WEBVTT - 8 Ways to Escape The Middle Class 0:00:00.120 --> 0:00:03.160 Welcome to business and the podcast for people making it 0:00:03.160 --> 0:00:07.320 all happen. Running a successful business completely takes over your life, 0:00:07.520 --> 0:00:10.120 but I'm a believer that there is still room for 0:00:10.119 --> 0:00:14.560 some ands like health, wealth, beauty, and maybe even some fashion. 0:00:14.840 --> 0:00:16.960 On this podcast, I'll share with you what's working for 0:00:16.960 --> 0:00:19.840 scaling my nine figure business while keeping you up to 0:00:19.880 --> 0:00:23.040 date on the latest trends, news and fun finds. This 0:00:23.040 --> 0:00:25.840 is a place for business and let's dive in! Are 0:00:25.840 --> 0:00:28.760 the hard truths for business owners about escaping the middle 0:00:28.760 --> 0:00:32.080 class trap and actually becoming wealthy. I know this because 0:00:32.080 --> 0:00:35.040 as a millionaire entrepreneur, I work with real business owners 0:00:35.040 --> 0:00:38.520 every day and they're stuck still grinding like employees. These 0:00:38.520 --> 0:00:42.400 are the hard truths that separate the millionaires from the burnouts. 0:00:42.440 --> 0:00:44.680 The first truth is that if you own a business, 0:00:44.680 --> 0:00:47.280 it actually owns you. Have you ever thought about what 0:00:47.280 --> 0:00:49.519 happens if you get hit by a bus? I know 0:00:49.520 --> 0:00:51.400 this is a little bit morbid, and you might be 0:00:51.400 --> 0:00:53.639 in the hospital and quite a bit of pain, but 0:00:53.640 --> 0:00:56.560 if you think about your business and what happens there, 0:00:56.560 --> 0:00:58.320 if you got hit by a bus, do you still 0:00:58.320 --> 0:01:00.160 make revenue? Do your team members still know what to do? 0:01:00.310 --> 0:01:02.670 Would your customers freak out because they weren't getting serviced? 0:01:02.710 --> 0:01:05.190 What would happen if you no longer were able to 0:01:05.190 --> 0:01:07.590 be there? That principle is how you should choose to 0:01:07.630 --> 0:01:10.789 run your business every single day. The creation of systems 0:01:10.790 --> 0:01:14.309 and processes have to be your priority because you could 0:01:14.310 --> 0:01:16.430 get hit by a bus. Now, I don't wish this 0:01:16.430 --> 0:01:19.470 on anybody, but it's a reality. Something bad could happen, 0:01:19.470 --> 0:01:22.590 but even better than something bad happening. Is something good happening, 0:01:22.590 --> 0:01:24.790 like taking a vacation? Wouldn't it be nice if you 0:01:24.790 --> 0:01:27.310 could step away from your business and have it run, 0:01:27.310 --> 0:01:29.830 and have it continue to grow and not have it 0:01:29.830 --> 0:01:32.950 slip backwards, all because you actually knew how to set 0:01:32.990 --> 0:01:36.390 up your business correctly. My simple trick for making processes 0:01:36.390 --> 0:01:39.789 effectively is recording what you do every day. So if 0:01:39.790 --> 0:01:42.350 you are on a call with clients and you know 0:01:42.350 --> 0:01:44.710 how to close the deal, record the call. If you 0:01:44.709 --> 0:01:48.030 are putting together some spreadsheet and making updates to what 0:01:48.030 --> 0:01:51.389 expenses you paid, record that entire process. When you record 0:01:51.390 --> 0:01:53.550 the most important things that you do when you bring 0:01:53.550 --> 0:01:55.790 new people on, it's very easy to get them up 0:01:55.790 --> 0:01:57.870 to speed because they can watch how you do it 0:01:57.870 --> 0:02:00.370 on two times speed and have a full process in 0:02:00.370 --> 0:02:02.650 place without it taking you any more time. The next 0:02:02.650 --> 0:02:05.050 truth is that your business may be making you money, 0:02:05.050 --> 0:02:08.410 but it's not making you wealthy if it's dependent upon you. 0:02:08.450 --> 0:02:11.090 So many business owners get stuck on this hamster wheel 0:02:11.130 --> 0:02:16.170 of increasing revenue, increasing profit. They're focused on growth, growth, growth, growth. 