Roland Frasier 4:50

I have no idea. Yeah, man I never find out because then I’m afraid I’ll be bored with it. Right.

Josh Hadley 4:55

I agree. I agree. So, Roland. I know you started your career as an attorney, so give people some context as to how did you get to this point where you’re doing so many different business deals, but yet you started in the world of, you know, as an attorney.

Roland Frasier 5:11

Yeah. So I started as a real estate agent, when I was 18, I got my license, I got my insurance license when I was 19, securities, when I was 20, helped do a whole bunch of building of developments and land and acquiring land and retitle it, you know, getting the entitlements to it, spinning it off, building houses, building apartments, things like that. Got my degree in accounting, but didn’t want to be an accountant. It’s got my degree in law, you know, practice law for about 13 years. But what has been a unifying thing for me throughout the whole of my, you know, my life really has been, I really like business, I just have liked it ever since I was very, very young. My father to this day is still a tax attorney. And so I was exposed to all these really cool entrepreneurs. And, and I remember him coming into the office, and, you know, my dad’s in a suit, and all the other attorneys are in a suit. And these guys are in their jeans, and, you know, a cowboy hat, or, you know, just like, you know, and I grew up in Virginia. So it was, it was, you know, a bit country fide. But I was just like, that’s really cool. Those guys don’t have to like they don’t seem like they have to impress anybody. They do what they want. They were what they want. They don’t really have offices that they work out of so much. Most of them, they were just kind of investor entrepreneurs. And they did everything from owning a bunch of racehorses to gold mining to algorithms with software, and, you know, or a chain of record stores, right? And so I got exposed all these people. And I was like, I think I want to do like, I want to be like that. I don’t know what I want to do. But I want to be like that. And then I asked my dad, I was like, you know, what? What do you think I should do? You know, because I have no idea. And he said, Well, what I can tell you is that if you learn how to read financial statements, and you learn about the law, and how taxes work, you’ll be able to use those no matter what you want to do. So if you want to kind of hedge your bets, go learn about those things. But all during the time I was doing all that stuff. I was like I, you know, very, very early on, got an opportunity to invest with one of the one of the guys that was doing these syndications, these real estate developments. And we bought a small piece of land and built four houses on it. And I doubled my money in about nine months. And I was like, this is just crazy. This is so cool. And then I found Bob Allen’s book, Nothing Down in the back of my dad’s car. And I read that and I was like, Holy crap, you can buy real estate with no money down, you know? Okay, I’m gonna go try it. And so here I am this idiot kid that didn’t know anything about anything. But I didn’t know you couldn’t do it either. Because Bob said you can do it. And you know, and I acquired a real estate with no money down. I remember the very first time so you get this goofy smile on your face. You’re like, how did that happen? You know. And then when I did my securities license, I got I had it held through a company out in New York and I met some people that were investment bankers at Prudential Securities, one of those guys took me under his wing and kind of showed me how leveraged buyouts work and I was like, so basically, you can also buy companies with no money out of it. Oh, yeah. Leveraged buyout, then you just get debt, and they just need to have this, this and this. And I was like, well, that’s really cool. And I wonder if you could also apply some of this real estate, no money out of pocket stuff to that and turns out, you could and so I just kind of fell into it, starting from real estate with from that very first, small, you know, four unit thing that we developed and sold to continuing to read every autobiography, I could learning everything I could about all the different, you know, ways that people could do business and negotiate and, and finance things. And, and then I’d say, it was a big turning point, meeting the guy from Prudential because I really got that you could do this with companies at that point. And, and just since then, it’s just been kind of, you know, can you do this? What if I could do that? You know, and and usually it works.

