Consulting for Equity: The Simple Way to Stop Trading Your Time for Money

Hey, business lunch listeners, welcome to today's episode. And today's episode is a little bit different because Roland is actually getting interviewed today by Ed o'. Keefe. And Ed's an absolute legend in the Internet marketing space. He's helped transform businesses and industries like finance, the coaching and consulting space, and also with health and supplement products. And on this episode, Ed interviews Roland about something called consulting for equity. And it's basically how experts can stop trading their time for money and how they can actually utilize their knowledge and expertise to, to gain equity in companies. It's an awesome interview where you're actually able to see a little bit more into the genius of Roland. So stick around. We're going to get into that interview right after this. How much more successful would you be if you had lunch with insanely successful entrepreneurs who shared their biggest secrets on how they think and achieve success? Well, now you can hear successful entrepreneurs reveal their step by step strategies and other fascinating stories. So grab your seat at the table because this is Business lunch with Roland Frazier and Ryan Deiss.

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Hi everyone, this is Ed O' Keefe and I'm here with Roland Frazier. What's up Roland? How are you doing today?

Doing great.

How are you doing?

Awesome. I'm super stoked to talk about. I know one of your favorite topics. It's becoming one of my favorite topics. Just so everyone knows, Roland has created what I think is probably one of the best pathways for to get wealthy through something called consulting for equity. It's perfect for obviously consultants, but it's also perfect for our coaches. High ticket coaches, experts, authors, agency owners, successful business owners, SaaS, creators, professionals looking to transition. Really. Rowan, I want you to dive into this in a second to share like what is consulting for equity and how you came. We're going to like the whole, the whole show today is to go through Roland's journey of creating it and how is literally the best way to get paid. Create recurring revenue as well as Equity and some big exits as well. So. So welcome to the interview today, the show. Yeah.

Good to be here. Yeah.

Let's take us all back. Like, how do you tell us what in your mind consulting for equity is first, and then we'll kind of work back to, like, how it all got started and stuff like that.

Sure. Well, so you have. You have a lot of ways that you can be compensated for something. You can be compensated. I say there's five real levels to it. You've got the one that most of us do, which is we give free advice. People ask us for our help and to use our IP and to benefit from the knowledge we've got. And because we're good, we human beings and want to give back to other people. We help them out, which I highly recommend doing. The challenge is, where do you draw the line of spending all of your time doing that? And then that starts to take away from your family and your other time that you've got available to do things? And so there has to be, I think, a dividing line, a point at which you say, I'm willing to share and help people, but within the context of a short exchange, not something that is okay, well, we need to, like, dive into all the questions that I've got that are going to help me give you the advice that I can ultimately give you. And so that's like, that's level one. That's the free advice. Level two is that we go and maybe we say, well, what if I started turning that knowledge into an actual compensable skill and I charge by the hour for what I do, which I did for years as an attorney. And even if, though you charge $1,000 an hour, right. You're limited. Let's say maybe you can bill 2,000 hours a year. So like, that's $2 million, and that's where you're capped out, which sounds good. But then you take out expenses and advertising costs and partners and rent and all the expenses, and maybe you can make, you know, 200, 400, 500, $600,000. I say I call them dancing bears. Right. You're dancing bear. Because as long as you dance, people throw money. But when you stop because you're out of hours that will allow you to dance, then the money stops. And that's the trap that you refer to, the dollars for hours trap. So I never really liked the idea of being a consultant because I saw that trap. And even though I did practice law for several years, where I did, we build by the 10th of an hour, you get really granular with your tracking of your time and you get really aware of what you're able to get for that and what the limitations are. So then the next level, which we also, I learned practicing law, is that you can charge a flat fee. So the nice thing about flat fees are that if you've got a service that you perform over and over and over, it becomes kind of rote. You systematize it. You've got staff that can help do a lot of the. A lot of what's being done. And so if I can charge $1,000 to do a thing, like for us, it would be maybe a document maybe. I don't think we charge $2,000 to form a corporation, right? Well, I don't spend 10 minutes forming a corporation, right. I don't have to do that. I get a flat fee. So that's nice. It lets me leverage the knowledge that I've accumulated in the systems that I've built to deliver the knowledge or the service that I've got. That's a really cool model. And I think that's where most people cap out. The next level three. That was level three. The next level, level four, would be where you actually get into a revenue share. So you're saying, okay, we've got a project I'm going to consult on. You've got this thing that you want to have done, and we're going to talk about it, and then I'm going to help you make it happen. And I know that I'm going to create a continuing value for you in that thing. And so I say, well, Ed, if I'm going to do that for you, like, maybe it's. I'm going to create an advertising campaign to help you get clients. Anything that comes through that effort that I've done to create that intellectual property asset that I own, I'm effectively licensing it to you to use the way that we talked about and receiving some sort of revenue, some share of the revenue that comes from it. Right. And it's better as a revenue share than a profit share, because revenue, you get a lower share, but there's no manipulation of what the profits are.

Right.

For your, you know, your Ferrari and your trip to Tahiti, that with your family, to have the retreat, you know, so. So that's level four. And then for me, I was. I was just always thinking, I was like, well, what I'm doing when I do this stuff is I'm really helping somebody build their brand. I'm helping them build an asset which I watched as an attorney, people sell over and over and over for multiples of the profits that the things that I had helped create were generating. And so I was like, okay, well, anytime that you're a consultant, the Rev share goes away basically at some point or doesn't apply company wide. It only applies to the thing you.

Do, or it doesn't pay out how you thought it would on the front end, which is very, is actually one of the most common challenges with just REV shares.

Right.

