How to Own Companies, Make Money, & Never Work in Them.

as you get your income covered stop trying to get income and start focusing on building well how can I get enough money to have my Lamborghini or how can I get enough money to pay the rent on my jet you know but that's not well this is the fighting entrepreneur the podcast dedicated to entrepreneurs looking to change the world learn how to start build and scale a business in today's highly competitive business environments here's your host the fighting entrepreneur on a single what's up you crazy fighting entrepreneurs welcome back to the fighting entrepreneur podcast this is your favorite person onyx single your host and I got you like we got a doozy today we got an amazing guest so the title of today's episode is how to own companies make money and never work in them never have a job whoo that's like every entrepreneurs dream come true right there and I'll tell you this our guest today has mastered this very trade and the reason I know this is this is why this is how our guest today okay Roland Frazier made it made his way to our podcast because I'm friends with him and I'm friends with him on Facebook and one thing I can't seem to figure out is how the man and it's never in one place for more than three days he travels and stays at the best hotel so he's taught me how to hack my way into really great rooms at hotels he stays at the best penthouse is dines at the best places he's always traveling he goes to Alaska he goes to I don't know he goes to the most not Alaska I was uh you went to Iceland or Greenland Iceland like all these random places and I'm seeing I'm wondering the man owns like seventeen companies how in the world is he so free I own one and I'm like you know working my butt off so I decided what better place to ask this question and learn then the podcast so you guys can learn alongside now remember go to onic podcast.com and i cape odd cast comm for any of your show notes if you're on youtube come on hit subscribe right now click the little bell icon hit the thumbs up leave a comment engage with us throughout this episode make sure you tell everybody you know about the fighting entrepreneur podcast but now before i tell you about my personal story was rolling i just really want to i want to read this friggin intro cuz it's that damn impressive that I'm gonna read it I'd rarely do this but rarely do I have the impressive interest to read of my guests Oh Roland Frasier found it scaled and sold two dozen different businesses ranging from digital commerce to consumer products to industrial machine manufacturing companies I don't know what that is with adjusted sales ranging from three million to three hundred and thirty-seven million dollars up correction he just told me right before we started it's not 337 million anymore it's four billion I don't know how the hell you take a 10x leap like that but we will find out throughout the podcast he's currently CEO of the war room mastermind which is considered our industries by far the number one mastermind out there he's a principal at digital marketer comm we know about digital marketer Ryan Deiss is the CEO of it traffic and conversion summit everyone knows that I don't know how many thousands of people go every year to that now Pratt Pratt CEO comp latter com true conversion calm realist and real estate worldwide man ok so through war room Roland advises over 150 companies on digitally centric customer acquisition monetization referral retention revenue ok bottom line is basically this man is a super man of businesses and so that's that's what I summarized from this is crazy intro my personal relationship was rolling literally began I don't know how the heck we became friends on Facebook have we even met Roland yet in person yeah we've got a few times okay but you you're way way bigger star than I am so I just can't you know go rolling do you want to trade I'll trade you can start I want this you wish for that's true right grass is the host greener on the other side but no um you know we the way honest to god the way I got just super duper crazy and president rollin is watch on Facebook I I engaged a lot with him like I leave comments and stuff and like his stuff and tag him so Facebook is courteous enough to show me a lot of his posts and so I just got intrigued by true living by example right so here's the deal so many entrepreneurs and so many of the younger generation if you're listening listen up you post pictures of yourselves and your Lamborghinis and your Ferraris and your private jets and your helicopters and you think that makes you super cool and it does in your age group but as you get older you start to realize that's not what matters and so what I was seeing Rowland do is not brag I just saw he's just showing what he's doing and it wasn't just once or twice and not like he went out and rented a Ferrari Intel posted a picture actually I've never seen him post a picture with a fancy car it's always fancy food it's always fancy places it's always hotels it's like every other week right it's consistent so you get to know from the consistency that the man's not making stuff up he's not lying so that was like how in my mind rolling you build credibility was just a consistency of your lifestyle and then from there I messaged him once never expecting a response and a guy like replied and super nice and explained me exactly what I wanted it what I wanted to know was how he was travel hacking his way into such fancy Suites and hotels and he explained it and from there we ended up talking and recently we got on the phone and I just asked him like hey can you be on this podcast and he said he would be more than happy to do so so rollin thank you very much for being here I'm excited I got pages and pages of things I want to ask you but Roland we do have a bit of a tradition here at the fighting entrepreneur so if you don't mind raising your right hand for me and just repeat after me I roll in Frazier do solemnly swear I Roland Frasier do solemnly swear to tell the truth and nothing but the truth tells the truth and nothing but the truth and reveal my four billion dollars in secrets reveal my four billion in secrets if that's all that you want then we'll stop there man so awesome so you know what we're gonna dive right in we're gonna go into round number one again most people who listen to the podcast know that I'm not big on story but I don't understand how to talk to you without first learning your story and I'm not sure I know the entire background I know you you told me once you come from a background in law and I just I don't understand how you went from that to this so Roland who are you and do you save kittens at night and are you Batman so let's move right into round number one okay round number one are you Batman I am not Batman are you sure Ryan Ryan Deiss did introduce me at one of the traffic and conversion summits as his personal Batman so I thought that was that is cool hey there you go so yeah man tell me a little bit about where you started and how you've come to where you are today yeah I started in real estate I got my real estate broker real estate agents license when I was 18 and was selling real estate I was looking to see how I might leverage that up because I didn't like the idea of pounding on doors to get listings one by one so I hooked up with some developers because I figured there they have lots of houses to sell and that seemed like a good leverage point as I started working with them they you know I found out more how they how they do their business and they said you know well we raise money and we have we do that to this thing called a syndication which is a limited partnership people give us money and then we and we run the the show with the money that they've done and build these subdivisions and we have they make us get this stuff called keyman insurance in case something happens to us and so I said