Cody has just revealed her seven-step blueprint to buy and grow any business Cody Sanchez is the multi-millionaire founder of contrarian thinking a business which has helped hundreds of thousands of dreamers Achieve Financial Freedom across the globe Cody focuses on buying small businesses and growing them to become cash flowing monsters so what are we going to learn today give us the headlines point one is going to be what I call the three waves so this is the why point two is limiting belief so how do I do this if I got no cash point three is
what type of business should I buy four is what if I've never done this before five is finding it in finance the fancy term is origination six would be how do you get other people to structure a deal where you win and they win seven is called selling you how do you talk somebody into like taking you seriously and letting you buy a business that seems hard this video is sponsored by Sur Shar let's start then with the three waves okay so the three waves is this singular idea that I found three years ago and
everybody thought I was crazy which is right now we've got the baby boomer generation retiring so there are 75 million baby boomers are going to retire over the course of the next 10 years so let's call it by 2035 those baby boomers are the ones who own most small businesses they own somewhere between 60 to 70% of all small businesses what's wild about that is you know this cuz you got a bunch of businesses the average net worth that is tied up in a business from a business owner 90% most of them have no extra
cash so they can't just shut down the business and walk away they need something for the business and so we have this huge group of businesses coming online for the first time ever but nobody knows how to buy a business because it was just for Wall Street before it was never for normal people and Wall Street wanted it that way because they were like we want to own everything and we don't want you guys to which is crazy like for instance did you know three companies own 40% of the entire corporate American structure which is
Vanguard Black Rock and uh State Street and what's crazy about that is we can turn the tables by buying businesses in weird unique ways that nobody talked about back when I was at Wall Street um so that's one wow bunch of businesses coming online in economics they call that supply and demand you got a ton of Supply then point two here is What's called the Great resignation right so um we've already seen this in the US right now there's 7 million work and age men that have just opted out of the workforce largely because they
can't find gigs also because they don't know what type of gigs that they want anymore so we've got all these people who are opting out quiet quitting they don't like their job anymore I've certainly felt that before so we've got all these young people that don't want to work in corporations anymore they're like your foosball table you know I want a job that matters right or I want I want to get paid more I want upside I want to live my dream right and so we have the great resignation with the great retirement or the
baby boomer generation leaving and then finally we got that great corporatization which is what we talked about with the uh three companies owning everything back in the day there's a thing called private equity which is what I used to do and private Equity they basically take other people's money and they buy businesses and private equity in 2000 used to own about 4% of companies in the US now they own 20% of companies so these guys are buying up all the assets while we have to go sit in cubicles and work for somebody else and it's
criminal and I think your first job does suck like mine did and you have to work hard and get over it but those three waves mean that right now today we can have Millennials and gen Z and young people match up with Baby Boomers not hate each other yeah Boomer whatever Millennials don't work hard gen Z doesn't work hard instead they can become the solution to each other's problem Simon has a business let's say let's imagine Simon's 6 Simon's kid doesn't want to take over the business he's already working in another state and so who
uh is going to take over this business and a lot of times they don't even know they can sell it and so we bring Millennials and gen Z together with these baby boomer owners and transfer the business so that's the three ways before we go any further I have to tell you a little bit about our sponsor of today's video now please don't scroll on because surf Shar have sponsored this video that allows us to give money away to people just like you to fund dreams and I want to show you how they allow me
in my business to stay safe online now like many of you as a busy entrepreneur I like to work on the go whether this be on a long train journey or a busy Cafe but the public Wi-Fi is a hot spot for hackers trying to steal your personal information and compromise your future business plans this is why in part I've asked surf Shar to sponsor this video so I can keep you safe online at all times and give your business the best chance of success surf shocks VPN service encrypt your data helping secure all of
your personal information it also blocks malware and fishing attempts using their clear web feature allowing you to surf the web safely go to Surf shark.com Simons squid for an extra 4 months of surf shark or use the link in the description to stay safe online surf Shar also offers a 30-day money back guarantee so it's totally risk-free to try out what are you waiting for okay well I'm really interested in where these businesses are cuz I know we're going to come to that later yeah I'm really interested in like just because of business is for
sale doesn't mean it's going to be a good business we can talk about the minute but most people will say they've got no money yeah to do to take advantage of the market you've just described so how do we uh awesome Cody I'm not a millionaire I can't buy a business that's how I felt I worked in finance for like 12 or 13 years and I still didn't really feel like I was smart enough to buy a business by myself and I thought I didn't have enough money and I thought bu buying businesses was for