Or it goes away because it's a campaign that you helped with and they run that campaign for a year and a half and then some other person gets to do that. Right. So I was like, well, how could you get compensated on a continuing basis for the things that you do and actually be part of the whole company that wouldn't go away? And the answer to me was to get a piece of ownership or equity in the company. And, and when you have ownership in the company, then you have the ability to get paid forever. You have the ability to do something one time and have a continuing ownership interest, just like somebody that buys a share of stock in a company. Right. So what I started doing was I started offering that I'll help you with this problem that you've got or this challenge, but what I want for that is I want to have a bit of ownership in the company. And so that's really kind of when I started doing that at scale and when you.

Just for clarification, because I know like when people look at like level three, level four, most people are probably either in I give free or all four stages in some level, like I give free advice, I'm wasting, like for you, you liked helping people. Yeah, right. So we can even go back to that. You liked helping people. You'd run events, you'd run high ticket coaching seminars and people would. Or you'd speak at other people's events, they'd come up and try and talk to you. Can I ask you a question? You got a minute? And my understanding is like one of the things you told me was, the challenge with that is it just got none of those relationships panned out into actual serious partners. That's a big challenge with it, correct?

Yeah, yeah, yeah. Very, very few. Right. So when you're helping somebody for free, free has no value, meaning that the people don't have skin in the game and therefore they're less likely to, to try to get a return on the investment that they've made by taking action on the things that you're talking about. So I have a good friend of mine who sat here with me night before last. And the way that he came to sit on my couch was to give me $25,000 to spend four hours with him here. And he's a friend of mine, and I've had lunch with him and I've talked to him throughout the years, and I've helped him with a particular situation that he's in that nothing has changed. And so when he called me and.

Asked me as a friend, when you're giving him free advice, nothing changed. Yeah.

And so when he called me again about this thing that we've talked about several times, and he said, hey, you know, I just wanted to see. I think that I need to do this, this, and this. What do you think? And I said, I think you need to hire me to help you because if you don't, you won't take action. And do you know how I know that? Because you haven't. Right. So with love. The best thing that I can do for my friends, for my potential clients, is to actually have them invest in themselves so that they have skin in the game, so that there is pain for them if they say, I mean, I spent that money and I got that advice, but I'm not doing anything well.

And so regarding giving free advice, there's like two. Two layers to that problem is, number one is if you don't charge them and somebody mentally is like, I'm willing to invest 5,000, 10,000, 15,000, $25,000 to solve this problem. But you give the free advice. Well, he or she still has that money in their head. They're willing to go spend with somebody else, and they're going to. They will go spend it or go buy the service or hire somebody. And the second part is that many business models are designed on give free advice with the hopes that they become clients or the hopes that they use your services or your software. So can you talk about the second part a little bit like on the agency, on the. Yeah, the hope side of it, it's.

Kind of cool because I was thinking about how I. How I do that, because somebody just asked me a similar question. It's like, well, how do I give advice without. Like, how do I give advice but. But then get people to want to retain me but also not be a jerk and say, you know, well, you know, the meter's up and so I can't give you any. I can't have this conversation with you unless you pay me money. Because that's just weird.

Right.

So the Answer that I found is that when someone talks with you and says, can you help me out? You say, well, tell me what it is that you need help with. So now what you get there is you let them talk about the challenge that they've got so you can hear what is the thing, what is the constraint, what's the issue? What's the limitation that they're dealing with? And then you can say it back to them. So what you're saying is that 1, 2, 3, 4, 5.

Yeah, yeah.

Then you say, why do you think that is? Then they'll tell you why they think it is. Now, at that point, that's the conversation that you're going to have before you get retained, when you get retained or when you get to that point. Now, I say, man, I can think of three or four things that would probably solve that for you, but I would need to get to sit down with you, drill down, get more information, more facts, and really set out a plan. And that's going to take about four hours, the way that I do that. And then you go into your consult. Right. And I found that that's really helpful. So I don't feel like I'm shutting somebody down. They're getting to have the catharsis of, you know, of emoting and communicating to me and telling me what the challenge is, which is pent up in everybody. Right. All of us want to share that.

Totally. Yeah.

To feel heard and understood and then to have somebody say, I think I have some answers for you.

Right.

Here's the process by which we'll get to those answers. And that. That's a good way to do that. Does that answer?

Yeah, it totally does. And then, so the dream scenario, I want to ask the. I want to. The dream scenario or the game plan with consulting for equity or equity consulting is you're getting paid as a consultant or a mentor up front. The way we structure the consult day and is designed in such a way that you not only help solve problems, but you expand opportunities.

Correct.

And then because of that, the way I phrased it, too, was by solving their existing problems but expanding their opportunities. There's a natural inclination for them to say, would you. How can I get you to continue to help me with that? And that's where, like, the equity conversation or partnership will form. Correct?

Yeah. So the way that it works is that you start out with, somebody's got a challenge, they come to you for help, they ask, can you help me? You say that you go through that process I just talked about now it's okay. The next step is for us to actually drill down to these things. That's a paid consult. Because now you've got something for your time and you've got a filter more than anything for people who aren't willing to invest in themselves. Because somebody's not willing to invest in themselves or isn't ready. It's not their bad people, it's just they don't have time right now. And if you're not willing to invest in yourself, why should I be? So now that solves the how do I allocate my time and how do I know who's actually interested? Qualify somebody to be interested in enough in what they've got going on to be willing to invest in it. I also get paid for my time, which I do want because given the choice between getting paid for my time and not getting paid for my time, I prefer to get paid for it. But I'm not building a dancing bear business. I'm not falling into the dollars for hours trap because here I'm actually really getting paid to vet a client to understand their business well enough to build the relationship deep enough to actually be able to solve challenges and prove the value that I can bring, which I do a half day consult, which is four hours. Some people do a full day, but within even a full day you can't possibly solve all the challenges. You can create a strategy by which they will solve. And so then you say at the end, usually, and I'd say it's about 80% of the time, the people that have invested in themselves to do this will say, how do I get you to come in and be part of my company?

