10 Businesses To Start BEFORE You Get Laid Off In 2024
Summary
TLDRThe video script explores the concept of recession-resistant businesses, offering insights on starting businesses that can thrive during economic downturns. It discusses various business models tailored to different financial and skill levels, including low-investment service businesses, high-skill consulting, and productized services. The script also covers the acquisition of established businesses and the high-stakes world of SaaS entrepreneurship. It emphasizes the importance of being prepared and strategic in business decisions, especially during uncertain economic times.
Takeaways
- 😨 The script discusses the fear of recession and layoffs, emphasizing the importance of finding recession-resistant businesses to start or invest in.
- 💼 It highlights the personal experience of layoffs during the 2008 financial crisis and the importance of having equity in the businesses one is involved with.
- 📊 The 'Money Matrix' is introduced as a tool to identify businesses tailored to an individual's financial situation and skillset in 2024.
- 🛠️ The first quadrant of the 'Money Matrix' suggests starting a service business with low initial investment and high scalability potential, such as auto detailing, power washing, or landscaping.
- 💡 The script emphasizes the importance of scaling service businesses through strategies like protecting profit margins, adding reoccurring revenue, and focusing on online presence and referrals.
- 🔑 For those with specialized skills but limited funds, the second quadrant recommends becoming a consultant or turning services into productized offerings.
- 💰 In the third quadrant, with higher funds but fewer skills, the script suggests buying a simple, established business in a recession-resistant sector, like a laundromat or self-storage facility.
- 🚀 The fourth quadrant is for those with both high funds and skills, recommending starting or investing in a SaaS (Software as a Service) business, which can offer high rewards but requires significant time and financial commitment.
- 📈 The script provides a detailed breakdown of each business type, including the amount of money needed, skill level, risk, potential rewards, and time commitment involved.
- 🌐 It stresses the importance of having a strong online presence and utilizing SEO and social media strategies to grow a service-based business.
- 🛑 The video ends with a reminder of the potential risks of economic downturns and the opportunity they present for prepared individuals to invest wisely and potentially thrive.
Q & A
What is the main focus of the video script?
-The main focus of the video script is to discuss recession-resistant businesses that individuals can start or invest in to protect themselves financially during economic downturns.
Why might someone be interested in starting a recession-resistant business according to the script?
-Someone might be interested in starting a recession-resistant business to secure their financial future, especially if they are worried about potential economic downturns, layoffs, and job losses.
What is the 'Money Matrix' mentioned in the script?
-The 'Money Matrix' is a tool or method developed by the speaker to help individuals identify which businesses are tailored to their specific financial situation and skill set in the year 2024.
What type of business is suggested for someone with low money and low skill?
-For someone with low money and low skill, the script suggests starting a service business that can scale, such as auto detailing, power washing, landscaping, or cleaning services.
Why are service businesses considered a good starting point for individuals with low money and low skill?
-Service businesses are considered a good starting point because they typically have low start-up costs, higher profit margins, lower failure risk, no shipping or supply chain issues, and are beginner-friendly with easier client acquisition.
What is the 'Promise Method' and how does it apply to scaling a service business?
-The 'Promise Method' is a seven-step strategy to scale a service business. It includes protecting profit margins, adding reoccurring revenue, establishing an online presence, leveraging referrals, using interpersonal strategies for customer acquisition, and managing customer expectations through reviews.
What does the acronym BRRT stand for and what is its significance in the script?
-The acronym BRRT stands for 'Buy a Boring Business in a Recession-Resistant Sector'. It signifies the strategy of purchasing an established, stable business in a sector that is likely to remain profitable even during a recession.
What are some examples of simple businesses that someone with high money but low skill could consider buying according to the script?
-Examples of simple businesses that someone with high money but low skill could consider buying include laundromats and self-storage facilities.
What is the significance of the statement 'buy when there's blood in the streets' in the context of the script?
-The statement 'buy when there's blood in the streets' is a metaphor suggesting that during times of economic crisis or downturn, there may be opportunities to invest or buy businesses at lower prices, potentially leading to high returns when the economy recovers.
What is the potential downside of starting a high-growth SaaS (Software as a Service) company according to the script?
