High Profit Thinking Part 1: LOGIC
How do you remove the risk from your business? With the skill of High Profit Thinking. The first element of high profit thinking is acting from logic rather than emotion. When you do this, you’ll quickly see that most of the “risks” in business don’t exist at all. They are imaginary, and when you look at them logically, they disappear.
WHAT YOU’LL LEARN FROM THIS EPISODE:
- Why conventional wisdom costs you cash
- Why you should bring your brain to the game to eliminate risk from your business
- Five questions to ask yourself, to get real about risk
- Why business isn’t nearly as risky as people will tell you
- How logic helps you make more money
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Welcome to Episode 32 of How To Make More Money, a podcast that helps you get seriously good at the game of making serious money. I’m your host Kelly Hollingsworth, and I’m thrilled you’re here because today we are beginning a series of episodes on high profit thinking. Why are we doing this? If you were with us last time, you know that we discussed a real reason behind the gender earnings gap. If your sales process doesn’t feel highly powerful, highly profitable, and highly replicable, it’s missing one thing: the engine of a high profit presentation. A high profit presentation is the dynamic force that drives your sales funnel. And if you’re struggling to harness the power of this engine, there’s probably a bit of a layered problem going on.
First, you may not be super clear on how to communicate with the marketplace in a manner that creates sales. That’s one thing that’s could be happening. You simply don’t know how to hit the messaging targets we’ve been discussing in episodes 26 through 30. How do you hit these messaging targets? The very best way to do this is using a method that I call “Invitation Marketing.” Invitation marketing ensures that you hit the messaging targets we’ve been discussing, by inviting your clients to a compelling happily ever after, on a clear unobstructed path to getting there. If you use invitation marketing in your messaging, your audience will see that, with your assistance, they can and will get to the desired destination. And then they will hire you!
Invitation marketing works. And learning what to do and how to do it is the first step in the process of creating your high profit presentation. If you can execute the process of invitation, marketing upon learning what to do and how to do it, God bless you. Go forth and prosper.
If you can’t, you’re not alone. Many entrepreneurs struggle to take the steps of doing invitation marketing because of all the protective behaviors that we bring with us from life into our business. We had talked about these protective behaviors last time in Episode 31. Basically what happens is, we march forth into business, wanting to make sales and make money. But we bring with us all the behaviors that we have used to remain safe since the dawn of time.
These behaviors include:
- acquiescence to our own false inferiority
- Permission seeking. (I gave a few examples of permission seeking last time. A few others include looking for a mentor or a business partner that you don’t really need, because it just feels safer not to go it alone. Or remaining employed, because then it feels like with an employer between you and the ultimate client, that there’s a margin of safety between you and the ultimate client. But you’re paying for that because the employer is keeping the lion’s share of the money.So that’s permission seeking.)
- Other protective behaviors we use to stay safe in the world, but that don’t work in business, are making a big fat fuss; and
- capitulating to a lesser harm, to avoid a larger one.
Where we’ve been using these strategies in life, it’s very reasonable to see why we’ve been using them. But in business they prevent us from making money. Acquiescence, and silence, and permission seeking, and making a fuss, and capitulation to smaller harms to avoid greater harms, are not cash generating activities. What are? The thing that generates cash is inviting your audience into happily ever after, and then delivering them to it with your goods and services. The game of business is won by discussing and then delivering on solutions. When you communicate the exact transformation you will create, and then you actually create it, your clients win. And then you win.
Acquiescence, silence, permission seeking, and capitulating to harm are not part of this money-making formula. They are SOOOO not part of this.
So what I hope you’re seeing here is that there is a set of behaviors that we generally view as protective—all the protective behaviors I’ve just listed. And there is an entirely different set of behaviors that create profit. And this creates, in the mind of the struggling entrepreneur, a giant, low–dollar dilemma, in which we perceive two equally unattractive options: we can continue the protective behaviors and feel safe, or we can let go of the protective behaviors. We can “put ourselves out there” and make serious money, but we put ourselves in harm’s way to do it. In the mode of low profit thinking, it feels like you’re forced to choose between two things: safety or serious money. You can have one or the other but not both, is how it feels. We want both, but on some level when we’re in this mode of operation, we don’t think we can have both at the same time. Conceptually, we may say that’s ridiculous, but deep down where it counts, we don’t really believe it.
We are now embarking on a series of episodes to help you find a profitable, protected way through this low dollar dilemma. If you’re drawn to the idea of winning at the game of business, making a big mark and making a whole lot of money in the process, you need a way out of this low dollar dilemma because it’s false. But if you’re stuck in it, it feels really true.
