WEBVTT - EYL #36 Buy Back the Block 0:00:00.400 --> 0:00:03.120 Coach, the energy out there felt different. What changed for 0:00:03.160 --> 0:00:03.800 the team today? 0:00:03.880 --> 0:00:06.000 It was the new game day scratches from the California 0:00:06.080 --> 0:00:07.080 Lottery players. 0:00:07.120 --> 0:00:07.520 Everything. 0:00:07.840 --> 0:00:09.799 Those games sent the team's energy through the roof. 0:00:09.880 --> 0:00:11.840 Are you saying it was the off field play that 0:00:11.920 --> 0:00:13.000 made the difference on the field. 0:00:13.119 --> 0:00:15.840 Hey, little play makes your day, and today it made 0:00:15.880 --> 0:00:16.279 the game. 0:00:16.760 --> 0:00:19.000 That's all for now, coach, one more question. 0:00:19.000 --> 0:00:21.800 Play the new Los Angeles Chargers, San Francisco forty nine 0:00:21.880 --> 0:00:24.960 Ers and Los Angeles Rams scratchers from the California Lottery. 0:00:25.040 --> 0:00:28.160 A little play can make your day. Peace may responsibil 0:00:28.240 --> 0:00:30.080 must be eighteen years or older to purchase late or claim. 0:00:30.480 --> 0:00:34.239 All right, guys, welcome back EYO Houston edition. Oh man, 0:00:34.400 --> 0:00:37.200 if you notice the backdrop is different, that's because you're. 0:00:37.040 --> 0:00:37.800 On the road right now. 0:00:38.080 --> 0:00:42.280 Yeah, took this one for sure. Show in the me 0:00:42.360 --> 0:00:44.800 in the great state of Texas, the beautiful city of Houston, 0:00:44.840 --> 0:00:47.680 so first and foremost shot to everybody in an We've 0:00:47.720 --> 0:00:49.720 only been here for them, like less than twenty four 0:00:49.720 --> 0:00:51.720 hours and we got shown so much love so far. 0:00:51.920 --> 0:00:53.120 I mean, as soon as we got on the plane, 0:00:53.159 --> 0:00:55.160 right they gave up their seats. Shout out to Crystal 0:00:55.200 --> 0:00:55.920 for give it up a seat. 0:00:55.920 --> 0:01:00.440 So we yeah, shot shout out to the radio station today, 0:01:00.400 --> 0:01:04.920 ye ninety seven, mad hatter. Yeah it was it was great. 0:01:05.000 --> 0:01:08.120 It was great. So we enjoyed ourselves and we're going 0:01:08.200 --> 0:01:09.360 to come back out here. We're going to spend some 0:01:09.400 --> 0:01:11.080 more time in is Real. 0:01:11.360 --> 0:01:11.760 Yeah. 0:01:11.800 --> 0:01:15.560 So we got a special, very special episode today. We 0:01:15.640 --> 0:01:18.280 have a special guest, Chris Senegal. Thank you for joining us. 0:01:18.400 --> 0:01:19.040 Appreciate it man. 0:01:19.040 --> 0:01:21.479 Welcome to Houston, Senegalgue like the country, just like the country. 0:01:22.560 --> 0:01:25.400 Shout out to Africa. So, yeah, we're going to talk 0:01:25.400 --> 0:01:28.280 about a lot of different things this episode. We're going 0:01:28.360 --> 0:01:33.319 to talk about everything from gentrification, real estate, investing, day trading, 0:01:33.360 --> 0:01:35.480 a lot of different stuff. Chris is a very interesting guy. 0:01:35.520 --> 0:01:38.000 He's a renaissance man. He does a lot of different guys, 0:01:38.000 --> 0:01:40.640 a lot going on, guy, lot going on. And this 0:01:40.720 --> 0:01:41.800 is one of the things that we try to do 0:01:41.800 --> 0:01:43.920 when we travel. We try to tap in with the 0:01:43.959 --> 0:01:47.200 movers and shakers and business people that are making waves 0:01:47.200 --> 0:01:49.120 and making a name for themselves in the city. So 0:01:49.640 --> 0:01:51.520 we had to tap in with the good Brothers. So 0:01:51.880 --> 0:01:53.400 I want to get right into it. Yeah, you're an 0:01:53.400 --> 0:01:55.800 interesting guy. You told me that you went to school 0:01:55.840 --> 0:01:59.600 for to be an engineer. You're a trained engineer, civil engineer, 0:02:00.160 --> 0:02:03.560 degrees in all right, and then but you was actually 0:02:03.680 --> 0:02:05.600 day trading for a little bit. Right. We haven't really 0:02:05.640 --> 0:02:07.280 covered day trading too much. We had an episode on 0:02:07.320 --> 0:02:10.360 stocks and we talked a little bit about Wall Street, 0:02:10.400 --> 0:02:12.880 but we didn't really go into day trading. What made 0:02:12.919 --> 0:02:13.640 you go into day trading? 