How To Spend $5k and Make A Million, A Case Study With Adam Lyons.

You're listening to Business Lunch with Roland Fraser. This is your seat at the table. Welcome to Business Lunch with Roland Fraser. I hope you're ready to be inspired. Today we have Adam Lyons on the show talking with Roland. Now you may know him as the dating coach, but today we're talking about something different because Roland has completely changed the way Adam thinks about business. You'll be inspired by Adam's confidence and enthusiasm. Enthusiasm. As he tells a tale that beautifully demonstrates Roland's acquisition mindset at work. Then you'll also hear some great acquisition tips from one of Roland's associates, Grant Teeple. But first, please remember, do hit the follow or subscribe button wherever you're listening. And you can check out Roland's epic challenge@businesslunchpodcast.com EPIC. Okay, let's dive in.

Adam, do you want to introduce yourself and tell everybody who you are and what you do? And I'd love for you to tell your story because I give a horrible rendition of how you acquired the gaming store after your son came home and told you that it wasn't going to be there anymore. But I know that story played out to be a whole bunch of things, so.

Oh my God. Yeah. When it first started, Roland, like I remember telling you about it and I was like, oh, I got no idea what's going to happen with this now. It's stupid. Like the original story. I was like, this is a pretty cool story. Now it's insane. So yeah. Hi guys, my name's Adam. I'm Roland Fraser's biggest fanboy. Pretty much that's my official title. I've said this before in numerous posts. That man's like completely changed my life. And what you guys know of as like the epic model is basically Roland's thought pattern on anything. It just so happens that he's applying it here to being able to acquire businesses. He completely changed the way that I think about things and running business. Full disclaimer. I used to be a janitor. So I don't know what you guys did for a living, but I used to change light bulbs and stuff. So that was my job. But through learning and through Roland and a whole bunch of other stuff and lots and lots of lessons, I ended up learning his method of acquisition. And my favorite acquisition because most of my company I grew by acquiring was my competitors companies or my competitors assets. To put this in perspective, last year I acquired 250,000 leads from $0 down. Thank you very much Roland. From my competitors. I would go in, take their leads off them for no money whatsoever down. And it was incredible. So that's, you know, there's. I've never seen an ad spend that compares to what I can from what I can do by acquiring my competitors businesses. And you know, just imagine, I don't know what impact that would have on you, but if you could acquire your competitors leads off of them and have them say thank you afterwards. Because all my competitors are happy about it. None of them were like, oh, Adam stole them, because I didn't. I bought them off them and they're very, very happy. I just bought them by paying them in advance later. Which is one of the best phrases Roland ever taught me. So. But this particular deal is one of my absolute favorites because all my children know about what I do is dad fixes businesses, right? That's what dad does. My kids are all, you know. My eldest is 11 now, he was 9 at the time. So my kid every Wednesday plays Dungeons and Dragons at the local Dungeons and Dragons stor. And he comes home, he said, dad, dad, dad, he's crying. I'm like, what's up, bud? And he's like, they're gonna shut down the Dungeons and Dragons store. Fix it. And I'm looking at my 9 year old and my 9 year old's like, dad, you gotta fix this. And I'm doing million dollar deals. This Dungeons and Dragons store has like three kids in it at any time. Most of them don't buy anything, but my kid is like looking at me like, no, this is like the most important business in the world to him. So I'm like, sure, I'll fix it. So I walked down to the local store with my son. The next day, I'm like, hey, I hear your company's for sale. The guy's listed it on Craigslist, by the way. For 25 grand, he's listed on Craigslist. And I'm like, I'm open to buying it. I'm interested. And I was like, I need to have a look at the books. So his books, he hands me, I don't know if I've told you this, he hands me like a legal pad that he's drawn out some numbers for the last couple of months and that's like his books. And this whole thing is just a nightmare, but. And I'm like, I'm not going to give you 25 grand for this. He's losing $1,000 a month. Like he's. It's making like 5,000. No, it's making 4,000 and it's costing him five. I was like, this is such a bad deal. I was like, but if you go bankrupt, there'll be nowhere for the children in our town to play games, and there is nothing else to do in this town. I assumed everybody instantly would join a gang or do drugs if this store closes down, because that's. I'm a dad, and that's where my head goes. So I was like, this is basically, we got to think of the children. You can't let the store close down. And the guy's, well, I'm not going to sell it for less than 25. And so this is a technique. You guys are going to learn a lot through the epic. If any of you guys do epic, which is don't take a bad deal, but be willing to wait. So I was like, look, I want the deal. I really want to do it. I don't want to do it at this price. I want you to be happy about doing the deal. So here's what I'll do. My offer's real. Don't go bankrupt. If it gets worse, call me. But I'm around. Hopefully you'll sell it to somebody else, and if not, call me. So I go in every month now. I got to be honest with you. His wife goes and hangs out in the store, and maybe