Entrepreneur Podcasts | 14 Ways To Get Capital To Start Or Grow A Business

Audio Transcription

Get ready to enter the Thrivetime Show! We started from the bottom, now we’re here. We started from the bottom and we’ll show you how to get here. We started from the bottom, now we’re here. We started from the bottom, now we’re here. We started from the bottom, now we’re on the top. Teaching you the systems to get what we got. Cullen Dixon’s on the hooks, I’ve written the books. He’s bringing some wisdom and the good looks. As the father of five, that’s where I’mma dive. So if you see my wife and kids, please tell them hi. It’s C and Z up on your radio. And now three, two, one, here we go. We started from the bottom, now we’re here. Started from the bottom, and that’s what we gotta do. Clay, good to see you, my friend. Hola. We are talking today about the 14 ways to get capital to start or grow a business. But before we start, I’ve got three different definitions here, because we want to clarify what it is we’re talking about. Sure. The first definition is from dictionary.com. Capital, the building in DC used by the Congress of the United States for its sessions. This is not what we’re talking about today. That would not be correct. That’s not correct. I just, as some people, their strength is not spelling, I just wanted to clarify, that’s not on the table for discussion. We’re not going to go there. Okay, good. The other two definitions I have are a bit more pertinent. That’s what we’re going to be talking about. Okay, awesome. The first one comes from Investopedia’s definition of capital, and that is financial assets or the financial value of assets, such as cash. Okay, that’s the first one. is the factories, machinery, and equipment owned by the business and used in production. What does this mean to you, Clay? Well, let’s look at each one here. We’ll go with definition number one here. The financial assets or the financial value of assets. Basically, what this means is if you have cash, maybe you have gold, you have silver, maybe you have bitcoin, anything that you have, you can exchange to, it has value. You can exchange for value. That would be considered, you know, capital. An example of what would not be capital would be like a car that’s worth $20,000 and you owe $7,000 on it and you couldn’t quickly liquidate that to fund your business. So when I refer to capital as we talk about capital, we’re talking about being able to basically get cash to put into your business to use to grow your business. So you can’t have a half paid for car and a half paid for this or that. We’re talking about the cash you need to grow your business. In businesses, the lifeblood of a business is cash. When you run out of cash, you’re out of the game. So that’s how you stay in the game. And the second is a lot of people watching this maybe have a factory or you have some kind of industrial plant or something, and these things can be considered as capital because it’s all this machinery and all these things that basically produce revenue for you. And so that’s the two different definitions. Okay, I got it. Now I know Napoleon Hill, one of your favorite authors here, author of Think and Grow Rich, he wrote and defined capital as capital consists not alone of money, but more particularly of the highly organized, intelligent group of men who plan ways and means of using money efficiently for the good of the public and profitability to themselves. So elaborate on that a little bit for us. Well, Napoleon Hill, what he’s talking about with capital, is he’s talking about how literally when a group of men or women get together for the concept of adding value to the marketplace, he believes that’s a form of capital. Because he’s saying like there could be a ton of money, a ton of financial prosperity that is mined from the minds of men, like it’s mined like a miner would mine gold out of the ground. They can mine it from the minds of men and women and so he believes that the basis of all capital and the beginning of where money and wealth and prosperity comes from is from the minds of men and so he makes a big point here to talk about how capital is intelligently organized groups of people that can come up with ways and means to make money and he believes that you can’t make money unless you’re offering a service that is of value to the marketplace. Right, all right, well, I’m just gonna go ahead and identify the elephant in the room here. There’s a lot of entrepreneurs that are watching this and they’re saying, yeah, this is, I know what capital is now, thank you for breaking that down for me, but there’s no way that I can raise capital because of what business I’m in, because of the relationships I have, that’s scary. I don’t know how to go there, I don’t know what to do about that. What do you say to that person? I would say that right now in our country, and really not just now in our country, but at any time in the history of the planet, since they’ve had currency, and I’m not going to get too deep, but a currency called fiat currency, which is currency by decree, where we say that this piece of paper has money, since that we’ve used currency in the way we know it today, there’s always been a huge surplus of capital and always been a shortage of good ideas. And so a lot of people have half-baked, poor ideas that are ill-conceived and they’re trying to raise money for