If I Were Starting a Company In 2024, This is What I’d Do [FULL 0-$100M GUIDE]

Summary

• I've successfully grown multiple businesses: I'm currently building my fourth business, aiming for a billion-dollar valuation. Despite the success of my businesses, reaching such milestones has been an incredibly challenging process.
• Focus on one product, one avatar, and one channel: If you're in the initial phase of your business, zero to a million, concentrate on finding a single product that fits a particular market. Achieve consistent sales before considering expansion.
• Taking action is crucial: You may feel unprepared, but understand that seeking endless information won't make you ready. Learn to take action despite doubts and fears; readiness comes through experience, not waiting for a "perfect moment."
• Cut through the noise: As an entrepreneur, you'll receive a lot of conflicting advice. Develop the skill to discern what's relevant to your venture and ignore the rest.
• Start where you have expertise: Your familiarity with a customer base from personal experience provides insight into their needs and preferences, simplifying initial steps.
• Sales skills are foundational: Effective selling on the phone or a video call can inform and improve your marketing tactics.
• Develop your skills methodically: Recognize that skill-building involves stages from incompetence to unconscious competence. Be patient and diligent as you improve.
• Learn offer development: Know how to create a compelling and well-packaged offer that aligns with the purchasing power and desires of your target market.
• Work capacity is essential: Increase your ability to work long and challenging hours. This capability is built over time through consistent effort and overcoming the temptation to give up when faced with adversity.
• Prioritize key areas: In the beginning, focus less on the aesthetics of your website or perfect systems and more on solidifying product-market fit and increasing work capacity.
• Phase progression: Understand that growing your business involves phases, and each phase, from the first million to beyond fifty million, presents new challenges and focuses, such as improving deliverables, mastering hiring, enhancing customer lifetime value, and eventually professionalizing management.
• Hire for what you're not great at: Delegate tasks you're not skilled at or don't enjoy, centering your efforts on your strengths.
• Balance your salary with business needs: Decide on your compensation by considering your personal financial requirements alongside the business’s capacity and future goals.
• Plan for eventual business sale: Even if you're not looking to sell right away, design and adapt your business with potential buyers in mind, reducing key man risk, customer concentration risk, and establishing consistent revenue.
• Innovation and talent for growth: Push past natural business plateaus by innovating your products or services and attracting top-level talent to drive the business forward.

Remember, these are merely the foundations; tailored strategies are needed for each unique business journey.

Video

How To Take Action

I would suggest focusing on one product, avatar, and channel when starting out. It's like finding a puzzle piece that fits just right with your customers. Make sure you sell that one thing well, over and over, before you think about adding more.

If you're always hunting for that one last piece of advice, remember that perfect moment never comes. Learn to take action, even when it feels scary. Like jumping into a pool before you feel ready. That's how you really learn.

Don't get lost in all the advice people throw at you. Think of it like sorting through a big pile of clothes. Pick out what fits your business and let the rest go.

If you know about what your customers need because you've been there yourself, start there. It's like having a map in a place you've already explored.

Getting good at selling over the phone or video calls can really help. It's like practicing a speech alone before you give it in front of people. This practice will make your marketing better too.

Building skills takes time, just like getting good at a sport. You start off not even knowing you're bad, then you realize you need to improve, work at it, and finally, it becomes second nature. Be patient.

Learn how to make a really good offer. Think about who you're selling to and what they can afford. It's like making sure the gift you're giving matches what the person really wants and can use.

Increase your ability to work hard. It's like training a muscle to lift heavier weights. The more you push through when it's tough, the stronger you get.

At the start, focus on making sure your product is something people want more than having a pretty website or perfect systems. Imagine saving fancy decorations for a house when you're still making sure it's solid.

When you grow and find things you're not great at or don't like doing, find someone else who is good at those things and let them do it. It's like passing the baton in a relay race, so you can run your best leg.

Remember that your business will go through phases. Each one has its own set of challenges, like levels in a video game. Prepare for them and adapt as you grow.