Josh Hadley 9:26

That’s amazing. One deal after another, you just you keep moving forward. And I think what’s so interesting about your, your story in your background, does sound like you always kind of had a thirst for knowledge. Right? Absolutely. And you haven’t, you kind of had this idea like, Hey, I like business. I’m going to kind of I got I need to figure out my way in life, so to speak, but you tested different things out, right, kind of dipped your toe in a couple different waters. But you never kind of gave up on this passion that you had. had, like you mentioned when you were young that you just loved beer. Listen, likewise, I was the same way myself growing up, I was a kid with a candy stand on the corner of the street and my parents weren’t entrepreneurs. But there was just something inside of me. It’s like, I’m gonna go outside, and I’m just gonna stand there and I’m gonna, I’m gonna try to get people to come, come over, buy some candy, buy some soda, and I didn’t work. It was great. And, you know, I kept doing it so much that my dad actually built a little candy stand for myself. I think the only thing he regretted is that he, he didn’t purchase lightwood. So the thing was just a beast. It was so heavy that I remember every time I’d have to ask him like, Dad, can you go pull out the candy stand? He was like, oh, okay, I’ll go get it. You know, I mean, he would go do it. That’s great. He’s like, I wish this was probably a little lighter, and he could go all about himself. Now I have my son. So I have a seven year old son, his name is Hudson. And he had the same idea. So we went to, he plays baseball and sodas, his sister plays T-ball. And so he saw that at one of the ballparks they had a concession stand. Well, where they play T ball. There’s no concession stand. There’s just four little ball fields, right? So he’s like, hey, I want to go sell candy here. That’s nice. I’m all in you know, and so he know about your prior thing? Not really. I mean, I think I told him like I, you know, sold stuff in the past. So he’s hounded me forever. Anyways, we went out this last Saturday. I mean, it was fun for me just go into Sam’s Club, picking out stuff I think I was the more Yeah, just as excited as he was.

Roland Frasier 11:34

You knew not to put together a very heavy canvas.

Josh Hadley 11:37

That’s exactly… although. So it’s a wagon this time. So it’s a little more mobile, and he’s able to move it. But I have to be the one that that packs it up, obviously puts it in the car. But anyways, he made 40 bucks, in one hour. So he was stoked about that. And anyway,

Roland Frasier 11:57

You have to do that in internet math. So let’s see, if he made 40 bucks in an hour. This is how we do it online. 40 bucks an hour, 2080 hours workable in a year, he made it he’s tracking towards $83,200

Josh Hadley 12:12

Hey, that’s not a bad start for a seven year old. I like that. I like that at all. So yeah, but he’s always you know, it’s funny, you know, even for my son, he asked me the other day while I was looking at Amazon, he’s like, Dad, can we look at business books on Amazon, you know, because I’ve shown him your book Zero Down, which I want to talk about, but he loves He just has a thirst for for learning, and the business world. So I think for any entrepreneur, right? I think my advice sounds like your advice is like you just got to keep learning. There’s so much to learn in life and never get never become the you know, feel like you’re at the top of your career. Because there’s always something else to learn or do or see.

Roland Frasier 12:54

Yeah, I read somewhere that it’s only about, like, 10% of the people that ever read a book after they graduate from from high school.

Josh Hadley 13:03

Are you serious? 10% Huh?

Roland Frasier 13:05

Crazy. I was like, Man, I feel like there’s so many great things and books and books are still, to me, the best consolidated source of smart people’s thinking, like more than videos more than, you know, podcasts is as much as I like, all of those other things for what they bring. But like when you want to master a topic daggone I mean, somebody that’s taken the time to edit and you know, all of their life and all of their learnings down into these couple 100 pages. That is gold. And so there’s so much of it, to to consume, and find and discover and be exposed to I agree with you 100%.

Josh Hadley 13:45

It’s very true. So I’m going to ask you what your favorite book is at the end of this at the end of this episode. All right. So keep that in the back of your mind. But I want to transition to your own book. It’s behind you right now. Zero Down, right. And then you have that Epic Challenge Workbook as well. You talked about, you know, epic as being one of the companies you’re really excited about right now. Tell me about Zero Down. I know that kind of plays in line with epic, why don’t you tell our audience a little bit more about that?