0:02:16.169 --> 0:02:20.130 But if the growth is dependent upon you, it doesn't matter. 0:02:20.130 --> 0:02:24.570 True wealth is not created from you being in the operations. 0:02:24.570 --> 0:02:28.530 Wealth is created through you owning something that's valuable. But 0:02:28.530 --> 0:02:32.530 if your time, your resources, your energy are focused and 0:02:32.530 --> 0:02:35.250 part of a valuable thing, you're stuck in it. Which 0:02:35.250 --> 0:02:37.610 means that you can't sell it, you can't exit it. 0:02:37.610 --> 0:02:41.290 And that's not creating wealth. It's just generating money. That 0:02:41.290 --> 0:02:44.210 brings us to truth number three. You're not actually focused 0:02:44.210 --> 0:02:47.889 on the real game. The biggest mistake entrepreneurs make chasing 0:02:47.889 --> 0:02:50.850 short term cash instead of structuring their business for long 0:02:50.889 --> 0:02:53.930 term value. Adding another million dollars in revenue this year 0:02:53.930 --> 0:02:56.210 is great, but you want to know what's better? Building 0:02:56.210 --> 0:02:59.960 something that is worth ten times in an exit. Have 0:02:59.960 --> 0:03:02.919 you really sat down and thought about, hmm, if I 0:03:02.919 --> 0:03:06.320 was to sell my business, what would be valuable about 0:03:06.320 --> 0:03:08.840 my business and how it's run in an exit? If 0:03:08.840 --> 0:03:11.839 you're not planning for the exit today, this is what happens. 0:03:11.880 --> 0:03:14.600 You eventually decide that you want to exit, but by 0:03:14.600 --> 0:03:16.880 the time you decide you want to exit, you haven't 0:03:16.880 --> 0:03:19.200 put the systems and processes in place and you haven't 0:03:19.200 --> 0:03:22.959 created the story, the valuable story that a future potential 0:03:22.960 --> 0:03:26.480 investor would be interested in would be captivated by. In 0:03:26.480 --> 0:03:29.040 order to pay more for your business. If your revenue 0:03:29.040 --> 0:03:31.359 goes up and down based off of how you choose 0:03:31.360 --> 0:03:33.440 to run your business, let's say one year you decide 0:03:33.440 --> 0:03:36.000 to take a six week long vacation and you know 0:03:36.040 --> 0:03:38.600 that your revenue plummets that year. Well, when an investor 0:03:38.640 --> 0:03:40.600 is looking at that over the course of a three 0:03:40.600 --> 0:03:42.800 year span, you're thinking, man, I got my revenue back 0:03:42.800 --> 0:03:44.880 up the next year. But they are going to see 0:03:44.920 --> 0:03:47.520 instantly when it took a dive. And then they're going 0:03:47.560 --> 0:03:49.200 to ask a really smart question, which is why did 0:03:49.200 --> 0:03:51.000 I take a dive? And you're going to know, shoot, 0:03:51.000 --> 0:03:53.120 it's because I took a vacation. It's because I stopped 0:03:53.120 --> 0:03:56.480 working as hard, which to the investor instantly tells them, oh, 0:03:56.480 --> 0:03:59.339 this business is dependent upon this person. Therefore, I'm either 0:03:59.340 --> 0:04:02.220 going to have to structure a nice long burnout so 0:04:02.220 --> 0:04:04.580 that you keep working in the business. Or I'm going 0:04:04.580 --> 0:04:07.060 to discount the value of this business because it's not 0:04:07.100 --> 0:04:09.420 worth that much if you leave. Neither one of these 0:04:09.420 --> 0:04:11.619 are great solutions. So what do you do instead? You 0:04:11.620 --> 0:04:14.340 switch your perspective to knowing that everything that you do 0:04:14.340 --> 0:04:16.580 in your business is creating a story for your exit. 0:04:16.580 --> 0:04:18.739 It doesn't matter if you're not exiting for ten years 0:04:18.740 --> 0:04:21.540 or 15 years from now. The story is being created 0:04:21.540 --> 0:04:23.700 through the financial impact. So the way that you make 0:04:23.700 --> 0:04:26.540 decisions and the products and services that you create cannot 0:04:26.540 --> 0:04:29.100 be dependent upon you. They have to be bigger than you. 0:04:29.100 --> 0:04:30.820 They have to be outside of you so that you 0:04:30.820 --> 0:04:34.260 can create true value. Next up is truth number four. 0:04:34.300 --> 0:04:37.299 You're focused on the wrong things. You have to shift 0:04:37.300 --> 0:04:41.420 your focus from making more money to keeping more value. 