that's awesome I said you know I can sell houses but how about if I how about if I sell you the insurance for the key man thing so I got my insurance license when I was 19 and then I got my securities license when I was 20 and started getting investors for the developers to be able to do the developments and then started when I had enough money I invested myself in a development I did several thousand houses where we basically built you know we'd buy land subdivide it turn it into Lots build houses on it sell Lots and through the securities connection that I had for my license I got introduced to business buying and selling businesses that way and so this was in the 80s when leveraged buyouts were really big and I hooked up with Prudential securities in New York and one of the investment bankers there took me under his wing and you know kind of learned how that business worked and from there I started buying and selling companies and over the years that's that's kind of evolved I did that while I got my undergrad degree in accounting and then I went to law school I was doing kind of this stuff the whole the whole time and then got out and started practicing law but never never gave up on buying and selling companies and because I did business law I met lots of different businesses so I had lots of opportunities to say you know hey don't pay me a legal fee give me a piece of the deal and let me show you how you can increase the revenue or profits in your company and then as the Internet came into being along the way I did I did 16 infomercials 14 with Kathy Rinker her corporation - with with k-tel direct I did a lot of spot TV radio as the internet came into being I had deals with CompuServe if you can remember back that far and America Online for what they called channels so I had one in health and beauty one in motivation and then as as that I used to spend I remember spending like 50 grand to get a website up it was just so expensive back in the day because you had to hire our designers and they did everything from scratch and had to code it and so I had some internet casinos and beto Netcom and make a bet com had the Nikon school for photography all just all kinds of crazy stuff along the way and then in the 2000s I ran into these guys that really seemed like they knew what they were doing online they had really good content and it was Ryan Deiss and Perry Belcher and they had a program called wholesale traffic system where there was this guy mr. X that Ryan interviewed mr. X was Perry but they didn't tell you that and I was like these guys are great I started following their stuff and bought it went to the first traffic and conversion summit my idea was to connect to connect what they were doing to the the companies that you could buy and sell and increase the value of the companies by adding this online stuff which is the same thing I did with Gary Halbert when I you know when I met him and it was great I just I joined there war room mastermind and just kind of helped them I knew that I had to you know impress them to get to know them so they had this thing called wicked smart where the people in in the mastermind there were only twenty people voted on who had the best the best strategy that actually worked with results and so I knew going into that meeting I wanted to win that so I won that Perry came up and said you know hey let's let's have dinner and he talked to me and we became friends and then I just started invite advising those guys because I have a unique set of skills from attorney accountants business guy Investment Banking to be able to help business people and for the first three years that I was a member of war room I just kind of helped him out whenever they needed help and they had a CEO that ended up exiting the company who had an option to acquire a third of the company and so when that happened they said you know would you be interested in in buying in and I said absolutely and became partners with those guys and then kind of help help build that company up we've had three exits in that group of companies since I joined them in 2013 and you know all the other businesses I've acquired along the way some of them have kept some of my soul wow it's amazing so so really one of my questions for you was going to be how in the world cuz I have known Ryan Deiss forever I means from the day I probably started off in the industry fifteen years ago and I was gonna ask you like how did you end up becoming a principal at digital marketer and so was it as simple as that you were around them you were buddies you were helping them giving good advice they liked you and then suddenly an opportunity popped up to buy in and you just said they asked you and you said I'm in that's it that's exactly what happened now has there ever been a scenario in any of your businesses where it wasn't so organic but you actually pursued and said I want to buy in like in this situation the opportunity to buy in came up but well I I mean I in tended to be partners with those guys from the beginning so the fact that you know it did not escape me that there was a possibility that in all of the help that I was giving that an opportunity to be partners and we talked about it I think as early as 2011 so and then we started doing I think we did our first deal at the beginning of 2012 and then we did an offer together and so we bought a company together before we became partners so my intent was to become partners with them I didn't know what that would mean or if it would mean digital marketer or not but you know obviously that was something that I hoped would work out and it turned out pretty good so you used some inception with with micro action and commitments I mean it was a you you had a you had a multi-year plan I'm getting into I like that that's its strategic it's well thought-out one gameguy and it's always find a paid channel of access the pay channel of access in that case was a mastermind the pay channel of access for Gary Halbert was he he had a $25,000 come down for three weeks and learn how to copyright and I went down for two days and then we ended up becoming partners on deal said it's it's just look for the opening that someone who you want to get to know has created in a paid fashion because I think going in with value if you if you go in like kind of begging if you go in you know you run up to somebody after they speak on stage and you're like you know hey I want to talk to you about this deal to me that that just puts you in a hole with you know a thousand ten thousand other people so I think that when you respect them enough to say hey I want to pay you to have the opportunity to talk with you and so that to me is a great way to get in business and it worked with Albert it worked with Ryan Deiss it worked with William Shatner and we just recently did the same thing with Richard Branson so he's kind of next on my on my climb up list of people to gather all right I want to dive deeper into this I'm not gonna let you get away with this so quickly because I think you've oversimplified it and I want to break it down into the micro micro parts of the inception so let's move into round number two which is not written on my document here at all but we're gonna just kind of we're going to swing for the fences here around number two I'm going to call it inception all right all right it reads within the dream within the dream yeah dream within the dream all right round number two I wanna I want to go through a physical example of this so I am trying to think right now I want to get in with let's just say person X okay or you know what let's use your personal example if you don't mind like Gary Halbert right so he has a 25k program most people do I mean I know even for me like I have a I have an upper program that our students are learned master's program people can buy into income five days they're around me I'm here so here you are you find the person you're