-The potential downside of starting a high-growth SaaS company is the high level of investment required, the risk involved due to the high cost of building the business, and the significant time commitment needed to scale the business successfully.
What is the average sales price for a SaaS company and what multiple is typically applied?
-The average sales price for a SaaS company is $1.65 million, and the average multiple applied is 3.63, which is typically on revenue, not profit.
Outlines
🛠️ Recession-Resistant Business Opportunities
The speaker introduces the concept of recession-resistant businesses and discusses the importance of finding businesses that can thrive during economic downturns. They share their personal experience with layoffs during the 2008 financial crisis and emphasize the value of owning equity in a business. The 'Money Matrix' is introduced as a tool to help individuals find businesses tailored to their financial and skill set in 2024. The first business idea presented is creating a podcast, which is positioned as a low-cost, scalable venture that can leverage personal skills.
🌱 Starting a Service Business with Low Capital
This paragraph delves into the advantages of starting a service business with low capital and skills, such as auto detailing, power washing, landscaping, and cleaning services. The benefits include low start-up costs, potential for high profit margins, reduced risk due to no upfront capital expenditure, and the absence of complex supply chains. The speaker also discusses the potential for scaling these businesses through smart pricing, targeting B2B opportunities, and leveraging technology platforms like Riverside for content creation and business management.
📈 Scaling Service Businesses with the Promise Method
The speaker outlines a method for scaling service businesses called the Promise Method, which includes seven steps focusing on profit, reoccurring revenue, and an online presence. They discuss the importance of setting competitive prices, securing long-term contracts, utilizing subscription services, and establishing a strong online presence through local SEO and social media. The paragraph also covers the strategy of leveraging customer referrals and the use of interpersonal marketing to grow the business within local communities.
🎓 High Skill, Low Capital Business Opportunities
The speaker shifts focus to businesses that require high skill but can be started with low capital, such as consulting and productized services. They discuss the potential of turning specialized skills into consulting services and the strategy of selling these services on platforms like GLG and Upwork. The concept of productizing services, as exemplified by Design Joy, is introduced, where customers pay a subscription fee for unlimited design requests, creating a scalable and profitable business model.
💼 Investing in Simple, High-Capital Businesses
The paragraph discusses the strategy for individuals with high capital but low skills to invest in simple, recession-resistant businesses. The speaker introduces the BRRT acronym (Buy a Boring Business in a Recession-Resistant Sector) and emphasizes the importance of purchasing profitable businesses with a clear understanding of the business model. Examples include laundromats and self-storage facilities, which are highlighted for their high success rates and potential for value addition.
🚀 High Capital, High Skill: Entering the SAS Market
The speaker addresses the high capital, high skill business segment, focusing on Software as a Service (SAS) companies. They discuss the potential of SAS businesses to generate significant returns, with an average sales price of $1.65 million and high revenue multiples. The challenges of entering this market are highlighted, including the need for substantial initial investment and the importance of innovation. The speaker also underscores the time commitment and the necessity for founders to understand both business and technical aspects of SAS companies.
🌐 Navigating Economic Uncertainty with Preparedness
In the concluding paragraph, the speaker reflects on the current economic climate, drawing parallels with the 2008 financial crisis. They argue that the present time may be one of the most precarious for employees and advocate for preparedness as a key strategy for success. The speaker encourages viewers to subscribe for more information and to consider the presented business strategies as a means to capitalize on potential economic downturns, echoing the sentiment that downturns can offer opportunities for the prepared.
Mindmap
Keywords
💡Recession-resistant businesses
💡Equity
💡Service business
💡Layoffs
💡Money Matrix
💡Podcasting
💡B2B (Business-to-Business)
💡Scalability
💡Local SEO (Search Engine Optimization)
💡Consulting
💡SaaS (Software as a Service)
Highlights
The search for 10 recession-resistant businesses tailored to the individual.
The importance of being vigilant during a recession and the potential for layoffs.
Personal experience with layoffs during the 2008 financial crisis at Goldman Sachs.
The revelation that many people lack equity in the companies they work for.
Introduction of the 'Money Matrix' for identifying businesses suited to one's financial and skill situation in 2024.
Advantages of starting a service business with low cost and high margin potential.
The low risk of failure in service businesses due to minimal upfront capital and no inventory.
