The One Mistake That Bankrupts Too Many Businesses—and How to Avoid It

Earnings Disclaimer: You have a .1% probability of hitting million dollar months according to the US Bureau of Labor Statistics. As stated by law, we can not and do not make any guarantees about your own ability to get results or earn any money with our ideas, information, programs or strategies. We don’t know you and, besides, your results in life are up to you. We’re here to help by giving you our greatest strategies to move you forward, faster. However, nothing on this page or any of our websites or emails is a promise or guarantee of future earnings. Any financial numbers referenced here, or on any of our sites or emails, are simply estimates or projections or past results, and should not be considered exact, actual or as a promise of potential earnings – all numbers are illustrative only.

If you’re looking to get to a million dollars a month—or even just increase your probability of getting there—you need to pay close attention. There’s one distinct way to achieve million-dollar months, and that’s by staying in Growth Mode. Unfortunately, too many businesses unknowingly switch into Survival Mode, and I’ve seen this mistake bankrupt far too many companies.

Key Takeaways

• Growth Mode is essential for reaching million-dollar months.
• Switching to Survival Mode can lead to contraction, chaos, and even bankruptcy.
• Cutting revenue-driven expenses like ad spend and sales commissions is a fatal mistake.
• Trust and confidence within your team are crucial for sustainable growth.
• Real-life examples demonstrate the catastrophic impact of shifting into Survival Mode.
• Watch the full video on this lesson here on Youtube.

---

Understanding Growth Mode vs. Survival Mode

There are only two modes a business can be in: Growth Mode or Survival Mode. There’s no in-between—no coasting or staying the same. You’re either expanding or contracting. To reach million-dollar months, you must stay in Growth Mode. Survival Mode, on the other hand, lowers your probability dramatically and can even lead to bankruptcy.

A Success Story: Kicking into Growth Mode

Solving the Sales Problem

We had a client whose sales team brought us into their account because their previous advertiser was doing a horrendous job. They weren’t bringing in qualified, well-framed people. The sales manager and the team knew we were the guys to overcome that problem, and we did. We kickstarted Growth Mode by solving this critical issue.

Scaling Through Strategic Hiring

After fixing the sales problem, the next evident step was to scale. The plan was simple: the sales team needed to consistently hire new salespeople week over week. The demand for what this business was offering was so high that we could fill a new closer’s calendar within a day by spending about $1,800 to $3,000 a day on ads.

• Day 1 Ad Spend: Fill a new closer’s calendar within that day.
• 24 Hours of Ad Run: Book the closer for three days out.
• Two Consecutive Days of Ad Spend: Book the entire week.

We discussed this scaling plan with the business owners, ensuring they understood the implications and were comfortable with it. They approved, and we started the process.

The Fatal Mistake: Slipping into Survival Mode

Unexpected Expenses Lead to Panic

About three weeks to a month later, the business added $300,000 a month in non-revenue-driven expenses. These bloated expenses needed to be covered, and since the revenue was primarily generated through our advertising efforts and the sales team’s work, the pressure was on us.

Despite this, we were up for the challenge. However, the added expenses made the business owners start looking at what they could potentially cut. They considered cutting significant revenue-driven expenses like sales commissions and ad spend.

Cutting Revenue-Driven Expenses

They suggested we limit the ad spend to the previous month’s amount, which made no sense if we wanted to stay in Growth Mode and make more money. Cutting ad spend—a revenue-driven expense—is a surefire way to switch into Survival Mode.

We pushed back, explaining that cutting ad spend would not save money but would actually lead to losing revenue. The money invested in ads turns into more money within the credit card billing cycle and even more in the subsequent months.

The Domino Effect of Survival Mode

Loss of Confidence in the Sales Team

If we had allowed them to flick the switch into Survival Mode, here’s what would have happened:

1. Sales Team Loses Confidence in Hiring: Hiring is a 3-4 week process. With ad spend limited, the sales team can’t confidently hire new talent.
2. Top Talent Walks Away: High-performing salespeople won’t stick around if they sense instability. They’ll spread the word, damaging your reputation.
3. Delayed Growth When Restarting: When you attempt to kickstart Growth Mode again, there’s immediate delay. The sales team lacks trust and is hesitant to ramp up hiring.
4. Erosion of Trust: Trust within the company diminishes, affecting morale and productivity.