trying to connect to they have an upper-level program you've already made it clear you put your money where your mouth is you buy that that upper-level program and you show up and you walk in the door my assumption is other people are there alongside of you you're not the only one there Gary in Gary's case I was there but let's assume that I was not the only one but you're okay great so you're not you know you're not the only one there there's other people walk me through like what you would do and how you would suddenly end up in front of this person positioning them for a partnership or something bigger well you you wouldn't you wouldn't go in with that you go in with value so the thing that most people do is they go in thinking in a program like that you have programs 25 grand right how many people come in so our program is actually 15 and we'll have at any given time about a hundred people here for that okay so hundred people is at your highest level program that is at the moment yep okay well so we have to talk about that because you need to have a higher level program for two reasons one because there are people that want to be in the room with less than a hundred people and two you will allow them to self-select as significant serious potential deal flow partners for you better if you aren't around quite so many so so that's just something to think about sure but so if I'm in there with a hundred people then I'm going to go in unlike probably 99 of the other people that are there who are going in thinking what's in it for me how do I get a return on my investment of the 15 grand I want to be sure I'm afraid maybe this was too much maybe Onix gonna rip me off you know maybe he's not gonna pay enough attention to me and I'm gonna go in saying what value can I bring to honor as soon as I get in the door what can I do to help him and his team I'm gonna be nice to everybody on your team I'm gonna be helpful to them I'm going to overlook anything that you're not doing right I'm not going to even point it out to you to be helpful because that's sometimes taken as incorrect not that in your case you would be doing anything wrong but but let's just say you know if anything's not perfect it's very easy to go in with the attitude of I am the customer and I go in with I am the provider of value and so the very first thing I'm gonna be looking for and I'm gonna research before I go in where the potential things that I might be able to help you out with then I'm gonna think about how can I help the other people that are in there which will help make your experience with me and with them better so in war room for example and and this isn't like a calculated thing it's just to me the right thing to do at war room I went in I'm really good at organizing information and taking notes so I took notes and I just sent them to everybody at the end of every warm I just send all my notes to all the members and people are like oh my god this is great you know because I'll go in when somebody mentions a link or something I while I'm there I'd put it in the computer click on the link look find the thing that needed to be done you know and so supplement the information that was in the room but also organize it and give a lot of value and then the people that were there I remember the very first time there was there was one of the members she had a challenge we were at dinner that first night just you know eight of us I think went to dinner and she was all depressed and I was like what's wrong she said well I did this thing with you know my dad has like 60,000 insurance agents and he trusted me to do an SEO program for his top 20 people and the guy that was you know that they they paid us the money and the guy that was supposed to do the work she's like I don't know anything about SEO the guy that's supposed to do the work basically took the money and left and now he know I'm screwed and my dad's gonna be pissed off and these agents are gonna be pissed off at me and him and I was like well what did you need to do and she said I just I needed to rank them for you know these words and I was like well I can do that I said how many of them are actually giving you a problem she said like like eight of them I was like okay so give me there give me their areas and their keywords and I'll just I'll rank them for you in the next day they were all ranked and she's like you know what do you what do you want for that it's nothing I want you to be happy and not worried about this jerk that ripped you off and it took me literally you know four or five hours in the middle of the night because I don't sleep I'm a vampire and I did it for you and now you've got it and you know enjoy and then she ended up later on just to kind of the pee over thing you know she obviously was very grateful for that and she ended up starting another company and and referring a ton of business to me and give me all kinds of opportunities another guy that was there asked me if he could interview me for his dentists that he provided information for and I was like absolutely and and after the interview he's like man I really appreciate that this was before podcast everybody wanted to be on a podcast right it was kind of like a favor and he's like I really appreciate that you talked about was so cool I appreciate you answering other questions would you mind if I got you know like maybe twelve of my dentists to pay 25 grand and come put him in a room with you for a couple days and we'll just split the money and I was like I would mind that and at the thing he's like oh god he's like none of these people want to be dentists we have to be able to offer him something I said well I can show them the four things that I'm doing right now - you know that are really successful and working for me and he's like that's great he said what do you think we should sell it for and I said well if they pay 25 grand to be here it probably should sell it for 75 grand and then five of them bought that and so it's like you know this is just my first interaction with all this stuff so I get to you know I I would go into your thing saying how can I serve you how can I serve your team and how can I serve your other members there's three groups of people in your meeting that I'm gonna be focused on what can I do for them and then I'm gonna do it and I don't expect anything to come from that at all what I believe will happen over some course of time it's a long game if you do it right but is that if I provide a whole lot of value to you your team and your people then if I want to be in business with you there's a pretty good chance that I'm gonna get your attention and then I'm going to find some opportunity to to ascend out of that group of a hundred into some sort of joint venture or some sort of speaking arrangement or something where I have the opportunity to just hang out with you and spend a little bit of time and and then organically it'll evolve or it doesn't you know I I just nothing is forced if I hadn't if I had identified an agenda in advance like I did with William Shatner was William Shatner we wanted we had a program that was trying to think of the higher as called higher yourself we had a program called higher yourself that was for seniors that we wanted to do and we wanted Shatner to be a spokesperson for it we wanted to write a book with him to promote this program and have him be the spokesperson but we didn't have the money to hire him in that company as the spokesperson right off the bat so we said why don't we have him speak at our traffic conversion summit event which we did in 2013 is the first year I was a partner and that was new because we've never had a celebrity before and we negotiated the price for that but the event that came out of a different bucket that came out of the event bucket budget so then part of the deal was and and always has been with everybody we've hired since then is it's a four-hour contract you