Mike Minutes Mastermind 10/28/2024

Hello, Guess the nation. Hope you're doing good. Happy Monday. Let's rock and roll.

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First one up is from Ricardo from Alexandria. I've never cared for politics up until owning a business. What are some resources to understand how different policies will impact your business and other aspects in life? Also, to what extent can an election really impact consumer purchasing power slash emotional spend?

Yeah, like, leading up to any election.

The market will move a little bit in terms of, like, stocks, real estate, interest rates, etc. Sometimes as people expect who's going to get in. And so I think we've seen that over the past, like, three to four weeks, kind of a melt up in the market in expectation of the next administration. And so long term, though, there's really not a lot of from an economic standpoint, there's really not a lot of evidence on either side as to who performs better historically for the economy. Now, how you measure the economy is also different. Like, do you measure it by stock market performance? Do you measure it by gdp.

Gross domestic product?

Do you measure it by inflation rate? Do you measure it by the unemployment rate? So.

In terms of, like, what we can do as business owners, like, it's a matter of, like, hey, you vote, and then wherever things fall, you just kind of roll with the punches and figure out how to win. And so I do think it can affect, like, the purchasing power and the like macroeconomics mostly. If in my opinion, my very limited opinion, if they do something around taxes or war, if they change the tax code, that can really, really change the way that companies are spending money. It can change a lot of spending power. And then if they go to war, it moves interest rates a lot. It moves national debt, which then usually moves interest rates. So those are some of the things I look at in terms of understanding how different policies will impact your business. You know, ask yourself, like, okay, so if interest rates go up, how does that impact me? Well, I'm probably less likely to go buy another truck because if I could get, get a truck for 4 or 5% interest, but now it's 12% interest, I probably am not buying the truck if I have inflation and the truck is $30,000 instead of $20,000 less likely to get the truck. So, you know, inflation and interest rates are probably the two biggest things that will impact most business owners because it impacts growth all. Also, inflation will affect mostly how much you need to raise prices. Like, the reason we've all been on this Tear of raising prices is because we've all been enduring.

4 to 9% interest rates over the past few years. That, that is historically not, you know, common. But I think it's going to be required in order for us to deal with our national debt. And so I do fully anticipate for inflation to be running hot over the next, you know, in the future.

Just my opinion, you've seen even, like, with the interest rates, they're trying to bring them down and inflation is getting hot again, like, so I think they have to have inflation hot in order to deal with the debt. The only way to be able to deal with national debt at the rates we have is to either a, have massive fiduciary responsibility and cutting costs, which will not happen because it's unpopular politically.

No one's going to cut Social Security or any sort of benefits. And so the alternative is you outgrow it. So the way to outgrow the debt is run inflation really, really hot.

Drive interest rates low.

And you try to grow the economy fast enough to stay up with the debt. And so that's the rationale. Now, is that really risky? And like, will we eventually have to pay the piper? Probably yes. If you look at the exponential growth of the national debt, it doesn't take an economist to realize this is not a sustainable path. And so.

To like, get to a balanced budget will basically be impossible. If you look at the way that they have the budget set up now, it's basically impossible. And so the only way to really, to really actually deal with that debt without.

Having wishful thinking is for a politician to say, hey, we're going to outgrow the debt, which means we're going to run really hot inflation. Interest rates are going to get cut. We're going to grow massively. And if that happens, the reason owning a business is a good thing is because you can raise prices with inflation. So.

Yeah.

All right, let's keep moving along. Next question is from Mr. Anonymous. Some cohesion regarding truck colors would be nice. The color swatch I just received at Kearney is an exact match the OG Augusta yellow color and also match Nick's car paint with the old color. Yeah, it's the same one. The new Augusta gold is significantly different. Additionally, Mako couldn't paint my color from hex code. They needed a specific paint code and ended up being a guest which was close to the hex code. So check, check that page again. I know that the media team just add a whole bunch of like, color swatches and things, but I Did mention to Zach.

There are several different shades of yellow and the one for the full wrap is off of is different, slightly different than the actual paint color swatch. So we'll get that changed slightly. But yeah like even like what you're putting on vinyl versus what paint color is that's going to be slightly different. So there are several different shades of yellow in the kind of gradient of yellow and green and black. So I would just match as closely to that, that paint swatch as possible. That being said, the part that is off right now is really the, the vinyl in terms of Mako they should be able like they we have the Mako paint colors, the actual printout. But like every single Mako even has different software and so the Mako codes feel free to reach out to the media team on the stuff. They have a lot more context. So mediagustalongasservices.com but like they just add a bunch of codes up there, not just hex codes. Hex codes are typically not going to be used for paint.

