When losing money is the best strategy
And why being hyper profit focused can ruin your long-term profit & company value
Yesterday, I was on the phone with one of my advisors...
"Over the next 3 months, we're going to lose at least $200,000 on a couple of the recently acquired businesses."
I told him that it was necessary for long-term growth.
He agreed short-term loss was the best choice.
As entrepreneurs, we can sometimes be obsessed with making a profit every month.
However, your job isn't to ensure you profit every month.
Your job is to build a sustainable and scalable business.
When I acquire a business, my #1 goal isn't to make money.
Rather, my #1 intention is to...
Build a solid foundation where the business can grow and scale naturally, not just be propped up on "quick win" growth.
I see this happen a lot in the business coaching world.
A coach or mentor takes a new client and gives them a 90-day plan filled with all sorts of "quick wins."
And those quick wins?
They destroy the longevity of the business.
Maybe you created quick wins to get testimonials and make the client sign up again.
When in reality...
Great growth takes time, and sometimes, it takes losing money (at first).
I have an example for you.
Recently, I acquired a new software company…
I haven't linked it...
I haven't talked about it...
I haven't done anything even though, with my audience, I could easily 5-10x the monthly revenue.
Because the business needs operational restructuring...
It needs better and new marketing systems.
It needs a full restructure.
So, instead of propping it up with "easy wins" of sending a few emails to my email list…
It will likely lose money until Q2 2023.
And that’s okay.
Here's what I'm not doing...
Creating a scenario where that business is on "Scott Oldford Brand" life support.
It must create its own wins.
It must create its own growth.
It must create its own revenue and profit.
All I'm doing is creating a job for myself.
All I'm doing is promoting businesses, all day long.
That's not being an investor...
That's just adding new products to a business.
I'll give you another example...
I recently acquired OnlineBusinessOwner.com as a brand and a media property to add to my Media Group.
I know the potential of this... and it's huge.
I also have massive potential to add value.
I had two options...
1) Sell it from the get-go
2) Sell some of the product behind it (sponsorships) and wait until launch, so I can charge 3-5x more.
By losing $20K+/mo on this business for 3-5 months and investing $100K...
I'll be able to charge FAR more for the product by April.
You should wait on that launch.
You should take more than just that client to hit profit.
You should look long-term beyond the quick wins.
Quick wins generally make it so that your long-term wins
are more difficult to obtain…
So have patience…
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