appear for 45 minutes and then we hang out we have lunch or whatever we're going to do but we're gonna spend some time together and I'm hanging out with him we have lunch and then in the green room everybody else is on stage it's just him and me and you know he's like you know hey talking to me about the stuff and he was like eventually he said I should probably get you to help me with my next book and I said I said you should and I never expected to hear anything else from him and then he asked me for my number and then May three weeks later I'm driving down the road with my wife in the car and my phone comes on I don't recognize the number I answer it and he's like Roland Bill Shatner just following up but I want to do that book and we ended up doing it so crazy you know it's and then in that from a negotiating standpoint just as I this is one of my favorite terms is he wanted you know he's like you know well my standard advance is a half a million dollars so you know obviously you guys will pay me that and then we'll do this and this and this and I said everything sounds great bill I love it the only thing is is the way we do these deals it's a deferred advance he's like what's a deferred advance they say oh it's an advance you get the first 500,000 from the sales of the book we don't give you a check for five hundred thousand years like okay so that's cool deferred so I put the word deferred in front of everything now it's like you know people absolutely I will give you a deferred down payment of this much amount of the wingman what's it deferred now baby well we'll give that to you you know after 30 days or at the end of this or when we run that offer and so that's a good example of just strategically thinking about what's the paid Channel for access that exists how can you add value to them first and then you know see what evolves from and by the way if nothing does evolve from it you can't be pissed off about that that's okay you still added value I mean if you do that four or five times one of them is gonna pay off right and that's probably the payoff to cover the other three or four that missed and so that's awesome you know it's funny as you're talking I realized I just someone just did this to me very recently and so I released a podcast episode anyone listening you probably heard it recently it was how I made $200,000 in Toronto and in two weeks and so it's funny because the two members that came to our masters event which is a $15,000 event Shahzad and Rene got involved and then they got involved in a higher level program we have which didn't pay for but they I'm not even joking they served the team they helped the members they weren't in front of me ever except there was this the the whole group surprised me with a check for my non profit and they they all donated a bunch of money to my foundation and these guys came up to me afterwards and said we're gonna throw in a nice another two thousand dollars into your foundation just because we're so grateful for what you're doing and I was so grateful for that and then a week later they positioned me and said we'd like to get you up to Toronto to speak and we're gonna put an event together for you and here's the thing I don't know why I said yes I actually say it in that podcast episode I don't know I don't say yes to speaking agreements like I don't speak anymore don't like to travel to speak and I said yes it was total inception I'm like oh of course because there was so much reciprocity I guess that was built up yeah exactly and not only did I agree to speak Roland you're gonna laugh I agreed to speak twice in the matter of two weeks I was gonna go up and do one event and then go back again to do a whole one-day event and but it ended up making everybody a ton of money and I got chance to hang out with them a lot really liked them and now we're gonna do real estate investments together so it's a damn I got rolling Fraser Dre I don't even think they know it I'm gonna send this episode to them but but it works and it's all for good I mean if it's all great it wasn't anything malicious or anything and I can tell you rolling that I've done this so yeah as I was saying it's it's it's it's amazing cuz I've also done this to people right like I've connected with some of the top people in the world and I've been blessed for it and people ask me how do I do it but it's kind of what she just said like it's to a degree of like find a way to get to serve them and something that they really want I love it I want to move on just because I have so many questions and all my rounds are getting totally screwed up cuz you know I already talked more and more stuff coming ah it's fine I love it but okay so I want to I want to talk more specific so let's move into round number three and the round number three is more about like what do you exactly provide these companies so okay so round number three it sounds to me like you you know you pretty much know the Contin who it is that you want to work with or get involved with and so there on your hit list you got a list over there and you start to find your your opportunity to move in with them so now for a minute I'm I'm Ryan Deiss okay so look at me I'm Ryan Deiss and you come and you provide value to to war room into digital marketer give me a little bit of a better example not even Ryan Deiss but like across the board there's so many companies that you've had what what is it that you have what kind of advice do you give them that is so magical that they immediately want to give you equity because I can talk to you as an as a entrepreneur someone who owns all of my company I mean it's like the heart you can ask for pretty much anything but shares of my company like most entrepreneurs would feel so I'm curious what do you provide that is so significant that they immediately start throwing you know shares are they're complicated you it's a good question so it every deal is different but what I am really good at is growing companies and finding the strategic opportunities that will move levers to dramatically increase the revenue customers profits and valuation of the company so I I will come in and say you know I see four opportunities that would have a pretty significant impact on the value of the company and I'm also very good and connected at getting capital and at getting companies to to buy other companies so if you're interested in selling your company in three to six years after building it up to say ten times the value that it is right now then I have a track record of doing that I have a good system for doing that and you know that's my skill set so I'm really good at identifying strategic relationships that will give you exposure to large new audiences that you don't currently have exposure to there are ways to position the company there things within the company that can have a dramatic impact on the value of the company and then putting the deals together acquiring other companies to help build up the company as well structuring I I know in a deal that we literally just closed last week I saved us a million fifty thousand dollars in taxes just because of how the deal was structured so you know those those things are generally valuable to people how to how to get your company to be worth more how to make more money how to grow into new markets and how to think different you know Ryan said it so I'm gonna quote Ryan not me but he said you know I want to bring my partner in on a deal we just did he said I want to bring my partner in because he just thinks bigger than I do and I don't think as big as a lot of people and I'm always pissed at myself for not thinking bigger but I do I do think pretty big and so I think differently about things than other people do and I also have the experience both on the accounting and legal side from doing hundreds and hundreds of deals as an attorney to know how to do a deal and so you know when you get into the negotiation