0:02:14.160 --> 0:02:14.400 Man? 0:02:14.440 --> 0:02:18.880 So eventually that essentially that was my escape to try 0:02:18.919 --> 0:02:21.280 to get out of corporate America, you know, because I 0:02:21.360 --> 0:02:22.760 was like, I was like the good kid, you know 0:02:22.760 --> 0:02:25.480 what I mean, straight a's in school, full scholarship to college, 0:02:25.800 --> 0:02:28.120 engineering job, got out there. I did it for like 0:02:28.160 --> 0:02:29.360 the first six months. I was like, man, I've been 0:02:29.400 --> 0:02:32.000 sold a dream. I hate this. That's how I felt. 0:02:32.120 --> 0:02:34.320 And so the first thing that came across my desk 0:02:34.480 --> 0:02:39.359 was stocks and trading. And I ran to a guy 0:02:39.360 --> 0:02:41.600 one day when I was at a conference for work, 0:02:41.720 --> 0:02:43.600 matter of fact, and he was about a pool all 0:02:43.680 --> 0:02:45.720 day every day with his laptop, and I was like, 0:02:45.760 --> 0:02:47.880 what is this dude doing? And so he was a 0:02:47.880 --> 0:02:49.160 brother and he was sitting out there and I was like, 0:02:49.200 --> 0:02:51.160 what are you doing. He's like, oh, I'm trading. You know. 0:02:51.200 --> 0:02:53.680 So he was watching the market what they called scalping, 0:02:54.240 --> 0:02:57.080 so basically watching for a stock to go up, knowing 0:02:57.120 --> 0:02:59.079 that it's it's it's probably going to come back down 0:02:59.120 --> 0:03:02.200 really quickly. He'll buy and make that little margin in 0:03:02.200 --> 0:03:04.880 the middle. And so basically I kind of talked to 0:03:04.919 --> 0:03:07.440 him into becoming my mentor. And so for like a 0:03:07.480 --> 0:03:10.160 full year I was like fully invested and learned how 0:03:10.160 --> 0:03:11.399 to trade outside of my work. 0:03:11.480 --> 0:03:14.399 So prior to that moment, did you have any familiarity 0:03:14.440 --> 0:03:15.200 with stocks. 0:03:15.639 --> 0:03:18.320 I had no familiarity with anything but going to school 0:03:18.320 --> 0:03:20.360 and getting the job, you know what I mean. So 0:03:20.480 --> 0:03:23.679 I had no exposure to business, entrepreneurship, investing, nothing else. 0:03:23.720 --> 0:03:25.679 This was my my I high moment, you know what 0:03:25.720 --> 0:03:26.040 I mean. 0:03:26.520 --> 0:03:29.800 And yeah, so what do you teach you about day trading? Like, 0:03:29.800 --> 0:03:31.400 what does like day trading one on one look like 0:03:31.400 --> 0:03:33.600 for anybody that's not familiar. Day trading is when you 0:03:33.639 --> 0:03:37.080 could really day trade anything. It's when so most of 0:03:37.080 --> 0:03:38.760 the time when you invest in something, you invest in 0:03:38.760 --> 0:03:41.920 whole right. Day trading is when you're dating. You're trading 0:03:42.000 --> 0:03:44.800 in the day. So you might buy a stock at 0:03:44.800 --> 0:03:46.840 eleven o'clock in the morning and then you sell it 0:03:46.840 --> 0:03:49.520 at eleven thirty, you're selling it at one pm. You're 0:03:49.520 --> 0:03:52.760 trying to like just make quick short term profits. And 0:03:52.800 --> 0:03:54.680 you do that pretty much every day, and it's like 0:03:54.760 --> 0:03:58.120 a job where you're just like watching the computer, watching 0:03:58.280 --> 0:04:01.560 like different you know, swings in the market, and then 0:04:01.640 --> 0:04:04.000 you buy and then you sell. Right, So, what's the 