this is your business it's a masterpiece right I call it the mosey Lisa but it has a few imperfections let me show you like this one diverse customer base and when we want to reverse engineer building the perfect business or a masterpiece business we have to take all these pieces that something's missing and then put them back in the right place for example automated metric tracking High cash flow profitable and growing with a good story multiple rival acquisition channels and a lot more so you might be wondering how I know all this well a long time ago in a galaxy far far away I started a company called gym launch and gym launch basically turned gyms around and then eventually became a licensing business the license over 5000 locations but here's the crazy part we went from zero dollars to 4.4 million dollars per month in 20 months and it also sucked and that's what people won't tell you it got so bad that Layla and I and my wife were walking one day and she says let's just shut this thing down I was like wait hold on this 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 millions of dollars 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 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 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 about to show you in this video is something that we developed at acquisition.com called the value acceleration method now you've probably heard of big companies like Netflix and Amazon and Microsoft being worth two trillion 5 trillion one gazillion dollars how does that even come to be like how can something be worth a certain amount we talk a lot about value provide value to people make valuable content but when we're talking about value within a business the 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 one is increasing the number of customers if 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 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 you divide that by risk How likely is it that this will continue in the future 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 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 so let's start with piece number one leadership team in place running the day-to-day so for each one of the ten that I'm about to go through I'll explain what it actually is how I learned it and then how you can tactically execute and fix these things so you can increase the value of your business so a leadership team in place running the day-to-day means that the person who owns the business can leave the business and the business can not only maintain but also grow in their absence now the thing is is that most small businesses the business owner is the reason the business even exists and if the business owner leaves so does the business the problem is if you leave and the company goes down then it means that no one else can buy it and as much as this is uncomfortable for a lot of entrepreneurs many people own businesses that are worth nothing I mean that not as an insult but more so because what they did was they created a job that pays well that they have other people who help them and they pay those people to help them but they haven't created an asset and so always remember to say you get paid for what you do you get Returns on what you own if you want to become rich you increase your paycheck if you want to become wealthy you get wealthy from owning assets all right that's the big difference so let me give you a tail of two different businesses that we have in the portfolio that try to solve for this risk the first one ended up just saying hey I've got this buddy of mine in my network he's never run anything like this he's just run little like odd job type businesses and I'm gonna have him come in and be the operator of my significantly larger company than this person has ever run and we were very vehemently against that but we sit in a minority position and so we say listen if that's what you want to do I'll support you but I want to voice the fact that I don't agree with this but once the decision is made we will support it to the best of our ability now I'm not going to tell you what happened yet second scenario is a company where we've continued to grow it it had plateaued at a point where we saw we really needed to help the two Founders and bring in a more seasoned operator and so this is Brick and Mortar chain we took somebody who had taken a brick and mortar chain from 100 to 2000 locations open over a span of 10 plus years had a lot of experience opening locations negotiating leases managing build outs getting vendors in line on timelines managing Capital allocations so that we can actually roll out at the same Pace making sure profitability across all of them ensuring quality assurance I won't get in any more of that but somebody who knew what he was doing guess what happened so we've got our sad operator and our great operator who come to the business so with the first instance what happened afterwards the business plateaued costs continue to rise because this operator didn't understand how to manage cash flow manage profitability basically got more people into the business without increasing any kind of Revenue which then basically ate up all the profit in the business and this business was not profitable for nine months it lit it just broke even for nine months and this was a very profitable business prior to this in this scenario with the more seasoned operator this business continued to grow at the same Pace but the profitability increase expanded at a dramatically faster rate with this new person in there and so they even had a period where he said hey I think we should just focus for this entire quarter on making all of our locations just more profitable we don't even need to open more and dramatically increase the profitability of the entire business overall and that's the difference between having an experienced operator and an inexperienced operator and if I'm a buyer and I'm looking at the business and I say okay these Founders are going to disappear imagine the founder disappears here I'm like I have no desire to buy this thing right versus here I say well gosh I can see when this guy came in I could see what it increased based on his decision making and his experience wow I feel like there's way less risk which means this is more valuable so let's talk about what you can do number one let me tell you one of the mistakes that I've made so many times early on in my career is that I thought an operator was someone who managed systems and organization that's not what it is at all an operator somebody who can lead the business it has to be someone that you aspire to be like that you admire in different ways and it should be people that everyone on your team could look up to because that is what is going to allow you to step out of the Limelight a little bit so that they can actually take some of the load off of you and let me give you the litmus test for knowing when operator is good or not if you feel like you have more time now and you have way more bandwidth they have helped you if they try to tell you to do all of these new things that you weren't doing before they are arguably hurting you so the way that you have to look at this as a business owner is the difference between local and Global meaning if I tell the sales team that they have to put notes in the CRM that actually increased how much stuff they do on a local level but by them doing that I decreased all the work in the rest of the company globally and so if an operator comes in and says everyone has to do all these things you have to zoom out as the owner and say does this decrease work globally or is this just giving us more stuff to do and a good operator tries to use as few systems as possible to decrease work across the entire company whereas a bad operator will feel entitled in saying why aren't these people filling out their checklist they're not finishing the tasks that I gave them to do it's because they add things without removing them and so from low to high you'd have a manager you might have a director of Ops you might have a VP of Ops and then eventually you'd have a COO all of these fundamentally do the same thing just at different levels of an organization I would always prefer to start lower most people over title it's one of the biggest problems that small business owners have they over credentialize people and then people beat their chest and get their ego involved and then you don't have room to bring people above them because if you have somebody you're like oh this person's been with me since day one and something realistically they're probably not a COO right they're probably a manager or maybe a director of operations and one of the sad truths and this is just data is that if you 10x in size the likelihood that you have the leadership team you had at 1X when you were at 10x is virtually non-existent people develop skill sets and those skill sets are good at certain seasons of the businesses growth and then they don't fit anymore and the only way for that person to stay on the ride you have to have a growth mindset and many people don't have a growth mindset you do because you're watching this but most people don't it's a much smaller percentage of people who are willing to do that one and then also just because of the the churn and burn of business in life and moving locations