while my kid was playing D and D, I go talking to his wife, and I asked her how she feels about losing $1,000 a month. I might have said that. I think I probably did. And his wife was definitely not happy about losing $1,000 a month and wishes he'd sell it. And I was like, oh, it's a shame, because I wanted to buy it and would buy it, but not losing money every month. And so that may have had a factor. I don't know. All I know is that three months later, he suddenly wants to sell it. And the original price that I offered was $10,000, which is the price of all of the stock inside the store. I basically was just going to buy the stock, right? Because that's the only value. The business loses money. And so he comes back three months later, and he goes, Done, $10,000. How many of you think I accepted the $10,000? Hell, no, I didn't. I said I'd buy it for the value of the stock. I was not going to trust that. Three months later, the value of the stock was still $10,000. So we did another stock check. Turns out it's only worth $5,000 now. And so I said to him, here's what I'LL do. I. I will pay you $5,000 via deferred advance. I don't know how Roland comes up with these phrases. Deferred advance basically sounds like you're going to pay him in advance, but it means you're going to pay him later. It's like, I just love him so much. So the guy goes, I accept your deferred advance. I'm like, great, so we're going to have payment terms then, and I'll pay you $1,000 a month starting in 30 days. And he goes, okay. I was like, I'll take the lease over right now. And he goes, great. So we walk to the office. He can't wait. Within an hour, he signed over the lease to me, and I've got all this stock. So I've now in control of the whole game store. Within hours, all the paperwork's done because he just can't wait to get out of it. And I'm going to owe him $1,000 in 30 days and then another 4,000 over time. Now, what I love about this deal is because I'll talk to people about seven figure deals, eight figure deals, because I've negotiated some of those quite recently. I did a $10 million deal and someone's like, adam, why do you always talk about the $5,000 deal? I was like, if you could buy a million dollar business for $5,000, don't you think that would be the best deal to talk about? As opposed to the seven figure deals where you're spending seven figures to get seven figures right? I would much rather pay $5,000 for a million dollar business. By the way, this business is worth a million dollars now. And wait till you hear this. Yes, I'm not kidding. So I go in, I liquidate all the stock on ebay. Straight away, we sell everything. Turns out he's got a bunch of collector's items because he hasn't sold things for so long. We actually made like $5,100. So I made 100, but with the $5,000 in capital, we then went to the most important resource that we acquired, which are the 400 customers inside the customer checkout system. The square System contacted the 400, said, what do you want us to stock in the store? The customers told us what to buy. We took the $5,000 and we bought all the stock they wanted. And that's how we built it. So we started building it, and then I would talk to Roland. I'd be like, dude, we did $6,000 this month. We made 1,000 and we kept going and it got bigger and bigger. And there are other reasons why I was comfortable doing this deal. I actually wanted parking, came with some parking spaces. There was all these ancillary benefits. But it got really interesting towards the end of last year when Tesla announced that they're opening a silly little factory outside of our town. And the chamber of commerce contacts me and says, you've got the only gaming store in the town. You should be aware that we're getting 20,000 new people moving into our town within the next two years. Now everyone's cheering, Yay. New people, customers and sales. My inner Roland is having a heart attack because I'm thinking, my rent's going to go up and I don't want my rent to go up because that would make me kill my profit margin. So I'm like, what am I going to do? What am I going to do when we're in the middle of COVID Right. Which, by the way, I did not anticipate when I bought the store, which is a whole other story. And so I'm like, there's a commercial property dip. Let's buy a building. So we then leverage the business and get a mortgage through the game store, and then we get a deposit through another investor. So I no money down, and we buy a giant commercial two story, brown brick building in the middle of this town. I can see Hannah's asking in Bastrop, Texas. It's just outside of Austin. So we now bought this giant building that because of the commercial property dip, was only half a million dollars. But within the next two years, the projection is this thing will be worth a million bucks. Now, remember, the business bought it, not me. So to put this in perspective, I paid $5,000. And by that I mean I paid $0 because I ended up paying for the business with the money from the stock that was in the store. So no money actually came out of my pocket at all. Now that business has bought me a million dollar, or what will be a million dollar asset within two to three years. And now, not only does this make me money every month, Roland, we're up to 20,000amonth right now. Just to put in perspective how much we're doing. But the biggest thing of all is. Thank you. But the best part, it gets even bigger, right? We now have staff in the store that run it. I never ran it. I always had staff. But the staff are now so competent, they babysit my children in the evenings because my kids go and play Dungeons and Dragons. So the staff are looking after My kids. But the best bit is I get care packages sent to my house. You're never going to believe this whole.