rich people and then I and I even I guess kind of was rich there but I didn't even think I was rich enough you know and then um I had a boss I really hated you ever had one of oh I have yeah yeah I think these guys have got one right now like I had a just an awful boss and uh and I wanted to get out of the job so bad but I needed to eat and I like had high expenses at that point so I didn't know what else I was going to
do and so I tried to start a few businesses on the side none of them ever made me much money like I try I tried I tried my you know what's your dream but I like couldn't figure it out and so then I started looking I was like wait a second we buy a business using other people's money and then we grow that business and then we sell that business for like 2 to 3x what we for that's what private Equity does like why can't I just do that but like on a much smaller scale
so the two words that you need to know in order to do this are seller financing to start so this is that's method one seller financing basically means the seller of a business knows that on average there are 11 small businesses for sale in any one-year period only one will sell in a calendar year we own the one of the biggest business uh buying and selling Market places in the world now we have 47,000 business listings on it it's called bis Scout so we have the data to back it up showing most of these businesses
never sell so if that's the case the sellers is like I got to retire I need the money they're motivated sellers yeah and so they are looking for somebody to take over the business 60% of all businesses sold are sold with some portion of seller financing so what we do is we get the seller to sell you the business using future profits at which point you're like who's going to agree to that m and the reason why is really three things the three things are time money and taxes the good old IRS reason number one
time the average acquisition if you're going to use a loan which is how most people buy it takes 120 days to close that's almost half a year takes a long time if you do seller financing you're the bank you can close as fast as you want to we've had deals Clos in a week or four weeks on average wait so Mr business owner you want to close faster of course you do you want to be on the beach cool let's do seller financing money on average the loans for a small business they don't want to
offer the full amount that the seller thinks the business is worth typically this is because financials and businesses are all messy right they like are on a piece of paper they're in a spreadsheet but they're not very clean so the bank's like Mr seller you want a million dollars we only think your business is worth 500k so we could give you 500k and you could take out a loan or or if you front us the money we could pay you a million dollars if the business is actually worth what you said it is so Mr
s do you want to move faster do you want to get more money out of it you do awesome okay then last part taxes if we do a bank purchase right now with a traditional loan which would be hard for us to get maybe if we're young and we don't have a lot of experience uh then you are going to pay 100% uh in capital gains which is a fancy way of saying how the government takes your money in a transaction if you do do a traditional loan if we do seller financing you're going to
pay a portion over of it over let's say 10 years the period of seller financing plus there's all these fancy things you can do with taxes on it so for this reason a seller might go I want to close faster I want more money and I want to pay less taxes so let's talk about seller financing the problem is actually not that you don't have money the problem is you don't know how to use money and get it yet and that can be really really freeing like once I figured that out I was like oh
not even the billionaires of the world buy their businesses using their own cash so this is this is rule number one of how you do it this is mind-blowing and I I have never bought a business so every single business I built 19 companies but all from zero yeah um so I I actually I'm I'm learning here and I really like this I think the thing I do know is similar though is that to build a business you need to know how money works so for example i' I've raised money for businesses that so I
have used my own money in some cases but when I was younger I had no money so I raised money from investors so it's not a dissimilar model they to this and many ways because people buy an equity piece in your business and they get a return over time so that that that model also can work in this case too you could get an investor you're talking about a finance seller could also be an investor 100% we teach 21 ways in the book to get other people's money in order to do the deal and what
you were just talking about is obviously first you could get investors you could go to Buddies you could go to your buddy parents and you could get them to invest in your business the cool part about this is if you ask people like imagine somebody you've already done this on the internet I think but like if some young Hustler came to you or me and was like listen I just read Cody's book I have a detailed notes on all the things I learned in the book I put together a onepage pitch on a business that
I want to buy it's going to cost me $100,000 to buy it I'm going to raise x amount and I want 50,000 from you Simon and 50,000 from you Cody um and this business I think is going to make you this over time and you get a percentage of the business you don't have to do anything I'm going to do all the work if I think that that person's done all that work for it what am I going to say high chance of yes High chance of especially if it links to the purpose of the
