Business Lunch

When you put yourself out there online, the haters are going to find you. How do you keep them from getting under your skin?

In today’s episode, host Roland Frasier shares honestly about some recent critical feedback he’s received on his paid ads online. If this were constructive criticism, that would be one thing. But some of it has been hateful and hurtful comments—about his intelligence, his motives, and even his facial features. There’s never success without criticism. Roland encourages you to understand that this hate has nothing to do with you and everything to do with the hater. They’re either angry or jealous or insecure or just having a really bad day. You can’t let them stop you from doing what you were put on earth to do.

Listen in to get some helpful advice about dealing with hateful critics in a healthy way.

IN THIS EPISODE YOU’LL LEARN:

• Mindset shifts that will give you much-needed perspective 
• How to not take the hate personally when that’s all you know to do  
• Creative (and funny) ways to deflect criticism and hateful comments
• 3 things to always keep in the front of your mind

OUR PARTNERS:

• 7 Steps to Scalable workbook
• Get a free proposal from Conversion Fanatics
• Get 3% cash back on your ad spend with AdCard
• Get my book, Zero Down, FREE

Thanks so much for joining us this week. Want to subscribe to Business Lunch? Have some feedback you’d like to share? Connect with us on iTunes and leave us a review!

Mentioned in this episode:

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You can’t build true wealth until you get out of the trap of giving away your time for money—no matter how much money it is.

On today’s episode, Ed O’Keefe interviews Roland Frasier about one of Roland’s favorite topics—consulting for equity. He has even started a new business to help experts and consultants get out of that dollars-for-hours trap. As Roland sees it, there are a lot of ways you can be compensated for something. He explains those ways in five levels that build on each other. Based on years of experience, he knows that one of the absolute best ways to create massive amounts of wealth in a short period of time is utilizing your knowledge and expertise to gain equity in companies.

Listen in as Roland walks through his journey of creating this path to wealth and invites us to follow the vision.

IN THIS EPISODE YOU’LL LEARN:

• The 5 levels of compensation and how to work through them 
• Which level most people tap out at and why 
• Why not giving away advice for free actually makes you a better friend
• How to do something once and get paid forever

LINKS AND RESOURCES MENTIONED IN THIS EPISODE:

• Consulting for Equity

OUR PARTNERS:

• 7 Steps to Scalable workbook
• Get a free proposal from Conversion Fanatics
• Get 3% cash back on your ad spend with AdCard
• Get my book, Zero Down, FREE

Thanks so much for joining us this week. Want to subscribe to Business Lunch? Have some feedback you’d like to share? Connect with us on iTunes and leave us a review!

Mentioned in this episode:

Get Scalable Live - THE PREMIER EVENT FOR BUSINESS OWNERS

Over 3 days, network and collaborate with fellow entrepreneurs and CEOs to build a ‘recession proof’ plan to scale your company to 8-figures and beyond, and…leave knowing 2023 is going to be your best year yet!

Get Scalable Live

“What is my company worth?” That’s a big question with a lot of answers. 

In today’s episode, host Roland Frasier walks us through a few different ways to value your company. Last time he checked, there were 432 different ways to do this. Don’t worry. He’s only going to share a handful—and he’ll tell you which one he thinks is easiest (and he uses most often). It can be overwhelming when you consider book value, market value, intangible assets, goodwill, and acronyms like IRR, SDE, EBITDA, and ROI. Thankfully, Roland is really great at breaking down difficult concepts in ways anyone can understand.

Listen in as Roland shares a helpful overview of valuation in the M&A world.

IN THIS EPISODE YOU’LL LEARN:

• What IRR, SDE, and EBIDTA mean and why they matter
• How to factor in goodwill and intangible assets when pricing your company
• How to use a comparable analysis when selling/buying a business
• The single easiest way to figure out what your company is worth 

OUR PARTNERS:

• 7 Steps to Scalable workbook
• Get a free proposal from Conversion Fanatics
• Get 3% cash back on your ad spend with AdCard
• Get my book, Zero Down, FREE

Thanks so much for joining us this week. Want to subscribe to Business Lunch? Have some feedback you’d like to share? Connect with us on iTunes and leave us a review!

Mentioned in this episode:

Get Scalable Live - THE PREMIER EVENT FOR BUSINESS OWNERS

Over 3 days, network and collaborate with fellow entrepreneurs and CEOs to build a ‘recession proof’ plan to scale your company to 8-figures and beyond, and…leave knowing 2023 is going to be your best year yet!