A good way of planning your pay is to balance what you need with what the business can handle. It's like making sure you don't eat all the seeds, so you have enough to plant for the next harvest.

If you think you might sell your business someday, build it like you're getting it ready for someone else to take over. Keep it tidy and running well, so it's attractive to buyers.

For growth, bring in people with new ideas and skills that can help your business evolve. It's like inviting friends who are great builders to help make your treehouse bigger and better.

Each business is unique, but these steps can be your foundation. Tailor them to fit your journey, like adjusting a recipe to your own taste.

Quotes by Leila Hormozi

"You need to become a person who can act despite not feeling ready"

– Leila Hormozi

"The first skill I would start with is probably sales"

– Leila Hormozi

"One thing that I would tell myself if I were going back is like you're never going to feel ready"

– Leila Hormozi

"You have to keep working harder despite feeling frustrated, tired, worn out, exhausted"

– Leila Hormozi

"Starting a business in an area that you already know is the best way to go"

– Leila Hormozi

Full Transcript

of which is worth over 100 million dollars and I am building my fourth right now and my goal is to get it to a billion this has not been an easy journey to say the least and so this video today is really for my 23 year old self and this video is for you too if that's what you're going through and if selling a business is something that is appealing to you at the end of the video I'm going to include some of my tips the things that I learned along the way to sell my businesses so I made this framework that basically outlines the four phases to go from zero to 100 million there's phase one which is zero to a million that's the face most of you are in that face is called Market fit or many people know it as product Market fit in this phase you need to nail one product that has one Avatar that you sell through one channel and you just sell that thing over and over and over again until you have consistency of numbers can you week over week and month over month sell the same amount of units or even better increase the amount of units month over month this phase sounds simple it's like all right one product one channel selling something to one person a million I get it that's simple right it's not simple because you have no idea what the hell you're doing so if you're watching this video you're probably what we would call an entrepreneur if you want to be an entrepreneur but you haven't taken that step before I started my business I was constantly consuming things I was consuming podcasts I was reading books I was going to free events I was trying to figure out if I was working the right job if I was getting in the right people I was trying to network I always felt like I just wasn't ready it just felt like there's like one piece of information that if I acquire that information then I'll be ready to do the thing and it's so funny looking back at it now because I realized like there is no Silver Bullet of information like there's never going to be a time where you feel like now I've acquired all the information and I'm ready because if you were to feel that way then you've already done the thing one thing that I would tell myself if I were going back is like you're never going to feel ready you need to become a person who can act despite not feeling ready and that is why it's so hard you don't know who to listen to you don't know what instructions are right and what are wrong you're getting different opinions from all different people and so it's very hard for people to even get through this stage and get to a million dollar per year business because there's just so much noise and you don't have the skill at which to figure out what noise to filter and what to listen to and so this stage feels like eating I call it like the swamp of because it just feels so hard it's either one of these three things you don't have something people want you have something people want and you're selling it to the wrong people or the way in which you convey what you have to people is in a way that they do not understand and in the beginning those are usually the three things you have to figure out good example of this is that when I started my first business gym launch there wasn't some crazy master plan behind it we're like doing crazy product market research running analysis like bringing in bainer McKinsey like it was just me and Alex calling people and then we thought to ourselves as people who had been in their shoes prior what would have been something that would have really helped us when we were in their shoes and that's why I think that starting a business in an area that you already know is the best way to go because often the reason for that is that you get the customer you understand what they want you understand their needs you understand what they like to to buy what they don't like to buy I think that sometimes people make it more complex than it needs to be and so I think that rather than asking yourself what Market do I start with ask yourself what customer do I know best okay Layla well where's this channel that I'm selling this to these people that's an easy question to answer where do they already live where do they hang out when we start gym launch gym owners aren't on LinkedIn you know who is on LinkedIn software Engineers are on LinkedIn gym owners were on Facebook so that is where we picked our first channel so when you're in this phase for example zero to one million I would say that the first skill I would start with is probably sales why would I start with sales as the first one because I believe that if you can understand how to sell to a person over the phone or over Zoom then you also understand how to Market to that person because you know what