thing you know we we sold 80% of trafficking aversion summit to Clarion events which is owned by black stone which is the largest I believe private equity company in the world and we got the highest multiple they'd ever paid for an event you know it's it is just something I'm good at that that whole negotiation exit by companies grow you know thing it's not it and also I'm also good at at walking through the fire because as an attorney you know you're not afraid of I don't like conflict but I'm not afraid of it so if the you know if the hits the fan then I'm pretty good at working through that not panicking and then kind of getting things worked out so there's something to be said about being able to provide all this strategic value the network the connections the knowledge all of what you're saying though just to be clear for everyone listening I mean comes with years of experience right it's because of wrong knowledge that you've built over so long so for someone I guess an entrepreneur that's new or that's young I mean they just don't have access to that they just don't know that stuff and so they can either try to pay you your quote or give you a give you a share of the give you a share of the company and just know that then you're really vested in it because you own a piece of it and yeah and and like I said usually that that happens over time I don't do consulting so nobody can buy my time I don't think you should ever sell you in your time unless you want to do $1 for hours thing so I basically say my time I will help everyone that I know as much as I can for free even when they're offering me money like no I don't want money because then you know then you've bought my time I don't sell my time I give my time to the companies I have equity in and so if you want more of my time and I think it's a good opportunity and I see that the company can get to the valuation that I needed to get to to meet my objectives then you know then we can talk about an equity thing so I have you know I have really good relationships you know I knew Ryan and Perry for you know five four or five years before I became a partner a deal that I just did I knew one of the guys for six years another deal I just did I knew them for four years so it is absolutely I'm not like going out cold and I meet you after one meeting and say you know why don't you give me some of your company but here's what I know if if you have a vision for growing your company and selling it you'd be kind of crazy not to do a deal with me because you're gonna make so much more as a result of having me as a partner and I know that and you can ask anybody that has done business with me and they'll tell you the same thing so that that I've got going for me but remember I've been doing this for a long time so if somebody else wants to do this to it is as simple as starting to offer value to the you know those three groups of people that I mentioned look at yourself not at what you're going to get out of it but what you can give even when you're the paying customer what can you give back and then looking for opportunities saying no to all the opportunities that aren't once-in-a-lifetime opportunities because I think the once-in-a-lifetime opportunity comes along 3-4 times a year and you need to have your bandwidth preserved to be able to do that you need to also ideally as soon as you get your income covered stop trying to get income and start focusing on building wealth and that's a big mistake that I see especially in the information entrepreneur area that people make they're focused on how can I get enough money to have my Lamborghini or how can I get enough money to pay the rent on my jet you know but that's not wealth you know those are number one depreciating assets assuming you even buy them and you don't even own them if you're renting them but there's nothing wrong with them as long as you're building wealth at the same time so it helps a lot actually and it walks this right into round number four I do want to talk to you about you know so what we're gonna move into now soon is you kind of creating a strategy for me knowing where I am my access and all we're going to talk a little bit more about that so I'll have some you know rapid-fire questions for that but you talked about wealth you talked about income so I'm gonna change it up there and let's go to round number four we'll talk about compensation okay so round number four I'm gonna ask very bluntly how the heck do you make any money I make my money as a as a member of whatever as an owner of whatever company I go into I'm on the same par with the other people that are in there so I receive distributions of the profits that the companies making is it and are you are you shooting for that like dividends and distributions or are you shooting more for the big sell at the end no I want the exit okay yeah cuz here's the thing that's the way to think about it is to think about companies sell for multiples so you have three different types of multiples that a company can sell course if it is a one-man one-person show then it's typically gonna sell and there's no systems and there's no big team or anything like that it's typically gonna sell for s DC or s de which is so basically seller distributable cash which is the amount of money that you took out in the last 12 months so the example I like to give is it made five million dollars you took a million dollars out it's gonna sell for a million dollars okay it's gonna sell for what you took off if it is more systematized and you have some managers and you have predictable selling systems and you have standard operating procedures and no one client makes up more than say 20 percent of the company's business and you know that sort of thing then it's gonna sell for typically a multiple of profit and profit is defined as a beta earnings before interest depreciation taxes and amortization so that five million dollar business with a million dollars in profit or ebody will sell for a multiple and let's just pick an average and say it sells for seven so now that business is gonna sell for seven times $1,000,000 or seven million dollars when it does that you earned seven years of income on that exit imagine if every five years you sell a business for a seven multiple that means over a twenty year period you had four sales at seven times your annual income which means you made an extra twenty eight years of income during that twenty years that you would not have made if you had just held on to the business now let's go to a subscription based business like a SAS software as a service company those businesses with monthly recurring revenue or annual recurring revenue will sell for a multiple of net sales so in our case the same numbers five million dollars million dollars of EDA that's gonna sell for let's say a 7x on top line or thirty five million dollars seven times five million so the difference in those three companies was as a solopreneur with no real systems and stuff even though you're making a million dollars a year you got a million bucks one year's income now that's gone with the kind of together company but you've got one-time sales no monthly recurring you haven't really built a subscription kind of thing that's gonna sell for seven million dollars now you've made seven times your annual income and like I said you can stack that for a few years it makes a difference now you start selling those companies that are selling for a multiple of sales I got thirty five million dollars that's thirty five years a generation that I would have had to have worked to earn that money so to not sell is kind of crazy but now think about if you're an investor and you own a portfolio of companies let's say that you only own five companies now you're selling on average every five years that means if you own five companies and they sell every five years basically every year you're getting multiple years worth of income