The truth is that more money equals more safety every single time, all day long. The more money you have, the safer you are from all manner of problems that life can throw at you. So to create this true safety, you need a way out of this low dollar dilemma. And the way out of it is through this skill of high profit thinking. Why is this the skill that helps you out? We will discuss this over the upcoming series of episodes, but the short answer for right now is that high profit thinking helps you dissolve the perceived risks that make all of the unprofitable (but protective) behaviors feel necessary in business when they are actually costing you a fortune.
When you have low profit thinking going on, the game of business feels like a bloody battlefield. When you become a high profit thinker, you see that it is really just a game of touch football. You can play, and win, with ease and without really risking anything. And when you see this, the game no longer feels scary. And then when it no longer feels scary, it’s very easy to leave all of those low profit, protective behaviors on the sidelines so you can get in the game and actually make some money.
So here’s the first thing you need to know about high profit thinking: It’s how you eliminate risk from your business. I’m not asking you to go forth in fear onto the risky field of business and bloody yourself in the battle. That’s not what business is about. It’s going forth, having fun and making money in the process.
So to get you to this place where you recognize that it’s safe to make more money, and that there’s really nothing risky about business, I’d like you to picture high profit thinking as a dial that brings the risk in your business up or down, depending on how you’re using it. When your business feels scary, the dial is turned all the way down to the low profit thinking portion of the range. You’re in low profit thinking and you’re perceiving that the risk is as high as it can be. When your business feels effortless and fun, your dial is turned all the way up to high profit mode, where you have an accurate picture of what the risks actually are and what you can do to mitigate them.
That’s the first thing to know about high profit thinking. It is how you eliminate risk from your business. And the risks you cannot eliminate, you mitigate. Business isn’t risky, and if it feels risky, you’re doing it wrong.
The second thing to know about high profit thinking is that it is logical thinking. It is the product of clear, sound, reasoning, and natural or sensible thinking given the circumstances. Here’s an example from my own life so you can see what this looks like. Before my husband and I were married, he owned a rental house and he had a prospective tenant approach him who was willing to pay about 30% more than market rate for the rent at that time. Why was he willing to pay 30% more than market? Because he owned a pit bull named Buster and other landlords refused to rent to anyone who owned a pit bull—even if it was a cute and friendly pit bull named Buster. They weren’t having anything to do with it.
So my husband called and he said, “We can’t rent the house to him. It’s too risky.” And I said, “Really? How do you know it’s risky?” And he said, “I called everyone. I asked my mom, my dad, I Googled it, should I rent to a tenant with a pit bull? And over and over, I got the same advice. No, it’s too risky.”
So notice where he was: in a cash–sucking cloud of conventional wisdom. When everyone is telling you that something is too risky, here’s the truth. Maybe it is risky, but probably, it isn’t. Once in a while, the risk everyone is telling you about is really there. Most of the time, the risk everyone is telling you about doesn’t even exist. So your first job as a high-profit thinker is to bring your brain to the game and figure this out for yourself.
Here are the “getting real about risk: questions that I’m always asking myself (or at least this is some of the questions). I’m always asking myself, is there really a risk? If so, what exactly is the risk? What can we lose as a result this risk? Is it really something that’s going to matter to us? Or is it really not a risk at all? Once I’ve been asking myself and answering the getting real about risk questions, and I know exactly what the risk is, then I ask myself, can we eliminate the risk? If not, can we mitigate it? So when this issue of renting to the owner of the pit bull came up, I sat myself down and I put my brain to work.
I asked my husband, “What could go wrong here?” And he said, “What could go wrong is that the dog hurts someone and we get sued.” And I said, “Have you met the dog?” And my husband said, “Yes, he’s great. He’s very friendly.” So it didn’t seem like there was really a risk. There was a pet pit bull named Buster. He didn’t seem like a fighting dog or a dog that you would ever have to worry about. But here’s the thing, all dogs can bite. My little dog Sheffield once bit me when I was picking him up and he was in pain. He bit me because he wanted me to put him down. So there is always a risk that a dog will bite someone. And at that point, the question was, if Buster happens to bite someone, this friendly dog who’s not vicious, but he’s like all dogs, he could bite someone. And if he happens to do it on the property that we own, do we have a problem?