marketing is taking the things that we say during a sales call and positioning them in a way that attracts somebody's attention the next thing that inherently you're thinking is like okay well how do I acquire the skill to Market how do I acquire the skill to sell well I think one important thing to look at is What's called the hierarchy of competence space this is a pyramid it and it's basically going through the phases of skill development so the first level of skill development is unconscious incompetence that means that you suck and you don't know you suck it's just like somebody who if they've never done something before they have no point of reference therefore they don't know how bad they are or how good they are the second level is called conscious incompetence which is you still suck at the things but you're aware that you suck at the thing because you now have points of reference what does that mean you've probably read up enough on the skill that now you understand what good looks like and you know that you're not it the third level is conscious competence that means that you are aware of what good looks like and you also are what good looks like and then the last level is unconscious competence which is when you are so good at the thing that you don't have to be aware of if you're good at the thing or not it's not even a thought because it is so now second nature it's so inherent to you say it's speaking on a stage for example you get up on the stage and you crush it you didn't practice you did nothing you've done it so many times that it is a behavior that's so ingrained you don't even have to think about it that is how you acquire skill now the thing is you can't skip to the top you have to go through all the levels and so any skill that you start at you're going to suck and you're gonna be like kind of maybe good and then like actually good and then eventually one day you don't even know how good you are and you take for granted how good you are because you haven't even thought about it in so long but the thing is that most people never get past the point where they suck so a great example of this when you're first starting off is sales it's such a linear process to watch people go through this and it's more of like a J curve when you think of the hierarchy of competence it's like it's slow at first and the feeling and the phase where you suck is prolonged and then when you start to increase then you really start to exponentially increase I had a neighbor and he came over to my house and he took a sales call and we heard him on the sales call and we said oh my gosh that was awful he was like was it because he was in inconscious incompetence he was so bad and he didn't know how bad he saw so the reason it's so interesting in sales is because that's usually where people start right they don't know that they suck then you start training you start learning you write a book on sales then you start to be aware of what good sales actually look like so then you know you suck and so then you continue to work on it and use the point of reference from say the book or the training you took or the course you took and you start to sound more and more like that then say you start to actually take sales calls with the customers that you're trying to sell at first you make some sales you don't make some sales you feel good some days you feel bad some days it's like you're really not sure what to expect it's a little unpredictable and a lot of people quit there because they just don't like the unpredictability or the uncertainty but the thing is if you Wade through the times of uncertainty you get to conscious competence which is where you're really good and you're able to produce consistent results and if you're able to continue doing that you get to unconscious competence which is where you're producing results that continue to increase month over month without much effort at all the reason that it's so hard to start a business is you're usually going through this hierarchy with multiple skills you're not just doing that with sales you're also eating with marketing and you're also eating with leading people and you're also eating with organizing your company and delivering and so it's very pain painful because you're stuck in that conscious incompetence in like five different skills the reason that I'm a fan of focusing on a few at once is because it's easier to increase one thing at a time now I would say the second and very close second depending on the business you could flip these but in most cases I would suggest this is marketing I see marketing as the expectations that we're setting of what our company does and what that customer is to expect for the entire Journey with us whether that's a one-time transaction or whether it's a transformation over six or twelve months marketing is setting expectations how do I show people that I have what they want in a way that then creates a good customer experience aside from sales and marketing the third skill that you're really learning during this period is offer development what is offer development it's understanding how you package the product for the people you're selling it to packaging is typically pricing combined with features for example so at gym launch we sold gym launch to gym owners when we're thinking of packaging there's different ways that you can look at this when we're thinking of offer development one is is our offer conducive for the market we're selling to what I mean by that is within your avatar there are subsets of your avatar if your offer is for weight loss is it geared towards people over 50 low 50 are they 20 to 50 what is it that is going to dictate what your offer might look like because the more specific you can get with who you're selling to the better offer you can craft an offer is the price point that you're selling at and the features that you're outlining so it's really