so you make so much more money selling than you do just holding unless you happen to own Facebook or uber or something like that yeah and and just to be clear for everyone who's watching you don't I remember one of the quotes you said to me during the pre-interview which I loved as you said your goal is to never end up on the org chart so you don't have an active daily job in any of these companies I do know you so you mostly its advisory role so whenever you're needed as needed strategic meetings helping point the direction but then after that you do let the management team of the company take over yeah the management team is always running the day-to-day if there's special projects like an acquisition or a divested or a strategic relationship or something like that then I'll take that and run with it but or if there's you know some litigation that needs to be overseen but those are things I'm good at but their project type things so I'm not the the day-to-day the company has to have its own people because if it doesn't we can't sell it yeah if it or if I'm in it we're gonna sell it but I'm gonna be selling me too and I don't want to sell me yeah no that's true so I have a quick question in regarding this valuation that was really cool you were giving kind of the three ways that companies get valued so would learn what we're building towards the closest example to it so we're not building a subscription-based necessarily but we're definitely on the road to building a company that's not onyx single brand and not selling only onyx single products I think the closest example I could tell you would be more like a udemy however we are more specific so we want our coursework to be specific to the Entrepreneurship space and we're more selective so we're not an open platform not anyone can publish with us so we try to keep the quality a little bit higher how would a company like mine and we have courses that range from $1 all the way up to $2,000 and so what should I be looking at like what are some metrics I should be focusing on to get my valuation as high as possible what would how would I be looked at as more of a SAS or as more of like a company number two that you talked about do in the content I'm sorry do you own the content are you publishing other people no we're publishing other people okay and then is it how is the content delivered all of a custom-developed LMS platform that we created so we loaded into the program and went to the site okay and then how do you charge people for that how does the consumer pay for its ala carte so depending like it could be as low as it like I said $1 it could be as high as you know a couple thousand dollars yeah so you're not too different from how digital marketer was when I came in digital marketer was a publisher like that and they paid a royalty to the people whose things sold and the average multiple for a company like that that sells is 0.9 one-time sales so if you are making a million dollars in sales on that platform let's say 10 million ten million dollars in sales on that platform then it might sell for 9.1 million so what I would do is what I did with digital marketer which is we go in and we'd say okay number one let's look at the multiples of let's let's say what are companies like are selling for and then we say what are all the kinds of companies that like like what could our company be our company could be a publisher it could be an educational company it could be a SAS it might be a like a combination company if it's in a particular market it might be like if it was real estate buying it might be a real estate company so I look at all of the types of categories that the company might fall into and you're pretty much gonna fall into publisher now and I'm gonna look at the multiples that those companies sell for and then I'm gonna say we need to reposition the company towards the highest multiple because just what you told me is that a publishing company as you are currently structured would sell typically four point nine one-time sales but a SAS would sell with recurring revenue would sell for six point three six I believe times right now on average so you would get six hundred percent more for your company if you move to a monthly recurring revenue revenue model from the one-time sales or what we call static income that it that exists right now simply by refocusing on that you've already got a custom LMS so that's great so that's another potential thing that could be a revenue provider for the company but just as is right now the very first thing I'd say is those one-time sales are gonna kill your valuation so I'd be looking at how do I deliver that on a subscription basis so how does someone like udemy get such a ridiculous valuation because they're probably worth a few billion dollars right now with twenty six million or I guess now thirty million users do you have any idea like are they just doing a free user valuation model like we have X number of users I don't know their model or evaluation and I'd have to look at it to see but like generally the the buyers that are out there the market says we value think about it this way anything that reduces the risk of the buyer in giving you a bunch of money is going to help them feel more comfortable giving you more money so if you have to go out and sell people again and again and again every single time that's harder that's a greater risk than a track record of hundreds of thousands of people who've paid you a certain amount of money continually for several years every single month right so their will they're going to give you more for that so if you to me was a subscription model if it's not and they had low churn and good customer generation and renewals then I think they would be valued at more okay got it no it makes a lot of sense cool well let's let's move into round number five and this was gonna be fun so I want to kind of put myself on the spot and let's see what we come up with so round number five Roland I I want to invest in deals right now you know fortunately I've been able to accumulate some wealth I could have done a heck of a lot better so if I had learned more of what I know now ten years ago geez I wish I did but it's okay Monday morning quarterbacking right I'm learning it now and I'm definitely looking to do more investments and I love the entrepreneurial business and specifically the market that we're in and so I'm just curious how do I go about finding deals you you kind of know me you know what I know don't know who you kind of travel in similar circles but I guess you would you could have at least a general idea of the kind of value I would bring to someone but how would I go about it and what would I do if you were me right now yeah well I probably already have good deal flow because of the business you're in as far as identifying companies that are like yours and in the industry so the very first thing is just to simply say you know hey I'm an investor not I'm a CEO I'm an investor so let people know that that's something that you do and you'll have people start to say hey I'd be interested in talking with you about my company and then also make it make an effort with the kinds of companies that you would be interested in investing in to get to know them and get to know the people that are operating them and if there's a particular niche that you're interested in you know like if you're interested in CD or if you're interested in crypto or something like that you would want to start networking in that area and offering them the value because you've got a ton of value you know I mean I've seen the stuff that you do and you know product launches and stuff like that you do great you've got a tremendous amount of value to bring to anybody in any industry especially the one you're in the best industry to invest in is always the one you're in yeah and and so I think that those deals will start percolating up in the hundred people