0:04:04.040 --> 0:04:05.480 one on one that he taught you. 0:04:05.440 --> 0:04:06.920 And you kind of learned as far as day trading, 0:04:08.160 --> 0:04:10.200 mainly just the cycles of the day, you know, I 0:04:10.200 --> 0:04:13.120 think a lot of people that understand day trading, they're 0:04:13.160 --> 0:04:15.240 trained to look at the signals. So there's a lot 0:04:15.240 --> 0:04:18.839 of different technical indicators that people use, and there's certain 0:04:18.920 --> 0:04:22.520 like certain dips that you'll watch for. There's a certain 0:04:22.920 --> 0:04:25.520 spike in a stock or a certain cycle where it 0:04:25.520 --> 0:04:27.280 goes up and down, up and down a couple of times, 0:04:27.520 --> 0:04:29.039 and then when it breaks up what they call like 0:04:29.040 --> 0:04:31.200 a resistance barrier where it goes up higher than something, 0:04:31.800 --> 0:04:33.280 then it's time for you to get in because it's 0:04:33.279 --> 0:04:35.440 probably about to make a run and go up. And so, 0:04:35.960 --> 0:04:38.440 like you said, you know, day trading is basically just 0:04:39.000 --> 0:04:42.360 guessing what's about to happen based off of previous behaviors 0:04:42.720 --> 0:04:46.039 of generally stocks in general, what's the stress. 0:04:45.760 --> 0:04:47.400 Level of somebody that's going to be day trading? 0:04:47.440 --> 0:04:49.560 Man? I could imagine, right, Like I remember we were 0:04:49.600 --> 0:04:52.720 talking about cryptocurrency and we weren't sleeping, so I mean, 0:04:52.800 --> 0:04:54.160 we were doing that with money. 0:04:53.920 --> 0:04:56.360 That we knew we could lose. But somebody who's doing 0:04:56.360 --> 0:04:57.840 that as a career, what's the stress level? 0:04:58.320 --> 0:04:58.840 Pretty high? 0:04:58.839 --> 0:05:01.320 Mean a lot of people don't survive. I got out 0:05:01.320 --> 0:05:04.200 of it after a year, honestly. I mean it is. 0:05:04.839 --> 0:05:07.320 I would say it's about thirty percent better than gambling, 0:05:07.400 --> 0:05:09.320 sports betting, you know what I mean, because at the 0:05:09.400 --> 0:05:10.919 end of the day, it's still a person on the 0:05:10.960 --> 0:05:14.400 other end of whatever you're watching that's making decisions, and 0:05:14.400 --> 0:05:17.280 it's big institutions that are buying stocks. Is it could 0:05:17.320 --> 0:05:22.280 be individuals, but if they own enough shares of that 0:05:22.320 --> 0:05:24.800 particular stock that you're watching, they make a decision, that's 0:05:24.800 --> 0:05:27.320 what makes it spike or go down. And so you're guessing, 0:05:27.360 --> 0:05:30.960 and you're assuming that because people told you when you 0:05:31.000 --> 0:05:34.720 see this pattern and this stock, that this is going 0:05:34.760 --> 0:05:36.279 to be the result, you're assuming that that's what's going 0:05:36.320 --> 0:05:36.960 to happen this time. 0:05:37.000 --> 0:05:38.960 Again, a lot of times that's not the case. Yeah, 0:05:38.960 --> 0:05:42.000 because there's a thing called technical analysis. So when you're 0:05:42.000 --> 0:05:45.280 looking at stocks, there's fundamental analysis and the technical analysis. 0:05:45.400 --> 0:05:45.560 Right. 0:05:45.680 --> 0:05:49.080 So fundamental analysis when you're looking at fundamentals, so that's 0:05:49.200 --> 0:05:51.960 like you know, when people actually look at like earnings 0:05:52.040 --> 0:05:54.880 ratio and how the company is doing stuff like that. 0:05:55.000 --> 0:05:57.560 But then the technical analysis is when you're just looking 0:05:57.600 --> 0:05:59.760 at all technical stuff, right, So these are things that 0:06:00.080 --> 0:06:02.720 really has nothing to do with the how the company 0:06:02.760 --> 0:06:05.680 is doing. And there's like different indicators in charge, like 0:06:05.680 --> 0:06:09.120 