5 EASY hacks you’re missing out on to drive MORE revenue..

Summary

• Operations are crucial for scaling a business from millions to tens of millions; they are the foundation for rapid growth.
• Many entrepreneurs misunderstand operations, thinking they add overhead without value, but effective operations directly support revenue-driving activities.
• Hire experienced operators; junior-level hires often lack the ability to implement effective, revenue-focused systems.
• Operations should drive revenue-related activities and support the backend needs of the business.
• For onboarding, personal touches such as calls, voicemails, or gifts can drastically improve customer retention by up to 82%.
• Renegotiating vendor relationships, including with banks and merchant processors, can lead to better rates and save the company money.
• Encouraging and systematizing referrals from customers can greatly increase revenue with minimal overhead.
• Ensure good bookkeeping and financial reporting to make informed, quick decisions that impact revenue.
• Implement a formal communication structure with direct reports to enhance productivity and reduce employee turnover.
• Focus on creating minimal and flexible systems that facilitate revenue generation and make operations easier to manage.
• The role of operations is to make other areas more effective and efficient, indirectly contributing to revenue growth.

Video

How To Take Action

I would suggest focusing on the importance of operations for business growth. Remember, great operations are not just about adding people; they're about creating systems that help make money. Here's how to put this into action:

Start by hiring the right people for operations. Look for experienced operators who know how to support revenue-driving activities. If you're small, you might not be able to hire a full team yet. That's okay. Just make sure you get someone who really understands how to help the business grow.

For your customers, make the beginning of their journey with you amazing. You could make a quick call, send a voicemail, or even mail a small gift to welcome them. This personal touch can make them want to stay with you longer.

Next, check if you're paying too much to vendors. Are you paying a bank or someone else too much money to handle your sales? Talk to other companies and see if they will charge you less. Then ask your current vendors to lower their prices, or you'll go somewhere else.

Encourage your customers to tell their friends about your business. Even a simple reminder to your team to ask for referrals can bring in more business without spending more money.

Keep your books clean and tidy. This means know where your money is and make sure your numbers are right. It helps you make smart decisions faster.

Finally, talk to your team often. Have one-on-one meetings with them to see how they feel and what they need. This helps them do better at their job and stick around longer, which saves you money in the long run.

Operations are all about making the rest of the business run smoother and work better. This way, you can focus on making more money with less stress. Good luck!

Quotes by Leila Hormozi

"Operations exists to support revenue-driving activities"

– Leila Hormozi

"A great onboarding experience can improve retention in your customer by up to 82%"

– Leila Hormozi

"The average customer decides if they're going to stay with your business in the first interaction after a sale"

– Leila Hormozi

"Learn to ask for referrals"

– Leila Hormozi

"Good financial reporting and customer metrics allow you to make faster decisions"