and families and drama and whatever that they actually are there with time you have to always prioritize the business because the business is what feeds everyone all the wealth that you want in your entire life is on the other side of a few hard conversations and so it's a skill you're gonna have to develop number two is hire for a purpose all right so you should have a clear idea of why this person is coming in you want someone to come in with a clear goal or a clear problem to solve and this makes the interviewing process a lot easier you don't have to give hypotheticals you can just say hey this is my business these are the stats this is the problem how would you attack it and if you ask that to 10 people the way someone answers the question and the way they talk through it logically should give you some insight into how this person is going to work with you a lot of times entrepreneurs just hire people that they think they would be friends with but then you hire a lot of people like you and then you still need the people who are not like you to actually run the business look at track record and experience and how comparable or relevant the experience is as one of the number one predictors that they're going to be able to help you go to where you want to go so this applies for a CMO a CFO a CPO meaning head of product all of those C Dash O's all of them you still want to think this way which is like can they do the thing more than are we going to be best friends and when we're thinking about replacing the day-to-day we've got risk you've got getting more customers and you've got making them worth more so you can actually think about that in terms of leadership so you say okay if I were to leave would we be able to get more customers next month and the month after if I weren't here well if the answer is no then all of the leaders that would make that happen would be check box one the second check box would be making sure customers stay and continue to pay and maybe increase how much they pay over time if I leave is there somebody or multiple people who are going to make sure that that happens if the answer is no then you need to check that box off and for us at gym launch for example my limits test is always if I step away does the company continue to grow for six straight months without me jumping back in which means that if they come to you with a problem you have to say you have to solve it they probably already know what you would do and they can just make the guess and a lot of times I would ask what do you think I'm going to tell you they're like well I think you told me to do this I'm like so what do you think like I think we should do that great do that right and so that's how it can develop over time so number three is that a players know their value an a player costs 25 more than a b player but a players produce five times more than b players and so being willing to pay a little bit more to get way more value is one of the single best investments you can make in business that being said if you are bringing a players on expect them to want more also expect some of them to negotiate pay some of the best people I've had have tried to negotiate pay when they came in and that's okay I actually had to have a conversation with one of our bigger portfolio CEOs because he had amazing talent person that we found he was like dude she's trying to negotiate if you said if she loves this job why doesn't she just take the job I was like a players know their value and it's now he said the all-time best hire has ever had and he almost didn't hire good Founders know that it's about the size of the the pie not the shape of the slice the founder of the company when they go public has on average 12 percent of the equity in the business when they go public all right now most people would say that if you founded a company and then it went public that you probably are very very wealthy so those Founders understood something that maybe you didn't and definitely something that I didn't when I was earlier on which is that it's about how big you can make the pie and the more people who are incentivized to grow the pie the bigger the Pie Gets Jeff Bezos doesn't have 100 of Amazon Warren Buffett has 30 something percent of Berkshire Hathaway Elon has 20 percent of SpaceX I'm going to ask you a visual question would you rather have this slice of pie or that slice of pie so it's not about the shape of the pie it's about how big it is and that's what we ultimately care about and that was a big belief that took me a long time to break as a small business owner I wanted to not give anything away but it's amazing how much more discretion or effort you can unlock when people feel like owners all these things put together go to create the first part of the mosey Lisa so let's talk about piece number two marketing without the founder so this is me marketing thy business and sometimes even being in the ads and the videos and making the content whatever it is that is not an asset that is a job this if I still own it and still happening is an asset that's the difference and this is what the investment banker friend of mine was explaining to me he said well number one you don't have a leadership team in place because it's just you and your wife number two is that urines every single ad if you leave how do we know we're going to still get customers I had you step by step fix this with my own business so that somebody else could own it I started filming ads with my general manager so we'd film ads together and he told me later that the first time we filled ads he was like terrified because of course she wasn't going to be as good because I've been doing it for a decade right like I've been recording ads for my gyms five years before that and then I've been recording ads for gym launch for another five years so like it been a while that I've been on camera pitching stuff and so I would record all the ads and then he would follow me and do the exact same ones and when we started running them surprise surprise mine still did better but we still ran the ads and he still came with me to do the ads in every session and guess what happened next he got better and over time he would start having ads that outperform mine and the way that we transitioned it was I did them and then I would do some with him and then those were the ads we ran in the beginning only Alex and then Alex plus kale Kale's my CEO he's still there two Alex kale separately to kale so that was the transition we went through think about this from a branding perspective brand is about associations and so if people associate me with this brand what I need to do is transfer that Association to someone else and so I say hey we're in this together and we run ads together and so people are like the brand Alex this person brand Alex this person and then eventually you can remove Alex and you have that person in the brand this process just from here to here took about 12 months and you might be like well Alex like you have a personal brand why are you doing this well there's a couple things one is that you can separate your personal brand from your business for example you've got Andy frisella has Andy frisella and he also has first form and they are somewhat different right you've got vaynermedia and you've got Gary vaynerchuk you've got Alex from Mosey you've got acquisition.com but I actually have another level of removal because all of how I actually make money is not ads for me it's companies that we own I can sell the assets that we have in our portfolio without it affecting me like somebody who buys one of our companies is going to be like well Alex doesn't come with a deal well I don't actually influence the business I influence how I get deals you're always going to be you and so your personal brand is always going to stay with you for the rest of your life you should want to make sure that it's not intertwined with your primary source of making money mind you that's if you want to sell if you don't want to sell then don't worry about it just go make money it's fine not a big deal so I don't know about you but I think we got the corner of my hat done and Mosey Lisa getting a little a little feisty so the third part of the mosey we said that my Investment Bank and Fred said that I didn't have and needed to fix was delivery without the face of the founder okay so you're not in the ads anymore but if I'm the one delivering service to customers or I'm key to the delivery and so you can think about this in two different ways one is I'm literally there doing the things as if you are the face and people come for your expertise in some way then this can be difficult now sometimes it's just your expertise is innate in why the product is good so like if you're a software designer and you're just a genius software designer or you're like an amazing editor even though your firm may sell this and it doesn't actually have to do with you if you own the customer relationships for example like they only work with it because they love you or they love your way of Designing things those are all different examples of why a Founder would be used in delivering any risk factor for somebody else coming in so what do we need to do ah rip my head off we need to uh make this with cool man there you go a lot of people think that when they're going to replace themselves they need