the candlestick, it's charge and so like you said, and 0:06:09.120 --> 0:06:11.960 then there's like barriers and it's like okay, if it 0:06:12.040 --> 0:06:13.880 breaks out over this, then that makes it's going to 0:06:13.920 --> 0:06:15.840 go up. If it goes down under that, then it's 0:06:15.839 --> 0:06:19.520 gonna it's I tell people all the time, it's not 0:06:19.560 --> 0:06:22.880 something that you can just jump into. Now. It's very complicated, 0:06:23.360 --> 0:06:24.960 and you can get lucky, like all things in life, 0:06:24.960 --> 0:06:27.520 you can actually get lucky and make some money, but 0:06:27.880 --> 0:06:29.640 in the long haul, you can lose a lot of 0:06:29.680 --> 0:06:33.800 money because it moves very quickly, and like you said, 0:06:33.800 --> 0:06:35.360 a lot of things are just out of your control. 0:06:35.760 --> 0:06:37.560 And even with the good technical now because you can 0:06:37.560 --> 0:06:39.719 still not really because it's still kind of guessing in 0:06:39.720 --> 0:06:43.599 a sense, you're kind of just making a prediction based 0:06:43.640 --> 0:06:47.640 off of educated knowledge of what you are seeing. But 0:06:47.720 --> 0:06:49.400 even what you're seeing can be manipulated. 0:06:50.440 --> 0:06:52.240 So you said, after you only did it for a year, 0:06:52.360 --> 0:06:54.320 I did it for a year. After the year, what happened. 0:06:54.080 --> 0:06:58.200 Next, Man, I fell back for a minute. I started 0:06:58.240 --> 0:06:59.720 reading more and trying to figure out, you know, what 0:06:59.760 --> 0:07:03.200 other industry I could get into just to get out 0:07:03.200 --> 0:07:06.040 of that job, And so I started reading books in 0:07:06.080 --> 0:07:09.280 real estate kept coming up. At the same point in time, 0:07:09.600 --> 0:07:11.640 I actually decided I was gonna leave that job I had, 0:07:12.240 --> 0:07:13.960 and I moved back to Houston. I was in Memphis 0:07:14.000 --> 0:07:15.960 at that point in time. Moved back to Houston, but 0:07:15.960 --> 0:07:17.600 it was during the recession two thousand and eight, so 0:07:17.640 --> 0:07:21.920 I couldn't sell my house. So after like a year 0:07:21.960 --> 0:07:24.120 paying the mortgage payment, I just decided to get a 0:07:24.160 --> 0:07:26.760 property manager up in Memphis to rent it out for me. 0:07:27.240 --> 0:07:29.560 They rented it out. They rented it up for like 0:07:29.720 --> 0:07:32.040 four hundred dollars more than what the mortgage payment was. 0:07:32.480 --> 0:07:33.960 So then that's when that light bulb kind of went 0:07:34.000 --> 0:07:35.400 off for me. It was like, wait a minute, So 0:07:35.400 --> 0:07:36.960 I'm out here trying to figure out what I'm gonna do. 0:07:37.200 --> 0:07:39.600 And meanwhile, I got this property that's out of state. 0:07:39.880 --> 0:07:42.120 I got somebody else working managing it for me every month, 0:07:42.160 --> 0:07:43.880 and I'm making four hundred dollars a month doing nothing. 0:07:44.000 --> 0:07:46.800 Blessing in disguise, blessing in this guy. Right, So that 0:07:46.960 --> 0:07:49.760 open minds up to passive income. So that's when everything 0:07:49.760 --> 0:07:50.720 shifted to real estate. 0:07:51.880 --> 0:07:54.720 Can we talk about the franchise business that you had 0:07:54.760 --> 0:07:57.960 a little bit because you had it's called super week Express, Yeah, 0:07:57.960 --> 0:08:01.520 super we So what was the So all right, super 0:08:01.520 --> 0:08:03.960 We've expressed. I'm assuming it was weaves. 0:08:03.920 --> 0:08:06.560 Hair extensions, hair section, the full service of their business. 