Correct.

That is an invitation to equity, which is the best. Right? Because then it leads to the rest of the conversation. They're literally inviting you into ownership of their company. The other option, the 20% of the time, if it's something that I'm interested in, then I'll say, how did you feel about the session that we did today? I thought it was great. It was fantastic, you know, super helpful. What kind of value do you think that will bring to the company? I think it's going to be ten millions of dollars, blah, blah, blah, blah. What would you think about having me available to do that on a regular basis as an owner of the company with you? And then that leads to. I didn't even think that was possible.

I didn't think it was possible.

Or once in a while it'll be. I don't think I'd be comfortable with that right now, it's totally cool. But what's interesting about that is almost all of the not comfortable nows become.

Later opportunities because they know it's an opportunity.

Well, they see that they got, they got breakthroughs from the time that we spent together and then they go back into the environment that has the whirlwind of all the things that are rotating around them, stopping them from doing the things that they need to do. And they want help to implement and fully get the value of the breakthroughs.

Yeah, I love it. I love it. So I want to get to the parts of how and why they give you equity, like case study wise. And so everyone can hear that. I want to go sideways real quick to talk about why that this is your favorite model for accumulating wealth, why it has the potentially the highest point of leverage of almost anything. And I had some breakthroughs that I'll bring up if you don't hit on them. But can you share with our viewers, like, why is investing in themselves in learning this process, the consulting for equity process and understanding it? Because it's a simple process. It's probably, I think one of the biggest mistakes that we have of our students right now is everyone complicates it. They really complicated. So why is it, why are you so attractive attracted to it and why do you believe it's like the highest form of leverage for people?

Why I'm so attracted to it is that I think that the like, effectively, when you are doing it this way, you are leveraging your experience, knowledge and contacts in a way that allows you.

That you've accumulated.

Correct?

Yes.

Which allows you to invest. That is the capital you bring to the deal in exchange for ownership in other businesses. So I have an unlimited checkbook to invest. I'm not constrained in my ability to invest by the dollars that I have available. That's pretty magical right there. Because I mean, you know what's really good right now?

Why don't you explain that again? Because I see, I think most people, most business owners, including myself, have made the mistake of my businesses are doing so good. So now I have cash that I need to go invest. And you said something to me before, after I made a horrible investment. You said, and cause I was like, well, Roland, why do you not invest cash? Like how are like. And it was, it was just so everyone understands. I was trying to understand like Roland's brain and. Cause you said something really smart. You said making money's making money like takes a, it takes a while to understand how to Learn how to make money. But. And once you start learning how to make money, making money is not that hard. But it's very easy to lose.

Yeah, it's hard to keep it.

It's hard to keep it. So do you mind repeating, like you said, you have unlimited. You have unlimited resources. But what do you mean by that?

Yeah, so the cash for equity trap.

The cash for equity trap. We got to write that down.

It's like the dollars for hours trap trap. The cash for equity trap is, and I get this a lot with people, when we're teaching people how to acquire with no money out of pocket, is that, hey, I've got some cash in my pocket. And the way that one goes about buying stock in the stock market, the one that you. The way that you invest is you give cash in exchange for equity stock in companies. That's what we all do. That's the stock market. Tens of millions of people do it every single day. Hundreds of millions of transactions. So that's what we think you do to do that. But you don't have to do that because what businesses are looking for and.

You'Re hoping for, what type of return you're hoping for.

I mean, in the stock market, 8% to 10%, you know, over a long period of time, is the historical average return. Real estate, the historical return is between 10 and 14%. Right? I mean, it's. I don't forget what Buffett gets. You know, it's. It's a bit higher, but it's not crazy, crazy high. Well, here's what's cool. If instead of cash, you understand that what businesses are looking for is capital, then you can invest capital in businesses for an ownership in the business. Well, so then we say, okay, well, what is capital? Capital is assets and resources, right? So that means that capital could be an asset called cash, but it could also be an asset called your intellectual property, your brain, your connections, your knowledge, other resources that you're able to bring of value. Capital is of value to the entity, to the corporation, to the business that you are dealing with. So what we have in our pockets when we come to the table, where we have the opportunity to have an investment in a company is cash. But cash is not the only asset that we have in our pockets yet. It's the one that we reach for every single time. So when we have no more cash to give, we are out of capacity to invest. We believe, but it's not true. That's the lie. Right? The lie is you've got to have cash to get Ownership in companies. The truth is that any resource that's a value to them, a smart company is going to say, I will give you some ownership in the company for that resource.

And I would say. Can I interrupt you there? Because we were talking about cash. I think the other trap is that, well, if I don't have the cash, if I don't invest in cash, I need to give sweat equity. Right. Which you're saying, no, you can leapfrog all that. You could time collapse all that.

Correct.

Because you've already accumulated a network of people, a capital of maybe it could be a service. You have that network built out or you're building it out.

Yes.

Yeah.

And that capital is not a liquidating resource. That's not like cash. You pull in and you have $1,000 in your pocket and you give $500. You have liquidated 500, converted it into something else. Your relational capital that you've got with all of the relationships that you've had over all the years, that doesn't go away. You don't spend that. Correct. When you connect people, and in exchange for those connections, you receive an ownership interest, you still are connected to those.