Roland Frasier 14:13

Yeah, so all of it comes from, from really trying to share a lot of what I learned and it’s always nice when you can when you can give back and do something good in the world. And also, there’s some good in it for you too. And so like for me, it was it really, I didn’t really start this in earnest until I got until the pandemic. And I was kind of like, you know, what am I gonna do you know, I’m gonna I’m at home, okay, you know, it’s great. But how do I do business? And so with Zoom and everything it was it was a friend of mine kind of had shared with us how you do these challenge things. And so I started, I was like, Okay, I’ll do this. I’ll just do a challenge. And so we put it together in a week. And now we’ve done I think 25 or 26 of them on that topic and The topic was, how can you acquire businesses but because most people don’t have access to banks, a crazy pile of money and a bunch of credit, or investors, those are kind of the traditional ways that people acquire businesses, I was like, Well, what if we put a spin on it and show them all the cool ways that, you know, that have come up in my life of how you don’t need to do those do to have those things and, and when I started making the list, I think my first list was like 59. And then, you know, after really brainstorming, and then kind of a lot of creative deals that have come over the last couple of years, I’m at 221 different ways to acquire businesses with little or no money out of pocket, you still can do it the traditional way. But this has become kind of a fun challenge to me is like, Well, how do I how do I do it without having to come out of pocket? Yeah, and, and so the, the book actually came out of the challenge, because writing a book, I’ve written a couple of books, and writing a book is hard and takes a long time. But what’s not as hard is that you teach something, and then you send the transcripts off to somebody who’s an editor and say, turn this into a book. And that’s really what that that came from. And so that book I’m very proud of, because I didn’t spend a whole lot of time on the book, I spent a lifetime learning the stuff, but then I just got to share with people, and then somebody else organized it all into this, you know, this format. And now I’ve got a book that kind of goes through that and, and we have a new version coming out. Because over the last 25, or six challenges, I’ve learned a lot from the people that I’ve been teaching, that can help them more as well like things that that might make sense to you one way you have to, to be able to explain lots of different ways to lots of different kinds of people with different levels of education and experience and understanding and, and fear. And so being able to, to kind of learn from all of that stuff has made me I think, a better sharer of information. And it has helped me create some tools that I didn’t have before that now I use all the time in my business. And so it’s just been a really giant win win.

Josh Hadley 17:12

I think that’s, that’s so awesome. There’s so much so much to unpack there. Maybe we could dive down a whole rabbit hole there. But for our audience, so e-commerce entrepreneurs here, ideally, in that seven figure range, they’ve probably just crossed that seven figure mark, right. And they may or may not have hit a plateau, right. But they know that they want to make a lasting impact in the world. They know that their business has a lot of potential, but maybe they don’t know exactly what the next steps are. Or they’re looking for different levers that they can pull to maybe get to that eight figure mark or grow and expand. Tell me how acquisitions fit with inside of you know, being able to scale and grow a business?

Roland Frasier 17:55

Yeah, so I think acquisitions are if you look at what do the wealthiest, most successful players on the planet, do. They acquire companies, they generally are not inventing things, they are finding people who have done something that they feel could enhance their business. And then they’re acquiring from those people, whatever it is they built, and what one of the tools that that kind of came out of teaching this is that I found there’s really seven primary categories that can dramatically impact your ability to grow your business through acquisitions. The first one is what they call horizontal integration, which is just acquiring your competitors. And that one seems like that one makes a lot of sense. But it’s not just buying your competitors. Because like, if you want to double your e-comm business overnight, you’re doing $5 million dollars a year, go by a $5 million e-commerce business and you’ve instantly gone from seven to eight figures right now you’re at 10. Yep. literally overnight, the day that you close the deal, that’s done. And being able to do that with little or no money out of pocket opens that avenue up, I think to a lot more people, but it’s not just acquire your competitors. It’s, well, who are the indirect competitors? Like who are the people that have substitute products or services for mine? And then you think you can go out and say, well, now what is it that I want to solve for problem once and so if you want to, if you want instant growth by your competitors, right, but if you want, let’s say that you’re just like, man, if I had more leads, I’d be able to really take off with this. Well, then media is your play, go acquire media if you acquire media, particularly as the costs on Facebook and Instagram and a lot of places Google have gone up and are continuing to go up like customer acquisition costs is a real challenge for a lot of people these days, but if you go out and acquire your own media, and that can be it doesn’t have to be like you go buy a television In network, it can be you go and buy a newsletter, or a group or a podcast or some other thing that people have put together that has attracted and aggregated the attention and eyeballs of the people that you want to sell to, then that’s a tremendously valuable acquisition, because now you do two things, you’re no longer renting, you own the media, you’re not renting it from somebody that can decide them. Maybe you’re selling something that they don’t like, like you’re selling, you know, supplements or something like that, that they’re that the, the, you know, the thing people don’t like, yeah, so, you know, or maybe your messaging is politically oriented. And they don’t like that, you know, well, if you own your media, you can do whatever the heck you want to do. And nobody can stop you from doing it. Nobody can stop you from buying it, nobody can outbid you for it, because you own it. So that becomes tremendously valuable. Right?