How to scale a service business using the 'Promise Method' with seven steps.
The strategy for scaling a service business with a focus on profit, reoccurring revenue, and referrals.
The potential of high-skill, low-money businesses like consulting and productized services.
The concept of turning a service into a product, exemplified by design subscription services.
The potential of high-money, low-skill businesses, such as purchasing a simple, cash-flowing business.
The use of acronym BRRT (Buy a Boring Business in a Recession-Resistant Sector) for business purchases.
The high potential of SaaS businesses during economic downturns and the importance of sales.
The average sales price and multiples for SaaS companies and the high reward potential.
The necessity for SaaS founders to understand both business and technical skills.
The current economic climate as a potential opportunity for the prepared to make significant financial gains.
Transcripts
most businesses in humans struggle
during recessions so we went out to find
10 businesses that were recession
resistant and ideally could we find some
that could be tailored specifically to
you that's what we're talking about
today bye celicia the question is are
there recession resistant businesses
that you can start in 20124 so you can
win no matter what if you're worried
about what's coming and want to profit
off of it this video is for you backed
by a bunch of data you're going to want
to see it is a huge recession warning we
still have to be vigilant we still have
a recession around the once again I
think Main Street America may be a lot
smarter than the economics profession to
be fair it looks like you are right to
be worried about failures recession and
layoffs look at these numbers job
openings tanking highes decreasing my
bet is layoffs are coming next layoffs
are coming layoffs layoffs layoffs
layoffs and it looks like we're probably
right more than
24,000 people laid off year to dat now
I've been through terrible layoffs at my
old corporate jobs Goldman Sachs in
particular it was 2008 during the
financial crisis I was sitting in my
cubicle watching people pick up
everything they owned into cardboard
boxes as 20% of the workforce was fired
people were crying protesters were
outside shanting the 1% then it was
awful but I remember I sat outside one
of the glass offices where they fired
people I overheard them firing one of
the managing directors one of the head
guys and he wasn't crying in fact he was
pretty stoic and they were going back
and forth over a piece of paper on it
I'd find out later was his equity
percentage that he'd get in The Firm
they were explaining to him what his
exit package would be and he was getting
paid to leave not work that pay included
him owning part of the company after he
left and his name was Jim and he was
paid Millions over the next few years
here's the problem most people don't
realize that they don't have equity in
the companies that they're in and they
don't use the money that they make to
get ownership in either stock market
businesses businesses they run or
recession resistant businesses and we're
going to fix that today because I don't
want you to be one of those people with
card Ward boxes packing out of a
high-rise like so many of my friends
were in 2007 8 and 9 I remember thinking
about a lot of what businesses I could
start to get out of my 95 when I
survived all the cuts at Goldman and
since then I've bought and sold dozens
of businesses we own a holding company
that does nine figures called contrarian
thinking Capital but not every business
is actually right for you right now and
so we came up with this Matrix Based on
data and a bunch of time at Goldman
analyzing hundreds of businesses this is
called the money Matrix and it talks
about which businesses are tailored to
you in 2024 it was something that I told
myself to me back in 2008 so this is
your plan to never be afraid of layoffs
again first I'll kick us off with a
quick business you can start for very
little money that can use whatever
skills you have creating a podcast
because I might be doing that now I know
that some of this seems like everybody's
doing it and maybe there's not enough
room but you don't need to be Rogan to
earn and crush a pod and you don't need
his team just some simple Tech is what
I'm using this one is called Riverside
it is the easiest way for me to to
record and edit highquality video calls
anywhere in the world like this whether
you've got business meetings podcast
episodes or creating talking head videos
Riverside makes it stupid easy for you
to produce highquality content that's
ready to be marketed no editing skills
required it also uses AI which is wild
to cut your full recordings into Clips
you can post quickly to socials no
edited needed to Save hours of work it
even analyzes your best moments to find
what is most likely to go viral and
since I have a badass content team they
wrote this who want control over editing
Riverside makes it easier on them by
recording everything into separate audio
and video tracks so you can use
Riverside for podcast interviews panel
discussions presentations webinars team
meetings but best of all it makes it
simple because I don't have time for
complex I got you guys a deal if you
want to try it for yourself get the code
and Link in the description below all
right here's how this breaks down our X
AIS is skill our y AIS is money this
gives us four quadrants up into to the