Get Scalable Live

Tactics and strategies are not the same thing, and only one of them is an effective long-term plan for getting your customer to where they want to go. 

In this episode, host Roland Frasier sits down with John Jantsch, Founder of Duct Tape Marketing and the author of the book by the same name. Duct Tape Marketing is one of those books Roland believes everybody should read. It’s in his all-time Top 5 and “fantastic.” John recently released a new book called The Ultimate Marketing Engine, and it’s filled with actual strategies (not tactics) for helping your customers along the Customer Success Track.

“The ultimate marketing engine is a successful customer,” he says, “and I think that’s the point of view that we often lose.”

Listen in to hear how John and his team take their customers through five stages on their way to lasting transformation.

John’s first book has met with fantastic success, and as he’s traveled the globe talking to businesses and entrepreneurs, he’s gotten a lot of feedback from larger organizations. “We want higher-level strategies,” they told him, and John delivered in his new book. 

He believes a lot of people are confused when it comes to the difference between tactics and strategies. Not that he blames them. Google “marketing strategies” and it’s a bunch of blog posts with 15 tactics. People are often looking for the latest marketing hack, but the essence of strategy is a plan. Where do you want to go? Who can you bring value to? Who can you bring even more value to? 

“Our job really, if we want to simplify it,” John says, “is to take somebody who has a need from where they are to where they want to go.”

A lot of marketers have a tendency to say, “I have this thing to sell. Here’s someone who said they’d buy it.” And that’s their marketing. But John and his team work hard to develop a Customer Success Track. They figure out where their customer is today—their characteristics, their struggles—and then plan out the tasks or milestones they need to achieve to get the result they want. It’s not about the next thing John can sell his customers, but what’s the next level of maturity for them?

In John’s marketing business, they have five stages they take their customers through. It’s like a value ladder, a roadmap. By building these stages and understanding what a business has to do to pass through each stage, John says they can “promise the rainbow.” They can promise, “Here’s where we’re going,” instead of just, “Here’s how we’re going to solve today’s problem.” Of course they still solve today’s problem, but it’s part of something bigger. When we solve x, we can do y. And so on and so on, stage after stage.

Here are the 5 stages in order:

1. Foundation (basic marketing stuff—leads, customers, etc.)
2. Level Up (pour money into lead generation because you have a foundation now)
3. Organize (consistently convert those leads profitably)
4. Monthly recurring revenue (this should always be a goal, no matter your industry)
5. Build a team (so you can ultimately scale)

Of the five stages, team-building might be the biggest challenge for people. If you’re an entrepreneur who hates leading people, John says you either need to get someone who does want to lead people, or you need to go to work on yourself. You need to develop some self-awareness to realize you’re the problem. Know where your blindspots are and what your superpowers are. Then find and surround yourself with people who...

Would you like to get paid your normal rates but also an additional amount in equity?

Today’s episode is a little bit different, because it’s taken from a coaching call Roland Frasier did with a Consulting for Equity Mastermind. The Mastermind is a group he started to help consultants get equity in the companies they’re working with while also getting paid their normal rate. 

Listen in as he walks someone through how they can get their normal consulting fee of $75k but also get an additional $125k in equity.

He’s talking to someone who gets a $75k fee for six months of consulting. Time-wise, it’s less than a day a week for 6 months. 25 days of his time. That’s $3000/day on average. 

Roland thinks he should charge more for his consult. If it was in the neighborhood of $10k to $30k, that’s his discovery day. He suggests starting with $20k for a consult day. It’s probably not that big a deal in that world. For that $20k, can you deliver $200k of value in the plan you give them to execute? That’s the math Roland wants to take us through. What are the 10x benefits they can get from your consult?

Possible benefits: 

• to quantify the increase in customer retention 
• to quantify the number of new customers
• to quantify how that impacts profits 

Give them transformative information that will say:

• on average, my clients have achieved these benefits 
• they’ve aggregated $400M
• the average client sees a benefit of $1M or more.

If he can do this, it’s very likely they’ll need him to come help them make those things happen. The more he shows them what the plan looks like and what the results will be, the more they’ll want him to be the one to do it for them. That’s the benefit of a discovery day.

So, if the average benefit is $1M in profit, and it’s a $20M profit company, then arguing for 5% would be to take the full benefit, so you might argue for less than that, so there’s a benefit for them as well.

If you’re offering a $1M benefit, you could charge $200k. Or, what if, instead of charging that, you offer a hybrid deal: your consulting for $75k and an additional $125 in stock in the company. So, $75k in cash and $125 in stock.

