Why 98% of Business Owners Are Stuck at the Same Number Forever with Brandon Dawson

So, I tell business owners the best time to bring on money is when you know how to generate 20 or 30% profitability, you know how to scale and grow your business, you've built a great management team, you haven't given any of your equity away. That's a good time to bring money in in order to go through rapid expansion. Until then, statistically, you're gonna die. Why take all your friends with you? The true freedom of personal, professional, and financial success is through how many people you can help achieve that. And then you will find that freedom. You doing it for yourself isn't going to get you there.

Hey, welcome back to the Unemployable Podcast. I'm Jeff Dudan. If you built a hearing technology company from scratch, scaled it past $100 million in revenue, then watched it get taken from you in a boardroom battle you didn't see coming, if you spent years rebuilding not just a business but your own belief that it was worth trying again, and if you now have partnered with Grant Cardone to build a business coaching platform that serves tens of thousands of entrepreneurs, showing them the path to scale billion-dollar enterprises. Your name can only be the incredible Brandon Dawson. Brandon Dawson, welcome to the Homefront.

Yeah, thank you. Great to be on your show.

Yeah, super excited about it. Your book is the first one that I ever listened to on tape. I was traveling yesterday, so I didn't realize your voice voice was this deep. It sounded really high on 2x speed. So I'm glad to—

that's awesome. Yeah.

Yeah. But it was, uh, it was really great. We have very similar backgrounds growing up. I think if we added our GPAs together, they— we still fall short of like 5.

So, but it makes sense.

Yeah, 100%. What can you share about how you grew up and how that shaped who you are today?

Yeah, great question. Well, I was in a little town in Corvallis, Oregon. My dad was a pastor, my mom was a nurse, and she and my dad divorced in 1976. And she met a gentleman who is an entrepreneur, invented the in-the-ear hearing aid. And so he was running around the country trying to convince people to try to buy it, even though they didn't work real well. And she and my dad divorced. She ran off to Minnesota with him and took me with her. So we When I was 8 years old, I moved to Minneapolis and I watched this little tiny lab from the vision of an entrepreneur grow to when I left there in 1995, it was a $375 million global company that had gone through several iterations of ups and downs. They went through a nasty divorce in '91. I was still there working, running North American sales. And so between going back and forth to my dad and my stepmom that were your traditional kind of middle America family, and then being in an environment with an entrepreneurial family with my stepdad and my mom, I really got the true context of Rich Dad Poor Dad thinking and doing. And I knew as a little kid, I didn't want to live in Corvallis, Oregon. I wanted to go build something huge. Something cool and got my juices going. And once I graduated high school from Corvallis, Oregon, I was out of there. And that was the start of my, my journey.

You got into a family business and very quickly made a name for yourself as a top producer. And it's really difficult when you get inside of a family business because everybody thinks everything's handed to you. You gotta work extra hard to prove yourself. People still don't believe it. There's a lot of resentment inside of that. We're a family office, family business here. And, uh, man, uh, we got a— we have a lot of family members working in the business, some of our young people. Um, what experience would you share for people that feel stuck inside of a family business?

Yeah, well, 93% of all businesses under $125 million in revenue have family orientation, is what I call it. So there's somebody in the family working in the business, and 97% of all those businesses will fail every 10 years. So, it's very difficult because when the family business fails, usually the family suffers. And then when the family suffers, the community suffers. So, I clearly understand this idea that when you're in a family business and you're expected to do more for wanting less and not complaining, I get that that's a majority of the mentality of family businesses. Where when I grew up, I had all my older brothers working for me and I had fired them all at some point in time. So, so it is very difficult. In fact, it really helped me get stronger because I felt like if I can do that with my own family, my older brothers, I can certainly do it with strangers. Um, and so what you need in a family business is you need targets, you need resilience, you need transparency. And it is true that most older founders that have kids in the business treat them disproportionately to even their lazy employees. And so what I would say is every business should be structured properly to recognize the contributions of the people contributing. There should be reward mechanisms. And if you're family or not family, you should follow that exact process. And if you are family and you're not, you should be replaced because otherwise the good employees will think there's no opportunity for them because you're allowing mediocrity to exist in the business. And these are the things that are very difficult for family businesses. And generally speaking, they'll screw all that up because they don't want to play with the politics or dynamics. They either screw their family up or they screw up the business.

Yeah, they know they ruin— they don't want to ruin Thanksgiving. Is it your experience that family businesses are more reluctant to find a bigger room to get outside? You know, we always go find things like Strategic Coach or these other networks that people get involved with to get around other business owners that are up to something and going somewhere.

And, well, I mean, that's the premise of our whole business, right? Like we, we, we have tens of thousands of business owners cycle through our events every single year and millions participate online with us. But to answer your question, birds of a feather flock together. 99 or 98.3%. So, so 1.7% of all businesses under $125 million, ever break $3 million of revenue. The average business at $3 million has 12 employees, and that's where they sit. They sit there forever until the 10-year cycle, until their profitability gets eaten up with cost and taxes and expenses, and then they go out of business. And so it's unfortunate, but what happens in a lot of family businesses is they don't want to put pressure in the system because they don't want to deal with it at home. They don't want to hold their kids or their spouses accountable. They're tired of fighting about everything. So they just exist until it doesn't work anymore. And it's very unfortunate. Now, contrary to that, when you learn to align your business, for example, Cardone Ventures, we're a high-performance organization. Started this business exactly 60 months ago after partnering with Grant and Elena, a husband and wife team. My wife is the partner and co-founder of Cardone Ventures. We're a husband and wife team. My brother runs sales. Her brother runs technology. And so when you have the right rules in place and expectations, everyone can thrive, not just survive, but thrive. But when you're placating to people and when you're holding certain people accountable and others not accountable, you are ripe for problems in your business. So I always tell business owners that have family, treat everybody when they walk through that door in the proportion that they contribute to the organization. And it's easier to remove family that's not working because then the rest of the business will work and those family members will move on and find things they're actually passionate about instead of feeling obligated or stuck to work for the family business and being disappointed they don't feel they're being treated fairly.

