Dan & Joe Kalis — How To Boost The Value Of Your Company

This is an intro. Intro, intro, intro.

Hustle and Float Shark with your boy.

My boy, Matt Wolf. Joe Fear. Hey, what up?

What up?

We back.

Welcome back to the Hustle and Flow Chart podcast with your hosts, Matt Wolfe and Joe Fear.

Looking good today.

Wait, no.

You know what I'm interested in doing? I'm interested. What the. What is wrong with my voice right now? I am interested in selling businesses. Are you interested in selling businesses?

By golly, how do you know?

Do I think our intros just get cheesier and cheesier with every single one.

When Matt hits the red record button on here turns into, like, cheesy voice. It's like radio Matt looking at me.

With a big goosebump. Strip club dj.

You would know.

Jesus. Yeah, but it's funny because on the normal podcast. This is a normal podcast. He doesn't do this, but sometimes.

Depends on our guest.

It's fun.

Depends on our guest. We just get goofy when we get time to record our intros.

You know what it is? And this is pulling back the kimono or whatever Matt likes to call it. This is like the last thing we do in our day is record intros. So by this time of the day, we're pretty delirious, fried, burnt out, excited. Having too many ideas in our head right now. Not complaining at all. But that's why we sometimes sound a little off.

Ye can no longer talk because we've been talking for eight hours straight and it's almost time for bed.

Yeah.

It is dark outside. Today we're talking to two bros. Two Bros. Which is actually really cool because they have a very similar dynamic that Matt and I do.

Yes. And we're actually gonna bring them back and do a round two talking about that specific topic.

Yeah, there's a little bit of that here, but it's Dan and Joe Kalis, and they are just. They're doing a bunch of stuff, but they do it really. Some interesting things about growing your company in smart ways, raising the valuation of your company if you're looking to sell or just to take some stress off your life.

Yeah. I mean, basically what we're talking about in this episode is they've got this sort of eight pillars, eight steps, eight leverage points. What do you call it? Basically, something eight leverage points that. That increase the sellability of your business. So, you know, the concept of this episode is you should always be building your business to sell, even if you really don't want to sell it. By building a business that is sellable, that you're going to have A much easier time running the business. And they have this saying that everybody exits their business eventually.

Right.

Which is totally true statement. Eventually, you will exit by choice. I buy otherwise.

Totally. And the big thing is. Yeah. If you can dial in your business using these eight levers. I forget the word they call it. And then, you know, actually do that. If you never intend on selling, if you love your business till the day you die, cool. But it takes the stress off you a little bit and. Yeah, it makes you more profitable. Whatever. Everything improves.

Yeah.

And we go through it all here in the. In the training.

They break down all eight steps and we talk about some hypothetical scenarios. And I think you're really going to enjoy this. We had a lot of fun talking to these guys and I think we got a lot of things that we need to kind of take closer looks at in our own business just based on this conversation.

So. Yeah. Well, you'll walk away with like a little score. An opportunity to do a little score thing, basically see where you're at and audit your business and then know what you can and should focus on. Word. So super cool stuff. As. As we've said before, but we will say again, we love audience building and traffic getting. Once you control all that stuff, you could pretty much sell anything you want. Want.

Yep.

Don't you agree?

Pretty much. That's why we focus on perpetually growing our audience. And we created a course called the Perpetual Audience Growth Course.

It is super cool. And if you just. Just, I don't know, write us an email, I can. I can point you to a lot of other folks that could say it's really super cool and helpful and worth every cent and way more that they didn't have to pay. And. And we'll actually send you a shirt as well. Hustle and Flowchart shirt for totally freezals.

Yeah. Just enter the coupon code shirt when you go buy the course. So go to evergreenprofits.com traffic and you'll learn all about our traffic course. There's a whole bunch of other bonus courses that we don't mention in training and guest experts that they're kind of a secret, but they're a big deal. Lots of cool stuff in there. So evergreenprofits.com traffic use the coupon code shirt. That'll let us know you listen to the podcast and we're gonna hook you up with a free Hustlin Flowchart Flowchart T shirt. I said that on the last episode too. All right. We're just the hustle and flowchart channel now.

We're brain dead right now.

Let's go talk to Dan and Joe.

Dan and Joe. Thanks for hopping on the show. How you doing?

Yes, guys. Good, good. Good to hang with you for sure. Like our Larry King booth here.

Listeners probably can't see it, but they're. You're legit, man. Your studio is just top notch. Where are you at?

Millions of dollars have been put into our studio. Unfortunately, it came from the public library.

Pockets.

This is my soundproofing, my bookshelf.

Books.

It's very absorbent. You know, the books.

It looks.

I've never read any of these. I don't even know what. Who half these things are.

I don't know who those people are.

Did you get them from Tai Lopez?

100%.

I've heard a lot of digital marketers go into their closet and like put blankets over them and their mic. Have you guys tried that before?

No, no.

It'd be a little louder with a two person podcast. Just both of us huddled together under.

A blanket sharing a mic.

Very romantic.

Yeah. Stop your heavy breathing.

It's getting weird. Yeah. Well, we're excited to be here and glad we. Glad we've been able to hang out at some events and have a lot of cool mutual friends and this is what you kind of. I think this is the best part of being an entrepreneur is just being able to have awesome conversations and build relationships and create content together and all that. So looking forward to chatting with you fellas.

Yeah.

Yeah.

I think we first met out in. Well, it wasn't technically Chicago, but it was out near Chicago at Perry Marshall. Event all about was all about buying and selling businesses, really, which is kind of one of the topics we're going to get into today. So I think we got introduced through mutual friend Brad Costanza, who's actually a business partner of ours.

I feel like he gets mentioned on most episodes now. The guy just knows way too many people.

Well, we started doing episodes now that we just call Bacon wrapped hustle, which is me, Joe and Brad. And we just do them repeatedly now because we have so many like mutual friends and so many conversations that we get into together. That has become like a once a month thing to do a bacon wrapped Hustle.

But does Brad have his own awesome T shirts like you guys have? That's the question.

No, I don't think so. Don't think he's a slacker.

Breaking him out.

Awesome, dude.

Well, yeah. Well, so you guys, I mean, your bros and you've. I don't Know how many businesses have you run together as a partner?

Are we counting ones that didn't make any money?

Yes, everything.

If we're counting ideas come up.

Are we counting domains?

143.

Are we counting domains? I'm curious. You guys have been in the game for a long time. How many domains have you guys bought collectively together?

Dear God. Yeah, it's been 12 years for us.

So we, we started in 2007. We're recording this in 2019. So that's what, 12 years? 11 years. 12 years. I don't know, my math's not that good right now, but probably 500 domains over 12 years.

That's one of the domain buyer.

Well, I get ideas randomly. I'll be like, oh, we should start a business around teaching people how to build horse stables. Horsestable Profits.com's available.

It's available.

I've never actually bought that domain, but I get random hair brain ideas. And I'm like, it's 10 bucks to throw a flyer out there and maybe someday we'll circle back around. And then the next thing you know, 10 years later, I'm paying like $1,000 a year in domain fees and I'm like, all right, I should probably trim back.

That's what you have accountants for. Yeah. So I would say, yeah, it's been, I mean, we did our, we did our kind of our time, if you want to call it that, in the MLM world, you know, for a while, and so try to become entrepreneurs in that realm. And there was a lot of things that we learned. But the last thing, the final thing that we learned in that world was that we're not actually doing marketing. We're not actually really allowed to do marketing. There was like one day I kind of stumbled across Mike Dillard, who basically totally transformed the network marketing space with his Magnetic sponsoring. He was a big fan of Dan Kennedy and created this idea that you could attract attraction marketing, that you could actually get people to come to you and not have to just. Or to be the hunted and not the hunter. And so that kind of led us both down a path of like, all right, well, we can't even actually really do this in the MLM business that we're in because a lot of them don't let you do that. So how are we going to apply this? And so we went on this journey of studying and I had been a fan and studying like Seth Godin from long ago, and Tony Robbins started getting into personal development and marketing. And we didn't really know how we were going to apply this kind of stuff, but, like, probably. I'm sure you guys had a similar experience. Like, once you kind of discover what marketing really is or what it can be and how you. It's. You can. It's a science and an art form that you could. You could create a campaign and it's direct response and like, you could. It's just a math equation and you just produce profits and like, what are we going to apply this to? And I think we stumbled along for a while and had our, you know, a few dumb domains and a few ideas here until.