So why don't. Why. What's the argument to, like, hey, I have this resource over here. I just want to get paid 10%. Like where you. It's, you know, it's the whole, like, I'm a middleman guy. So what is the fallacy? And I know there's probably certain contexts where that is good, but then why do you skip past that? You have a frame on this that I thought was really brilliant.

Have you, have you ever sold a house using a real estate broker? Yes. Were you super excited about paying them the 5 or 6% that you pay them of the gross value of your home to connect a buyer with you? I mean, like, super excited.

If I looked at what we actually paid about it.

Yeah, you felt really good about it.

You tease.

Yes, because I don't. Yeah. I hate it.

Yeah.

Yeah.

People hate brokers because it's such a transactional value addition and the compensation of a percentage is abhorrent to us. Like, it's, you know, I hate it.

Yeah.

I don't want to pay, you know, I have a house and it's worth $100,000 in gross value and maybe I've got a loan of 90,000 on it. So I've got 10,000 in equity, and I'm going to pay you a 5% commission. $5,000 on the gross value when my equity is 10,000 I'm going to give you literally 50% of the equity on my home. You son of a. You know, I'm going to be mad about that.

It immediately creates the, how do we edge this person out? Yeah, I'm not sitting on the same ties like them.

You have a. Conflicts of interest, you want to get rid of them as fast as you can. You, I mean I get people all the time, they're like, how do I cut the broker out of the deal? I'm like, you don't, don't do that. That's wrong. So find off market deals that don't have brokers. But, but repeat your question so that everybody's current.

I was just going through like I could hear one people going like, oh, that's kind of like that. But this is not.

Well, here's, here's the difference. So, so if I were to. And so my advice to people is that don't be a broker because you will be hated. Okay? You'll be reviled and hated. So don't do that. Instead, why don't you think about how can I actually add value beyond the connection? Right? So if all you're going to do in a transaction is connect person A to person B and you want a fee for doing that, then you know that's fine. If that's how you make your living, it's okay. But just understand people aren't going to really be happy about that. You're not going to be making a lot of friends and you're ultimately going to get cut out of deals. And the next deal they do together you can pretty much count on, they're not going to deal with you. They might stop paying you after a while. If you thought that was going to be a lifelong deal, instead of that, just connect and leave. Why not figure out how can I actually add value?

Because if they're asking you for help there, they have other issues that they have other networks they need to be.

Plugged into or they don't know like you know, how to really get the full advantage of the relationship that they will have with that person. Maybe they don't know how to deal with them and negotiate the best deal to start with. But also they probably don't know the full value that that person could bring in the relationship that they're already going to pay for. And so if you can create additional value above that, then you can arbitrage the value of that one time transactional relationship into ownership in the company. Does that make sense?

Yeah, totally. So let's.

I Want.

I have two really quick follow ups on that. So as far as, like, one of the things you said a few minutes ago about why. And this is why it's so important to understand that the consultation, like, one of the mistakes that people have is, hey, I get equity in people's companies, and so they're just getting equity in people's companies. But one of the things you said that was great about with consulting for equity, the model you get paid to vet potential partners.

Right.

And that's a different way of thinking. Can you go through, like, what criteria you're looking for in partnerships and the type of clients who should hire you and the ones that, you know, your clients in consulting for equity should be looking for? And I'll chime in my thoughts after you give me your filters on that.

Yeah, it's a great question, because you should be asking that. Right. No matter what. And it does really apply to everyone. So for me, I don't want. I don't. I'm not really that interested in. I'm not using the upfront fee that I charge to make a living. Right. I'm. I'm good. I'm using it as a filter, and I'm using it so that I can be sure that the people take advantage of the thing that I share with them so that they'll actually do it. So they have skin in the game. So if you're looking for that to make a living, then you might have a different philosophy. But I won't take a client for paid consulting that I don't think. That I don't think is interested in exiting their company. So they have to want to sell.

At some point, because that's also one of your unique abilities. And it's another payday for everybody to look at it. Yeah. And.

And also that. That I believe there is an opportunity to have equity in their company. So I think if I talked to somebody and they said, I'm never gonna sell, I don't ever want any partners, ever. I've had so many bad relationships with partners I sued the last 12 I was with, I'd be like, okay, we definitely aren't gonna be partners. And I would say, you know, let me refer you to my friend, you know, Mike, you know, somebody else. But that, to me, the criteria is that it needs to be a big enough business that I can have transformational impact on the business. So if it was a business doing $100,000 a year, I wouldn't be able to help it very much in the way that I'M looking to, it wouldn't be big enough for me to be interested in having an ownership in. And, and so I probably wouldn't take them as a client. But if it's a, you know, if it's a business that's doing a half a million or more in profit, then they're at least in a position that's probably the lowest level at which I would be able to have the impact I'd want to have because I charge a lot for that initial half day. And I want to be sure that if I'm taking say, because I'm usually looking for a 10 to 50% equity in a company. So if I got 10% equity in a company that's earning a half million dollars a year, I'd make $50,000 a year from that. And then if we sold it at a multiple of 10, it would sell for $5 million and I'd get paid 500,000. After having invested some time and effort, it's probably not worth it. Right. So it's got to be enough that it makes sense. So wherever your level is, I would say pick the level using that analysis I just did and say if I was to get 10% of this and I had 10% of the income currently and 10% of the current income times, let's say 5, then would that make it worth me doing whatever the services I want to do is that's the screen. And if they're willing to invest in themselves by paying the upfront and they're willing and the numbers make sense to you and they're open to selling and they're open to the potentiality of if you razzle dazzle, frazzle delight and surprise them saying yes, I would be open to having a partner, then to me it's a client.

