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So right now your business does not have you CEO and you say that you are passive in it,

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I would probably challenge you on that and say that's not true.

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Right?

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The company has to be able to grow and innovate without you.

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The wealthiest people in the world see business as a game.

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This podcast, the game is my attempt at documenting the lessons I've learned on my way

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to building acquisition.com and to a billion dollar portfolio.

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My hope is that you use the lessons to bring your business and maybe someday soon partner

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with us to get to a hundred million dollars in beyond.

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I hope you share and enjoy.

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I'm going to talk to you about how to structure the business in order to sell it and why

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you should do that independent of whether or not you're planning on selling it in the future.

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So if you have a business right now and you're trying to scale it, you're trying to grow it,

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there's usually one of two outcomes, right?

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Either this is something that you're super passionate about or this is an opportunity

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that you're passionate about because of the upside potential of making lots of money.

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There's tons of people who are real, you know,

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builds off for companies that are like super passionate about like data management,

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but they're really good at it and they think there's an opportunity to make money.

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It doesn't really matter to me, whatever way you do it is fine.

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But what happens is over the trajectory of the careers of the entrepreneur,

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you know, we develop in skill sets, we level, level up, you know,

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first we're doing, they were managing, they were leading, they were casting the vision,

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any move your way up in the company as the company grows underneath of you as you scale, right?

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The thing is is that at some point, you know,

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I think the entrepreneurial journey is always trying to find the most leverage for our skills.

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Like what's the best vehicle for the skills that we have to capitalize on the opportunity marketplace, right?

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And that's the entire market, not just within the context of your business.

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But if you were building the company at some point,

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and this I think the one of the hardest transitions that I've had to go through,

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and it took me a very long time to do this was transitioning from CEO to owner.

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And you've heard me talk about this before, but I'm going to say it again because I think it's so important.

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Independent of whether I plan on keeping the businesses or selling the businesses,

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learning how to structure the business so that it could sell someday was one of the most

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valuable things that I've done as an entrepreneur.

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And I remember when I started out as like, I'm never going to sell this company.

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I'm never going to sell this company like I'm going to keep these things for life.

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And that may or may not be true, but as I've gotten older, I will tell you this.

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I do like having optionality.

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And by doing by structuring the company in such a way that I could sell it,

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which I'm going to get to what some of those things are in a second,

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it actually enabled me to have more freedom, which was the ultimate goal of the business.

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And so the biggest hardship that I've probably forced on myself was starting another business

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while I had a business, which is probably one of the questions I get most frequently for

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entrepreneurs was like, well, you say I should be focusing on stuff, but you have all these businesses.

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And the answer is yes.

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And part of that is because I made mistakes and I'm hopefully hoping that you don't have

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to make the same ones that I did coming up, which is I would see you of one company

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and then started a second company because I wasn't doing anything in my first company

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or wasn't going to plan on doing anything in my second company.

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I was like, I can be CEO of both terrible mistake.

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And it cost me dearly in time and stress and all of the other things that go along with that.

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But being CEO is a full time role.

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And so unless you are truly the owner of a company and not the CEO,

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then that company still needs you.

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And it means it's a not sellable or sellable for much less because it's still dependent on you as the owner.

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And I remember I used to poop who this when I was, you know, earlier on in starting my career.

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I was like, when people, I would hear gurus say like, and maybe this because I didn't know how to do it.

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But they were like, you know, a business can't run without you.

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It's not a real business.

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Well, I don't think it's not a real business.

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I think that you are not an owner if it cannot run without you or you are an owner, but you're also a CEO of the company.

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And so for me, understanding the difference between CEO and owner was really important because I didn't even have any examples of that.

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Right.

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It was only when I started looking at the investor world, the wealth world that I understand the difference between those two things.

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And so as an easy example, like if you look at Warren Buffett, he doesn't run C's candy.

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He owns C's candies, right.

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He doesn't run Geico.

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He owns Geico and he doesn't own, you know, Ben Bridger's jewelers or whatever it is, like he owns it.

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He doesn't run it.

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And so if you think about that within the context of, you know, your businesses is like, is there a way that this business could not only maintain, but also grow without my involvement whatsoever so that I could function the same way I do in the stock market as somebody who's in it who owns equity in this company that it grows without me.

