How To Create A Business You Won't Regret (Or Send You To The Hospital)

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You can build a wildly successful business and completely destroy your health, your relationships, and your sense of self all in the process. Now I'm smiling because I've experienced this myself and I've watched it happen to some of my closest friends. I used to work 12-hour days for 10 years straight. I did it. And what happens is, is that the exhaustion accumulates slowly and you don't really realize it. You don't really notice it until one day you wake up and you realize, I haven't felt rested in years. And here's what I know after 20 years of building businesses. The goal is not just to build something that makes you money. The goal is to build something that you're proud of that doesn't cost you everything else in the process. Because money is great. And I'll tell you, money solves a lot of problems. But if you're rich but don't have anybody to spend the money on, you have nobody to enjoy it with. You have no health to enjoy it with. It's really useless. You want to build a business that funds a life that you want, not a life that you just end up with because of all the collateral damage that you experience through building the business. Today, I'm going to give you a 4-step framework for building exactly that— a business you will not regret. Welcome back to The $100 MBA Show. I'm your host, Omar Zenhom, where I deliver practical business lessons 3 times a week Monday, Wednesday, and Friday to help you start, grow, and scale your business. If this show has helped in any way, it would be amazing if you could drop us a quick review on whatever app you're using to listen to this podcast right now. It helps me and my team bring new episodes every week, and more importantly, more entrepreneurs will be able to discover our podcast so you can help someone else start their journey. Thanks so much. Now, listen, I'm happy with a lot of decisions I made in life, but if I can have a few do-overs, I would definitely do things differently. So I'm teaching you out of experience. I'm giving you a framework that I've built so that when I was able to restart my life after selling my business, Webinar Ninja, that I was a little bit more cautious about the type of business that I built for myself so I don't build a monster that destroys everything else outside the business. My life, my relationships, and everything I mentioned. So let's get into it so that you have that business that you absolutely love. Step 1 is to choose a business model with the right economics. Yes, we're going to start with money. And there's a good reason for this, because I made this mistake several times in my first businesses when I was starting out as a young entrepreneur. And you can avoid a lot of years that it cost me and a lot of unnecessary stress. Okay, build a business with the right economics, because the wrong economics is going to make your life like hell. It's going to make things so hard for you, and you're going to have to sacrifice more than you have to or more than you should in your business. The web design agency that I started when I left my teaching job was a good business. It generated real revenue, but every dollar required my direct time and direct skill, which means I was still trading time for money. I had no leverage, had no recurring revenue, I had no product that was working for me and selling for me while I slept, which meant I was always one slow month away from complete disaster. This is a lot of financial pressure on yourself when you have a business that has this kind of model where it doesn't really work for you. And financial pressure is one of the fastest paths to burnout. And by the way, it's the number one reason for divorce. So it's going to affect you in so many ways that you may not even imagine. The business model you choose determines the quality of the life that you're going to have. I know this sounds like a little extreme, but it is true. I'm telling you right now, if you are under a lot of financial pressure, it's going to affect so many areas of your life, your health, your relationships, your relationship with your colleagues at work. You're going to be short, you're going to be snappy. It's not going to be pretty. When you choose a model with a high margin, like a high margin business, like a service-based business, a digital products business, subscription software, you keep most of what you make, which allows you to have some breathing room. On the other hand, a low margin business like physical product, retail, manufacturing, anything that requires significant inventory or overhead, they require an enormous amount of revenue, a lot of sales, a lot of customers to generate any kind of profit that is worth your effort and your time. It's a very simple math. If, say, for example, you have a product and you have 100 customers And for every time you sell a product, you make $10, then you're going to make $1,000, right? 