Time is never coming back.

Oh, boxes. Boxes get sent to my house filled with Dungeons and Dragons stuff that I get for free every week. Giant boxes. They just ship them to me for free. So all my kids have the latest stuff, I get the latest stuff, my kids get babysat. The store runs itself. We make 20 grand a month, and it's paying for a what will soon be a million dollar asset. So far, no money out of pocket at all. I haven't paid anything yet. And then I got real smart.

Wrong.

This is your fault. Because then the real cost came and the only thing that came out of pocket was nothing to do with that. But you made me restructure my company. You didn't actually, but you just kept talking about it correctly. So now the building is actually 711 Chestnut Street, Bastrop. So now I own 711 Chestnut Street, LLC, which technically is the official owner of the building. And the Bastrop Games and hobby store rents 711 Chestnut street from. From 711 Chestnut Street, LLC. We basically are fully structured correctly.

Yeah, I love it. And what was the deal on the building?

So the deal on the building, it was two part, right? So there was the mortgage. We got the mortgage directly through the company, through the game store. Yeah. But then the building has an apartment upstairs with a rent, with a tenant. So we kept the tenant in there. And between the tenant and what we were paying before in rent, it's the same as the mortgage price. So we have no costs monthly. The only thing we needed was the $100,000 deposit, which is the one thing that we needed. And if I told you this before, I had a student that paid me a lot of money years ago, and for the last two years, he hasn't been paying me, but he phones me up for advice every so often. He's a billionaire. And so I was like, I could pay 100 grand, but I've got to pull a Roland. So I phoned him up and I was like, how much money do you think I've made you over the last couple of years? And he's like, oh, he's like, a few million at least from your advice. He goes, you're super smart. I was like, I'm so glad to hear that. I was like, and would you like to keep phoning me up over the next few years for more advice, completely for free? And he's like, yeah, of course. Oh, that'd be great. I Was like, I'm so happy you said that. You see, because I want to buy a building, and I need 100 grand in cash right now, and I don't want to be selling any of my investments. I don't want to be pulling out my bank. I really just want to somebody who really appreciates my value to just send me a gift of $100,000 I could use as a deposit on a building. And I was like, now, I want to be clear. I'm not expecting you to do it, and I would understand if you didn't want to do it. However, if you did it, it would definitely pay me back for all of the phone calls I've done in the past and would be doing in the future. And I would appreciate it from you. Could you just pay me $100,000, please? And he went, let me think about it. Came back three days later and went, yeah, sure, dude.