And I've been totally unemployable most of my life. It just took me a long time to figure out that having possibly hundreds of jobs in my life, Joe's been more stable than me over the years. But it was like I was selling right at the. I was in the mortgage business, in the real estate business, and during the kind of the heyday of 2003, 2004 to 2008, when everything fell apart. And I was selling, like, mortgages and funding and stuff right before then. And I was like, you know what? I started selling loans and unsecured lines of credit to real estate investors because I was like, I want to get into real estate investing. Kind of caught the bug on that. I was like, maybe we can apply all this to them. Maybe we can flip houses like Robert Allen and these guys, you see. And long story short, like a lot of people, I think Frank Kern has a similar story. I was like, I hate prospecting. I hate cold calling. I'm done with this. Let me kind of merge what I'm learning right now and just test it out to generate my own leads for businesses. And so I started doing that and I said, you know, Joe, like, you're not really doing the network marketing thing anymore. You're like, he's an operations guy. Like, if we were a band, we always say, like, I would be the front man, you know, along with the erratic personality and really hard to deal with and all that kind of stuff. And he's more like the drummer or the manager or whatever. He's like, trying to keep the beat together. So I was like, dude, if you help me, you know, like, we could scale this and we could get 5, 10 times more sales if you just kind of help me process everything. And anyway, so that was where I decided to call this brand Funding for Flipping. And it was lead generation for real estate investors. And, like, because they always need capital.

Well, it didn't start off as lead generation. You. You suckered me into selling on the phone with you, which. I'm an operations guy. I'm a support manager. I was not interested in selling on the phone. I wanted to start a company out of college and I didn't because I don't know how to sell things. But you've sold your whole life. And so I started selling on the phone and I realized how terrible that was. And I'm like, there's got to be a better way to do this. So that's really what birthed the desire for marketing as far as that was concerned. From my perspective, I was cleaning up his mess because he's a front end sales guy. Not much on details. I'm the exact opposite. I don't like talking to people and I'm all about details. So we kind of married our forces together and yeah, started calling people on Craigslist, selling funding, real estate investors. And I was like, this is stupid. We should probably do some Facebook ads. So that was our first company. So very glamorous.

It rings very true to our partnership, Matt and I too. I feel like I resonate obviously with Dan a lot more. Just kind of just erratic sometimes. My ideas are not totally fleshed out. I'm like, we got to try it, we got to go, gotta go. And he's like, hold the fuck up, chill out. And, yeah, more analytical thinking about the bigger. Maybe not the bigger picture, but just like, what are the steps to do that?

Have you guys ever taken the strengths finders test before?

No.

It's more than a personality test. I recommend anybody that's an entrepreneur or anything at all, including you guys, do it because it's part of Gallup and it really kind of tells you, like, what your inherent strengths are. So that. And there's like 34 different things. And so it really kind of tells you where you can focus on, like, for me and maybe you as well, Joe, it's like, I'm a starter. I'm an activator. That's my number one. I'm terrible at finishing things. So, like, my coach for that tells me, like, you're the. You would be amazing at starting companies and getting companies from good to great. But, like, to get them from start to good, like, you're worthless. You have to have other people, like my business partner or other people involved. And so Joe's better at executing, he's better at coordinating. So it's a really great thing. So these are some of the things along the way that we kind of started to realize that there's These tools that you can use for efficiency and productivity. And I know you guys are really, really huge into tools, and that's really kind of where you Is your bread and butter as far as what you promote. But, yeah. So we ended up testing some Facebook ads, and we had several ad accounts get shut down. You know, like the big massive, whatever. I don't know what they call that.

What are they?

If you don't put a privacy policy or contact information on your site, like you're hiding something, they shut you down. We didn't figure that, but that's what we learned.

You guys have some Facebook accounts shut down over the years?

We have, yeah.

Yeah.

Activate them. Now, the little secret Facebook link that goes right to their livestream.

You need to send that to me.

So I've had Google Ads account shut down once, and that was actually shut down for, like, three years before I finally got it turned back on. And actually, just maybe two months ago, we actually had our Facebook ad account shut down, but I had it turned back on within 48 hours because we were lucky enough to have a few podcast guests in the past that were really like Facebook ninjas that had account reps there that knew all the inner workings of Facebook, give us some advice. And using their advice, we were able to get our ads account turned back on within, what, 48, 72 hours, something like that.

We'll just name the guy that really helped us. Mr. Kurt Molly.

Yeah, it was Kurt Molly.

You guys probably know Kurt disappeared from Facebook.

Okay, here's. Here's a little. Now, I think we've. I might have met Kurt briefly. Probably doesn't even know me personally. But interesting thing, the guy that we had doing our ads for us at the time was actually being mentored directly by Kurt. And so he was like, tell it. You know, he was like, yeah, Kurt just got, you know, just kind of disappeared. They really kind of treated him poorly, and a lot of us heard that story, ended up coming back from that. But so we, you know, we fought through that, and then it started working really good, and we didn't have a lot of experience, and the company we were partnered with had been doing, you know, I don't know, $20 million a year in various financial services, including funding. And they said, we know nothing about marketing. Shocker. And so. But we like what you guys are doing, these leads that are coming through. Awesome. Because we took it everything from the Facebook ad to a booked, booked phone appointment. And he said, what can I do to help you scale? And so that was our first Kind of strategic partnership. And it'd be in a whole other podcast episode. We could talk about the things we've learned to do right and do wrong with partnerships, but I don't want to go too far down that rabbit hole. But suffice to say that they said, here's our amex black card. Let's go spend a bunch of money. Let's just go scale this. So we got to a point we were spending not an amount that, like, everybody would be so impressed with some people in our space, but, you know, like $6,000 a day, you know, which was pretty. Which was pretty awesome. And things were going really good. And it was like we only kind of had to check in every once in a while. And then it got to a point where their. Their phone sales process and team just wasn't really as efficient as it could have been. And that kind of eventually sort of fizzled out. But along the way, we built a separate side brand that generated leads that we were selling tools and education and as affiliates to. So we generated, what, 350,000 leads in three and a half years that we monetized through a variety of different things. All the while, you know, we weren't real estate investors. We never claimed to be. We weren't posers. We're just saying resource center. We're vendors, you know, we're providing funding and then we're bringing you. We're vetting these people out and providing that.

So.

And then that kind of ran all the way through to a point of where we just. We weren't really into it anymore because we weren't doing real estate. And we said, okay, let's just kind of go on to the next thing. Thankfully, we were able to sell a portion of the business, you know, assets from the business email list and so forth for a modest amount. Nothing crazy. And that was kind of like a. That kind of was like a validation for something that we had also been studying that I kind of wanted to get into with you guys, which is this idea of buying and selling businesses and valuation and M and A and these kind of sexy real business things that a lot of people in digital marketing space maybe never think about.

That's where we want to definitely focus his story about this whole episode, because I know you guys work. What was it, the built to sell system or you're certified or something? I don't know what the actual name is.

I think along the way, we had bought ourselves some freedom in that business. It was just lead gen. Business ran itself. So we were Able to go to conferences and just fraternize around town and talk to business owners and learn the common struggles and pain points. And we just. I know Dan went into his shop one time and talking to the owner and she just, she didn't know how to do an offer a promo, like, how do you get more foot trapped? And we just had this desire to help businesses get the low hanging fruit that they have. Like, we would say stuff that any four of us would say anything. Any marketer would say something and they're like, oh my gosh, how'd you come up with that? And it was just like, what?