them. There will never be enough capital for those people. Example, maybe you have known somebody or maybe you’ve done it yourself. You’ve got $10,000 that you found yourself with or $5,000. You found yourself with some big amount of cash, and you found a way to spend it all immediately. Other people can take $5,000 and multiply it many times over because they’re industrious with how they use the money. So anyway, I would just say that the main thing we want to think about is there’s not a shortage of capital, there’s a shortage of good ideas and a shortage of the ability to communicate your good ideas. So if you feel like there’s a shortage of capital, you need to do a gut check or a self-check and say, am I, one, good at presenting my ideas? And two, do I even have any good ideas at this point? And I mean, a lot of businesses, the biggest issue they run into is a lack of capital that they have possession of. I understand what you’re saying is there’s not a lot of capital out there. But Napoleon talks about the issue that comes about when you don’t have enough capital. And he says in that same book, Think and Grow Rich, he says, lack of capital, this is a common cause of failure among those who start out in business for the first time without sufficient reserve of capital to absorb the shock of their mistakes and to carry them over until they’ve established a reputation. This is just talking about when you’re starting out a business, there’s going to be those unforeseen issues and problems. You’ve got to have enough capital, right? And even when you’re growing a business, there’s all sorts of statistics and data that shows that most businesses simply go out of business because they could not withstand one major traumatic event. And it doesn’t matter what kind of business you’re in. I was just talking to a young man the other day who’s looking at getting married and he says, Man, I just got this massive bill. I didn’t expect it. And man, I got another massive bill. And I was trying to explain to him like, welcome to marriage. You know, well, my wife had to have surgery, we had a miscarriage, you know, you don’t plan on these things, but they happen. And then you don’t plan on having one of our, back in the day with our DJ company where we did the wedding entertainment services, we had our entire trailer of our nicest gear stolen at the same time. You know, I’ll just take it. You don’t plan on that, but it’s going to happen. And if you have enough cash reserves, you can, you know, come back and fight again. So I recommend anybody watching this right now, make sure you save money in the bank, enough money in the bank to pay all those deductibles for insurance, and then buy as much insurance as you can. And we have some good episodes on this in even accounting, I think, with Tim Redman talking about snowball effect, how to start saving that money so that you can prepare for the unforeseen disasters that will come. Check those out. Well, one more thing he says, Napoleon Hill says that, he says here, without sufficient reserve of capital to absorb the shock of their mistakes and to carry them over until they have established reputation. A reputation. What is a reputation? Some of you watching this might know who a guy by the name of Billy Joe Doherty was. This guy was an unbelievable person. Regardless of your faith, he was a really solid guy. He started a Christian school and grew it. Well, Oral Roberts University, where I went to college, was having all sorts of financial problems. And it was Billy Joe Dougherty who had this relationship. He had a reputation as being a very good steward of money. And so he found himself as the interim president of Oral Roberts University. And it was because of his reputation that the founders of Hobby Lobby were willing to invest the money needed to keep the school afloat. What does that mean? The guy who started Hobby Lobby, he had the great flood. Tulsa had a flood like in 1985. This is massive flood that wiped out a lot of the business over there by the river walk or rather by the river side in Tulsa. And he had a lot of his business assets that were flooded. Well because he had a great reputation with trucking companies, they came to his aid and extended him the credit he needed to stay in business. So what I’m saying is that your reputation plus your practical education will determine your compensation. So you’re starting out in business, you probably don’t have a reputation. So it’s like being pulled over on the side of the road, like your car breaks down on the side of the road, and you’re pulled over there, and you call and no one answers. You’re calling for emergency and no one answers. That’s what it’s like not having a reputation in business. So when you’re starting out as a small business owner, you will not have a reputation. So it’s really, really, really important that you have cash reserves until your reputation is such where you can have a mastermind, as Napoleon Hill defines here, this group of people that are organized for the purposes of creating money that can help you and be available to help you when you have a tough situation. Before we jump into these 14, I want to make sure that all of our viewers know a little bit about you and specifically your expertise in this area. This is not new to you. You’ve been raising capital, creating capital for quite a while now. I think you’ve got a very