Does it have to be your own company, or you represent that

company?

Chet: It has to be your own company, yes. The owner of the company,

keep standing. Oh, I just had a bunch of people sit down. (Laughter) There's one guy here with 15 employees, - company with ten million dollars or more in sales. Alright, so sit down. I’m going to have you stand up again in a few minutes. Let me just tell you the facts. 85% of

companies in America will never reach a million dollars. Carl, can we have that door permanently shut, please? Thank you.

So 85% of you will never reach a million dollars, and in fact, only 95% - I'm sorry, only 5% will reach $5 million, and only 2% will ever get to $10 million. So 98% of all companies in America are small business, and they're under $10 million in sales. Only 1 in 25 will survive 10 years or longer. So now I'd like those of you who are the company owner, if you've been in business for 10 years or longer in the same company, stand up. Wow. That's an anomaly, and it says a lot for Jay and the kind of

companies he attracts. Okay, have a seat. So, my question to you is, what's the difference? Why do some companies get to $10 million and other companies never get past $1 million? It's not that people start off saying, 'I'm only going to grow to 200,000.' A lot of people start off with much bigger goals, and we're going to establish that in a few minutes. So in most cases, it’s not the product; meaning that -1967, a hamburger joint opens, and it's called Joe's Hamburger Joint; and we go back 30 years later, and it's still Joe's Hamburger Joint. 1967, another hamburger joint opens and we go back 30 years later, and it's McDonald's.

Now, my question to you is, is the hamburger made at McDonald's really that much different? (Laughter) We're talking like $40 billion a year, versus $300,000 a year, for Joe's Hamburger Stand. What is the deal here? So what it turns out to be, is - I'm just upstaging myself here - is it's really the skills or the learning curve of the entrepreneur. In other words, what you bring to the table is what's going to make the difference of how far you can really go. It is generally not the idea, because someone else will start with one idea.

I was corrected by somebody recently; I kept telling them the Tom Watson story, about how he built IBM, and somebody wrote me in an email, and said, 'Oh, by the way, did you know that Tom Watson was famous for saying, 'Computers will never work,'' or something like that, because he actually has data-processing - started with some simple thing, anyway. But he had the foresight, and the vision, and the leadership, and the judgement and all those other things that it took to try and turn what could have been Joe's Stationary Store, into IBM.

Okay, so it is the skills of the entrepreneur that makes a difference. So my question to you is, what kind of person grows a company to a million? Just, what kind of person does it take, because I’m going to tell you in a

minute, what kind of person it takes. Just get a company from nothing to a million, because 85% of companies in America won't ever get there. And then to get to five million, that's a different person, different skills; you've got to think differently, and I'm going to tell it to you. You're going to be clear, you're going to believe me, you're going to know I’m right.

And then 10 million is quantum leap from a million. I mean, you're talking about $1 million a year and then going to $1 million a month. What kind of a person, what kind of changes do you, as the entrepreneur, have to make in order to have that happen in your company? Okay, and then a hundred million - because this is called Zero to a Hundred Million - or a billion, right? And I say, skyscraper, anyone?

So, now, let's ask another very important question, and we'll get some reality check here. How many of you in the room - now let's take you back to when you started the company. Not what your feelings are now,

because we've got a lot of people who are in business ten years and you're - ten years can beat anybody down, and can change your

perception, and you give up on a lot of stuff. So I want to know, when you started your company, how many people in the room had the desire to take the company to at least a million dollars, please stand up. When you started your company, did you want to grow it to at least a million dollars, stand up.

So that's almost everybody, right? Because we've got a lot - will the employees of companies who want to go beyond a million dollars, stand up? Because I just don't want to have any deception here. Alright, so that means that almost every company in the room here, at least wanted to grow to a million dollars, right? So there are some of you in the room who don't want to grow to a million dollars, keep standing please. Because this keeps you awake after lunch; this is deliberately planned, just to make

sure you guys aren't going to fall asleep on me, and I will have you stand all through this...no I'm kidding.

But, now, the question becomes, how many of you wanted to grow to five million? Keep standing. When you first started the company, the goal was you're going to grow to at least five million or more. Ten million or more. So still like 90% of the room - saying this for people who aren't going to see this on tape, who aren't going to see, they can hear it. It's like 90% of the room wanted to get to ten million. Okay, have a seat. So why haven't you? What's it take? Not trying to embarrass anyone, I'm trying to give you the tools that you're going to need to get there. Real practical stuff. Alright, one million is easy. It says your workload is - it shows a guy totally overworked here. One million is easy - well, I say not exactly, because what it takes to build a company to a million dollars; anyone with passion, drive and hard work can build a company to a million dollars working half days. Can anybody tell me what a half day is? That's right, if 24 hours is a full day, what's a half day?