0:08:06.960 --> 0:08:09.880 So that's a billion dollar business. Right. We talked about 0:08:09.880 --> 0:08:12.480 the hair business, but not really in depth. But what 0:08:12.600 --> 0:08:15.040 made you want to go into as a man? What 0:08:15.040 --> 0:08:17.600 made you want to go into a woman's industry? Man? 0:08:17.640 --> 0:08:17.800 You know? 0:08:18.000 --> 0:08:20.080 I mean it's it's it's a supplying demand thing, right, 0:08:20.120 --> 0:08:21.720 So as an entrepreneur, you know you got a supply 0:08:21.760 --> 0:08:23.920 a product and that if there's a demand for it 0:08:23.920 --> 0:08:26.080 and there's a spread, then you can make a profit. 0:08:26.200 --> 0:08:28.760 And that's the only reason why I looked at it. Actually, 0:08:28.880 --> 0:08:32.120 the founders of that company are actually from my hometown 0:08:32.160 --> 0:08:34.440 port Art of Texas, and they had several locations and 0:08:34.480 --> 0:08:35.719 I sat down with them and they showed me the 0:08:35.760 --> 0:08:37.679 revenue numbers and their store was doing like half a 0:08:37.720 --> 0:08:39.360 million dollars a year and I was like. 0:08:39.320 --> 0:08:41.960 Man, I had no idea the weaves. Yeah, it was 0:08:41.960 --> 0:08:43.200 a physical brick and mortar store. 0:08:43.240 --> 0:08:46.120 Brick and mortar store they had, They had a stylist there, 0:08:47.000 --> 0:08:49.040 and they it was a commission based salon, so they 0:08:49.040 --> 0:08:50.760 got a percentage of the commission, but they did all 0:08:50.760 --> 0:08:53.120 the marketing, They did all the advertising, and then they 0:08:53.160 --> 0:08:55.400 assigned clients to the customers that they came in. And 0:08:55.400 --> 0:08:57.720 they also supplied the hair. So they bought it at 0:08:57.720 --> 0:08:59.280 the wholesale price, sold it that retail. 0:08:59.559 --> 0:09:02.560 So you bought a franchise, correct, Yeah, but a franchise. 0:09:02.559 --> 0:09:04.640 What's that process like? Because I think we spoke about 0:09:04.640 --> 0:09:06.720 that in one of our early episodes about being a 0:09:06.720 --> 0:09:07.240 franchise e. 0:09:07.679 --> 0:09:10.640 What's that process like and how'd you get involved? 0:09:11.080 --> 0:09:13.440 So the whole franchise model is basically, instead of you 0:09:13.480 --> 0:09:16.880 starting a business from scratch, you are identifying somebody that 0:09:16.880 --> 0:09:19.600 already has a business that appears to be successful, and 0:09:19.640 --> 0:09:22.960 you're paying them to use their branding, to use their 0:09:23.200 --> 0:09:27.679 their business model, you know, their business plan, and in exchange, 0:09:27.760 --> 0:09:30.679 you're going to pay them up front, you know, as 0:09:30.760 --> 0:09:33.160 a as a fee to get in and then monthly 0:09:33.160 --> 0:09:35.679 they're going to take a percentage of your revenue. I mean, 0:09:35.679 --> 0:09:37.360 And so that's that's what your franchise fee is. 0:09:37.679 --> 0:09:39.040 And the thing. 0:09:38.880 --> 0:09:41.720 That most people don't realize is that the average business 0:09:41.960 --> 0:09:45.960 is only profitable within the fifteen to twenty percent margin range. Right, 0:09:46.320 --> 0:09:49.360 So then when you're a franchise e, if that franchise 0:09:49.360 --> 0:09:51.880 says their royalty is what it's called, if it's forty 0:09:51.920 --> 0:09:54.600 eight percent, that's forty eight percent of your gross So 0:09:54.640 --> 0:09:57.199 they are a top line expense. They don't wait to 0:09:57.200 --> 0:10:00.559 see if you're profitable or that. On the back end, franchises, 0:10:00.760 --> 0:10:02.640 they can be good because it takes a lot of 0:10:02.640 --> 0:10:05.599 the risk out of what you're doing, but your profitability 0:10:05.600 --> 0:10:06.040 goes down. 0:10:06.200 --> 0:10:07.640 You said, that's the trade off. Can you can you 0:10:07.720 --> 0:10:10.120 explain that when you said the average business is profitable 0:10:10.200 --> 0:10:12.319 fifteen to twenty percent in the profit mark, can you 0:10:12.360 --> 0:10:14.280 explain that like what that means to the average person? 