diverse history too. I think you’ve helped doctors, small business owners, franchise owners raise money. Talk to us a little bit even about your real estate experience. Just dive into that real quickly for us. Well, full disclosure, we are not endorsed by Perrier. Yeah, I’m glad you clarified that. We have not ever been contacted by them about endorsing our program. Not technically. Not, well, yeah, I mean, they haven’t called us per se. We haven’t called them per se, but we believe things are in the works in the cosmos. It’s a feeling. It’s a feeling we have, and that feeling is what we, what we, what we believe, and that’s why we have Perrier on the set today. And it’s not because I just drank this, this flavor-neutral beverage. Okay, so moving on here. Good, so tell us about your background a little bit. Yeah, so I’ve worked as a mortgage consultant for two different mortgage companies, basically helping them sell mortgages. And not to overwhelm you guys with thoughts, but basically what you do is you go out there and you sell mortgages and you bundle them together as a thing called the tranche and you sell those as mortgage-backed securities And I helped do the first step which is to sell mortgages Then like franchise sales, I’ve helped people buy franchises people with no money I’ve helped them buy franchises get in franchises borrow the money for franchises done a lot of that Working with doctors. I’ve helped them get the business loans They’ve needed to start a business to sell a business to acquire a business to buy new lasers for their office to buy new machines. And then I’ve been coaching with countless entrepreneurs. So I’ve really almost seen every kind of financial dilemma, quagmire, and in every situation, when somebody’s been diligent and has been committed to raising capital, I’ve been able to help them do it. And you’ve probably experienced and tried out a lot of these 14 we’re gonna talk about today. All of these ones I’m talking about today, I have seen from personal experience or a client I’ve worked with has done. But these are very common. These are the most common 14. There might be 18 or 20 out there. These are the most common 14 you need to know. This is how you raise capital to start or grow your business. And as we go through these 14 we’re gonna weigh the pros and cons of each and we’re just gonna give the definition of what they are. But it’s up to you to actually go on Thrive and dive into the specific episodes that break each of these down. Boom. Because we’re not going to dive into specifically how to do these, but we have other episodes that do that. Right now, it’s just to clarify what these are, give you the pros and cons of each. Real talk, and I want to throw out one last thing before we hop into this. Most people are like, I’ve tried to raise capital. Well, no, you’ve tried probably one of those 14. This is the 14 moves. So if you try all 14 and then you can’t raise capital. Now we’re talking about not being able to raise capital. But these are the 14 moves. Let’s do it. Let’s move like you all. Yeah, we’re going to move fast, okay? Fast. Super fast. So fast. Like, prepare right now. Your mind might be blown. Can we have duct tape just to prepare? Whatever we need to do to prepare here. I’ll duct tape. Feed through this. You might want to duct tape your head so if it explodes you can just keep the brain matter in there. I don’t know if we have any of that. Okay. Method number one, work hard and save method for raising capital. The work hard and save method for raising capital. Clay, define this for us a little bit. Yeah. Napoleon Hill, my favorite success author. I named my son after this author, okay, because the book changed my life. He says, when you thoroughly understand the law of habit, you may ensure yourself success in the great game of money making, money making by playing both ends of the game against the middle. What he’s talking about is if you’re working hard, you’re going to start earning more. And if you’re saving more, then you’ll meet, and you’ll do great. So for example, I went and worked construction. I did not have any money, and I wanted to start a business. I needed like $20,000 to get started. I needed to buy a van. I needed equipment. I had a net worth of zero. I had no cash, boom. So I got a job working as a home health aid and working construction simultaneously. My schedule consisted of about 90 hours a week on the clock. So I’d work from like 5 a.m. to 5 p.m. roughly and then I would go take a shower, go work as a home health aid until like midnight or 1 or 2 and then come back and do it again. But I was earning a ton but I also was saving a ton. So I was able to earn and save, thus working both ends against the middle, boom, all of a sudden I was able to save like twenty thousand dollars in less than like half a year. And I know a lot of people that takes them years and years and years. So he’s talking about is the habit of saving mixed with the habit of learning how to work hard. Yeah. That’s that’s what we’re talking about. So what are some of the pros and cons of this? Well, the pro is that you’re going to build a reputation for being a diligent person. And I think anybody, if you’re watching this, if you if you are a diligent person you will get presented with opportunities all the time Everybody that I have it seems like almost everyone I’ve met Calls me and says hey, bro. I