Josh Hadley 20:58

And I think in e-commerce, especially right, I think you have blogs, right? I mean, think of how many people make affiliate income just off of running blogs or review sites or deal sites. Right. Those are, those are some easy targets, right. And like you mentioned, Facebook groups, and even Instagram pages, and tiktok, you know, is becoming even more of a thing. Anything else you would add to that?

Roland Frasier 21:22

As well, obviously, meetup groups, masterminds. Any I mean, there are radio, television and print properties that are available magazines, you’d be amazed, like, I mean, we were looking at buying was a Conde Nast owned property. But, but like we’ve looked at at major magazines that can be acquired for pennies on the dollar out of bankruptcy or out of just a desire to dump them during acquisitions. There are all kinds of media that are out there. So I would just say like, you’re only limited like media is any asset that comes with people. Right? Yeah. So like, there is like a form of media is an Amazon listing. Because an Amazon listing that ranks well in the Amazon engine for search actually carries with it a whole bunch of reviews, that’s a bunch of people that have already been aggregated and proven as buyers. Now Amazon just opened up, I think, this week, to being able to reach out and email your customers, including your past customers. So like, you know, hey, news flash, if you acquire that Amazon account, or that Amazon product that’s got those people that’s attached to it, you just got an email list.

Josh Hadley 22:41

Yeah, that’s very true. Yeah. I didn’t think about that. That’s true. Yeah.

Roland Frasier 22:45

So like that, all that stuff to me is is, is really interesting that that all of these things have, like the SEO blogs, but you know, blogs and URLs that rank videos that rank, and you can acquire the specific asset, the specific page, you can acquire the whole site, the whole channel, you can acquire the whole account. And you get all of these benefits each time you go up a level. So like media is almost infinite that’s out there. And you’re only limited by your own creativity and identifying what is it and and like really diving in, and like, that’s just a channel and that channel has, you know, so many are that’s one of the categories, I guess I should say, media is a category. But there are literally hundreds of types of it. And then under that millions of potential acquisitions for for anybody, and media sells typically, for not much, unless it’s like if it’s a syndicated TV show with hundreds of millions of viewers. Okay, sure, that’s gonna sell for a lot. But so much media is created through micro influencers and things like that, where it’s just a labor of love. That turned out to be something that’s probably now a pain in the butt. Because it’s after they’ve run it for three or four years, they kind of got to keep doing stuff for this. Yeah, we’re not getting paid for it, you come in with an offer for any little tiny bit of money. They’re pretty excited about that.

Josh Hadley 24:12

That’s, that’s awesome. I mean, so many golden nuggets out of there. And we could continue diving down that rabbit hole. And that’s only one of the two verticals that you kind of talked about, right? Like you said, you have kind of seven different categories, right? Yeah. So

Roland Frasier 24:26

So if I go around the list, the next one would be how can I get teams and infrastructure a lot of people are will say, well, I need to, I need a media buyer. And I don’t know where to find one or I need inventory management or I’ve got to have a, you know, a three PL team to do this stuff. And I have no idea how to do that. I’ve never done that before. Well, those teams all exist, as do all of the other resources that you might need and there’s a good chance that you can acquire them. As a matter of fact, from from somebody that’s already done it as a matter of fact, they have a term for the teams. They call it acqui-hiring where you acquire or a business or business division or business unit, and you get the team. And then you have a team instantly. And we’ve done that with software and r&d and a whole bunch of sales, you know, then another category would be products and services. So if you look at what are the products and services that your people who you’re selling to or buying, particularly BDA, before, during, and after the time that they’re buying from you, like, go buy those products, you instantly can add a whole lot more sales, increase your average order value, add upsells and down cells, just by doing that, you can also go and acquire up and down the supply and distribution chain. You mentioned affiliates, so many people forget that they can actually acquire their affiliates. So they’re paying them 30, 40, 50, 60% of the gross sales price. And never even think, well, what if I just acquired that mommy blogger? And what if I just acquired that newsletter? Or, you know, I mean, and that’s a huge one, like, I’ve got people that have acquired people that they were paying a million dollars plus a year to, and they were able to acquire them for less than one year. payments that they were making, dude,

Josh Hadley 26:13

That’s amazing.