You make a very interesting distinction between mentors and friends. Can you speak to that?

Yeah, a mentor is somebody that you're specifically learning and developing from. That has nothing to do with being a friend with somebody. So, so when you're friends with people, you're, you're, you're co-contributing to each other personally, professionally, financially. When you're mentoring from somebody, you are specifically learning and developing in areas of opportunities for you to succeed. You don't need to know your mentors. You don't need to like your mentors. Your mentors don't need to know you. They don't need to like you. They don't need to know anything about you. A mentor is someone that you learn and develop from because you're inspired by something that they can help you with. And if you really learn your mentor's information and bring that to fruition, bring it to life, you probably will meet your mentor at some time who will want to be your friend because you exemplify what they're teaching if you handle yourself properly. But there's no— there needs to be clear understanding. There is no commonality between a mentor and a friend. Those two things are entirely separate, and they have nothing to do with each other unless you're able to develop a rich enough relationship with a mentor that then they become a friend. And this is what I've spent a majority of my life doing, and I talk about it in my book. Almost every single mentor that I had, I didn't know because I was reading their books or I was somehow otherwise found them. But all those mentors became dear friends, some of them family. And collaborators because of the contribution they made to me, me always telling the world I learned this from them. A lot of people aren't willing because of the egotistical aspect of the human nature. When they learn something new and they're quoting it, oh, I'm an expert in leadership and this and that, they don't talk about where they learned it from. So if I'm somebody that's teaching something and someone's using my words and I know that I've talked to that person or they've read my book and they're not quoting me, then when I do meet them, I have less of an aptitude or less of an appetite to actually get to know them because I feel like they're not, they're not giving back to what I did. Yeah.

It's really clear when you, when you pick up a book and it's just a, a collection of things from other people's book that are put together as opposed to the authenticity that comes across in your book, sharing your stories, sharing your experiences, and really giving people, uh, a blueprint and a framework with which they can inform their lives and their journeys. Acquisitions. You built a company very, very rapidly through acquisitions. You got out over the tips of your skis a little bit with it, with the board. And now what you learned in that process has led you down a very interesting path in building businesses through collaboration. Can you talk a little bit about how important it was and what you learned in that acquisition process that spoke into what you're doing today?

Yeah, great question. You know, a lot of— I have, and I know you have experience with this on both levels, both being the acquirer and capital raising and all these things.

Yes, sir.

So when I was 26, I went the traditional route. I went out and made hundreds of presentations, got my first million, then raised $6 million, then raised $28 million with Warburg Pincus at 29 years old, rang the opening bell of the American Stock Exchange as a high school graduate voted least likely to succeed. All Those were things that I was told would never happen, and I was able to make them happen. The problem was buying 130 businesses and shoving them together to try to create a platform company. And for those that are listening, they're like, what's a platform company? A platform company is what Wall Street talks about that has 10 specific elements. It's an organization that has a strategy, it has proper promotion and marketing, it has proper sales conversions, it has proper alignment mechanisms. It has proper operational protocols. It has proper leadership. It has proper data that it knows what it's looking at and what it's doing. It has proper technology and systemization, and it has proper investment thesis that fits the strategy. And in order to afford all that and to be successful making 20-30% of profitability per year, you're going to have to be between $100 and $150 million of revenue or you can't afford all that and the expertise associated with it. So a platform company is a company that has all those resources, all those assets, all that leadership, all pulling the business in one direction towards a stated objective to execute and drive value. Okay? That's what a platform company is. A platform company isn't a $10 million or a $20 million or a $30 million business because you're not big enough yet to have all those things. So understanding what a platform company is, and I understood what it was because my mentors told me, so I was on a race to build a platform. And I had to do it by buying hundreds of little tiny half a million, million, million and a half dollar businesses and trying to shove them all together and create all the leadership team and create all the systems and create all operating protocols at 29 years old with no formal education. So if there was a recipe for disaster, I was it. But because I was able to survive and push through, I had this false sense of I can overcome everything. And that caught up to me. Actually, the business started doing unbelievably well. We were going to be the largest in the world. People were throwing money at me, but my investors of 5 years, Warburg, the professional investors are like watching me thinking any minute this guy could drown, right? Any minute he can make a technical mistake because although I was in survival mode feeling like I conquered, they were in, oh my God, this guy's in panic mode all the time. So when there was an opportunity for them to exit, take all their money plus 100% of their money, plus, plus, plus, plus, plus. Leaving me and my investors with nothing. They took it. At the time, I was bitter and upset about it, but in reflection, if I was them in today's state, I would do the same thing because I was just very fortunate that I survived. I was missing the strategic and leadership and investment thesis side, and I just looked like a reckless doer when I go back and look at myself at that point in time. Right? So everything, In business is two things when you're building a business, context and contrast. And until you have wisdom and experience, it's very difficult to have context and contrast. And so, um, but I would never trade all those experiences because they were unbelievable. And the one thing it did say to me is I can overcome whatever's in front of me. And so what I wanted to do in my next iteration of business is retool how businesses are built. And that set me on the course I'm on today.

