Ep 306 | Brendon's Formula for Evaluating Opportunities

Thank you for joining me today. It's Brian Gubernick, and welcome to the No Days Off podcast, where we believe that every single day brings a new opportunity to get better. If you're listening to this podcast, odds are you've had some business success. If you haven't had business success, you're listening because you intend to have some business success. So you're on the rise. With success comes more and more and more opportunities. In other words, the bigger your world gets, the more success you have, the more relationships you create, the more influence you have, and candidly, the more money you end up with, the more supposed opportunities actually land on your desk. Maybe Piers approach you with an opportunity, a perceived opportunity. Maybe someone in your office shares an investment deal. Maybe somebody in your circle proposes a business idea and considers you for potential partnership in some capacity. Whatever the case, as you have more and more opportunities come across your desk, you need to have some sort of filter, some sort of underwriting process to determine if in fact a deal, an opportunity is right for you. Now, for years at Metrics, the, the mastermind that I run with my partner Ben, we've worked through an opportunity filter. It's a series of 10 or 11 questions. You ask these questions and they help you determine whether the opportunity is in fact a good one. We've even discussed it here at the podcast in the past. Well, just recently I had the opportunity to listen to another partner of mine, Chris, interview or interact with, present with Brendan Burchard. If you don't know Brendon, you probably should. Certainly a name we've brought up in the past. Brendon is one of the best, if not the best, high-performance coaches across the globe. He's a, he's a guy that's coached Oprah. He's coached presidents. I mean, the guy's done a lot. He's accomplished a lot. And, and in, in his conversation with Chris not too long ago, they discussed Brendon's equation. For evaluating opportunities, and I, I absolutely love it. As a matter of fact, I wrote this equation out and it's been sitting on my desk for several weeks now, and I've had the opportunity to break it out twice and evaluate if a potential opportunity was right for me. After getting through this formula, I actually, in those, in those two cases, decided that both of them were not, not a good fit, and I attribute that specifically to the combination of the filter I've already been using through metrics, as well as the formula that Brendan presented. Today I want to go through this, this formula with you. I think it will serve as a tremendous tool for you moving forward. Now you're going to want to take notes, you're going to want to write these things down so you can visualize, uh, exactly what I'm talking about here. Okay, so here's the formula. TERMS, T-E-R-M-S, it's an acronym. TERMS must be less than ROI plus FV plus L plus PD. I'm gonna say it one more time, write this down. TERMS, T-E-R-M-S, must be less than ROI plus FV plus L plus PD. Let's walk through the definition of these respective letters, these, these acronyms. TERMS. TERMS is an acronym, T-E-R-M-S, and it stands for T, time, E is for energy, R is for resources, M is for money, and S is for sanity. So what Brendan is saying with this equation is that your time, your energy, your resources, your money, and your sanity, those things compiled or, or summed up together must be less than the right side of the equation that we're going to discuss here in a moment. So, your time. How much time is this potential opportunity going to cost you? We're all at different phases of our respective careers. Some of us have more time, some of us have less time. No, no two, you know, we all have different scenarios. Time is gonna be different for all of us. So this is gonna be very specific to you. Time, your time commitment. In combination with your energy, how much energy will you have to exert? And how do you feel about the exertion of that energy? Do you have the ability to contribute that degree of energy? Resources, what resources do you have to, do you have to contribute for this opportunity to be a successful one? I also would lump into resources things like influence, right? That is a resource of yours. M, and M stands for money. What sort of money do you have to put into this deal to make it work? Again, no two entrepreneurs are gonna have the same answer here. Money for one, a lot of money for one may not be a lot of money for another. This is very specific to you. And then S, sanity. Will you have to sacrifice your sanity? And if so, to what level? T-E-R-M-S, time, energy, resources, money, and sanity. That's the left side of the equation. Now, terms must be less than ROI plus FV plus L plus PD. ROI is exactly what you think it is. ROI stands for return on investment. Bottom line, this is you getting money, you getting a