0:10:14.280 --> 0:10:15.200 I mean, no, understand that. 0:10:15.520 --> 0:10:19.680 So the biggest issue that I see with a lot 0:10:19.720 --> 0:10:21.480 of us, a lot of the biggest thing that we 0:10:21.520 --> 0:10:24.160 have a lack of exposure to when we start businesses, 0:10:24.200 --> 0:10:27.280 we listen to what somebody clots is their revenue, right, 0:10:27.400 --> 0:10:29.680 and that's the growth. So that's every dollar you've taken in, 0:10:30.040 --> 0:10:33.840 But that doesn't include what your what your rent cost is, 0:10:34.000 --> 0:10:37.240 what your labor cost is, Yeah, what your what your 0:10:37.679 --> 0:10:40.280 what your product cost is. You know, even when you 0:10:40.280 --> 0:10:42.800 bring in money, if you're in a business that has 0:10:42.840 --> 0:10:46.440 a lot of merchandise and products, even if you have profit, 0:10:46.600 --> 0:10:48.719 usually if your business has grown, you got to take 0:10:48.760 --> 0:10:50.480 all that revenue and put it right back in the 0:10:50.480 --> 0:10:53.720 business to re up on your inventory and probably buy 0:10:53.760 --> 0:10:56.120 more inventory to keep up with your demand. So there's 0:10:56.120 --> 0:10:58.000 a lot of money you can't really pull out that pipe. 0:10:58.800 --> 0:11:02.200 Then you got like you you got taxes, you got 0:11:02.280 --> 0:11:04.559 all these expenses that come along with running a business, 0:11:05.000 --> 0:11:08.959 and then what's left is profit. So and most of 0:11:08.960 --> 0:11:10.959 the time that's fifteen to twenty percent, especially if you're 0:11:10.960 --> 0:11:11.600 brick and mortar. 0:11:12.640 --> 0:11:14.880 You said that was one of your biggest mistakes, is 0:11:14.920 --> 0:11:17.960 getting into a business based on that revenue and not 0:11:18.080 --> 0:11:18.960 their net profit. 0:11:19.200 --> 0:11:19.600 That's it. 0:11:19.679 --> 0:11:21.640 How did that come about? How did you realize, like 0:11:21.679 --> 0:11:22.880 this was a mistake that I made. 0:11:22.960 --> 0:11:28.760 Well this business specifically, So when we opened, we hit 0:11:29.640 --> 0:11:31.360 a home run. You know, the first year we did 0:11:31.640 --> 0:11:35.199 four hundred and fifty thousand revenue. It's like sixty percent 0:11:35.679 --> 0:11:39.079 from the retail side and forty percent from the services side, 0:11:39.080 --> 0:11:41.920 which is a hairsalon. But the expenses were so high 0:11:41.920 --> 0:11:43.480 and we had to keep so much money tied up 0:11:43.520 --> 0:11:45.080 in it that at the end of the year what 0:11:45.240 --> 0:11:46.400 was left on the table. 0:11:46.720 --> 0:11:48.200 Was about sixty thousand dollars. 0:11:48.600 --> 0:11:48.920 Wow. 0:11:48.960 --> 0:11:51.880 And then I had a partner, so now you're splitting 0:11:51.880 --> 0:11:55.120 that two ways. So now for all that work, you 0:11:55.200 --> 0:11:56.640 make thirty thousand dollars a year. 0:11:56.679 --> 0:11:58.480 Oh that's crazy? Can you can you just go into that. 0:11:58.679 --> 0:12:01.839 You said that your your net was six hundred thousand, 0:12:02.080 --> 0:12:08.360 four hundred and you you netted sixty. 0:12:08.080 --> 0:12:11.400 Thirty Yeah all right, yeah thirty? 