This might give you ideas for ways to expand what you’re doing. Not everyone you meet as a client will need everything you’re able to do for them. The more leads we can turn into clients, the more profitable we’ll be in a DPL kind of performance in our efforts to generate customers.

Be thinking about: what other types of consulting can I offer? You may have a business where you help companies improve retention and reduce churn, but they don’t all engage you initially for the $200k consulting. Maybe they love what you’re saying but can’t afford you right now. You don’t want to wait, so you can offer a less-intensive advisory capacity.

Or Roland will put his money where his mouth is. What if he comes in on performance, and each time he gets them another $100k in performance, they give him 10%? Say: “I can get you $1M for free, and when I get you there, you give me $200k.” They have nothing to lose and everything to gain.

There’s also transactional consulting. Are there things that are finite in their delivery that are a one-time occurrence and specific? On that transaction, you’ll get compensation that’s a percentage of what you get for them.

The more services you have to offer in more situations, the more money you’re going to make.

OUR...

SPVs are really good things, yet nobody’s talking about them. Why not?

In today’s bite-size episode, host Roland Frasier makes the case for SPVs (Special Purpose Vehicles). A year or so ago, Roland was interviewing GaryVEE (Gary Vaynerchuk) and asked him, “What do you know now that you wish you had known when you first got started?”

And Gary gave one of the best answers Roland has ever gotten. He said he could have saved himself tens of millions of dollars if he had known about SPVs when he was younger.

Listen in to find out how you can use SPVs to your advantage in every business deal.

An SPV is a subsidiary company that is formed to undertake a specific business activity. For whatever reason, not a lot of people are talking about SPVs. They sometimes talk about forming companies to protect you from liabilities. We all know it’s good not to have a sole proprietorship or partnership where the owners have unlimited personal liability. But a lot of people don’t know about SPVs.

In fact, if you go down to the place that forms companies, like the Secretary of State, and you say, “I need you to form an SPV for me,” they’ll look at you like you’re nuts. There is no SPV that you can form. SPV is the use to which you put the entity that you form. 

Roland is a big proponent of limited liability entities. With an SPV, you’re using a limited liability entity for the specific purpose of what you’re doing. You’re acquiring a company, doing a consulting deal, or going into a new territory. That can be a good time to use an SPV. It just protects you, your personal assets, and your business assets from any liability that comes out of the deal.

When Roland is looking to do any kind of deal, he does a limited liability entity for that deal. The fact that he’s using it for this special occasion, this transaction, that makes it an SPV. It’s really just a fancy set of words attorneys use to say “this company, this corporation, this LLC is going to be used to do this one thing.” That one thing might be broad or very specific. 

Let’s say you’re acquiring a company. You form an SPV to acquire the assets of the company. As long as you’re paying the fair market value, then generally you’re not liable for the debts of the company you’re buying them from. This is assuming there’s not a direct lien against the asset. Then you won’t have successor liability.

Another situation would be that you’re using an SPV to acquire something, and it’s going to have seller financing or some kind of debt. Instead of you personally taking on the debt, the SPV will take on the debt. You won’t lose your house or have them garnish your wages or lose your investments or other assets to satisfy a claim.

As far as when you should do this, it makes sense whenever you’re doing anything that potentially creates business or personal liability exposure for you. It’s really just a good habit every time you do a deal. You might have a holding company that owns several SPVs, but you really want to separate one for each new deal or partnership.

How much does it cost? Just the cost to form an entity—maybe $1k to $2k. There’s a company called Prime Corporate Services that does it here in the U.S. 

Take it from Roland and GaryVee and get an SPV formed whenever you’re doing a deal.

LINKS AND RESOURCES:

• secstates.com

There’s a new version of entrepreneurship out there that’s gaining steam and is going to change the way we do business over the next few years.

In today’s episode, host Roland Frasier chats with Tom Shipley, President and Co-Founder of Foundry. Much like Roland, Tom is a serial entrepreneur who prefers to stay off the org charts. In the past, Tom has always been the entrepreneurial operator, building a number of 8-figure businesses and developing brands that have become household names. But, over the past couple years, Roland has helped open his mind to the concept of being an entrepreneurial investor, and that has changed everything.

Listen in as these two brilliant minds discuss all things entrepreneurship, aggregation, and asset classes.

Obviously, entrepreneurship isn’t one-size-fits-all. But there are common/traditional ways of being an entrepreneur, and then there are people like Roland who are pioneering new entrepreneurial territory. 