Well, here. The specific thing was that she had a. It was like a, a hodgepodge shop of all these different interesting merchandise. And she had Razzles candy. And I was like, oh, razzles, like from 13 Going On 30, the movie, you know, the Jennifer Garner. She's like, oh, yeah. I was like, you could run Facebook ads of everybody who's like that movie within like, you know, 10 miles and be like, we have Razzles. We're the only ones in Colorado Springs. She's like, that's a great idea. You're so smart. I'm like, just thinking off the top of my head. And so it turns out she had been in business like 10, 15 years. And I was just like, you know, how are things going? You know? She's like, well, I, I haven't taken a paycheck in the last three years and this and that. My husband's working full time, I don't know what to do. And I was like, do you even enjoy this business anymore? And she's like, some days, yeah, some days, no. And it just kind of broke my heart. I was like, okay, there's got to be a better way for people like this to do things right if they were willing to listen.

And then somewhere along the way, I think it was from a lot of the stuff studying Jay Abraham about getting parts of businesses, equity, even maybe even buying businesses and flipping businesses. It's like, I thought, you know, for those of us that know even just a little bit more than the average business person, and a lot of us know a lot more, it seems like the highest and best use of those skills would really be not necessarily to create courses, not necessarily to run an agency or even do consulting, but to like buy a business opt, you know, like do all the things that they're doing wrong, ramp up the revenues totally and then resell it or just even hold onto it.

So there was that. But then it was this other component which is, well.

When you're looking at a value of a business, you're looking to sell business, you have your earnings and you have the multiple of earnings. So it's a two prong thing. And it was just like, okay, there's a tie in. And I read the book Built to Sell like you said by John Warlow, and it was all about how these stats were thrown in our face that validated everything that we were looking at before. 80% of all small businesses, meaning like businesses under 10 million a year in revenue are unsellable. So, you know, you look at like a lot of these baby boomer business owners right now in 2018, 2009, 2019, and they're like five, 10 years away from legitimately needing to retire. Not like, all right, you know us in our 30s, 40s, whatever, like, I want to retire in five years. And no, these are like, they have to retire and they can't. What are they going to do? And there's so many of them and it's like, okay. And then of the ones that do sell, only 5% of businesses that sell in that range, the owners state that they're actually happy with the net proceeds. So they basically settled. And to bring in a real estate investing or real estate analogy is they're motivated sellers.

They have to give their business away. They're a buyer. When you guys talked to Carl Allen, you probably got a little bit of that was like, these professional acquirers are going to come in and they're going to have so many advantages over the small business owner or, you know, serial entrepreneur that they're not going to be prepared. And so we thought, okay, we can participate not only in learning if we're going to buy a business, how to increase the value, because that's how the majority of the wealthiest people in America have exited from a business that was a John Warlock quoted that that they either built and exited or they bought and then built it up and exited. That's where you're going to get into the kind of the stupid money, the fu money. So anyway, we could take a little break here for a second and if you have anything to add. But that's really kind of what it got us thinking is there's more to just the revenues. Like we can take the digital marketing skills that we have and the average business, we can help them double, triple 10x whatever. But then there's like, if you, you could be a profitable business and be unsellable, where nobody's going to want to Buy your business from you when you need to and everybody's going to exit at some point one way or another. So. So you could be profitable and then. But you can't sell it because it's. Nobody wants to buy a job right now.

This, this totally resonates too. I've. I've been involved in multiple different exit exits. The very first one being from an actual brick and mortar company and then a couple digital companies after that. And I can say pretty much 100% of the time, both parties left sort of unhappy with the way the exit happened. So it's going to be an interesting discussion because I do have some tiny bit of experience with this, but I never set up a business with exiting in mind. I always just kind of exit a business when I was.

I don't think anybody really ever does start a business with exit in mind. I don't think anyone's that responsible.

And the E myth is a lot about like, don't start a business based on just because you're passionate about something. It's like the entrepreneurial myth is that if you're good at something, you start a business. That's not true, but that's usually how things work. So you never think about when it's going to end because you're so excited about it beginning. And like Dan said, he's good at starting stuff. I think human nature is to be good at starting stuff. You get excited and then you just get tired. Like, nobody likes running the half. The second half of the marathon. Not that I would know, but it's just, you know, it takes a very savvy business owner to actually start a business and think about the end. But you can, you can start midstream. Like if you've been in business for 10, 15 years, you can still set up the foundation that you didn't set up 10 years ago. Based on some principles that have been proven by data of companies that were surveyed and sold. And it's a prescriptive model that we've learned about through build to sell. It just excited us because we're like, anybody can be fixed. That's my nature in life, in business. I can't help but fix things. I just fixed brokenness at any job I ever had. Dan's process of selling stuff was broken and it was messy. I'm like, let me help you. Any business has the low hanging fruit and we can make it stable and have a foundation that they could sell on. And it's awesome. It's just so cool if people are willing to hear that. So we're kind of on a mission with that.

I love it. And you mentioned Jay Abraham. I know they have the. He released the Mindshift Challenge. I think it's like a free PDF anybody can just get. It's about 100 pages, but just that alone. We both read it. I shared it around to some friends we mentioned on the podcast. We're like, dude, that will expand your mind. You want to think laterally and not just out of the box like Facebook ads or just. Obviously he's not talking about Facebook ads inside that thing, but just thinking about how you could partner or leverage something else to scale what you already got going on and do it in a smart way.

Yeah. Let me give you kind of a cool analogy that I think it really paints a picture of this is that if you kind of equate business ownership and business growth to human health, there's always kind of this. The two pronged. I don't know if you want to call it a debate, but people would say diet versus fitness and exercise. What's more important? And a lot of people would say, oh, well, diet is 90%. I think there's kind of more of a blend than that. But it's very easy to get into this mode where you're working out, you're building your body up so that you look good. On the surface, it's more of a. I'm not going to say it's a vanity thing because you're still healthier, but it's the external part of it. And when it comes to a business, the KPIs that you look at, the key performance indicators are going to be revenue, profits, and maybe cash flow to a different degree. And that's great. Those are the things people look at. And if you want to go even higher level, and you're looking at your social media stats and your traffic and conversion and all that, but that's only one part of it. And so that's like what I would call the quantitative. So it's just numbers. And when you're looking at a valuation, what's the company worth? It's the earnings, which is basically, for all intents and purposes, just profits. But then the multiple to come to where the value is is really a representation of risk factor. So if somebody's gonna come in and buy your business, they're saying, what's the likelihood that I'm gonna keep getting those earnings that you've reported that you've showed me through due diligence for a year, five years, 10 years. And then you have two different types of buyers. You have the financial buyer and you have a strategic buyer. And the financials are very like, it's a discount. So it's like, if I think that I'm gonna, if I'm happy with taking, you know, five years to basically have this business pay for itself, then I'll give you a 5x multiple. You know, that's the rough math. And when you're talking like this in the small business sector below 10 million, you know, you're really not getting into anything more than maybe 5, 6x multiples. When you start to get into these fancy tech companies, Silicon Valley, then you get in double digits because you're talking about strategic buyers that are saying, I don't even really care about the numbers. I don't even care if you're not profitable. I'm buying your process. Like what we learned at Perry Marshall was like, it's a process simplifier, it's a price simplifier. I'm buying something proprietary. But most of the businesses that are sold out there, the great majority are bought by either a mom and pop business that everybody that wants to buy business, or maybe even a small private equity company. And they're looking at the numbers and they're scrutinizing them and they're saying, this is an asset, we'll keep producing. And the other thing that I think is like even the bigger picture for us, that makes this feel more like kind of a mission oriented endeavor. I mean, you know, don't get me wrong, we're in this to help these businesses make a ton of money and for ourselves as well. But it comes down to lifestyle almost. It's like, I think that the value of your business is like one of the best representatives of your quality of life. Because if you have a very unsellable business, your life's going to be a drag because you're going to stress about it all the time. You have no freedom, you can't do anything, you can't leave the business for a day. And so like the quality of your life is really tied to the value of your business. It's a really kind of an interesting indicator that we've kind of come up with. And so that's why it's important. And biz owner freedom, the freedom concept is kind of a two prong thing as well. It's like you could have freedom in your business or from your business. I'm kind of ripping off Michael Gerber's working on your business versus in your business. But it's like freedom in your business means it's like running like a well oiled machine. The cash flow is consistent. It's not dependent upon you. You can take time to work on your business, it's not dependent on anything.