0:04:41.420 --> 0:04:43.979 The biggest winners in business aren't the ones who make 0:04:43.980 --> 0:04:47.860 the most. They're the ones who keep and reinvest the most. 0:04:47.900 --> 0:04:51.540 Your top line revenue means nothing if you are bleeding 0:04:51.540 --> 0:04:56.340 cash on bloated overhead, bad tax strategies, and inefficient systems. 0:04:56.339 --> 0:05:00.080 And this is why I am obsessed with systems and 0:05:00.080 --> 0:05:03.760 team efficiencies. The most successful business owners I know don't 0:05:03.760 --> 0:05:06.960 just make money, they know how to protect their money. 0:05:06.960 --> 0:05:09.200 One of the most painful mistakes that I see business 0:05:09.200 --> 0:05:12.520 owners make is they start making money. And when they 0:05:12.520 --> 0:05:14.800 start making money, they start to think, oh, I have 0:05:14.800 --> 0:05:17.520 a lot of money, which is cool in that moment 0:05:17.520 --> 0:05:21.200 for them, because they buy the fancy car, they start 0:05:21.200 --> 0:05:24.520 spending more money on their lifestyle, but all of a 0:05:24.520 --> 0:05:27.080 sudden they're defocused and now they're not doing what they 0:05:27.080 --> 0:05:29.480 used to do in order to generate money, and they're 0:05:29.480 --> 0:05:31.640 not doing what they used to do. They don't have 0:05:31.640 --> 0:05:34.120 excess capital to reinvest in the business. So then the 0:05:34.120 --> 0:05:38.240 business eventually stays steady and stops growing, and it might 0:05:38.240 --> 0:05:40.760 even decline because of the lack of focus on the 0:05:40.760 --> 0:05:43.599 business now. And so they find themselves in this problem 0:05:43.600 --> 0:05:45.640 where they had capital and they could have used the 0:05:45.640 --> 0:05:48.240 capital in order for them to fuel operations in order 0:05:48.240 --> 0:05:50.800 to fuel their growth, but instead they get distracted. Do 0:05:50.800 --> 0:05:54.040 not make this mistake. Do not get distracted. When you 0:05:54.080 --> 0:05:57.430 finally start making money, tell yourself that you're broke. Just 0:05:57.430 --> 0:05:59.469 say I'm broke. I can't touch this money. I'm broke. 0:05:59.510 --> 0:06:01.710 This money needs to stay in the business so I 0:06:01.710 --> 0:06:05.990 can reinvest in the right hires, in the right systems, 0:06:05.990 --> 0:06:08.750 in the right education for me to know what to 0:06:08.750 --> 0:06:11.150 do next so that I can fuel the next round 0:06:11.150 --> 0:06:13.870 of growth. Do not bleed out your business by spending 0:06:13.870 --> 0:06:16.670 a bunch of money when you're finally making money. Next 0:06:16.710 --> 0:06:19.350 up is number five, which is a personal favorite of mine. 0:06:19.350 --> 0:06:22.390 Why would you chase growth when you can buy it instead? 