of the investor but yeah yeah absolutely absolutely so the the the often the problem isn't money it's good deals and it's being able to see them we'll talk about that when we get to finding deals the second way is what I called expertise to equity so this is how Simon should probably buy a lot of businesses which is like you know how to go viral AF on social well what do most business need marke yeah and so since they need leads they could say hey Simon I'll give you 10 or 20% of my company if
you will post on social media in fact I think you have V videos about this okay so this is called expertise to equity and you get expertise to equity through three things you get it one from cash so can I increase leads can I bring more Revenue to a business two is cutting costs of a business can I just have you spend more money somebody came to to to me right now or you and was like um hey I think you spent $100,000 right now in marketing I could drop that by 50% you might get
them some equity in a business and number three is pain so most small business owners are unorganized we're running around like chickens with their heads cut off and we're in a lot of pain so somebody could come in and operationalize your business and decrease your pain then we would probably be open to giving them some equity in a business now what is s so at this point a lot of people go okay Cody uh so should I buy laundr bats like you talked about in the beginning should I buy a media company like you have
and they don't know what type of business to buy and there's a lot of different ways to talk about this but I have one that I call SS which I break down in the book in general which goes like this we want to have businesses that are stale and that means that they really haven't innovated uh in particular it's kind of a good sign in a business when you're buying it like this if there's like a fax machine and they use it you know if they're uh invoices or on like a piece of paper and
they're writing it down in the back so you want a company where you could come in and you can add some technology so we're looking for stale businesses the second one is old and this to me you want businesses that have been around at least 3 to 6 years the reason why it's not because Cody says so it's a thing called the Lindy effect and basically what you see is there's a graph like this so if you have a business let's call it year 1 through year 10 and here you have likelihood of failing the
the Lindy effect is a mathematical formula that tells you that the longer something has been in existence the more likely it is to continue to be in existence so it's almost the opposite of what we think today it's like AI it's going to be great we should invest in that actually it's going to have a super high fail failure rate there'll be a few that make it huge but there will be a graveyard of the many and so in year one your likelihood of having a business that is going to fail is really high and
then basically what you see is every year all the way down to year 10 you're likelihood of failing goes down and so by the time you get to about year six you have less than a 50% chance of failure now you know statistics are are doesn't mean that you can't still fail in a business you can but you just know that historically this business has made you money and the likelihood it will continue to make you money is higher so that's why we want old businesses and then the next one is we want weak and
what do I mean by this it means I don't want you to go compete against Jeff basos like yeah you could have an old business in the form of Amazon that's trying to compete with him but we don't want to compete with the best when we're just starting out cuz we're not that good um and so what you're looking for here is like you know when have you like I don't know gone and gone to a a handyman and the handyman was just like incredible they like did text followup they sent you a survey they
asked for a review they did an upsell sequence they had recurring Revenue like that doesn't exist doesn't happen doesn't happen so what would that mean handyman probably you could really excel in that space exactly and then the last one is simple so this one is you should feel good about this if you don't know a ton about business because here's what I don't want I don't want you talking about IP I don't want you to talk about patent pending I don't want you to talk about biotechnology we're talking about a business so simple you can
explain it to your seven-year-old although probably really smart or like my grandma very simple business because this is your first one so we want the first one to win so this is how I determine if I'm going to buy a business and I've never bought one before I want to do it with seller financing I want to cash flow off the business this isn't like the my passion for life this is like I want to make money I want to make money right now I want to do it by myself I want to be able
to have a business that makes me more maybe than my salary then I use S so that's one of the we have seven Frameworks to determine how to figure out your type okay let's talk about mindset mindset okay rule number one I think people get scared to buy a business because they think that their first acquisition will be their last and that is not true so what I want you to think about I did this as an example actually I was pulling one of you but I didn't uh put it on on Instagram which I
should have back in the day I started a business back in the day two years ago I started a little newsletter business with really no cash like on the side not with my name publicly Etc it's called grow Getters and then I grew it to a couple thousand subscribers and then I sold it for $88,000 and the reason why is I wanted to show people you can start a business and sell it so you should also read the book if at any point you have some everybody who has a dream gets their dream started should