left we've got low money low skill to
the top right we've got low money High
skill the bottom left we've got high
money low skill and on the bottom right
High money High skill so obviously low
money means you don't have much money
low skill means you don't have highly
paid for or required skills I can't tell
you exactly what business is going to be
right for you but I can tell you that
everyone falls into one of these four
categories and then you pick one of the
10 businesses and if you do this right
you can progress all the way to the
fourth quadrant no matter where you
start so let's dive in to the first
quadrant low money low skill this is
where I would start if I was you and it
is called a service business but a
specific type of service business a
service business that can scale we're
going to break down exactly what that
means four companies I like in service
based businesses auto detailing power
washing landscaping companies all
variations of cleaning companies here's
what a service business is overall
because definitions matter things where
you are providing not a product to a
person but a service that is really just
Tim traded in a particular segment that
is not the user's time I would start a
service business for a few reasons
reasons low cost they don't cost you
much to start you can have higher
margins if you're actually running the
business there's a lower failure risk
because you don't have much money up
front or what's called capex Capital
expenditures no shipping or supply chain
nonsense that comes with e-commerce for
instance you can actually add a more
sophisticated B2B option which means you
can charge more they're beginner
friendly that means they're easier to
start finding clients is easier than
most other businesses and you can scale
for instance you can start I would say
more than 20 to 30 service businesses
for less than 500 bucks I have multiple
friends that started an 8 fig eventually
cleaning business that cleaned windows
for $500 what did they actually need to
do their first job they needed Rags they
needed cleaning solution they borrowed a
ladder they needed a truck that they
also borrowed they needed some window
wipers and they needed somebody to say
yes let's get specific on what are good
margins 30% at least but you could have
upwards of 80% if you're the owner and
you run the business the second reason
this type of business is interesting is
because of low failure risk your only
cost is your labor if you decide to
scale up this business you have low
inventory not a ton of big expenses and
no shipping expectations the risk of
bankruptcy is actually quite small you
don't have shipping or supply chain
e-commerce companies for instance are
not my jam nine times out of 10 too
expensive order values are high you
actually buy something before you can
sell it so you have to have a lot of
guessing and make sure that you're right
the other thing is lots of
oversaturation and competition with
China none of these problems exist when
you're are mowing people's Lawns you do
not have to proactively pay for it out
of pocket now B2B options are
interesting because you can go and you
can charge somebody 50 bucks to mow a
standard lawn in Austin Texas or you can
get a contract with a commercial
building and they could pay you $5,000
every month for you to mow the lawn two
times a month and guess what those
contracts pay upfront you get money
before you provide the service the other
thing is these typically will not
require to be experts or licensed which
is great because I don't know about you
but I haven't gotten around to getting
my journeyman's license so unless you're
doing something more complex like
Plumbing or HVAC you do not need a
license typically to do things like mow
Lawns or clean houses finding clients is
much easier why you live next to them
and most people need these types of
services if you see a neighbor cleaning
their pool there's a business if you see
a neighbor cleaning a pool and talking
to another neighbor there's your second
customer other thing that's interesting
about these businesses they're scalable
they're not easy to scale but they are
much easier to scale than buying a bunch
of inventory you use initial profits to
invest more in equipment marketing and
more employees what is scaling actually
look like you can make an a 100 every
now and then through service jobs for
sure but that's you being an employee
again which is with an opportunity to
get laid off or you could build it into
a real business that functions without
you and exceeds your current salary
that's what real scaling looks like all
right so at this point you go well how
do you scale Cody I've never built a
business I don't know how to build one
to a million 10 or 100 million let's use
what I call the promise method there's a
lot of moving Parts but if I were to
distill it down to seven steps here's
how I'd scale a service business I'd
start with P profit one thing we want to
do more than anything else is we want to
protect the margins so this is kind of
interesting because if you're going to
scale you want to think about how you
price things first that means you'd go
out you look at what other people in the
market price for landscaping services
let's say and you'd price it slightly
higher than them why would you do this
you're brand new at it because you're
probably not efficient and you want to
keep 30% profit margins are higher good
thing about service businesses they suck
at distribution meaning getting sales