Yeah, yeah. And just to kind of button up on that, just so everyone understands, like one of the mistakes a lot of coaches or consultants make is they go for the people who are going to say yes to consulting because they give equity because it feels good to get the deal. But you really want to have a business that has momentum, that's, that's generating customers that, where you can come in and using some of our frameworks on and leveraging the back end, front end, add these other network values, they're ready to exponentially grow based on that. I want you to talk a little bit about the idea of why you like selling companies as a wealth accumulation tool rather than just trying to get paid transactionally.

Sure. So I don't know any Way to build wealth faster than selling companies. Because the way that we earn money is from the profit of the businesses that we have. So if I make a million dollars a year off my business, I make a million dollars a year. That's great. Love it. Wonderful. But businesses sell for multiples of those profits. So if, let's say that this business, the average private equity fund right now is paying over 15 times profits, which we define as EBITDA, earnings before interest, taxes, appreciation, amortization. If those companies are selling, let's just say at 10, because that's an easy multiple. But it's just so, you know, that's less than the average that companies are selling for now. So that million dollars in income, I get paid in a day, the day that we sell the business, 10 years of profits. So I would have to, had I held onto that company, continue, continue to work for 10 more years with the.

Hopes, the market that everything stays the same.

Hopefully everything stays perfect. I mean, you know, hello.

It doesn't.

Right.

Yeah. Yeah.

So. So here's what's really cool, is if I think about selling that business and Now I've got 10 years of income in this year and my buddy held onto their business and they've got a million, but I reinvest half of that. I've got 5 million in my pocket. I've got 5 million that goes into a new business and I sell that business three years later for 10 times. Well, then in a period of three years, I've made 22 years worth of income. If I get to the point where we are now, where I'm selling a business about once a quarter and I'm selling it 10 times, I'm making 40 years of income every single year. After 10 years, I made 400 years of income. I mean, that's pretty magic. And that's without talking about leverage. Because if I'm using leverage to buy my new business because I'm only putting 20% down, the numbers get to be actually kind of comical.

Yeah, well, and I think that's one of the things that every, you know, I guess we can skip. So like, well, who should be thinking of this consulting for equity model, like and to exit model. Because we glossed on it a little.

Bit.

And the logical thought, and this is a mistake I made. Right? So we had. Just so everyone understands, I had a business where we were helping dentists. We had hundreds of dentists in our program. I did that for 10 years. Right. Sold a division of it. Right. Didn't get any equity, didn't get any licensing ongoing with any of those dental offices or any of the patients that came in or any device companies or any, you know, like, I mean, let me. Let me count the ways. Or any of the rich. Made a lot of people. Yeah. A lot of money. And in the supplement space. We are in the supplement space for years, mentored a lot of guys in the supplement company. And at the time, I didn't realize I was doing consulting, but I never realized that I should have been cutting deals with the manufacturers, the. And getting paid, even if it was $0.15 per bottle for everyone I referred to them.

Right.

You know, that would have paid off a lot of college tuitions. But I didn't have that mindset. I always thought, oh, that's, you know, I don't. I don't need to do that, or. I don't know what I was thinking. Maybe stuck in the.

It just doesn't occur to you.

It doesn't occur to you.

You're caught in the world. What you're like, this is how we do business. Yes.

Yes. Yeah.

Like, when you go to invest in a company, you think, I've got to have cash.

Yeah. So. And then. But the other thing that came to my mind before I even asked the question was the other thing that, that you and I were talking about even growing one of our companies, and you're like, well, I'm not opposed to going to acquire some of these sites or things rather than building them. And I think a lot of people are stuck in a trap where, hey, my business is growing. I don't want to do consulting. We got to scale our business so they start hiring more people and they grow horizontally with some vertical hope. But that's usually where a lot of chaos, complexity comes in. Instead of maybe getting paid through consulting for equity, so now you got partnerships. So I guess I want to ask this question because I know I could ramble on this. But who specifically, who would you recommend? Like, when we look at, like, a lot of your clients, I'm going to ask for some case studies here in a second. But when you think of, like, some of your best clients who are using this model, doing this model, or you're doing it with. Who should be doing consulting for equity.

I think the key is that you have the capital. Right. The capital intellectually.

Intellectually. So.

Meaning that if you have something that if you're B2B. Okay.

Business to business.

Right. Because you don't get to take equity in people. Yeah, you know, we're working on that. No, so. So it's got to be b2b.

The metaverse is here. You know, somebody is.

So if you're providing some sort of help that is valuable to businesses and they are paying you for a service that you have or for connections that you have, then you're ideally positioned. If you're a speaker, an author, an expert, a service provider of any kind, it could be an accountant, an attorney, you know, any of those things that provide value to businesses, then that makes sense. Right? That, that's something.

And specifically, we have people that are. They do conversion rate optimizations, they do email rate, they do email inboxing, they do different. Yeah. Social media, they're providing revenue generating services.

Any business service. Any business.

Any business service? Yes. Yeah, yeah, yeah, yeah. Our buddy Vinnie Fisher, back office accounting with Fully Accountable. And he's got equity in businesses that he works with. You know, what about SaaS companies?

SaaS companies also. And so like we. I had a client that came in. It was actually kind of interesting because I had a client that came in because he said, you know, Roland, I'm stuck at seven figures and I make a million dollars a year in profit from my company and I haven't figured out how to break that because I have to work so hard to create that money.

He's in the machine providing.