Roland Frasier 26:14

Crazy, right?

So say no, so that’s a really cool, you know, that’s a cool distribution thing, because a lot of people are like, well, you know, an e-commerce, it’s easier, but they’re, you know, a lot of people will say, Well, I don’t really have distribution on DTC, well, you might be DTC. But are you direct to customer because you’re selling to them from your website, are you direct customer, because you’re selling to them through your website, but you also have affiliates that you’re paying to send people to your website. So you can sell direct customer, that’s all that’s considered an affiliate relationship, right, you’re, you’ve got a lot of options there. And then up to your suppliers, your component, or ingredient, providers, all of those your formulators, those are all people who are taking a slice of the profit out of the overall value chain for this thing that you’re ultimately selling. So all of the people that are taking their piece of the value chain profits above you or beneath you, are great places to consider acquiring, and then intellectual property would be another one. And you know, if you if you watch Shark Tank, or Dragons Den or any of those things, you’ll all the time see people saying, you know, the sharks especially they’re like, why don’t we just take that to this company that already does that and get a royalty for doing it? Yep, license it out. Yeah, right, you can do that too. You can be a license or, or a licensee. So maybe you don’t want to acquire the intellectual property because you can’t afford it or it’s not for sale. But if you could get a decent license deal, you are acquiring the right to use that property, which then gives you innovation baked into everything that you can offer new stuff to all the people that already bought from you before. So a lot of people are just dying to buy more from you, but they bought everything you’ve got, if you want to find something else, you need to go out find products, find services, or go up and down the supply and distribution chain or get IP to do that. And so like, all of those things, so that’s basically buy your competitors by the media, acquire the teams and resources, Get products and services, get recurring revenue assets. So anything that’s being sold on a recurring revenue that you could add to yours. Get your intellectual property. And I think I said supply and distribution. So like, it’s, I mean, oh my gosh, there’s still so across those seven categories, then let’s say you could only identify 10 subcategories, you’d be at 70. And we’ve identified a lot more than that. And then let’s say that you identified 10 companies under each of those, yes. 700. potential acquisitions. You can go all you know, all day long. Yeah. Right. So there’s plenty, there’s never a lack of potential companies to buy in. Because it’s so much easier to acquire a company that’s already got value than it is to create value from nothing. To me, it’s just crazy to think about, I’m going to start something when so many people already have, and are so willing to allow you to acquire it for no money out of your pocket.

Josh Hadley 29:18

Yeah, I think that’s such a big mindset shift. I know it’s been it was a mindset shift, even when I went through your challenge the first time and just the mindset shift of like, yeah, look at all the opportunities there are there’s literally numerous opportunities, unlimited, it just, what do you want to devote your time into? You know, exactly. So for e-commerce specifically, and you’ve got so much experience working with so many people through these challenges and the EPIC program. What have you seen so, because there are so many opportunities, where would you recommend? Somebody starts if they have an e-commerce brand? Let’s say they’re selling on Amazon right now. Doing well, mid seven figures there. They want to take it to the next level. But do they pursue, you know intellectual property or acquiring their supplier? Or you know, acquiring a new team? So on and so forth? Where would you recommend somebody typically starts? Or does it? Or does it just changed based on so many different variables?