and you are going to be good at that
because you're going to follow the
promise method so we're going to protect
those 30% margins by the way margins are
basically this I charge a dollar for my
service it costs me70 cents to fulfill
my service that 30 cents that's left is
my margin 30% margins all right the
second thing we're going to do is we're
going to add reoccurring Revenue that's
the R I have a motto called sell once
charge continuously you're going to do
long-term contracts which means monthly
and annual contracts you're going to
have Auto renewals with subscription
services like jobber or service Titan
you're going to also allow for pay as
you go subscription if they want to do
add-ons around the holidays perhaps you
do Christmas lights around this time of
year that could be a pay as you go
subscription to add then you might add a
loyalty program the longer you stay with
us the more you continue to use our
subscription Services the more you get a
little value very few service businesses
ever do that so you're going to be
unique the last thing that I want you to
do I want to make sure you obsess on the
thing that no Services businesses do
online presence what do you do when you
need a handyman you Google it so I want
you to obsess on how do I establish
what's called local SEO Authority I want
to try to get people to come to my
little website and say that I'm awesome
one of the best ways to do that is the
thing I'm doing to you right now which
is creating content around my Niche look
at all these examples of landscaping
content look at these examples of power
washing content this is going going to
be in my opinion the new type of SEO
which is social media SEO the m is
mouth-to-mouth marketing strategies here
we're talking about referrals most
businesses get less than 10% of their
current clients from referrals which is
crazy because when you like something
you are more likely to tell a friend to
use a service and so you already have
somebody who's using your service
continuously why wouldn't you ask them
for more referrals you're going to be
unlike everybody else and you're going
to have a strategy for referrals that's
going to look like this every single
time you get a new customer because
you're tiny and you're just starting
you're going to follow up immediately
afterwards ideally with a phone call but
you know Millennials we don't like
phones and we don't answer them so it
could be a text message and the text
message is going to be kind of cute
you're going to send something like this
hey we loved mowing your lawn today I
hope that it turned out awesome if you
also liked the service could you do me a
huge favor I'm a brand new small small
business here in Austin your referral
literally keeps my lights on would you
mind mind telling me one or two other
people we could reach out to is that
possible is there somebody else that you
might know in this area or region that
we can service and you're going to do
that for every single customer now most
people are going to tell you no but
you're going to use the law of 12 which
is basically for every single person
that you ask out of 12 one will probably
give you a referral the ey is
interpersonal this is how you get your
first customers by talking to your
neighbors getting personal you start in
your neighborhood and you use the
concentric Circle model which is you
start at your house and you look at if
you were going to do a five minute
series of laps around your house can you
go and knock on all those doors and ask
for their business why would you want to
do it in your neighborhood well because
one of the most important parts about
keeping your margins tight on a service
business is your ability to group and
bundle your individuals now when you're
not the only one eventually running this
business you're going to have a fleet of
people out there that are going to be mo
lawns all around Austin but in the
beginning it's just going to be you and
the more money you make is going to be
directly correlated to how close the
services you are providing are to one
another you're going to knock on your
neighbor's door and you'll be like hey
Tanner I'm Cody I actually live down the
street we run a landscaping business
locally in this neighborhood we actually
do a bunch of the neighbors houses we'd
love to have you as a client would you
be open to trying a local small business
like mine there's immediate trust
transfer because you live down the
street the second thing you're going to
do is you're going to open your phone
download your contacts this is your very
second lead list and on this second lead
list you're going to start texting
people now let me tell you how much
better it is to get text about
Landscaping than a Tupperware
party this is not an MLM scheme you're
one of the few people who are offering a
service people need every single day I
would love to give my business in
landscaping to somebody that I know just
happen to be somebody who knocked on my
door now we get to something a little
bit more technical sales subscription
bundles specifically we are going to do
what's called the three-fold method look
at this website every single good
service business has a three-fold sales
tier basically cheap product and
offering to the left more expensive
product and offering to the right and
that Goldilocks perfectly warm offer in
the middle you're going to have a
subscription offer in each one but your
middle pricing is going to be the one