understanding the value of something and how you portray the value in a sales pitch is usually stemming from the offer that you develop with that offer if you really think about it right it's like okay if you have marketing and you have sales which are elements of an offer or like stems of it the rest that you need to decide are the packaging and pricing which is what things am I going to give for what price so gym launch we're like okay but we're sixteen thousand dollars they get an accelerated program that is 16 weeks long you have a coach for support you have a technical thing you get these many ads you get these many calls you get these things now if you want more than that then you go one level up right and the thing is about the level up is it also was for a slightly different Avatar this level up had support with building a team building training Etc and so what we understood is that because when we were first starting the business we want to focus on one product one Avatar one channel we only did one level which meant that our pricing and our features that we sold were attuned to the newer gym owner starting out the person who just needed to make money they weren't trying to build a team they were trying to make money they're trying to make extra Revenue they were trying to get more people in their gym that is who we cater to and so when you think about the third skill it's understanding who do you cater to and at what point in their Journey as a gym owner as a dance teacher as a custodian as a you know consumer of supplements like at what point in their Journey are you catering to them and that's going to dictate how many much purchasing power they have and what features they want from your product now those are hard skills right those are skills that anybody can learn but what is the one thing that's a soft skill that's something we need to acquire in order to even have the capacity to achieve all those things and I would say it's work capacity you know when I was first starting out I think that I was primed for business because of working in Fitness so I would get up at 4 am I would open the gym at 4 30 a.m I would be there until 8 or 8 30 pm to close out finish all my last clients I had a break in the middle of the day for a couple hours but during that break I was messaging other clients trying to make sales working the floor and so I was working for really long hours now a lot of people don't have that experience before they start a business a lot of people actually start a business because they want to work less But the irony of that is that you often have to be able to work more in order to one day work less and so in the beginning because there's so many skills that you have to try and acquire your capacity has to be very large and the only way to acquire work capacity is to not back down when it gets hard like a lot of people want some fancy formula for this but it's just like lifting weights if you want to get stronger you lift more you'll be sore the next day but you have to keep lifting more despite feeling sore you have to keep working harder despite feeling frustrated tired worn out exhausted you will get there but using those things as a reason not to pursue your dreams not to pursue this business they're not good reasons in fact I call that special snowflake syndrome which is we think I'm more tired I'm more frustrated this is harder for me it's not it's hard for everybody and thinking about people that's not hard for doesn't help you and I think that was a really pivotal thing for me to learn is that I wasn't special you know I need to learn these skills just like anybody else it's hard for everybody because learning is hard in the beginning and I think a lot of times if you want to build your work capacity remind yourself this is a season of heart you know starting a business is hard and I remember telling myself you know there's no better time than now I'm not going to get any younger there's no time in my life where I'm going to have less risk taking this this will be a season of hard it's not going to be fun if you go into building a business thinking like this should be easy I should be making a million dollars in six months these expectations which what are they founded on like some dude on the internet who's posting it trying to sell you his course you know what I mean of course it took him six months because he's selling you a course he's going to tell you whatever he needs to tell you you have to set the expectations low prepare for a season of hard and focus on increasing your work capacity just like you build a muscle now I also think during this stage people get distracted by hearing about things that are in important for business but they're not important right now for business so if you're still trying to find product Market fit then certain things don't matter the appeal of your website does not really matter now will it matter soon yes but should it matter right now should that be something you put resources towards probably not you know having the perfect CRM in place and the perfect systems does that matter it's good to be organized but the likelihood that you have to change it all in a year anyways fairly hot Google spreadsheets is fine you know becoming an insane leader that has very great management skills important yes right now not the most important why you probably have a couple people and a lot of people can manage two to three people without much skill at all and so all of those things like professionalizing the business becoming a great manager having a great brand presence they're all important but they're not the most important thing right now right now what I've got to focus on is one channel one product one Avatar and selling it consistently over and over again until I'm so good that I have to start doing these other things because the demand is so high the reason I think think zero to a million