I'm Building a $10,000,000 Business Working Less Than 20 Hours A Week

I developed a framework for entrepreneurs that I call the owner's model. And the owner's model is basically a way of structuring a business so that you own the business and you cast a vision for the business, but you don't do all the little details of the business, which frees you up to be able to build a business that you really enjoy, but doesn't monopolize your life. In this video, I'm going to share with you an example of how I'm using the owner's model to take a broken, worthless company and turn it into a business that's worth eight figures over the next couple years. And I hope that this gives you permission to be able to implement it in your business, to be able to accomplish much more than you ever thought possible. I started a business in 2013 with $600. It was a supplement company called Sheer Strength Labs. And my partner Matthew and I built that to about a $10 million run rate, which we then sold in 2017 for a valuation of $15 million. We got most of that money up front, but we didn't get all of the money up front. And then the company that bought it ran it into the ground, and they eventually declared bankruptcy on the company. Now, five years after we sold the business, I just closed on buying the business back. So I bought the business back for pennies on the dollar. But the company is really worthless. This company was really run into the ground. I mean, it does not have the sales it used to. It's down 90%. It doesn't have the audience that it used to. It doesn't even have the same products that it had when I was running the business. So it's a complete do over. And the only way that I could come in and run this business and turn it back into something that was worth millions of dollars again is if I implemented the same process that I teach our students@capitalism.com and that framework is the owner's model. And the owner's model is where we bring in all the different pieces that we need in order to build a great company. But the owner, you or me, doesn't have to be in every detail of the business. Because, let's be real, I don't have time to be working 40 hours a week or more in this business. I don't even have 30 hours a week. I don't even have 25 hours a week. Some weeks I don't even have 20 hours a week to be able to run this business. But this is my baby. This is the Business that I wrote my book 12 months to 1 million about. This is the business that made up half of my wealth. So I really just felt like I needed to buy this business back. I wanted to buy this business back, but I couldn't do it the way that I did back when I started the company. I didn't have a full time focus to be able to dedicate to it. And I don't even want to to do that. But I'm so excited about what I want to do with this company. And so I want to share with you in this video how I'm implementing the owner's model to be able to resurrect this business. There's three elements to the owner's model and if you bring in these three elements into any business, it's probably going to grow. And those three things are capital, you need some money to be able to fund the business. You need exposure, you need an audience, you need people who want what it is that you're going to sell. And you need strong operations. Obviously you need to run the business. And most people, especially entrepreneurs, think that they need to be the source of all three of those things. They think that the money in the business needs to be their money because they're funding the business. They think that they need to be the primary operator who's making all of the decisions. And they think that they need to be the one that builds the audience so they learn about Facebook ads or become an influencer. They create a lot of content. Now you can do that. I teach that to entrepreneurs who are building their first million dollar business. It's probably what most first time entrepreneurs should do. But when you've got eight figure aspirations and especially nine figure aspirations, you can't be the one that is doing all three of those things. And if I'm going to take this company that's right now kind of worthless and resurrect it like a phoenix from the ashes. I definitely can't be the one who is doing all three of those things. So I use the owner's model, which is creating relationships in order to fill in each of these three buckets. Now, once again, this is a company that I started and then sold. So I have a pretty good idea of what needs to happen in this business. I'm experienced in the supplement space. I know exactly what I want to do with this company. But I had a few rules for if I was going to get involved again because this is a total turnaround project and I need to have some amount of boundaries around my time and my attention if I'm going to stay in my zone of genius. And the truth is, we can't achieve everything that we want to accomplish if we're not in our zone of genius. And we have to be protective of that because our zone of genius is the true asset for the businesses that we start and that we run. So for me, I needed to put some protections around my time and focus. And the rules for me were I didn't want to put up the majority of the money. I want to focus on the things that I do best that no one else can do. And I'm only interested in taking this company back if I'm confident that it can be an eight figure company again. So the first thing that I asked myself was how much capital will I need to be able to buy this business back and have enough money in the bank so that I'm not freaking out about sales every single month? And for me, that means that I needed to have a few hundred thousand dollars in the bank after we buy the business back to be able to hire good people, make long term decisions, hire the right agencies, and execute the rest of the owner's model. The second thing that I needed to have in place was audience. And I could create a bunch of content around fitness and health and supplementation in order to build that audience. Or I could take a page out of my own playbook and simply partner with an influencer. Now, at the time of this video, we don't have a deal done just yet, but I have several relationships with people that could serve as excellent influencers so that when our products are ready, we can send them to the masses and make a bunch of sales as soon as we're ready to take sales. And the third thing I needed was one core person who's going to live and breathe this company. Essentially a CEO of the business, so that I'm not diving into every little decision in the company. I knew that I needed to be that person short term, but I needed help. So how do I go out and find a partner or a person that can build the business that's in my head and not run out of money at the same time? Now, once again, we when you tie all three of these things