– Leila Hormozi

Full Transcript

what is up in this video today what i want to share with you is how to increase revenue through operations what i continue to see is uh the lack of infrastructure in businesses that want to go from doing a couple million a year to 10 million 20 million 30 million 50 million and above and i kind of want to break your beliefs around what operations is supposed to do because um i don't have a personal story of how operations was unimportant to me and then became important to me i was told from the very beginning of when we started jim launch that operations was important because of that i focused on it and we were able to scale uh extremely quickly because we had the infrastructure in place and so i actually credit a lot of my success to the fact that i just heard that applied it right away and i didn't question it and what i've come across um a lot recently is just the lack of belief in operations and it kind of started with a conversation i had with an entrepreneur who's doing about seven million a year and we were at a dinner with lots of generous entrepreneurs and at this dinner um what he was saying is that he fired you know most of the people that were in the operational roles and they said well you know why did you fire them and he said well it just seemed like it was added overhead and it wasn't actually adding value to the business which 100 if something is just adding overhead and it's not adding value to your business the role should not exist in the business however the reason that a lot of people that are new to business and they're only doing a few million a year even up to 10 million a year don't know how to utilize operations it's not because operations is bad and it's just overhead and it's just adding payroll right it's because you don't know what operation is actually supposed to do and most of the time you also don't hire somebody who knows operations is actually supposed to do and so here's what i've noticed because i've had about four different operators that have worked directly under me i've operated obviously i operate in the beginning then i hired people i delegated and the operators always roll into me and so i can tell you um what kind of operators work well in a startup versus what don't and then how the ones that do work well actually drive revenue through operations so the biggest reason that you might have felt in the past or you see people that do this they bring someone on for an operational role whether it be in finance hr i.t or just operations in general like an operations manager and then they just let them go right and it just continuously happens and then the business is really just made up of sales marketing and product and then there's a lack of back end there's a lack of people who take care of fulfillment and all administrative stuff on the other side and the biggest reason for that is because they're hiring people who are a little bit too junior to be in that business and what i mean by that is if you don't know what that role is supposed to do and you've never done it before and you haven't read 10 books on it before or interviewed 30 people for operations before then the likelihood that you can train somebody to do what is needed for that business at that point in time is very low and here's what i've noticed people who are newer operators they've been operating for less than you know less than five years and they come into businesses even especially those who uh maybe have more of a background of bigger businesses is they come in and they put a ton of infrastructure in place they're like we've got to get a crm and we've got to get a finance thing we've got to get a system for this a system for that and they're not talking about anything that's going to drive revenue in fact it's almost like they don't care about revenue they only care about putting this infrastructure in place system system systems and this is the biggest mistake that you can make in terms of hiring somebody who's going to do that and if you are an operator this is the biggest mistake you can make for your business is putting operations above anything that produces or drives revenue operations exists to support revenue driving activities and so we have to think from that angle and so that's the first piece is understanding that most of the time if you don't have the experience you actually want to hire somebody who has more experience and operations because somebody who does so i'll give you an example i have two operators in my business right now or in the couple businesses i have and both of them understand that operation should drive revenue related activities and then there's always the stuff we have to do on the back end right there's things that you just cannot neglect that are you know you have to be legally compliant et cetera um but what they understand is that depending on the stage of the business that is what dictates what operation should look like and so i'll tell you when we hired our cfo she came in and she was astounded at how many opera how many operational procedures we had um and almost to the extent that you know she thought we had almost too many for where we were at and we did we trimmed down a little bit because i think that we had had a prior operator in there who was actually a little bit too heavy-handed with the systems they put into place right and so for the revenue level we're at we're not at 100 million at that point then we're not going to have a million sops an sop for everything a system for everything a database for everything like that's just not feasible because we only have so many resources that we can put towards every area of the business and it's certainly not all going to go towards things that don't drive revenue whereas a immature or a less experienced operator would come in and they'll probably tell you you need more sops more infrastructure more more more more what i want you to think about is you want minimum flexible systems you want minimal flexible systems so you can run the business produce revenue and make your life easier operation should always make your life easier when i'm advising somebody who's a new operator or i'm advising someone who's hiring an operator the first thing i want to think of is when you're bringing somebody in to do something like that or you're transitioning someone into a role where they're going to be driving operations i think that there's five different ways that are the easiest ways to drive revenue with little or no infrastructure okay and so i want to talk about those five ways because i think that they're little known by a lot