You had unusual vision at a young age thinking about that acquisition strategy, building the platform, had to be informed in from what you learned and what you saw in the business that you were a family business from growing up and said, I can do this bigger, better, faster. I can do it differently. And today you work with business owners. I saw one podcast where we had somebody on there that came to you pre-revenue. And it was an engineering firm. So you work with businesses from zero, probably up into the hundreds and hundreds of millions of dollars at Cardone Ventures.

Billions.

Yeah. When you— billions. So when you think about the smaller companies that come to you and ask for help and ask for partnership, when is it appropriate for them to take on debt? What have to be the conditions in the business for them to take on debt versus perhaps raising outside capital?

Yeah, it's a great question. I always recommend they do neither. So what we teach businesses is to do what I did with my last company that I sold for 77 times EBITDA, and that is force the business to be responsible enough to fund itself.

Yeah.

Because here's the thing, 97% of all businesses fail within 10 years. So if you're raising money from third parties, outside investors, you're going to have all the pressure associated with demands that you will struggle meeting because you're just going to struggle in general building a business that works. In addition to that, when you raise money, the first money you raise will always be the highest valued money statistically, because the next round you raise is because you're not working the way you said you're going to work, and then you're going to get crushed. So instead of putting any energy into that, because I know a lot of entrepreneurs are just professional fundraisers, and this whole concept that Wall Street peddles of deficit financing, you know, raise capital. And sure, Uber, it worked for Uber. It worked for some— it worked for Amazon. Bezos was made fun of for not making money and today's richest guy on the planet.

Yeah, he can, he can deal with that.

Yeah. So there's a few, few scenarios where that works. WeWork is an example where it didn't work, right? That's right. So even though the founder made out better than all the shareholders, everyone else lost money. So, so at the end of the day, The best, safest way for the average founder. Now, this is different. A founder is different than an entrepreneur, and an entrepreneur is different than a chief executive officer. And so anybody can be a business owner founder, but you don't become an entrepreneur until you recognize the significance at the $15 to $25 million mark when you actually realize, wait a minute, I need a strategy. Oh, wait a minute. I need leadership. Oh, wait a minute. I need systems. That's when you move to being an entrepreneur because you start recognizing the things the business requires in order to succeed. A CEO is someone who's chartered with creating massive value, aligning, incentivizing teams, hitting targets, defining the business objectives and strategies, and knowing where to properly invest in the organization in order to create massive value and hit internal rates of returns. That's a professional CEO. A lot of founders call themselves CEOs, but they don't even know what it means to be an entrepreneur yet. Okay. So, founders tend to be— founder business owners tend to sit in that $1 to $15 million range, struggling to survive every day. And so, what I tell business owners is you need to know your place and you need to know the difference between what the specific differences in competency. Contribution, and abilities. And you need to be honest with yourself because if you don't, you're going to surround yourself with all the wrong people. So you ask a question, which is, when is a good time to bring on capital? Well, the best time to bring on capital is when you can prove— because remember the chief 3 complaints for why businesses fail. Chief complaint number 1 is no demand for product or service. You should never bring capital into the business if you haven't yet vetted the demand for product or service. Chief complaint number 2 is can't find any good people to help me. Well, until you prove that you know how to be successful with your products or services, you're never going to find good people because good people don't work for shitty business owners. So it's a natural law of progression. And then 3, can't get access to capital or money. Well, what moron's going to give a founder money that can't hire any good people because they themselves can't prove demand for product or service? So it's all excuse for actually not vetting what the true business opportunity is and not owning the responsibility of actually building a business. A business is a thing that has its own life, that is able to grow up and feed itself. It has a purpose, it has mission, it has vision, it has values, it has intentions. And so I tell business owners, the best time to bring on money is when you know how to generate 20 or 30% profitability. You know how to scale and grow your business. You've built a great management team. You haven't given any of your equity away. That's a good time to bring money in in order to go through rapid expansion. Until then, statistically, you're going to die. Why take all your friends with you?

Yeah, that's such a great answer. That is— people need to listen to that. That was, that was really incredible.

Well, you're in the business too. How many people tell you, I just need capital, I just need capital, I just need capital? It's the default thing because in their mind, if they just had money, they could solve their fact that they can't even build a basic business and demonstrate it works. So like, do that first.

Yeah. And then, and then I think at the, at the other end of the scale, you and we see it with some of these great national brands that have gone bankrupt. They, you know, they go through a transaction, they get levered up on debt with the promise of using that debt to expand the business. But again, they haven't vetted out the products or the service. The plan doesn't work out. You try another CEO, and the next thing you know, you're in trouble and you've got so much debt on your business. Interest rates go up and now you're in trouble. Where great businesses, I mean, how much cash does Apple have on the balance sheet? I mean, just, you know, tons of tons of tons of cash. So the fact that these businesses need to grow up and feed themselves, I think that's a great analogy for what founders and and entrepreneurs really need to think about.

Well, I'll be honest with you, and you know this, you're a successful business owner and you talk to a lot of people. You're going to sleep so much better at night when you have a little money in the bank. You don't have the gun to your head. You don't have people yelling at you. Even if you're not growing at the speed in which you want to grow, if you're sleeping well at night and you're able to achieve your personal, professional, financial goals, you've got a team that's able to achieve their personal, professional, financial goals. The business has the discipline to self-fund. You're just going to have a much higher quality of life. And so the first reason to not take on debt and not use other people's money with the concept of trying to build something is you're probably going to fail and you have to live with all that liability. So go slower at the beginning, structurally build it correctly.