At the time, I was practicing law, and I went into Westlaw and I did five minutes’ worth of research. I mean, seriously, five minutes. Maybe less. And I found the answer to this question of “can we get sued if we rent to the owner of a pit bull and the pit bull happens to bite somebody?” And the answer came in the form of an Idaho Supreme Court case that was directly on point. The case was about a landlord who had rented to the owner of a pit bull. The pit bull bit a woman, and the woman’s son, and both of them sued the landlord because it happened on his property. The idea was if he hadn’t rented to the owner of a pit bull, they wouldn’t have been bitten. And because they were a bitten, the landlord was liable for their damages. So it’s an interesting question.
The Idaho Supreme court held that the landlord was not liable. The court said, basically, everyone deserves a home, including owners of pit bulls. So landlords are allowed to rent to everyone, including the owners of pit bulls, because we like the idea in Idaho that everyone has a place to live. And so landlords, you can rent to these owners of pit bulls without fear of what’s called “premises liability.” Yes, owners of vicious dogs are liable for the damage caused by their vicious dogs. If you own a vicious dog, whether you rent, own, live in a tent, live in a train—it doesn’t matter where you live—if you own a vicious dog, you’re liable for the damages caused by the vicious dog that you own.
We very much like the idea that owners of vicious dogs are responsible for what they do, because it puts the onus on the owner of the vicious dog to make sure, if you happen to have one, make sure he doesn’t bite somebody or hurt them. Landlords, on the other hand, are not responsible for what vicious dogs do, or don’t do, that are owned by other people. Landlords are responsible for, among other things, providing housing in a fair manner so that everyone, including owners of pit bulls, has access to housing.
So this is a very clear answer about who is responsible for what, from the Idaho Supreme Court, that applies within the bounds of the state of Idaho. It’s a clear answer and it kind of makes sense when you think about it. Other states may handle things differently, but the thinking in Idaho at that time was that no one should go homeless. That’s what our State Supreme Court had to say on the subject back when I was doing the research. So what happened when I found this case? We had an answer. The answer is that the risk everyone is telling us about—that is so scary we can’t rent to this owner of this pit bull and make this 30% premium on market rate over rent—none of it was true.
We found an answer. They were wrong. They were telling us there was this insane amount of risk. There was no risk. And then, when we found this answer, we were able to rent to Buster’s owner, and Buster and his owner moved into the house. People who were concerned about us warned us, for no reason, not to do this. They warned us to forego money so we could “be on the safe side.” But instead of listening to cash-sucking conventional wisdom about “better safe than sorry,” which often is dead wrong, we instead approached the question from a logical standpoint. And approaching the question from a logical standpoint, gave us an accurate answer, that there was no risk. And doing that substantially enhanced our return on our rental house.
This is what will happen to you too. The further you get into the game of making money, the more you are going to notice people telling you, “better safe than sorry.” And this is what they will tell you when you’re heading out onto the field of business. Rarely—sometimes—they will be right–you’re heading into an unnecessary risk. And when this is going on, you should listen to what they’re saying. You should recognize the risk and reduce it to the greatest degree possible, or perhaps you don’t proceed at all, because the best return in business is the risk–free return. And if you look for them, you will find them over and over and over again.
But mostly when people are warning you, “better safe than sorry,” this is not what’s going on. The folks who are warning you about risk, about “better stay safe than be sorry,” are just dead wrong. They’re telling you that there’s risk where there simply is none. They’re wrong in this manner. And high profit thinking employs logical and rational thinking to help you figure out that they are wrong. When you do this, then you can proceed with complete safety onto the field of business and make more money, which is one of the best forms of safety I know. As I said earlier, all other things being equal, having more money means, among other things, more safety, my friends. So what I hope you’re seeing from this story is that high profit thinking is logical and logic creates not just a sense of safety, but more money, which further enhances your safety.
When you bring your brain to the game of business, and you use it in a logical way, you will make more money than when you’re acting from a fog of unfounded fear that is fed by conventional wisdom and by well-meaning but misguided folks who are trying to protect you. In the case of renting to Buster the pit bull, people warned us to feel afraid. But instead of feeling afraid, we used logic to figure out that there was no real risk. And at that point we felt no fear, and we made more money as a result. And Buster and his owner got a nice place to live during the time that they rented from us.
So the first thing to know from this series of episodes on high profit thinking is that high profit thinking is the mechanism by which you remove risk from your business. And a primary way to do that is to operate from logic rather than emotion. What’s the next thing to know? Join me next time, and we will discuss it as we proceed further through our episodes on high profit thinking. Thanks for being here today, and I look forward to talking with you next time.