then read this book because they should learn how to sell that dream what happens for most of these side hustles and businesses is they shut down this business that I sold had zero C had zero customers we didn't sell anything it had no employees and still they could sell it for 8K so I wanted to show people that and then uh the first business that I bought I sold later the first business that I bought made me like $67,000 a year the first one that I talked about publicly and this was a laund mount and
everybody on the internet goes like this is a terrible deal why would you buy a business for 100k that does $67,000 or they'll say this is too good of a deal that could have never happened you would never make that much on a laundr map one of the two and the truth of it is is for me at that time that was a great deal it was like little enough for me to feel okay with it and it was also big enough where I could make real income and see if I could do this or
not not and since then we've bought businesses for $10,000 we've bought businesses for $10 million so the truth of the matter is what what happens when you start looking for buying businesses you turn on something called your reticular reticular activating system you've heard of that yes of course so basically if anybody hasn't it's say I go buy a car I buy a Porsche before I buy the Porsche I don't really notice Porsches anywhere then I buy the Porsche all of a sudden every in LA's got a Porsche what happened between the two well my brain
I had just been telling it Porsche Porsche Porsche Porsche Porsche so it starts to see Porsches everywhere and this is the same thing with businesses once you learn how to do a deal you're going to talk to your buddy who has an idea for a startup and you're going to be like wait a second I know how to do sales for that startup can I get some equity in it you're just going to see the businesses all around and so my mission is kind of to get as many people as possible to turn this on
to read the book we have the same Mission wake up realize your potential right learn to enjoy risk as well oh my God it's it's actually so interesting I I think that the way that you make money tell me what you think of this framework and if I'm missing anything Here's my thought I think if you want to make money you one have to increase your skill set so you need a value stack of skills that's pretty good you two have to work harder than you think for three longer than you think four developing some
sorts of connections which usually starts with you giving things before getting them but five you have to take risk and if you don't take any risk you can become a millionaire but it's a lot harder and I don't think people think about risk people think about risk badly but in finance we call it like oh I'm I'm taking a risk on trade it's like a good thing totally um what do you think well first of all I think it's absolutely right um the Nuance is always interesting because I made the most amount of money when
I wasn't working hard but it took I had to work hard to get the company to a point where then I could bring people in seasoned people with skills better than mine to run the company and then I didn't work as hard and I made even more money yeah but there is a there is a there's a progress uh part especially if you got if you're watching this you got no money starting a business I think you have to work hard at the beginning but but you're really stupid to keep working hard cuz it's not
sustainable and the business will collapse if you stop working hard which is a risk for an investor or risk for you in life you want to build it out as quickly as possible so that you're not working hard the smartest people I know built businesses where they're not really working that hard on the business anymore unless they want to unless they want like I'm I'm working hard today because I want to you like it and I like making content I like making content helps people hopefully the content also promotes my and promotes help bank but
I want the community eventually to support people starting businesses not me yeah but I have to work really hard at the beginning and partly I want to but then I don't need to anymore right that's the otherwise your five we should have written those Five Points well I think actually you're right and it kind of is like what you talk about so 1 2 three four five so I think first it's hard work then it's long work then it's skill stack then it's connections then it's risk so if you are not willing to work hard
long you don't have any skills and you don't have any connections but you take risk to start you're probably not going to do great but if you've developed a skill set an ability to work long and hard and then you take risk it might work but if you start with all four of those and then you get to risk it works and then in the future what do you really do you really only use this one and this one well you take risk hiring senior people to run your company for example then you get to
this level yeah it's so true find a business now I know you're building an app around this which I've been intrigued about um but yeah how do people find a business to buy yeah so there's lots of different ways we teach 12 ways to buy a business so um I don't think you should use all 12 I think you should pick like three methodologies and focus on that otherwise um it might be too many so the the two main ways that people buy find a business to buy are off and what I'll call onm Market
deals so an on Market deal would be like bis Scout and I won't say our competitors you know not just there's a bunch of other ones whatever there's bis I sell there's Loop net no don't list them giving them free exposure to millions of people we're so good we get most sponsors yeah exactly we're so good that uh it doesn't matter but this basically means you go to bis Scout and it's like Zillow for small businesses there's a ton of them up there um you can get you know financing and you know all of that