have a business idea Can we meet why because they know that I consistently I want to say something I shouldn’t say if I consistently kick Derriere hmm. Yeah, Jerry a period period period visit. Okay, but I get it done Yeah, so I have to get up at 3 in the morning and get it done, I’ll do it. If I have to stay until midnight, I’ll get it done. I don’t have to worry about my work-life balance. I just get it done. And because of that, people are like, you’re diligent, I’ll invest in you. So I have more opportunities than I know what to deal with all the time. But the con of that is you just can’t run around anymore just buying stuff whenever you feel like it. You can’t really be the, you know, you can’t just be this person every time you hear a marketing commercial You’re like I should buy that and and so because that’s what most people do right as a culture And I worked in the mortgage business. This is crazy Do you know if you got a Google this mess if you’re watching this the average American? Refinances their house a little less than every four years You know that on a 30-year mortgage almost the first 15 years are almost all interest So you start to think about it. The average American is basically just renting a house from the bank and moving every four years. Why? Because they get a, I send them a letter, our third mortgage company, we were good at it. We send you a letter saying, do you want to lower your payments? Do you want to take money out with a home equity line to renovate your deck? Do you want to go on that dream vacation that you deserve? And they’re like, yeah, we do. And I’m like, yeah, I know you do. And you take money out, and it’s this great game of marketing. And then you can’t be influenced by that. I’m a marketing guy, and I’m telling you, do not be influenced by that mess. Because every company is trying to market. Starbucks says, treat yourself. I think you should treat yourself. But if you treat yourself every day, you’re going to be massive. So you just got to be very careful that you’re not just led by marketing. You got to say no to things. This second method is similar to this. I think it goes hand in hand here. Yep. This is method number two, the live below your means method. Dive into that for us a little bit. Well, a lot of people watching this might say, I don’t really want to work that hard. Now, I’m not offended. I’m not upset. I’m not coming down on you. I’m saying, some people say, I know a lot of my friends who’ll say, I would never work till midnight. I would never do it. There’s nothing you can make me do. I’ve got one of my buddies, he’s been a civil servant for years, he will never ever work more than 40 hours. But what he’s done is he’s consistently chosen to live below his means. So he’s acquired a massive sum of money at a relatively young age. So I’m gonna read this quote from John D. Rockefeller, the guy who was at one point the world’s wealthiest man. He says, I believe that every right implies a responsibility, every opportunity obligation, every possession a duty. I want to underscore every possession a duty. What does that mean? If you buy a car, you have to change the oil. You have to have it maintained. You have to fix it. If you buy a house, the roof is going to be damaged. I have a friend of mine who bought a home, no money down back when you could do that. No money down, bought this beautiful house. Well, his air conditioning goes out. Why? Because it’s a house. Right. So he’s like, I’ll just call the, call who? I said, you own it. You know, well, you can’t, his car, his car, car breaks down, same guy, car breaks down. He comes over, hey, my car broke down, I got my roof going on, I got this roof problem, I got this air conditioning problem, I’ve got the car, I’ve got all these expenses. So you’re saying living below your means is having that in mind, this duty that comes with your possessions? Simplicity is the ultimate form of sophistication, according to Steve Jobs. And I would argue that if you had two really good pairs of shoes, and you lived in a rental house and two really nice outfits, and you had very little, you had one TV, very little possessions, your expenses will be less because you don’t have the cost to maintain that stuff. You get what I’m saying? That’s why for Thrive, we’re so passionate about the military. Because we have a free country, but you have to maintain that mess. To be a free country, somebody has to sacrifice year after year after year. Therefore, nothing is free. So he talks about here, again, I’ll read it to you one more time. He says, I believe that every right implies a responsibility, every opportunity, obligation. So it’s just like you’ve got to be thinking about that. If you’re somebody who’s saying, I want to live below my means But you go out and install a pool. Well, I can afford I’m still living below my means I can install a pool No, you’re not because you’re adding up to your you’re adding your expenses. Nobody’s taking into account the maintenance almost everybody I know does this it is crazy. So please live below your means and if you do According to the millionaire next door. Yeah, you’re one of the few people on the whole and the whole country We have here the United States, right assuming you’re not watching in Australia, who does so? Very few people live below their means. It doesn’t matter how much you make. If you’re watching this and