That's awesome. I think it's the karma of. I know that client that you're talking about. I remember you telling me. And it's. You've done so much, and it' great because you were doing above and beyond without receiving anything. And so let's do good things for people, and good things come back. That's. That's really great. I love that. That's. Congratulations, man. That's. That's really cool. I didn't know you had acquired the building.

Yeah, it's. It's amazing. So now. And so, yeah, so technically, the business doesn't own the building, but it really did pay for everything. I mean, and it's still paying for it. And one of the coolest parts about it. And this is. I think you'll appreciate this. Eve was the one that was against buying the business initially. She was like, this is my. My partner, guys. And she was like, we don't need to do this. We don't need to do this. It doesn't matter what your. So, you know, you don't have anything to prove. I was like, no, it really does. And then it was the parking spots that made her shift, because we started getting complaints from the local town that we were taking up too many parking spots in our home. And this thing came with parking spots. And, like, she got like. I mean, we were getting, like, police turning up, like, you guys need to move these cars. So Eve was like, okay, fine. It comes with parking spots. At least we won't have to pay for additional parking. But now, because we're making so much money, we're getting chunks of cash get delivered to us in envelopes, right. Which do the extra cash. And so Eve is like looking at this cash as it's come in and I gift her the money and he was like, what are you doing? And I was like, you know that jewelry you wanted or that, that handbag? And I'm just giving her the cash. And she now loves the game store because the game stores like her pocket money because she's getting thousands of dollars of guilt free money that she's. It's been, it's such a great thing. And then. Actually, Roland, I haven't brought this to you yet because this is all in one year. Our next step, of course, is now we've worked out how to finance these things, is to duplicate the McDonald's model and buy a building in every town in America and put a game store in it.

I like it.

Yeah. That's the big growth that we'll be moving towards next. I give you guys a picture of the future.

And how old is your son? Or was he at the time?

He was nine then.

That's what I thought. Okay. I keep telling it. Sometimes I tell it nine, sometimes I tell 11. And then I'm like, I don't know, it's nine or 11.

So he's 11 now. He was nine then. Yeah.

See?

Okay, so I'm right both ways. I can tell it either way. I like it.

I presume you don't write.

That is cool. Grant, why don't you introduce yourself and I'll tell you what Grant normally says when you ask him anything. As he says, it depends.

It depends, right? Yeah. I'm like the old people's diapers, right? It depends. So you got the dad jokes today. I've known Roland ever since he stole my credit card when we were dating the same girl in law school and ended up. I ended up paying for the whole night and I thought it was my girlfriend. He ended up taking her home. So then that's how he is. You know, it's so funny because.

Yeah.

So you know, tonight, today, a couple of things were said already in this. In this that really make me remember who Roland is. Is like Roland's mind. When you put Roland's mind across any deal or any situation, it never comes out the same as us normal people, you know? And mostly it comes out brilliant and super fun. Not too often twisted and sick, but really it's just amazing. And for those of you guys who don't know me and haven't seen this, I'll tell you, I've been doing this stuff for 30 years. Right. I'm a business attorney here in San Diego. I help people buy and sell their companies. I help people structure their tax stuff. I help people do all kinds of transactions with their high, high, high value employees. And every time I get done with the Roland at the end of a transaction, he amazes me. And it's still, frankly, it pisses me off. Roland, nothing personal that he can find that extra little bit of value that I'm sure I'm the smartest guy in the room until Roland's there. And in addition to that, the deals that we've done over the years, you'll be surprised how much stuff that you hear in this epic courses that I meet business attorneys who don't even have a clue who they do their things the one or two or three ways they do the stuff, they do it. And they have no imagination, they don't think outside the box, they're not creative. And the deals that we bring them that Roland has come up with, and I would like to think I have, but he did. And then we take out to the street. It's amazing to me how you all will be exposed to more deal versions, frankly, than most of the attorneys I ever meet out there. And I'm telling you right up to the top, I work for hedge funds buying and selling companies, private equity firms buying and selling their companies. And I'm telling you those guys haven't even, don't even have not even been exposed to the multitude of versions of deals and deal making that you get in the course. In a way, this course is too much. When I watch the course, I can follow along because I've done it for 25 or 30 years. It's like a fire hose of information. And I'll just tell you, really try to glom onto the things that work and work for you. If I would give any one piece of advice, don't try to boil the ocean, right? Don't try to do it all. Do what works for you, do what works for your space and follow the contacts that you can get through this network. Frankly, I use them in my business to find deals and make deals work. This is an amazing early kind of like an entry level time for the Internet and for the way to make deals, especially using Roland's stuff. So I'm not just saying that because I love him and he's good looking. I'm saying it because their scoreboard today was, it was yesterday. Roland and I finished a deal that was almost worth $40 million that Roland negotiated. And we Did. And I can't even go through the number of people lately that we've been working with through the EPIC program that are getting deals and doing deals. And frankly, we're going to have Roland. Have to talk about expanding my bandwidth here because I'm not sure I can take many more people who are getting all these good deals.