Yeah.

Learn the rules of starting, building, optimizing, scaling, and then exiting a business. Learn those rules. This is what we teach. And, and and then just do it a little slower until you figure out the algorithm for doing it. And then build a great team of people who enjoy working with you, that you can be passionate with, that are highly aligned for execution, not being mediocre, and incentivized to flourish and prosper. Prune the orchard once in a while when it's not working. Keep the core discipline in place. Go prove out what you're doing. And then hit the accelerator after you've built some cash reserves. So if you're wrong, you can afford to make the mistake and you just retool and go back to where you level set and do it again. That is ultimately going to be a much— for pro survival mode, that's going to be a much better way to do it than just trying to chase everything as fast as you can using everybody else's money only to suffer the consequences of the statistics that 97% of all businesses fail within the first 10 years.

Yeah, that's right. And losing other people's money's a bad look.

It sucks.

Yeah. So you just walked us through a mindset progression where founders to entrepreneurs to CEO. So Cardone Ventures works with people and you have tools and you have processes and technologies that you put in place. How do you communicate how to these people, how they should think bigger and think in a more disciplined manner?

It's a great question. And really the art and the reason I wrote this book is because sure, I have a bunch of operating system books, right? Like we have documented, there's to go from zero to a platform company, $125 million. There's 10 specific elements, 76 sub-elements, and 240 specific things you need to do. Okay? So that's all been documented. We teach on it every day across every single one of those 10 elements in the sequence in which you need to do things. If you think of your business as the thickness of a pad of concrete and you start your business thinking you're going to build a one-story building, and then as you— and that would be the $3 million statistically— and you get to $3 million, you're like, man, this was good. I'm going to go for $8 million. But you don't increase the thickness of the structural pad after you add a second and third floor, you're going to collapse. So there's 3 to 5 things that you must have in place at level 1 through level 7. That's $0 to $125 million. There's actually 11 breakpoints, um, to a billion. And so as you're building your, so think about it. If I came to you and said, engineer me a 10-story building, 12 feet each, 120 feet high, um, and you do the engineering work, you build the blueprints. I pick the interior design, we pick the exterior design, we go through this whole process and then we start building. Well, that is entirely contrary to how the founder builds the business. And it isn't until you run through a couple cycles as a failed founder that you ask the question, what do I need to do differently next time to be successful? And that's where you move to entrepreneur. Now, if you can bypass the failures at $15 to $25 million, you're going to be sitting around going, how do we get bigger? How do we make more money? And someone's going to go eventually, you know what we need? We need a strategy. And you're like, oh, strategy. We just have always just done and it worked. And so you grow into being the entrepreneur. Like, we need to think further out. We need to have better things in place. We need to find, attract, align, develop, and retain great people. You start to move into that out of necessity. And if you don't, you will collapse and fail, right? So, so, so there are 3 to 5 things at each breakpoint, $0 to $3 million, $3 to $8 million, $8 to $15 million, $15 to $25 million, $25 to $45 million, $45 to $75 million, $75 to $125 million, all the way up to a billion. There's 11. If you know what elements need to be in place, now what you need to do is ask yourself the question. So this is the fundamental question. Do you have the patience to build, because there's a few things that you need to equip yourself with to move from founder to entrepreneur to chief executive officer. And those things you need to equip yourself with is the patience and the resilience to learn context, contrast. If I do this, what can I expect is going to happen? And if I do it wrong, What will probably happen, and you need to be patient and move delicately. Jim Collins talks about innovation as incremental improvement on the things that you can prove work. So first part of innovating is proving what works, or you can apply radical innovation, which is what Elon would talk about, which is just invent something new and go all in on it. There's a few people that have been successful doing that, but most fail. So in small business, you need to apply the Jim Collins definition of innovation, granular incremental improvement on the things that you can prove works slowly, systematically within the rules, and then you build. Well, if you follow that principle, you're going to be successful because you're not going to have big radical shifts because you're not doing big radical things. You violate those rules and you start trying to do big radical things, chasing revenue. Statistically you'll collapse. So what happens is you engineer as you go. But if you don't recognize the fact that you're on the third level or fourth level and you have not reverse engineered, you've not structurally engineered, and you haven't gone backwards to say, what did I miss that I need to have in place? You will eventually implode. And this is what happens to 97% of all businesses in the growth cycle. So you're either going to break through to the next level or you're going to break If you break back one, one breakpoint, it's a slip back. If you break back two breakpoints, it's a snap back and it's catastrophic because you can't catch yourself in the fall. So there's just all these rules. And what we do is we teach business owners these rules. Now, the fundamental question that we talked about is, do you have the patience to learn context, learn contrast? Do you have the resilience Are you willing to do the hard things like family and moving people around and realizing you put the wrong people in the wrong place and you're paying them too much or not paying them enough? Do you have the resilience to make good decisions? And then fourth, do you have the wisdom? And then fifth, do you have the aptitude? Like, do you really want it? Because boy, if you don't really want it, it's going to be so hard. Yeah. You will conform to mediocrity and sit wherever you're at until your costs exceed the benefit ratio of being in business and you go out of business or you sell.