Roland Frasier 30:22

Well, it’s a really good question. So what I would say is, what do you want to solve for, because if you want market share, then it’s go get your competitors. But if you don’t have enough leads, it’s acquire media. If you need teams and resources to expand your infrastructure, then it’s acqui-hiring right teams, teams and resources. If you want to increase your ao v, then it’s other products and services, because then you can downsize upsell bundle all of those in. If it’s, you want recurring revenue, you want to increase LCV, or Lifetime Customer Value, nothing like recurring revenue, I’d go out and say, who’s got, you know, what can I do? That’s a consumable in some way, whether it’s consumable content, or consumable, like toothpaste, or consumable, like a supplement, or you know, a gas, you know, a gas that goes into grill or whatever, right, or minutes for a phone, all of those are consumable examples. And all of those can dramatically increase your lifetime customer value. If you want to increase your profit margin, then I’d say go up and down your supply and distribution chain. And if you want to increase innovation, it’s IP. So I think, like, which of the seven categories is what do you want to solve for first, and then when you identify what you want to solve for, you can be more opportunistic, right? You can say, Okay, I want to solve for leads. So I know I want media, fantastic. Then you can just set a goal. And you can say, my acquisition criteria, which is the next thing to really focus on, is to say, Okay, I know, I want media, what is the minimum level of media that I’m going to need? Well, I’m going to need something that’s got at least 5000 people for this to print to make sense for me great. Well, now you know, anything that’s under five doesn’t work. And, and anything above that works. And then you just start putting it out there. And knowing that there’s newsletters and blogs, and videos, and all of the things that we talked about a little bit ago, then you just start saying, Okay, on all those categories, do I know anybody right now. And that’s the lowest hanging fruit. And then after that, you start querying your network, you tell everybody, you know, hey, you know, my name is Josh, and I’ve got a business doing this. And right now, I’m leaving, because they always will ask, you know, so what do you do, you know, e-commerce thing, and I sell iPhone covers. And right now I’m looking for iPhone, user groups. And, and any kind of media that’s got I find iPhone users. So if you know of anything, or know of anybody, let me know when you start telling people and you know, put it out on your social and all that and then people will start responding. And you just keep pushing that out there. Now, then the next level would be you can go system systematically, right, you can systematize and say, Okay, I’m going to get a list of whatever it is that I want. And then I’m going to maybe load those up into email, send out a direct mail campaign, maybe do some ringless voicemail and actually start a programmatic meaning I have a program for it. Mergers and acquisitions campaign, right? And that’s when things get really interesting.

Josh Hadley 33:29

No, I like that. It’s almost the you kind of have to put on your sales hat, in a way in terms of looking at, you know, imagine you have a product that you’re trying to sell to, let’s say bloggers, right? And so you you go acquire that list, right? And just as if you were trying to generate business with them, like put on that same thinking cap, because I think so many people, you know, especially myself, my original mindset was like, Oh, I can only go on to websites like Empire Flippers, or worse places to go to the only places people are willing to sell their business. And instead, like you’re saying, it’s like well reach out to your network, go acquire a list just like you would if you weren’t trying to sell to those type of businesses and 100% reaching out, right?

Roland Frasier 34:13

You build a funnel for your e-commerce products build a funnel for acquiring the things that you want to acquire as well.

Josh Hadley 34:20

I love that such a good mindset shift. Alright, Roland. I also want to ask you, so what kind of let’s say we’ve acquired another e-commerce brand? Okay. If you were to acquire in a hypothetical situation, you’ve just acquired an e-commerce brand. Let’s say you want to increase your profit overnight. And what what are some of the quick actions you would take? If you’ve just acquired a brand? You want to increase profit?

Roland Frasier 34:46

What would be the first steps very first thing that we’ll always do is see if we can raise prices, because most most business owners have not raised prices in a while. Now. You’re seeing more of it now. It may feel like Well, everybody’s raising prices, everything costs more. Well, we’re in an inflationary cycle right now. So you may find more people have raised their prices because their costs have gone up. But what I can tell you is that most entrepreneurs are not doing price testing. And they don’t know if they would sell more by lowering their price, keeping their price the same, or raising their price, because they’ve never tested it. And so one of the first things that will always do is test price increases, because here’s what’s cool about price increases, whatever additional income that generates on the top line, also goes directly to the bottom line, because there is no increase in your cost when you increase the price. So that’s the very first place we go. And then there’s about well, there’s 63 profit enhancers that we look at, there’s 196, sales enhancers and 50, valuation and amplifiers for the value of companies. So I just go through my list and systematically say, you know, from low hanging fruit to high, where’s the easiest place that I can find money here? And then, you know, go from there. And probably the second thing I would do is look at, how can I get effectively an extra cycle out of my payables. So can I get credit terms with my suppliers that will give me maybe everything you’re paying cod or in advance, God forbid, that you’re ordering right now, you know, if you can go and negotiate terms or find a different supplier, sometimes they’ll even pay you to switch? Right? Because they know that you’re worth a lot to them in the long run if you’re manufacturing, or you’re buying products or something from somebody. So you know, that’s the next place that we go, that’d be the first two easiest places.