Yes, he's in that machine. And. And so I said, well, let's take a look at the business model and then let's talk about what you're doing and could you actually take equity in other companies? And he's like, well, there's a webinar software company that exists right now that they've put a ridiculous amount of money into, but they don't know how to access all the people I know. So you know the exact customer market that these people want? Yes. And you know how to make them more money because he makes most of his money doing webinars, by the way. So why don't you get an interest in that company, an ownership interest, and you have that now, you've got equity in that company and then you connect them and you do a webinar for them. And all those webinars that you do now not only are selling the stuff that you're selling and you're still getting paid what you're getting paid before, but now you're actually building value in this webinar company. And so we had a conversation during the consult. We reached out because I do a lot of hot consults where we'll basically say, okay, you need to talk to this person right now. And I'll just. I'll. I'll connect them or I'll say, you need to get him on the phone right now. And so he got the guy on the phone, and we put together a deal on the phone to acquire 67% of the webinar company.

Wow.

$0. Because they valued his reputation that he built up the equity that he built up in his brand, his personal brand, to be able to do that. And then he turned to me and he said, would you take half of that?

Actually, thanks for saying that. Thanks for saying that. Because actually, I was going to bring that up saying, like, here's what's interesting is some people are going, like, right now they're saying, hey, but I don't know, I. I know a guy who could generate customers, and I know a software company, but I can't do what he's doing, and I can't do what they're doing. They're forgetting that they just figured out the A, they're the B in the. The middle. They're the A plus B equals C. And you were the B there. You were the connector in that.

Right. And I always say, yeah, because that's kind of the heat of the euphoria of I just got 67% of a company, you know, is, as I said, are you sure that you want to do that? Where do you see the value that I can add now? I do that for two reasons. One is I don't want them to get buyer's remorse and say, I'm sorry that I gave Roland equity in the deal, because if they said that, I would give it back and I don't want to have invested time and then give it back. So the second reason is that I want them to re articulate the value to both themselves and the other person that they see that I bring to the deal. So that's. That's to me the way you do that. Right. So that was a really, to me, a really good example of somebody that had never thought about their business model as having established that brand equity that they could then use to get equity in other companies.

Yeah.

And one of Mutual friend of ours can't clothe the earth.

I was gonna bring him up. So I'm glad you did. Yeah.

We were sitting at a. At an event that we did. So I. One of the things that we'll do is I'll go to people who have audiences already and I'll say, how about if we make some event or something like that available to your audience and we, you know, we split the profits from that. Well, that gives me access to people's audiences that they've built up that I didn't have to build up. Plus the credibility of coming in with their arm wrapped.

I think that's a writer downer. If you're watching this and listening to.

This, like, write that down.

Like, who's the audience of your ideal customers? And who has the credibility that you can borrow their. Their co. Brand or co. Co credibility. You're getting your. You're borrowing their credibility and trust with the audience.

Right? Exactly.

Genius.

And. And so if you get. That's the mafia introduction.

Is that right? Yeah, yeah.

With me, you know, shoot this guy. So. So we were sitting there and I was delivering a event and. And I was talking about this. And in particular, one of the strategies that we have is how do you get equity in companies that you're sending a lot of business to? So a lot of us send a lot of business. You sent. You just mentioned it. Right. And the dentist thing, you said in the supplement, send a ton of business to those guys. Right. So if you had gone to those people that you were sending a lot of business to on the reg and said, you know, I've noticed I send you a ton of business. And I started thinking to myself that I should really have a business like yours. And so then I started thinking, you know, well, do I want to start one or maybe I should just buy one. And I was like, well, I should talk to Ed first, because I'm already sending out a ton of business. And you're probably afraid I'm not going to continue to do that at some point. What if I don't? And you're like, well, I never thought about that, but now I'm a little concerned about it. So then I say, so why don't you just give me equity in your business in exchange for me not only continuing to refer you the business that I'm referring you, but also what if I actually thought I'm accidentally sending you that business? It's incidental to my business right now. I'm not thinking about that as a profit center. If I think about your business as a profit center too, imagine how much more I would likely do. So that's a good reason for you to give me equity in your business. So I was telling this to the group, and I see Kent just disappear from the conversation, and he's like, texting on his phone and texting on his phone, and it's like he's gone from the conversation. And so about 45 minutes later, we took a break. And I was like, man, is everything okay with the family? And, you know, you looked like you were, you know. He's like, I am so pissed. He's like, why didn't you tell me this before? He's like, I just texted six of the people we work with and I got equity in three companies already.

Wow.

I was like, sorry.

Yeah, yeah, well, yeah. But the light bulbs, the light bulbs went off. And in his market specifically, he started looking at how he converted vertically and horizontally, start building partnerships. Because he, instead of just starting. And this is what a key point of growth is. Instead of going out and building yourself and taking on all that risk, you're just leveraging there.

And the thing is, is that, that it already exists. So a lot of what we are doing, very few of us are creating Google.

Hey, business hunch listeners. We're going to get right back to the show, but Roland wanted me to invite you to a brand new training that he's doing on acquiring businesses with no money out of pocket. It's something that he's talked quite a bit about on the show, but he's doing a free training where he's going to walk through the entire process. So if you want to get access to that, go to businesslunchpodcast.com epic that's businesslunchpodcast.com epic and you can get signed up.

Correct.

Very few of us are inventing something that's new. So there's a good chance that the business that we are in is already out there. And we are a me too business. We have our own personal brand. We have our own way of doing the things that we do. But there's somebody teaching somebody how to do everything already, right. Shakespeare said, I think there's only seven plots. Right? There's only so many things that exist. So why create from scratch again and again and again when the effort of other people has already done that? Way more than enough for you to tap into. And one thing for anything.

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Thanks.

But I think one thing people always wonder about, you have two categories, you have people that have a lot of clients already. So part the easy flip, even though it takes massaging and you have to like get your head wrapped around it, is how do you turn your existing flow into this new model? Right? But I think just like from you, like and then you have people that are brand new into consulting. So we provide tools and matrixes to create a world class consultant consulting experience. So the delivery is five star. So let's pretend that's already taken care of. But everybody wants clients and everyone wants better clients. So do you want to talk a little bit about getting your ideal dream client and how your brain goes about it and then I'll share a little bit about how I think about it.