0:06:22.390 --> 0:06:25.190 Because the fastest way to ten-x your business growth is 0:06:25.190 --> 0:06:29.470 to buy the growth through mergers, acquisitions, and partnerships. When 0:06:29.470 --> 0:06:32.349 you think about Jeff Bezos and what he did at Amazon, 0:06:32.390 --> 0:06:34.589 do you remember how he grew it? Was it through 0:06:34.630 --> 0:06:37.950 campaigns and all of this internal effort, or did he 0:06:37.950 --> 0:06:43.390 buy entire industries? Think about Whole Foods. What about Zappos? See, 0:06:43.430 --> 0:06:49.430 Amazon grew through acquisitions, not just traditional marketing, traditional organic strategies, 0:06:49.430 --> 0:06:52.870 and one brick by brick building this business, you can 0:06:52.910 --> 0:06:57.100 grow quickly through acquiring other businesses and the biggest businesses 0:06:57.100 --> 0:07:00.140 do not scale just by working harder. Yes, they do 0:07:00.180 --> 0:07:03.460 work hard, but they also work smart. And the smart 0:07:03.460 --> 0:07:07.060 move is to start looking at acquiring your competitors or 0:07:07.060 --> 0:07:10.340 creating a joint venture where you can connect with somebody 0:07:10.340 --> 0:07:13.300 who has something that you don't have. Because remember that 0:07:13.300 --> 0:07:16.780 organic growth can be very slow and it traditionally is 0:07:16.780 --> 0:07:20.460 very expensive. When you have this mindset where you're going 0:07:20.500 --> 0:07:22.420 to switch into a different game, you're going to think 0:07:22.420 --> 0:07:24.660 about how is my competition? Not somebody that I need to, like, 0:07:24.700 --> 0:07:26.940 beat up, but somebody that I could align with or 0:07:26.980 --> 0:07:30.260 a potential partner that has a complementary business that has 0:07:30.260 --> 0:07:34.460 existing clients, existing leads that you could leverage, or maybe 0:07:34.460 --> 0:07:37.900 even a deal that comes from someplace that you might 0:07:37.900 --> 0:07:40.700 not be currently looking that could multiply your revenue. You're 0:07:40.700 --> 0:07:44.100 starting to think smart, and you also are working hard. 0:07:44.140 --> 0:07:46.460 These are my two favorite things to be. I'm going 0:07:46.460 --> 0:07:48.300 to be a hard worker, but I'm also going to 0:07:48.340 --> 0:07:50.460 work very smart. And I'm going to add revenue and 0:07:50.460 --> 0:07:53.500 strategic ways. One of our favorite sayings at Cardinal Ventures 0:07:53.500 --> 0:07:56.720 is collaboration. Is the new currency. There is no reason 0:07:56.720 --> 0:07:59.720 in this day and age to not be collaborating with people. 0:07:59.720 --> 0:08:02.080 If you're not collaborating with people, that might be a 0:08:02.080 --> 0:08:04.200 little bit of an ego situation that you got going on, 0:08:04.200 --> 0:08:07.520 because there's no shortage of opportunities. And the fastest way 0:08:07.520 --> 0:08:10.120 to do something is to collaborate. But if you want 0:08:10.120 --> 0:08:12.760 to do it all by yourself, that is the slow way. 0:08:12.800 --> 0:08:15.480 That is the hard way. And it takes the longest, 0:08:15.480 --> 0:08:19.080 which actually might increase your chances of failing. Why wouldn't 0:08:19.080 --> 0:08:22.680 you just collaborate and increase your chances of actually being successful? 0:08:22.680 --> 0:08:25.280 That brings us to number six. Your industry will not 0:08:25.280 --> 0:08:26.920 look the same in five years from now. So if 0:08:26.920 --> 0:08:31.040 you're not reinventing, acquiring, or diversifying, you're going to get 0:08:31.040 --> 0:08:33.640 left behind. The number one piece of advice I give 0:08:33.640 --> 0:08:36.480 to business owners is do it scared. The market doesn't 0:08:36.480 --> 0:08:39.160 care how hard you've worked. It only cares about who 0:08:39.400 --> 0:08:44.560 adapts the fastest. How are you leveraging AI? How are 0:08:44.559 --> 0:08:48.360 you adapting your customer service models? Your ability to generate 0:08:48.400 --> 0:08:51.200 leads based off of the market today? Do you spend 0:08:51.200 --> 0:08:53.719 a lot of time doing this if you don't as 0:08:53.720 --> 0:08:56.820 a business owner in 2025. I promise you, you are 0:08:56.820 --> 0:08:59.340 going to get left behind because all of a sudden 0:08:59.340 --> 0:09:00.980 we are going to wake up in a world in 0:09:00.980 --> 0:09:05.220 2035 where things look very different. And if you get 0:09:05.220 --> 0:09:07.980 ahead of this, you can be a part of the growth. 