of people in the business and they can really increase the lifetime value of the customer so the first way is your onboarding customer experience okay people vastly underestimate the importance of onboarding okay a great onboarding experience can improve retention in your customer by up to 82 okay and this wasn't driven by me this was by like customer success metrics in the book i read what that means is that how you bring the customer in is how they are going to experience the business what the book did say what talked about a lot was that the more personal touch there is the more you increase the lifetime value and so even for you know direct to consumer products a lot of people put in at minimum a phone call it might even just be one of those phone ringers that goes to a voicemail but it leaves the new customer voicemail thanking them for their business welcoming them to the product etc etc if you're looking at more of a b2b if you have a b2b product and you don't have a welcome call or an onboarding call if you want to increase your lifetime value that's literally the easiest thing you can do and i have learned this firsthand because we launched our software company we tried about six different ways of onboarding customers and i got to see the different lifetime value and how it changed based on how we changed our onboarding right and so a lot of people look at churn and they're trying to fix churn right especially a lot of people who are very friend minded but in reality you want to fix the proactive step you don't want to be reactive reactive and looking at how do i save people how do i make sure they don't exit how do i make it harder for them to exit that's not how you increase lifetime value how you increase lifetime value is being proactive the average customer decides if they're going to stay with your business in the first interaction after a sale so wouldn't you want it to be the best interaction that you have and that is why onboarding is so important a customer is literally deciding if they're going to stay with you right after they close the sale the third way that i would also say that you could um you know make a point of touch with the customer after they close is by sending them something right like a card or a gift or anything like that a handwritten letter for thanking them so uh phone call onboarding call any kind of gift or wow package those are the three things that i would say like if you're not doing one of those i promise you you're losing money the second piece that i would advise an operator to come in and look at is renegotiating different vendor relationships and so a lot of the times um this can be banking this could be merchant processors or this can be suppliers depending on the kind of business you have right and so when you first start the business usually you have the lower hand you don't have the upper hand in the deal and so you cannot negotiate really good rates with anybody but as you gain more and more traction you have more history and you have more record then you can say hey we need to really look at these contracts and a fantastic operator is going to come in they're going to say i'm going to go and i'm going to go get so say for your merchant processor right say your rates are something like 3 they're they're gonna go and they're gonna go get bids from four other merchant processors and they're gonna get them for lower and then what they're gonna say is they're gonna bring those bids to your current merchant processor and they're gonna say match one of these bids or i'll leave that's it it's literally as simple as that if you want to get better rates and so a fantastic operator is going to do that what they can also do is they can actually take that bid from the merchant processors and they can show it to your bank so whoever you actually keep your money with with the business with personal etc they can show it to the bank and say can we just process directly with you here's all of our history here's all of our transactions here's the bid that i currently have but i would just rather keep it with you since you already have my money and any bank is going to jump at that and they're going to say okay yes i definitely want to keep it and most banks have better rates than a merchant processor in general so processing directly with the bank if you can is always advantageous the third thing that a fantastic operator will do is they're going to look at referrals okay because if you want to increase the business without increasing any overhead just learn to ask for referrals it sounds as simple as that um in a it was i think it's a dale carnegie study where they said that 90 of customers say that if asked they would refer a friend you know how many sales people actually ask for referrals 11 and so obviously there's a huge discrepancy there and what it actually is is that most of the time the sales people just don't remember and so maybe they just need a prompt or a very simple system or maybe when they're entering the customer data there needs to say referral whatever it is a great operator is going to put that into place so you can get referrals coming in so they're literally increasing revenue through something as simple as ensuring the sales person asked for a dang referral when they close the sale it is really that simple and it's just a small thing where they can put that into place and make sure that they can drive revenue now another way that they can help support this too is that they can create a referral program whereas one that you can acquire rewards points you can also have uh basically modules or videos on teaching your customers how to refer uh we had that in gym launch so we had an entire module on how to refer people to the business because a lot of people don't know how to elegantly refer and so that's the reason they don't is because they think what do i say how do i say it where do i send them there's a lot of questions well then you need to teach them right and so if it's not just collecting a name and a number on the front end of the sale then teach them how to do it in the back end of the product especially with the b2b now the fourth way is fast access to information with good bookkeeping so a great operator will come in and they will know everyone knows that finance is incredibly important to a business because it tells a story it tells the story of the business it tells the story of the customer it tells the story of the employees it tells everything that's going on i think that our finance department i think we have about six people in there um they have the best insight about the business