you’re going, if I made a million dollars a year, I would definitely start living below my means. No, you wouldn’t if you don’t yet. Because all these NBA players, they earn 63 million, 104 million. People mock Antoine Walker and Allen Iverson. You know what, though? There’s doctors I know who make a million bucks a year, spend it all, too. Teachers I know making 40,000 a year spending it all. Just live below your means. So give us some pros and cons here of this living below your means method. Well the pro, and I want to quote Dave Ramsey, the great financial coach, financial consultant. Dave Ramsey says, if you live like no one else, later you can live like no one else. Right. Marinate on that for a second. Just, here we go. Marinate. Close your eyes while keeping focus on the screen. If you will live like no one else, later you can live like no one else. I feel like you’re a good example of that, though. Early on in your career, did you not have to live like no one else? Yeah, and I think that people don’t, I drove a 1984 brown van that didn’t have a door until 2008. Yeah. So I had a doorless van until 2008. And a lot of people are like, dude, you live in this nice house. Why do you drive that van? And I only replaced the van after my homeowners association made me do it. So I got a Hummer as my backup plan. But the reality is that I’ll probably drive the Hummer until the wheels fall off. But I think it’s important that everybody watching this, you have to know you have to have sacrifice. Some of the most successful mentors we have here on Thrive do this so well. Lee Cockrell, we’ve seen him do that. These men live below their means now and you know that they did that back before they had wealth as well. Well when Lee took us out for dinner, he took us out to one of the fanciest, nicest restaurants that we’ve been to, really nice. He really treated us like royalty out there in Florida and we drove there in a minivan, it was paid for. Yep. Why? Because he knows that if he buys a bunch of cars, luxury cars, which he could buy, he now has to maintain it. He has to then pay for the insurance. He has to pay. So he drives a vehicle that’s paid for that he can afford. Now, the one drawback here of the con, a living below your means, is that you can’t keep up with the Joneses. You can’t live like most people. You just can’t. So people say, hey, do you want to go out to dinner? Sometimes you’ll have to say no. I would say most times. So my wife and I, we do stuff that’s interesting, I guess. For us, it’s normal. But we turned off the air conditioning in our house so we could buy yellow page ads. And we made a decision that we would work together on accounting every night as our time together. Let’s just go ahead and clarify where you’re living when you turned off the air conditioning and what time of the year it was. It was in Oklahoma. It was in, we got married in May. So it was like May, June. It’s about 100 degrees, and it was in the Fountaincrest Apartments over there behind the Marriott, where it’s very hot. It’s 71st and Lewis. But that’s what we did. But the thing is, is that we made a decision that we wanted to buy a Yellow Page ad the size of like an eight and a half by 11 sheet of paper, when all we had was just very, very, very little money. And what we did, they made that sacrifice, and we made that reward later. So we lived like no one else so that we could live like no one else later. So we went on our big old extended cruise and lived it up. People were like, how did you guys afford that? I remember when I moved into my neighborhood, I was 20. I was 21, I guess. I moved into this neighborhood, and every neighbor I have could be my dad. And they’re like, would your parents buy the house for you, son? You know, that kind of thing. And it’s because I had chosen to live below my means. That’s just what you have to do. If you want to get there, ask yourself, how bad do you want it? And are you willing to say, no, these are practical ways to generate capital. Number three, method number three here, the SBA small business loans method for raising capital. Talk to us about this. I’m going to read you a little definition from entrepreneur.com. It says, a small business administration loan is a government-backed term loans that are available at most banks and commercial-lending institutions in any given year. The SBA can guarantee tens of billions of dollars of loans that support tens of thousands of small businesses. What it is is the SBA basically goes to banks and says, if you lend money to conforming clients, to clients that, if you lend money to people who are starting a business, and if they meet these certain guidelines, we as the federal government will guarantee the loan. So if I’m the bank and I lend money to you and you go out of business, I’m okay because the federal government will back and will pay off the money that you basically owe the bank. So the investors, the people who deposit their money at the bank, their deposits are safe. However, if this happens too often, then the bank will basically not be in good standing with the Small Business Administration, and that practice will soon stop. So if you have a conforming business plan, and you have all the documents and documentation that the bank needs, then you have a very strong chance of getting a small business loan, approved by the Small Business Administration, and the banks