Or you can go on vacation. Small business owners never take vacation.

Right. But ultimately you're going to have a point in your life where you want freedom from your business. You're going to want an exit more than just exiting the position. You're going to say, all right, I'm done. And so when you structure and optimize your business with those things in mind, then you have the freedom to go either direction. And in the meantime, you have a business that's a blessing, not a burden. So that's, we're almost kind of looking at it like. And if you want to scale your business, that's obviously been a hot buzzword for several years. Everybody was talking about scale this, scale that, this is how you rapidly scale and it makes sense. But you can't scale a business if it's constrained by you or you don't have the proper cash flow. And we can get into whenever you guys want some of the specific eight drivers of value and that sort of thing. But that's.

Yeah, I was just gonna, about to ask what, what makes a business sellable? Like what you just said, if you don't have a sellable business, you're probably not going to be happy in that business. You're not going to take vacations. You know what, what sort of things do you see as like defining a sellable business?

Yeah, that's a good, I mean, and we'll kind of maybe toggle back and forth on this. But the beautiful part about this is that like, it's not even like an opinion and it's not even like, you know, like Joe and I went through all these exits or you guys did and like this happened during our thing. That's obviously all valuable. But the reason we were so attracted to what John Warlow did with his book and with the valuable system is he had a data company from years ago providing research to these big companies that would sell to small businesses. And he tracked all these trends as far as like, this is the demographic, the psychographic, this is what makes a company valuable. And he ran 40,000 businesses through this system and determined that there was eight drivers, if you want to call it that, of value, of value that were weighted way heavier than anything else. And so he created a scoring system so that a business could go through and Say, all right, this is where I'm at right now. Out of 100, I'm 59 is going to be the average. And so there's eight different things. And it's a data driven thing. So it's like we can go through and say, look, it's, it's not a good. And there's other intangibles too. This is more for like a financial transaction. But I mean, I'll go, we'll go through them kind of really quickly. But, you know, and this is in no particular order necessarily, but financial performance would be one of them in terms of like the strength of your financials. If you're a business that is like an offline business, heavily dependent on cash, you know, your books have not been audited, they're not trackable. It's all a mess. Somebody's going to come in there, they're never going to trust what they're seeing. They can't rely on those sorts of things. That would be a red flag enough that they would say, sorry, we're out. And so again, even just having a professional audit from a CPA firm on your financials is enough to dramatically. But they want to see upward trends of profits and revenues. They want to see organization of your KPIs. There's software, there's different things that can do that. So it's just getting your financials in order, having somebody dedicated that's either a CFO or even like a fractional cfo. You're just professional in that manner. And it sounds simple. But as you guys, I'm sure know, so many businesses are just a complete mess when it comes to that. So that would be one. I don't know if you want to go through a little bit.

Sure. Yeah. So out of the eight, financial performance is one. Do you have a question?

No, I think it's. This is solid.

Yes. So there's. John Warl is great at stories. He's very much a storyteller and he talks about, there's a thing he calls Switzerland structure. So any business, Switzerland is a very independent country. So the concept of being independent in your company of any one customer, like a lot of companies are built on one customer that provide them all their business or one employee or one supplier, basically a dependence on somebody or something that if that one thing were to get knocked out, you're out of business. Hey, that sounds familiar. Yes. Yes, it does. I mean, people, multiple streams of income. Right? That's the best. The hot buzzword or, you know, passive income all over the place. But it's true, like if you don't have multiple streams of income, if you don't have multiple employees that you can trust, it can't all be reliant on you as the owner, et cetera. So Switzerland as an independent country, they call it Switzerland structure. So that you can analyze in a business if you're going to be in trouble if a supplier were to go. Like in the food industry, if you have one supplier and all of a sudden all the meat has E. Coli, you're up the creek, right? So you got to. And the profit. Marcus Lemonis does this a lot too. He'll go in and he'll nail down a bunch of suppliers as backup. Just so Switzerland structure and independence from any one supplier, customer or employee is pretty powerful too.

It was Dan Kennedy, didn't he always say like the, the worst number of business is one the one of anything. So it's exactly what you're saying here.

And we lived that because that's, that was probably the main reason that we ended up having to sort of like dissolve and sell off a part of the other businesses that we had. Like yes, we had thousands of customers through that took funding and all these other things, but really like for us, our partner was really a customer that we were providing that with, that we generated millions of dollars with and it didn't work out with them in the end. And then that whole thing, we could have, yes, we could have taken it in house, but we just didn't really want to do that. But if we would have had 10 of those set up, you know, we'd be having a completely different conversation right now.

And we didn't not have the skills or network to do it. We've met so many people, we know exactly how to do it. It's just, it's the trap of passive income and that we had time and location freedom, right. And we.

Abused it. We both have a five year old, six year old daughter now and we spent time with family and it was great. But at the same time I wish we would have firmed up our structure. So just having multiple streams of income, multiple suppliers, multiple everything in your business is better than not.

I'll whip through the rest of the six on there because I don't want to take too much time on that unless you guys want a deeper dive. So you have those two. The other one would be like growth potential or scalability. So like how much meat is left on the bones, how many different opportunities as far as like if you can identify prior to Your exit. Hey, you know what, there's all these different markets that we could go into geographically or niche wise or there's this other product that we have that's ready to go. And it's like they know that there's this upward trajectory. So growth potential. Or another example of that would be like if it's a retail business that is selling locally, but they have really good proprietary products, there's an opportunity to bolt on an E commerce component to that business that most offline businesses never think of, don't know how to do.

But.

And we're not E commerce guys necessarily. And I don't know how much you guys are, but it's like we could still help them do that or there's people that could help them do that. So there's that potential. Yeah, bolting on value like I call it more of like a cash flow teeter totter is another one. So like if you're, if your seasonality is just totally all off and if you, if your collection practices are really bad, I mean just give you an example. I have a dear friend in the family that they're in the meat business, wholesale, the supplier they sell to restaurants and they have their accounts receivable at any given time is well into the high six figures. And they just have a really incredible hard time collecting money. And so that constrains them because if that money's sitting out there and they're scared, they haven't set up their business to be rock solid so that they could say, look, you either pay or we're cutting you off. They're in a position of weakness where they can't do that. And so their cash flow is jacked. And there's a million other examples of how that can happen. Another top one, and this is one of the most remarkable ones, is having recurring revenue. That's really a popular topic in the digital marketing space with membership sites and SaaS, products and things like that, software as a service. But there's ways that you can incorporate recurring revenue into even some of the most bland of businesses. H Vac company or a restaurant, things that we kind of know that we would do in more of a digital standpoint. You could say that a restaurant could create some sort of membership that you pay and you get these VIP events so you get these different benefits. Or an H Vac company getting contracts so that you know or you are, so that you're an installer or a reviewer comes every quarter to make sure you're good. Because how many people forget to change their air filters and then have a blow up, you know, stuff like that. So recurring revenue, I mean like the private equity companies go bananas over that. Like there's companies that are in that, you know, 1 to 10 million dollar range that should sell for a 5 multiple. We have case studies. They're ridiculous. I'll tell you guys about that later. How your listeners can get access to. Some of these things are really cool. Selling for 38 times, 50 times multiple because they were super, super strong in recurring revenue or they were super strong in laser focusing on. Instead of selling a million things to like a small number of people, selling fewer things that are really good to more people, that's another way to do that.

Monopoly control, which is kind of another way to say like a unique selling proposition. You really have something that's unique. And again, in the offline business world.