10 times $100 is $1,000. But say, for example, you have 100 customers and you're selling a product that makes you $300 for each product. Okay. Huge margin, right? You're making, you're keeping a lot of money every time you get a customer. And this has a lot to do with price point, a lot of other things, but the difference is humongous. You're making $30,000. So that is a completely different business life existence. And this is what I mean by margins, how much money you keep at the end of every month. And listen, the funny thing is that you get to choose. You get to choose at the start what kind of business and what kind of margins you want to have. This is the beauty of business, is what I love about business. You get to create your own world. You create the rules, you create your own script. And the flip side of that is that if you choose wrong, you're going to have to suffer the consequences because you set it up that way. You're the one who set up that business to give you those headaches that you actually maybe didn't intend to do it, but the margins and the type of business model you choose will make all the difference. So let me make this easy for you. Let me give you some questions to ask yourself so that you can know if your business has the right margins, it has the right model. Ask yourself before you commit to any business model, what are the margins? And I recommend any business that gets you at least 50% margins. This is going to give you enough breathing room because there's a lot of expenses you're not seeing yet when you're starting out your business. There's taxes, there's fees, there's insurance, stuff that just comes out of nowhere. And you need to make sure you have enough margin to cover any kind of that, plus emergencies. Next, is there recurring revenue or do I have to start from zero every single month? Meaning when you acquire a customer— when I say acquire means when you get a customer and a customer signs up with you, Do they pay you every single month or every single year, or do they just pay once and that's it? And then in order for you to make more money, you need to get another customer. The next question is, does this business require me to be present for every dollar it makes? Meaning, do I make money when I'm not around? Is there ways for me to leverage my time and leverage my effort and leverage my skills to make more money? If not, then you have a low leverage business. Very hard for you to clone yourself, right? We don't have that ability yet. So if it requires you to be there, that's a problem. In essence, you are becoming self-employed rather than building a business. And a business is an asset that you leverage to help make you money. So the answers to those questions are going to tell you whether the business that you're building can fund the life that you want to have, the one that you want to design, or whether it's gonna gradually just consume your whole life because you've built this monster. So if you want to implement this step, map the economics of your current or planned business. What percentage of the revenue are you keeping? That's your margin. Is there any recurring revenue? And what happens to that revenue if you take a few weeks off? Does it stop coming in? Just a quick note when it comes to the importance of having recurring revenue. When we were running our software company, Webinar Ninja, and we were approached by buyers, one of the pieces of information they wanted to know is what's our CAC. CAC is an acronym, C-A-C, the cost to acquire a customer. Now, what's that mean? Well, how much does it cost me to acquire this customer? How much do I have to pay to get a customer? So if I ran an ad, let's say for example that ad is cost me $100, and every time I run this ad I get 10 customers, that means it cost me $10 to acquire a customer because I got 10 customers times $10 is $100, right? Why is this important? Because if the difference of the CAC and how much money I get from this customer is a big difference, that means this is a very valuable business. Why? Because let's say, for example, my customer pays me $100 once. That means the difference between the CAC, $10, and $100 is $90. So every time I run this ad, I'm going to make $90 per customer from this ad. Okay, now let's change it up a little bit. Let's say, for example, this customer pays me not $100, but they pay me $100 a month, and the average customer stays for 10 months. So what it means is that every time I run this ad, I don't make $90, I make $1,000 minus $10, which is $990. So that is a really valuable system, a really valuable business, because the buyer can just buy this company and just dump a bunch of money on these ads and make more and more customers. You have basically a flywheel of business. So recurring customers is incredibly valuable, not only for you to make more money, but also for the value of the business when one day you sell it.

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This means, for example, If you have an emergency, you are on holiday, you have to go and see your parents because they're not doing well, whatever it might be, and you're not in the business, if there's no system for somebody to follow a plan of what you do every day, that means your business stops. That means you don't make any money. And this is why what we call SOPs, standard operating procedures, a documentation, a playbook of all your systems of how you run your business is so important. Because you want to be able to have anybody in your business to just follow the steps to do any task. Now, they're not hired to do this task specifically, but if they needed to, they have a guide. They have a way to figure out how to do something. So for example, let's say part of your business is to publish a blog post once a week and you would have a document that explains step by step how this is done. You know, maybe this blog post is drafted and then this proofread and then there's corrections. And then once there's a final draft, We need to copy and paste it and put it into our website. Maybe our website uses WordPress. Okay. So we put it into WordPress and then from there we schedule this post. Then we add images, then we do tags, we do the metadata. All these steps need to be documented because if one day somebody is out sick or somebody is unable to do the job, somebody can step in and just follow those steps and do it for them. Maybe it won't be at the same level of this person because they've been doing it for years, but at least it'll get done. I'm saying this as somebody who was the system for years for all my businesses. And then I realized I'm playing