And the, and then PE makes all the money, which happens, I see happen all the time. People spend 25 years, 25 years building a business. They sell it for nothing. The people that know what they're doing come in and 2 years later they sell it for 10 times what they paid for it. And it's, it's not that difficult. Well, no, what it is, because I'm gonna reference your, I'm gonna reference your model of founder to entrepreneur CEO. I would suggest, and I'd love to get your feedback on this, without a Cardone Ventures playbook, as you described, 95% of founders will not transition to entrepreneurs. And I would say another 95% of entrepreneurs are not gonna transition to CEO. True. Fair.

Uh, I would say the stats are higher because remember, 98% of all businesses are stuck at $3 million or less if they're under $125 million. So only 2% break through the $3 million zone. So you get to the micro percentages at $15 million to $25 million. So I'd say 0.05 or 0.08 get to the entrepreneurial stage and 0.002 get to the CEO stage because how many, entrepreneurs do you know, or founders do you know that built businesses greater than $75 to $125 million and stuck with it without bringing in the professional leadership team to run it?

We acquired 5 businesses in 2022. We, and we spent the entire year platforming them onto a business platform, a franchise business platform. We went out and hired the best C-level executives that we could. We launched to the market in '23, and this year we'll do somewhere around $98 million with those businesses.

Because you're an entrepreneur, dude, you're not a You're not even the CEO, right? You know, you, you figured something out. Here's, here's the funny part. When you say that, like, you and I are going to laugh at this. The people listening to it need to hear this because you and I have never met and we've never talked, but we're speaking exactly the same language, right? Because here's what you and I are. We're entrepreneurs that are investors.

Yes. Yeah.

We don't want to do the work. There's no reason for us to be the CEO. We don't need that control. We just need to know we put the right people in the right place doing the right things the right way. In order to hit the right targets. We're entrepreneurs who are investors. We see opportunities, we go acquire the opportunities, we build the things that I mentioned to take care of all the bullshit that we're not going to want to do. Not that we can't, we just don't want to do that. We've been there, we've done it, so we do it differently. And I think that's the difference is that you are an entrepreneur investor. Who can be a founder, who can be a CEO, but you and I both know it's not the highest use of our contribution. That's right. And we're better off finding great people and giving them that opportunity to succeed and doing more of those things. So what you just described for those listening is he is an entrepreneur investor that knows the requirements to build a huge business and knows the people that need to be there to do the right things. He's building teams, finding opportunities, placing people in there, giving them the opportunity to accelerate and thrive and conquer. And, and, and then he's going to go get the next deal because that's what smart people do. By the way, it's a $12 trillion space, that small business space, and $5 trillion of it is looking for an exit that can't find it because they're not profitable. And you're running around picking off all those businesses and then bringing life to them for the people that are sitting there underneath the owner that can't figure out how to grow it, and they probably love you for it.

Yes. We're closing on our 6th brand today. The DocuSigns are in my box as soon as we're done. Oh, and by the way, it's my birthday. So I think those—

Happy birthday, dude.

Serendipity. 56 today, closing on our 6th brand.

And I— You and I are the same age, man.

Oh, is that right?

We're 1 month apart. Well, yeah, mine's May 22nd. We're 2 weeks apart.

Oh, happy birthday to you. And of those 6 brands, only 1 original founder remains. Active in the business. And it just, it just, it didn't work. It can't work because it's—

Dude, one of two things.

I hope— They get the bands.

One of two things, you know this and your listeners, look again, I'm gonna, I'm gonna qualify this. You and I have never talked. This is the first time we've ever had a conversation. True? True. But we know something. We know that there's only one time a business works and that's when it's kind of working. Because when a business, when you, when you acquire somebody's business and it doesn't work, they're gonna be disenfranchised and they're blowing out on you. When you buy a business and you blow it up and it becomes more valuable than it's ever been, they're pissed off at you because they think that you screwed 'em over when the reality is they just couldn't figure out how to do it, which is why they sold in the first place. So the only time a founder actually works in a business after you acquire is when it's just kind of going along and they haven't been able to get enough money to score, so they're willing to drug it out or fight it out. They'll still be a pain in the ass in most cases, But the only time it works is when it's just kind of working, because when there's too much money or not enough money, it's always going to be a disaster.

Yeah, that's fair.

Okay.

Can we talk a little bit about future trends? I would love to get your perspective because you're— I think you're probably thinking 5, 10 years ahead of me and everybody else that's listening here. Marketing tools, 24 months. It's I've spent, I was, I've been on the road 16 of the last 30 days talking to, looking at, figuring out like what the marketing stack and customer lead generation stack at Tomorrow looks like. And some people have really figured it out and they are blowing up their businesses and other people are trying to figure it out. The risk of not figuring it out, not incorporating these tools. I mean, if I owned a marketing agency, I don't, I would be I couldn't, I couldn't even, how do they even keep up with everything that's going on and, and serving all their clients and stuff? What's your view of marketing tools, automations, technologies, and the role, uh, the impact on people, things that people used to have to do that they no longer have to do, and how are you leveraging that?