0:12:11.440 --> 0:12:13.240 How did that happen? Okay? 0:12:13.360 --> 0:12:15.720 So Number one, we went we wanted to be in 0:12:15.720 --> 0:12:19.600 a prime area, so we went and got a retail 0:12:19.600 --> 0:12:21.400 space in a shopping center. We were like between a 0:12:21.440 --> 0:12:24.920 salad beauty supply and the SAMs and so that was 0:12:25.000 --> 0:12:27.600 like five grand a month right there off the top. 0:12:28.880 --> 0:12:33.120 Then since Neither he nor I were stylists or we 0:12:33.160 --> 0:12:34.480 knew how to run a salon. We had to hire 0:12:34.480 --> 0:12:37.520 a manager and we had to have an assistant. So 0:12:37.600 --> 0:12:40.959 that's seventy grand right there. And then you know the 0:12:41.400 --> 0:12:45.000 revenue for the hair extensions. You know, only about thirty 0:12:45.120 --> 0:12:47.240 thirty five percent of that is profit, So we spent 0:12:47.280 --> 0:12:51.520 two undred thousand on that. So you know that that 0:12:51.640 --> 0:12:54.000 revenue looks like it's really high, but when you look 0:12:54.000 --> 0:12:56.360 at all those fences, it gets really gets smaller. Then 0:12:56.440 --> 0:12:58.679 you got utilities, you got product you got to keep 0:12:58.679 --> 0:13:01.280 in the salon the stylists to be able to use. 0:13:01.600 --> 0:13:03.640 You got marketing and advertising, and we were spending like 0:13:03.679 --> 0:13:05.280 five grand a month to stay on the radio to 0:13:05.320 --> 0:13:06.240 keep people walking. 0:13:06.000 --> 0:13:06.560 Through the door. 0:13:07.400 --> 0:13:09.840 You got insurance. So it's a lot of expense that's 0:13:09.840 --> 0:13:10.520 tied to that business. 0:13:10.559 --> 0:13:12.440 And this is what this is twenty seventeen. 0:13:12.720 --> 0:13:15.960 This was two thousand and fourteen, twenty fifteen. Okay, yeah, 0:13:15.960 --> 0:13:17.520 I'm glad you said that because a lot of times 0:13:17.520 --> 0:13:20.440 people don't fully understand a reason why most businesses fail, 0:13:20.520 --> 0:13:23.920 right financial issues. You don't fully understand what goes into 0:13:23.960 --> 0:13:25.640 making a business. So even if you make almost in 0:13:25.679 --> 0:13:27.480 your case, almost a half a million dollars a year, 0:13:28.120 --> 0:13:29.920 you still might be broke. You end up making thirty 0:13:30.040 --> 0:13:32.320 thousand dollars. It's like you could have worked a part 0:13:32.320 --> 0:13:35.240 time job really and now, but that business is probably 0:13:35.240 --> 0:13:38.160 taking like ten hours a day for you to actually run, 0:13:38.200 --> 0:13:38.800 maybe even. 0:13:38.600 --> 0:13:40.800 More exactly right, And we were open seven days a week, 0:13:40.840 --> 0:13:42.800 so there was no days off, you know. Yeah, so 0:13:43.000 --> 0:13:45.360 even though you have a manager, and manager still looks 0:13:45.360 --> 0:13:47.640 to the owner and make final decisions on things, so you're. 0:13:47.480 --> 0:13:48.400 On call all the time. 0:13:48.640 --> 0:13:50.320 You know, I tell people a lot of times what 0:13:50.360 --> 0:13:52.760 you said is exactly right. You may leave the comfort 0:13:52.800 --> 0:13:54.960 of a job to start a business not really realize 0:13:54.960 --> 0:13:58.120 that you just created another job for yourself with less benefits, 0:13:58.520 --> 0:14:00.000 with nothing to fall back on. 0:14:00.760 --> 0:14:01.000 You know. 0:14:01.080 --> 0:14:02.960 So it's got to be the right decision. You got 0:14:02.960 --> 0:14:04.560 to really understand the business you're getting into. 0:14:04.760 --> 0:14:07.079 Now, that's a fact. So what what would your suggestion 0:14:07.200 --> 0:14:11.640 be as far as an entrepreneur, an inspiring entrepreneur that 0:14:11.840 --> 0:14:14.160 is going out there, would you say that, you know, 0:14:14.440 --> 0:14:17.640 looking at expenses is just as important as looking at 0:14:17.640 --> 0:14:18.800 what they could potentially make. 0:14:18.880 --> 0:14:21.400 Much more important, much more important, much more important. Yeah, 0:14:21.440 --> 0:14:24.960 and you know, and I highly advocate getting a mentor 0:14:25.040 --> 0:14:28.880 somebody that's doing it, and you know, because it's hardly 0:14:29.200 --> 0:14:31.400 a business, you're gonna find where somebody else isn't already 0:14:31.440 --> 0:14:34.240 running a business like it. And I encourage people to 0:14:34.240 --> 0:14:36.120 try to find somebody in a different market that's doing 0:14:36.160 --> 0:14:38.560 the same thing so that they're more open and willing 0:14:38.600 --> 0:14:40.760 to talk to you about the ins and outs, the 0:14:40.840 --> 0:14:43.280 nasty part that people don't talk about, you know what 0:14:43.320 --> 0:14:45.600 I mean, because they won't feel like they're creating a competition. 