Right? So, I'm telling you - because I've seen a lot of companies that are utterly and totally dysfunctional, and when I'm finished here, you're going to know exactly what I mean by dysfunctional. I've seen a lot of

companies that are completely dysfunctional, and just the owner is just so passionate and he's got so much drive, and he works so hard, he's just dragged that company to a million dollars on the pure sweat of his back. And you might get to $2 million by doing the same thing, but I guarantee you, you will not get to $5 million, and you sure as heck will not get to $10 million just on passion and hard work.

So, it should be nice to know that you're not going to have to work ten times harder, if you really want to still go to ten million, like some of you people kept standing to tell you me you want to do. Because you can't work ten times harder, can you? Not if you're working half days now. There's only another 12 hours in the day. So, clearly the owner working half days to do a million, can't possibly work ten times harder to get to $10 million. So the point is, it should be a great relief to you to know you're only going to have to work smarter, not harder. Right, and I want to try and give you that.

So what do you need to reach ten million and beyond? I'm going to tell you in the next five, six slides. And when I tell you , you will hear what I say, you will understand it intellectually - come on, got to point right at this thing - you will agree with all the principles, you will know that it's the thing you should do, and you will still not do it. (Laughter) Okay, this is what I call reverse psychology. It's like when your kids were little, you used

to be able to say, 'I bet you can't get me a drink of water.' 'Oh yes I can,' and they'd run off and get you a drink of water, and now they're 14 and they go, 'Yeah, you're right, I can't help you out there.' (Laughter)Doesn’t work at all anymore.

So why won't you do it? This is more reverse psychology. Well, because here's the key guys. Here's what it takes to get to ten million and then beyond. It's pig-headed discipline and keeping your eye on the ball. Now, I'm going to take exception with Brian Tracy's comment, where he said, 'Working on the business is a bunch of crap, all you got to do is just sell, sell, sell, sell.' Well, I've got a lot of clients that sell, sell, sell, sell, sell really well, and the company is nothing but problems. And it's because no- one's stopping to work on the business. So, the question really is, to work on the business, but what should you be working on? And that's where people get stuck. They don't really know what to work on, so you just come to these events, and you get tons of ideas; you're not really sure where to go with all of it, and so what I'd like to do is kind of give you a blueprint in the next half hour, that I have here, and help you get there. Well, first is that you want to work on being proactive instead of reactive; and it's kind of obvious, but I love what Fran Tarkenton said; he thinks the 80/20 rule is now the 95/5% rule. And so 95% of your time is probably spent doing things that yield very little results, working in the business and if you're lucky, 5% is on things advancing the business and moving the business forward. Okay?

So there's different needs at different levels of growth, but the bottom line is you definitely need to work on the business, and I’m going to give you some really clear examples, and I’m going to make it real easy for you. And the key - if I could get this thing to move forward - is what I call the 'three P's.' So this is interesting, because the first time I unveiled this concept; zero to a hundred million; and I have a cassette program coming out [unclear 4:23] Bill Conan, called Zero to a Hundred Million, where I take this much further than the half hour we're going to here today; but the first time I was exposed to it, I was running a bunch of trade shows for Charlie Munger, and - if you don't know who he is, he's Warren Buffett's partner, they started Berkshire-Hathaway when it was $9 million, and today it's $90 billion, or something; and Charlie is the co-chairman, and I, stupid kid that I was, 28 years old; got a job working for this guy. I had no idea who he was, but it was a fantastic opportunity, because you go to Charlie Munger, a billionaire, with an idea, and he'd say, 'You think you can do a good job at that?' And I'd go, 'Yes. I do,' and he'd go, 'Well, go ahead.'

Started trade shows, bought magazines; it was so much fun, oh God, I had a ball. But I learned a lot, and one of the things I did at one of the trade shows is put on this conference where we analyzed the kinds of people who grew companies. And I got this epiphany. At the time, I was running nine different divisions; I was so busy, I was working 12 hours a day at the office and then go home to do three or four hours a day; worked every single weekend. I remember going on vacation in Hawaii, and getting an average of 15 to 16 faxes a day. This is my vacation, you know? And some of you know exactly what I'm saying.