It'S full of platitudes. A lot of times, you know, it's like, oh, we're the number one. We've been around since this time. You know, they don't have any intellectual property. They don't have any unique way of offering the differentiation. They don't, they're not doing their marketing any different. So any type of like, you know, like Warren Buffett said, create a mode around your business that's impenetrable. And again, as marketers, we sort of take this for granted. Like, yes, this is, this is what we need to have in our business. Most don't though. You can add something.

I was gonna say family owned. That's if I see that on one more sign.

Yeah, yeah.

It's always like, yeah, number one in San Diego. It's like, bullshit.

You did it. You really did it. Number one cup of coffee.

Good for you.

Good for you.

Congratulations.

Like really, like they're supposed to be free. That's not a benefit. Sure. You know, so. And then there's. There's just two more customer satisfaction that you guys are familiar with. Net promoter score at all.

Yeah.

Oh yeah.

It's like, has a lot to do with, you know, customer reputation. How? I mean like online reviews is a big part of that. Just like, you know, the repeat business, the amount of referrals that come through, just there's a lot of. And this is a lot of stuff that the potential buyers can see on the surface before they even do. A lot of due diligence is like, what's your reputation? There's a lot of tools out there that you can use for that to increase reputation management. Whether it be Google reviews or Facebook Reviews, Yelp, people that are promoting you, your pr. There's a lot of different things on that. And then just actually doing the Net promoter score test to see how do your customers really feel about you, and that's really valuable. And the last one is what they call hub and spoke.

Which is basically the E myth, the lack of dependence on the owner. Simply put, if the business requires you to be in it, then nobody wants to buy a job. It has to be able to run. And to do that, you. And there's books that are written all about that. I'm not going to go into a whole lot of detail, but creating operating procedures and processes. And again, going back to that same example, that family friend. One of the problems that they have is that the two brothers inherited their business, like, maybe 20 years ago from their dad. And they're not really. They don't have a lot of business skills. They just know what they know. But they work, you know, 60 to 80 hours a week. They're getting up at 3, 4 in the morning. They're just grinding, and they're like. And they're, you know, they're in their 50s. They're just. They're burning out, and it's like, they won't. They do not trust anybody. I'm like, even if you got somebody in to do what you're doing, and they did 80% as well, and you could.

Nope. Nobody can do it as good as me.

And that's a mindset thing, really. I mean, like, that whole thing is really mental.

Yeah.

Yeah. I think that's one of the. As far as entrepreneurs go, that's one of the hardest things to get over. I know for just in our own cases, there's still some things in our business that we haven't wanted to let go of. You know, I think that's like an ever. An ongoing struggle. Like, I'll learn something and I'll start doing it. Although this is really cool, I really don't want to. I don't want to pass this off. I'm doing it too well, you know, So I even still do that to this day. In a lot of things in our business, advertising being one of them. I still do most of the advertising stuff.

Yeah, but you.

How many people have you heard from that you respect. That said, once I got out of my own way, my business tripled. You know, we all hear that, and then we're like, oh, no, but me, it's different.

I don't believe it.

So what would you say from those eight things of the companies you've worked with, is there one thing that's just like overwhelmingly common? That's just like every business seems to have this issue. Of those eight sort of drivers, I.

Would say financial performance. Everyone just nobody really, when you're making money, you don't really pay attention to it unless you know your financials have to be defendable, Right? That's the number one thing people look at an acquirer will look at. And oftentimes, I mean, I'm sure you guys know Vinnie Fisher and companies that do stuff like what Fully Accountable does to keep the books in check and strategies to make sure your cash flow is proper. But a lot of traditional businesses just have no idea. I mean I'm a friend.

He runs his mom's spa and they're going out of business largely because their money, they have no idea there's cash here, there's on the books there. It's just depending on the business obviously. But most people don't pay. Most people in their personal lives don't pay attention to their money as much as they should. So financial performance is the number one thing acquirers look at. And usually the number one thing that is the sloppies.

I think they're all common. I mean, I think it's like maybe one's going to have one that sets out more than the other. But it's like that's why it doesn't require an incredible amount of. I mean like if you kind of look at, we go back to the long term thinking, right? If you're thinking, okay, well yeah, like I know that I'm going to exit at some point so you know, maybe in 10 years. Well, that's not too long of a time to actually start exit planning. You know, that's. People talk about business planning and market your marketing plan and your, your strategic growth plan. But it's like you need, every business owner needs to incorporate exit planning into it. And because it's not like doing these kind of things. This is like the qual, right. The quant is like things that generate revenue and it's like the fitness, this is like the diet, this is like the internal health of the business. This is like the structure, the quality of the infrastructure because there are marketing implications in here. The monopoly control usp. Like you could do all the greatest Facebook ads in the world and all these kind of things. But if you don't, if you're not clearly identifying what your unique value proposition, your selling proposition is, everything else is not going to work as well. If you, if you're trying to sell too many different things and you're not really focused, then that's a marketing element as well. So it's like when these two kind of things work together, it doesn't.

It.

This, this is not like, totally separate from growing revenues. Now you have to choose. I'm gonna grow revenues or I'm gonna build this like you can really legitimately. It's. It's just a holistic way. That's why the health analogy works so well. It's a holistic way to look at your business. And I don't care if you're an offline traditional business owner or a young whippersnapper, you know, E commerce, drop shipping kind of guy that's, you know, new to the. That game. Most entrepreneurs and small business are not. Not looking. Are not like viable business owners. They're not looking at it like professionals. You know what I mean? They're just. They're looking at, I want to grow my following. I want to kind of have influence and all that.

Well, I was just gonna say it really quick because that's the issue when you're looking at your own business. You're too close to it a lot of the time. So it's so difficult to spot these gaps. Whereas, like, if you looked at our business and we looked at yours, we'd probably spot completely different things.

Totally, 100%.

So I'm just curious, like, what is. What would be like, a first good awareness step for folks to look in the mirror for their own business and be like, ah, shit, didn't notice that one before?

Well, I think the awareness of the eight drivers in general, but specifically with what we coach, is that there's a sellability score. You can take a questionnaire, like, 38 questions about your business, with your revenues, with all of your indicators in your business, and they pump out a score that Dan had mentioned. But the most powerful part is it doesn't matter what we think or what you think or what the owner thinks about which one is most important to them or in general to the universe.

We can literally change that. We can toggle the score. Like, each driver, each of these eight drivers that we mentioned gets their own individual score. So there's a comprehensive score, but then you can drill down into each one. So a lot of times businesses will score zero on recurring revenue because they don't know what it is. They don't know how to apply it to their business. Maybe that's a big opportunity, but maybe if we toggle the 0 to 50, that would not have as big of an impact as toggling the customer satisfaction from 30 to 80. It's not really about our opinion or, like, we try to take emotion out of it. It's all about statistics and how these drivers affect the bottom line of any given business. And there's a system in place that we just follow and we implement with. With business owners. And it's awesome because they're like, I want to grow my company this much. And we start toggling those numbers, and we're like, okay, let's look at this one and move it over there. If they have a preference, we can show them how much it changes their business structure. So, you know, we take everything into consideration of what they would like to do, what we think they should do, but ultimately, it's really what. What drives value with the company, because that's. That's what.