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Now, let me explain how my role works now because I have been able to structure my my life so that I actually treat all portfolio companies the same.

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So despite the fact that I have 100% ownership in three of them and I have, you know, minority stakes in the other five, I still structure my engagements with them the same way.

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So I'm still meeting quarterly with those, those companies and their leadership teams and I have, you know, meetings as needed with them throughout.

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And one of the important pieces is that I am nose in hands out, so you can write that one down like NIO and I got that from a mentor of mine.

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Nose in hands out, which means that when we have a meeting or we have a, you know, a long talk, we want to talk about something strategic, I don't walk away from meeting with with homework.

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I don't walk away with to do's, all right, and that is a purposeful effort by design because if I had to walk with to do's from all these companies that I would I would never be able to get anything done, right.

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And so I go into there as a strategic advisor. I'm there to offer my experience, but I'm not there to lead the meeting. I'm there to bounce ideas off of.

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And the way to make that transition is that you have to build it with that intention. So as I've now built businesses later in my career, compared to earlier, my earlier businesses, I built independence on myself because I had those interpersonal needs and I also didn't know any better.

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And so this is one of the downsides of having a personality based brand compared to a business that's faceless that's really just a brand in and of itself that's outside of the entrepreneur owner who started it, right.

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These candies is not about more and Buffett guy code is not about more and Buffett, they have a get go, right. And that's the mascot. And so as I've transitioned through this, I can tell you that now finally, I would say I'm in a position where I actually am an owner and it's awesome.

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It's great. These companies pump out cash flow and I can allocate that cash flow accordingly and you know, buy percentage of other companies again, real estate, all these other things.

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But it comes from literally being able to do that, which means that I either have to bring someone up to operate SEO. So right now your business does not have a CEO and you say that you are passive in it, I would probably challenge you on that say that's not true, right.

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The company has to be able to grow and innovate without you. If it can do that, then it passes my test of ownership, right.

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And so I like to have a certain amount of involvement, which I just said, like quarterly and touch points and things like that. But beyond those things, the business must be able to operate and grow on its own.

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And a test that I have is that in a six month period after I leave and I put someone else in charge, does the company grow during that period of time, not only maintain, but grow in both toppling and profit unless there is, you know, some reason they wanted to make some sort of capital investment or whatever.

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But for the most part, you can use your own competence there. But that is my litmus test is six months. So if I put someone new in and I give them six months, does the company grow without my involvement, switching to this communication cadence.

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And I think one of the hardest and most significant things that you can do to really remove your stuff from that is if you have any sort of central communication for the company.

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So if you have Slack or a son or some place that you that you are, you know, integrally involved, you see everything.

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If you can remove yourself from that, if you can get off of the company slack, if you can get off of the company, a son, so that no one can have contact with you and you can start a separate communication center,

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which is what we have done with our portfolio. We just have one slack that has all of the executives from each of those portfolio company.

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So they are the only ones who have direct access to us and their teams have access to them directly. And that is how we can have far more leverage with the skill sets that we have given the opportunities to marketplace.

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And so the important point here that I want to make is that independent of whether you plan on selling or you plan on keeping your company, structuring your company so that you can sell it will ultimately give you the freedom that you want.

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And this was something that I did not do early on in my career and it's taken me years. I mean, now over a decade to get to this point and I can tell you, I don't think I'll ever build another company again the way I used to.

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And I think part of that comes with skill sets, part of that comes with beliefs, part of that is character traits that you develop over time.

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But hopefully we can fast track that, which is why I'm making use of it. So I hope to find that valuable. If it was for you, I'm trying to help entrepreneurs who are trying to scale their companies and just kind of show you the lessons that I've learned along the way.

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The key point is ownership is the goal, not CEO ship. And if we can act as owners, I think we make better long term decisions, you are far less stressed about the short term nuances in the business because you have a much more long term outlook.

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And ultimately, I think it actually better serves the business in the long run in terms of the value that it creates for its customers.

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So, and honestly, the value that the business creates for you in your life, which I think most of us wanted freedom and it takes a long time to get here.