business on hard mode. Okay. And the physical and mental costs of being the single point of failure is enormous. Meaning that if I am not available, nothing gets done, right? The solution is not to work harder. The solution is to build a system that works without you. Document the process for every repeatable task. Now I know what you're saying to yourself right now. Omar Zenhom, I don't have the time to document anything. I could I can barely do my business and run it and pay my bills. I understand, but it's going to be worth it in the long run. Even if you just document one system a day, it will accumulate every day. One of the things that we did is that the first task we gave our EA when we hired them is we would just basically shoot a video of any task I did that day. I just shot a screen grab video, and then I sent this video to the EA and I said, hey, I need you to write down the steps of what you just saw on this video. And they did the documentation for me. So I just made it as easy as possible. So you can start by doing that as well. You might be saying, well, Omar, I do a lot of different things in my business. Sometimes I do them once, sometimes I do them, you know, a million times a day. I have a rule: if I see something that's done more than 3 times, then it needs a system. So for example, we put up sound panels here at the studio. We only did this once, and we don't really see we're going to do this again in the near future. Maybe in the future, maybe in a year or two, we'll move into a bigger space and we'll have to do it again. But we don't really need a system for it because we're not doing it every day. We don't need a system of we got to order the panels and the panels need to be stuck on the wall. We need to get somebody to come and, you know, install them. We don't really need a system for that. But for something that we do every week, maybe for example, we get the office cleaned. So we need a system to know how we're going to organize these cleaners, how they're going to get into the building, you know, make sure they shut off the lights and make sure they shut off the AC when they leave. All that kind of stuff. That's a system cuz it's happening over and over and over. So we need to document that system so that it can be followed. I'm gonna be 100% honest with you. You know, I'm about to travel for 4 weeks to Europe. I'm going to a bunch of conferences and playing basketball in the FIBA Master Games. It's gonna be a lot of fun and it's gonna be an enjoyable process, not because of the things I'm doing, because I can relax. I know that we have systems in place. I know that our team has it handled. They know what to do. They know what they have to do. If something happens, if life happens, there is a contingency plan. We've already documented these things and we understand what is required to run the business. And when I travel, when I'm sick, when I'm needed to do something else outside of business, I don't feel a sense of panic like everything's going to fall apart because the system will handle it. This is a level of freedom that I never experienced until I learned the hard way and was overworked. And realized this got to be a better way than doing this. And about a decade ago, we started to establish these things. So as an exercise for you to implement this step, I want you to identify 3 tasks that you do repeatedly in your business so that you can document. Someone can help you with that documentation, like doing the video recording yourself, showing them what you do, and then they can document it. They can even transcribe this video and then turn that into a documentation. AI can help us with the process. So this is all doable, but you got to get started and just choose 3 tasks that you know that you do repeatedly on a regular basis. If this episode is helping you think differently about how you build your business, subscribe to the show because you're going to get more and more practical business lessons. We have an upcoming episode I don't want you to miss, and by subscribing, you won't miss it. Okay. The episode is called, "Do You Have Low Cash Flow?" If so, I'm going to give you 3 steps to get your business making more money now, not tomorrow. I'm talking about the day you watch this video or the day you actually listen to the podcast episode. Hit subscribe so you don't miss it because I can't wait to help you with that. Step 3. This is going to be a little controversial, but listen, hear me out. Okay? Build your team before you are desperate. Here is the hiring mistake that burns out most entrepreneurs. And I've seen this happen over and over again, not only myself, but with my friends, with my colleagues. With the people that I've built businesses with, that you have to start realizing that you are actually not the best person to do everything. Okay? And one of the best pieces of advice I got was from a great business coach, Ayman Abdallah. Ayman told me one day that you need to start being allergic to work. I said, what? He said, yeah, you have to start being allergic to work. Pretend that you will have an allergic reaction if you did some work. I was like, really? He's like, yeah, you have to start taking pride in not working a lot. And this sounded so counterintuitive to me. What are you talking about? Working hard is like part of my DNA because of my upbringing and my immigrant parents. And, you know, I'mma hustle everybody and all that rhetoric that I told myself. But he said, no, you're at a stage in your life where you don't need to do all this anymore. Once you have traction in your business, once you have product-market fit, once you have customers, you have to start seeing yourself out of the business. Okay? You have to start working on getting you to work less. Okay, that's your new priority. That's what you work on.

Why?