So whether it be pantone colors etc, there's like CMYK colors, they're rgb, RGB something colors. So reach out to them, they can hook you up if needs be. But really matching that yellow on the paint swatches is the most accurate paint color. And then every single like software or machine at these different paint jobs just seems to be different. So we've got specific ones where they print out the whole thing. It gives like a specific our formula. But then every single like formulaic software seems to be different even between makos. So I don't know what to say there. We've always, always been like hey, match the color on the swatch. It is the original, it is the color we always use. The one thing that we are going to make sure is standardized a little more is on the full wraps that that full wrap color is closer to the paint color, the original paint color. So like the original paint color is like a deeper yellow. It's not a bright like fluorescent layer. It's not like this, it's not this color. So yeah. Number three, Ricardo from Alexandria. I've been approached by a trustworthy old friend who has been who's built his own business and while talking offered to partner up for future locations. What do you think of a funding only partner for multi location growth? This person would hold some equity in the business thinking no more than 15%. Their only contribution is the money necessary to start locations anywhere from 70 to 100k per location. They will not contribute in any Other way to the business labor, GM truck equipment operations would still need to be fulfilled by you or your gm. The they are essentially a bank you draw from when starting a location. Instead of interest, they take a percentage of ownership. This could potentially save one or two years in gathering the money necessary for the next location after reaching 500k at that location. Do you think this would can work long term or is equity given up not worth the upfront money in this case? If not, what would be a way I can utilize this person so it's fair for them? Like look, if they're willing to give you the money for only 15% equity, that's a slam dunk deal. I'd be taking that. Obviously make sure you know you're going to get a legal contract set up. But like if they're not, if they're not going to have any say in the business and you're, they're only getting 15%.

You only have to get 15% of your upside and they are basically taking all the downside. So like if this deal is legit and they actually are going to give you the funding for only 15%, I'd be all over this. I'd be willing to give up 30% of a deal probably if someone was like, hey, I will give you all of the money, I just want 30% and you make all the decisions, I'd be down for that deal 100%. They're taking all the downside now. I would ensure that your first location is past the $500,000 marker and you're putting it in profit mode. I would not jump into this. When you have your first location on its growth trajectory to 500,000, I would get to 500,000. I'd throw your first location into profit mode. Maybe in that next year that location is 550 or 600 after raising prices. But I wouldn't do, I would not do, you know, if you're at 250 or 300, I would not do a second location like this because then you are playing with someone else's money and it can get really, really bad. So I would get your first location to the point where you do throw it into profit mode. You get a general manager running it and then you go take this person's money and go start another one and do the exact same thing. And you'd be able to do it in maybe a year, year and a half instead of two or three years to your point, if you didn't have that capital. And so the fact that they're Willing. Willing to take 15 is pretty unheard of. Like, they must like you. So I would do this deal 100%. Just make sure that in the agreement if something bad happens, that they can take the assets of the company. Right. So like the trucks. That's very fair for them to take the trucks or the mowers, but don't let them come after you personally. And then secondly, I would be making sure that they have no operational control or voting power whatsoever in the business. It sounds like that's what they've already agreed to. So it's like, look, you get 15% of the upside for risking your capital. And so I would be fine with this. And you know, make sure you nail down what distributable cash looks like, because that's what they're going to want in years three and beyond is some sort of distributable cash that makes $80,000 a year in distributable CA. They're making extra 10 grand. That's when they start to actually make some return on their money. And then their long term payout is if you build a chain of five or 10 and then sell it down the road for several million, then they make a good chunk. Right. So.

Yeah, if someone's willing to do that, Ricardo, I would be definitely courting them and making sure you keep them in your back pocket and getting ready so that when you hit 500,000 in annual revenue at your location and you get a general manager and you put it into profit mode, then that you've kept them warm. I wouldn't do it quite yet if I was you, but when the time comes, this deal, if it stands as is as stated here, that's a pretty phenomenal offer. They must know you. Oh yeah, it looked like it was old friend. So it's a great deal. I would take that deal if I was you. Once you've proven it one time, once you've got to 500,000, you've documented that process and then you can go to them confidently knowing you're not going to waste their money and like, personally, if you like. For me, the amount of stress that I have when I have someone else's money is 10 times more than my own money. And so like, that's why I don't take anyone else's capital.

Because it's stressful enough running your own business, let alone using someone else's money that's depending on you, believes in you, etc. So that'd just be my recommendation. All right, Shorter Mike minutes Mastermind today, no marathon did send everyone an email on Saturday. So if you didn't get that mic onto your spam, if you, if you're like me and you set up a filter that set for emails with the word unsubscribe to go to your archive, go check your archive box, Send an email about the updated five stages of growth. There's really not a huge amount of changes. Besides the fact that stage four is no longer 500 to 1,000, 500,000 to a million, it is 500,000 to 800,000.

And which lines up with all the other aspects of what we've been talking about recently and terms of growing 800,000. And then we allow for stage five for someone to do multiple locations or to grow their one location to 1.5 million. That's totally fine. And it's not matter of we allow. It's more a matter of inside the models that we describe. And so, yeah, check out that email. The five Stage of Growth is the document that we go through at the very beginning of training and we read through. And so that revised document is now in the Facebook group. It's going to be on the academy later today inside of the Google Drive. And so, yeah, make sure you check the email. There's a bunch of different updates in there, so feel free to check those out. All right, everyone, have a fantastic week. We will stay in touch. We'll see you tomorrow. Take care.