And then I got this epiphany, and I realized that everything that had any kind of impact in the company had to start and end with me because I had not established what the three P's are, and it says the most successful companies constantly focus on the three P's, and they are: Planning, Policies, and Procedures. Now how many people here own PEQ? Oh we've got a good number of you in the room. So you guys know exactly what I’m talking about, but I’m going to put a new spin on it for you; and I know some of you are guilty of still not doing stuff at PEQ, so I hope this is

impactful repetition being the mother of skill. Because I go deep on this in our PEQ program, but planning policies and procedures; when you work - I've had 50 Fortune 500 clients, and they have tons of planning sessions for everyone.

They have quarterly planning, they have annual planning, they have monthly planning, they have policies for everything. There's nothing - it's like in your company - how many people have sales people? So I'll pick on you just for a minute. Microphone? You took my mike, Rick. How many sales people do you have? 20 sales people? [inaudible 6:51] gentleman, mike.

Okay, what's the policy for follow-up? How many times are they supposed to follow-up with a prospect who says no? He's got a policy for that. Your mike doesn't work? (Laughs) So you actually have seven follow-up

procedures for a customer who says no? And they're strictly adhered to in the organization?

Man 1: No. (Laughter)

Chet: (Laughs) Okay, how many other people - just wait a second - how

many other people with sales people - first of all, how many people with sales people, raise your hands. High, come on, so we can see them. And then, where you have seven, or even three standardized policies for

following up on a customer who says no. Keep your hand up if you do. Like I person - 2 people, three, four, and a PEQ over here, I know.

Okay, and then what's the policy on follow-up after the customer buys? Is it up to the sales person or do you have procedures in place for that? This guy is good. This guy is good. Okay, let's pick somebody else. (Laughter) Thanks, thanks. No, that's good, that's okay.

The point is, most companies don't have policies for that and it's funny; a sales person will come up to you and go, 'What's our policy on if they say no, how many more times should we try?' And most entrepreneurs will look at them and go, 'I don't really know. I don't really have an answer for that.' And so what I try to do with companies is systematize everything and - here's the learning curve. Here's exactly how I got to this. I was top producer every place I ever worked. The last sales job I had, I was out selling the next five sales people, all put together, and I couldn't

understand why they didn't hire more guys like me. Right? Why don't they just hire more guys who love to cold call in the morning. How many people here love to cold call in the morning? How many people here are in sales? Everybody should raise their hands.

Almost everybody raised their hands when I say how many people love sales, and three people raised their hands when I say how many people love to cold call in the morning. You know why? It takes a warped

psychological profile, no offense intended, so you and I are the two in the room who have that warped psychological profile. But it is a unique

psychological profile that really loves to cold call in the morning. So what I did is, I got this job working for Charlie Munger, and I tried to hire nothing but sales super stars. I was determined; I said, 'You know what, when I get in a position of authority, I’m going to hire nothing but guys who love to sell.' So I hired what I thought were great sales people; all you guys who hire sales people, you know exactly what I’m talking about. How many superstars are there in the world? And how hard are they to find? Really hard to find.

So I actually developed amazing techniques in that area. You PEQ guys, you know exactly what I'm talking about. But the point is, then I started to - so if I wanted them to try 12 times to get an appointment, because the average sales person actually statistically will give up after only two rejections.

So, what's your policy for how many rejections they should face before they give up? And if you don't have a policy there, then you're running like, Joe's Hamburger Joint, not like McDonald's, because McDonald's have got policies for everything. You know what I’m saying? Morgan Stanley has policies for everything. But if you don't have policies and procedures for each area where you want some competency in your company, then

you're not ever going to have a great company, and you sure as heck can't grow to 10 million and beyond. And I’ve got clients who get stuck. Now, I only work with Fortune 500 clients, prior to meeting Jay, and I've 50 of them, so I've had some great success; million dollar fees, to go in there and help them. And Jay says to me, 'Well, you know -' and it is frustrating too, working with a Fortune 500 company, because if I make a suggestion at Wells Fargo, it's like a year before anything happens with that. And the layers and the things; and now working with smaller companies with this high-flying deal that Jay's come up with, I can have like an immediate impact.

Got a company, six weeks [unclear 00:58], we were like doubling their sales. And I'll tell you the exact story tomorrow; how we did it, and every one of you in the room will be able to do it, and you'll be able to apply the combination of my skills and Jay's skills for yourselves.

So, sort of like Jay says, 'What's a forensic reconstruction -' forensic person reconstructs the crime and tries to find out how it happened; what's a forensic reconstruction to see how many situations require your input, where you could apply the 3 P's. So because every area of your company you need to do this - and I’m going to explain this really well in a minute here. Okay, the more you utilize the three P's, the better the company will