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When you should sell your business · The Empire of Wealth

• 0:00
  Speaker 1: When I was 21 years old, I was completely broke.
• 0:03
  Speaker 1: I had some successful businesses in the past, selling Instagrams, whatnot,
• 0:08
  Speaker 1: made $ 30, 000, thought I was amazing. And I ended up
• 0:12
  Speaker 1: losing it all. I launched a cafe, completely failed. Anyway,
• 0:17
  Speaker 1: I was living with my parents at the time and
• 0:19
  Speaker 1: I finally hit my winning businesses and we're making a
• 0:23
  Speaker 1: lot of profit. The most interesting thing happened. I felt
• 0:26
  Speaker 1: more poor than ever. because every single dollar that I
• 0:30
  Speaker 1: was making was just going into inventory, and the cash
• 0:34
  Speaker 1: would come in and go straight out. In that situation,
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  Speaker 1: for a first-time entrepreneur, it's very hard to see the
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  Speaker 1: light at the end of the tunnel, where you can
• 0:44
  Speaker 1: finally buy the things that you've always dreamed of as
• 0:48
  Speaker 1: a kid. So when I got approached by some people
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  Speaker 1: to buy the business, and I remember them sending the
• 0:56
  Speaker 1: email and saying, I just read it and it was
• 1:00
  Speaker 1: like $ 16 million plus a little bit extra. It was
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  Speaker 1: just the most surreal experience. So excited. I was like
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  Speaker 1: a hundred percent. Yes. Like there's literally nothing that could
• 1:11
  Speaker 1: stop me doing this. And I think that it's really
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  Speaker 1: important that people understand that there's multiple reasons to sell
• 1:22
  Speaker 1: a business. And I think that a lot of the
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  Speaker 1: people that are doing their first sale of their business
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  Speaker 1: are is not considering how it's actually going to change
• 1:33
  Speaker 1: their life. Now, obviously, when we're selling our business, it's
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  Speaker 1: a multiple of the future and cash flow that you
• 1:40
  Speaker 1: are going to realize from. But I think that there's
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  Speaker 1: two other kind of things that we need to consider.
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  Speaker 1: The first is how it's going to change your life.
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  Speaker 1: There's two lines of freedom that we can realize from
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  Speaker 1: selling a business. The first one is just the general
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  Speaker 1: freedom line where you You're still going to have to
• 2:00
  Speaker 1: work again in the future with other projects. You're not
• 2:05
  Speaker 1: scared to go to the doctor and spend a bit
• 2:07
  Speaker 1: of money there. You could help someone if they need
• 2:09
  Speaker 1: a bit of help and you can go on some
• 2:11
  Speaker 1: cool holidays. That is an amazing feeling. But I think
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  Speaker 1: that a lot of people can realize that through the
• 2:19
  Speaker 1: future cash flows that the business is going to produce
• 2:21
  Speaker 1: for them. And a lot of people freak out at
• 2:24
  Speaker 1: this point where they're like, oh, but what if it
• 2:26
  Speaker 1: doesn't last three years, five years? I was constantly told
• 2:31
  Speaker 1: that my businesses were going to fall off a cliff
• 2:34
  Speaker 1: in year two, three, four, five. It was only until,
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  Speaker 1: and this was one of the main reasons I wanted
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  Speaker 1: to sell, it was only until I sat down with
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  Speaker 1: a mentor that truly knew business at that scale and
• 2:44
  Speaker 1: how big businesses get. When I surrounded myself with like-minded
• 2:48
  Speaker 1: people that have a firsthand experience of where I was,
• 2:52
  Speaker 1: that he said, this fear will never go away. It's
• 2:53
  Speaker 1: so rooted inside of you. And that this fear is,
• 2:59
  Speaker 1: probably irrational considering all of the inputs that are going
• 3:03
  Speaker 1: on and the outputs that are happening. Anyway, the second
• 3:06
  Speaker 1: line of freedom that you want to achieve is this
• 3:09
  Speaker 1: self-actualization line. This line where you can do absolutely anything
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  Speaker 1: you want, work on absolutely anything you want, you can
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  Speaker 1: solve any problem, you could help anyone in any way
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  Speaker 1: that you want. And this line is just so much
• 3:24
  Speaker 1: greater than selling a small dropshipping business with your first sale.
• 3:29
  Speaker 1: It's true. And I think that a lot of people
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  Speaker 1: are thinking that this $ 1 million or $ 2 million exit
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  Speaker 1: is going to completely change their life. Now, I'm not
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  Speaker 1: saying that $ 1 or $ 2 million isn't a lot of money,
• 3:44
  Speaker 1: but at the same time, I'm saying that it's just
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  Speaker 1: not going to produce the life that you think it's
• 3:49
  Speaker 1: going to because you are going to have to take
• 3:52
  Speaker 1: that money. Unlike a large exit, which we'll go through
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  Speaker 1: the numbers, You're going to have to take that money
• 3:58
  Speaker 1: and you're going to have to reinvest it into a
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  Speaker 1: product that you don't know that you have product market
• 4:02
  Speaker 1: fit for. And a lot of these dropshipping businesses will
• 4:07
  Speaker 1: end up failing, but at the same time, they're not
• 4:09
  Speaker 1: failing because they were fundamentally a bad business. They're failing
• 4:13
  Speaker 1: because you as a founder sold it and it wasn't
• 4:18
  Speaker 1: set up for success without you. And I've seen some
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  Speaker 1: people that just stick with these I shouldn't say dropshipping businesses,
• 4:25
  Speaker 1: but e-commerce businesses for a long extended period of time
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  Speaker 1: and have created amazing results because they've developed a product flywheel.
• 4:33
  Speaker 1: They've just constantly iterated and they've built a brand. But
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  Speaker 1: I think that if we're doing the numbers, if you're
• 4:40
  Speaker 1: going to invest, if you're going to make $ 2 million
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  Speaker 1: on an exit, there's no point putting that in the
• 4:46
  Speaker 1: S & P. Like you're going to make $ 150K a
• 4:49
  Speaker 1: year if you're going to invest $ 2 million out to
• 4:52
  Speaker 1: tax into the SMP. That's just not enough money for
• 4:55
  Speaker 1: probably most people watching this video. Whereas if you look
• 4:59
  Speaker 1: at something more like if you're going to invest $ 10
• 5:02
  Speaker 1: million into the SMP, that's $ 750, 000 a year on average
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  Speaker 1: adjusted for inflation. So I think your number is going
• 5:13
  Speaker 1: to be different. Your number is going to adjust as well.
• 5:15
  Speaker 1: The hedonic treadmill, you're just going to keep wanting more
• 5:18
  Speaker 1: and more and more. I'm not going to tell you
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  Speaker 1: what the right number is. But what I do want
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  Speaker 1: you to reflect on is those two levels that you
• 5:26
  Speaker 1: can achieve and what is going to happen after you exit.
• 5:31
  Speaker 1: Because it's not always what it cracks up to be.
• 5:34
  Speaker 1: And you really, really need to consider it.