Traditionally, you get into one business where you follow that and try to create a liquidity event or dynastic wealth. Then there’s serial entrepreneurship, where you’re doing this over and over again. Then there’s this new version of entrepreneurship which Roland is an evangelist for—the entrepreneurial investor. An entrepreneurial investor doesn’t have to control, operate, and manage everything on their own. They just make their money and move on. That’s the beauty of it—and the opportunity to create exponential wealth.

Tom sees Roland playing both of these roles—entrepreneurial operator and investor—in tandem and doing it remarkably well. (Roland jokingly suggests the term “acqui-preneur. We’ll see if it gains traction.) As Tom has moved into the entrepreneurial investor space, it’s been an incredible transition for him. He sees the way Roland has been able to impact thousands of entrepreneurs’ lives and change the game. And he wants that for himself.

Once upon a time, Roland and Tom had an equity deal that didn’t work out, and it didn’t work out in the very best way. Tom and his partner were working toward selling their business. Roland happened to be offering his EPIC challenge around that same time. Tom watched the challenge and started changing how he did things. He started focusing on what impact the sale of the business could have. And he asked the big question: what’s next?

As they were trying to identify a big opportunity, he looked into aggregating platforms, something he loves to do. There’s acquisition, but he really loves aggregating platforms. They decided to do a small aggregation play in e-commerce, then flipped to Amazon. There were only five players in the space back then, so it was difficult to get funding to acquire an Amazon business. It was considered risky, because you don’t control the marketplace, but brilliant because it was so cutting-edge. 

Tom knew institutional funding would eventually become available, so they decided to pivot. Tom spent a day with Roland talking through ideas. What will this look like? What needs to happen? How can we scale this?

He made seven calls to private equity firms and talked about the idea. Without a Power Point or a business plan, he got six offers out of seven meetings. They’d go out and buy Amazon businesses, build them to a 2-6 multiple, and pull them together as an aggregator. When you do that, you can have a multiple of up to 20, and that’s really the play.

They fleshed out a business model and assembled a team. The private equity traditional structure tries to pigeonhole you, but Tom and his partners didn’t follow that. They created their own

When you’re doing a merger or acquisition, should you acquire equity or assets? And what’s the difference exactly?

In today’s snackable episode, host Roland Frasier breaks down the key differences between acquiring assets and acquiring equity, as well as the advantages and disadvantages to both. If you’ve ever been confused about how you should buy a company, you’re not alone.

Listen in as Roland quickly and succinctly shares everything you need to know about equity vs. assets.

Many people don’t realize they have options when they’re looking to acquire a business. They think it’s like the stock market, where you buy shares of ownership—equity—in companies. But when you’re talking about buying private companies—or doing mergers and acquisitions—you can acquire assets instead.

When you’re buying assets, you’re buying the physical components (equipment, computers, office chairs) and intangible components (URLs, logos, digital assets, software code, copyrights/patents) that allow the company to be in business. You could buy the whole company that owns all these things or just buy these things directly. 

Let’s say you’re going to acquire a controlling interest in a company (51% or more of the voting stock). You may want to think about avoiding potential liability. The equity carries with it whatever liabilities already exist in the company. You get all the assets the company owns, but if there are claims against the company, or debt, that will come with ownership of the equity. Even if the claim/debt is contingent. 

Maybe there’s a lawsuit against the company that hasn’t been resolved. Maybe there’s a worker’s comp claim. Or a copyright infringement. Or a sexual harassment case. Or a disability claim. All of these things could be out there lurking. And we just don’t know about them.

How can you acquire a company and feel safe that you’re not also acquiring all these liabilities? Lawyers and business people have come up with a way: purchasing the assets instead of the equity. Equity represents ownership evidence in a company and all of its underlying assets. Assets are just the physical/intangible things the company owns. When you acquire equity, all the claims come with it. That’s kind of a downside. 

There are also some tax consequences to think about. When you’re acquiring assets, you’re generally allowed to depreciate those assets, for tax purposes, over time. With equity, you’re not allowed to do that. 

If you’re a seller, selling the assets might create two tax events for you, or it might prevent you from receiving certain beneficial tax treatment that you would have gotten from the sale of stock. Roland recommends hiring a business attorney to handle all of this. At the very least, someone who is a tax professional. Have them look over the deal for you.

What types of assets should you buy? Just buy the ones you need. A good strategy for reducing the purchase price of the company you’re acquiring is to ask: are there assets owned by the company that we don’t need? This is called a carve-out. When you want to acquire a company, but you don’t need/want all their assets, carve out what you don’t want. It will save you money.