Yeah, you can get a score. But one of the things I was gonna say real quick, too, is that, again, I don't care if it's somebody who's in their 20s, 50s, or 70s. In business, it's like unplanned life events happen. Whether you have an, God forbid, a sickness of something that takes you out of your business, or, you know, you have another child and you need to take some time off, or you just want to pursue other opportunities, or you just decide, like, you want to travel. And it's like, if you get to that point and then you decide, okay, now I need to, like, exit this business. It's too late. Yeah, you're gonna. I think the worst possible emotion that a human being can really experience. Tell me if you guys agree. Would be regret. And if you get to that point and you're like. Or you get on your deathbed and you're like, I wish I would have eaten better. I wish I would have done all these things, I think that's like, the equivalent of that in business is like, I get to the point. And again, like, there's a book that we have that we're gonna probably write that's gonna be called Ready or not. Exit will come because it really is that. And so if you're not. And you should be prepared 10 years at a time, ideally, but if not, at least a few years. Because you can either exit on your terms at your price for top dollar. And again, a lot of times, if you're not prepared, you're gonna get the. You're not gonna get the price you want. You're gonna get very little cash. They're gonna want to do A seller financing, they're gonna make you stay on for a few years. These things people don't think about. Or you're gonna like exit and just dissolve the company or God forbid you're gonna go bankrupt. And so you need to really kind of prepare ahead of time, but you need to know where you're starting. So something that we do have is. And it's also good to hear case studies of like companies that have done it extraordinarily well or done really, really good in one of these areas or more. And so if you guys want, we have it's a case study video. It's actually part of it is by us in the beginning. And John Warrilow goes through like five case studies. These companies that just remarkable like one's like a floral company that is normally a kind of a boring hard business to run. And they did some things differently, incorporating recurring revenue to have a multiple that was just extraordinary. And their lifetime value of their customer went up, I mean from like $50 to like $2,000 or something. It was crazy. A staffing company that kind of rent positioned itself not from administrative services, which is the company that gets the lowest multiples, but to more of a tech type company in the way that they built the software around that. Our mutual friend Roland Frazier talks a lot about that kind of repositioning. What your industry code is, what type of business are you really in can make all the difference. We got a bunch of cool case studies, some research results about what industries have different multiples, things like that. Then at the end of that, there's just an opportunity to, to get your score and you know, nothing to sell on that.

All right, how do we get that and how do listeners go check that out?

Yeah, we can go to. What's the, what's the link?

Biz owner. So it's biz. Bizonrefreedom.com hustle so biz owner freedom.com hustle yeah.

Do you think your process does it? Is there any businesses where your process you don't see it working?

No, that's a good question. So one thing that I would say, I think the general information and the concepts are something that any business owner really should know. However, I will say this. It isn't for everybody to implement at every time. Because there's a couple things. If you're kind of a person who's like a call like a craftsperson or a solopreneur and you literally like the business is you and you're like. If you guys think of like the Cash flow quadrant Kiyosaki. Like it's you and maybe you have then like you're never really going to sell your business. It's not really going to be optimized for value. You could still study the information and apply some things. And that's actually the majority of small business owners. I would say this is more applicable to somebody who is growth oriented, who's probably doing at least a half a million dollars in sales, at least been in business for at least three years. Because if not, you're not going to have a lot of things sort of the optimize. I'm just talking about actually implementing these things in your business. But again, the general knowledge would be great for anybody.

The reason I'm asking is I'm just trying to think of applications to our business and I know there's obviously a lot of things that apply, but you know, obviously everybody think, well, my business is different and our business, you know, is different, is different. It's not, it's so, so our, our main business model is we sell info products and we also monetize through affiliate marketing. And you know, our affiliate revenue is actually a bigger percentage of our income than our info product income. And just trying to think of like, if we were to try to set this business up for an exit, I don't even know what steps we would, we would kind of put in place because the info product side is sort of based on us and our personalities and people knowing our brand from our podcast and our videos and things like that. And then the affiliate side doesn't seem too sellable because I don't know if like a private equity company is out there looking for like an affiliate model business, you know what I mean? And, and these are probably all limiting beliefs that you can totally crush for me, but those are my current limiting beliefs.

No, I know. Well, in fact, I just heard, well, I've heard Dan Kennedy say this and I actually also just heard Gary Vee say this. You know, like, oh, but my business is different. And he's, and he's like, shut the fuck up. It's not, I'm not going to say that to you, but. Because sometimes it really is. It's like, you know, you guys have a couple different things at play. You have a media, like, I mean, your podcast is essentially a media property, right? Like, and you guys are the ones. And it's because of your dashing, charming personalities and that sort of thing that is, that is irreplaceable. Now, if you eventually had a thing where you Brought on other people that kind of represented the hustle and Flowchart, sort of like humor and that sort of thing.

Michael Hyatt and Dave Ramsey both did that, where they took it off of themselves and created a company as opposed to a brand.

Because, yeah, like, I mean, really the value for that type of business is. Is in your mean, you have a list, you have a customer list. It may not be the, like, the same type of opportunity as if you were to build a SaaS company, you know, that was like, you know, generating its revenue and had its own servicing and all that sort of thing, and it was its own entity. Or like, if you look at Digital Marketer and you look at, you know, and we've actually had this conversation with Ryan Dice, you know, like, what's the different. Where does Ryan Dice and Digital Marketer differentiate? Like, is right. Ryan Dice is not sellable. Neilpatel.com is not sellable necessarily. But Digital Marketer is highly sellable. And Neil Patel's growth sprout or whatever his companies are, those companies are sellable. And so I think for you guys, again, there's things you can do to increase your financial performance, your audit, your numbers. You're probably already doing a lot of that sort of thing. You have to kind of just look at. Of all the. And I know you guys are unique in that. You don't. As far as I know, and I remember, you really don't sell information products. You kind of have, like, an aversion to that. It's really selling tools and maybe some coaching and things, and that's definitely unique. So you have a unique selling proposition in that. In that there's a lot of people in the market that greatly appreciate that sort of thing. And you're kind of pushing against the current a little bit.

I'm sure you have recurring revenue. Yeah, it's tough. I mean, it would be a little bit different, but I think that depending on what part of the business you would ultimately want to sell, if not the whole thing, there's always a way to do it and to kind of incorporate that and build up the culture of your. Your brand.

Right.

And I think our philosophy has kind of been, you know, we've got our. Our evergreen profits brand, Hustle and Flowchart or the content we put out, we don't ever see selling that. That's just kind of our educational resource that we put out there for free. It's us, it's our personalities. But underneath that brand, we can create other businesses that we set up to sell you know, we have Homebrew Academy, which is one of the part. The businesses we partner with Brad. And that one, the day we bought it, we were thinking about how we were going to sell it.

See, we are the anomaly. We were thinking from day one, we're gonna sell this.

Yeah, we're like the smart. The smart little sub segment. And that's. That's why I resonated with Brad Rep from the beginning, and you guys as well. But it's like. Yeah, no, you're exactly right. I think. I think the way to look at it is to say you have a platform and you don't necessarily, like, ever really need or want to. I mean, maybe eventually want to retire, you want to do something else or change the name of the podcast to go a different direction or whatever, things like that, but use the influence and use the leverage and use the following and use the attention that you're grabbing to be a feeder for these other things. And then that in itself will be a unique selling proposition that will be a monopoly play. To say this business is uniquely fueled by the fact that we have.

A.

Million downloads a month on itunes, or we have a million people on Facebook that follow us, and from a media property, you can go a million different directions. So I think that's probably part of it. But, yeah, I mean, you know, you guys are welcome to get your score as well, too, and see what.

See what we will. No, that's interesting. And that's. You nailed it, too, because that was actually a shift of ours. Like, I think it was actually after Perry's event, we're like, we're a freaking media company. Like, we are building a media platform. And, you know, that involves all sorts of platforms out there. Social media, our blog, podcast, whatever.

Well, yeah.

List.

Essentially, what we've built for ourselves is a megaphone, right? We've built a megaphone so that when we have other products that we want to promote, we've created this megaphone to essentially spread any product that we now get involved with. You know, you look at someone like. Like a Tim Ferriss, right? He can. He can go and record a podcast episode, and any product he mentions it on that prod on that podcast sells out on Amazon the day that podcast goes live, right? I don't think Tim Ferriss is ever going to give up the Tim Ferriss podcast because it's too big of a megaphone for anything else he wants to do in his business and life.