that you actually want them to choose
and more often than not we humans choose
the one in the middle just make sure you
have a subscription offer most small
businesses do not e stands for
expectations for customers well actually
stands for reviews but that didn't
really fit into the acronym reviews are
super critical 93% of customers read
reviews 90% will not use your product if
there's less than three and a half Stars
58% of consumers will pay more and
travel further for a better reviewed
company unhappy people are 10x more
likely to leave a review and it can take
10 to 20x positive reviews to neate one
negative review entire story here is
you're going to obsess on reviews and if
you want my exact process for how to get
reviews you can click this link we've
put it all together in one document for
you this is a super simplified version
if you want to see me apply this to a
power washing business to grow it to
$4.1 million 10 minutes this video is
for you so I'm just showed you your
first quadrant how to take the promise
method and apply it to any simple
service business and how anyone can
start this business even if you don't
have much cash and you don't have many
skills this will not work for you if
you're not willing to do any work but it
will work for almost anybody who is
willing to put in the work I especially
wish that I had started something like
this when I was young instead I was
waiting tables and getting beer spilled
on me all for minimum wage and no equity
this is the money Matrix that we've just
gone through money level needed
basically Z skill level I don't know
don't be an idiot let's call it a 3 out
of 10 risk level 2 out of 10 reward
first year on average I think you could
make somewhere between 10,000 to 100,000
best case after several years Millions
lots of examples of companies that do
this time commitment 8 out of 10 it's
going to take up a lot of time at least
until you make enough money to hire the
person who's going to take over for you
quadrant two where we're going now you
need a specialized skill that you can
sell nice thing about skills you can
learn them even if you're broke the the
internet's a wonderful thing you could
also subscribe to our Channel and you
could learn a lot more of these skills
so maybe hit that button if you already
know everything about a high skill
service this quadrant is all about
learning how to sell it or better yet
turn that service into a product this is
a gold mine
guys second quadrant High skill low
money there are three buckets for these
types of businesses consultant product
as service product as a service let's
talk about the three types Consultants
what are they there's somebody who has a
mark aable skill that's in demand that
you pay in order to steal their 10,000
hours for instance we have a consultant
that taught us how to do YouTube shout
out Jamie we have a consultant that
taught us how to do newsletters that was
Jordan I had a consultant in Chile
Brazil Colombia Mexico for every single
Market I tried to enter when I was in
first trust and build an upper Asset
Management business Town self if you
want to scale fast you use consultants
and if you have money you use
consultants if you don't have those
things you become one do you have a
skill set that's valuable enough to be a
Consulting business you probably have
one if you have a job right now where
they teach you to think and not just use
your hands if you have anything that is
not a labor based business but a
thinking business you can likely be a
consultant and if you want to check go
to these three sites go to upwork GLG
get intro when you look at those three
sites you can Google search exactly what
you're good at graphic design accounting
sales YouTube Type in the thing that you
think you're good at and see what the
average hourly rate is for that if
nobody on there is searching for you
maybe you don't have sufficient skills
but if somebody on there is searching
for you you already have your price tag
that's associated with Consulting if I
was going to start a Consulting business
I would start on one of these Platforms
in fact I did I used GLG back in the day
I would probably also use intro now the
platforms aren't ideal because they take
a cut of your money and it takes time to
apply for gigs but it's a good first
step and then you can send your link
without having to build out an entire
website or having to build out an entire
brand you can just send that link to
people people that you want to start
building one the strategy that I would
use to scale it is the exact same thing
for a service based business this is you
building your lead list and your lead
list is comprised of the people that you
already know and perhaps the clients
that you're already working with in your
employee situation right now there's a
problem with Consulting and freelancing
business and that's there's only really
two ways to realistically scale charge
more spend more time working there's a
ceiling there so instead I would do this
a productized service let's use design
joy as an example because it's brilliant
this is Brett he decided he wanted to do
more than his 9 to-5 design job however
he didn't want to fight all the other
consultants in design work so what did
he do instead of having to manage people
send all of his profit to payroll he
decided he would create a design as a
subscription think of it is Netflix you
pay a subscription fee but instead of
unlimited movies you get to make
unlimited graphic design requests the