to find one person to replace them but finding another human being who has lived your exact life is impossible but it's much easier to find two or three people or five people who've lived portions of your life in different areas so that together we're gonna make this look even weirder you have a Hydra of people who can deliver value to the customer now here's how we did it I started edifying different people now how I did it was we called them subject matter experts so I found people really get one component of what I did I might say this guy is my subject matter expert of sales this might be my subject matter expert of retention this might be my subject matter expert of marketing and so what happens is people will identify that person as an expert in that particular area but not necessarily overall now they still could be good overall but how you brand them within your world matters number two the people that I did put even more edification into had equity in the business which also means that non-competes hold weight if there's equity and to give you an idea of how involved I was in the beginning to give you some hope if you're like man what easy for Alex right the first 400 days of gym launch I did a q a for 90 minutes every single day so I just said hey if you want my help I'll hop on with you but I say this to say that like I had a huge amount of demand to show you how much of a contrast this was from day one today whatever it was and put yourself in the shoes of the buyer the investor why would I want to buy a business where the guy who's literally delivering all of the values like hey can you just pay me for the next six years of value I'm not going to provide no of course not right it wouldn't make sense I will pay you for all the value that your company will provide to customers in the future if it doesn't require you and that's why this affects the risk factor within the business remember this little variable we got customers because remember if you lower the risk the lower you make the bottom fraction the bigger the overall value so a mistake that a lot of Founders will make is that they'll start selling kind of time with them one-off things they might do if you're in the beginning and you make money do what you got to do survive don't get me wrong I'm just talking about how to maximize Enterprise Value it's really just more you doing a job and getting paid for it which is fine it's just not wealth creation it's income creation so Point number one is that it might not be one person but many people who end up fulfilling Your Role within the company number two is that you want to edify each of those people to the customers in their respective places number three is that you want to transition me less than them and then eventually adjust them and then number four if they're high enough up then you can consider giving them small slices now mind you what I'm saying giving Equity I'm not saying like give 10 I'm saying you can give a half a percent or point one percent do these people said that they're still tied into the Business Delivery without the face of the founder boom next up we have this part of the background of the mosey Lisa but incredibly important multiple reliable acquisition channels so right now if your business looks like this if one day someone comes in and this just snaps and you have no way to feed your family over here all your family they all die because you can't eat right very sad so we don't want to do that what we want to have is multiple lines in the water that's you know a Fisher with lots of fishing pole sticks yeah all right so there's two elements to this you've got multiple and you've got reliable and both of those make up the fact that you have a more valuable business the idea here is that you want to know that you are not going to have your line snap because you get a ban on some platform if all you do is run Facebook ads if for some reason tomorrow Facebook says I ban you because I'm the god of media and I don't want you to make money anymore and your entire business dies that's a significant risk the same degree if you make content on YouTube and that's your primary way of getting customers YouTube can cancel you or let's say that you have a emailing method that gets customers in the door if you're doing outbound well yet again if for some reason you have you know your whole domain gets shut down and then your deliverability tanks now mind you all of these things have Solutions entrepreneurs are problem solvers it's like well then I create a new alternate YouTube channel or I create a new a Facebook account under my wife's name and that one we were able to run or I spun up a new domain so that I could deliver emails like there's obviously service students around this but the more of them you have that are consistently getting customers the less likely an invest just going to think wow this can go from 100 to zero overnight all of these things decrease the risk of the business and so for us at gymwatch I had Instagram paid ads I had Facebook paid ads as my only two channels right but what ended up happening believe it or not was that during covet these actually didn't perform Super well for me and so I had to find another way to start marketing and so I actually had a guy from a competitor company approach me and he's like oh I work at a gym company that I hadn't heard of and I was like huh that's weird I was like well if you don't mind my asking like what kind of Revenue guys doing is like oh we do about 10 million a month and I was like okay so you're telling me that there's another person in my exact space that's doing more than we are and I don't even know who they are I was incredibly intrigued and I was like well how do you guys get customers he said oh we're all outbound and so of course I was never getting cold calls from them because I'm not a gym owner right but he had a team of 30 plus guys who were cold calling emailing to get customers and I was like well do you think you could build out the outbound system here and he's like yeah I'm pretty confident he's like it would take me like you know some time but I think I could do it and I was like all right well here's the deal I'll give you the job offer but you're going to start your own department and it'll just just be you and you're gonna have to start everything from the ground up and so the long story short is that 12 months later it was 50 of our Revenue by doing that and by mending this we had Outback as another method and because we had three different ways of getting customers the acquiring company was like okay I feel good and it wasn't just like oh we get five percent of our customers from this half our customers came from outbound half of our customers came from inbound and they were like this looks stable and the thing is is that over time this has been a lifesaver because sometimes stuff does happen ads get disapproved one of your top Setters goes on vacation or the manager is not doing a good job who you just put in there like there's things that can break on either of these but the more that you have that are reliable the more reliable the entire business is overall and that decreases risk which increases the value of the company and doing this provided you don't drop on your main Channel because of your split Focus also increases the number of customers you get so this having multiple acquisition channels both increases number of customers and decreases risk which is why it can be incredibly valuable it is however one of the most time consuming and focused draining things you can do as a business owner and if you think about timing somebody give you tactic number one is that one one one offer one Avatar one channel and that's until you hit one million dollars per year if you're not there don't worry about this you're not trying to build your a valuable Enterprise yet you're trying to make money which is fine once you're here I still say just increase how much you're doing of these once you get to about here you can consider getting another Channel going and oftentimes if you do it right you can have the other channel support the primary Channel if I said I wanted to start making content if I have content content supports outbound content supports paid ads and sometimes content itself can become paid ads and so these things do work together synergistically it just takes resources and my recommendation is if you're going to start it start with someone else doing it so that you don't stop doing your main job so number two is what I just went over which is the first thing that I'm going to do after I have something working is more and better okay we have paid ads can we do more paid ads can we spend more money can we make more ads we make our ads better can we introduce different callouts going to introduce different hooks can we create different value can we get a more voluminous Cadence of recording in place that would be ways of doing more if I was doing outbound more would be more calls more dials more Setters whatever better is improving the scripts improving the training improving the offer we give them on the phone this is the lowest risk way of growing the business we already know it works let's do it more or let's do better to the point where I think my team is probably tired of me saying more better and number three is don't kill your business in trying to