0:09:07.980 --> 0:09:11.020 If you decide to hang back and to say, I'm 0:09:11.020 --> 0:09:14.020 already doing too much, I'm already overwhelmed. I can't take 0:09:14.020 --> 0:09:16.260 anything new on. You're going to find yourself in a 0:09:16.260 --> 0:09:18.820 very difficult position in a matter of ten years from now. 0:09:18.820 --> 0:09:21.900 So depending on where your lifespan is and what your 0:09:21.900 --> 0:09:24.460 career is and what you're looking to do with your business, 0:09:24.460 --> 0:09:26.780 I would hop on these things now. It would be 0:09:26.780 --> 0:09:31.140 like the person who decided only to advertise in yellow 0:09:31.140 --> 0:09:34.100 pages back in the day and not learn anything about 0:09:34.100 --> 0:09:36.940 the internet. The internet was coming. They could have been 0:09:36.940 --> 0:09:40.460 buying Google AdWords, but instead they put all of their 0:09:40.460 --> 0:09:43.380 money into Yellow Pages because it was working. It was trusted, 0:09:43.380 --> 0:09:46.179 it was what everybody was doing. But fast forward today, 0:09:46.340 --> 0:09:47.780 that would be a waste of money. There would be 0:09:47.780 --> 0:09:50.860 no real reason to invest your hard earned marketing dollars 0:09:50.860 --> 0:09:56.090 into Yellow Pages. Why the internet exists. Social media exists. 0:09:56.130 --> 0:09:59.890 Google exists. So don't think of this time right now, 0:09:59.929 --> 0:10:02.850 especially if you're having some success, as I'm just going 0:10:02.890 --> 0:10:05.290 to keep doing what I'm doing because the world is 0:10:05.290 --> 0:10:08.130 changing and is changing rapidly. How are you getting in 0:10:08.130 --> 0:10:10.410 front of AI? If you haven't done this already, I 0:10:10.410 --> 0:10:14.010 would recommend you type this prompt into ChatGPT. Based on 0:10:14.010 --> 0:10:18.610 my business that does x, how should I start today 0:10:18.650 --> 0:10:22.930 to leverage AI across my operations and build me a 0:10:22.929 --> 0:10:26.170 three month roadmap for how I would integrate AI to 0:10:26.210 --> 0:10:28.770 make my business more effective and ahead of the curve. 0:10:28.770 --> 0:10:31.370 And you are going to watch this magical list of 0:10:31.370 --> 0:10:35.890 things unfold about how specific roles can use AI, about 0:10:35.890 --> 0:10:38.490 how your processes can be optimized, and it is going 0:10:38.490 --> 0:10:40.730 to be the launchpad for you to start thinking about 0:10:40.730 --> 0:10:43.970 how you re-engineer the way that your business does work. 0:10:44.010 --> 0:10:46.290 And don't be scared of it. Ask it follow up 0:10:46.290 --> 0:10:49.130 questions so that you can use it. You can partner 0:10:49.130 --> 0:10:51.449 with it to help you get ahead of this because 0:10:51.450 --> 0:10:53.870 it's coming regardless, so you might as well make it 0:10:53.870 --> 0:10:56.270 your best friend. That brings us to the final truth, 0:10:56.270 --> 0:10:59.630 which is to really know who you're building this business for. 0:10:59.710 --> 0:11:01.910 Is it for yourself or is it for others? You 0:11:01.910 --> 0:11:05.349 might have originally started your business because you were escaping something. 0:11:05.350 --> 0:11:07.990 You were running away from a job that you didn't like, 0:11:08.030 --> 0:11:11.030 and you just decided to create a business as an alternative? 