are gonna be a little bit more loose with the checkbook to write those loans because the money is backed by the federal government. So I think that we’ve kind of outlined what that pro is there. You can touch on that any more, but what’s a con that we’ve got? I think a con of that is that you do have to deal with the government. And it’s whenever you deal with the government, there’s paperwork. There’s meetings. There’s meetings about the paperwork. There’s forms. There’s forms about the forms. There’s red tape. There’s a lot of bureaucracy. And so if you’re an entrepreneur who’s like, I just want to open up businesses everywhere, all of a sudden you’re going to have a real frustration because you’re like, I have to go to another bank meeting and then another one and then another one. And you might try to apply. It might take you six months. I worked with one doctor. It took him almost nine months to get his documentation up to conforming standards. Nine months. Yeah. It would have taken me probably three weeks, but it required about 100 hours of work. Right. And so he wanted to space it out a few hours a day. So it took him nine months. I know other people who’ve got SBA loans in three or four months, but you have to have a conforming loan. Got it. All right, now let’s move on to method number four, the credit card method for raising capital. Talk to us about the credit card method? This is where a lady or a dude will use their credit card to finance their business. And if you are resourceful and you have a good credit line or good credit standing, you can use this method without ever paying interest. And so I guess a good example would be, I knew as a young man that I wanted to start businesses and I knew I had no money. So what I did was, I went on, at the time they didn’t have this website, but I went on to Discover Card and I applied for a card, which I’ve had since I was, I think, 16. And I built up a limit where in 2007, I think my limit, I think I could buy like $100,000 of purchases on my card at any given time with 18 months no interest. So that is real talk. So now what you do on a credit card method, I’m gonna walk you through it. Okay. I’m gonna go ahead and buy stuff as indicated. This will be the debt. Okay. This is this paper. A lot of times they call debt paper or notes, whatever. Yeah. So this is how this is the debt. Let’s say it’s a hundred thousand. I can have another credit card and you want to have the other credit card set up by the way before you do this. Right. But then what happens is there’s a no charge or a very minimal charge to transfer balances. So if this is a MasterCard, I can then use my Discover card and in six months, after I’ve paid it down a little bit, I’ll transfer the balance from one card to the next, thus freeing me up for another 18 months. And every six months or so I’ll keep doing this. If I have a six-month no-interest period, every six months I’ll transfer hmm and so in 2000 and like I don’t know doesn’t three doesn’t four I booked I think 45 weddings on the same day Wow, and I think I had six DJ systems Oh, maybe ten and so I bought them all on credit cards just maxed out every single card I had when I kept one for working capital and what I did was I Charged the brides and grooms a deposit right to trip your nose a down payment to reserve the DJ And then when their wedding date came and I got the full payments I just paid him off. Hmm, and I’ve done that probably a Hundred times so you’re saying use one card you make a big purchase you wait six months usually well If you go into credit cards calm credit cards calm you can find the cards that have no balance transfers Okay, and they don’t talk about this at college because I don’t understand what they’re teaching there. But they should be teaching this. But a no-balance transfer fee, what it means is you can transfer the payment, the amount of money you owe, from one card to the other. So the key is you want to get your credit score up high. Well, how do you get your credit score high? What you need to do is you need to have, there’s a thing called a Chase Freedom Card. And a Chase Freedom Card is basically anybody on the planet almost can qualify for that. And get yourself a cell phone bill. If you’re a young entrepreneur, get it in your own name. Pay your utility bills. Now, here’s the real talk. If you don’t pay your utilities on time, you don’t hurt your credit score. If you have all your cards maxed out, you don’t hurt your credit score. So what you’re going to want to do is you’re going to want to have credit cards where you never spend more than about 50% of the limit, and you pay them off every single month. But what’s awesome is you’ll start to, you’ll call them about every three months and say again these are this is a process Okay, every three months just call your credit card company and say hey I’d like to request a credit line increase and they say how much so like the double and then the dude puts in the machine He says you’re approved and all of a sudden you know, I’ve mm-hmm so let’s just say you have ten dudes working on a company since a startup right or Or three dudes. So if you guys are trying to raise money, what you do is you all go on creditcards.com, you all apply for a card, you get a no balance transfer fee card, and you go up there and then you each get like a $2,000 limit. Spin. Buy it all. And then have a second card