save your business if you decide to go after the second Channel understand that it's going to take a long time and so if your main Channel drops while you're trying to start your other channel you basically create the problem you're trying to solve you want to one be patient before you do it and be patient once you start number two is look at progress more than outcome that's what I would highly encourage you to do because it's going to take time so like even if you're starting paid ads the first thing you'll be is like are we getting clicks great if you're getting clicks then it's like okay are we getting opt-ins great if we're getting opt-ins and can we get scheduled okay are they showing okay are the people who are showing the right types of people okay yes great if they're not okay what do we need to do to tweak in the targeting or should we get the messaging across the whole funnel okay we're getting on the phone with the right people but they're not buying okay then we need to add some more friction we need to add some more selling aspects Etc right look at the progress not the outcome because if you look at that you might think wow this took two months and we didn't even make any sales the thing about this way let's say it costs you ten thousand dollars a month to invest in a new way to get customers and it takes you six months to make your first sale let's say a sale is worth a thousand dollars well that costs sixty thousand dollars but when you do get that first sale you got a ten to one return on that once you got all the tweaks done well in that next month you could spend 30 grand and make 300 and get 5x on your initial investment think about this as investing in a machine that prints money of course it's going to cost across time and cost money to create the machine but the machine will pay for itself over and out which is why business overall gets higher returns than anything else because there are very few other machines we can put a dollar in and get 10 Baht or put a dollar in and get 100 back in a month but business you can but it costs money and time to figure it out my third Point here is that I would say use others and of course there's examples where you could say okay I started this one channel I got a leader in place and I'm going to figure out this next Channel that's a way of doing it as long as that person continues to run the thing without you the way that I have preferred to do this over time is that I will bring someone else in to start the thing and I will consult and give feedback but I want them to own it so that I don't just create another problem that I'm going to have to solve in the future which sometimes means that it's going to take longer and I have to make sure I'm focusing on the progress as long as every week we're moving towards this we'll get there and if you're looking at well okay well which one would I do next which is a great question all right which is number four my recommendation is look at where people in your industry already acquire customers so if you are a directory consumer brand and you sell something that is weight loss focused well then paid ads is a huge source for people in that industry and you can be confident that if it's paid ads and it's in this media type for businesses of your size like don't look at Weight Watchers and be like well Weight Watchers is running a Super Bowl ad so I should try that probably not the best first step right but if you're looking at other people who run local gyms and you can say okay well companies of my size in the space are able to acquire customers here profitably so if they can do it so can I and that's kind of how I look at it until you've like done this multiple times just look at what other people are doing and you can iterate off that hey real quick guys if you're a brick and mortar chain you've got two three five locations and it's a working model that's doing at least a million dollars a year profit maybe two three five million dollars a year we're super interested uh to partner with you and help you scale and take you to the moon so if that's you go to acquisition.com we'd love to talk with you provide some value and if it makes sense invest and take it to the moon so with that being said enjoy the rest of the show multiple reliable acquisition channels like content ah tile number five is reliable recurring Revenue so let me illustrate visually why this is so important in a normal business what might happen is you would sell a customer this month and they're worth a thousand bucks and the next month you sell another customer is worth a thousand dollars you make another thousand dollars this month and guess what month three you do the exact same thing and make the exact same amount of money that is what most businesses do which is why they are not valuable now let's say the exact same scenario except in month one you sell a recurring customer a customer who buys this month he buys them next month he buys a month after that well in month two we're still going to sell another customer so we're gonna sell that customer and guess what he's going to do he's going to pay the next month too in the third month we're going to sell yet another new customer boom now if you're comparing the before and after here of old Way new way this is just three months now imagine 36 months or 60 months this thing would be this high and this would just still be the same and so when you see a business that's plateaued it's because they sell the same amount of customers every month and those customers are worth the same amount to them and they do not grow they've hit a point of homeostasis recurring Revenue businesses if designed properly will continue to compound and so this is why it takes time to build big things and so one of the biggest breakthroughs that I had in my business career was understanding not that you should have a subscription and why it's not just about having a subscription because let's say you get a subscription everyone cancels after the fourth month so this is the fourth month but every month after this we're going to have the same Revenue so this is going to stay the same because they're all worth four months so I'm gonna stair step up to four months and then I'm gonna plateau again what you really want is something called net negative turn it's a fancy word but it basically means that every single month if you acquired no new customers you would still make more money so an example of this would be something like Salesforce which is a company that's valued at a gazillion dollars and the reason for that is let's say that this month they have a hundred customers now they may lose one or two customers this month but the remaining 98 customers become more valuable to them than next month than they were that month because those businesses grow and the better designed a business model is the more aligned your customers outcomes are with your own outcomes and so for Salesforce they're like okay well if you have more seats or you have more email contacts or more Revenue that's flowing through the software we get a bigger percentage of that and so the remaining growth that they tie themselves to they get their claws in you allows them to continue to grow and so when they acquire customers think about this if a customer to them might be worth a million dollars how much can they spend over our customers unlimited that's the difference here is that we want to have Revenue that will not only stay but also grow and that's kind of the two levels of this like Netflix doesn't really have a lot of expansion Revenue besides you getting add-ons for your family or whatever right but they just hope that you never cancel and that's more common in consumer businesses in B2B businesses because you have way fewer customers you want to usually have much more expansion Revenue opportunities tied in in a way that not only gets them to not cancel but actually buy more so remember earlier we talked about Enterprise Value so Enterprise Value is the value of the business but usually the value of the business is measured by a multiple on earnings meaning how much money did this business make this year or the last year and what is the multiple that we'd have so if I made a million dollars in profit and I said the company was worth five million dollars then it would be a 5x multiple right and so in public companies they call them price to earnings ratios let me show you some companies that you may have heard of so you've got Netflix here you've got Amazon here a little Jeffy B and we got a little Billy G little Microsoft and so you might be like oh all of these companies are super valuable and they are but you might not know how much more valuable investors value them compared to their earnings and that multiple is purely based on on how reliable they think the future revenue of the company is and How likely it is to continue to grow so Netflix right now trades at 44 times earnings man wouldn't that be nice if you made a million dollars in profit someone paid you 44 million what a steal Microsoft trades it 29 times earnings a little less kind of interesting good old Jeffy B is getting 310 times earnings now there's a couple things here part of the reason that this is 310 is because Amazon actually runs slim margins and that's by Design because they continue to reinvest in growth and they look at their Returns on