key word here is unlimited whether you
make five requests a month or 50 the
price stays the same either 5 or 8K per
month great caveat though you can only
make one request at a time so unlimited
really becomes limited to how fast they
can get them done we have a business
called viral Cuts uses a similar pricing
model here's the three tiers you could
do this with just about any Consulting
business remember promise exact same
process here but you're selling a
productized service nothing changes from
the P all the way to the e a product as
a service second example would be Justin
Welsh a friend of mine solo prener
business model gives away lots of free
content on socials sells $150 courses
plus gets some sponsors for newsletters
and teaches people only this how to
repurpose content across multiple
Platforms in a course method all right
here's the breakdown how much money do
you need not much theoretically zero
maybe some monthly subscriptions up to
1,000 2,000 bucks skill level you need
to have some skills 8 out of 10 so you
could spend your time just there the
risk probably a two out of 10 because
you're not going to spend a bunch of
money up front but if you're not good at
marketing it this is one where
somebody's going to have to believe that
your skills your knowledge in your head
is worth paying for that is harder than
showing somebody that you mow their
lawn the reward though is realistically
if you take this seriously this is a
multi-million dollar business uh but I
think upfront doing it on GLG and on a
service like intro in the beginning I
used to make first a th000 and then
5,000 bucks a month on the side the time
commitment here way less than the first
the first one was eight out of 10 I
would say this one you're talking about
more like a six out of 10 quadrant three
High money low skill for this I'm
talking by simple businesses I'm going
to tell you exactly what types I like
this is maybe if you have a good salary
but you're feeling stuck you have some
money set aside but maybe you don't know
very much about running a business what
can you do with that money the first and
foremost caveat is we buy businesses
that cash flow we don't buy dreams we
buy realities and profits so please do
me a favor and don't do yourself a huge
disservice and buy a roofing company
that's bleeding cash nobody needs that
we want you to buy a simple business
with a business model you can already
understand quick caveats I want you to
remember this acronym brrt it stands for
buy a boring business in a recession
resistant sector we're going to explain
some data specifically on what those
would be raise prices add technology
remember how we talked about your
promise methodology before here we add
promise and brrt how much do you need to
buy a business well you could do it for
zero but in reality many deals are going
to need a mix of your money other
people's money plus some cash so in my
mind this really starts to make sense
right around you have 2550 $100,000 at
least that you're willing to put on the
line for a business there's tons of
caveats on how to do this correctly or
not if you want more information there's
actually a free newsletter here that you
can learn more on simple business number
one laundromat this is where I started
average purchase price somewhere between
250,000 up to a million success rate
they say
95% most likely a little bit lower the
most likely reason a laundromat would
not succeed over time is you buy it too
expensively simple business number two
Self Storage lots of the perks of real
estate but some simpler tenants very
simple model people have too much stuff
in the us cuz we're hoarders you put it
in a room that's not at your house you
can do a value add capacity AKA my
friend Nick Hubert talked about adding
$150,000 facelift to one of his
buildings and how much that increased
the total value the success rate more
like 90% the average profit for a
storage unit business owner is somewhere
around
$184,000 a year now lots of members of
our community like these people have
bought roofing companies plumbing
companies electricians cleanings well
pumps yep garage door companies shower
door installation so you could refer
back to the first segment where we told
you to start service companies and you
could certainly buy one instead but
let's start really really simple because
if you fail the first time you'll stay
an employee forever and you won't do
another deal let's break down the money
I think you need six figures skill level
5 out of 10 risk 7 out of 10 you can
take steps to drisk your purchase but
ultimately you're putting a lot more
money on the line buying a business in
this example reward could be an 8 out of
10 risk is higher but your reward is
more immediate too can't promise you
you'll make a certain amount of money
nobody can but if you buy a business
that's already making money you have a
higher likelihood of that continuing
than if you start a business where most
businesses go out of business 90% of the
time and most startups never actually
make any money time commitment this is
actually a little bit less so could be
anywhere from 5 to 10ish with an
operator could be less than 10 hours a
week without an operator you know
depends on which business laundromats
maybe 20 to 30 hours a week Self Storage
business probably the same thing
full-time Empire of this type of
business 24/7 just like any other CEO
okay don't freak out YouTube I'm going
to do some public math class is in