Because now you're making your business more valuable because you're not essential to making the business work, to make it actually function. And this adds incredible amount of value to your business because you can sell the business and it'll still run and it'll still be incredible. Even if you don't want to sell your business, what if you want to take a holiday? What if you want to take some time off? What if you want to pursue something else and start another business? Well, if you have a system and you are allergic to work and everybody else is doing the work, then you are good to go. You can continue to do that and you can see yourself as an investor in your own business rather than the operator. So I'm telling you this so you can stop waiting until you're drowning before you hire. Okay? So when you do do this, when you wait until like you're drowning and you can't breathe, you hire in a panic, which means you hire wrong. Which means you waste time, which means you waste money. You don't want to do that. You want to make sure that you hire even before you need them. So a principle that I follow is to hire before you are desperate. Why? Number one, because it takes much longer than you expect to make a hire. We often think that, oh, I can find a hire within a month or two. Sometimes it takes 6 months to find the right person, to find the perfect person for this role. So it's better for you to hire when you're not absolutely desperate, where the business is falling apart and you need somebody to do this. And the beauty is, is when you have time, you can actually train this new hire properly. You can afford if they make a mistake and learn through that mistake instead of it being a big catastrophe. Okay. And that's not a fun place to work where one mistake just kind of ruins everything. All right. And of course, like I mentioned before, you want to hire on character, on judgment, because you can always train people on skills, but you really can't train them on their attitude. Okay. They either have to have a good attitude or not. They have to make that choice. Character is something that shows up when things get hard, when they have a problem or they have to fix something or they made a mistake and they have to show their character by saying, hey, I'm owning up to that and I'm going to make sure that this doesn't happen again. But also I'm going to, you know, fix this up and make sure that everything's going to be fine. A lot of people think the most expensive hire are the like highly skilled, really talented, really rare people out there that are hard to find. No, the most expensive hire is the wrong hire because you can hire somebody and think they're great and think they're like a diamond in the rough. And they work for you for 6 months, a year, 2 years. I'm speaking out of experience and they really don't add anything to your business and you just wasted hundreds of thousands of dollars and a bunch of time and your competition is eating your lunch because you decided to hire too late because you were in a rush. And I'm not talking to my former self here. And it's just the wrong hire. It costs you incredibly a lot of money and time and effort. So It's not just the fact that, hey, you are, you know, panicking and it's last minute. It's also costing you an incredible amount of time and money and financial burden on the business. So what I'm trying to stress to you here is that when you hire before you need them, you have a little bit of breathing room and you're able to train them properly. And then you can be able to leverage this new hire to bring in more business so you can afford more hires. Now, I mentioned earlier that it does take longer than you expect to make a hire. And then when you hire before you need them, when you actually— before you're desperate, you have a bit more time to find A-players. The thing about finding A-players is that they're very rare and it takes time to find them and to discover them. And it might take a few hires. What do I mean by that? Sometimes you hire somebody and you think they're going to be promising. You discover 3 months later, oh, they're not so great. Or maybe in the first month And then you make another hire. So you figure that out. It's gonna take a few times sometimes, or you go through the interview process a bunch of times and it's gonna take you months to find that person that's gonna be perfect. So in that moment, you're not desperate. Even if it takes 3 or 4 months and they join your team, they're able to kind of hit the ground running and learn and get trained and be able to add value quickly. The reason why I share this with you is because when you make one bad hire and then another bad hire because you are desperate, because you're rushing, you're creating a culture of mediocre players. So your talent density is very low. That's not the type of business you want to run. You want to get as much value as possible from each hire so that your business is moving in the right direction. So how do you know what to make your next hire before you're desperate? Well, here's an exercise. I want you to identify what you're working on right now. What are the things that you do on a regular basis? Write it down. Even if you spend the next week writing down all the tasks that you do, every single time you do a task, write it on a notebook. And then find out which tasks would actually make the biggest difference in your business, would either alleviate your stress, time, energy, or you can just hire out and get somebody to do that for you. Now, when I first did this exercise, I had a list of 300 things. I'm not joking, 300 tasks that was on my list. And then I circled the things that, hey, if I took these things off my plate, I would have more time to bring in more money for the business. And I just looked at the things that were taking all my time with the most time-intensive tasks, and then I hired for those tasks. Step 4: Build recovery into the business model. This is a step that nobody puts in the entrepreneurial playbook, and it's called recovery. Business is a high-intensive sport. I kind of see it like American football where, like, they only play once a week because it's so intensive. They're clashing literally with each other. And business is kind of like that. There's these series of sprints that you are working incredibly hard. You're creating really magic. You're creating things