Capital and so investors know that at any time if they wanted to make the business more profitable they could they choose not to make it super profitable which then compresses the amount that is being multiplied for this value so there is a little bit of a game to this in terms of understanding why the multiples are so high but when us as business owners you're probably not going to be in any one of these scenarios realistically you're probably looking at one to four times earnings if you're a small business owner that's doing less than 10 million a year if you're doing over 10 million a year and over two million dollars a year in profit then sometimes that multiple can move up again it depends on some of the other factors we're talking about today which is and you check all the boxes then you do own an asset that's valuable and that's the point of this whole thing part of the reason that Amazon also has a higher multiple is that Amazon has a lot more expansion opportunities so think about this they have Amazon Prime in their home Marketplace but then they also have like AWS and they've got Prime video they could literally sell everything so they have tons of expansion opportunities Netflix has significantly fewer expansion opportunities and so it's not valued as highly and that's mostly just because they only really have one core thing and the other piece is how defensible is this How likely is it that another Netflix gets created well we already have proof of that you've got Disney plus you've got HBO Max they used to be this category King they're the only person then everyone else is like oh wait we can just go hire Production Studios and stream stuff too we need to get a couple big Brands models Disney was like we'll get Marvel and Star Wars and then they weren't the dominant they were just a channel whereas Amazon it's virtually impossible to recreate what Amazon's done and so they also have this big competitive mode around them which makes it almost impossible for anyone to beat them at their game and so they have this base way of holding on to all their customers and then all they're going to do over time is just add more and more and more ways like buying Whole Foods to make money from their customers but there are nine C's of recurring Revenue when I think about this is like how can I increase how sticky it is or How likely someone is to continue to pay me for whatever I have number one is consumption are they actually using the thing that they are paying for right one of the interesting things I found out in the gym world is that almost everyone is willing to pay for a gym membership that they use and almost no one is willing to pay anything for gym membership that they don't the next is collateral think about a storage unit they've got your stuff like you have to keep paying them a payment processor has all of your customer data and they process all of it they make it very difficult for you to take your credit card info which is encrypted from their payment processor to somebody else's and so they have collateral they have some of your and so they force you to keep paying them so that they keep making money the next is cost of switching is there a way that I can make it difficult to leave don't think how do I make my customers life harder more think how do I make my thing so much better better that they would lose all of these benefits if they left if I have 10 friends in a community and I pay for that community and then I leave and I meet with them in person on a regular basis I'm going to lose that so there's a high cost of switching next is choice I don't want many other choices like what I have available for them if you have a patent or you have some sort of trade secret that makes it difficult for other people to clone what you have so your n equals one of the only option that someone can have next is control the money flow this is more in a B2B scenario but if I have the ability to control the money flow that's why I like payment processing and software always tries to get the ability to process your payments for you Uber process their payments for their drivers doordash does for the restaurants if you can control the money flow you have a lot more leverage for them to stay with you the next is a softer one all right which is cause Charities movements things that you associate with if you have two different options and you're like you know what this one does a lot of good in the world I align my identity with their values I want to continue to pay there and I hinted at this one before but Community right like Community is a way to increase the stickiness around whatever the recurring membership you have is right whether it's a gym or it's an online subscription if there is a community now you might be like well there's no Community around Netflix you're right but do you think that there's a community around stranger things hell yeah there is right and you want to be able to say on Monday morning dude did you see the new episode of stranger things it was wild right and so you commune with other people about the content next is contracts and that's the same ideas as commitments right so if I say hey you're signing up for 12 month membership here's the contract that's your commitment then you're going to have stickier recurring Revenue than you are if it's just months a month you can cancel whenever you want and the last one I'll give you is communication which is literally just talking to your customers more regularly so in the gym world we figured out that when we said we're going to run events on a regular basis belly Blaster big booty boot camp or whatever it is our churn would decrease leading up to the event because they had something to look forward to but then after the event it would go up and so what do you do you just always have something for people to look forward to and you communicate that regularly so I give you nine ways to do recurring Revenue there are more but that's a good place to start do you think we've checked this one off I think so this looks like a nice green corner that was anticlimactic so our next one is part of my bicep or Mosely Lisa's bicep diverse customer base so having a diverse customer base let's imagine that this is your customer base you've got all these little fishies here and then all of a sudden one day boom Mr whale comes along and says I want to give you so much money because you're a small business owner you're like man I gotta win this whale I want to make this money and hey don't get me wrong by all means go whale hunting but the thing is is that this actually materially changes your entire business and your business strategy if you continue to acquire customers here and then you have to keep delivering on and hire more people to deliver for this whale you've kind of got this weird business and if I'm a buyer then you really don't have this business these are almost irrelevant it's like having only one customer and if that whale all of a sudden gets sick or just doesn't like you or one of your reps say something rude and he says I'm going to swim away then you're sad and then you're like what do I do and now I have all these people that are over hired for et cetera et cetera and so if you have the choice between this with a couple of little fishies underneath or a whole school of fishies then as an investor you're going to want this because it's more diverse if I lose one fishy it's not really going to kill me and I can go get another fish but if you're thinking what else could I do well I'll tell you yeah [Music] if you decide that you want to do this whale thing and you realize that whales are worth more and you actually enjoy the process more then go get a whole bunch of whales you will still get a diverse customer base of huge clients and these are some of the most valuable businesses is if you can get 10 or 20 or 100 whales then everything's based on percentage of Revenue whale is relative if you get Google as a customer they're a will but if you have Google and you have Amazon and you have Netflix all the other big companies then all of a sudden they're just little fishies too it's just you have a way bigger Pond for your fishies to be in and so the idea is that you want to have no one customer be greater than 20 of your Revenue ideally for me I don't like anyone more than five percent of my Revenue as much as the short-term revenue of having a whale come along sometimes these guys can Cannonball and create too big of a wave in your business that might actually sink your ship and so the risk that we're trying to address here is what if one customer leaves so let's say you've got a hundred dollars whatever you can put whatever zeros you want on this all right this is your business today and this is your profit cool I told you that what if a whale is 30 of your business here's Mr whale it's like a worm anyways now Mr whale leaves so does your profit and then all of a sudden you're breaking even so even though the customer was only 20 of your business it might be a hundred percent of your profit and so if you can lose 100 of your profit by losing one customer that's super risky and so that is why I prefer to keep it at five percent or less of all my Revenue coming from one specific client or customer I think there's two big decisions you have to make when you're thinking about diversifying customer base one is do