Yeah. And this is where small businesses really needs to like open their mind up, right? Because There's 7 promotions in a business. Promote who you are, promote what you do, promote why you do it, promote your impact in the community, promote why somebody should join your team, and then teach everybody the 6 promotes. That's the 7th promote. Now, how do you promote? You promote through digital strategies, paper strategies. You and I are 56. Back when we were 20, we were running around handing flyers off and sending newsletters to people and doing all that bullshit. Today, you've got a full automation stack that AI should be able to make the outbound calls, should be able to qualify the leads, should be able to schedule them into the appointment, should be able to confirm the appointment, should be able to listen to you actually communicate when you have a live person either on site or over the phone and score how well you're doing it, and then immediately give you feedback on did you fit within the 90th percentile of being the best version of what we know works, or in the 70th or the 50th or the 30th. And it should automatically institute training protocols, and you as the owner should just get your alerts— green, yellow, red. Red means somebody's entirely butchering the process. Yellow means they could use some work. Green means they're great and they're your top performers. So, so now the question is, okay, does that even exist? And the answer is yes. And not only does it exist, but it can do it in every language in this world and do it in real time. And so then somebody's like, wow, does that— is that real? Yeah, but it has to be structurally built because here's the thing, the only reason marketing doesn't work If you think about there, there's this funny thing that, and you'll appreciate this cuz I know you're already looking at it in your due diligence. So you and I have never talked. I know you look at it. Recurring revenue. What percent? If a business has been in business for 5 years, 65% of its revenue should come from a second, third, fourth, fifth, eighth sale to somebody they already built a relationship with. 35% should come from new relationships. If the ratio's 80/20, 80 new relationships, 20% recurring, it's a broken business. And they're spending 10%, 15%, 20% in marketing because their operations suck. Okay. So if you know that and you understand what your targets are, now, I don't mean to tip off these businesses that are like, how do you guys know if we're good or not? There are certain things that a guy like this and I will look at immediately and we'll know if you're good or not, even if you try to trick yourself into thinking you're the best. So here's the thing, automation, AI, will work to the extent that you're committed to operationalizing the best practices across the total spectrum of everything you do. And you're willing to hold the manual teams, the physical team members, the people you're inter-reliant on, to the extent you're willing to hold them accountable and incentivize them to do the right things at the right time in the right way. Okay. You can have all the technology in the world, but if you're not going to be able to do that with your team, you're still going to fail as a business. So technology for businesses that embrace the systemization, the automation, and the, the intellectual capacity of what all this technology can do for you, if you're willing to embrace it, that's great. But to the extent that you're unwilling to initiate the discipline and accountability through the manual delivery of it, you'll still go out of business. So to me, I think that technology is creating this unbelievable— and now if you're competing against a large institutional-owned business and you don't embrace the idea that you need to embrace these tools, deploy them in your business, align your team with them and hold them accountable to doing the right things at the right time with the right people. You're going to go out of business. And the private equity guys, they're, you know, I go to Alaska and I go to Alaska and fish with my buddy and we're in the back of the boat jigging for salmon. And then the big trawler comes by, right? And you see them throw hundreds and thousands of fishes in there. And then they're throwing off the ones that you're like, man, I would love to catch one like that. Boy, I haven't got a bite for 5 hours. They're throwing out fish I'd love to catch. Well, because they have the benefit of having a net so wide, they are looking for something so specific, the rest of it, they don't even think about it. right? Versus you're just sitting there jigging in the water. Well, if you're the business owner who's just jigging in the water, private equity are the guys coming by and trolling through, or your big competitors are, and just throwing back the, the stuff they don't want and keeping the absolute best of what they do want. If you want to be the best and the most valuable, that is a commitment that a business owner needs to make. And then it's a pursuit they have to stay committed to. With all the resilience in the world, or they're, they're working harder, not smarter, and they're not able to create value for their team. So they'll never have the best people. Because once your people find out you're not paying attention and you're not pursuing excellence, your top-performing people will go to those other groups that are growing fast. Because fast growth is exciting. Fast growth that recognizes talent is rewarding. And exciting. So if you're not that person that's talking about growth, talent, and rewards through operational effectiveness, you're in big trouble. No matter how much technology you think you can deploy, if you can't align your team with it and execute to it, you will be left behind.

It feels like entrepreneurship is accelerating at an accelerating rate. There's so, so many sophisticated collaboration companies out there, such as your own, that have really figured out about how you can get in a win-win-win alignment with companies. And I see companies, particularly in the blue-collar spaces like we operate, we're property services. Some companies just seem to be hitting the nitrous in the car and just accelerating away from the pack. So the bigs are getting bigger. There's roll-ups that are happening out there that puts more pressure on the small business owners. Yet entrepreneurship, it seems like even at the side hustle level, the blue-collar level, online, you know, influencers and marketers and Amazon shops, it just seems like entrepreneurship is really alive and well and expanding and accelerating to people that had never really thought about it before. What's, what's your view on that over the rest of this decade here?