Josh Hadley 36:41

Yeah, no, I love that. And especially on that, that second point there with the supplier and the credit, you know, we actually did that, you know, obviously, with inflation going up, our manufacturer did the same thing. And as we reached out, we’re like, hey, well, we haven’t shopped the market for a little bit, we went out and we found another supplier that was hungry. Now, we didn’t move all of our business overnight. But we said, look, this is our book of business that we’re normally spending. And it was nice, being able to bring all of that to the table, and then say, well, if you do want this, here’s what we would be interested in, right. And we got, we got net 60 days, after something has been shipped into the warehouse. So what I have found, it’s been a huge game changer for us in our cash flow. In our own business, we actually sold out of all of the product, before we even paid for the product. And then at that point, we were able to, you know, go invest in new product ideas. And that was just a huge shift. So I’m excited to hear you kind of share that same sentiment is like one of the first early steps that you can take to make a big impact in your business. One other question that I have here for you kind of related on that same topic. A lot of people we’ve heard a lot of aggregators in the Amazon space recently. Now things have cooled off a little bit. But I think more entrepreneurs, with FBA businesses have now kind of thought about that exit in mind. And so Roland is you’ve consulted advised, you know, a thousand-plus businesses that have been sold and grown. What are some quick actions and, you know, tips that you would share with our audience as ways to maximize their value, if they’re considering an exit in the next, you know, three to five years.

Roland Frasier 38:33

So the, I’d say a couple of the most important things like the very first one is for your business to be sellable. You need to not be an owner operator, like to get the most for it, it’s a giant jump in the valuation of businesses that are not owner operator, what isn’t an owner operator, if you can’t leave that, leave that business for a year, and come back and have it be doing just fine, and hopefully better than it was when you laugh, then you’re an owner operator, you’re wearing too many of the hats, you’re too important to the business. And what that means is that one of two things is going to happen. Either your potential buyer has to also be willing to be an owner operator, or they have to go and find someone who will operate the business for them. And so you get paid significantly less on your exit of that kind of business for a couple of reasons. One is because there’s a lot of work and risk to the buyer. And risk has an like the greater the risk, the lower the price. There’s an inverse relationship between risk and price, right or valuation. And the second is that the universe of potential buyers of owner operators or people that are willing to find an operator is dramatically lower than the universe of professional buyers who buy professionally run businesses. So I’d say the very first thing I would do and I actually just had this conversation this morning on a console is that, you gotta, you will get significantly more or, you know, if you move away from bad things, you will leave a lot of money on the table. If you are an owner operator and don’t professionalize the business that to me is, you know, one of the most important things. And I’d say the second most important thing is that many businesses are overly reliant on a single channel and don’t have their own growth engines or predictable selling systems. And so what does that mean? Well, if you have an e-commerce business, and you only sell on Amazon, then there’s a giant risk to a buyer that you’ll do something that Amazon doesn’t like that Amazon will decide they no longer want to sell that or as happened to one of the businesses that we were in the middle of acquiring, when it happened. Amazon will say, hey, we do Amazon basics for that now. Right. And now you’re competing with somebody that you can’t really compete with. So you need to diversify your channels of sales. And, and if you haven’t done that, and you’re relying on one primary platform, that’s, that’s a very bad thing. And it goes down to two ads to So like, if you’re only getting Google shopping leads, then something can happen. They can change the algorithm, there’s another what is the something content, good content, or healthy content quality that they just came out with? You know, like, they have no qualms at all about completely destroying your business accidentally, while trying to create a better user experience for Googlers. So long,

Josh Hadley 41:38

We saw that with Facebook and the iOS update, right? Yeah.

Roland Frasier 41:43

So I mean, it sounds like those, those two things. And the corollary to the first of don’t be just an owner operator would be when you do get people to help you run the business. The other thing that buyers really are looking for is bench strength. So they want to know, at least that, you know, the top people in the business are cross trained to be able to make the business function, if something is going to happen to any one of them. So I think those are like, there’s a whole lot of them. But those would be, you know, some of the bigger ones I’d be thinking about. Yeah,

Josh Hadley 42:16

I love that. What a great summary and great advice to anybody. A future guest is going to be Ryan Deiss. And he, he runs scalable companies, right, you both are partnered in the scalable, you know, business, do you want to just give a quick little pitch about scalable what it is right now? And then we’ll let Ryan do the heavy lifting about that. But I think it’s poignant based on that last conversation that we had of owner operator.