Yeah. Because there are so many ways to do it. The thing is that a lot of us don't realize that we already have lead flow and pipeline that we just don't understand is lead flow and pipeline. So everybody who, like I used to kid people because they would. A lot of people will come up to you after you talk at a conference or, you know, you've been in a mastermind or a meeting or something like, hey, can I pick your brain? And to me it just, I don't know where that came from, but it sounds, I'm like, you know, it sounds really painful and it should probably be illegal, but. But I didn't really like it that much when people said it. And it was a thing that I was like, you know, I like helping people, but I just, you get overwhelmed, like if you speak and 50 people come up around you, then you can't possibly help them with any depth and they're going to tell you their problem in great detail While the other 49 people are there tapping their, you know, feet. So what I, what I finally did was when I said I'm going to create a filter of investing in themselves and them having skin in the game by saying that it costs money to have me spend that time. It turned for me, all of those people into prospect, into prospects instead of people that I couldn't help or that were even annoying sometimes it became, well, I want people to want to.

And it wasn't their fault they were being annoying. It just was like you were getting stuck, bombarded. But you wanted to help them. That's actually why you got burnt out by doing.

Correct.

You were helping out so many people.

Wasn't that they came and said, can I pick your brain? The annoying thing was that I would tell them, yeah, okay, what do you got? And they'd say that I said, do this, this, this and this. And then they go off. And then I'd see them a year later and they'd say, hey, can I pick your brain? And they'd ask me the same daggone question. And so it was like, well, you're, you know, I'm not giving you what you need because you're not able to take what I'm so I got to figure out a structure by which you will feel the pain enough to take action, which I think is the investment. So that then they say, well, I paid, you know, Roland to ask me, you know, ask him these questions, and then he gave me the answers. Now, if I don't do it, I'm kind of a dumb.

Yeah, there's something about putting skin in the game and making an internal, unconscious commitment that I'm going to get something done.

So every. Can I pick your brain? Every message that you get on LinkedIn, Facebook, social media, everybody that watch walks up to you, every meeting that you go to, every person that you meet, every party that you go to, where.

It'S, what do you do?

I do this. What do you do? Oh, well, I have a question about that. All of those. Got a minute? Can I buy you lunch? Can I buy you coffee? Can I take you to dinner? Can I ask you a question? Do you consult? And can I pick. Your brain becomes a potential client. That's what's so cool about that. So you've got. And I'll ask, when I speak, I'll say, how many of you have had somebody say, can I pick your brain? Or can I get advice from you in the last 90 days? And almost every hand goes up. So we all have knowledge, skills, and experience that other people want to tap into. And so to turn that into client flow is as easy as having something that you can say to every single person that asks you those questions.

Now, let's say, okay, so just, like, I'll share a little bit on myself. Like, if I was going to start consulting or on a specific topic, I'm the type. I prefer to do an interview like this or a podcast or a piece of content, post it, drive my ideal client there, whether it's organically through tagging people, email them, or running Facebook ads, LinkedIn. I mean, LinkedIn is actually interesting. I know people spam the hell out of it, but you don't have to do that. There's so much. There's so many better ways to look for a core influencer who has your audience and then find a way to create value for them and get introduced to everybody. Like, and I usually. I like Colin. I know you do the same thing. Like, you provide insight to that marketplace that's unique and different, and all of a sudden they come flying at you. Do you have any favorites in that?

I do, but I want to. I just want to point out first the challenge because you like doing that better because you know how to do It, Yeah.

And my personality.

Most people don't know how to do it. Most people haven't done it. And so what I like about really taking, just being aware that there are people who, who value you at least enough to say, can I pick your brain? Can I ask you a question? Can I consult, tells you that you have a market.

Yeah.

Now, putting up content scares a lot of people. A lot of people don't. They look at themselves on video and they're like, I hate the way I look on video, I hate the way I sound on audio, you know, or they're like, I don't know what to talk about. Or they're like, I don't know how to build a funnel. I'm gonna have to hire somebody. And then they'll also get lost in the getting ready for. Getting ready to get ready to get ready to get in business.

And they never do one of those things.

So what I want to do is say, how do you do that? How do you shortcut all of that right off the bat? You literally can do it today by just going back 90 days and all your messages, all your texts, all your DMs and saying, how many times have I been asked for anybody to give advice? And then I can start doing that. And if nothing else, it just will convince you that you've got people out there that value what you have, knowledge wise enough to ask you for advice. Now, maybe none of them will pay you for it, but that's where you.

Start, you know, but here's this thing on that, like, you know, one of my friends was going through a business transition. Like a lot of people who end up in our, like, you know, this is a transition. I want to add this new, new service to our business. And they started, they took like their old, like whether it was 100, 300 or 500 of their past clients, friends, whomever, and they started emailing monthly and sending out a simple postcard. And it was filled with like, hey, guys, happy. Let's just say it's happy July. I'm making this up. It's not July right now, but hey, it's middle of the summer. Here's three things that are working in our business. Here's from a client. And then underneath it was, ps if you need a free 15 minute business breakthrough, which you can't really do anything in 15 minutes except identify a problem and can you solve it for me? And he is so busy with his little workshops and his consulting business and that's there's zero paid advertising in that that's just farming your existing relationship.

I think that's really great. I like that kind of stuff to start because complexity in that. Yeah, well, so, you know, I recommend you start a podcast. I do. But starting a podcast has a lot of points of failure for you to get started. I don't understand the technology. I don't know what a podcast is. I don't know how do you host it, I don't know how you record it, how do you edit it, where's the music going to come? And all that kind of stuff kept me from doing it.

