Selling Your Business For Millions

Hey, fastlaners. Ryan Daniel Moran here. Welcome to Freedom Fastlane. Hey. Today I want to brag with you a little bit and also share some, share some insights that have resulted from some of our students, specifically our backroom mastermind students, getting a really attractive exits in their businesses. And this seems to be the trend as of right now, mostly because I consider the end game of starting most businesses unless you're just super packed about what you're doing. But I consider the end game for a business to be the acquisition to be when you cash out, when you sell. And I have very publicly taught the lessons that I have learned from selling a company, from building several companies. And the biggest takeaway being you're not building just something that makes money. You're also building an asset that is going to be sold, hopefully at some point, because that is the other way that you monetize your hard work. It's just like a house. If you've got a renter in a house who's paying you cash flow, that is awesome. But you're also hoping that the house appreciates. You're also hoping that you're building up equity as the renter pays down the mortgage. You're hoping that you can fix the paint and carpets and that the neighborhood appreciates and that you're, you're building up wealth as well as cash flow. The same is the case in business. And when we look at it, the real big payday comes when you sell anyway. One of the arguments that the team who acquired Zenactive, my yoga company, made to me, which I thought was really interesting, was the idea of businesses being almost like a snowball when you're building your first business, getting that payday and taking that money and putting it into your next business, your next brand, and then building that up faster, building it up bigger and selling that and then taking that and putting it to the next one, was they argued that that was actually a legitimate and favorable strategy for the average entrepreneur. And I mostly agree with that model. I was speaking with Josh Bazzoni recently. He's the founder of BioTrust. He'll be speaking at the hundred million dollar panel at Freedom Fast Lane Live. And we were talking about our desires to own, well, really my desire to own a Major League baseball team. Go Indians. World Series here we come. What a great year. But we were talking about the strategy, the best strategy to accomplish something like that. And Josh said something interesting. He runs a $100 million a year supplement company. And he said the only strategy that I have seen be viable to Be able to earn billions of dollars is to build up a company, sell it, take the money, put it into the next business, build it up, sell it, put it into the next business, become a better entrepreneur along the way. And until you're at the level that you want and then for some people who just want to have a cozy life, I think building a business, selling it, investing the profits is probably the fast lane to being completely financially free. So I am very public about the fact that I think that you should plan for the long term. But when you plan for the long term, I have seen that you can build up a million dollar business that is sellable and scalable in one to three years. You can be at a million dollar business often in about a year. You can be scaling that into the multi millions years 2 and 3 and be selling your businesses for many millions of dollars around that time. And we've proven that over and over and over again. What's interesting right now is that some of our students and some of our backroom Mastermind partners are selling their businesses for 9 million, 10 million, 12 million, 16 million, $20 million. These are all people in our mastermind as well as there's folks in our tribe who have businesses that are worth one to five million dollars. And that is completely life changing. I said at the beginning of this year, or maybe it was the end of 2015, that I predicted that private equity groups and funds would move into the Amazon space and start buying and building companies. And I didn't get a lot of predictions right this year, but I got that one right on the money. There is a lot of big money moving into Amazon there. It is kind of a seller's market at the moment. So that's attractive to a lot of people right now. But what I want to talk about for the majority of the time that we have is the little things that some of our students and clients are doing in order to get these big paydays beyond just selling good products, beyond, you know, building it for the long term. What are the little things that they're doing in order to set themselves up for big paydays? The first one is extremely simple and forgive me for repeating myself as I've been kind of teaching publicly for the last several years. But there is a big difference between selling things and building a brand. There's a reason why our training on selling on Amazon or training on building a million dollar business is called the Brand Builder boot camp and not the make money on Amazon course. And it is because when you build a brand when you have a target audience, when you have products that stack on top of one another, meaning the same person would want to buy products. 1, 2, 3, 4, 5. When you have a very specific demographic that boosts your valuation, it's easier to scale that company. It may not be as quick to cash flow, but it will certainly be worth more money. And in the long run it will likely spit off more cash as you develop a rating customer base. So that's really the crux of what we teach inside of the brand builder bootcamp. If you're building a million dollar business, I think the fastest way to do that is to build a brand to have product number two reflect the customer needs who bought product number one, and on and on and on. So if you have products that are complementary of one another, if you're serving a very specific demographic, if you are solving a pain point, if your company represents something, then you are usually worth more money to a potential acquirer. The second thing that I've kind of hinted at that has boosted valuations is having some sort of an audience, having a group of people that you can contact that you can certainly get your products into the hands of, whether that is a following on Instagram, whether that is getting email addresses, whether that is having a content site. Having the ability to influence eyeballs. Now when I am speaking to conferences where people sell on Amazon or even E commerce brands, there tends to be pushback against this because there doesn't appear to be immediate ROI to this. And they're right. That doesn't always cash flow. Building up an email list does not always bring in dollars from day one. It makes your next launch easier. It makes being able to spike sales whenever you want a lot easier. But there's not a day one ROI to that. So what I encourage people to think about is if you look at it like an asset that will be sold, then it's okay to spend the money and lose the money to be able to build up the eyeballs to make your company more sustainable. If you've got the eyeballs, you can launch whatever products you want. If you've got the eyeballs, you can cross sell things. You can monetize it with affiliate programs if you have to. But if you have the ability to send customers where you want them to go, that is an asset that makes your entire company more valuable. And as a result it'll make you more attractive to a potential acquirer because the person who's buying your business, they're looking at the risks in your company too. So when you think about, I worry about it all going away. I worry about Amazon making a change. I worry about Amazon deleting my reviews. Potential acquirer is thinking about those things too. So it makes you more attractive if you've got that leeway because you control some other piece of the customer experience. The third piece is diversification of sales, meaning your sales come from a multitude of different areas. If you're only listed on one place, even if it is something you control, that makes you less valuable than if you have sales from all over. I was at a conference recently where one of the owners of the Honest Company was, which was just acquired. In fact, he was talking on the day that the Honest Company was acquired for one, I think exactly a billion dollars by Unilever. They were acquired for a billion dollars. And he said from stage, I don't care where the customer buys from me, I care that our products are in their home. Which I thought was really interesting because it actually violated a little bit of what I believe is I want to control as much of the customer experience as possible. But one of the founders of the Honest Company was saying, I don't care where they buy it, I care about it being in their home. Which I found really, really interesting. But I have seen the kind of merging of both of those worlds happen when you are able to take sales from multiple places that you have some control in. So there's a reason why I know a lot of Amazon sellers like to go to ebay to sell their products, which makes me a little bit uncomfortable just because of the branding play on ebay. But there are other channels, or your own e commerce store or being in retail that can definitely boost your overall valuation as a company, because a potential acquirer will see that there is diversification of income, there's diversification of sales channels, of customer acquisition. So if one goes away, they still feel like there is another pillar that they can go to in order to continue the operations of the business. So all of these things will increase the value of your company when you go to sell. But let's talk about when for you is the right time to sell a business. And I'm speaking specifically for those of you who have small teams who have become successful entrepreneurs in the last handful of years and probably have a business that's more successful than you expected. When is the right time to sell a business? The first time to consider it is when your skill set has been maximized and your skill set has taken your company to the point where it is and probably won't take it further. You've done everything that you know how to do to build this business. And now for the success and health of the business, it would probably be best to have someone else. And they're bringing their skill set, their network, their financing to the table in order to grow it. That's a perfectly good reason to sell. That's the time that I think it makes sense to cash out what you've built. You've put in as much value as you could possibly build in. The other option, of course, is to hire people who have taken it to beyond where you are right now. But for most entrepreneurs, hiring isn't necessarily a skill set that they've developed. So unless you want to develop that skill set, that might be the time when you think you're ready to sell. The next time is just when the delta on happiness is the greatest rather than keeping the business. That was a messy way of saying happiness is happiness or security.

