How To Make $100m In 5 to 10 Years

There is nothing I enjoy more than being on stage, being in front of especially entrepreneurs, talking about things that I know will be impactful for them is literally an out of body experience for me. I was in Miami a couple weeks ago giving a talk to entrepreneurs and I shared with them a thought process around the three types of money. And when I shared this with entrepreneurs, there were light bulbs that went off across the room. I could feel, feel the energy shift in the room. Several people in the room who I've admired for years who were coming up to me asking for my help because of this concept that I taught. And it's the idea of prioritizing enterprise value instead of cash flow. So here's how I explained it. There's three types of money. The first is cash flow. We all know what that is. That's profit. That's what you can spend. It's what you've got left after fulfilling all of your obligations. This is money you can live on. This is what most entrepreneurs focus on. I want more cash flow because most of us come from nothing. Most of us come from humble beginnings. So we focus on cash flow because we want a different life. And that's where most entrepreneurs stop the conversation, which is why most entrepreneurs stay on a hamster wheel of always working and never actually having freedom, which is what they ultimately wanted. It's very interesting irony. The second type of money is wealth. This is what grows without you working. Your wealth is your portfolios all added up. You don't have to work for it. It's growing with or without you, and it's very long term. But the third type of money is enterprise value. Enterprise value is different than the other two. Enterprise value cannot be spent. It doesn't produce cash flow. So most entrepreneurs don't think about it until they think about selling a business one day, if they ever get to that level. But enterprise is still real wealth. Because you can sell the business. You can also borrow against it. You can also use it to raise capital. So it is usable, it is real wealth. And the faster you think about that, the faster you think about building enterprise value, then the higher your net worth will be and you will make the most money and you'll have a business that you can sell and you'll never have to worry about cash flow ever again. Now that insight changes the way that you approach business. It changes the way that you focus your attention and what you prioritize in your business. If you're thinking about cash flow, then when you go to sell a product, you're Thinking about, all right, like how low can I keep advertising costs, how low can I keep overhead? Can I spend a dollar to make a $50? And that's how most entrepreneurs think. And they're bootstrapping a company in order to get enough cash flow to where they can reinvest it and two years later they have a successful business. But if you're thinking about the same question from a perspective of enterprise value, you're not thinking about turning a dollar into a $50, you're actually turning a dollar into $100. And that's because instead of thinking like, what am I going to spend on advertising? I think, all right, who can I partner with that is going to bring as many sales as possible from the get go, get me as much attention and long term customer value, long term fans get as much awareness as possible. Well, instead of running pay per click ads, I could partner with an influencer or I could partner with another business and I could do a swap of advertising. I'll promote it to my audience, they promote me to their audience. Or maybe I could buy a podcast. Maybe I could go buy a podcast that has 100,000 subscribers and I could get an investor to put up the capital for that business because it's already producing cash flow. And then I will have all the free advertising that I could have by owning this podcast. Those are the types of questions you ask when you're thinking about building enterprise value. And that grows a business so much faster. Now, a lot of entrepreneurs will say, I would love to think about building enterprise value, but I don't have enough money to think about enterprise value. I need the cash flow so that I can focus on building my business. And then one day I can build a business like the way you're talking about, Mr. Capitalism Man, Mr. YouTube Man, Mr. Podcast Man, Ryan. But if you have a compelling vision, if you think about the vision that you're building, then capital's everywhere. Capital is easy. Investors, banks, customers, want to be a part of something with a big vision that is building a lot of enterprise value. And so if you can, if you can find a way to punt the short term cash flow and think about building something of extreme value. The ironic thing is that it will make the most cash flow in the long term and you will never have to worry about cash flow ever again. But it requires that you flip the script and think about enterprise first, then wealth, then cash flow. After I shared this mindset with the audience, I went into some details about how to do this. But there was one part of the talk that gave people a big aha. And it was when I talked about the numbers behind Enterprise Value. It looks like this. Let's say you're building a business and you go out to investors and you raise $250,000 and $1 million valuation on your idea. And you say, hey, I am an experienced entrepreneur. I've been in this space for four years. I'm building this part of the business. I'm raising $250,000, just like you would see on structure. But if you took it the next step further and you went and partnered with a blog that had a million monthly subscribers and you offered them five points in the company for advertising rights, you got to put your product and your business in front of their audience. Is it reasonable to say that that one introduction, that one relationship could raise your valuation from $1 million to $4 million or even $5 million? Well, if you know that that audience is going to pretty much guarantee that your product is going to start selling consistently, then yes, it's reasonable to say you, you now have a multi million dollar plan rather than a $1 billion plan. And if we took it two steps further and we said, okay, now that I know I can get sales, I haven't sold anything yet, but now that I know I can get sales because of the relationship that I have, I'm going to go now hire a COO from a competitor that's built a $25 million company before. And I don't have the money to hire them right now, but I'm going to go build that relationship and I'm going to have a verbal agreement that once I'm ready, they're going to come work for me. Okay, well, now I have a COO that's going to run the company, and I've got an audience leader who is going to talk about the business.

The only thing I'm missing is like a couple advisors. Let me go offer two points of equity to three strategic advisors that have done this before. Well, now we have a board of advisors. We have somebody who's going to run the company. We have an audience partnership. We haven't spent any money yet, but now I can go to investors and raise capital in a $10 million roll, easy. Because I say, this is my board, this is my advisor, this is who's going to run the company. Here's how we're going to get sales. Now we have a plan. Now we have a business with real enterprise value. So before we were selling 25% of the company, getting $250,000 at a million dollar valuation. Now we sell 25%, it's worth 2.5 million. We now have $2.5 million in cash to fund the operations for all the agencies we need paying the CEO or COO advertising aggressively. And we have the right team to be able to do it. That's the game that is building enterprise value. Because now you pretty much know that you're gonna have a 10, $15 million a year company that that is actually a better thing to do for your investors because they have a higher chance of success, of getting a return than if you were just bootstrapping this thing that you're doing all by yourself. The irony of this is that you need a certain level of mental security in order to be able to do this. A certain level of peace. Because you've got to think about this in a way that is more about vision and contribution and value for other people than thinking about how much money you're going to make. But you will make the most money by thinking this way. You see, that's what we were all after when we became entrepreneurs. We wanted to be able to start projects that excited us to create something we were proud of and get paid for it and do that for the rest of our lives. And most of us have a story in our minds that once I get enough cash flow, then I will do that. But you will get there just by doing it, just by building enterprise value. If you want some help doing this, my name is Ryan, I run capitalism dot com. I work with entrepreneurs, I invest in entrepreneurs, I am an investor, I'm an advisor. Sometimes I'm an influencer, I guess. And I put together some resources in the description of this video. You can download it, get help starting this process. Because the first step, if you know how you're gonna get to a hundred sales a day, then you can build the vision for having an eight figure exit. So first step, see how we get businesses to 100 sales a day. And that link is in the video. If you like this, let me know in the comments because.

I wanna work with entrepreneurs who think like this. I wanna invest in entrepreneurs who think like this. This is how we create change, a beautiful thing. So if this resonated with you, let me know in the comments and subscribe to the channel. Thanks for watching. See ya.