0:11:11.070 --> 0:11:14.110 That is awesome. Congratulations on being an entrepreneur. But it 0:11:14.110 --> 0:11:17.270 can't stop there because as a business owner, there are 0:11:17.270 --> 0:11:19.310 a lot of people who are depending upon you and 0:11:19.309 --> 0:11:22.230 there is a significant amount of responsibility that you have. 0:11:22.230 --> 0:11:24.590 And if you're not taking into consideration all of the 0:11:24.590 --> 0:11:28.070 people who depend on you to have a plan, then 0:11:28.070 --> 0:11:31.469 you are being very irresponsible. Your plan for how you 0:11:31.470 --> 0:11:33.670 exit your business. Your plan for how you set your 0:11:33.670 --> 0:11:37.550 business up for success directly impacts the people who trust you. 0:11:37.550 --> 0:11:39.589 So when you think about who you're building this business for, 0:11:39.590 --> 0:11:43.110 I hope you choose yourself and others. You choose the 0:11:43.110 --> 0:11:45.870 life that you want to live, the income that you 0:11:45.870 --> 0:11:48.230 want to create, the impact that you want to have, 0:11:48.230 --> 0:11:51.470 while also choosing to build a great business for the 0:11:51.510 --> 0:11:55.540 purpose of impacting other people, both your customers and your 0:11:55.540 --> 0:11:58.860 team members. If your business can't survive without you, you 0:11:58.900 --> 0:12:02.060 are not protecting any of these people and you're actually 0:12:02.059 --> 0:12:04.900 putting them at risk. You have to remember to make 0:12:04.940 --> 0:12:07.459 sure every single day that the decisions that you make, 0:12:07.500 --> 0:12:09.580 the products that you create, the services that you have, 0:12:09.620 --> 0:12:12.500 can run without you. This is the only way that 0:12:12.500 --> 0:12:15.500 you actually build wealth and escape the trap of the 0:12:15.500 --> 0:12:18.660 middle class. I get why this is challenging. It's challenging 0:12:18.660 --> 0:12:21.860 because today you have to prioritize what you need to 0:12:21.860 --> 0:12:24.820 do in the future. All while today it feels like 0:12:24.820 --> 0:12:27.260 things are on fire. As a business owner, I get it. 0:12:27.260 --> 0:12:29.980 There are problems, there are challenges. There are things that 0:12:29.980 --> 0:12:32.660 go wrong every single day that feel like you have 0:12:32.660 --> 0:12:34.780 to put your energy and attention on them. Without that, 0:12:34.780 --> 0:12:36.819 it feels like maybe your business won't even exist in 0:12:36.820 --> 0:12:39.460 six months from now, much less in five years from now. 0:12:39.500 --> 0:12:43.220 I get the difficulty, but here's the reality you can 0:12:43.260 --> 0:12:46.179 build your business for the future while still solving problems 0:12:46.179 --> 0:12:48.820 for today. And it is just a simple mindset shift. 0:12:48.820 --> 0:12:50.459 You have to have a plan. You have to have 0:12:50.460 --> 0:12:53.570 a strategy. You have to know what is valuable in 0:12:53.570 --> 0:12:57.090 a business and start taking those actions, such as putting 0:12:57.090 --> 0:13:01.210 processes in place, creating clarity on your products and services 0:13:01.210 --> 0:13:05.010 and how somebody sells them without you even involved. These 0:13:05.010 --> 0:13:07.730 simple things help set your business up for success and 0:13:07.730 --> 0:13:09.530 allow it to grow. And you are going to be 0:13:09.530 --> 0:13:12.250 amazed at your ability to step out of your business 0:13:12.250 --> 0:13:15.210 once you start building everything with this frame of mind. 0:13:15.210 --> 0:13:19.170 If you enjoyed this podcast, you are going to definitely 0:13:19.170 --> 0:13:22.010 not want to miss out on my new newsletter. It 0:13:22.010 --> 0:13:24.690 just dropped. I just started creating this content and I 0:13:24.730 --> 0:13:27.490 am obsessed. Every single week in your inbox I'm going 0:13:27.490 --> 0:13:30.890 to send you business. And which is exactly what it 0:13:30.890 --> 0:13:33.610 sounds like. How do you fit business and all of 0:13:33.610 --> 0:13:35.810 the other things in your life so that you are 0:13:35.809 --> 0:13:40.650 up to speed on fashion, beauty, wellness, all things that 0:13:40.650 --> 0:13:43.490 really matter. If you want to subscribe and get this 0:13:43.490 --> 0:13:47.050 special gift and weekly treat in your inbox, go to 0:13:47.090 --> 0:13:47.770 Cartoon Ventures.