That's. But that's. That's where we're at in 2019. It's like. It's like the decentralization, the democratization, if you want to call that of media. The fact that, again, somebody like Tim Ferriss or Joe Rogan or Adam Carolla, these guys are like some of these guys that are leaving, like, say, Fox News, because they want, like a Glenn Beck, like, they have their own platforms now. Whether you like them or not doesn't matter, but they have a lot more control over different things, and attention is what we're really trading.

Let me. Let me ask you guys a question. You said you're different. Does that suggest that you don't think you're sellable as a media brand?

No. I mean, I think certain aspects of our business would be hard to sell. Like, it would be hard to sell the. You know, we've got this business that's like the. We call it the info side of the business. We do have a course that we do sell. We have one course that we sell. We've got affiliate products that we promote, and we have the podcast that's kind of like the encompassing info business that would be hard to envision selling it because it is so tied to our personalities and our faces and that kind of thing.

Yeah. So I think that then that ultimately goes back to the difference between a strategic purchase and a financial purchase. Right. It's a strategic purchase would be a company, a brand bigger than you guys that have the same market that just swallow you up because they want your audience, because you've built such a raving audience, and they can bring you on as a guest speaker. You can phase out of that by a bigger company taking your platform that you've built. So there's value, and there is. It would be worth it to look at all these factors as it pertains to that. Even the piece of your business that you think is unsellable, possibly being sellable in the way that we mean, you're selling your megaphone. Right. You guys are awesome, and Frank Hearn is awesome, and any Ryan Dice, any of these guys are awesome. But they've created a tribe, and every tribe is sellable to another company that wants that tribe and just will absorb it. Right. It happens. These acquisitions happen all the time. So it might not be the traditional financial purchase of, you know, they're buying Hustle and Flowchart because you have so much growth potential in the microphone business. But, like, it's. It's. You've built this. This character of this. This. This crowd of people that are amazing, that are hungry for knowledge, that are really wanting to be entrepreneurial. And we want a hundred thousand more of those people. So we're gonna buy them from you. Like, that's. That's the sort of stuff. And how do you make that most valuable? So everything is sellable. It's just. It's just creating value for it.

That actually reminded me of something that Roland Frazier told us in a Mastermind once. He was like, you can either. You can either build it or you gotta buy it. You know, if you. And we were talking about software specifically, but that goes with anything. Like what you're saying here is, yeah, a company that might roll up another, like, say, swallow us, they want to buy it. They don't want to spend the time to actually build it from.

The funny thing is, we literally did that with Homebrew Academy. We went to Homebrew Academy. None of us are really that knowledgeable in the Homebrew space, but they had a lot of traffic going to their website. They had a large mailing list. The mailing list was active. They were making pretty consistent sales. And it was actually built around one dude. This one guy was running the site. It was him, his face and all the videos, his. He wrote most of the content on the site. And we still bought it because we wanted that list. We wanted that following. We wanted. You know, we basically bought all the. We bought the whole business, but we were basically going after the followers and the users because we knew other places in the brewing beer world that we can sort of tie things together that he wasn't yet tying together.

I mean, once the revenues are there, like, it's not hard to find somebody who wants to be like, the face or even to run, you know, like having certain skill sets. There's probably millions of people who are into brewing across the world, at least hundreds of thousands, whatever. And so somebody.

It would be.

It'd be pretty easy to find it. But again, I think, like, for you, for you guys, the same thing for us. I mean, if you're looking at this and thinking, okay, like, this is really good knowledge to have, and I would agree that it is. That's why we're doing it, is that the platform that you have gives you relationships with all these people who have businesses who maybe you could either could be part of your farm system, that you could either buy from them or you could partner with them. And then once you know this knowledge, you then you apply it. The same thing. Why we're working directly with Carl Allen on that as well. It's like, you know, he's Got people that are coming in, learning how to buy businesses, no money down. And he has. Now he has knowledge about how to grow businesses, but not as much as we do from this data standpoint, these kind of things. So, like, we can help those people that are buying those businesses grow them. And he's really, really awesome at negotiating, and he was working for big companies and all that, so. And the other thing, too, is. And this might apply to you, just throwing it out there. One of the other brands that we have that we're growing just very organically and just kind of to help our friends is called the aspiring entrepreneur. Because there's a lot of people out there that want to get out of their jobs and they want to do something different, but not all of them are really equipped or have the stomach or the skills to be, you know, the founder, necessarily. They just want something different. And so you guys probably have thousands of these people, respectively, throughout your audience. And it's like somewhere in there, there's somebody who worked at a brewery as a general manager, and he would love to get out of that job and be your general manager with equity and work for an entrepreneurial company, because he hates the guy. And so when you're kind of like helping these aspiring entrepreneurs, knowing that a big percentage of them would rather just say, oh, we're looking for a person right now to run this business that we just bought. You put that person in. You use the drive, you optimize the eight drivers, you grow the business. You guys are. It doesn't have to be brewing. It could be you bought a business that, you know, sells greeting cards. I mean, it doesn't really matter. It could be something that's obscure, like something industrial. Hey, has anybody ever run a, you know, a rubber glove manufacturing plant? Yes, me. Okay, well, I know how to do that. You know what I mean? So you guys have those people in your network, and if you place them in the right place to run, and then now you have the skills. You have the skills to grow revenues, and then you have the knowledge to increase the valuation. I mean, that's kind of really all you need.

That's. That's the value of knowing all the eight drivers. And just this stuff in general, man, you just, like, have this toolbox to work with and the network. And the network. Yeah. It's like you combine those two things, you can do whatever the hell you want.

Yep.

And like I said, I just think it's like nobody's really talking about this right now, and I think this is going to Be valuable because going into whether we have a recession that's coming up soon, in the next year or two or later, eventually cycles happen. And it's like, if you're. If you're in a position that you know how to acquire businesses, that you know how to add value, then you're as immune as you ever could be, you know? And even when it comes to traffic, Neil Patel is saying, you know, he. I'm not. I'm not paying media prop. I'm not paying media spend anymore. I'm buying websites that have traffic. I'm acquiring, like, existing traffic from companies.

Yeah, one of the. My mentors, one of the guys, I, I worked with him for quite a while, a guy named Travis Sago, he, he. He really has that mentality about, like, why are people out there spending so much money on Facebook ads and things like that, trying to grow their list. I can go find you a list tomorrow that has 20,000 people on it in your niche that that person's not even mailing it. They're not even using that list. Why not just go buy that list and, and start there, you know, and that was definitely a big mindset shift for me because we still, to this day spend a lot of money on advertising, but it's probably not the smartest route. We could probably find. Sort of guaranteed wins by buying other lists and buying other businesses.

It's so fun split testing all day long, isn't it?

We love it.

Thanks for reminding me about that because we got to look into that as well. So, yeah, that's all we're going to say, Joe.

So I have one last question. Did you have something on this?

I was just going to say it goes back to the whole buy it or, you know, buy it yourself and you leverage someone else or actually grow this Facebook thing by yourself. Hustle and grind probably fail a lot.

We literally just interviewed Los Silva. I don't know if you know Los, but we were just talking to him, and one of his strategies is he's going around and buying up Instagram accounts that already have big followers, that are already kind of influencer accounts. He's buying those up and then basically giving himself a bigger megaphone by going and buying up a whole bunch of Instagram accounts that have big followings that are no longer very active.

Same idea. Yeah.

Yeah. In fact, we met somebody not that long ago who's like, oh, my wife has a Fitness channel on YouTube and we don't really do anything with it. We're thinking of shutting it down. We're like well what, you know, what's the thing? We look and it's like 10 million views on like each video and it's like, you know, 5 million subscribers. We're like really? Let's, let's figure that out. And so there's more of those out there than. And that's a different type of acquisition, a different type of thing to add value to. But those can all be rolled up into a regular business.

That's actually one of the drivers that's part of growth potential you can grow by acquisition. A lot of companies never think about that. The rabbit hole goes deep on all these. But it's just like paying attention, thinking, starting with the end in mind, having long term thinking, playing the long game and having the benefits along the way of a company that's a well oiled machine, that's stable, that's viable, that's bankable. And by the way, if you get to a point where you're going to be trying to raise capital through angel investors or venture capital or anything like that, the higher valuation you have, the lower amount of equity you have to give away. So there's a lot of people that, that's the main motivation for this kind of thing for sure.

