Top
  >  Business   >  The Success Formula

There is a formula for success…literally.

And as soon as I saw it everything started to make sense.

It explained why what once worked didn’t work any more.

It explained why I was spending all of my time in my business.

It explained why I couldn’t grow the business further.

And so much more.

All of that in one simple formula.

But without experiencing it yourself it is much harder to get the same understanding from the formula.

So each of you will take away something different so I would love to hear what your takeaways are in the comments below.

So are you ready to see what the success formula is?

Here we go….

In the book Organizational Physics author Lex Sisney explains all of this so eloquently with this simple…yet complex formula:

This simple formula is about what the author calls System Energy Management.

The theory is you have a finite amount of energy and you are either going to spend it growing (integration) or maintaining what you already built (entropy).

They are based on the 1st and 2nd law of thermal dynamics and when adjusted to fit your personal life or your business will unlock so many answers to why you are “stuck” in a certain spot.

But before we get into that…

Lets define what “Success” is in this formula.

It is the “result” that a system produces.

For example…

A coffee machine is a “system” that creates a result of a tasty drink ( (that I am enjoying while I write this ;)…

A car is a “system” that has a “result” designed to transport you…

And a Business is a “system” designed to make money…and other things…

You could even apply this to falling in love 🙂

So this definition of “Success” can be used with anything.

Now that we have that clearly defined lets move on…

Integration measures how much energy a system is getting from its environment.

Lex goes onto say:

“Energy in this case is anything useful and desirable that can be made productive in the pursuit of success (e.g. money, resources, clout, etc.).

High integration is good.

Low integration is bad.

Why?

Because when there’s high integration between a system and its environment, the system has aligned its capabilities with opportunities and is extracting available energy.

It can use this energy to be successful.

If there’s no integration, then there’s no new energy available to the system and it will fail.

Entropy in the formula indicates the amount of energy required to maintain the system, make decisions, and get work done.

Low entropy is good.

High entropy is bad.

Why?

We know from the first law of thermodynamics that, at any given point in time, the potential amount of energy available to a system is finite.

We also know from the second law of thermodynamics that the force of entropy is constantly eating away at a system.

And here’s where it gets profound:

The energy available to a system must always flow first to manage its entropy needs.

Only after those needs are met, and if any energy is left over, it will be made available for integration.

Therefore, the higher the level of entropy, the lower the level of success.

And if entropy gets too high, the system will perish and fail.”

When I read this my mind was blown because it articulated what I was experiencing over my entrepreneurial journey but couldn’t put words to it.

What does this look like in real life?

Let me give you an example:

You launch a new business and you undervalue your resources and charge to little.

The lack of funds which are considered “energy” in this conversation are not enough to hire additional support staff to deliver on the order.

You have a finite amount of time (also considered energy in this conversation) that first has to go to delivering and fulfilling on the sale before it can move onto creating the next sell.

This might work to get started because when you are getting started you might not have the “energy” called “money” so you use your time or other resources.

But as your company grows it is not sustainable and you will top out at some point.

This is why it is incredibly important to know your numbers before you start a business to make sure the value proposition is weighted in your favor as a business owner so you can continue to grow.

And remember value doesn’t always have to equal money but you can only pay your expenses with cash….

And don’t forget that.

So the key is to find someone that values what you have more than they value the cash they have.

Simply put…but complicated to complete.

We have a process we follow that produces consistent results for different businesses we have started and scaled.

It allows us to understand how a “system” manages energy so we can adjust accordingly and drive energy where it needs to be which is integration.

We first look at the finances of a company.

This is critical because it is the “results” of all of the energy.

We can tell so much by well prepared financial statements so it is critical that you start with this.

The businesses that we scale all start with a financial model.

We know exactly what our income and expenses are to scale to any level.

This allows us to understand how the system uses energy…or in this case how it uses cash.

Once we have a full understanding of the finances we will then look at the operational efficiencies or inefficiencies.

This is critical to make sure that the company can actually handle scaling.

I see so many people that first crank up marketing and then their sales and operations can’t handle it.

Don’t do that 🙂

Make sure your operations and the fulfillment of whatever you are selling is on point so you can effectively transfer the energy used to build the business infrastructure to growing sales.

Once we have maximized the operational efficiencies and documented all of the processes we then move onto the sales team.

We want to make sure we extract as much “energy” from this process by having an effective sales process for the item you are selling.

For example, we have a real estate training and development / coaching program we sell that is $20,000.

Our sales process lets them try it out for 7 days for only $25.

This is such a no brainer for people who are serious because they get to actually test drive the education and daily coaching calls before committing.

They then get to see that there is not anything else like what we have created and are now highly motivated to buy from us without any “sales” tactics….because the product is great.

Once we finalize the sales process we then move onto marketing.

This is almost always the first thing people focus on…

And at some angle it has to be the first thing because that is how you generate leads to sell to create income.

And….

It is a delicate balance of scaling fast enough to generate excess cash flow but not so fast that you can’t keep up.

This is why you want your financial model completed so you can project all of these numbers out and anticipate what needs to happen.

Once you get your marketing dialed in you can reliably crank your ad spend up and measure the results with your financial model and know where to focus your time.

This is something we are incredibly passionate about so if you need any help check out our fee resources below.

We are always looking for unique and creative companies to help scale 🙂

If you want to learn more about this I highly suggest reading the book Organizational Physics by Lex Sisney.

If you are looking for a like minded Community of investor and business owners check out our Free Facebook Groups:

1). Zach Oehlman’s Personal Page – Indiana Oehlman: https://www.facebook.com/zach.oehlman

2). Elevate With A VA – Business Development and VA Staffing: https://www.facebook.com/groups/developingbusinesstoscale

3). Real Estate Investing Community For Successful Working Professionals: https://www.facebook.com/groups/reiforworkingprofessionals

4). Genius In 21 Days – Brain Training Education: https://www.facebook.com/groups/439304365063770

5). Spanish In 30 Days – Learn Spanish in 30 Days: https://www.facebook.com/groups/694026602079838

We build Communities of like minded people so we can all learn from each other and leverage each other skillsets.

Looking forward to seeing you on a training one day!

And maybe even on one of our trips one day 🙂

Have an amazing day!

Indiana Oehlman

post a comment