Has value to it. And if you have been slaving away at a business, worrying about a business, putting all of your eggs into that basket. And the $2 million, the $4 million, the $1 million that you will net from the sale of a business will create more happiness than simply keeping the business and maintaining your lifestyle as it is. And you take that money and you invest it and you want to be, quote, done, or you want to take that and put it into something else. Because your happiness is maximized when you're starting things. That's when it's time to sell. In fact, one of our backroom Mastermind members was saying, I thought this was so insightful. They said at our last meeting in San Francisco, he said, I've realized that I get more excitement, more joy out of building something new. I have built up my current business as far as it is exciting to me. Therefore, it is time for me to sell. And he's gonna get an enormous payday for building that business. But what's more important is the value he's created is now real. It'll be in his bank account when he sells. He can invest that into real estate or the stock market and never have to worry about money another day in his life. And he gets to do what's most exciting for him, and for him that's starting new things. And he'll have the funding to do whatever the heck he wants as aggressively as he wants. There's real value to that. In fact, when we talk about multipliers here on Freedom Fast Lane, we've talked about those things that create Almost unlimited upside with minimal downside. Well, when you have a lot of cash starting new things that have unlimited upside are multipliers. Whereas tweaking a business process and going for the 10% increments is not necessarily a multiplier. So this individual, I thought, was extremely insightful to see that by taking the money off the table and putting it into the things where he knows he has a lot of upside, that that was the greatest use of his time and capital as an entrepreneur. So when you have maximized your happiness, when you have maximized your, the excitement you get out of your business and it's no longer exciting, there's diminishing returns on your excitement. That might be the time to consider selling your business and putting that capital that you get into.

Other businesses or other things that you want to start. We are rolling out in the tribe the, the access to people who are buying businesses partially for selfish reasons. Because I buy businesses, I always want to start buying, I always want to buy more businesses. If you have a business that's either pacing a million dollars or near the million dollar mark.