Those are the primary advantages/disadvantages of assets vs. equity. Most of the merger/acquisition deals you’ll do will be asset deals, not equity deals. 

OUR PARTNERS:

When you’ve taken your business through all 7 Levels of Scale, it’s time to live your very best Level 7 life.

In previous episodes, co-hosts Roland Frasier and Ryan Deiss walked us through the first 6 levels of their proven and powerful framework, The 7 Levels of Scale. In today’s episode, they’re discussing Level 7, Hit Your Number. This concept is near and dear to their hearts, so much so that they created a whole company, a whole book, a whole movement around these 7 Levels of Scale. And Level 7? Is the absolute most fun of all.

• Level #1: Sell and serve 10 customers.
• Level #2: Build a growth flywheel.
• Level #3: Build an upgraded scalable operating system.
• Level #4: Double your take-home pay.
• Level #5: Build your advisory board.
• Level #6: Complete an acquisition for expansion.
• Level #7: Hit your number.

Then listen in to hear all about the fun, freedom, and opportunities that await you in Level 7.

When Roland and Ryan are talking to new clients about the 7 Levels of Scale, one of the pre-steps is to have them answer this question: What is your number?

There are actually two numbers at play here. First, you’ve got your personal number. What number do I need to hit to feel like I’ve “made it?” Then there’s the number for your business. Your personal number for your desired ultimate wealth is completely different from what you’re likely to get this business to do. It’s important to have an understanding of both.

For the context of the 7 levels, what’s that number for your business where you’ve maxed it out to its optimal level?

Roland and Ryan have their clients think in terms of three-year planning cycles. Three years is a sweet spot—long enough to do something truly meaningful, but short enough to be somewhat predictable and tangible. Over the next three years, what do you want your numbers to be in each of these three key areas?

1. Top line sales
2. Bottom line profit
3. Enterprise value

All of those numbers are very figure-out-able, and Roland and Ryan expertly walk clients through each one. Obviously, that third number is a function of the other two. They call it going top to bottom. If you can take today’s top line revenue, and in three years from now, that’s actually your profit, then your company’s value can go through the roof.

After you figure out what you want your top line sales, bottom line profit, and enterprise value to be after three years, the next area you’ll look at is impact. What impact do you want your business to have on your personal life? On the lives of your family and inner circle? And on the world at large? You can divide it into 3 spheres of impact:

1. me
2. us
3. them

As you think through each sphere, get really specific about what you want. Do you want to send your kids to college debt-free? Do you want to buy a house for a parent? Do you want an annual European vacation with your partner? Do you want to write a check to a charity for a million dollars?

As far as your impact on the world at large, this idea is front and center in the world right now. Companies are being asked to take a stand socially for what’s right. There’s a whole movement called ESG...

When you’ve found a business you want to acquire, how do you get in touch with the owner to get the ball rolling?

In this week’s snackable episode, host Roland Frasier shares 10 simple ways to contact the owner of a business you’re interested in buying. Whether you want to acquire it outright or cut a deal for consulting for equity or do a strategic alliance or a joint venture, you have to get to the decision maker. You need to talk to the owner. And to talk to them, you need to find them. Good news: the odds are in your favor. If one or two of these tips don’t work out, you’ve got eight more options. Be sure to check out all the links at the end.

Listen in for some quick and brilliant solutions to getting access to the owner of a company you want to buy.

This is the most obvious and easiest way. If you have a company already identified, then just look up the phone number, call them, and say to the person who answers the phone. “Who is the owner of this company? May I speak to her or him?” No research necessary.

This website is basically a collection of the U.S. Secretaries of State for each of the 50 states. That’s the government office where you file to form a corporation. Click on the Secretary of State site for your state. Type in the name of the company you’re trying to find out the information for. This is updated every year, and the filing also includes the address. That’s a really good way to get the home address of a director. Sending an actual physical letter can be really effective. 

There are similar agencies in the Canadian provinces and Australia as well. You’re basically just going to where the company is formed and looking up the official government filings in respect to it.

Zoom Info has a lot of information on companies all over the world.

Most business websites have information about the owners on the About Us page. If you can’t find it there, try the Contact Us page. Or the Meet Our Team page.  

If you’re having a really hard time, you can go do a “Who Is?” lookup or a reverse “Who Is?” lookup to see who is registered as the owner of the URL of the website of the company you’re looking at. That information is public.

If you go to the bottom of the website, there’s a Terms of Service page. Click on that, and it will very often list the person or company that owns the site. The owner’s email might even be there. You can look at the privacy terms as well.

This is a paid service where you can...