Business Profit Maximizer #2 – Why Cash is KING – Dan Lok

Business Profit Maximizer #2 – Why Cash is KING – Dan Lok


(fast-paced music) – So three questions. I’m going to keep going. So you can operate a
long time without profit, but you cannot survive
a week without cash. You can operate a long
time without profit, believe or not; but you cannot survive
a week without cash. Without cash. So cash is what? – King.
– King! Yes cash is king. Very good. Cash is king. Know every single business
goes out of business because they run out of – Cash.
– Cash. – Period. Not that very often. Not that they’re not
getting enough customers. Not that the thing is not working. Not that they’re not working hard. Not that they’re employees
are not working hard. They’re running out of cash. They can’t pay the bills. They can’t meet the payroll. They are done. Finished. Done. Finished. Cash, cash is king. Understand that. So can you see how important
cashflow management is? – [Audience] Yes. – That’s it. That’s the name of the game. So ignorance is not bliss. Facts don’t cease to exist
just because you ignore them. Facts don’t cease to exist
just because you ignore them. You look at net income. You look at net profit. Everything goes well. You don’t look at your cashflow. I don’t need to look at that. I think I’m doing well, because I’m optimistic and I will always do better. Facts don’t cease to exist
just because you ignore them. So the number one key to
longterm business success, I believe, is to avoid bad assumptions. It’s to avoid what? – [Audience] Bad assumptions. – Most entrepreneurs they
fail because they assume. Write this down. They assume. They assume when I start this business, in 30 days I’ll be profitable. Okay? And I’ll be making very good money within six months. And my marketing … I
don’t need marketing. I get on the marketplace,
people will love it. They assume people love it. They assume their friends, they will tell their
other friends about it. And then they’ll beat a path to my door. Then I just sit there and collect cash. (laughter) They’re assuming that it’s going to work. They assume it’s going to be easy or they underestimate how
difficult it’s going to be. They assume whatever product they’ve got or the service they’ve got, they assume there’s a market for it, and that’s the issue. They underestimate. They haven’t done enough research. Going back to “The Art of War” a quote from “The Art of War” a battle’s won before it’s ever fought. Intel. Intel. Business intelligence. Just avoid bad assumptions. All my fucking money I’ve
lost is because I assumed. I assume that my product has a market. I assumed that I could make it work. I assumed with my ability
I could push through and I could create a market, and I could make it happen. I assumed and that’s how
I lost a lot of money. Nowadays, those assumptions,
I want to verify. I want to verify. How do I know there’s a market? Just like, how many of you
ever had this experience? Maybe not you, you may know somebody. They come in with an idea. You go talk to your friends and you know what, I think I’m going to make this widget. I’m going to sell this widget. What do you think? (loud clap) I think it’s a great idea. I support you for it. Yeah, you think so? Yeah, I think people will love it. Great. Let me just mortgage my house. (audience laughing) And sink my life savings to this thing. Because all my friend
say it’s a good idea. And you make this thing. And your garage is full of them. And you go talk to your friends. Yes! I’m now ready to take it to market. Would you like to buy some? No. But I thought you said you support me. I thought you said it’s a great idea. Well it’s a great idea, but I’m just trying to be polite. Fuck! Why didn’t you tell me earlier. (audience laughing) Why didn’t you tell me earlier? Don’t try to be polite. So from now on, if you have an idea and
you talk to your friend and you say, “You know,
I’ve got this idea here. I don’t know if it’s a good idea.” And they will say to you, “Yeah
I think it’s a great idea. I think you should do it.” What do you do? Give me your credit card. (laughter) Take their money. Yeah. Oh, I’m not going to buy it. Fuck you. (mumbling) You’re not being honest with me. You know what I mean right? They’re just lying to you. Being nice. Better to find out early than when you find out you
sink your life savings into it. So verify. So that’s why it’s not
accurate to ask you friend. What is the marketplace telling you? Who are your competitors? How long have they been around? What’s their profit margin? How are they doing the selling? How are they doing their marketing? What are some of the issues they have? What are their strengths? What are their weaknesses? Why you and why now in this marketplace? What makes you different? What makes you unique? How long can you last? How much cash can you last? Can you last one month? Can you last three months? Can you last six months? Can you last 10 months
not making a profit? Those are good questions to ask. Yes? Tough questions. But if you ask those questions, avoid bad assumptions. Avoid bad assumptions. Minimize the loss. You’re asking how they minimize loss? That’s how you minimize the loss. Okay, here’s a question. It’s a painful question. Listen to me: how much more money would you still have if you didn’t make those bad investments, or bad business decisions? (sighing)
(murmuring) (low laughter)
(whispering) How much more money– now forget making money, would you still have if you didn’t make those bad investments or bad business decisions because of assumptions. For most of you, you would be like, “Shit … Wouldn’t that be nice … to see if I could avoid that.” But it’s a good question to have to ask. It’s a good question to ask. – [Announcer] 10 times your finances. 10 times your business. 10 times your marketing. 10 times your life. Hit the subscribe button now. (fast paced music)

You May Also Like

About the Author: Oren Garnes

19 Comments

  1. Hey Dan Lok I know you could help me I'm very interested in starting a company online whats your email

  2. How would you get these information about your competitors? Margins? Etc… Like wouldn't it be in a company advantage to keep these info hidden so that other people can have harder time replicating them, or doing it better…

  3. I like how you talk about people’s peer group. Friends support your idea but maybe they support you. Good advice, don’t take advice from broke people or ones that don’t pay you lol

  4. Most businesses fail because they assume. Facts don't go away just because you ignore them. This goes with how successful people think with being ACCURATE.

  5. Start to take notes when you asked the questions! I have watched many entrepreneurs videos but I feel there is something different about you Dan 🙂 Thanks

  6. Dan I hit rock bottom and I'm building a STRONG foundation on you. I assumed I would make it work but ran out of money, ran out of confidence. THANK YOU for your incredible work! I truly relate to you and your motivating SKILLS!

  7. POWERFUL LESSON. You have got super skills after overcame the lots of challenges. Thank a lot for sharing this, Great Sifu

  8. Im so really gonna do that, Im gonna take my friends' money, those who asked me to sell my cured pork cause it is just so good that they eat a lot of it when i bring some. I've seen someone explain Pre-selling concept, but not like this, Pre Selling Dan Lok Style!

Leave a Reply

Your email address will not be published. Required fields are marked *