return on your commitment in terms of your financial commitment, your energy commitment, your time, your money, your resources, and your sanity. This is a return on investment. ROI plus FV. What does FV stand for? Future value. Future value. Never do anything just for ROI. If you're going to do something, it must benefit you later on. Meaning that whatever this opportunity is, it's got to be a building block or a stepping stone to the next big opportunity. Even if you're looking at something that you think is a home run, will set you up for life, and you'll never have to work again, you're kind of lying to yourself because even big home runs or grand slams like that, you're probably not gonna stop. If you're an entrepreneur, if you're part of the No Days Off Nation, you are likely to continue even after that grand slam. So, bottom line is every opportunity's got to be a stepping stone or a building block to the next opportunity. Maybe it allows for new relationships, Maybe it creates a bigger world or bigger financial world so that you can invest in more deals. Maybe it just opens up your thinking. Whatever the case may be, future value has to be factored into the equation. Remember, it's ROI plus FV plus L. What is L? L is lifestyle. Bottom line, is this opportunity in line with the life you want to live? right? Does this expand your life in a direction that you in fact want it to go? That gets factored in. And then lastly, you have PD. PD stands for personal development. Will you grow? Will you develop from this opportunity? Is this in line with who you want to become? Everything that we do in our careers, it's gotta push us. It's gotta help us grow. It's gotta help us develop. So, terms: time, energy, resources, money, and sanity must be less than ROI plus future value plus lifestyle plus personal development. I love this equation. I want you to think through right now maybe some opportunities that you're currently evaluating. Maybe go through this exercise right when you're finished with this podcast today. Pull that opportunity out and scrub it against this formula. Underwrite it. In business school, they teach you all about return on investment, but it usually stops there. And it's probably what I like most about this formula of Brendon's. It goes from ROI, but it doesn't stop there. It goes to your future value and your lifestyle and your personal development. And these are things that they're tough to assign a number to. Like return on investment, but arguably they're equally, if not, if, if not more so, uh, more important in terms of underwriting this opportunity. So I'm a big fan. Now, if you're going to look at opportunities that are in front of you, I also want to encourage you to look at opportunities that you've maybe pursued in the past that worked out or did not work out. For those that worked out, I want you to scrub it against this formula and ask yourself, gosh, where did this succeed? Where, you know, I'm saying the terms were less than ROI and plus future value plus lifestyle plus personal development. If it, if in fact worked out, that means that you honored this equation. So where did you see each one of these respective attributes or components of this formula show up? And for those things that didn't work out for you, I want you to plug them into this formula and ask yourself, where did this miss the mark? Where did ROI maybe not show up in the way that you thought it would, and therefore it was not greater than terms? Or where did future value not show up? Or lifestyle? Or personal development? Or a combination of all of these things? Where was there underperformance? And as a result, terms were not less than, terms were actually greater than. In other words, the sacrifice of your time and earn— time and energy and resources and money and sanity ended up being greater than the output of that particular opportunity. I know this is detailed. I know it's going to require some work on your part. I know you've got to underwrite future opportunities and past opportunities. The more you use this formula, the better you're going to get at using it, I believe, I sincerely, wholeheartedly believe this should sit out in front of you. It should be on your whiteboard, it should be on your desk, and it should be a filter by which you judge every opportunity or perceived opportunity that lands on your desk. Again, you're growing. Everyone listening, everyone that's part of the No Days Off Nation, we are growing. We are growth-minded here. Every single day brings an opportunity to get better. Every single day is going to bring an opportunity for you, for you to improve your business world. We have to make great decisions. This is yet another mental model, another tool to allow for that. On that note, that's all I have for you today, the No Days Off podcast. Thank you so much for listening, and remember, every single day brings a new opportunity to get better. So let's get after it. [MUSIC] [MUSIC]