that you've got there are probably opportunities like the folks in Toronto that you did the real-estate deal with right that's a great example of how do we get to know each other how do we now you've got this this platform of the hundred people that come to your mastermind within that if you make those people aware that you are you did this deal with the Toronto folks and you're interested in doing more of that then they will feel comfortable coming to you because a lot of times those people are a little intimidated they're like you know well you're the you're the guy and you know I don't know if you'd be interested in my stupid little eight million dollars it's totally be interested in your that's and and they you know they already already have the authority and positioning they know that you're gonna bring the value and then you just say well I mean before we do anything let's see if there's if there's an opportunity you know tell me about the business and then give them some help and give them something they can do and see if that actually helps them when it does then that's a good first step then the next step is I think ideally is there some sort of joint venture kind of thing you can do which is great about you going up and doing the event with the Toronto folks and then after the joint venture works or doesn't work if it doesn't work it's almost better because then you've seen how does it work if we lose money together if you can be with somebody that can lose money and still be friends with you then that's a golden person right and and then you move into to the next step so I think you've already got a plat that most people would really be envious of because you've got access to people who are successfully moving forward in all of their businesses and and and that's that's pretty valuable I mean that's something like investment bankers salivating for so I definitely would be thinking about that I will say also as you're looking at investing the the the evolution that I've had in how I invest over the last several years has been I really want to look at companies that lend themselves to multiple exits so coming in for example to digital marketer digital marketer had media through digital marketer it had an event which I know there are buyers for through traffic and conversion summit it had a sponsorship company that sold sponsors to the events that was separate it had an event management company that handled the logistics for that it had it developed three separate Sasa's crack co d m HQ proxy has our LMS DM HQ and acquired true conversion and then we had on the other side the company had multiple ecommerce properties that Perry ran through survival life etc so that company going in I saw there was the potential for six or seven exits and that's kind of fun because you can exit one use the money that came from that to take some chips off the table but then let the sale finance the other companies and if you get lucky like we did with trafficking conversion summit the deal itself the sale of the deal brings in a high dollar partner that then funds something through one of the companies that benefits all the others so for us we sold traffic and conversion summit the event but now as we do geo cloning and go into Amsterdam and Russia and Brazil and all the other places that Clarion is expanding in and they're funding the expansion digital marketer gets additional clients a Worman mastermind gets additional clients prac Co gets additional clients the event sponsor company gets additional sponsorships to sell all those companies are growing funded by the footprint of the Geo clone from the acquiring company Clarion with the real estate company that I just acquired an interest in it's a brokerage and it has the ability to have multiple exits - it's got a title company a mortgage company an escrow company an appraisal company etc etc so the the the layer on to me like an additional layer of sophistication is you're not only looking for one shot exits you're looking for multi threaded exits that can go and feed each other and that the buyers of those things can then help add additional value which means you don't have to raise capital in those ancillary companies which means that you can sell them for a whole lot more without giving up any of the equity does that make sense makes perfect sense that that was I was awesome yeah it makes complete complete sense and yeah I mean as you're talking I'm already thinking of a few particular people and some things for now I'm definitely very focused on learned but there's at least a couple people that I think if I were to go into their businesses I believe without a shadow of doubt I could trouble double or triple them pretty quickly and I think that would vouch for a discussion of getting getting ownership in those companies cool so I want to do this I forgot to ask you an important question so I'm gonna make a round for it itself round number six all right so hold on round number six basically I forgot to ask this like this was what blew me away in your introduction then I got so you know distracted with other stuff 330 you gave me this bio a few couple months ago at max okay and in that time you went from 337 million dollars of sales to four billion in a matter of so what the heck happened how did you do that in a matter of a couple months yeah it's different companies I acquired an interest in a company that's doing four billion that's awesome man that's awesome so so you continue to just now rolling when you do this or are you acquiring an interest in all these companies by paying for it or sometimes are you working out deals where your equity is sweat and and you know just your intellect yeah most often it's not once once you get up into companies that are doing tens of millions of dollars it's very difficult to just get handed a big chunk of equity so most of the deals that I've done lately have been investments as well so I'm coming in with capital we agree on a valuation but the valuation is way way way low compared to what we all know the company is worth and that's the favor to me is to give me a discount but it also provides working capital for the company usually more than you know more than not that it needs to do the things that I'm talking about we need to do so if I'm coming in and I'm like well we need to do this this and this and it's like that's gonna cost you know a million two so fine I'll put in a million two for my equity you give me a valuation that's really favorable and you know everybody's happy Wow love it absolutely I say just for everybody that's listening most of the deals that I did before I mean that's in the last like six years I've really come in to say I want higher higher higher quality companies that are farther along and those those have those have all required capital but before everything that I did was straight straight I get equity and it might be that we baseline it you know so we say you're making two million dollars in the business right now so the first two million dollars in profit is yours but we're 50/50 on everything over the two million until we 3x the revenue you know or 3x the profit and then we're 50/50 on everything so there's never I'm coming in saying I want to take you I want to take money away from you Yeah right I got it that's awesome awesome all right we're we're gonna move into our last and final round which is a selfish one again so here we go round number seven now this one rolling didn't know who's coming I'm totally blind siding them with it and that is rollin one of the from what I'm hearing from you from what I've read from watching you I mean just your Facebook and just talking to you it seems like you have this knack for coming in and just giving companies advice to help double triple quadruple the revenue and it's funny because when we were talking you said hey do you have a twenty five thousand our program and I said no and you said