Making $4.4 Million a Month Almost Killed My Business

0:00We went from $0 to $4.4 million per per month in 20 months. And it also sucked. And that's what people won't tell you. Because at the time, I felt like the genius with 1,000 hands. I was in charge of every single apartment with my wife, and we were basically doing everything while trying to managing and lead while seeing the company and hiring and firing and training and onboarding and dealing with more customers than you could possibly handle. Obviously, what it felt like for us is this constant roller coaster of emotions that I felt like a dancing bear on camera because every time customers would start going down, I'd be like, "Oh, I got to go make some more ads. I got to go get on camera. I got to go drum up some business." And so, this thing felt like this rocket that I was holding on to and I was sweating until I hit a wall and I didn't know what to do. And every time I went to these like masterminds and coaching groups, I was by far the biggest person in the room. And so, I was like, "What do I do? I don't know where to go." It got so bad that Leila and I, my wife, were walking one day and she says, "Let's just shut this thing down." And I was like, "Wait, hold on.

0:55This might be worth something." So, I called an investment banking friend of mine and I said, "Hey, if I were to sell my business, like, do you think I could get anything for it?" And he's like, "Oh, you could get millions of dollars for this business." And I was like, "Wow, that sounds amazing." He said, "Wait, but not right now. There's a ton of things wrong with it that you'd have to fix in order to get an institutional investor to want to invest the kind of money that you would want to make an exit." [music] And that's what began this journey of figuring out how to take something that just makes money into an incredibly valuable asset that can change your life forever and your family's life from a financial perspective. And everything I'm about to show you in this video is something that we developed at acquisition.com called the value acceleration method.

1:35Now, you've probably heard of big companies like Netflix and Amazon and Microsoft being worth $2 trillion, $5 trillion, $1 gazillion. And the question is, how does that even come to be? Like, how can something be worth a certain amount, right? And so, we talk a lot about value. Provide value to people. Make valuable content, right? But when we're talking about value within a business, person we're providing value to is the investor who's going to buy a share of it. So, there's only three variables that are really going to affect how much a company is going to be worth in terms of your ability to influence it. One is increasing the number of customers.

2:14If all else remains the same, if you 10x the number of customers, you will 10x the value of the business. Sometimes more. The next is something I call lifetime gross profit, which means the amount of profit that you generate from these customers over the lifetime of their stay with your business. For example, if I own a food cooking business and I sell meals for $10 and I said sell 10 meals on average somebody, my lifetime revenue would be $100. But if I only make a dollar on each of those meals, my lifetime gross profit would be $10. And so, if I want to make more money, I'll either have to get more customers or make them worth more. So, then what's the third variable? Because this is pretty much all it takes to grow a business, which by the way is what it is.

3:07You divide that by risk. Meaning, how likely is it that this will continue in the future? [music] And so, if you listen to Uncle Warren, he talks about the value of a business is is taking all the future cash flows that it will ever generate discounted into the present, >> [music] >> right? And so, these are the things that are all the cash flow that it's going to generate for the rest of its time. This is the discount to the present. And those are the three variables that you have to increase or decrease the value of a company. And all these three things put together equal a term called enterprise value. Or what a lot of people call EV. So, take out your notepad because each one of these 10 things unlocks another level of enterprise value in your business. And you when you get them all right, you make a lot more money. If you like this video and you're a business owner who wants to break through your current revenue ceiling, I distilled every lesson from scaling 10 businesses past 10 million and three businesses past 100 million into a completely free scaling roadmap that I've used to go from zero to one, zero to 10, and zero to 100 plus. And so you can click here and you can check it out. Again, absolutely free. And since you're a business owner, I appreciate you and uh enjoy.