We'Re always looking for deals to purchase, but we're also, we just want to be able to bring in the capital from other people who want to buy businesses, partner them with people who want to sell businesses, because I believe that's how we create the most value in the world. I recently interviewed Tom Bilyeu, the founder of Quest. He is speaking at Freedom Fast Lane Live this December. And that podcast will be up. Well, if you're listening to this one, it's gonna be the podcast right after this one in the queue. But he was talking about the fact that that business grew to about the, the $500 million a year point by using almost the exact same strategies that we talk about here on Freedom Fast Lane. And I don't know what that business is worth, but to see the growth in that by having.

A very defined market with a defined mission, it made me realize that I don't think most of you who listen to this realize what you're sitting on. I don't think you get the potential that is sitting in front of you. You know, I was speaking with one of our tribe members a couple weeks ago who listens to the podcast, decided to go all in on a business. He spent $60,000 into a brand and he got it to over a million dollars in run rate within about two and a half months. And the fact that he now is pacing a million dollars a year three months after even coming up with the idea for the business, the brand that he can build from here. I don't think people realize the type of potential that is there. I was speaking with one of our backroom members who just took his company public. You know, we've got, we have people who run a publicly traded company in the back room. We've got people who have sold their businesses for $10 million and up. We have people who run businesses that do a million dollars a month. We've got a great group in the back room, but one of them runs a publicly traded company. And he was looking, he was basically giving his perspective on the e commerce world. And he said, I've never seen these numbers before. In all, in my entire career, I have never seen businesses be able to profit this quickly, to get to a million dollars this quickly, to have the profit margins that you guys have. And listen, if you sell on Amazon, if you're an e commerce entrepreneur, if you are building a brand, I don't think you realize how special the skill set that you have is. The ability to take an idea, bring it to market, get customers and build. That is just something that has never been available or accessible or possible to do as quickly as we have done in the tribe inside of the brand Builder Boot Camp among our students and clients. I just want you to realize how special it is that you legitimately have the shot of building up a million dollar business and selling it for 1, 2, 3, 5, $10 million in just a couple of years and be investing that capital or building another business out of that capital. I just want you to know that you're sitting on something that is almost unprecedented. And I'm so proud of what we've done and what our students have done. And if you either are struggling to build a brand or you have been listening to me and you haven't yet built a brand that is pacing a million dollars. We do a training that we've put all of our students through called the Brand Builder Bootcamp. It's the same information that our most successful clients have used. And in order to build up a brand that is sustainable and sellable, our goal there is to have you come out as quickly as possible with a business on its way to a million dollars that is both scalable and sellable. You can see it@freedomfastlane.com Bootcamp. If you go through that and you give it your all for at least three to six months, you will have everything that you need in order to build a brand that outlasts you, that is scalable, and sellable and it is both attracting customers and providing value in the world. One of the things I'm most proud of is the fact that we're not only making money, but we're making a difference in our customers lives, in our employees lives, in our communities. Because these are value adding businesses, these aren't just value extracting businesses. And if you do run a successful brand, I highly encourage you to come to Freedom fastlane live this December because you will be in a room with some of the most successful brand builders, e commerce entrepreneurs and investors on the planet. It's December 9th, 10th and 11th here in beautiful Austin, Texas. You can escape the snow from where you are, come to Austin, be around some of the most successful entrepreneurs in the world. We'll discover the strategies that Quest used to go from $10 million a year to $500 million a year. We'll discover the secrets behind Garden of Life. One of the owners is Alicia Silverstone and she'll be keynoting day one talking about how they build their audience, about how they've built a really successful brand in a highly commoditized and highly competitive industry. We have a hundred million dollar panel people who have run $100 million companies who are coming together for a new venture. We're gonna go through what their plan is, what their launch plan is, how they're gonna get it to market, how they're gonna get customers, how they're gonna use crowdfunding to raise all the capital they need. They have this incredible board. How do they all come together? What do they each contribute to the business? We have our investor panel of people who successfully invest to reduce taxes, to increase cash flow, to increase wealth creation. We have Jesse Itzler, the founder of Marquis Jet. We've got John Mackey, the founder of Whole Foods. The whole event is keynoted by Peter Diamandis. And you will walk away with the 0 to 100 million dollar plan and every stage in between, as well as how to invest your money once you get it. It's going to be what I think the highest value event, especially per dollar. We should have charged way more. In fact, my buddy Jesse Elder was saying, if I was doing this event, I would charge $30,000 ahead. And if you're listening to this before November 1st, then we're still in pre sale. The ticket sales go up on November 1st, but we're still in pre sale, so it's still below face value. So if you go over to Freedom Fast Lane live and grab a ticket before November 1st, you'll still get at the pre sale price before we raise it to the full face value. So I hope to see you in Austin. If you are building a brand, I think you are sitting on something extremely special. Just because we have seen over and over and over again our clients and students building million dollar businesses, selling multi million dollar businesses for huge paydays, investing the profits or putting them into new businesses. And I'm under the belief that that is the fastest way to financial freedom and wealth. And you're following that plan. So if we can help you inside of the boot camp or the tribe or in our backroom mastermind, we would consider it a privilege to help you go to where you want to be. A great place to start is this December at Freedom Fast Lane Live. Thanks so much for listening. I hope to see you in Austin and I will see you all on the next episode.