out of thin air. So you need to recover. You can't just work at that pace and work at that intensity day in and day out, month after month, year after year. Otherwise you're going to burn out and you're asking for trouble. You want to prevent that as much as possible. So you want to be deliberate. You want to protect your energy and you want to have non-negotiable time to rest and restore and recover and come back to your business sharper than you left it. Now, some people, they only need a long weekend. Maybe they, you know, after every 6 weeks, they want, you know, 3-day weekend. And that is enough for them to recover because they completely shut off. Some people, they need 2 weeks, whatever it might be, but you need to experiment with this at least. Why? Because I found that the best ideas I have that will help take my business to the next level happen when I am resting. When I am on holiday, when I am away, my subconscious mind has the freedom and the rest to be able to come up with these ideas. So I'm telling you right now that if you just implement this one thing where you just say, hey, I'm going to bake in time to recover. So for every 3 months, I'm going to take a week off to recover. It's going to be interesting. Every time you're going to come back, re-energized, but you're going to have new fuel to the fire, more ideas, more initiatives, more strategy that's going to help your business go to places that you never knew that you can go. I'll give you a perfect example. In 2016, Nicole and I running our software company, Webinar Ninja, for about 2 years, and we were kind of plateauing revenue-wise. We were not really innovating. We were working, you know, 7 days a week, 12-hour days. It was intense. We said we need to take a break. We decided to take 5 days off we went to Ecuador and we had a great time. We went on these excursions, we had a lot of fun. And in that break, I got the idea of, hey, a lot of our customers love doing live webinars, but they can't do a live webinar every day. And we came up with a concept of automated webinars. We're one of the first companies to come up with this where people can run their webinars automated, like they had a recording, and then they can come back and answer questions via email later on and they can make offers automated in these automated webinars. They can make these offers and, and interact with the customers. And that product feature was launched about a few weeks later after I came back, cuz I was so fired up with this idea and I told my team and we were able to build it really quickly and come up with a minimal viable solution to that. And it kind of changed the business completely because it created this new revenue stream. It allowed us to have an add-on feature and it got us thinking, what else can we create? All these different types of webinars. And from there we came up with series webinars and we came up with hybrid webinars. So, So if I didn't take that break, I don't think the idea would have come to me when I was able to kind of recover and recharge my batteries. So as an exercise to implement this step, I want you to schedule one non-negotiable recovery block. This could be a day, this could be a block of 5 or 6 hours. It doesn't need to be a week holiday, but you need to just try this out where you're not thinking about business, where you're doing something else, where you're enjoying something else. This could be playing basketball. For me, sometimes it's just playing poker or going snowboarding. Why? Because, because I'm so focused on one activity, I can't think about anything else. When I'm going down the mountain on a snowboard, I'm just trying to live, right? Don't hit that tree. I'm only focused on that. Don't die. And what happens is that you just relieve your mind of thinking about work, and then your subconscious mind takes over and you're able to kind of come up with some really creative ideas. So there you have it, a complete 4-step framework to building a business you will not regret. Choose a business model that has the right economics. Build the system before you actually need it. And then build your team. Number 3, build your team before you're desperate, right? Be allergic to work, remember? And number 4, build a recovery window time into your model, into your business before you burn out from the start, from right now. Even if you start out with just a block of hours or a single day a week to just focus on something else other than the business. Today's lesson is about working smarter. The entrepreneurs who are still standing after 20 years from now are the ones that are still excited about their business, that still have their health, that still have their relationships, that still love what they do. All the entrepreneurs I know that have businesses that have lasted for decades, they have all these hallmarks. And this is kind of how I came up with today's lesson. One of my favorite quotes is by Jason Fried, who is the founder of Basecamp software. And he says, I'm not interested in having a startup. I want to stay up, right? Something that's going to last, something that will serve me in my life for years to come. And that was the point of today's lesson. And hopefully you're able to do that with the steps I provided. If this episode has made you think differently about how you're building your business, great. That was the whole point. Okay. We have an episode that we recently published that I want you to check out. It's called How to Run Your Business in 4 Hours a Day. Because you need a game plan to start reducing your workload so that you can start offloading things. You need to have an understanding of how do you actually start working less and work smarter and be allergic to work. And that episode's all about that. Go ahead and check it out in whatever app you're using right now to consume this podcast. Thank you so much for being a part of the show, for tuning in. We are cheering you on from afar, and we are here episode after episode to support you. If you found today's episode helpful and you want more practical business lessons to help you start, grow, and scale your business, the best thing you could do is subscribe to this podcast. Hit subscribe or follow on your favorite podcast app, the one that you're using right now, whether it's Apple or Spotify or wherever you listen to podcasts. 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