so you go and you peruse businesses just like you would real estate and the key I'll talk about in a second which is called your dealbox so no matter what method you you use You' got to have what it's called the deal box and we'll get into that so this is an on-market deal this is scroll or like Sean would say the founder of Tinder like swipe right or left on businesses off-market businesses are two types on bis Scout we do have a off-market deal scraper basically an off-market deal takes longer to find but is
often times a better deal so it's like what what's your trade-off you want to go fast or do you want to go a little slower but maybe get a better deal off Market deals would be when your friend tells you God you know my Uncle Sam is ready to retire and nobody wants to to buy this pizza shop he might shut it down and you might be like Sam why don't you just let us take over that business we'll pay you from future profits of the business and if it doesn't work out whatever you still
made more money than shutting that bad boy down that's an off-market business so it's just reticular activating system on looking around or on biscot we have this scraper where you could say like where are you from uh London what London proper okay so let's say let's say you are looking for businesses in London and you want to buy a coffee shop and so you would go on there and you could search all coffee shops in this parameter um and you could get the business owner's contact information Etc in order to reach out to those small
business owners so those are two ways but the real key is a dealbox and this is like um you know before our time cuz I don't think the apps existed back then but like these days on the on a Tinder app if you were going to date somebody you might be able to say like what do the kids say like 65 blue eyes fun you know whatever um now you that on my head good be playing it later La all right so you might say like I want this you know here's the parameters of the
of the person I want well it's the same for a business you might go I want the business to make X I want the business to be located in London I want the business to be one where there is an operator already in place that runs it I want the business to be able to take seller financing we have like this full checklist in the book you can go through and kind of like you're like gold El loocking it right right you're like ah that bowl too cold and too hot just right this works the
same in Angel Investing by the way cuz I've invested in 78 companies exactly the same model like a business I can add value to right so marketing if I bring my marketing to the company will that bring value exactly the same criteria yeah exactly and so two ways to find a business and then your dealbox this is the most important part and one part of the deal box that I think you'll like that I add that other people don't is one fun you don't want to buy a nightmare you know you want to buy something
you're like that'd be cool I want do that so private Equity guys they're no fun BL they don't care about that I care about that and the second is dignity so in my belief like I said labor is like one of the most beautiful things you can do so when I buy a business I want to make sure I'm the boss that I wish that I had I want to make sure we provide the value to our clients that I wish I got at some other place and so um for me if I was to
go buy a pawn shop yeah you can make make a lot of money on that I don't think that'd be my dignity might be somebody else's um and then you know if they were like uh you know you need to own an accounting firm I might be like I really don't want to do that that doesn't sound very fun so those are two additional things I add I find the word fun in business is not used enough I love to hear this being highlighted to people yeah what is fun for you though I like solving
problems that I think I'm uniquely you know I uniquely am skilled to solve so like I I think it's fun to solve a problem live but not all problems so you know if it's hey I got to get in a spreadsheet all day to look at how to save on taxes I'd Rather B my eyes out but if it's like this business over here has a great founder he's Young and Hungry it's in the trades but they need to Market more he's a great guy the team's incredible and you get to mess with the brand
fun and so for me it's I love like a good problem to solve and then the other part is like good people people to solve it with otherwise life sucks this model reminds me so much of the property business I I actually have a real issue I hate the property business cuz it's a bit soulless but this reminds me very much like real estate I'm talking about people buying property and rent them out renovating them this model has a very similarity similar flow to it but this is so much better because this is keeping businesses
alive even keeping Traditions alive keeping fun alive for some of these companies historic companies I just I just I actually really love the idea this could replace people thinking doing property is a good business and then start a business or buy a business to me is so much more fun and you learn yeah buying a house changing the kitchen Chang the lock on the door and renting out to someone who can't afford it for high yield what is the point how much do you really learn doing that like whereas if you buy a laundry mat
you will actually learn a lot you'll learn about how money works you you'll learn about how customer service works you'll learn about engineering probably because the machine probably break down but like that they just learn so much when you have a business that you don't learn I think just buying a property and venting out yeah well the other part that I think that's tough about real estate is that it's super volatile so like in a business um you know you're in my businesses I know for a fact you're growing a lot right now in a
market in which Real Estate is down in the us like 20 to you're going to get a lot of haters in the comment on this one CU every time I S off property I get a lot of haters but but the thing is because there nothing safer than houses there's some Li there's belief systems that people have that AR not true but Gold's made more money than that property if you bought gold in the 70s it's more valuable than property day equivalent in inflation I know just holding gold you don't have the maintenance cost of
