Dan Martell is an entrepreneur, angel investor and thought leader. In 2016, he founded the SaaS Academy.
Below, Dan shares 5 key insights from his new book, Redeem your time: unlock yourself, reclaim your freedom and build your empire. Listen to the audio version – read by Dan himself – in the Next Big Idea app.
1. Determine your redemption rate.
Each person should understand what their redemption rate is. They do this by determining how much they can afford to pay another person, part-time, contracted, or full-time, to perform the tasks they currently perform. To start, take your income and divide it by 2000. Two thousand is the average number of hours a normal person works per year; this will give you how much income you generate per hour. Take that number and divide it by four because you want to get four times the return on investment (ROI) of your buyout.
For example, your salary might be $70,000, plus $20,000 from earnings or distributions, then $10,000 for discretionary expenses. Your combined income, salary, benefits and discretionary expenses is $100,000. If you take $100,000 and divide it by 2,000, that’s $50 an hour, divide that by four, and that’s a buyout rate of $12.50. This means you shouldn’t do anything on your schedule that you could pay another person $12.50 or less per hour for. If you do, you are working against yourself. Similarly, if you’ve just started your business, you shouldn’t pay anyone more than $12.50 an hour to complete a task that you could do. You want to keep the high value work for yourself and buy back the lesser value things that consume your energy.
2. Run a redemption loop if necessary.
What do we do when we reach the pain line? The pain line is any time a business owner feels that if they grow their business any further, their timeline will explode. Some people are into it and some people know it happens, but once you hit the pain line, you need to implement the redemption loop.
There are three steps to running a redemption loop. First, you do a time and energy audit. Identify the things that take energy from you versus those that give it to you, and have a low cost if you pay someone else to do it, say a $1 task versus a $1 task. $4.
“Once you hit the pain line, you need to implement the redemption loop.”
With that, you move on to the second step, the transfer. All low cost tasks are bucketed and transferred to someone else. Either hire someone, use someone on the team with renegotiated expectations, or bring in an intern. You don’t always have to have money to be creative, but you do need to find a way to transfer and clean up your timeline.
The last step is filling. Here you identify opportunities to do more of the work you love, do what will generate the most income, or invest in skills and development: learning new strategies for growth, creating playbooks, or whatever. skill in which you think you have a deficit. You can also audit beliefs, world beliefs, money beliefs, people beliefs, any beliefs that don’t serve you, and get coaching or training on them. It can also be character traits, like consistency, mental toughness, etc. Every time you hit the pain line, run a redemption loop and keep building a business and a life you don’t want to retire from.
3. Mount the replacement ladder.
How can you hire people in the right order to get the most out of those hires? It involves a five-step scale, each with specific outcomes.
The first level is the executive assistant – million dollar companies aren’t built on $10 tasks. Have someone organize your inbox, run errands, do your shopping, do research, or arrange vacations or trips to free up your time.
The second level is delivery, or whatever is involved in your after-sales transaction: fulfillment, onboarding a new customer, taking payments, or customer support.
“If you have to tell someone how to grow that area of the business, you’ve made the wrong hire.”
The third level is marketing. Marketing is about understanding what campaigns you are going to run to generate leads and what your traffic sources are; on foot or online. Someone has to wake up every day and monitor this, ensuring higher quality and quantity of traffic. At some point, it should no longer be the CEO; someone else can build a lead generation system to grow the business.
Level four is for sales, i.e. hire a salesperson, but only when the first three levels are met. Otherwise, you’ll have someone who doesn’t have enough leads to make money and they’ll quit within three or four months. Hire a salesperson who can do all the initial calls as well as follow-ups.
Level five, the highest level, is a management team. This is when you start investing in leaders to support all functions of your business. It can be the execution side, the marketing side, sales, operations, whatever you need, depending on your timeline, using the buyback loop. The key is that they own and are accountable for that department’s strategy, results, and goals. If you have to tell someone how to grow that area of the business, you’ve made the wrong hire. Following this sequence will ensure you always move up the ranks in the most efficient and effective way.
4. Follow the 10/80/10 rule.
It’s for the creatives in the crowd: the podcasters, the artists, those who think what they do is unique and special, that no one else can do. 80% done by someone else is 100% awesome. The first 10 percent is ideation and you do that with the person who is going to own the process. This is an opportunity for you to talk about the creativity, the guideline, the scenario and the outcome goals and all aspects of the desired needs. Then the 80% is the person who takes that information and pushes it forward through research, prototypes, drafts or drafts – someone who can take your concepts and turn them into a first draft. The last 10 percent is integration: taking something that’s nearly finished and adding the finishing touches to it like someone would in a restaurant. When the plate comes out, they give it one last look, put the garnishes on it, clean the side of the plate, and hand it to the waiter to bring to the table. It’s the 10/80/10 rule.
Steve Jobs is a prime example. He would follow this rule with Jony Ive. They would walk into the design studio and come up with various concepts. Jony and the Apple team would then assemble a bunch of prototypes, run the CNC machines, contact suppliers, get costs and raw materials, and try to figure out how to build those crazy ideas that Steve and Jony had come up with. Steve would then do the final 10%: stage presentations, demos at their events. The 10/80/10 rule allows creatives to redeem their time and still feel like they have their mark on their projects.
5. Create your 10x vision map.
It examines four key areas of your life and gives you permission to dream, think about the future, and increase your current life by 10 times. It is easier to multiply your life by 10 than by 2.
The first of the four key areas is the team. To achieve any dream, it all depends on the people you work with. To unlock yourself, reclaim your freedom, and build your empire, you need to identify your team.
“It is easier to multiply your life by 10 than to multiply your life by 2.”
The second of the four key areas is the core business. Every person who has created wealth or resources in this world has had a primary purpose in their business. So what is this current goal and if you were to multiply it by 10, what would that look like? Try to be as specific as possible when planning the future. Most people can explain what their day looks like today, their team size, profits, revenue, sales, but if you ask them, what does it look like ten years from now, what does it look like Does it at 10x level, they draw a blank or just say “better”. But if you can do this, you unlock the empire, the third key area.
Every business owner, from Richard Branson to Warren Buffett to Oprah Winfrey, has all either left their primary business, taken that resource and reinvested it, or created multiple copies of their primary business, add-on or close versions. cousins. Understanding what your potential empire is, your current business at 10x scale, is key. What is this empire, this big business with more leverage and more resources?
The last key area is your lifestyle. This is the big one because the principle of redemption is not only applicable to work; it must be applied at home and in your personal life. If you have a clear idea of what you want to achieve in life, then you won’t make the mistake of climbing the ladder of success, only reaching the top and finding it’s leaning against the wrong wall. That’s what the 10x vision map allows you to do: focus on the destination, the what, without worrying about the how. It is a powerful framework to give someone a real sense of direction, clarity and confidence to build their future.
To listen to the audio read by author Dan Martell, download the Next Big Idea app today: