BCS 277 – Secrets to Achieving High Margins and Sustainable Growth in Business

Business Coaching Secrets with Karl Bryan

Exciting New Episode Alert! 

Exciting insights from our latest episode of “Business Coaching Secrets” with co-hosts Karl Bryan and Rode Dog! Dive into Episode 277 for a deep conversation filled with humor, actionable strategies, and inspirational thoughts on business growth and success.

3 key takeaways:

Zen Thought for Entrepreneurs:

Embrace the concept of “jump and the net will appear,” encouraging you to take action without waiting for perfection. Remember, controlling fewer desires and focusing on incremental daily improvements (1% a day) can lead to significant progress.

Financial Literacy & Profit Margins:

Understanding financial statements and maintaining good profit margins are essential for business success. Aim for sustainable growth with steady profit margins rather than simply expanding the company size, to avoid vulnerabilities and ensure long-term profitability.

Strategic Business Choices:

Instead of selling your business, consider hiring talent from competitors to grow it. Staying involved with reduced hours while enjoying ongoing revenue might be more beneficial. Explore alternative strategies, such as acquiring struggling businesses at lower prices, for potential tax advantages and increased profitability.

For more on these insights and much more, tune into Episode 277 of “Business Coaching Secrets.” Let’s continue growing and learning together!

Tune in to hear more about Karl’s journey, key entrepreneurial lessons, and practical strategies for achieving business growth. Plus, Karl shares a unique job experience from his backpacking days that shaped his public speaking skills!

Karl Bryan helps business coaches get clients. Period.

For more magic on how you can grow a coaching business by attracting small business owners, filling local live events, and closing more high-end coaching clients… go to focused.com

For a free subscription to my magazine, The Six-Figure Coach go to thesixfigurecoach.com/get-it

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Episode 277 Transcription

Intro [00:00:00]:
Welcome to another episode of Business Coaching Secrets, where we decode the art and science of building a thriving coaching business. Let’s uncover what’s in store today with none other than myself, the road dog, and of course, the legend himself, Karl Bryan. Shoots. Welcome to the show.

Karl Bryan [00:00:20]:
Shoots. What’s going on, my man? How you doing, my brother?

Rode Dog [00:00:24]:
You know, just live in la vida loca, buddy. I don’t even know what that means, but it sounds pretty Spanish and exotic, so that’s cool. That’s cool. How about yourself? Let’s go down the truth. Shark sightings. What’s going on?

Karl Bryan [00:00:38]:
No shark shoots. No sharks did see a dolphin yesterday, so there you go. So I circled around him on my little e foil, which was good fun. Good fun.

Rode Dog [00:00:48]:
If I looked up your browser history, do you think I would find. Can. Can I learn the language of dolphins? Do you think that would show up?

Karl Bryan [00:01:00]:
Maybe. Or maybe now it shoots.

Rode Dog [00:01:04]:
And that.

Rode Dog [00:01:05]:
Would be your way.

Rode Dog [00:01:06]:
That’s your safety net, right? You see the fin and you just start doing the little dolphin talk, and that’s when you know if it’s a shark or not.

Karl Bryan [00:01:12]:
Is that. Oh, my God. I. That day nerves me greatly. Just quietly, but anyways. Oh, good. I see sharks all the time, but they’re right up bottom of the ocean, man, and they’re. I can see them clearly, but they’re hanging there.

Karl Bryan [00:01:25]:
That’s why you never e foil. So the. When it gets dark, the sharks come up, right, to eat.

Rode Dog [00:01:30]:
Oh, is that what it is?

Karl Bryan [00:01:31]:
So. So too early in the morning or too late at night, not happening. So there you go. That’s your little bit of shark trivia for you. Shoots.

Rode Dog [00:01:41]:
You know what?

Rode Dog [00:01:42]:
Shark trivia that.

Rode Dog [00:01:44]:
Dude, I think we just found a new segment. This is it. Shark trivia. Karl, Bryan, let’s. Or is this like a. A separate podcast? Like shark talk with Karl? Like, what’s happening? How do you want to handle this? Speaking of stick handling, Mike, it’s hard to say.

Karl Bryan [00:01:57]:
I have nobody listening. Nobody listen. Just like, any.

Rode Dog [00:02:02]:
The crazy part is we could do something completely asinine like that, and it’d be like, spend 5 million downloads, like, freaking episode one. You never know, folks, right? You just got to go out and do. That’s it. That’s it. So, hey, speaking of just going out and doing it, I’m gonna. I’m gonna hit you straight out of the block. Sara shoots. Zen thought of the.

Rode Dog [00:02:23]:
Of the. Let’s go.

Karl Bryan [00:02:25]:
Oh, Zen thought. All right. Zen thought. Here’s one that I thought of this morning. So jump and the net will appear, right? It’s like build, don’t talk. As I say that. I think that’s the exact opposite ways. But, but jump in the net will appear right over preparing, you know, perfectionism, the lowest standard on earth.

Karl Bryan [00:02:52]:
That just stops it from happening. You know, like just jump and the net will appear. You, you want to go to a networking function, you want to do the local live event, you want to contact the accountant, you want to form the joint venture, you want to get in with the network organization, you know, just, just put yourself out there and you’ll get a little bit better, A little bit better. But maybe actually was listening to a podcast on the weekend and it was Naval Ravikant. I don’t think it was a podcast, I think it was a, a YouTube video. But he said something to the effect of desire is a contract with yourself not to be happy until you achieve what you set out to achieve, right? Or that, that desire. So when feeling anxiety, frustration, let’s call it unhappiness, what’s my question would be? And the question that it brought me to is like, what’s that underlying desire? Right, Translation. Control your number of desires in order to be a little more Zen like than you currently are.

Karl Bryan [00:03:51]:
And remember 1% a day for 365 days you get a 37X which means if you’re incredibly chaotic right now in between the years, if you were 37 times better than you’re currently at, I think you’d be doing well. And by the way and controlling the desires that you don’t have control over the weather, right. Right now in some parts of the world, right. The snow is falling, you know, worrying about that, worrying about the economy again you got exactly zero. We were talking about the pre show shoots, right? Like create your own economy, right? It’s like a strong, strong marketing message. You know, the election election just went. But again there’s going to be other elections and there’ll be another one and not too distant future whether it be local or federal etc, you know, people responding to you, you, you can’t control whether somebody’s going to respond to you, right? So stressing out about it, getting anxious about it, worrying about it, feeling like you’re not enough as a result of that or that that person’s not interested. You know, you, you can control the messages, but you can’t control the reply message, right? So control the number, you know, control the number and just go, go, go, right? One of actually Dale Gibbons, one of our star clients, we interviewed him on one of Our internal calls, like one of the advanced calls.

Karl Bryan [00:05:09]:
And he was just saying, you know, and the question was like, what’s the secret sauce? And he said, honestly, guys, I’ve just been doing this for a long time. And I just get up and I just take one foot and put it in front of the other. I, I just take action, right? Translation. He sends out his 25, you know, targeted. 25 targeted personalized messages a day, and the results are there, you know, and he’s been doing it for a long time. Think of that, you know, the 37x when you 1% gain it every single day for a year anyway. So just, you know, slow and steady wins the race. Maybe another thing, you know, be mindful.

Karl Bryan [00:05:49]:
I’m thinking about like, AI and like, be mindful of your biases, right? Like, everybody hates advertising until they need to sell their own car is a, you know, great example, in my opinion of, you know what I mean? Something just like stresses people out, but then all of a sudden it’s like, you know, I get a better one. Advertising the profit is a superpower, right? Like, so what, what bia. That’s not the greatest example of a bias, but no doubt, you know, there’s recency bias. There’s, there’s tons and tons and tons of them. If you’re not completely aware what your biases are, look, that’s not a good thing. So you might want to go and do a little bit of homework on ChatGPT or, you know, Google to have a little bit of a look and say, what are the things that I’m falling victim to? And translation, and why I said that, like, the magic that people don’t see about AI is its lack of biases. That’s why it gives like really, really solid answers. It’s got absolutely no biases.

Karl Bryan [00:06:43]:
It’s never done a marketing campaign that flopped. It’s never spent too much money on a marketing campaign that went sideways, et cetera, right? Anyways, and another like, okay, maybe an example of that, like Coke is a marketing unicorn, right? Maybe nobody’s ever done it better than Coke. Well, maybe Nike. But Coke and Nike right up there at the top, top, top of the, you know, advertising game, you know, actually not a branding, branding game, right? So translation, let’s go to Coke. You think Coke must be the best company, you know, due to the brand strength and their popularity over, you know, ridiculous number of years. Maybe it’s 100 by now. But you know what, if you actually look at the numbers, Pepsi’s outperformed Coke in terms of shareholder returns, like I don’t know exact numbers, right, but it’s like 2x over the last 50 years, right? So like. But I would, I would imagine that the average, that would surprise you, right? So if you were taking a, you know, looking to dump some money into the stock market and there was only Coke or Pepsi as your two options, without doing some homework and looking it up, you would automatically favor Coke just on the back of, you know what I mean, their popularity and you know, just, yeah, the branding, brand, their marketing is just so good, right? And by the way, the reason that is they have.

Karl Bryan [00:08:00]:
Pepsi has significantly less reliance on Pepsi the drink and they have better use of their distribution channel. That’s really, you think about Coke and Pepsi, the real magic of the company is their distribution. So Pepsi do a better job of selling chips and snacks and bottled water and energy drink, whether it be Red Bull or the competitor to that. So that’s where they really crush them and that’s why they’ve crushed them. Whereas Coke, I don’t know that they’ve rested on their laurels by any stretch. And again, they’ve been an incredible investment over 50 years. But Pepsi significantly better over the last 50 years. Like we’re not talking over the last year or two, we’re talking over the last 50 years.

Karl Bryan [00:08:37]:
I think that that would sur. That certainly surprises me and it might surprise you, right? And by the way, so okay, so now I just said bottled water as an example. The reason the bottled water company struggles to get off the ground, right? So somebody comes up with a new Ph style water or cleaner water, this water, that water, you know, from the Caribbean, whatever it might be, it’s shelf space, right? It’s not the quality of the water, the quality of the packaging and the quality of the marketing, it’s shelf space, right? So to stock it at the gas station or 711 of the convenience store or the grocery store, etc. Because you’re now selling water, you don’t have distribution, they get to open up a new account, it’s a new delivery because you’ll be, you know, you’re not going to be. It’s not getting thrown on the back of the Coke truck, right? It’s going to be a new delivery, it’s a new account payable, just, just another company for them to deal with and for them to track. And that’s going to translate into some distracted employees, right? So again, the reason that Coke and Pepsi are the incredible machines that they are is distribution. And that is so. And not, by the way, translation for a business coach.

Karl Bryan [00:09:51]:
That’s why a joint venture with an accountant work so well for a business coach. What does the accountant have think about is as a distribution mechanism as opposed to just somebody to send you a few clients. So anyway. Shoots. That’s. Yeah. Those are some thoughts, my man. Around.

Karl Bryan [00:10:09]:
That’s my Zen thought. And I started off, I think, with the exact opposite. Opposite of a Zen. But I do think build, don’t talk. I think those are what’s about. What is that three words? I think those are powerful three words for the average business coach. That’s my answer.

Rode Dog [00:10:22]:
But so disclaimer, folks. Literally don’t jump. Like physically don’t jump. There is no, like, just we’re not doing this. That number one. Number two, you mentioned about control desires. That reminds me, I was listening to Leila Hermosi’s podcast this weekend and that sort of reminded me of what she said. It’s not.

Rode Dog [00:10:49]:
It’s like for why people don’t take action. It’s not so much the fear, but it’s the feeling of the fear.

Karl Bryan [00:10:57]:
Yeah. Oh, right. Emotional control. Yeah, you gotta control those emotions. Yes, I think we said that last week, actually. It was like the number one skill. And it’s like, you know, the. The ability to regulate your nervous system.

Karl Bryan [00:11:11]:
The ability to regulate emotion is right up there at the top, top, top of the game for an entrepreneur to be successful.

Rode Dog [00:11:18]:
So, yes, it’s that whole. You have the fear, but you do it anyways.

Rode Dog [00:11:22]:
You.

Rode Dog [00:11:23]:
You don’t let your emotions control your. Your habits. You have the discipline to just do what you know you must do.

Karl Bryan [00:11:32]:
Yeah, I think that’s agreed.

Rode Dog [00:11:34]:
So, okay, you said something to the lines of, you get rich, not off the deals you make. It’s the deals you walk away from. That that’s interesting. I just wanted to ask you if that’s the same reason that you always say that bankers are generally broke.

Karl Bryan [00:11:56]:
That. That would be. That would be. That’s one Joe Cornetta, by the way, legend. Yeah. So bankers, look, bankers are a classic, right? Like, if you introduce me to a poker player who’s broke, I’ll introduce you to somebody who is not good at poker. Okay. Because again, they.

Karl Bryan [00:12:12]:
They’re playing with money. So they just need to be like, right 51% of the time, and it’d be all right. Nuances, of course. Right. But. But bankers are effectively playing with money and they get it wrong, like 90% of the time. Right. Why? Okay, so let’s go two different companies go to the Banker and they say, look, I need to get a million bucks, right? And one is a company who needs 10 trucks, and they’re $100,000 each.

Karl Bryan [00:12:38]:
So saying a million dollars, and he says, give me your business plan. And then the business business plan is that they’re going to have net margins of 10%, and there’s this need in the market, and they’re the guys and they’re going to work harder, and this is going to be great. What does the banker say? I love it. This is amazing. You need 10 trucks, they’re 100 grand each. Million bucks. Look, let us know where to send the money. And that company with 10% net margin sounds incredibly profitable.

Karl Bryan [00:13:02]:
Go get them, tiger. Right? Versus somebody goes to the banker and they say, look, here’s what I need, and I don’t need a million dollars. I need a hundred thousand dollars, right? So I need 10% of the money. And what I’m going to do. What are you going to do with the money? Well, I’m going to get on a plane and I’m going to go to Trinidad and I’m going to buy leather and some other articles. So what I’m going to do is I’m going to make purses and I’m going to make wallets, and I’m going to make things out of leather, like specifically purses and wallets. And I’m going to go to the marketplace, and I think the most expensive, you know, one of the more expensive ones that I saw are $1,000 each for this purse. So I’m going to charge $2,000 and I’ll make it super cool.

Karl Bryan [00:13:46]:
And then what does the banker say? They say, I don’t know. There’s just something about it. I don’t feel good about it. Right. And I’m just. I’m describing Louis Vuitton, right. The third richest man I believe, in the world owns Louis Vuitton. Right.

Karl Bryan [00:14:00]:
And they don’t like that idea. And simply put, they’re just taught and trained because there’s 10 trucks and they’re $100,000 each for whatever reason, you know, not for whatever reason, because they then have an asset that they can take away. That’s the business that they go for. Right. And again, that’s just completely talk about biases, and that sort of stuff skews their ability and their understanding of business. And that’s the guy who gets the money, Right. It’s like strategy maybe, you know, like, maybe off topic, maybe perfectly on topic. But like, Trump just recently came out.

Karl Bryan [00:14:33]:
He’s not president yet and he’s going to put 25% tariffs on Mexico and Canada and you know what I mean? And he goes 100 public with all the news or what happens, Everybody freaks out, right? Just go to business insider.com or the newspaper and you’re gonna. I’d be amazed if you wouldn’t see an article, right, including, and you know, in a month from now, like love them or hate them, but certainly you’d have to give Donald Trump credit for being a really good negotiator, right? Well, what happened almost immediately after, you know, you were, you know, Trudeau, you know, the Prime Minister of Canada flies to Mar a Lago, right, to have dinner. The Mexican, the Mexican president responds publicly, right? And people see the threat, but then they don’t see the strategy, right? And again, the guy’s not even president yet. Like negotiators maybe are a better example and less controversial in these times. Negotiators like Icahn, right, they start with hard stance and then they have clear stakes at play. They create some public pressure, whether it be around inside the company or potentially as, you know, broad, as you know, newspaper media, et cetera. And what it does is it forces urgency for the person that they’re negotiating with. And really what one of the, you know, one of the things with negotiating is time, right? And you want to have a dining where all of a sudden they feel a little bit rushed, like they need to take action, right? It’s chess over.

Karl Bryan [00:15:58]:
It’s chess over checkers, right? As a one on one metaphor. And by the way, negotiation is something you can learn. You know, I sold $100,000 coaching programs in the mid 2000s. I negotiated like a win win deal with scarcity and urgency. And the person felt, look, I got to take action here. I need to, I need to move on this, right? And I did that in a number of ways, but that’s semi irrelevant here. But there was definitely scarcity and there was definitely urgency built onto it and a little bit of pressure, right? That was a good thing all of a sudden. And if in some cases they would, you know, say yes, in other cases they would say no.

Karl Bryan [00:16:33]:
But what they did do is they didn’t, you know, the, the worst when you’re negotiating, especially, you know, in the coaching world we’re doing, you don’t want to have those maybes, right? Shoulda, coulda, woulda, you don’t want those. You want to, you know, create a dynamic where decisions are made one way or another and you can Keep going. Right, so that’s what I would, that’s what I would say there. Shoots. But the bankers, they got a little bit upside down is what they’ve got it. And that’s it. It’s the same with like, try. And by the way, maybe I’m wrong.

Karl Bryan [00:17:03]:
Maybe I’m horrifically wrong. Don’t, don’t listen. You know what I mean? Just listen to what I’m saying and take it as fact. Go and speak to some bankers and try find me really, really wealthy bankers. And I think what you’re going to find is that will be the exception by a long way. And the other one is the accountants. Right? Accountants, they play with money all day, much like the poker players. Right? They’re playing with money.

Karl Bryan [00:17:24]:
But I think if you line up 10 accountants, you’re going to find that one of them is not going to be wealthy. And my opinion is they should. And by the way, the way that they do is they stop practicing accounting and they go into the business world and use their accounting as a competitive advantage. But anywho, so that’s. That’s my answer. Shoots. That’s my answer. See, well, be careful listening to the banker when, when creating a business plan and trying to get money, etc, be very, very careful with the.

Karl Bryan [00:17:52]:
The banker has to say, I guess is what I’m trying to say.

Rode Dog [00:17:55]:
I guess it’s like asking the real estate agent, is now a good time to buy the house from you?

Rode Dog [00:18:00]:
Anyway, so I, I looked up the.

Rode Dog [00:18:04]:
Top 10 richest people in the world because that, I’m like, there’s no way. Well, okay, number one, let’s go. Who is it? KB number one.

Rode Dog [00:18:12]:
Richest man in the world, Elon Musk.

Rode Dog [00:18:15]:
100%. $343 billion. Number two, let’s go. This is, this is. We’re doing this. Number two, your boy.

Karl Bryan [00:18:25]:
I’m going to say Bernard Arnault. That’s the Louis Conrad guy.

Rode Dog [00:18:29]:
Incorrect, incorrect. But it is your boy. You talk about this dude a lot.

Rode Dog [00:18:34]:
It is. No, not Tom Brady.

Rode Dog [00:18:36]:
Jeff Bezos is correct with 229. Bill, number three. This one is a shocker. I didn’t expect this to be in the top three.

Karl Bryan [00:18:46]:
Bernard Arnault, Zuck, Zuckerberg. How is he? No.

Rode Dog [00:18:52]:
203. Number four is Larry Ellison. And number four is Arno.

Karl Bryan [00:18:58]:
Arno.

Rode Dog [00:18:59]:
$168 billion. Which is about, I don’t know, half of Elon Musk. Isn’t that nuts? That a unbelievable. So, but I’m going down this list. Then you’ve got Gates You’ve got Larry Page Alphabet, then you’ve got that Buffett is number eight. Number eight and he ain’t no banker. Steve Ballmer is number nine and number 10, Sergey Brin. So no bankers in the top 10, folks.

Rode Dog [00:19:32]:
So there you go. Shoots.

Rode Dog [00:19:33]:
Your.

Rode Dog [00:19:34]:
Your story holds. Your story holds. Hey, speaking of stories that hold, what a great segue. Holy smokes, I should be getting paid for this. Hey, something we haven’t done in a while, how about some good old fashioned? And I dread this because, God, we’re going down rabbit holes. I can feel this already. KB Wisdom. Oh boy.

Rode Dog [00:20:01]:
This. Do I need like, do I need to put bumpers up like if we’re, if we’re bowling, do I need to put bumpers and guardrails in place right now just to make sure we don’t go completely off the rails?

Karl Bryan [00:20:10]:
It might be a good idea. Shoots. I had a line likeness.

Rode Dog [00:20:13]:
You know what? I’ve had worse ideas, that’s for sure. Worse ideas like yes, , I will take that last beer from you. All right, Something everyone should know. Let’s go. What you got?

Karl Bryan [00:20:26]:
Okay, I get coaches.

Rode Dog [00:20:31]:
You know what, I’m not, I’m not going to restrict you this first round, but if I tell you, if you don’t behave, it’s full on guardrails the next time around.

Karl Bryan [00:20:39]:
Nice. Okay. Okay. Well, I’ll tell you this. The average politician making and in control of fiscal policy is. I have no idea, by the way, but I’m going to say it’s a 70 year old baby boomer with assets, right? So they get a stock portfolio and they got a couple of houses. So if you look at the fiscal policies, like printing trillions during COVID as an example, it’ll suddenly make sense, right? They don’t want prosperity. They’re not 25 to 35 year olds, right? So my question is, do they want prosperity for 25 and 30 year olds, right? And if you do your homework, you will see that a 20, it’s never been more difficult for a 20, like a 30 year old to basically make it financially, you know, and we’re talking about stocks and you know, buying real estate, etc, right? Which, which by the way would be a correction of assets which has happened for, you know, since the end of time at different times.

Karl Bryan [00:21:36]:
You know, that’s the house all of a sudden being devalued substantially, let’s say as much as 40%. Not a correction at like 5 or 10, but like a proper downturn, right? And they’re stock portfolio tanking. They Want economic stability for themselves in retirement. No doubt that would make sense, that that’s natural. Well, and again, maybe I’m horrifically wrong and maybe I’m spot on. Go have a look at fiscal policy over the last, I’m going to say certainly 20 years, possibly over the last 20 years. And I think that you’re going to find that if you were a 70 year old baby boomer with asset stock portfolio and a couple houses and the cottage, et cetera, I think that you’re going to find it fav. And I think that that is not necessarily a great thing.

Karl Bryan [00:22:22]:
We. I’ve said that once before on the podcast at some stage, but that right there might make you feel a little better, might make you feel a little bit worse. And again, don’t listen to what I’m saying. Maybe I’m horrifically wrong. Go check it out. But anyway, so it’d be that. But, but that said, and it’s not too late, you talk about 70 year olds or you know, like Kroc was 52 when he started McDonald’s. I talked to coaches all the time and they, you know, I can feel, I don’t necessarily use those words, but they feel like they’re a little bit behind, which frankly can be a bit of a dangerous position to, you know, psychologically to feel like you’re behind.

Karl Bryan [00:22:54]:
Translation, taking unnecessary risks and not good ones. But you know, Kroc was 52 when he started his first McDonald’s. Red Bull was in his 60s when he started. I can’t pronounce the guy’s name for the life of me, but he was like in his 60s when he started Red Bull. Working out pretty well for him. You know Rodney Dangerfield, who’s like a Hollywood legend, he was in his mid-40s, I think he was 46, 44, 45, 46 when he got his first role, like when he kind of cracked it. So you know, you’re just, you’re not too late. I think that that is super duper important and psychologically I think it can give you a bit of an advantage or certainly some relief.

Karl Bryan [00:23:32]:
Hey, be wisdom. So people, look, just go to coaches like people don’t understand compounding both. And this would be the coach consultant and this would be the entrepreneur like they say they do. Right. So translation seven plus seven plus seven is easy done and very natural. But you go seven times seven times seven and it doesn’t compute for the average person. Which by the way the secret of it is marginal utility theory, which is literally the foundation of My software, you know, where you get compounding returns without the need for time, right? Because again, you get this. You get multiplication instead of addition, right? You’re trying to hit singles instead of home runs.

Karl Bryan [00:24:12]:
Just think Moneyball, right? My software is built off of Moneyball and hitting singles and not home runs. But the magic is you can get that compounding result without having to wait 10 years the way that Warren Buffett would tell you was necessary, right? But understand that Warren Buffett and certainly Dave Ramsey, they speak to employees, they don’t speak to entrepreneurs. So just singles, you know, and again, and by the way, the same way that McDonald’s is built, Subway is built, Walmart is built. If you reverse engineer their business models, what they really do is they just have the found, you know, the, what am I trying, not the foundation, but the fundamentals in place. And they do them consistently. And it’s really, really boring. And it doesn’t change a lot. Suppose you look at the changes that McDonald’s have had over the last 50 years. In that case, they are not spectacular by any stretch of the imagination of a company, its size and its popularity and its revenues, etc.

Karl Bryan [00:25:05]:
So any who, you know, just multiplication, just understanding compounding, understanding marginal utility theory, which marginal utility theory is just. If you improve 1% per day, every day for an entire year, 365 days, you get a 37X, right? So if you suck at sales, I don’t care how bad you are, if we multiplied your abilities by 37, you’d be pretty good, right? So all you gotta do is you gotta go and read a book, listen to a podcast every single day. Every single day. And then, by the way, if you do it for two years, I can’t remember quite what you get. You get like a 1600% return. What that doesn’t say is it gets a little bit harder, a little bit harder, a little bit harder as you compound your talents and you get, you know, better at something like sales or maybe it’s coaching or accounting or whatever it is. Anywho, so. So that I think that there’s real magic in that, just understanding the, you know, the foundation of compounding and how that.

Karl Bryan [00:26:01]:
How you could benefit as an entrepreneur and how your clients could benefit as a business coach. Look, I can’t look, when asked for wisdom, it’d be impossible to skip over this one. But it’s old money equals never sell. Okay, so old money equals never sell. You introduced me to a family with old money, and I’ll introduce you to a great, great grandfather and a Great great grandmother that never sold. Right? So again, holding. And Sam Walton would be an example. Like, you talk about the richest people in the world.

Karl Bryan [00:26:31]:
The thing with Sam Walton is he’s broken up. You know, Walmart is broken up amongst all of the family members. If you took it and added it up, I remember, like, Bill Gates was the richest man in the world, but the reality is the same, like the Walton family trumped him big, big, big, big time because they broke it up through, you know, the family members. It, it didn’t show, you know, that to be the case. But at the end of the day, Warren Buffett. What does Warren Buffett say? Never. He never buys a stock that he doesn’t want to own for, at a minimum, a decade and more, preferably for forever. So, translation, literally had a conversation about this via Facebook with a guy who’s basically, he’s going to sell his house to go all in on his company.

Karl Bryan [00:27:12]:
And I couldn’t help myself. I’m like, wait, wait. And it’s a guy that I’ve had some conversations with and I’ve, you know, mentioned, you know what I mean, maybe helped him along the way. I think of what he would say and I’m like, man, rather than sell your house, like, the reason, why would he sell his house so that he can cash out and get the money in the bank? What’s he going to do with the money? He’s going to put it into the company, right? So translation, he doesn’t want to sell his house, he wants to get the money. Well, depend upon credit score and a few other things. But he could go to the bank and let’s just say he’s got a $600,000 house with, I don’t know, $200,000 of equity. He would be able to pull out a good percentage of that 200 grand without selling the house. Right? So I think that would be an example of old money equals never sell, you know, buying and selling.

Karl Bryan [00:27:58]:
If you introduce me to somebody who’s owned like, you know, five houses, I always say, I wish you, I bet you wish you didn’t sell the first one. And it’s just like the money that they made on all the five, let’s say they sold five houses, they made money on each. If you take the money that they made on the five houses that they sold, it will be trumped. It will be, it will be the, the money that they would have made in equity on the one house if they never sold, it will be more. And clearly that’s the, the Bottom line, old money equals never sell. Know what I mean? Like, you buy that piece of real estate, find a way to not sell it. Because if you really want to get a hold of a head in real estate, what most people do is they buy a house and then they sell it, then they buy a bigger one and then they sell it and they buy a bigger one in a better neighborhood, etc, and you need to own two to really get ahead, if you think about it. Anywho, so old money equals never sell.

Karl Bryan [00:28:53]:
I think that’s a writer downer. Yeah. Look, last, you’ll be remembered for what you refuse to give up on, right? So the question then becomes, what do you refuse to give up on? You know, like you’re coaching, a new coach gets going. I always hit him with these three things, but it’s just straight from the Mel Fisher movie where he found $100 million treasure off the Florida Keys. And he had three beliefs. One is that it was there. Two, that he was the guy that was going to find it, the treasure. And three, it was going to be worth it.

Karl Bryan [00:29:24]:
By the way, it took him 17 years to get it. And he lost a wife, he lost a fortune, he lost a child. You know, it was a horrific dynamic, but the end of the day, he never let up. My question in your. If you want to be successful in coaching, are the people that struggle the most are those that go, you know, day to day, week to week, month to month, quarter to quarter, year to year, deciding if they’re going to keep going? What you really need to do, I think, is you got to go all in and say, this is what I meant to do. And by the way, the clients are there, I am the guy that they should pay because I’m more passionate, I am more knowledgeable, I’m going to work harder, I’m going to show up faster, I’m going to show up at a higher level, et cetera, so that you’re the right person. And then third, most importantly is that it’s going to be worth it. And if you don’t feel like, if you don’t go to number three, what you’re going to find is those speed bumps and those obstacles and in some cases, the concrete fences that get in your way could stop you.

Karl Bryan [00:30:23]:
So you gotta be very careful. Again, I always say you gotta get mad, not sad. You gotta look for reasons to advance versus reasons to retreat. Right? So actually, you know, another one this is. Oh, shoots, should I say this? But shared emotional experience. And the example that I use is the Old show, Bachelor and bachelor, right? Like we go on a date and they go bungee jumping and they go, you know, gorky, go kart racing and they go do all kind, you know, e foiling retreat in Colombia. You know, maybe they’re going to do something crazy like that, right? Like I went on an e foiling retreat with a guy, a friend of mine here on the island and you know what I mean, we’re significantly closer as a result of, you know, of the. Of the.

Karl Bryan [00:31:03]:
What would. You know, you know what I mean? Like going through the experience. So a shared emotional experience. The reason on Bachelor and the reason they make these really, really deep connections so fast. A little bit to do with the cameras, a little bit staged, etc. But. Absolutely. But they do on these dates as they go bungee jumping and they go skydiving and they, you know, crawl down the side of buildings, etc.

Karl Bryan [00:31:24]:
So translation, you know, doing that with your client, is that a good idea? Have you ever gone go karting with your client? You ever gone bungee jumping with your client? You ever gone hiking with your client? Some, Some of my best coaching sessions is taking a walk in nature with a client, right? And say, look, let’s do it this way today, right? You’re assuming that you’re in the same city, but also jumping on a plane and going to see your client getting face to face, toes to toes, belly, belly with them could be a really good idea. And by the way, you. You might or may not know, but Steve Jobs was famous. If you ever a lot of Steve Jobs best business meetings and something very consistently that he did is he would invite you for a walk. And it. That’s just. He, he loved it. You know, he’d go for a walk in nature and talk business and partnerships and new stuff.

Karl Bryan [00:32:12]:
So I don’t know, shades. That’s. How’d I do?

Rode Dog [00:32:16]:
It’s sort of. It’s sort of like when you invited me for a steam and I said like, not even a towel. Like, what’s the matter with. Seriously? No, too much too soon. It’s too close to home anyways. Hey, listen, nobody wants to picture that. You mentioned something about the software. I just.

Rode Dog [00:32:37]:
And you sort of alluded to it. Can you just. I sort of allude to the software a lot. You mention it a bit from time to time. Can you just explain so folks can truly understand the foundation of the software? Can you just take a couple minutes on that?

Karl Bryan [00:32:55]:
Yes, I could. Yes. Okay, so short answer. The language of business is what? Give me a room of 100 people, and I ask that question, 80 hands will go up for sales and marketing. The truth is, and this isn’t me, this is Warren Buffett. The smartest minds, the smartest business minds ever, like the guys that we just listed, Elon Musk, et cetera, they’re going to tell you that the language of business is accounting, and it absolutely is. Right? So I believe that if you took Elon Musk and you said, okay, that’s the reality, he would say, well, what are the first principles of accounting? Right? Like, and I’ve done this right? I. That is revenues, profit, and cash.

Karl Bryan [00:33:33]:
Profit and cash are not the same thing. Okay, so revenues, profit, cash. That’s the first re. That’s the first principles of accounting. But then if I went deeper and I said, okay, so let me go further than that. What are the first principles of revenue, profit and cash, okay? That will bring you to compounding, which you’ll never see. You’ll very seldom see an interview with Warren Buffett where he doesn’t use the word compounding, right? So, and think, you know, what, what, you know, wealth, what’s the foundation? What’s the first principles of wealth? Again, compounding. And then the first principles of compounding, if you went further, you’re going to come to three words called marginal utility theory, right? My software is 100% built off of marginal utility theory, right? So I too, and that may be a complicated way of saying what happens when you double a penny every day for 30 days, you end up with $5 million.

Karl Bryan [00:34:27]:
The problem is, of course, you know, the business owner, what don’t they have? They don’t have time, right? So you double a penny for every day. But by the way, it gets really, really exciting towards the end when you start getting that compounding effect. You go to 31 days, you’re at over 10 million builders, right? Well, number two, I said a minute ago, if you improve 1% per day for 365 days, you get a 37x jump. So again, if you, if you can coach, you can’t sell, and if you can sell, you can’t coach, right? That’s a little bit of an exaggeration, but I’m, I’m not too far off in the industry, right? So if you’re no good at sales and we 37x your talents, look, surely you’d be able to get a, you know, you’d be getting a few more deals done, that’s for damn sure. If not entering the realm of what we call elite, right? In the coaching space of getting deals done. So the software, effectively, it gets business owners compounding financial results without having to wait the time, without having to wait 10 years. The way that Warren Buffett will tell you, right? How do you do that? By a marginal utility theory, which we call profit acceleration, by the way. That’s what’s called profit acceleration software.

Karl Bryan [00:35:36]:
And like an example, okay, So I mentioned McDonald’s earlier, right? So what McDonald’s do is they do the fundamentals over and over and over again, right? So market dominating. What is the market dominating position of McDonald’s? Well, you may or may not know. You probably heard the expression fast food. Okay, well, McDonald’s literally created those two words pieced together, fast food. So now you hear it, you think of, you know, it might be Dairy Queen and it might be Burger King or whatnot, but you think of fast food. But McDonald’s created that. And without putting any explanation on the other end, no doubt you could see how fast food is something that would be attractive to somebody on lunch break or with kids in a rush to get home, it’s getting late, it’s getting dark, et cetera. And then by the way, they created the drive through, the ideal client, market dominated, think unique selling proposition.

Karl Bryan [00:36:28]:
But what we do at the market dominating position is it solves the ideal problem for the ideal client. Okay, so I think drive through the reason once again, McDonald, you look it up. But McDonald’s created the drive thru, right? Why mom’s got three kids, getting them out of the car, you know, parking, getting the kids out of the car into McDonald’s, sit down, eat. To do back into the car is a hell of an exercise and it takes significantly longer than ideal in many cases. Well, they created the drive thru. So you literally drive through, grab the order, put the food in the back and basically the kids are eating. By the time you get home, the kids are fed, you throw, you know, the wrappers in the garbage and bingo, bingo, bongo, Mom’s done, she’s good, she can chill out for the night, start getting the kids to bed, right? Well, McDonald’s do that. That is part of my software, like the fundamentals, Like I reverse engineered the biggest companies in the world.

Karl Bryan [00:37:22]:
A McDonald’s and there’s Subway and there’s Walmart, et cetera. I think they’ve all got the exact 12 areas dialed in. They call them something different. And by the way, it’s the same stuff that Tony Robbins teaches in his program. Dan Kennedy, like you take the most successful coaching programs in the world, maybe Say the most expensive programs in the world. Again, you’re. They all have different names and whatnot, but they’ve got these same specific areas, the fundamentals. Another one is bundling, right? Well, you go to McDonald’s and they say, do you want me to turn that into a meal? Right? They’ve got an upsell.

Karl Bryan [00:37:51]:
Do you want. Or do you want me to supersize that? They got a cross sell. Do you want fries with that? Do you want an apple pie with that? Raising prices again. The average business owner hasn’t raised their prices in three years. If you go to McDonald’s and again, don’t believe me, go check out the stat, the, you know, the data. But you will see that they’ve consistently raised their prices year over year over year over year over, you know, the last hundred years. And they don’t just do it automatically. By the way they measure, you know, economic, you know, environment like I during COVID They wouldn’t have raised their prices.

Karl Bryan [00:38:24]:
Could imagine the bad press is not going to prompt them.

Karl Bryan [00:38:27]:
Right.

Karl Bryan [00:38:27]:
So you didn’t do it then. But anyways, they, they raise their prices. Does the chiropractor do it? Does the dentist do it? Does the butcher, baker, candlestick maker do it? I think, you know, instinctively, if they’re not doing it, they’re not thinking about it. They’re not. Is not something that automatically happens. And if they do it, they probably do too much of a jump. You know, like McDonald’s doesn’t double the price of a Big Mac. They just raise it up, you know, 5%.

Karl Bryan [00:38:47]:
And then controlling costs again, they’re all about buying better. If you know anything about McDonald’s, I mean, that’s one of the big things. And the advantages of franchising joint ventures. You ever been to Walmart? What’s there? A McDonald’s? You ever go to a gas station? What’s there? A McDonald’s. So they basically, the software has got these specific 12 areas. We call it the Jumpstart 12. And it’s the same, you know, areas that the biggest companies in the world had. And you know, and I’m going back when the research was done and whatnot.

Karl Bryan [00:39:13]:
You know, we’re kind of going back a decade, but it’s all there and go. Mango bongo. Yeah. Remember, I built very importantly, speaking of fundamentals, I didn’t build revenue acceleration software. I built profit acceleration software. Right. So basically the software guides a business through a, you know, the coach and client through profitable process. And you know, in that way, by the way, clients, yes, they cancel all the time and different issues.

Karl Bryan [00:39:40]:
But I got to tell you, if you look at your clients that have stuck around for three, five, 10 years, the ones that are making great money are absolutely, you know, I mean the ones that are making good money and a good return, you’re able to point at it. Generally speaking, they’re just not going anywhere. Right? So, and notwithstanding, one of the challenges is that know they, they can’t afford you. You know what I mean? Well, guess what? Profit acceleration software is designed to create a very profitable income and outcome. And those compounding type results without you having to wait, without the client having to wait, without everything have to get stretched out over a period of years. Right. It can be done incredibly quickly. So anyways, and again, singles, not home runs, singles home runs.

Karl Bryan [00:40:23]:
We go to those specific 12 areas. The instructions are always 2% jumps, 5% jumps, 10% jumps, not 50% jumps. So the 50% jump is a home run, a grand Islam. And the 2% jump is like getting hit by a pitch, right? And the other huge. So I think like talk about market dominating position, solving the problem. What’s this? What’s the problem that your entrepreneur, your prospects, your business coaching clients, your business consulting clients have? And it’s that business owners are trying to get big so that they can get rich. I will let you guess how that ends up time and time again, right? It ends up being the, you know, they get big and they become the opposite of rich. They become insanely busy and their profit margins tight the whole way through.

Karl Bryan [00:41:09]:
Right? Or their goal opposed to trying to get big so they can get rich. Their goal is to hit a million dollars this year. How often do you hear that? You give me a room of 100 entrepreneurs. Remember, 96% don’t make it to a million dollars in gross revenues. They want to get to a million dollars a year. It’s just, it’s. I don’t know that it’s a stupid goal. We talked about it lots of time, the podcast.

Karl Bryan [00:41:30]:
But like this is the problem to solve, right? It’s. Why? Why is that a stupid goal? Because they could hit their goal of getting to a million dollars and lose money. They could get to their goal of a million dollars and make very little money. And then by the way, what happens when they don’t make money? They make a negligible amount of money. It doesn’t feel like it’s worth the hassle. They lose passion, right? Success breeds passion. You introduced me to somebody that made it to the major leagues or you know, playing Professional football, playing professional soccer, playing professional cricket. And I’m going to introduce you to somebody that was really, really good at it.

Karl Bryan [00:42:03]:
And then that led them to train more. Right? Well, your entrepreneur is no different. They lose the passion because they don’t feel the success. A business owner that’s going from success to success to success, success, you’re probably going to find you’re going to have somebody that’s, you know, jacked up, ready to go. They don’t need an alarm clock to wake up at 5am like they’re, they’re going, right? So, so rather than trying to get to million dollars, what’s the antidote to that? What’s the solution to that? What’s the opposite of that? Well, how about they create a goal to build a crazy profitable business with 50% profit margins and then maintain 50% profit margins while they grow from 250 to 500, from 500 to a million, from 1 million to 2 million, 2 million to 5 million. Now that’s a goal, right? So anyway, so just margin, margin, margin. You know the way in real estate, it’s location, location, location. I believe that we should be thinking, and again, most, a lot of coaching is too much jumping up and down, clapping hands, singing kumbaya.

Karl Bryan [00:42:59]:
You motivate an idiot. They do stupid things quicker. You know, the opposite of that is just making sure that they’re building a profitable business and going margin, margin, margin, as opposed to motivation, motivation, motivation. And not that you don’t need some motivation, but I think that the motivation organically happens with the success. And again, and success looks a lot like profitability. Again, profit acceleration software, not revenue acceleration software. Shoots another one that comes to mind. As I say, that is a higher level thought, but a lot of businesses are looking to what to exit.

Karl Bryan [00:43:35]:
This is Keith Cunningham 101. Look, rather than exiting, which I know sounds sexy, and it will get you some sales, there’s no question. But what about building a business you could sell tomorrow but don’t want to right now? There is a higher level thought. Now that’s an aspiration, that’s a goal. And I think somebody that would really excite something, that would really excite them. And like Warren Buffett, again, he’s one of the greatest venture capitalists of all time. Again, I can’t remember what you said shoots, but out of 150 billion, something insane. Well, what does he say? And by the way, one of the greatest entrepreneurs of all time might not be seen.

Karl Bryan [00:44:13]:
People think of Warren Buffett as like the investment guy. He Is a consult. He is a business guy. He is a consultant on steroids and insanely good at it. He has two things that is very, very rare. Old and he is rich. Okay, Old and rich. When somebody is old and rich, it’s normally know a time to use the, the two ears, one mouth analogy.

Karl Bryan [00:44:35]:
But okay, so what does he say? He says that he wants to find something that he can buy for a penny, sell for a dollar. And that is habit forming. Buy it for a penny, sell it for a dollar. That’s habit forming. Genius of that statement is insane. And look at, look at his, you know, his, his, his best investments. Coke. Is that a little bit, you know, habit forming? Gum.

Karl Bryan [00:44:59]:
Habit forming. Tobacco is certainly habit forming. Candy. Rent. You know, when you start renting a house, do you want to pick up and move? You, you plan to rent for six months, you plan to rent for 12 months, and when ends up happening three years later, like I can’t believe we’re still in the same house, you know, Is that habit for me? I don’t know that falls into the same category, but it’s there, right? So, so relative. It’s a cousin. It’s a cousin of chewing tobacco. And so, okay, I think I said this a second ago, but I want to make sure.

Karl Bryan [00:45:30]:
So another issue, right, is that they grow from 500 grand to 2 million using your guidance, right? So their GROSS Revenues are 500 grand. When you meet them, they’re trying to get to that elusive million dollar mark and they blow past it because you’re good, they’re good, working hard. Everybody’s putting one foot in front of the other and they’re making everything work. They get to 2 million, but they’re making less money at 2 million than they were at 500 grand. They’re making less million at 2 million than they were at a million. Right? Or maybe they’re making more, but it’s a negligible amount. Right? Well, the big takeaway there is that the company is more vulnerable. A $1 million company is not as vulnerable, generally speaking, than the $2 million company.

Karl Bryan [00:46:10]:
The reason, more staff, more accounts, more accounts receivable. A rogue staff member could leave and steal some clients. A client could go bankrupt. Or, you know, not a, you know, you had a bad debt on the books that you just, you know what I mean? The money’s just not coming and you lit it on fire and made the sale and you know, did the work, it paid the bonuses, etc. So solution to that, you know, again, you, you want to build A instead of building a big company so you can get rich building a really profitable business with steady with margins, great margins and margins that you maintain through the growth. Right. Or like another one, like talking to the accountants or you know, we talk about financial statements a lot. And again, the foundation of the software, it’s not like it’s accounting software in any way, shape or form, but it’s got very much, you know, project.

Karl Bryan [00:46:58]:
If you thought of it as projection software, it’s a really juiced up and impressive form of projection software. Well, when you read a P and L, the problem is the average person will go where because they don’t understand what they’re looking at, they go straight to the bottom line. Well, if you had two companies and one made $100,000 profit, that’s the bottom line. And one does 500. So they both have $100,000 of profit, bottom line profits. But one does $500,000 of revenues and one does $5 million of revenues in order to make, you know, in order to get the $100,000. Well, which one would you rather own? And by the way, I’ve done this exercise and a lot of the time people will say, oh, the five million dollar company. Because you just need to make some tweaks, which is not entirely we.

Karl Bryan [00:47:42]:
I’m not giving you enough information to make the, you know, to, to give the answer. But I gotta tell you, I would be very, very cautious to go to a business that’s that big at $5 million making tight, tight, tight, tight margins like that. Because I think if anything goes wrong, you know, they’re on the red big time. And I don’t think that’s a good thing. So again, remember, they’re trying to get big so they can get rich. And my experience is, and I think you’ll see the stat, you know, the data, 95% fall over. Right? That’s, you know, why? Well, I’m explaining it, you know what I mean? Like they’re not, they’re not using her software. That’s the solution.

Karl Bryan [00:48:20]:
That’s the solution. But at the end of the day, again, uneducated, we’ll just go straight to the bottom line and assume that two companies that made $100,000 a profit or $250,000 of profit or $50,000 of profit or $500,000 of profit are the same. And it’s just, it’s not enough information. And that’s why I would encourage any business coach, any consultant to get. You don’t need to become an accountant in Any way, the same way that I don’t need to be an electrician to turn on the lights. I just need to know where the light switch probably is beside the door, right? Reading financial statements going to be a lot like that. You don’t need to be able to create them. You got to be able to read them.

Karl Bryan [00:49:00]:
In order to read them, you need to know where to look. And it’s really not that complicated, I promise you. So anyway, so, so yeah, that’s solution to all that. Margins, margins, margins. The company that grew to like $5 million and at his poor profits, they were not watching their margins on the way up. And I guarantee when they were at a million, their, their margins would have been significantly greater. Otherwise they wouldn’t have got to 5 million, by the way. Unless of course, they’re raising money.

Karl Bryan [00:49:26]:
Blah, blah, blah, blah, blah. Again, not enough information. But Martin, the same way that real estate is location, location, location, I want you to be thinking margins, margins, margins over top of motivation, motivation, motivation, which I think, I know that it plagues our industry because it’s very, very important, for obvious reasons. But you motivate an idiot, they do stupid things quicker. And I would hazard you to be a little cautious with that as you’re, you know, you, you put the jumpstart 12 to, you know, into action and start making these profitable companies, make sure they’re, they’re profitable. So, and, and by the way, what I just said, I think is like the world’s greatest sales pitch to become a business coach or to become a consultant. And coaches miss this all the time, right? Like they can never give me this answer when I ask them unless they listen to the podcast. But one of the reasons to become, and this is channeling my inner Warren Buffett, the reason to become a coach consultant is because we make 80% margins, right? 80% margins.

Karl Bryan [00:50:24]:
Massive, massive. So the other industries, you know, the landscape are just not making that. You know what I mean? There’s just, it’s, it’s not that the landscape is not going to make 80% margins as, as, you know, assuming that they have any kind of a business. So there you go. Shoots. That is my answer. How did I do Buy it for.

Rode Dog [00:50:45]:
Penny, sell it for a dollar, and it’s habit forming.

Rode Dog [00:50:49]:
You know who else subscribed that? Pablo Escobar.

Rode Dog [00:50:56]:
Well, there you go. Shoots. That, that’s, that’s true. Hey, listen, I, as soon as I was just like, that’s a perfect example.

Rode Dog [00:51:04]:
Habit forming.

Rode Dog [00:51:05]:
Yep. A hundred percent king of cocaine. Listen, you talked about and I really just. Last point, I want to touch on, off the cuff completely here. You talked about the whole people wanting to basically become rich or build a business just to sell. It reminded me of a quote that I saw that my buddy Dan Martel posted the other day, and he put, you receive what you desire for others. Stop making it about you, make it about them. And I thought that was a really excellent quote that he did.

Rode Dog [00:51:40]:
But can you touch on this for a second, dude? Like, especially in SaaS, right? Like, there’s a lot of that. But you see in every business, in every industry, people that say, look, I’m just doing this to get it to this valuation I’m selling. Is that a dangerous mindset to have?

Karl Bryan [00:51:57]:
Oh, you’re 100%. You’re like, again, it needs to. Look, exiting is all about you. You know what I mean? Like, that’s not, you know, now you, like, you really care about the client, you really care about your product, do you really care about your services? Do you really care about the experience? All you’re trying to do is jack it up, the exit. Absolutely. It’s a. I don’t know that it’s a cancer, but it’s pretty damn close. I mean, if you introduce me to somebody who’s building a company to exit, I might introduce you to somebody who’s just.

Karl Bryan [00:52:24]:
Just. You know what I mean? They’re just, they’re. They’re. They’re stuck in their own head, in their own way, you know, in a not so good way. So. And in the SA, you mentioned SaaS, you know, the SaaS piece, it’s absolutely rampant. And I, Yeah, I. It’s.

Karl Bryan [00:52:40]:
Yes, yes, and yes, it’s crazy.

Rode Dog [00:52:42]:
It’s interesting because as soon as I’m just thinking it through, I’m like, okay, well, if all you care about is really to truly have the higher margin so you can get a higher valuation, what is that saying? You’re probably skimping, you’re probably shortcutting on production, you’re probably having a weaker product, all these other things. And what does that do for you? Well, eventually you will lose, right?

Karl Bryan [00:53:09]:
Somebody else is going to come in that’s more committed, more jacked up. And of course, there’s nuances to all we’re describing. Right? But absolutely, I think, look, you want to build a business, you could. Well, here’s another. So we’ve talked about this in the podcast at different times, but here’s the person that I will get on the phone with, I’m going to say semi, not consistently by any stretch, but semi consistently I’ve had this conversation countless times where somebody exited their business. Well, I do this, that this is day two of business coaching mastery. I say, if I were to give you $5 million for your company, who would sell it? Right? Put up your hand and of course, you know, all the hands go up unless they’ve seen, seen it generally, but almost all the hands go up. And I say, okay, so let’s just assume I’m going to give you a 5x, I’m going to give you a 5x multiple on your company.

Karl Bryan [00:53:54]:
So what does that, what does it mean? What did I just say? Okay, that you were, you had earnings, you had profits of a hundred thousand or a million dollars in order for me to come to $5 million, right? Exit so that means that you were making a million dollars. And then the problem is I write you the $5 million check and then what happens? Okay, you got to pay some tax. You got to pay, you know, the business broker, the, you know, the M and a guy, the investment banker. You got to pay somebody to sell it, which is going to be, call it 10%, which would be 500 grand, not chump change. There’s going to be some debt for sure and some other stuff. So really the way the math shakes out is you got like 2.75 left. Well, remember a minute ago you were making $1 million a year without meeting. The person making a million dollars a year normally has some spending habits and that sort of stuff.

Karl Bryan [00:54:43]:
And now They’ve got their 2.75 cash and what do they got to do? They got to invest it. Well, somebody that’s running a business for the last 20 years now has 2.75 million to invest. Where do they put it? They put it into real estate, they put it in stocks, they put it, you know, might be crypto nowadays, etc. Well, generally speaking, and without knowing how the story ends, how do you think the story ends? How do their investments go, right? How good, you know, the person that they task with helping them, how does that go? And you probably know, so now all of a sudden the 2.75 becomes one and a half, right? Maybe two and maybe it grows. That would be awesome. But again, look at the data. And now it. And so all of a sudden, and they have retired and now they’re golfing a lot and now all of a sudden it’s okay, well look, I got to get back to work and I need to get back into business to do, to do, to do.

Karl Bryan [00:55:34]:
And they end up you know, in our game, they end up consulting business owners and with regard. And by the way, I’ve had this individual that I’m describing, I’ve had them in tears on the phone. Okay, why are they in tears? Because the worst mistake they ever made was accepting that $5 million deal not knowing you gotta be. Not they. And now because again, they sell the company because they’re frustrated, they’re jaded, they’re a little bit overworked, but guess what? When there’s only so much golf you can play. So guess what? They get bored stinking silly and they want to get back at their company. And of course, the company that buys the company, how good of a job do they do? In some cases, they kill it. Many cases they.

Karl Bryan [00:56:13]:
As in kill it in a good way, right? But many cases they kill it in a bad way, right? And now their baby gets beat up, that doesn’t feel real good. Their clients are contacting them, et cetera. So what they say to me is, the worst, the worst business decision I ever made was selling my company. So if what you, I just described sounds like something that you might want to educate yourself around or become a. Again, you want to look for big problems and then solve them. If you want to solve the problem that I just said, what you can do is the guy was making a million dollars a year, right? Well, what if they brought somebody in? So you want to bring in the number two guy from the number one competitor as an example, okay. And then bring that person and pay them real money, and let’s call that a couple hundred grand a year plus bonuses to get to 250 grand a year. And they event that they do a great job.