that gold right other than storing no no ring Gold's not ringing up and saying excuse me my washing machine broke you know what I mean like I just and I I actually think it's back to your dignity thing actually without going off at tangent I think property uh hurts the the poorest amongst us because like a nurse can't afford to rent or buy yeah so what so she she's like in England anyway like they're on food stamps right they're like having to survive cuz their salary is not enough and their rent's too high but the
person who owns a house is getting their 9% yield and I'd rather create a business that creates employment it creates opportunity and you learn more so I I just well and you can offset like for that nurse Let's help her make more totally and I think that's the beautiful goal that's totally the property business is completely taken over you a lot of young people's minds um they think that's the way to make money property and I don't I think it's buy a company now or start a business okay structurally so here's one of the most
important skills I think you can ever become which is a dealmaker and I think you believe the same thing yes if you can understand the language of money which to me is deals you'll never be poor totally because take take me out of America right now put me in another country with none of my assets take everything away from me I still understand how money works and I can still go up to somebody and say I bet this is worth this I bet this is worth that if I bring this other thing could I make
money from that and it's like this it's a little bit of magic and so the main thing about structuring a deal that I think I want to talk about today is price versus terms do you guys ever talk about this no okay so the famous thing to know in making a deal is there's only two levers you can pull price and terms most amateurs obsess on price so if I go to sell a business they're going to say I want a million dollars for my business my business makes $10 a a year I want a
million dollars for a business would I say if I if I said to you Simon right now makes $10 a year in his business and you and I want to buy it from you for a million bucks what would you say uh no you'd say no why because it doesn't justify the a cap can put it elsewhere and get and get a better of a return okay well most people aren't going to say that most people are going to say yes and why are they going to say yes they're going to say yes because this
business only makes $10 why couldn't why wouldn't oh I misunderstood you mean sell it oh I see what you mean oh yeah yeah would I sell it for if I'm making $10 and sell it to you for a million 100% yes yeah you'd go sorry I thought you meant buy it I was like I wouldn't buy it you're like terrible business I like the way you work with me there though you didn't call me an idiot that's nice thank you um so if you're only making $10 a year and I say I'm going to buy
it for a million bucks Simon goes yeah of course of course definitely silly deal and I go s sign it right there yeah exactly sign on the dotted line sweet here's the problem what if I tell you I want to buy it for a million dollars a dollar a day for the next 50 years you go I did a bad deal why because of the terms so we don't actually care about price as long as we get the right terms and so in doing a deal you would look at this because you've looked at contracts
a million times and you look at the contract and go wait a second I'm not giving you those terms but most people obsess on price and if you know this like the people listening they're going to go oh sure we'll do a deal for $50,000 for this business no problem if we see that the business is valued properly at that and you're always going to give on price because the the secret is you can have your price and my terms or my terms and your price but you can't have both and you're going to let
them control the price because that seems nice but in reality you're going to control the terms and the terms is where money is made by the way the same in I had an agency business it's exactly the same framework when working with clients you know clients will always want the low price and the best service you know you you can't have both right that's right yeah exactly so if if you remember one thing in Deal making remember control the terms and you control the price and what I teach in this chapter which is chapter eight
is when we're looking at doing deals overall if we understand it's kind of like um you know how if you say if you go to drive a car and you know there's like Park reverse neutral drive if you know what all the levers are you can make the car do what you want y if you don't know what the levers are the car won't move or you'll stall it out or you'll break it and the problem is most people go through life not knowing what the levers are and because of that they'll never make a
ton of money and this is why most people don't get equity in their business is you go to negotiate your salary with your boss and what are you negotiating salary maybe only 3% of people negotiate their salary every single year done second thing that they negotiate is vacation right that's it if I was going to negotiate you know what I'm doing not 3 or not vacation and not salary I'm going to negotiate upside I'm going to negotiate commission percentage I'm going to negotiate if then statements which basically like if I do this can I have
this so I'm not even going to talk about you want unlimited upside I don't know why people would ever cap their upside 100% but we weren't taught no so like when I first did it I I was like they offered me $37 a year uh 37,000 for my first job and I was like I'm so rich bch thank you I didn't negotiate anything right probably for the first like two years probably good though the experience is also part of The Upside sometimes in those early years 100% but as long as you negotiate kindly you can