If you look at. Let's take something super simple. You can go on Facebook right now and look at all your friends who just had a birthday in the last week. Send them all an email with your PS saying, like, like, you have this, and you're like, you know, your. Your business card on the like. Or your business, like, hey, are you looking for 12 ways to grow your business? You know, can I help you with your taxes, whatever your thing might be, you know, do you need help with getting your deliverability?

Yes.

Holy cow, Joe. I didn't know you do that.

Right.

Wow. Well, this is how we work, right, man, we can help you out.

Yeah, Yeah, I like that stuff. I recommend that all the other stuff is.

But so you're saying, like, I mean, really, just for our listener and viewer, like, that if you listed out the 12 simple things to organically take your existing database or like, or friend network, go one tier out of that, and you start just letting people know what you're doing, creating, you know, we have a system for doing this, but that could be good enough to have a thriving consulting business. Absolutely. And it depends.

Like.

Like, that's the other cool thing. And so at this point, I don't want more than one or two.

I know you don't. I know we talked about this.

So. So I charged. I charged 25 grand for four hours. That's great. And so if I do two of those, that's $600,000 a year, which is great, but it's not what I want to do to make money. What I want is I want to choose carefully the two people so that while I like the 600,000, what I get really excited about is the 30 or 40 million in equity. Right. And so I'm picking very, very carefully. And so what. It's kind of like when we teach people how to acquire businesses for no money out of pocket. We have people who go out and buy 14 businesses the first month, and it's like you can't work 14. I mean, I couldn't do it. I don't know. You know, I hadn't seen anybody be able to do it. But your kid in a candy store. This and this and this and this. And so when you start this and you say, okay, now I've got all these people who have paid me to consult, that's good, that's maybe new income for you. And that's fun. But then as those start turning into equity deals, you have to be careful because you'll get so many deals that then you won't be able to take advantage of the once in a lifetime deal that I say comes along three or four times every year.

But how do you. So what's some of the misconceptions about getting equity rather than going through all the different deal structures? Because we keep it pretty simple. But what are the misconceptions on it?

I think it's that that you. Number one, it's that it's even possible. I think a misconception is that it's cash for equity and that's the only.

Way you get equity.

Or I work for a big company, maybe that has stock options, you know, a plan, a formalized plan. The truth is that equity is available to anyone, anywhere, anytime, in any company, in any structure, because all you have to do is show that you have the value. But you also have to ask, right? Or be asked. So I think that that's the first thing is not even knowing that it's available. Then I think it's, well, I don't know how to do it. It's got to be super complicated. And there's somebody told me the other day that they couldn't get equity in a company. Company. They were told they couldn't get equity in the company because it was too complex. And the company was set up so that no one could grant equity. And I was like, well, that's just not legally possible, you know. So I have the benefit of being a recovering attorney. I know it's very simple to issue equity. There might be covenants that require more than one person in the company to agree to it, but it can be done, right? So if you've got something that the company values enough, then it's just stating the case and saying, what I've got to give is worth this. The next is that they don't know how to know how much to get. And there are ways to calculate it. One of the simplest would be the company figure out what the company's valued at the Company's valued at a million dollars. The thing that I'm going to do is worth 100,000. That's what I'd normally charge if you were to hire me to do this over the period of time I'm going to do it. You divide 100,000 by a million. That means 10% of the value of the company is what I would pay to buy into the company. Only I'm going to buy in with the services that I've got instead of cash. Right. So like those to me. How do I get out? Am I going to be stuck in the company forever? Well, you can build in a put option so that you have the right to get the people to buy you out at a certain time, at a certain price in the future. You know, any of the things that you can think of are pretty easy to deal with.

Yeah, yeah, yeah. Awesome. Okay, cool. So people can follow you at Roland.

Frazier on all your social network everywhere.

Right. And so by the time this video's out, we will have our consulting for Equity Instagram everywhere. And if people have questions, they can go to consulting for Equity IO, which is our site. And we are obviously doing the Masterclass. Now. The one thing I just want to share really briefly is that the whole purpose of us doing the masterclass is that when Roland and I were talking about how do we help people do this, it really covers the three frameworks of get clients, get paid and get paid ongoing and get equity. And so that if the equity part doesn't work out, the vet doesn't work out, we got paid. You didn't give free advice and you didn't walk away. And you can scale in multiple ways or any last pieces of advice you'd want to give or last benefit.

It's just that it's. It's truly life changing when you have the breakthrough. I had somebody that sent me a video day before yesterday and he was so excited because he had just done his first deal four weeks into the program. And I know how he felt because I remember the first time that I did it. And it's like you can kind of tap into it. It's just like you're just so excited at the possibility. Like a whole new curtain has been opened. And behind it is the ability is an unlimited opportunity. Because now there isn't the constraint that you've been told all your life stands between you and having ownership in a lot of companies that's completely gone once you get it, and you don't completely get it until you do the first deal.

Yeah.

But when you do, then all of the haze goes away and you get crystal clear. I could do this.

Yeah.

Again and again and again. And there's really no limit to how many of these I can do. So whatever I have ever thought I wanted for myself or my family, make that happen.

Yeah.

That is pretty powerful.

Yeah, I love it. So I'm going to end it right there. Thanks everybody. On behalf of myself, Ed o' Keefe and Roland Frazier, we appreciate you. And Roland, thanks for having me here sharing your wisdom as always.

Super fun. You've been listening to Business Lunch with Roland Frasier. If you're enjoying the show, let us know by subscribing and leaving a review. And for more information, go to businesslunchpodcast.com thank you for listening.

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