together, you've got the owner's model, you've got capital, you've got audience, and you have operations. And when you're able to piece all three of those together, you're able to sit in the owner's chair and even have multiple projects at the same time because your Time is not being monopolized by every little detail in the business. You're able to sit in that position where you can cast a vision and make great long term decisions, which is exactly what you need to be doing as an entrepreneur. Now, the first thing that needed to happen was we needed to raise some capital. And theoretically I could have used my own savings or liquidated some other investments to be able to buy the business back and fund it. But I knew for where I was in my life that that would cause some stress. I would then be worried about the temporary swings in sales or how much money was in the bank and, and that would prevent me from staying in my zone of genius. So I decided to raise capital so that I could stay in that place of long term thinking and making great decisions. That's really the best thing for the business because a stressed owner creates stressed decisions and stressed results. But a relaxed owner is going to do the things that actually take the business back to a multimillion dollar business that could be sold for a whack ton of money. And that can't happen right now. I bought the business for less than a million dollars, which means that I didn't need to do a huge capital raise. I just needed to have enough money to buy the assets back, have enough time to stabilize, and have enough in reserve to be able to go find that one or two people that can help execute the vision that's in my mind. Some entrepreneurs make the mistake of valuing their business based on what the assets are worth today. And in reality, the assets of the business I'm buying back is not very high. And so there needs to be something else that's brought to the table in order to get the valuation that you need in order to do a good job. So for us, we valued the business at $5 million. And you might ask, wait a minute, you bought it for less than a million dollars? How do you value it to investors at $5 million? How did you just create $4 million out of thin air? Here's how. Investors are betting on a team, they're betting on a vision, and they're betting on the plan. And the current owners of my old company didn't have any of those things. They neglected the business, they let it run out of money, they let it run out of inventory. And it needs a new vision, it needs a new team, it even needs a new product line in order to be turned around. And so before we ever bought the business, we went to the drawing board and we looked at where do we Want this company to go, what's the vision of this brand if everything works out exactly as we want? And most importantly, who are the people that we want to partner with? Who are the people that can open up doors for us? Relationships really are everything in business. Because the right connection or the right relationship can open up a new opportunity for you that you couldn't get by just having the right strategy. For example, when I ran the company a few years ago, one relationship opened up the opportunity for us to have our products in a thousand retail stores nationwide. Now, we could have knocked on every door and tried to get into a thousand stores. And in fact, we, we did that for a while and it was a massive failure. But one relationship with a person who was experienced in that space got us on the store shelves of over a thousand different locations. One relationship almost doubled that business. So I sat down and said, who am I bringing to the table that can help execute this business plan? And if I can figure out who I need to partner with, then that's enough for investors to see that there's opportunity for us to bring this back to an eight figure company. I had a couple of secret weapons in my back pocket that allowed me to justify a $5 million valuation on my business. The first is the fact that it's my old company. I did it once, there's a strong reason to believe that I can do it again. And the markets changed and I don't get my partner this time. But I have done it once. The second secret advantage that I had was a relationship with the owners of bodybuilding.com Some friends of mine recently bought that company and I was an investor. So I have an in with a company that has a lot of reach. I mean, they have millions and millions of people who follow their work. And I don't have an official relationship between my brand and bodybuilding.com right now, but I have relationships that make it possible for me to get a meeting or to get an introduction or to get priority if they're considering different brands to feature on that website. So that was one relationship that I could bring to the table and say, as we solidify this relationship, that's gonna add a significant amount of value to the company. And the third secret advantage that I had was some relationships with influencers that I've been cultivating over the last several years. Now, once again, I don't have anything solidified with these influencers and that's important to note. I'll tell you why in a second. But because I had these relationships, I could add them as part of the vision that I was casting to my investors. And. And as a result, that gave them confidence that there was a plan in place. So the lesson that you can take from this is you don't need to have everything buttoned up in your vision. You just need to have the opportunities that could lead to something special. The second thing that I needed to do was fill in that audience bucket, and once again, we could build up the audience ourselves. But I believe in creating a relationship with that one person who can just set something on fire. Right. I take a page out of Aubrey Marcus's playbook, who created a partnership with Joe Rogan when he started Onnit. And because Joe Rogan owned equity in Onnit, he talked about it on every single podcast. That is what helped put Onnit on the map, and it eventually sold for nine figures. I think it's fair to say that that company would have had a much harder time reaching the type of awareness and impact and valuation that it had if Aubrey had not created a relationship with Joe Rogan. And it's interesting how they met. Aubrey wasn't buddy buddy with Joe. He was a sponsor on Joe's podcast when that podcast was still small. And because they had traded before, because they had exchanged dollars before, they had a loose relationship. And so Aubrey was able to get the meeting with Joe when he wanted to pitch him on the idea of him taking an equity stake in the new company. So I look at relationships that way. I look for easy yeses to get in the door, like trading with them, sponsoring their podcast, or doing work for them, having them on