you take the wheel on to begin with because it may create too many waves in your business that you basically have to create a business around the whale that if the whale leaves you then are left with all these costs that would sink the business if you didn't have them so you become really reliant on them so decision one is whether you take the wheel on decision two is that if you take the whale on are you going to then go get more minnows or you're going to go get more whales because it might make sense if you say hey strategically I think it makes sense for us to go up Market go after higher value customers and have fewer of them and so I'm willing to build this infrastructure for this one customer so that I can have 10 more of them that makes sense and so if you said this is my business this is my avatar this is my Niche this is who I'm going after then a big part of focus means saying no and sometimes a big shiny whale is just another woman in the red dress who's trying to distract you from your ultimate goal because fundamentally if you had a business that just served that one Avatar you should just go 10 exit this will create all of these difficulties that will distract you from the main thing I don't think there's anything else to add here so let's stick this puppy on diverse customer base before upper arm piece in reality number seven automated metric tracking every business needs to have metrics because if you don't have data you can't make good decisions and you'd be amazed how much smarter you seem if you have data to support what you do it's one of the first things that we do when we work on a portfolio company is get this stuff in place so that we can make better decisions for the future and ultimately give that data to an investor who might ultimately want to buy it for significantly a higher multiple in the future so what I'm going to do is demonstrate this in the real world to give you an example and call my director of brand this could go horribly wrong what's up all right pop quiz test number one uh how many registrations do we have right now for uh the book launch event we have 34. almost 292 000. that sounds nice thank you guys uh how many uh how many Affiliates how many people are promoting the book on our behalf uh it's over ten thousand I think it's ten thousand eight hundred and something as of yesterday as of this morning as of this morning yeah I can get it I have so 10 800 as of this morning all right that's you know we're two hours away from that real-time stat so there you go 10 813. okay thanks man I appreciate you so that idea is automated metric tracking and so he would only be able to say that if he actually had dashboards in front of him that would allow him to answer those questions if he didn't he'd have to be like I'll have to get that to you tomorrow and I'll have to look at three different Google Sheets and then count manually how many people are doing x y z right and the thing is is that the more difficult it is to collect data and report on data the less data you end up reporting on which means that you have few and fewer pieces to make decisions off of and so I'm often Amazed by how little data is collected in most businesses because I'm like how are you making any decisions and for the most part the answer is they're just guessing which is a terrible way to make decisions so one of the best things you can do is switch from a big conglomeration of Google Sheets to actually fully integrating some sort of CRM into your business and this is where the things like Salesforce and HubSpot and some of these other platforms exist is to help small businesses become medium-sized businesses it's worth paying well to get it implemented in the business so you know data of what's going on in real time so you can make real-time decisions automated metric tracking affects how many customers you get lifetime gross profit per customer and the risk associated with everything because if you don't have tracked metrics you won't know what your lifetime gross profit is you won't know uh where your customers are coming from or what percentage of Revenue each customer is worth or what your cost per lead is and so if you don't know what the basics are then how can you make the advanced moves if you don't even know what the basics are how do you improve them and so the first thing if you want to do a gross business is know what current state is but again I'm amazed at how many people don't even know what's going on in their own business if I'm like hey how much profit you make that's something they're like I don't know I'm like that's Friday you should know these things you can tell how skilled someone is at anything based on the number and quality of the metrics they track a lot of like marketing Founders if you're really good promoters are like oh our product's amazing and I'm like cool what's your time to Value what's your turn which your onboarding you know process and I start collecting you know asking just for stats around product and they're like we have a low chargeback rate and I'm like that is not what a good product means if I said hey what's your customer impression what's your cost per lead what's your conversion rate and they're like oh I got that you need to be as in depth about your product and your delivery as you are about your acquisition and if you know the quality and quantity of stats on the front end you should be paired in terms of how nuanced you are on the back end because the people who are really good are that nuanced and that is my biggest indicator if I'm interviewing for roles by the way of knowing if somebody's good or not if I'm interviewing for a sales manager for example and I say hey you know what metrics you'd be tracking he's like I like to go by feel you know manage the vibe of the team I'm like that's not bad that's fine but like what metrics do you track and they're like you know closing percentage and uh you know cash collected I'll be like okay cool that's a great start versus I have a guy who comes on and says show rates I like to count offer percentage I like to count uh what types of objections we're getting on our nose I'd like to count number of uh calls required to close I like to have cash collected I like to have cash as a percentage of total ticket value I like to know what my speed to contact is I like to know what my speed to close is in terms of first Contact until they close all of a sudden I'm like okay this guy gets it he's looking at a number of different variables that are highly quantitative so that he can then make far more targeted improvements in the process so that we can make more sales this is actually supposed to be for another video but I'm going to show you this uh in real time so this was actually a before and after of one of our portfolio companies and so what we did we said hey let's track data and so then we started tracking data and then they were like oh gosh these are our stats and we're like okay cool now let's improve it so to make these improvements for example for the show rate we have a huge checklist of like 22 things that we do many of them are automated that we can do to increase show rates and boom 50 to 70 now you might think oh that's a 20 Improvement that's not a 20 Improvement that's a 40 Improvement on the original number so like wow that contributed a lot here from close rate we then started going through our drilling process to train closers and our scripting process so we can get to the sale faster so we can close a higher percentage people and that showed in the numbers so from an improvement perspective this was 14 but 14 of 27 is a 50 Improvement in sales and then the bottom is the end result so one of the things that I have is no silver bullets many golden babies it's a game of incremental improvements for us at acquisition.com because we work the same types of companies we know what it takes to improve shell rates like we have all the best practices and we just say here's the 22 things we do and we're going to implement all of them one by one and that's the result with close rates we're like these are all the things that we have to do in the business and one by one we take them off and so it becomes very clear what the next step is because you know if you do all of those things the numbers will go up why do we feel that way because we have evidence so number one pick the platform that you want to start tracking the data number two pick the data like what data do you want to actually track some people call it kpis I don't really care pick the data that you want to track number three person so you're usually going to have somebody who's going to be implementing this platform in your business someone needs to own it you need to have one chest to poke or throat to choke or whatever you want to say and then four game plan and the way that we do this is we operate off the theory of constraints which is we look at these numbers right so let's say that we had just collected so we picked our platform we picked up the data that we wanted to pick and we had somebody who's making sure that this is happening okay cool which of these do I feel like we have the highest likelihood of improving the fastest right this is going to be the constraint of the business and the way that you see what the constraint is you can add five percent or a fixed percentage to any of them and see which one