Yeah, well, there's $12 trillion of existing businesses in the small business space. $5 trillion are looking for a backdoor. It's really— there's never been a better time to want to be an entrepreneur. You don't need to start it from scratch. You can just walk into somebody else's existing brand and business and make it better. Immediately. And it will be self-funding. But you need to learn the skill set and the talent to do it. I think it's important for business owners to understand that Gallup Poll does a survey every single year. And in that survey, 100 million U.S. workers respond. Two-thirds say they're disengaged; 18%, 18 million of the U.S. workers say they're actively disengaged or sabotaging the company they work in. So really, if you have 10 employees, 3 are actively engaged, aligned with you. You better make sure you know who those 3 are and you're leaning into them. And you need to get rid of the bottom 2 or 3 and replace them and then just continue to have that mindset. Because if you're looking at your workforce right now and you're like, wait a minute, I haven't added anybody or fired anybody in 5 years, 2/3 of your people are disengaged or actively disengaged or sabotaging you, and 3 or 4 are going to leave because they're like, man, nothing's happening here. We're going to go take advantage of this entrepreneur wave that's happening. Because who becomes an entrepreneur? Well, here's the funny thing. We interviewed— so I did all this research in 2009, 10, and 11. It's interesting because many of the blue-collar businesses back then, HVAC, garage doors, electrical, plumbing, they were considered low-valued EBITDA businesses. So, a $50 million blue-collar sheet metal building business would've been worth 4 to 5 times EBITDA back in 2009, '10, and '11. Today, it could be, well, 2 years ago, it would've been 12 to 15 times. And that's because where technology was deployed and where you have a business that becomes a front door to other things happening, you're worth so much more now because of the recurring revenue and the automation, blah, blah, blah, all these things that allow that to happen. But here's the thing. There's so many businesses, 96% of business, I'm sorry, uh, 86% of business owners self-disclose that the reason they started their business, became entrepreneurs, is because they didn't want a boss. They didn't want to be told what to do. They didn't want a limitation on their earnings. They didn't want to be held accountable. And so they started their business because of what they did not want versus those that start it for what they do want. So when you talk about the ability to flourish and prosper as an entrepreneur, the 3 people out of the 10 that are working in somebody's business who are watching this dysfunction happen, the reason they go start a new business is because they don't want to deal with the bullshit anymore. So they move somewhere where they can be in control. And you lose your good people and then you're really in trouble. Okay. So could there be an amazing boom of forward-thinking entrepreneurs? Well, when you go start a business, you're already like, I'm moving to something new. I'm excited about it. I'm going to get it going. If they can learn the technical aspect of how to do it right out of the box versus before they get disgruntled and before they get disappointed, before they're under stress, pressure, and anxiety. And fear and all that stuff, they could crush it. And we're seeing that with 20-something-year-olds because they're not stuck with all the broken thinking that they're experts. They go find help. We have so many people between the age of 18 and 28 that are running $10, $20, $30 million businesses. I can't imagine a better time in the history of youth and entrepreneurialism than there is right now. Just remember that space of, of, of 31 million small businesses that do $12 trillion a year in revenue. They employ 67% of the workforce. It creates 45% of the gross domestic product, so the GDP, the economy, and yet it's only represented 8% on the stock market. So, all those founders with all those employees that are killing it every day, they just never get the value. Imagine a world where you could learn how to turn the switch of value creation on like you have, and all of a sudden, bring all those young ambitious people that are older ambitious people that are tired of the BS where they're working. Into your atmosphere, you pull them into your world and put them to work where they can pursue their personal, professional, financial goals. There's no rules. It's a wide open throttle. And you know, the valuations on those businesses are going up every single year. So, you know, you'll have a huge exit at some point if you build it right. Man, I can't imagine. I'm 56. You're 56. Could you imagine the knowledge we have today at 26?

Oh yeah, it'd be amazing. But you know what? Man, there's a lot of things we can do right now to stay good. So we got time. We got lots of time. Dan Sullivan with Strategic Coach, I don't know if you know who that is. One of his great books, Who Not How. Find— when— don't, don't look for the who, find the how. Like, like you mentioned, a lot of these young people are doing. He's 80 and still just, you know, doing it every day, whether it's a partner or whether it's a key person or a star employee. What are some of your favorite strategies for incentivizing and retaining these people? I know you mentioned P-shares. At one point, you know, really from structuring, you know, the ability to structure some collaborations and some deals like that. What would you speak to some of these people could use to really be more thoughtful about how they retain people and incentivize the right behaviors?

It's a great question. And you and I both know that the top 5 reasons businesses fall apart between $0 and $25 million is bad partnerships. People giving equity to the wrong people with the wrong expectations, getting the wrong results, and then they're sabotaging and destroying their own companies because they're all caught up in the emotional aspect of that. So, so look, there's a proper way to incentivize people. You have long-term incentives, LTIs, you have short-term incentives, STIs. And what you want to do is you want to create the motivators that drive value in your business. You want to be able to give your team STIs. You don't want to overcompensate. There's a bunch of problems that happen with compensation between $3 million and $25 million. And most people do it wrong. It's another huge reason at $15 to $25 million, they go through a massive breakpoint. They lose a third of their best people because they realize they've been entirely compensating incorrectly. They switch the compensation. The best people leave because they go find another business owner who doesn't know that yet. And they're able to go command the income they were earning and the business owner ends up falling backwards. So there's so many technical things that are as certain as gravity in business. And what I would say to people is, if the equity that you want to have with all your employees is their personal, professional, and financial goals. If you can align and if you could listen to your human beings talk about the things they're most ambitious and excited about over the next 1, 3, and 5 years, personally, professionally, and financially. And if you could show them through their contribution in the organization, how you're going to help them achieve those things, that is the equity. In your business until you're about $50 to $75 million, where you need the sophistication of bringing somebody that knows how to run a $100 million or $200 million company into your organization. And they're looking to make that move downward. They're looking for something they missed the last time. And so that's where you talk about real equity. And that has to be structured appropriately as well, or it'll end up screwing things up. So the equity a business owner sub-$75 million should really be thinking about with all their team members is how do you align their personal, professional, and financial ambitions and allow them to succeed and accelerate and accomplish those goals through the business by contributing to the business, knowing when the business wins, they win. When they win, the business wins. That's the best equity you can have. And then the technical equity outside of that and normal compensation, you should factor whatever base you pay somebody, you should show 'em how they can make 50% to 100% of that base through driving value in the company. Then on top of that, have that goal setting mechanism I talked about. So I would say it's very important, but most people are giving equity to the wrong people when they're too small, they already don't know what they're doing, and then they have a disastrous cap table, and then it causes all the friction and resistance, and that keeps them small. I wouldn't even contemplate equity or partnerships in business. Statistically, those are all be the reasons you fail anyway. They're in the top 5 of all reasons you fail under $25 million. And so I would just try it. If you're going to start a business, collaboration with other people is the best. Let them have their thing. You do your thing. You guys work together. You add value to each other, but you own your business. They own their business. Collaboration is the highest form of currency that you can have with people. And I would just recommend that you try that first before you start giving your company away to a bunch of random people.

