34: Racheal Cook: Run Your Business Like a CEO

I’m super excited to be here today with an entrepreneur I have admired for a long time, Racheal Cook. Racheal is a business strategist and the founder of the CEO Collective, where she helps women entrepreneurs to start and scale service-based businesses without the hustle and burnout. Her biggest mission is to end entrepreneurial poverty for women, because she believes if more women make more money, we will be able to solve a lot of the inequality in the world.

When it comes to entrepreneurial poverty, if we look at the statistics, even though women are starting businesses at a rapid pace, more than any other time previous, we only make 4% of all the revenues for small businesses. And most women entrepreneurs are not making enough revenue to actually make it a sustainable business. 75% of women entrepreneurs make less than $50,000 a year. And $50,000 a year of revenue is honestly very, very little take-home pay for most women, which means not only are they struggling just to keep their business going in a sustainable way, but they’re struggling to build real wealth for themselves and their families. They’re not able to reinvest and grow their business where they’re able to hire people, which is one of the biggest ways we can make an economic impact- we become the next generation of employers who then can offer things like maternity leave, and better health care options, and who are able to really become the type of businesses we wish were available when we all started.

One thing that Racheal says she sees all the time is people over evaluate the ROI (return on investment) of courses and educational tools. They will more quickly invest into a course, then they will invest into hiring the expert to implement for them. And at some point, you can either decide to try to learn absolutely everything yourself. Or you can start saying, okay, here’s where I am best and where my skill set really shines. I’m going to hire people to help me implement it. If you hire someone who is an expert, you can start jumping not just the learning curve, but you can start jumping that ROI curve because they’ve already done all the research and training and we don’t need to be experts in every single part of our business. We just need to understand the big picture- how our business is going to work and then get people on board to help us move that needle. Some very smart early-on business investments for entrepreneurs is a great overview course- something that kind of helps you figure out who your market is, what types of offers you’re going to have, a basic marketing and sales strategy. You can also get this information by working closely with a mentor who kind of specializes in startup businesses. And if you don’t have the funds to do either of those things, then invest your time instead- podcasts, YouTube- there is a lot of incredible free content available that will get you started. According to Racheal, you don’t need to make any massive investments in your business until you have 10 paying clients. Because once you’ve gone through that validation, which isn’t just people saying- hey, that sounds good, its people giving you money, then you can start building a brand.

“My biggest mission is to end entrepreneurial poverty for women because I believe if more women make more money, we will be able to solve a lot of the inequality in the world.”

– Racheal Cook

When it comes to selling, Racheal feels there is just so much hype out there about how you need a complicated funnel, and all of these moving parts in place, when actually all you need is a phone and an email. It is cheaper and faster and way more lucrative to simply have free 20-30-minute sales conversations and get some clients in the door via a phone call or a Zoom call or a Skype call or whatever technology you want to use. It is way more efficient and way more profitable to do that, than to set up a complicated funnel, which is going to take you a ton of time and energy to figure out to test and then drive traffic to for a one to 2% conversion rate.

 Another point that Racheal makes in this conversation is the importance of referrals. She notes that earlier stage entrepreneurs are more likely to join an email list, they’re more likely to be on the search for content and more likely to be on the search for courses. But once they get out of that stage, they tend to seek help via referral. Getting into the network is the most powerful thing you can do. And that’s one reason why Racheal loves attending events, especially boutique conferences that are under 200 people, because she knows that she will meet the right people and either she will find somebody who can help her or someone will find her who she can help. In the end, she always walks away from events with clients and with people who can support her in growing her business.

According to Racheal, the biggest thing to pay attention to if you are a service-based business and you’re still primarily working one on one, do you really need to market at scale? Or do you just need to have 20 clients a year? If you just need to have 20 clients a year, then you don’t need to work so hard. But if you need to have 200 clients a year, you’re going to have to do a lot more marketing at scale in order to make that happen. And knowing where you fall on that spectrum is really important.

One of the first things Racheal does with her clients is they sit down and look at how big is their audience? How many people are there? And then they decide as they crunch the numbers, does it make sense to just have one on one conversations which are much higher converting or, if they can’t do that anymore, do they need to go straight into higher, more complicated marketing and sales. And it depends, sometimes they do a hybrid, where they will leverage content marketing, but still send people to sales calls. And Racheal believes that there’s a place for all of it. You just have to be really clear on your business model.

Another gem that Racheal shares with us is regarding your mentors. There’s a lot of “do as I say, not as I do” happening in the online space right now. Everyone who is teaching courses right now, did not start with a course. If you look backwards and you really listen to their story, you will find that they started with a one on one service. They were coaching, they were consulting, they were service provider, and they might not have loved it. In fact, part of their story that they’re using to sell you on the course model was “I hated my business”. But they learned, they learned everything they could about their audience, they got to really get in and understand the psychology behind the people that they’re trying to serve. And if you don’t understand those things, selling at scale is nearly impossible. So, while those people are telling you the course model is the way to go, really understand that they’re telling you based on where they are now and not where they were 10 years ago. And it’s either going to take you a lot of time to build the audience size that can support a course model, or it’s going to take you a lot of money to run the ads that will be required to support the course model. So, pay attention.

An action step for our listeners: do the “10 last clients exercise”- just grab a notebook, go and write down your 10 last people who paid you and figure out where they came from. You can figure out where they came from by asking them, you can go into your email record and figure out how they interacted with your email list, there’s a lot of ways to figure out where they came from. This will be incredibly helpful; it will tell you where you should double down. Instead of trying to do all the things, double down on what is actually bringing those clients in the door.

Thank you for listening. If you enjoyed this episode make sure you subscribe so you never miss new episodes. And if you have a business bestie, who needs to hear this message go share this with them. See you in the next one.

Love + magic,

Maggie