So I told you, Grant, three more deals and I'm willing to let you out of that garage I locked you in three years ago.

Yeah, thanks. Hey, as we say here in California, drink them if you got them.

Grant is. So Grant and I met in law school, as he said, and had a chance to work together for several years. And he's. There's only two attorneys I've ever met that I would hire, and Grant is one of them. And of course, you know, when you leave a partnership that you've had for well over a decade and you go, you know, you go out to do different things, you don't get to see each other as much. But we've managed to stay in touch throughout the years and do a whole bunch of deals together. And it's really been cool for the last few years now. Gee, we've been able to. There's just been so much going on that we've had a chance to talk together a lot because, I mean, we'd stay in touch and see each other every now and then, but when you're actually doing something together, you get to see each other every day. And so it's been really cool doing that. And gosh, don't there seem to be so many deals right now, Grant? I mean, it's. I met yesterday. I didn't even get to tell you I met with this guy yesterday. They turned down a $200 million offer, and that's potential merger for one of the other companies that we've got a mutual client on and that I own part of. And it's like the day before one of my other partners introduced me to an escrow company. I mean, it's just. It's insane. So I've been sending Grant a ridiculous amount of work as well, which is. Which is good for him. But, yeah, I can tell you guys, man, it is hot right now out there. There's so much money chasing companies. And I can't believe that one company I was telling them about, there was. Grant was working with me on this as well, that there's one of the companies that we're helping out that received an offer and they have 40 bitcoin. And we were telling them you got to decouple the bitcoin from the thing. And they had this offer, and it was this horrible offer, but they read it one way, and we were like, no, it's not actually the way you think it is. It's this way. And we were like, let's wait and see. And they were kind of eager to take it. And we said, well, they told you there's this other offer from these other people coming in. At least wait and see what that is. And it turned out that that offer was it four times as much, I think, as the first one. Grant.

Yep.

At least. At least. And they wanted to grab that first one so bad. Roland's like, hold it. Just hold on.

Just Grant. Grant has a saying. He used to tell me, because I get frustrated when we were doing something, especially in litigation, because litigation is a lot of hurry up and wait. And he would say, man, it's baking a cake. You gotta let the cake bake. You gotta let the cake bake. So that's what I tell people now. Gotta let the cake bake. Adam, you're a great person to start with. And then I'm gonna go to Grant, too, because one of the things that people ask me regularly is, what about credibility? What about people that say, I need a proof of funds? That kind of stuff? Would you guys share your experience?

I know you.

So you're working on this giant deal. Do you have 100 million in the bank? Have you been asked to show that? What's going on with that? And if not, why not?