and the reason for that's because they have the numbers for everything and so if you don't have any infrastructure in finance um here are my two suggestions for if you're bringing in an operator and you're looking for something for them to do for this to drive revenue or you're looking at doing it yourself which is you need to decide if you want to have an outsourced finance team that can give you this information and compile your data and give you monthly reporting or if you need to build an in-house team now i would say that until you get to um around i would say like 7 to 10 million in revenue you probably don't need an in-house team you could probably get by with just a staff account or a bookkeeper um and maybe someone for like arap so you could just have two people running it however if you want to have good monthly reporting good customer metrics you know where you retrieve all the true information about the business so that you're not using excel every night trying to figure out what's going on then i would say then you want to start bringing it in house so if you're trying to go from 10 to 20 30 50 million i personally would prefer in-house i have tried lots of outhouse i have tried to refer people to outhouse there are some that are good but if you want the absolute best information then i do believe having in-house is the best um and i do think in the long run you actually save money because they're doing everything correctly and they get you the correct metrics to give you information about the business so you can make decisions and so that is how you actually drive revenue through finance and through good bookkeeping is that if you have financials that are readily available quickly and you have customer metrics that are available quickly you can make faster decisions than if not so i remember back in 2018 before i hired my cfo and we had a team of like 11 people in finance and i had not hired anyone with enough experience to know how to properly you know calculate the metrics and systematize things so our data was really bad and so at one point i remember i looked at the weekly report and it said something like it was like our churn spike from like i don't know below 10 to like 25 and i was like this is insane what the why is nobody pointing this out to me this is a huge problem and i remember me and alex we called the whole team and we had like two weeks of meetings that were going until way into the night early morning we were super stressed out you know what happened turns out our team was calculating it incorrectly and so when we came back it actually had never changed they had just put in the numbers wrong and that was because it's an inexperienced team and so um that is how important it is to have the correct numbers because i look at the decisions that we made because of those numbers um which we did make decisions that ultimately lost us revenue because they gave us the wrong numbers from bookkeeping right um and i look at the amount of time that we lost in putting our energy towards something that wasn't even a problem it was ridiculous so that is why good bookkeeping is something that i would give to an operator i would say if you are an operator you want to make sure you have good financials in place and good financial reporting and good customer metrics okay and that should all be driven by that department and then the last way uh to drive revenue through operations is by having a formal communication structure with direct reports so essentially what i'm saying is you have the manager and you have their direct reports and creating a formal communication structure where it is i want to say the word mandatory a mandatory that they have a one-on-one weekly or bi-weekly with the people that report to them and obviously this is going to be dependent on team size and what kind of team they are they part-time full-time et cetera right like if you've got 50 direct reports and they all come in for a couple hours a week you're not gonna have a one-on-one every week with them it might be every three weeks or four weeks i'm reasonable um but if someone's full-time i think that having a 30-minute 101 every week or an hour every two weeks is crucial and the reason for that is because if you look at the metrics of employees who have one-on-ones and this study was done by google okay uh the likelihood of an employee sticking with your company increases by 3x over two years and their productivity increases by 2x over two years if they have formal one-on-ones with their manager and so it drives me crazy because i know all of these metrics and i tell people i'm like have one-on-ones if you don't have one-on-ones really get these into place because i know how much they're gonna drive productivity and efficiency within the team and that's because you have speed only if you have clarity and trust right and so if you have those one-on-ones you're establishing the trust you're giving clarity and then you can have speed on the other side and so um if you're not doing this i would suggest as an operator you set up a cadence for everyone in your company to have these on a weekly or bi-weekly schedule and you say you're going to let the employee decide if it's weekly or bi-weekly because it should be up to the employee not to the manager because the employee is going to kind of dictate what they need at that point at least to start the second is you're going to ask them on that call simple two questions what are your current pain points and how can i support you the rest of it is just listening and so if you can give somebody that kind of time that's the kind of output increase and the kind of retention increase you're going to see in your business right and if you look at the cost of employee turnover the average employee that turns over before one year who has been on in the company for over three months and leaves before one year costs you about fifty thousand dollars so if you could expand the lifetime value of your employees by 3x don't you think that would save you money and so that is how operations drives revenue and so i hope this helps if you're somebody who doesn't believe in operations or has had a hard time with operations or you never wonder you always wonder like why does not work when i bring these roles in this is why because operation should drive revenue it just does it differently than marketing sales and product and so i will continue to make more videos on how we can drive revenue through operations i hope this one helps send it to your ops manager uh use it when you're hiring take notes on it whatever um i will see you on the next video