session the average service business
sold for
2.38 X its profits last year the medium
sale price was $290,000 which means that
that business probably had a cash flow
of
$121,000 if it sold for $290 now your
take-home pay for owning this business
likely won't be near 121k and will
depend on you having operators in the
business but I don't think that's too
far off to say you can make four to five
figures a month from buying a good
profitable business without having
hundreds and hundreds of thousands of
dollars because you could get an SBA
loan for anywhere from 10 to 50% of the
purchase price and you could also use
seller financing if you don't know us
about seller financing subscribe to this
channel we talk about it all the time
last one high money High skill business
SAS business why now well I myself just
bought a SAS business we own a few and
we're scaling the reason why is you know
what all these companies have Inc
commmon all these logos you see on here
all of these companies were started
during a recession and these are now
unicorn ORS there's a common belief in
Venture Capital that more unicorns are
created during downturns and upturns I
don't know says 95 us companies were
valued at more than a billion and were
founded during recession but 757 were
not so mixed bag the good news for you
though is I think we are in a teeter
totter we've had boring companies like I
talk about doing well hiring and
bootstrapped companies totally fine but
then over here on the right we've got VC
money drying up downward pressure hug
huge Tech layoffs and when that happens
you can see from let's say you know the
first part of this year to 2019 we've
basically lost $182 million in funding
during that period and that's important
because it's expensive to start a SAS
company so you could start a micro SAS
company they say for around 15K I still
think that's hard and you could start an
MVP of a complex uh SAS company for
about 150,000 but the truth of the
matter is if you want to SK scale a big
business in SAS it's going to take
millions of dollars like the average
high growth SAS company raises $9.5
Million by series a that's like the
first real time they go out and say give
me your money VCS for slack for instance
if you wanted to go recreate slack today
they say you could create an MVP that's
similar to slack for 100k the problem
with that is Slack's already been
created so that really wouldn't get you
very much you need to come up with
something totally new the cool part
about this is how much can you make well
the average sales price for a SAS
company is
$1.65 million you also have an average
multiple that's quite a lot higher uh
3.63 and this is for the lower end of
the spectrum often this is 5 or 10x and
this multiple is on Revenue not profit
how much time is this going to take for
you well I think it's about like this
can't tell if you're homeless or just a
tech entrepreneur the time is going to
be all of your time if you think well I
don't want a 9 to-5 job but I'd like to
work 24/7 sass is for you and the one
thing that SAS entrepreneurs never
really think of in my opinion is that
they like to raise money they like to
build things and then they're a little
bit like Ryan Gosling here not saying hi
to the actual customers they need to on
board so remember back in promise where
we told you sales is everything same
with SAS companies one way or the
another skill segment take a screenshot
it's a lot if you want to be a Founder
in general you need to learn all of
these skills but if you want to be a
tech founder you've got to also learn
the language of technology something
like what these programming skills are
you don't actually have to be a
programmer I'm not and I own some tech
companies but you do have to be able to
speak the language that they use to
build it so let's do a little recap here
money level a lot of it probably a
couple $1,000 to a couple million over
the life of it skill level high 9 out of
10 I think the highest skilled
entrepreneurs typically play in Tech
risk 8 out of 10 because it's going to
be expensive to buy one and you can't
buy one profitably so you're going to
have to build one yourself reward really
high if you do this well in SAS this is
a 10 out of 10 and then the time
commitment is all of your time I don't
know somewhere between 8 and 10 10
businesses four different types but I
want you to think about this for a
second in my mind this might be one of
the scariest times to be an employee
since 2008 and I should know because I
was sitting next to all the cardboard
boxes at Golden Sachs interest rates at
22-year highs Wars across the world
still recovering from crazy inflation
Americans outlook on the economy is
getting worse by the month and although
inflation is kind of improving what's
happening in the labor market like we
talked about I think what you're going
to start seeing is acceleration of All
the Things That Go Bump in the night
economic downturns like this make a lot
of people poor but if you position
yourself right this could also be one of
the chances you have to make the kind of
money that most people could only dream
about one of my favorite quotes is from
Baron Rothchild and he says buy when
there's blood in the streets even if the
blood is your own and maybe especially
then there's an old saying in investing
that
Market downturns steal from the
unprepared and give to the prepared so
be prepared hit the subscribe buttton
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