is the hardest is because it's the area in which you incur the most cost of change you just made a big life change to start a business you're not only incurring the cost of starting a business you're incurring the cost of whatever change you made in your entire life you might have changed or gotten rid of relationships you might have quit a job and lost all your friends and then the thing is is that as you're able to deal with that stuff and you get used to the new environment you get used to not talking to people you talk to you're used to not having a job you clock in and get a paycheck up then things start to go faster you have more clear headspace you have more attention back you're able to focus more because your environment has stabilized and once your environment has stabilized it makes everything go much faster in the business now in the second phase which is really one to ten million like I talked about it's a lot focused on deliverables and the reason for that is often like I said you have one product for one Avatar via one channel you might have a product that you're selling a transaction is made but what are you getting from that customer after and so the goal from the one to ten million is how do we increase lifetime value how do we get recurring Revenue in place in the zero to one million what becomes a problem thereafter is we don't make enough money per customer and so we need to figure out what more does that customer want that I can sell them that's really what we want to figure out from one to ten million now what goes with that is you can't really provide a product to customers beyond what you're doing today without building somewhat of a team the skill that goes along with that is learning how to hire now why do I say learning how to hire and not how to train because I believe that in small businesses it makes more sense to get good at picking people than it does training people the reason for that is it is much harder to train people when you only typically in a small business have to hire one of every role so should you as the leader take the time to get proficient at one of everything at it at Finance at sales at marketing probably not that would probably take all of your time and you might actually drop the ball on the things that you are doing that are Paramount to the business figuring out how to extend LTV of the customer paired with figuring out how to hire the right people and identify what roles are needed are the two skills that are going to take you from one to ten million the reason that increasing LTV is often a better alternative to just selling more people is because it actually costs you less in the long run to acquire a customer is typically more costly for a business than it is to extend the lifetime value of that customer so an example would be a fitness app they get customers on those customers pay say like 100 dollars a year and what happens is that in the beginning cost of acquisition is low because you're new to the market you've got something working really well you're able to acquire customers say it's like a one to two ratio over time what typically happens is the cost of advertising only continues to get more why because more people get on the platforms so you're competing against more people and more people saturate your market and so then what you're doing is that your margin per customer continues to shrink over time so say you're selling that 99 app and say you were profiting forty five dollars say three years ago and now you're profiting ten dollars not looking very good not easy to run a business on those margins and so rather than saying let's sell more people I would say okay let's extend the lifetime value of the customer after they purchase your app what do they go purchase after do they go buy supplements do they go buy clothing do they go buy resistance bands what are they buying as they continue to use your app that you're not selling them that's where you have room to look at the LTD of a customer the cost of acquiring them can continue to rise and as long as you can continue to sell them more things on the back end without having to acquire a new one you can increase the margins of your business and compete against everybody else while they're trying to squirm for like how do I reduce my cost of acquisition you're like I don't care because I'm making more money on the back end so then you can beat your competition and again this is why knowing your customers so important you know with Jim launch for example we knew what people wanted after they were in our 16-week program we understood because we'd been there when you really understand the customer you understand what they need after your product and so it makes it much easier to figure out how to extend that LPB because you've been a customer before you've been in their shoes or you know them so intimately that understanding all the other things that they're going to buy is really easy for you now when it comes to those early hires how to identify who you need to hire at this stage comes down to this quadrant I think of there's things that you hate and Saka there's all the things you hate but you're good at there's things that you're good at and there's things that you like and you're good at the first thing you want to offload is the things that you suck at and you hate what are the things that you suck at and hate that are most important to the business growing you usually want to offload the things that we hate but are good at right like sales or marketing because we might have gotten sick of it by now but we don't want to offload those things business can't afford to have the close rate drop from 85 percent to 50 we gotta extend lifetime value first whatever you're good at in the business like extraordinarily good at keep doing and start Outsourcing the other things first so saying I was doing that I sucked at and I didn't like was