Yeah, great advice. Partnerships and sinking ships. Avoid them both sometimes. Ah, we're heading towards the barn here, Brandon, but this has been fire, man. I really, really appreciate it. What, uh, would you say today is the number one way that you would like to define your legacy?

You know, I have in my career, I now have 290 millionaire to multimillionaires that I've been directly involved with impacting their life. I have another thousands of people behind that, that I've helped hit their largest income goals they've ever hit in their career. I want to help 1 million 10X business owners achieve their personal, professional, and financial goals. And because for me, that's somebody that wants to hit 50 to $1 billion. So that's millions of human beings through this personal, professional, and financial planning strategy and compensation, long-term incentive strategy that we've created for the businesses we work with. I want to be responsible for millions and millions and millions of Americans or people globally. We just launched Cardinal Ventures UK. I want to be responsible for millions of people. Like when I'm on my deathbed, I would love to be getting those messages saying, You changed my life by teaching me how to achieve something I'd never been able to do before, and it's impacted my life, my family's life, my legacy. That's what I'm looking for, to be the ultimate. I don't want to be the king. I want to be the kingmaker. I want to create million, multimillion-dollar kings all over this world that can invest in their families, invest in their communities, invest in the things that will create value to other human beings. And that's what I want to be known for. It just so happens my talent and my skill set in doing that is, is, is economizing businesses.

That's beautiful, man. That is, that is a purpose worth doing. Definitely. And we need it. I mean, we absolutely need it. Think about today. Kids can't buy a starter home for less than $400,000. People have more month at the end of their money because of inflation, wages and things don't go up as fast as everything else has. And you're really starting to see the stress of this economic condition that we're in. And you gotta give people a way to achieve their financial freedom, economic security, create generational wealth on Main Street USA for everybody. And I think it's a very important patriotic thing to do. It's important work that needs to get done, and I applaud you doing it. That's why, that's our, you know, we have 3 purposes here. The one I just, what I just said, and then we want to impact kids. So we are building reading rooms across the country in Title I schools because The earlier in a manufacturing process you fix the defect, the cheaper that it is. So the more that you can pour into youth, I think is critically important. And then we support transitioning veterans through Operation Homefront.

So, dude, we're right there with you. I just signed a partnership with 52 Ventures, Ray Lewis and the Grant Cardone Foundation and Cardone Ventures to start bringing all this technology and learning abilities into inner city kids. And kids without fathers. Those are our missions. We have a huge vet space. I have a SEAL Team Commander 4, and I have a retired special forces very high up, and I have a general or two that we're launching a bunch of programs to, to give vets an opportunity to own businesses. So I'm right there with you. And here's what I already know. I know that this is the first time you and I ever met. We did this podcast together. We're so aligned in how we view the world because of our experience. By the way, that should tell your listeners If they're like, well, how do I know I can do it? The only reason you and I are having this conversation and we're speaking the exact same language intuitively is because you learn by doing it. It's trial or error. You're either going to do it with somebody collaborating or you're going to go figure it out yourself, which is the slow way to do it, to be honest with you. And it's the most dangerous way. I have a feeling that post this podcast, you and I are going to connect somewhere and we're going to end up investing in something or somebody together. Or a multitude of things together, because this is what happens. Smart people want to work with smart people. Good people want to work with good people. The predictability of somebody's ability to be smart and good is based on historical results and what they're currently doing. And I would just recommend to anybody listening and watching this show, surround yourself with people that have proven they're actively doing it and they're willing to share how. Or do it with people who are actively doing it and being successful. Just make sure that you're aligned emotionally, you're aligned with the target, you're aligned with the mission, the vision, the purpose, the values. And if that's the case, man, go all in. Because you and I both know we've created so much wealth for people who work with us. They don't have to own the business. They can do it through us. And with us faster than most people will do it by themselves. So I have to just say, look, get involved, go show up, educate yourself, get out of your mindset. This is what Nine Figure Mindset is about. Getting around the right people, becoming an owl. Who can I trust? Who's doing it? Who can I do it with? Who else is doing it? Who can I learn from? Who's going to do it next? Who do I need to talk to to get help from? Who, who, who, who, who? Become a professional owl. And I know either one of us would entertain that conversation with someone who is serious about wanting to succeed.

100%. And I'm gonna make that happen. I'm gonna chase you around and figure out where you are, and then we'll just happen to bump into each other. Uh, last question here, Brandon. Uh, if you had one sentence to make an impact in someone's life, what would that be?

The true freedom of personal, professional, and financial success is through how many people you can help achieve that, and then you will find that freedom. You doing it for yourself isn't going to get you there.

Perfectly said. Perfectly done. This has been Brandon Dawson ripping it up with Jeff Dudan on the home front. Brandon, thanks for being on.

Jeff, thanks for having me.

Yeah, right on.