you can at least get some learnings I think as business owners we're both business owners if people come to me with they're going to do something to make the business have an upside I love people sharing the upside me too I that that that makes total sense to me but people don't negotiate that way and most companies don't want to teach you this right most people aren't like us because they don't want their employees to be free they don't want they don't know they don't want people to be financially free so so the people that
know you and I know owning Equity is the only way to scale financially own upside and what happens to the business but those that work for someone don't know that and the bosses that are out there won't tell you this because they W want you to come and ask for Equity or they don't want you to have upside they want to cap their cost 100% well and I think this might even be more important than selling you but even let's say that you were going to negotiate in a business that you don't own outright so
just working for somebody um there was a couple things that I would do one is bonuses based on side we already know that if I do X I get y second is equity third is Rev share which means if the business does this and I have like a material impact on the business Revenue growing can I get a percentage profit share slightly less cool which is if the business makes this in profit can I get a percentage on it and then the other thing that I think a lot of people don't ask about investor percentage
hey boss I know that I'm not valuable enough yet to get equity in the company look yourself in the face not every employee is valuable enough to get equity in the company I wasn't valuable enough for probably 10 plus years at that point you could say hey I know that I can't get equity in this company and your boss would go this kid smart instead though can I have the ability to invest alongside you in a deal or two this year could I take a little bit of my bonus a little bit of my salary
and could I put it into a business and put some risk on the table and you would say h 100% yeah do that and if you were colleagues do that by the way in one of our other platforms they literally just offered to invest alongside small small percentage so this but by respect for them also go skyrocketing too like they're thinking about how they can add value take a risk alongside me even if it's a minute risk versus mine that is a great way framing this is the way that most private Equity guys make all
their money it's actually never in the it's not never it's rarely in the actual company it's not in contrarian thinking my company it's because my company does 100 deals a year and if I do 100 deals a year and my guy says to me hey I I'm maybe not the best at analyzing deals right now cuz I haven't done it this much do could I have a shot at like your top two deals this year that you really like so you help me analyze them you pick two cuz I can't afford to do all of
them and that's how PE guys make all their money love it absolutely I thought by the way you were going to say with the equity thing I've seen this if someone's like a top performing salesperson in the company and they and I don't want to lose them and they say to me I'm going to set up my own sales company um would you like to be a shareholder in it keep working for you but I'm going to hire other people and I'll still service you maybe even more so and you can get reverse investment that's
a that's a really good one and I didn't talk about it I love that okay selling you is that part we covered it really selling you there not yeah I mean the only other thing I was going to say with selling you is the it's um the best predictor of future behavior is the past so if you want to sell yourself as somebody who's selling a business you should show a history of winning so um in investing we say um you know uh historical guarantees are no indication of future returns except when you go and
invest what do people always do look at what's called your track record they look at how you've done historically so if you are looking for somebody to give you a part of your business you are a salesperson and you are selling what I like to call your personal track record so what you really want to do here is there's three things in track record that matter you want to show one hey look at all these times I won M I'm a winner two look at all these times I almost failed but I didn't cuz I
don't give up three look at all of these times that I did something that is valuable to your business it's like I already kind of did this thing that would be the same thing as your business and then lastly you want to show a lot of curiosity God Simon I love this business this is the best business ever I've always wanted to be involved in a business like this and then finally compassion one of the reasons I think deals go sideways is like I remember some of my first deals I was like oh God you
guys run on that software you're not doing any sales is this what this is I'm going to come in here and I'm going to kill it and the owner was like listen kid you know I'm doing this for 20 years beat it so if you can show winning you can show grit you can show value you can show curiosity you can show compassion then you have a track record that allows somebody to want to sell you their business I really like that I also think the references you know other people saying you're great there's some
stuff there too right I think the references generally are just so underrated if I if someone tells you Simon's great it's much better than me saying I'm great um so getting getting those those Point those people that have said I worked with them and they did this and they were amazing I couldn't recommend them enough yeah I know you've got to go so that's it folks I hope you enjoyed that and we're off to have some chicken now so see you later and don't forget go to Surf shark.com Simon for four extra months of surf
shark on me