0:14:45.960 --> 0:14:46.960 But a lot of times, a lot of them just 0:14:47.000 --> 0:14:48.440 want to vent and they want to talk about, you know, 0:14:48.440 --> 0:14:50.680 the real issues, and they don't want to confide in 0:14:50.720 --> 0:14:54.160 their friends and their immediate circle because everybody looks up 0:14:54.160 --> 0:14:56.160 but then puts them on a pedestal for having this business. 0:14:56.520 --> 0:14:58.520 But so it kind of gives you an opportunity to 0:14:58.520 --> 0:15:00.720 be a sounding board and really learn the business. 0:15:02.680 --> 0:15:06.360 And also experience is always the best nature as well. 0:15:06.520 --> 0:15:08.200 I mean, no matter how much you're still gonna have 0:15:08.240 --> 0:15:11.160 to make mistakes and learn your own. Yeah, but like 0:15:11.200 --> 0:15:13.040 you said, you kind of curve the learning curve a 0:15:13.040 --> 0:15:15.440 lot if you actually have a mentor or you're working 0:15:15.480 --> 0:15:16.280 under somebody. 0:15:16.040 --> 0:15:18.720 For it's not about what you what you make, it's 0:15:18.720 --> 0:15:19.520 about what you keeping. 0:15:19.560 --> 0:15:22.040 Yeah, sure, yeah, And your school kind of conditions us 0:15:22.040 --> 0:15:23.520 to try to learn how to get it right on 0:15:23.560 --> 0:15:26.240 our own. First, don't cheat, don't copy off for somebody. 0:15:26.240 --> 0:15:27.800 But when you get in the world of business, your 0:15:27.800 --> 0:15:29.120 best bet is to copy the. 0:15:29.080 --> 0:15:32.080 Right cat Toad's that's a good you know, that's a 0:15:32.160 --> 0:15:32.600 good point. 0:15:32.920 --> 0:15:33.600 That was excellent. 0:15:33.840 --> 0:15:35.920 That's actually a really good point. Never really thought about 0:15:35.920 --> 0:15:36.360 it like that. 0:15:36.680 --> 0:15:38.560 Well, I mean, and that's something I teach too, like 0:15:38.640 --> 0:15:41.400 because I mean, so many people in corporate America that 0:15:41.440 --> 0:15:43.640 are trying to get out and I just tell them, 0:15:43.760 --> 0:15:45.880 Number one, you got to retrain the way you think 0:15:45.920 --> 0:15:48.320 about everything because school now only school teach you not 0:15:48.400 --> 0:15:51.440 to cheat. School teaches you that if you're wrong more 0:15:51.440 --> 0:15:53.280 than ten percent of the time, you are not the best. 0:15:54.320 --> 0:15:56.080 All A students got to be writing ninety percent of 0:15:56.120 --> 0:15:59.320 time or more consistently to stay to stay up up. 0:15:59.280 --> 0:15:59.960 On that pedestal. 0:16:00.240 --> 0:16:01.800 Whereas you got a lot of people that were seeing 0:16:01.840 --> 0:16:06.320 these students failed, they comfortable feeling twenty thirty percent of 0:16:06.360 --> 0:16:08.280 the time all the time, and at the end they 0:16:08.320 --> 0:16:09.480 got the same diploma you got. 0:16:09.480 --> 0:16:12.440 You know, Jack mad said something interesting. If anybody that 0:16:12.440 --> 0:16:14.760 doesn't know who that is, that's the head of Ali Baba. 0:16:14.800 --> 0:16:16.600 He's one of the richest people in the world. And 0:16:16.640 --> 0:16:18.920 he said, he told he tells his son that you 0:16:18.960 --> 0:16:21.680 don't have to be an A student. It's okay to 0:16:21.680 --> 0:16:23.960 be a C student because those are the only people 0:16:24.000 --> 0:16:27.040