of those will actually yield the most throughput meaning if I had five percent here five percent here five percent here five percent here which of those five percent increases actually changed this number the most and the answer in this instance would be this one which is the lowest number so if I'm looking at this and my my next lowest number would be cash collected and the number after that would be show rate and so I would usually attack it in that order so that I could have the biggest bang for the buck for the things that I do which one of these is the smallest that's the one where if I if I make an incremental change it'll actually yield the most outcome forearm we're getting close we've got ourselves a nice corner piece of the MOSI Lisa which is high cash profitable growing with a good story so let's do a little physics lesson Sir Isaac Newton's first law of physics was an object at rest will remain at rest and an object in motion will remain in motion until another force is acted upon it and so it's much the same with businesses you want one that's already in motion because you know that it's more likely that a growing business will continue to grow than a business that's not growing will start growing because you have to exert Force to a business that isn't moving in order to get it to move stay a business that has high cash flow means that it kicks off cash in excess of what it needs to reinvest in the business to remain competitive and grow the second is that it is profitable now you can have a profitable business that doesn't create a lot of cash flow for example if I deliver services and I have to wait 90 days in order to get paid then I might be profitable on paper but not produce a lot of cash Because by the time that cash hits I have new liabilities that I'm incurring and growing is that a business gets bigger every month or every year right pretty simple there and ideally with a story because if you have a story investors like anybody else our customers and they like to hear stories as well so let me give you a very complex visual of what this looks like you want a business that goes like this and not like this I'm not saying that a company cannot be valuable if it doesn't have a high in every cash or it's not profitable HubSpot for example I'm pretty sure isn't profitable and it's a public Trading Company worth hundreds of billions of dollars I also try to cater my content to my audience which is 99 of business owners aren't Netflix or aren't HubSpot or aren't venture-backed with tons of money that are hyper scaling most of them are like us are self-funded in one way or another or have friends and family who invested in their business to help them grow and those people have lives and I will say this is that we hear all of the Netflix stories and the HubSpot stories but we don't see the graveyard of the many others that didn't make any cash flow for six years seven years and they never quite became HubSpot and so the founder spent seven years of their lives never really took a paycheck out of the business and then ended up with nothing and so for me especially if I'm investing in a business I'm a cash flow investor I want to see how much money does this thing kick off after we have to reinvest in the business to keep it competitive and even with companies that have high demands on Capital I'll give you an example like we we love brick and mortar businesses so like by the way if you have brick and mortar chain we Crush those those have very consistent Returns on Capital meaning it cost me a hundred thousand dollars to open a facility and I make five hundred thousand dollars a year and profit back and then I say okay cool well that's an amazing return on Capital how can we take that 500 and then open five and even in those situations with an insane return on Capital I would still usually recommend that the founder take a fixed amount out of the business on a monthly basis to de-risk them now it's a 100 personal choice because risk and how much you're willing to expose yourself to is personal but for me I'll tell you a quick story when I had my gyms I invested 100 of all my profit to open new locations I then decided after a few years that I didn't want to be in the gym business in that way anymore and so then I basically fire sold my gyms to then start gym launch and so I could have made a lot more profit during that period of time and I could have sold them for a lot more than I did but because when I wanted to sell them I wanted to get rid of them and so I think in total I think I made like 250 or 300 000 from the sale of six gyms which is not a ton of money I'd put way more that just into building the gyms I encourage Founders to take cash out I still prefer to put human first and say I I'm willing to sacrifice a little bit of growth for you to like take care of your family for example we started talking to a company which is a teeth whitening chain in 32 locations by the time we actually ended up closing the deal I think this is probably like four months um end to end which is actually pretty decent in terms of timelines they had grown by 30 percent in that period of time right and this is what made them attractive to us as an investor is that they had they were high cash flow they were profitable and they were growing and they had a cool story about how they wanted to continue to see growth and this is my bread and butter and I will be excited to tell you what happens in 12 months with these guys because I'm very confident about our Playbook but it doesn't cost a ton of money to open a teeth whitening Studio relative to the amount of profit that they kick off and so because of that Arbitrage we get really good Returns on Capital meaning instead of investing in the stock market and putting you know 100 in and getting ten dollars back I could put a hundred dollars in here and because of also how quickly they become profitable like how quickly can I pay off a new location well I could pay off a location in two months okay well then that means that I can compound six times in one year off of one location now when you have 32 locations and that's why they have so many so quick it can it can get really big really fast so when you're building a story for a company you usually want to track the story to a trend meaning like AI is a trend right now here's how AI will help us or how AI will not affect us is a great way to demonstrate a story around why somebody should expect to continue to see growth in the business so like if I have a haircut chain I could probably make a strong argument that people are going to still need to get their hair cut now if I'm in a design firm I might have a harder time arguing that AI is going to not affect my business or flip side I am going to try to put myself out of business and say we're fully leaning into Ai and we've already you know cut headcount by 50 and 10x productivity using these tools and so now we're even more profitable than we were before with higher cash flow so the idea is you want to track the trends that you align with that will give you Tailwinds to get one of these stories and not one of these I'm going to give a little a little nug here one of the first things that I'm going to give you a little Insider secret that I do when I go into a brick and mortar chain which is probably my favorite thing to invest in is I look at their whole product Suite so that means the products and services that they sell out of the facility and I'm going to look at two things I'm going to look at Absolute gross profit and I'm going to look at gross margin so what's the percentage right those are the same thing once a percentage what's an absolute amount and in general I look at what percentage of our sales are coming from each of each of our products and then I think okay this one has the highest gross profit and the second highest gross margin but we sell it the fifth most often how can I recombine these things so that it becomes the first thing that we sell most commonly in the highest volume and sometimes just making these types of tweaks can make massive differences in the amount of profitability and cash flow the company generates and so this is just one golden bb that we do in the process if you don't know what your gross profit is and your gross margin is on every product you sell and what percentage of your sales come from each do that and then reorganize your sales process to emphasize the ones that give you the most gross profit and gross margin and maybe consider down regulating some of the ones that don't weird green tile High cash flow profitable story of growth next tile audit ready financials whoa exciting I'm gonna make this one a little bit shorter because I know this is where people's eyes glaze over but if you think about audit ready financials from a risk perspective if I'm a buyer and you say this is what your profit is and I have no way of proving that that's your profit you could just make up a number if you have an audit ready Financial it means that a third party will come in and go through all your numbers they will calculate their own measure of profit and it matches yours if that's the case then you have audit ready financials a lot of times Founders think that their profit is a lot higher than it really is their Banker their accountant oftentimes works for them and as crazy as it sounds if you make the profit