Erosion of Trust and Reputation

Survival Mode puts everyone in the company in a state of contraction. People start focusing on protecting themselves rather than contributing to growth. This leads to:

• Reduced Team Morale: Employees are less enthusiastic and more skeptical.
• Loss of Top Talent: The best employees have options and will leave for more stable opportunities.
• Damaged Reputation: Word spreads quickly, making it harder to attract new talent and clients.

A Catastrophic Example: From $5.5M Months to Bankruptcy

The Initial Success

Let me share a story that illustrates just how catastrophic slipping into Survival Mode can be. We had a client who scaled up to $5.5 million a month. They were steamrolling their niche, buying out businesses, and delivering excellent results for over 800 clients. They had more than 300 staff, with a payroll of around $1.5 million a month.

The Decision to Cut Front-End Acquisition

The business decided to cut front-end acquisition to focus on back-end fulfillment and revenue sharing. They planned to reduce overhead, make more profit, and make the company more attractive for a potential buyout.

They began by laying off 60 employees involved in front-end acquisition. Unfortunately, they failed to:

• Communicate Transparently: They didn’t adequately explain the reasons behind the layoffs.
• Remove Access: They didn’t remove the fired employees from internal communication channels like Slack.

The Chaotic Downfall

The laid-off employees, still having access to Slack, began spreading negative propaganda within the company. This led to:

• Internal Chaos: Remaining employees became anxious and distrustful.
• Client Skepticism: Clients noticed emails bouncing back and heard negative rumors, leading to mass cancellations and chargebacks.
• Erosion of Leadership: Executives began distancing themselves, further destabilizing the company.
• Legal and Financial Troubles: Reports to government organizations, lawsuits, and ultimately, bankruptcy.

What started as a decision to reduce expenses spiraled into a catastrophic failure. This company went from considering a buyout worth tens of millions to facing bankruptcy within months.

Revenue-Driven vs. Non-Revenue-Driven Expenses

Why Cutting Ad Spend is Counterproductive

In Growth Mode, you must understand the difference between revenue-driven expenses and non-revenue-driven expenses.

• Revenue-Driven Expenses: Costs that directly contribute to generating income, like ad spend and sales commissions.
• Non-Revenue-Driven Expenses: Overhead costs that don’t directly impact revenue.

Cutting revenue-driven expenses is counterproductive. When you reduce ad spend:

• You Lower Revenue Generation: Less ad spend means fewer leads and sales.
• You Erode Team Confidence: The sales team can’t perform without leads.
• You Damage ROI: The return on ad spend (ROAS) diminishes, affecting your profitability.

Strategies to Stay in Growth Mode

Maintain Confidence and Trust

• Consistent Investment: Keep investing in revenue drivers to show your commitment.
• Support Your Team: Ensure your sales team has the resources they need.
• Avoid Sudden Cuts: Abrupt changes erode trust and can have long-term negative effects.

Invest in Revenue Drivers

• Increase Ad Spend Strategically: As long as ROI remains positive, increasing ad spend fuels growth.
• Hire Top Talent: Attract and retain high-performing salespeople.
• Focus on ROI: Monitor your metrics to ensure your investments are paying off.

Transparent Communication

• Be Open with Your Team: Share your vision and the reasons behind decisions.
• Handle Layoffs Carefully: If necessary, communicate clearly and compassionately.
• Keep Everyone Aligned: Make sure all departments understand the growth strategy.

Conclusion: Choose Growth Mode to Achieve Million-Dollar Months

Switching to Survival Mode is not a strategy—it’s a death sentence for businesses aiming for million-dollar months. By staying in Growth Mode, investing in revenue drivers, and maintaining trust within your team, you dramatically increase your probability of hitting significant revenue milestones.

Remember, it’s expansion or contraction—there’s no middle ground. Choose Growth Mode, and watch your business soar to new heights.

---

If you found this insight valuable, make sure to implement these strategies in your business. Stay in Growth Mode, keep investing in what works, and you’ll dramatically increase your chances of hitting those million-dollar months.