tech support so in the beginning we brought in all these customers and in order for them to get their marketing up to build out funnels to get you know Facebook ads launched Instagram as launched they need a lot of technical help and I am not good at that because I've never practiced and I didn't enjoy it you know I probably didn't enjoy it because I suck at it because like we know when we suck at things we don't really like them needless to say that was one of the first things that we hired for was people who were very technically competent now the second thing that I hired for was somebody that could take the things off my plate that I might have been good at but they weren't worth my time meaning it was low dollar per hour work which is another filter you can run this through which is like you always want to Outsource first the things that are the lowest dollar per hour because those things can then make rooms that you can focus on the higher dollar per hour work and so then I brought on the executive assistant now a lot of people ask me they say Layla I've heard higher slow Fire fast I'm not really the biggest fan of that because I think it's taken out of context you know I think that at this point like do you even know to hire well are you even that skilled at hiring do you even know what fast or slow is right probably not not if this is your first business and so I think that what I would rather focus on is higher well firewell learn how to hire people well learn how to set great expectations for them provide them with job descriptions give them a clear idea of the deficits of the company and the problems they are going to solve if they come and join you and on the other side when I say fire well means first make sure that you've done your part in terms of setting the right expectations onboarding the person properly training them properly and making them aware of the things that they need to work on because if you've never communicated those things to somebody then why are we firing them rather than just having a conversation in terms of how much to pay yourself I think it comes down to understanding why did you start the business did you start the business to make money for yourself or did you start the business to have an impact on an industry on a specific kind of people in the beginning when we had gym walk we were broke and had debt and so we wanted to make a ton of money from the business you know we took out as much cash as possible from the business in terms of acquisition.com you know now we have enough money we don't really care how much money we're taking on the business in fact we don't intend to make money on this business for years we're reinvesting most of the capital it just depends on where you're at in your life and what the objective is I don't with the gray so a lot of people will play in the gray they'll say hey I'll do this little tax strategy like hey you know there's a chance one day you know I don't do that if there's ever a chance of anything I'm just completely risk-averse to that I don't want any gray I think that that's a personal question you have to ask yourself but I will say that if you ever want to sell the business investors will devalue the business for taking too much risk from a tax standpoint so if you're watching this and you feel like some of these things are helpful for you let me know in the comments which ones are the most helpful and let me know which ones you're still unclear on so that I can make another video on it now the next phase is 10 to 50 million the problem we're solving is inconsistency and often what it takes is just experience and seeing over time that one inconsistency at times is normal to have but once you can get consistency in place through systems then you feel much better about the business because you know that you have systems in place to mitigate the inconsistency when it does arrive and so what are those things it's professionalization of management professionalization of systems and implementing data as a practice or as a core piece of the culture you can work up to 10 million and not have a ton of data I see businesses do it all the time like they're able to get there just because like they really understand the customer they really know what they need and they're able to get to 10 of 12 million without having a dashboard kpis measurements in place but to stay there and to continue to grow gets exponentially harder especially as you grow the organization and you're relying on everyone's Word of Mouth which is harder to get as you have more people and not data systemizing data integrating that in creating a dashboard and then professionalizing the business is what you want to focus on now how do you professionalize a business you professionalize management when you get from 1 to 10 million usually you can do so with people that are promoted from within with honestly even just like two to three leaders who maybe are the founders you don't need too much in place but in order to get past 10 million and honestly even to set yourself up well and not want to rip your hair out when you're at 10 million getting functional leaders in place who have been there done that is really important and the reason I like bringing people in who've been there done that is because you don't need to bring the whole organization in from the outside but to bring certain people and put them in leadership seats so they can mentor others beneath them that's really powerful because otherwise it's going to fall on you you're going to be the only Mentor there's going to be everyone looking to you for answers and you're like hey I haven't done this before either and so in order to actually get from 10 to 50 million you need some people who have been there done that you need enough of them that they can help educate the rest of the people on the path forward now it's not easy to find these people I'm not going