Karl Bryan [00:57:04]:
And now that individual is tasked with growing the existing company that is already making $1 million a year. And by the way, if you paid that individual 250 grand to run the company, the company’s, you know, still making 750 grand a year. Doesn’t sound like a bad day job. And effectively what he does is he moves himself out and creates a little bit of a consulting role, right? You call it chairman, call it whatever you want. But all of a sudden, so now you’re consulting your own company, and the guy that you’re high, you’re hiring for a couple hundred grand a year. The number two guy from the number one competitor or somebody that’s working for the competitor that’s looking for an opportunity that they don’t see, know, forthcoming in their, their, their current role and their current company, his job is not to come take over and hold steady. His job is to grow it, and that’s why the incentives are there, Right. What Charlie Munger would say is, show me the incentives and I’ll show you the results.

Karl Bryan [00:58:01]:
Right? So incentivize them wildly to grow the company. So now the guy, let’s assume that they can get it to $2 million of earnings. Well, now the guy is. Built a company he didn’t, you know, he could sell tomorrow but didn’t want to. You know, he still owns his company. He’s consulting to his company. He’s only doing three hours a day or, you know, 20 hours a week or whatever he, he decides would be the right number for him or her number. And they still got their company and, and it’s increasing and, you know, increasing in value.

Karl Bryan [00:58:32]:
And now they got staff taking over and going. So anyway, so that could be a better opportunity. So starting a company with exit in mind, I agree with you wholeheartedly. But not only that, you know, for the landscaping company, you know, the oil and gas company, the, the guy that’s, you know, he owns three hairdressing salons, et cetera, you know, selling them. And that might be the right play, you know, if I was going to buy a company. What you’re looking for is you’re looking for somebody who’s beat up, tired, old, sick, and just totally over it. And the problem with that, though, is again, without saying any more, no doubt, you know, that that person is getting lowballed. That person is going to let the company go for significantly less.

Karl Bryan [00:59:17]:
And that’s why you want to buy the company off that individual. Because you make money when you buy, not when you sell. Not that we’re looking to take advantage of people, by the way, but you know what I mean, that’s the kind of person you want to buy a company from. You just, you know, you want to buy. It’s like, you know, if you want to buy real estate, know what I mean? Like, find a grandma whose husband passed away recently and the house is just too big for her now to maintain an upkeep and the memories are just too much for her. That’s an example of a house that you could do, you know, really, really well with similar in, in business. So anyway, so yeah, just look, building a company to exit shoots, it’s got hazard written all over it. All over it.

Karl Bryan [01:00:00]:
Very common.

Rode Dog [01:00:01]:
Yeah, no fair.

Rode Dog [01:00:02]:
You beat me to it.

Rode Dog [01:00:03]:
I was going to say, yeah, go to number one competitor, get number two. Man, you beat me to that, that punch. Never mind the fact that if you’re still consulting for the business, all the tax advantages and everything else that you would have, right, rather than that big lump sum of cash. Again, we’re making some bold assumptions here, but.

Karl Bryan [01:00:22]:
Yep, absolutely. But sure shoots. Surely we can agree that being, you know what I mean, that entrepreneur, you know, and let’s make him your father, your uncle, you know, somebody close to you that you care about, surely he deserves to have a conversation with somebody who’s heard this conversation to. Look, there are other options, right? So in business, it’s always, it’s, it’s, it’s not binary, right? Like the money is a number three is what I’ve always said. So the option to, should I stay or should I go? Should I continue to operate the company or should I sell it, right? It’s a binary. It’s a yes or no. It’s option one or option two. And the question is option, what’s option number three? And surely that entrepreneur with 20 years of experience and 20 years of blood, sweat and tears building the company deserves to hear that.

Karl Bryan [01:01:10]:
And I will tell you that without you going to that individual, like, they haven’t heard that standpoint, they’re thinking it from a binary standpoint and they’re just thinking, at what stage am I going to sell this thing? At what stage am I going to exit? At what stage am I going to get out of this? And it often ends up being a grandiose error for reasons I just outlined. So there you go.

Rode Dog [01:01:33]:
Well, it’s interesting too, right? Just real quick, not that we’re gonna, we were beating this horse to death here, but it’s. When, when you, when you look at that, it, everything’s. Why does it all have to be so black and white? You know what I mean? Like, it’s just like, no, I’m. I have salad. Okay. Or I guess the other option then is you pass it along to your kids and that’s sort of, that could be massively, like detrimental as well, right? It’s just, it’s because they. I always take a look at the example of, and I love this one, Arthur Griffiths, right, took over the Canucks, right, from his dad and then ended up having to sell the team.

Rode Dog [01:02:07]:
Why?

Rode Dog [01:02:08]:
Because he didn’t have the, the intellectual capacity.

Karl Bryan [01:02:13]:
He didn’t.

Rode Dog [01:02:13]:
What did they say? He didn’t have his father’s business acumen, like. So my question is, why not, right? If you’re going to bring your kids into a legacy style business, it’s not just about dollars and cents. It’s about learning all of the reasons of a why you started the business and then also just all the little pieces inside of the business.

Rode Dog [01:02:31]:
Right?

Rode Dog [01:02:32]:
Like it’s, it’s no different than nobody can just walk in to take over Focus.com right now. Because everything that you know that you haven’t even shared yet on a day to day that you instinctively do, that would take somebody probably years to figure out.

Karl Bryan [01:02:51]:
Yep. Okay. Hence why it would make so much sense to bring somebody in, you know, protect your baby. Right. And basically, you know what I mean? Like mentor and consult that individual, you know what I mean? And actually and becomes fun, you know what I mean? Like in a lot of cases that’s like a really fun. Remember, remember they sell their company and then five years they get into consulting with you and I. Right. Like this is what they end up doing.

Karl Bryan [01:03:18]:
Like start now and do it, but become a kick butt consultant for your own company and not. And see the problem is again, because they’ve got the grind. The hustle and grind is still there, but the bringing in of the talented individual with different ideas, you know, in many cases better ideas, etc, you know what I mean? Let’s just. That could be a lot of fun.

Rode Dog [01:03:40]:
Because again, the vast majority of people that have done well want to what, mentor and help others. So here’s an opportunity to do exactly that. So. All right, well, we could continue on this for another hour and a half, but why don’t you close us out with the one thing from today’s podcast.

Karl Bryan [01:03:57]:
The one thing. Look, it would be marginal utility theory. Again, foundation of my software, which is fancy, you know, fancy math, but just really. So translation, a 1% improvement over every day for 365 days, you get a 37X. Okay, so the same way when you go to a business and you. The way you get marginal utility theory, what we call profit acceleration, is that you go to multiple areas in the company and you make small incremental changes and improvements in multiple areas. So that way you get multiple. The numbers multiply instead of add and translation, they get a compounding effect.

Karl Bryan [01:04:40]:
The same way that you double a penny for 30 days and end up at 5 million. Right? So you get that. So, so marginal utility theory just. And for those. If you suck at sales, improve 1% every day for a year, you’ll be amazing at the end of the year if you suck, you’re the really good salesperson. And coaching isn’t. You’re not that good at coaching and you feel like others have got a leg up on you. Every single day get 1% 1% 1% 1% better.

Karl Bryan [01:05:03]:
At the end of 12 months, you would have a 37x return on your coaching ability, which means you’d probably be pretty darn good at it. And by the way, let’s assume that you fail miserably, you end up somewhere in the middle. You know, a 15x, a 20x 12x, you’d still be doing pretty good. So. So that’s the one thing shoots.

Rode Dog [01:05:24]:
Okay, well, there you go folks. Thanks for tuning in to another episode of Business Coaching Secrets with the King of the Caribbean himself, the Shark King, Karl Bryan. If you’re not on the inside and getting access to the pre show, or you aren’t getting Karl’s daily emails, or you just want more information, particularly on the profit acceleration software or how to just grow and scale your business, visit Focus.com subscribe today and again, if you enjoyed the show, please like share and do all those things. Subscribe because hey, we want to have an impact too. We want to hit as many people as we possibly can with our message. And that is it for another week. We will see you in the next episode. Remember folks, progress equals happiness.

Karl Bryan [01:06:01]:
Take care everybody.