Yeah, it's pretty funny. So my latest thing is I walk into deals wearing 1980s T shirts. So my last one was a Thundercats T shirt. And when everyone else is in suits and I rock up in a 1980s Thundercats T shirt, usually with my headphones wrapped around my neck, and I kind of look like I'm not really interested in what's going on. I basically look like a multi billionaire because I just don't care what's happening. And at that point, usually the people that are across the table for me will start saying, like, is that Thundercats? I'm like, hell, yeah, it's Thundercats. Thundercats are the best. And no one actually tends to question whether I've got the money, because I'm acting like somebody who has the money. In the one time when somebody said to me, do you have that money in the bank? I was like, no, I'm rich. Why would I keep that much money in the bank? That's the worst place to store money. At which point they went, oh, yeah, that makes sense. I was like, if I'm going to buy it, I'm either going to have to sink some assets, move some money around, or bring on another partner, which I might do if I want a venture capitalist involved. The reality is I want to see what's going on with the deal first and see where we're at before we decide what to do.

I love it. So, Grant, we come to you, Adam and I, and we say, man, your client, XYZ Company, we're interested in the possible acquisition and we've got some ideas on how we'd like to play it. And I know they've told you to be the representative. You're the guy to talk to because the CEO trusts you. Do you immediately ask us for a proof of funds? And if not, why not? And if so, what the hell are you talking about?

Well, the answer is probably not. We normally wait to see what your offer is, and we see if the offer works, and then we ask for funds.

Right?

Because if the first thing you say to a girl that you're dating is, but will you marry me and have the children? Can I name them what I want? The answer is never going to be good. It's the same thing in a business deal. I always think these M and A deals are just like dating, right? You start flirting in the beginning, maybe it works. If it works, you go to the second date, talk about what would be like to live together. Where do you want to live, honey or sir, or whatever your orientation is nowadays? Sorry, don't mean to offend everybody. And. And then you go from there with the deal. So, short answer. We never ask who goes anywhere and asks how much money somebody has.

Business brokers.

That works. Almost never.

Yeah, business brokers do it. And that's really what I'd like for you to take away, is that. And what Grant really helped, I think, show you what the timing is, that it's not appropriate to ask about funds until at least you get an offer that involves funds, right? So when you're reading Biz, Buy, Sell, and these other sites and it says proof of funds required, you know, what you can do is even do a time shift and say, look, whoa, hang on there. You know, let's find out first if this is something I'm interested in buying, because I'm certainly not going. I'm not in the habit of going around producing bank statements for people, and I don't even know that this is going to be a bank statement deal. I don't know what? I don't even know if I want this deal. So if you are a seller, then show me you want to sell. If you are not, then let's be friends. And when you get around to wanting, you know, when you realize that you might be interested in what I have to talk about, give me a call. Right? It's that power of walking away and helping to reframe this as it's. The timing is completely incorrect and inappropriate before you even know if you want the business to produce a proof of funds for a business they're asking $1,400,000 for. Let's say, what am I going to do, show you I have $1,400,000 in cash? As Adam said, that'd be kind of dumb to have that sitting in a non interest bearing investment. Anybody that's got any kind of money knows that's going to be in short term cash equivalents or something else that's making money. You're not going to just sit on it in the bank and you're not also going to write a check. Even Grant, how many of those big private equity company deals that you do write checks for 100% of the thing out of their cash account?

Zero.

What do they do? Do they use any kind of financing, those guys?

Every time?

Right. So that's the other thing is the big players don't ask for that because they don't do it either. If they're sitting on a billion dollar committed fund, they're not going to pay $50 million for a $50 million company they've got out of that cash they're going to leverage like everybody else does. So I think your answer when somebody says that is, look, A, I don't know if I'm interested in this, B, I'm going to definitely do a leveraged deal here and see, I'm not showing you anything until I see something back from you to see that this is a company I have any interest in buying at all and that really like I'm telling you that power positioning is everything because people just don't ask. It's truly like a business broker level, newbie, low level kind of thing to ask for. So I just want to be sure you guys understand that you don't need a pile of cash to do this. All you need to do for Grant, who's done hundreds of these deals is to say, man, here's what my offer looks like. I'm looking for your guy to carry back 60%. I'm going to do an earn out for 20% and then there's some things that I can do with the assets of the company. That'll be the rest. What do you think about that?

You've been listening to Business Lunch with Roland Frazier. 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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