well we better talk about that and the truth is I'll tell you the truth why I don't have a twenty five because people petrify me and being in a room of people that have paid me twenty five thousand dollars where it's that intimate environment usually will actually scare me because I have I can't sit in one place I get claustrophobic and so I've never done it for that very reason rose growth occurs when you are at least comfortable to che see right there he just challenged me to do that you're absolutely right you're absolutely right so I was gonna ask you something that a lot of our listeners who are maybe publishers or digital product sellers or information marketers or whatever term we want to use obviously you've had so much experience with digital marketer and helping them and every way and without of course violating any you know trade secrets if you were to give me let's say five tips as a information marketer or things to add revenue right now like things that I could go out and do to add a half a million bucks a million bucks or a few million bucks and I've seen you've made the post you've made a recent post it was like a couple weeks ago it was really interesting was a long one where you wrote like all specific things from your journey and all the trip but yeah give me give me let's spitball a little bit give me a few ideas you know if you were yeah if you were a partner learn what are some things from the outside that you know so just just generally and alright so that I can go through the the post which was four steps if you like but just generally it's going to be it's going to be analyze your look at your analytics and say is my price right if I lower my price will more people come in and then see my back-end offers that that generate a higher lifetime customer value or even a higher immediate average order value that would be the one of the first things to look at then I would say are you matching your highest converting front-ends to your highest profitability backends so are the things that are generating the most customers on the front actually showing those customers the things that make you the most money in terms of depending on your objective profit margin or gross then I'd say can you expand internationally are there product extensions or new products that you could sell to your existing market could you sell your existing products to extended or new markets could you change your model to monthly recurring are there cost centers right now that could be profit centers or points of entry into your funnel that you don't know right now are you maximizing all your cross selling efforts who are the strategic partners that you should have that already have giant groups of your existing customers are you selling physical products in addition to your digital products because physical products typically increase conversions on digital products are you increasing margins by selling digital products on the back of physical products because that also tends to increase margins have you considered franchising have you considered licensing have you considered geo cloning have you considered outsourcing to reduce costs those would be some off the top of my head I stopped writing after five because you're going so fast so I just decided I'll go back and listen to the episode again but that I'm sorry I would I was just trying to give you some are you kidding me not to say sorry I got a recording of this thing man I can go back and listen to as many times as I want that was so epic Roland it's been so powerful and I really appreciate your time that you took away from from your your family from your business this shares some inside secrets for entrepreneurs I think most entrepreneurs out there dream of exactly a scenario like this where they can have multiple companies and for me it's like you get to play in the world of companies right because it's so many different companies so many different challenges so many different things going on every day it's something different and you get to play with that you get to profit from that I love the quote where you said stop building income once you don't need it anymore and start building wealth it really resonates with where I am in my life right now and so it just really played a role for me before we go Roland I'd love for you to how can people follow you connect with you learn more about you and you know dream of having you invest in their company where would someone go to find you sure I have a podcast also called business lunch so I interview smart people like you as well so that's a good place where we talk about a lot of this stuff digital marketer calm for our training traffic and conversion summit calm for our big event we'll have 10,000 people there in March 31st April 1st and 2nd of 2020 it should be fun at the San Diego Convention Center or online for me I'm Roland Frasier calm or any of the socials I'm forward-slash Roland Frasier that's awesome thank you so much listen everybody I highly highly highly highly encourage you to follow Roland if nothing else just stalk him on Facebook and his posts are fun they're awesome you learn a lot and you get to just see really cool hotel rooms all over the world that he brags about how he got into for like pennies on the dollar so I thing that's fun stuff yeah that is the fun stuff and maybe we'll have him back one day to talk about that on how he travel hacks because that's fun stuff for entrepreneurs to I actually applied his technique for the first time at the Ritz in Tokyo and it was awesome I got $700 in free money I couldn't even figure out I never told you this role and I actually couldn't figure out how to spend the damn thing and at the very end we were running around the gift shop just buying stuff because I had to spend it we got I got a weekend for free I got two upgrades I paid less than the price of the regular upgrade I don't know what was going on and and I followed his model to the tee now that I've sold that enough people like what are you doing you got to go find it he's got awesome posts on his Facebook wall but basically it's about how you use the AMEX platinum or Centurion benefits and kind of all of that stuff but anyways in a future episode Roland thank you so much guys go role in Frayser comm find them on social media digital marketer comm go to traffic and conversion make sure you're there at the summit and connect with Roland Roland thank you everybody onic podcast.com for the show notes go back and listen to this again if you want on youtube come on Roland just took away so much of his time to be with us let's show them some love leave a comment click subscribe click the bell icon click the thumbs up icon let's spread this message to the world so we can inspire more and more entrepreneurs come on learn nation and remember go to learn comm L you RN com sign up for your free account we've got tons of amazing resources at learn including free courses and including a lot of courses that you can get in for just a few dollars if you're ready to start your education or started ready to continue it get in there right now this is onyx ting off telling you right now what do I always say when life pushes you stand straight smile and push it the heck back come on fighters I'll see you on the next episode thanks for listening to the fighting entrepreneur with your host onyx and god [Music]

Channel: Anik Singal

Views: 23,370

Keywords: Lurn, Lurn Nation, Anik Singal, Entrepreneurship, Entrepreneur, roland frasier, billionaires, interview with billionaires, flip the business, buying businesses, how to start a business, entrepreneur advice, business ideas, billionaires club, entrepreneurship development, buying businesses with no money down, online business ideas, entrepreneurship development mba, entrepreneurship development cycle, entrepreneur advice for beginners

Id: o7oZW0JlD-s

Length: 63min 36sec (3816 seconds)

Published: Wed Jul 17 2019