverage [01:00:41].

Sticking with It: The Power of Compounding and Focus

Sustained financial growth requires uninterrupted compounding [01:02:07]. This means ruthlessly focusing for long periods and saying “no” to distractions and new, seemingly attractive opportunities that can disrupt current progress [01:02:37]. The path to success often involves:

  1. Uninformed Optimism: Initial excitement about an idea [01:04:38].
  2. Informed Pessimism: Realization that the endeavor is harder than initially thought [01:04:47].
  3. Valley of Despair: The point where most people give up due to difficulties [01:05:02].
  4. Informed Optimism: Understanding what it takes to succeed and seeing a path to victory [01:05:17].
  5. Achievement of Goal: Realizing the set objective [01:05:30].

Many entrepreneurs restart at step one, chasing new “quick and easy” opportunities, which ultimately disrupts their compounding growth [01:05:42]. True wealth is often built by concentrating all efforts into one area before diversifying [01:06:50].

Getting Better: Continuous Learning and Feedback Loops

Continuous improvement is essential for sustained growth [01:09:44]. This involves:

  • Volume and Data: Generating a high volume of output (e.g., content, sales calls) to collect data on what works and what doesn’t [01:10:01].
  • Common Factors Analysis: Comparing top-performing efforts with bottom-performing ones to identify discrepancies and “golden nuggets” for improvement [01:10:06]. This applies to content, ads, sales scripts, and even understanding customer avatars [01:11:48].
  • Feedback Loop: Establishing a continuous loop of taking action, observing results, and making improvements to gain skills [01:12:20].

For entrepreneurs, personal growth and business growth are intertwined; when one struggles, the other tends to grow through the painful learning process [01:15:57]. The objective of business is not to “win,” but to stay in business indefinitely, playing an “infinite game” of continuous improvement and becoming the person capable of achieving ever-larger goals [01:17:02].