look better for the founder they are happier with you having a third party or making books that are third party ready for audit and getting something called a quality of earnings allows you to say to an investor these have been validated this is like a blue check mark in terms of this is really what I say it is so let's talk about this in levels level one have financials in general all right this sounds silly and in the beginning oftentimes you're just going to Outsource it you're going to have a third party who's an accountant or a bookkeeper in the beginning before you have an accountant who's just going to handle your books number two is you're gonna actually upgrade to an accountant uh who's going to be doing this and oftentimes this comes when you go from cash based accounting to gap which it just stands for generally accepted accounting principles that's all it is right cash is just money in Money out like so if I sell a three-month contract for 30 grand and I collect 30 grand today cash based accounting shows that we had thirty thousand dollars in Revenue today Gap says that we have ten thousand dollars in Revenue today as it's recognized over three months and then ten thousand next month ten thousand the month after right and so Gap Smooths out a company's financials Gap a cruise for the cost and the revenue throughout the year so that you can see over year over year how much money is increasing right it makes it easier to analyze the business level three of this is that you have audit ready financials and this could be in-house or out of house that you uh that you get this set up I've switched my perspective on this I used to be all about uh in-house accounting and in-house financials now you do need somebody who's in charge of that function but it just depends a lot on the business if you have a service business that doesn't require a lot of capital expense meaning you have to like invest money in forecast cash flow thing like that you don't need as advanced of a person for the business if you have something that's like manufacturing you need a very good Financial arm because they have to manage cash flow out to collect Goods invoices that are coming from customers as things are getting delivered payroll in between and you're managing a lot of moving Parts while also putting out orders for six months from now for stuff that you know you're going to need in forecast so like it depends on the needs of the business but I will say this one of our portfolio companies scaled over three years they went from you know a couple million dollars a year to a couple million dollars a month and we got to this Plateau point and I was talking to the the CEO and he's like I just don't know where the profit's going like I just I don't know if I have enough cash to open more locations or not I just like how many should I be opening he's like I'm just really struggling right now and I was like okay I want you to pause I want you to feel this feeling right now I was like it's because you don't know you don't recognize this pattern and I want you to recognize it for the rest of your life which is the feeling you have right now is a lack of Finance like you don't have the finance function built out and you don't have the support of Finance leaders because if you did then you would know what percentage of cash flow you could put towards it and how many locations you could have given the growth rate that you want but since you don't know that lack of knowledge that feeling of uncertainty is because you don't have that thing it would be the same as like I don't know where my next customer is coming from it's like you have a lack of the marketing function and I bring this up because you may feel this right now and if you feel that way it might be because you're missing this I know this one is the most boring but it's important and you will literally not sell your business for anything that's material if you do not have this audit ready financials 5 million plus in ebitda damn it the reason that this particular number is important is that most institutional investors do not want to buy companies that are smaller than this and that's usually because to get to 5 million plus in ebitda and ebit is just a fancy word for profit for the sake of our of our video today because usually to get 5 million plus on eBay you do have a professional management team it's not common to have a company that is doing that kind of profit and doesn't have a true management team that can run without the owner this is more of a volume or size requirement when you have a billion dollars you're never going to buy a million dollar business the time it takes for you to even analyze the business is not worth the time and I'll tell you a fun secret it takes about as much effort to help grow a one million dollar business as it does to help grow a 20 million business same effort arguably less because you have more of an infrastructure which is why people buy bigger stuff now just to give you some stats around this the S P 500 has gone from 12x to 18x historically and then today it's 23. if you made a hundred million dollars in ebitda then you'd have a 2.3 billion dollar valuation as a company the reason I think this is so important is that a lot of small business owners overestimate the value of their business to them because they're friends amongst their friends they are the richest people they own a business that makes money but in the world of business when you're compared to Google that's what they make in the first like minute of the day right is your entire Year's revenue and I share this stuff because I made these mistakes too and I mistook the fact that I put years of time and effort into a business for it being valuable you might be thinking well how long does it take to improve this stuff like if I'm not a million or I'm at 2 million like how long does it take to improve well if you have the right tools and systems and the right plan the right who the what and the how you can get the right outcome pretty quickly I actually have my team print out our stats for this so our portfolio company on average within the first 12 months we increase Revenue by 1.8 x so if you're making 10 million by the end of 12 months you're making 18 million not bad profit increases by 3.01 X on average so you're making two million dollars in profit at the beginning 12 months later you're at 6.03 million dollars a year in profit I'm going to show you a little something that I haven't talked about publicly the reason that I look for companies that are at least a million usually two at minimum is that most of the companies that I like taking on are in that two to five to the six range the reason for that is because I can come in and do the things that I know I can execute our show list checklist our closing checklist our content checklist like this into a business we already know works and then go from five million dollars to quickly plug these holes that I'm talking about and then unlock 50 100 million dollars of value you might be like well is it like a one-trick thing not really because it looks like within the first 24 months so two years the average revenue increase goes to 2.8 x on average and the average profit increase is 4.7x on average that 2 million dollar profit company becomes a 9.4 Million Dollar ebitda business think about the value difference here maybe it was worth 6 million when we came into it two years later at nine let's say it trades at seven so that would be worth 63 million that is fundamentally real data on context of how value can be unlocked all that to say if you know what to do then it just comes down to doing it a lot of people spend a lot of effort on things that are not the bottleneck now this was an example of I think a month difference or two months difference well it's like boom well that's a double great what are we gonna do for the next 22 months right well we're going to work on other parts of the business this is just the sales and show rate stuff and we've become more and more disciplined with this we only go after businesses that were like oh yeah we know exactly what we're going to do so that we can mitigate our risk big picture zooming all the way back out if you have a company and you want to make it more valuable you need to sell more customers you need to make them worth more and you need to make it more likely that it continues to happen without you which is why when you're making your MOSI Lisa Masterpiece with your best business getting a capped deltoid AKA getting big enough and having five million plus in ebitda makes you a significantly more valuable company and when you check each of those 10 boxes you make the business Masterpiece that can create the generational wealth you ultimately had and it's not about selling more it's not about making them worth more it's about making sure that those never stop happening and it doesn't matter if your business looks like this or like this or like this and so if we see that this one and this one are missing then we say great we're going to go unlock 10 million dollars in value by putting these right back in whatever the holes in the painting are the nice thing is that the end result always looks the same we know what the mosey Lisa looks like and all we have to do is paint by colors to fill in the gaps and that's how we made the companies a lot more value