to pretend like it is it's the same as finding customers how do you find people who are experienced when you are not that is really what the question is why should they work for you when you have less experience than them so really what you need to do is develop your employee value proposition which is why should employees want to work for you and not somebody else just like your offer that you have to the marketplace which is why should somebody buy your product and not somebody else's it's the same thing but done internally is it higher pay is it culture is it flexible remote work what is it that you're going to provide here and then a better way to even engineer is what are the type of people that you want and what do they want do they want remote work do they want higher pay or do they want learning opportunities just like you find out what do my customers want you have to figure out what do my employees want and then that is what you're going to provide and that's how you're going to attract them how you do that mechanistically if you can get the offer right the next thing that you need to do is get the platform right which is where do these people live well we know that LinkedIn the average person on LinkedIn is making more than eighty thousand dollars a year so if your job that you're posting for is making forty thousand dollars a year are we going to do it on LinkedIn or indeed we're probably going to do it on indeed versus if we're looking for people making over a hundred thousand dollars a year we're probably gonna post it on LinkedIn so for example in gym launch we had a very large coaching department and that's probably a department that a lot of people struggle to scale in fact I would say is one of the hardest and the reason for that is to find a gym owner who's proficient enough who has the track record that other gym owners will listen to they might be making a million dollars to their gym taking home 300 Grand a year so why would they want to come work for gym launch at you know 100 000 a year Well I realized that they wanted to learn from Alex and myself more than they wanted more money our value proposition to coaches was that you were going to learn directly from us you're going to get access to everything that we know ahead of everybody else and we're going to Mentor you like you Mentor your clients the reason I think this stage is hard is that you have way less peers you can rely on every year that goes by less and less businesses are able to continue to grow you know they might be stuck at a million or two million or three million or 5 million what I found difficult was that I used to be able to find mentors who could help me with all aspects of the business and what I realized very quickly that I had to segment and find mentors for each area of the business people had domain expertise rather than holistic business expertise so I found people who were great at investing found people who are great at Finance found people who are great at technology found people who are in that domain great and then you know paid them for expertise paid them for insight hired them if I needed to whatever to figure out what we needed to do to professionalize those areas but I found that where a lot of people get stuck here in the reason it's hard for them is they're still listening to mentors who helped them get to 10 million but those people themselves aren't past 10 million and so it's it's really hard to get advice from somebody who's not been where you're at now I will say there are professional people who are just very good coaches some of them in Silicon Valley for example like they haven't even been business owners but they can coach people but that's different that's not the same as telling someone how to grow a business some of the best basketball coaches of all time haven't played on the court so a lot of people ask do I fundraise you know should I raise money to grow my business I think it depends on what the end goal is would you prefer to own 100 of the business or would you prefer not to do you have the skills it takes to manage multiple stakeholders or do you not have those skills I see that a lot of people who have started successful businesses before do well raising money because they understand the value of having other expertise there so I think that you have to be self-aware enough to realize is this something that I can take on on top of starting the business and weigh out the pros and cons for yourself the final stage 50 to 100 is all about Innovation and talent I mean innovation in a few different ways typically a business can get to 50 million or even 100 million with a very simple product line and organically growing more sales more marketing more CS more of all these things more infrastructure but then a business gets to a point where it's at its hypothetical organic Max this vehicle in which we've built the business it can't go past 80 miles per hour so we might want to go to 120 miles per hour but this car isn't going to get us there and so the business often fundamentally has to change this is where you see people sell to private Equity you know what private Equity does they add in technology said the business becomes a technology business which is automatically increases Enterprise Value and it creates additional products that you can sell that have more recurring Revenue typically another thing that you do is you see vertical integration which is we're selling supplements but we don't own this Supply chain we could automatically go from 50 million to we could be worth 250 million if we buy all the supply chain and this is where you see really a business become a business of businesses The Innovation occurs where you say okay we've taken this the best darn place we can organically now we have to figure out what does the business need to become to go past 100 million what kind of business does it still remain a service