Roland Frasier 42:45

Sure. So you know, what, what we identified as a big need in many of the businesses that we acquired, and that we that we run is that they need to have the ability to operate in some repeatable, standardized way. And so we looked into a lot of operating systems, we looked at Gina Whitman’s EOS, the Entrepreneurial Operating System, and Vern Harnish’s, he’sn got the Gazelles, I’m not sure what his operating system is called, like the Rockefeller habits. And, and several others, and we just didn’t find something that was more modern for what we needed for our businesses. And so scalable came about as a result of us deciding that we wanted to be able to have a portfolio of companies that ran and reported in a similar way, and that the operators could all speak a common language to each other. And so we created a combination of software and, and procedures and standards that allowed us to all speak the same language to get focused and to be much more modern, then you have to have a mission statement. And then, you know, good financials, it’s like, Okay, what does that mean? How do I drill down on that? And how do I get buy in from all my people and that kind of stuff? And then what are the numbers that I want? And, you know, what, how, like, a five year plan is a great idea. But how do I quarterly, you know, quarter by quarter look at leading indicators instead of lagging indicators to know how I’m going to win going forward, instead of Did I mess up, you know, in the past. And so all of that has congealed into this operating system that we call the scalable OS. And that’s what scalable.co That’s what the scalable company does.

Josh Hadley 44:35

I love it. Well, thank you so much, Roland, I’m going to sum things up here, I think we have kind of like three actionable takeaways for our audience today. So I think first would be you, you know, determine if you have an acquisition target in mind, right? You mentioned the seven different categories. identify which of those seven categories you really want to pursue, where is it or do you need more leads coming in? Do you need more profit margin, right. And like Roland said, choose one, and then dive into it right and go, go start reaching out to your network, acquire list, start building a funnel, to go acquire some of those assets that can help you take your business to the next level. A second idea, if you’re maybe not ready to go acquire businesses, Roland already mentioned one of the quickest ways that he would increase the value or profits and any business that he recently acquires. Go raise prices, number one, start price testing at least. And number two, go see if there’s some opportunity with your suppliers to negotiate better terms. Then I think finally, a third step, no matter where you’re at, in your business, I think this is good advice. start trying to create those SOPs and almost kind of work yourself out of a job, you don’t want to be the one running the show the whole time. Because as Roland said, your value is going to increase as a business, your pool of of buyers is going to increase as well. So I think those are some easy three takeaways for any of our listeners. Roland before we sign off, I know I asked you this earlier, but what is one book that you would recommend?

Roland Frasier 46:14

Well, there’s so many, I think one of the books that I got the most out of over the last five years or so was recommended by Richard Branson, and it’s called Black Box Thinking. And it really, the black, it comes from the black box that is found when airplanes crash that track the things that tell the causes and how that open systems that the airlines all share that data with each other. And that, that the thinking of how they do that really isn’t allowed airline safety to increase to be one of the, you know, one of the most safe means of transportation, even though that we’re sitting in this non flyable It seems you know, hunk of tons of metal in the air. So, the methodology, and the stories and the insights that were in that book, I think had a pretty significant impact on my thinking. And I like books that I read, and I close it and I’m mad at myself for not having thought of all that stuff before. So that’s one of those books that did that for me.

Josh Hadley 47:19

I love it. I’m gonna have to go dive into that book. You’ve got me excited there. Last thing Roland. Where should people reach out to you if they would like to learn more about what you’re doing? Learn more about epic, even your books? What you got going on?

Roland Frasier 47:33

Sure. So I do a challenge about every month that is a free challenge now and it’s at GetEpicChallenge.com where I talk about how to acquire businesses with little or no money out of pocket. You mentioned EpicNetwork.com, which is where a lot of the the products and services around that lay. I’m on, I have a podcast, just like you do here. It’s called Business Lunch, where I talk to smart people like you about what they’re doing. And and then I’m everywhere on social from TikTok and YouTube to Instagram and Facebook and LinkedIn at whatever those things are forward slash Roland Frasier.

Josh Hadley 48:07

Awesome. I love it. Well, thank you for your time today Roland. It was a pleasure having you on.

Roland Frasier 48:12

Yeah, thanks for having me. I appreciate it.