So when you run people through this process and you get them a score and then do you know that they're ready to sell by essentially optimizing these companies running them through that test again and then once they get like a certain score then you're like okay, now you're ready for the exit or you know, how would somebody determine when okay, now I feel ready?

Well that's more of a personal issue on their side of it, like a life event type of thing. But I would say having the company ready to be sold, that's part of it. So like if you the scale on this questionnaire and the scoring model is out of 100, the average business out of these 40,000 that have run through that's below 10 million in revenue is about a 59 out of 100. And the ones that go on to sell out of that batch that are usually sell for a multiple about three and a half times earnings. But companies that score above 90, whether they started there or they got there, sell for double like 7.1. They get twice the amount of offers and they sell for twice as much. Now this is just like the normal standard across the board. There's always anomalies like some of these companies in these case studies we're sharing where it's like it wasn't a 7. It was like a 20x. It was ridiculous because they were so powerful. And one of the drivers, the recurring revenue was so amazing that the other company acquirer said, I just want this. And that's one other good point to bring up is that you always want to have your company to a point where like one of the highest, they say one of the highest forms of flattery is imitation or different types of things that go with that. But it's like the best type of compliment a business, or if you want to call it flattery, is getting unsolicited offers. Now, you may not start getting the offers that you want to get, but if you, unlike real estate, if you start listing your business for sale, you're already right out of the gates marked as a motivated seller and you already are from a position of non power. You want to have your business looking so amazing and you want to be going to trade shows and conferences and doing different things where people are like, that is such an amazing business. I want to buy it from you. And you're playing kind of the reluctant owner now. You have all the power. So if you can get your business to be so attractive and so valuable to get unsolicited offers. And then eventually when you're ready to go, you're like, oh, okay, fine. You know, you hear this all the time with these big tech companies. Mark, Mark Zuckerberg, you know, turned down a million dollars back in 2006 or seven or whatever. And you know, he's sure, he's glad he did. A lot of companies, and then there's other ones that didn't and they should have. So that's another part of it is you want to, you want to be ready at all times.

So Snapchat should have sold when they got a billion dollar offer.

And Meerkat too, probably.

Meerkat too, yeah. Because Instagram just went and said, all right, Snapchat, screw you, we're just building the same thing.

Building our own stuff.

Yeah. So yeah, there's, there's. And again, you know, it depends if you're talking about, you know, a traditional roofing company and, you know, Albuquerque, New Mexico, or some, you know, snazzy software company in Silicon Valley or a chiropractor in New York City. I mean, a lot of the same things apply, but there's also a number of other variables as well. But sure, yeah.

What was the URL? One more time just for listeners.

Bizownerfreedom.com hustle.

Cool. It'll be in the show notes as well.

Now Just kind of wrapping up. Are there any books that you find yourself referring to often or recommending to others often?

Yeah.

Well, I would say, again, we're kind of part of the value builder system with John Warlow and tied into that. So I'd say Built to Sell is great. It's a shorter book that's written like a story format that really kind of spells it out. He also wrote another book called the Automatic Customer, which is about recurring revenue. E Myth is always good to go back and forth, and all the different E Myth variations, the E Myth Mastery, Myth Contractor, depending on what career you're in.

And any book that has to do with differentiating, you know, differentiate or Die Trout and Elreise, Purple Cow, stuff like that. Kind of the classics. And then Star Principle.

Have you read Star Principle?

I have the audiobook. Yeah. So Star Principle beating. Yeah. Category.

There's a book called Notice he didn't say he did read it. He has the audiobook.

There's a book called Play Bigger that's all about Category Kings, which is a really fascinating reading.

I actually just got that one on Audible, but have not yet listened to that one yet.

Appreciate your honesty.

Yes, we all have that. Is it still considered, depending where you're at, I would say, like, read everything by Jay Abraham by optimizing every part of your business. Yeah, that's a great start. And then all the stuff by.

Michael. How do you pronounce his name? Yeah, yep. The profit first. And, you know, his just books on getting your business to run by itself and Clockwork. He's got some really good stuff, too.

Cool, man. No, that's all really good stuff. And I'm really excited to go see these case studies personally, so listeners definitely go over there.

Well, if you guys are down, I'd be down to do a round two at some point because one of the topics that I thought would be kind of an interesting discussion would be kind of the. The partnership dynamic, because you guys are rare successful partnership, and we're a rare successful partnership. And most partnerships don't work out long.

Brothers, even. You're not even brothers, are you?

No, we act like it, though.

We basically are, though.

I mean, we don't have brothers, so we just call each other a brother.

They have the same birthmark on their left butt cheek, though.

And I'm the younger brother who is supposed to be telling Dan what to do, which you could imagine how well that goes most of the time.

Well, yeah, not only, like, partners in, like, a pure partnership thing, but like we mentioned earlier, the sort of the warnings and like the pros and cons and the kind of the what to look for when doing strategic partnerships that are outside of that, such as, like, okay, you guys are a partnership and what you do and when you do, you're doing one thing with. Brad's a good friend, but Brad's brought into that. So that's a different type of thing. Or if you're partnering with another company and like, you know, you're doing a rev share or a profit sharing thing, that would be another example. And there's certain things because, I mean, the bottom line is like, I think we were naive and like, oh, we don't have to have a lot of agreements. We don't gotta have all this stuff. And it's like, oh, my gosh. Like, no, you do. You really have to think through, like, the worst case scenario and don't make assumptions about this person's gonna honor things. Cause there's a lot of people out there that are at best, maybe just totally lazy and apathetic and at worst, complete scam artist.

Yeah.

And I honestly think that's a whole nother podcast episode that we can dive into on that topic of partnership. So we can open that loop now and in a future episode, we'll close it for people.

We'll make it.

I love it.

Sure.

We'll have a pink microphone by then.

You better. Matt hates it, but I love it.

Anywhere else you want people to go or is that the best place?

No, I think that's good for now and then. Yeah, anybody can reach us. I mean, we're on. You know, you can find us Dan Kalis, Joe Kalis on LinkedIn, Facebook, anywhere like that where we're pretty accessible. And this is. Yeah, this is kind of our thing. And you know, we. We are also. We also, you know, we also able to help businesses on the marketing side too, once we kind of help them really kind of fix the foundation of that. So we're doing a lot of content and trainings and stuff on that as well. Because again, like, just especially in the traditional business world, so many of those businesses are just getting, you know, amateur help at best, and they're not getting anywhere. And I think at this, what could potentially happen with the economy, they need to be better positioned. So, yeah, we're just trying to do our part. And yeah, man, we look forward to talking with you guys about more cool stuff and seeing you in San Diego as well.

Of course. We'll make it happen. Well, thanks for your time, guys. Have a good one out there. See you.

Absolutely.

All right. Thank you. And I hope you just enjoyed this episode you just listened to. Now, right now, before we sign off, I have a few things I would love for you to do. So the very first thing is to go find our guest on Facebook and tell them that you loved their episode with us. That's going to help them just feel good about themselves, but also it's going to spread the word a little bit more for us. Go find them on Facebook. Everybody's on Facebook. And go say that you love their episode and maybe one cool thing that you learn there. The second thing is to go to itunes and subscribe to our podcast. Just look up Hustle and Flowchart and hit the subscribe button. And the very last thing, the third thing, is to leave us a review on itunes or wherever you're listening to this podcast and help us spread the word more. That's how more people are going to get this awesome knowledge, this, this cool podcast training and a whole bunch of other cool, free training that we give out@evergreenprofits.com so that's about it. Go find them on Facebook, go subscribe on itunes and leave us a review. You would be amazing if you did that, but you're always amazing. So thanks for listening and we'll catch you in the next episode.

You're awesome.