my podcast, or being on their podcast. These are all great ways to start a relationship. So based on all of those doors I had opened, I've made a short list of people that I would love to work with that look like our target customer and that I think would be excited about the vision that I'm casting for this new old company. So my structure for partnering with influencers is putting 5 to 15% of the company on the table to be earned by influencers. Now, that doesn't mean that I'm just giving them 15% of the company or even 5% of the company. That usually means that I will put on the table 2.5% per year, every year for four years. So that influencer could potentially earn up to 10% of the company, which, if this becomes a $10 million company again, would be a million dollars for that influencer. And the way that I usually have these conversations is I Say, I want to be treated just like all the brands that you endorse, but I want you to feel like you have ownership in this business. I want you to be able to say, I, this is my company, I believe in this. I helped develop this product. I share this with all of my friends. I want that buy in from the influencer. So when I'm talking with different audiences that might be a fit for a company, I'm looking for the person who really believes in what we're doing so much that they can stand in front of their people and say, I believe in this, I'm part of this. Because that conviction is what will create conversions. In addition to having relationships with influencers, it's also important for us to do the blocking and tackling of building an audience too. So that means running ads, it means building an email list. And the way that we're doing that is we're creating a book funnel. I created a relationship with a doctor that I respect and we're co writing a book together. And that book will target the exact type of people that would be a fit for the products that we sell in sheer strength. So as we're putting together this book funnel, the strategy will be that we'll run paid advertising to the book funnel and the upsell process will be our supplements. And we'll also have follow up processes and other content featuring this doctor talking about our product line. So the book funnel sort of primes the people who follow us and who buy the book to be open to the types of products that we have. The third thing that we need to have in place is operations, because you don't want me pushing buttons in any company. I'm an idea guy, I'm a marketing guy, I'm a relationships guy. And the more time that I spend trying to figure out what's working on Amazon or what's the best way to run a Facebook ad, the slower the company is going to grow. I should be partnering with agencies and managers and outsourcers and paying them to do it, which requires that I've got enough capital and I've got good products for them to be able to do a great job at what they specialize in. But most importantly, I need that one person, I need that one operator who's gonna live and breathe this company. And I didn't know who that was gonna be. So I know that I need to go build new relationships with people who would be a fit for this brand. And the most important thing, to attract the right type of talent and Partnerships is to have a really compelling vision. Oftentimes we get hung up on how much we're going to pay somebody or how much equity we're going to give them. But nobody wants to work for a boring company with no vision and no soul. You've got to be able to properly compensate someone which goes back to having enough capital. And you've also got to be able to incentivize them to with a vision that's exciting to them. And it's got to be one that's big enough for them to feel like they're going to have a chance at earning a lot of money if this company ever sells. Because I'm going to give my CEO or my brand manager at least a small amount of equity if they're putting in their full time effort into growing that business. So I just needed to make a job description and then start calling people and say, hey, does this sound like anybody you know? And at the time of this video, I have a few people who make very interesting candidates for a CEO of this business. It's really interesting how when you just get clear on what you need and you start putting it out there that you're looking for something, relationships just start unfolding. But most people are afraid to go through that process because they're so stuck in this thought of like, I couldn't hire a CEO or I don't have enough money to hire somebody, or I don't even know what that person would look like. You've got to go through the process of having conversations and actually writing down what you need in that person to be able to know what you're looking for. So if you look at these different pieces, it all comes down to the connections that you make. Influencers are people, you've got to make relationships. Investors are people, you've got to build those relationships. And operators, CEOs, they're just people. And you gotta be well connected and you've gotta have a vision that's compelling enough for all of these different parties to be excited about what it is that you're building. So once again, the owner's model is a way of creating a business and building a really big vision that sets you free to stay in that visionary seat. This is what we teach our students to do inside of the capitalism incubator. Because the goal for so many entrepreneurs is not just to have an eight figure company or a seven figure company, it's about being freed up to be able to build a business that really excites them. I don't think you can build a business that excites you if you are in the weeds of everything. I don't think that you're ever freed up to be a visionary. If you are so stressed about the short term dollars from month to month you that you can't even make good long term decisions. That's why this structure of the owner's model is so powerful. Because you're just the owner of the business, you're the visionary of the business. So this is my preferred way to build a business. It's the owner's model because you can have multiple projects going at the same time and you're freed up to do what you do best and stay in your zone of genius. If you wanna learn more about how we do this, I've done entire trainings on what the owner's model is and how to structure it and this is how I am resurrecting my old business which is currently just a shell of what it used to be and bringing it back to a multimillion dollar business that can have another really profitable exit. If you found value in this video, let me know in the comments. I'd love to hear about how this set you free to stay in your zone of genius and cast a much bigger vision than what you've been doing up to this point. I'm Ryan Daniel Moran with capitalism.com thanks for watching. I'll see you next time.