business does it need to become a technology business are we keeping up the market what does the market want now is the way in which we're delivering the product and providing value still as effective as it was or could we innovate it and take more market share and so the question is really how do you do that and how do you operationalize that and a huge way that you do that is by one attracting higher level Talent having a true executive team that can run and not just run grow the business without you and innovate it on your behalf bring new ideas to the table bring different perspectives bring experience from areas that you don't have you know if you need to turn the business into a technology business what do you need to do find people who have built technology businesses if you need to vertically integrate what you need to do find somebody who's vertically integrated the business becomes a machine of its own and it's one that it requires more than one person to run and often what happens is that Innovation starts to die around 50 million because one person's brain can only fuel so much you need more innovators and more thinkers on behalf of the business in order to get it to 100 million and Beyond that's why I think there's really two sides to this which is how are we going to innovate the product or the business as a product and what kind of talent do we need to allow for that Innovation because it can't be the founder anymore they can't do this all on their own and you might not feel like this relates to you but I actually would really encourage you to think like what does my business need to look like three years from now say you're at 2 million right now or 3 million or 10 million like we're always talking to our Founders about what's the vision three years from now I'm not going to say five I'm not going to say ten but three and then reverse engineering back when do we need to start thinking about vertical integration when do we need to start considering if we should become a technology platformer we should do a Tech play when do we need are thinking about if we're going to be a business that buys other businesses we need to start preparing for those things yours in advance and so it would behoove you not to think about this stuff because what happens is that a lot of people take action up to 50 million that make it much harder for them to grow Beyond 50 million and if you're not at least informed and you're still unconsciously incompetent then the amount of time it's going to take you to educate yourself on what needs to happen the opportunity will be gone and you won't have a chance to grow the business to 100 million and Beyond because you've lost the opportunity somebody else has taken so at the beginning of the video I said I was going to give you a few pieces of advice if you're interested in selling your business at some point I would say the first thing is understand that your business is a product to a greater Marketplace the private Equity or the Venture capitalists or the family offices that would be interested in your business understand what kind of buyer would want your business and for what reasons would they want it private equity for example oftentimes wants many businesses purely from a financial investment they're trying to make Returns on their money anything that puts that at risk is not something they're going to like versus a strategic buyer so say you're a cookie business and you're small you say hey that big cookie business might want to buy my small cookie business because I got a recipe that they might want I would go to them when you're small and say what would you want to see out of me to buy me when I'm a little bigger and so that would be a strategic buyer and a strategic buyer would most likely take the business put it under their umbrella Allah you become one of their businesses and they would probably keep things a little bit more intact but your brand would get immersed under their brand in that scenario they might pay you less than a private Equity buyer why because they might plan to do more work on the business than private equity on the other side you might have someone like a family office buying it and a family office might just be wanting a stable asset that can hold money doesn't even need to get crazy returns and so they might buy the business and say just keep doing the damn thing we don't want to touch a damn thing we're just going to put our money in my biggest piece of advice is to understand who would possibly buy your business in the future who would this be a product for and then ask yourself or even better go find them and ask them what would you want to see out of this business for it to be a viable business to buy now I will say that there are some common traits that all of those investors might look for right the first one is that there's not key man risk most investors do not want to buy a business or invest in a business where one person makes the majority of the decisions they want to know they can remove the founders seamlessly and things will still run as is the second is customer concentration risk which is do you have too much of your Revenue coming from too few customers again this is a huge risk for investors of any kind and so if they see that there's only a few customers driving majority of the revenue that's not appealing to them and then the third piece is lack of consistent Revenue so that usually stems from lack of structure in place for a sales team churn coming from not the best practices on the product side or maybe poor packaging and lack of consistency with systems and team overall that being said if you're going to do that you might be wondering what kind of business am I going to start and that is why I made this video where I basically rank different business opportunities and give my insights on what I think are pros and cons and strengths and weaknesses of each one