that you already have, and once you get time where you owe money on it, transfer the balance from one card to the next. And then make sure you never get caught where you have a balance due and you don’t have any money. But you should have a business model. I knew that no matter what I was going to pay it off because that’s how I roll. Now if you’re somebody who’s like, well, I might pay it off, well then don’t do it. But this is a great and very, very valid method. and uh… sarah blakely who started the billion dollar companies banks right did this people that uh… uh… a lot of the i don’t love three guys who uh… very very successful millionaires who actually own a home building companies here started a company’s with us alone so this is the move i love it was very practical i think i’m about the pros and cons of this credit card method the pros that you can use the balance transfer to move money over, and the credit card is fast. You know why? Because you’re dealing with a non-government entity. Sweet. So what you do is you apply. They tell you right now, no, you’re not accepted. Yes, you are. You get a card sent to you overnight, 24 hours. 24 hours later, dude, you are spending money. Bam, that’s sick. So I got this awesome MasterCard. It’s a silver. It’s called a silver card. That beast, I get some cash back on that. So I’m going to take my wife on a trip to Miami, all paid for with my rewards points. Not a dollar out of pocket, super cool. A lot of your Christmas gifts. For free. Yeah, so I do that. That’s cool, right? For free. That’s nice. It’s fast. You get cash back rewards. You can transfer money. It’s great, great, great. Bad deal. Here’s the cons. pay the payment in full each month, your interest will be so sky high you will believe that you are in Colorado at the top of some mountainous resort smoking pot. Wow! Yes. That’s super high. That’s high. Okay, well that’s good, that’s a good warning. Yeah. Pros and cons there. Very high. Method number five, the venture capital method for raising capital. Sure. That’s something you’ve been doing most recently I believe. Talk to us a little bit about this. I have done venture capital to raise money for other people in the past Not on the scale that we’re doing for thrive as thrives designed to be a global worldwide overhaul of Entrepreneurial education, but I have the venture capital on smaller scale. I think a lot of people they read venture capital. They say Silicon Valley True, there’s only about between 400 and 600 active meaning companies that actually lend money on a consistent basis through what they call institutional investments. So it’s like a company that actually lends money. That’s what they do. They have analysts who analyze every deal. They look at every deal. Very few, there’s only between 400 and 600 of those. So that’s what venture capital is usually, people are referring to when they think about it. But venture capital could also be somebody who’s crazy enough to invest in your business or believes in it enough to put money in it and it’s not secured You’re putting money in but it’s not guaranteed by like when you lend someone a house You’re not lend money to someone to buy a house You’re not that crazy because you’re saying I will lend you money to buy this house if you do not Pay for the house back. I’ll take the house right in my mind students loans are the craziest venture capital ever Because you’re lending money to a person who doesn’t have discernible job skills and they have no ability to pay it back. There’s nothing to take. We’ll take you back. You can’t take their… But venture capital is like unsecured investment dollars that people are investing in your venture. That’s what that is. I’ll go ahead and read you the definition from entrepreneur.com. Venture capital funding is the type of funding that includes venture capital from professionally managed funds that have between $25 million and $1 billion to invest in emerging growth companies. OK, so what are some of the pros and cons of this one? The pro is if you have a high growth, high tech, high financing needs business, it could be perfect. So I mean, if you have a company where you say, it could be worth a billion, then venture capital, it makes a lot of sense. Because the people investing money need to have so much of a huge upside that it’s worth it. When people invest in venture capital, I don’t care what venture capital book you read, there’s one called Pitching Hacks, which is good. There’s one by a book written by Bill Draper. The name escapes me, but we can put it up on the screen. It’s a venture capital book by Bill Draper. What he talks about is that venture capital, they have to believe that over half of the businesses they invest in are going to go belly up. So they better make enough money on the ones that win to make it worth it. Now on the con side, what’s bad about it is it’s hard to get. I mean, when you tell people that you’re open for business and that your business is lending money, everyone lines up. So there are thousands of people trying to get venture capital and almost nobody can get an appointment. And then the people who can get an appointment, almost none of those people can close the deal. Right. So we have an episode that talks about how to do that, but it’s very hard to get. You can do it. Yep. You can do it, but it is hard. Right. All right, so let’s move on to method number six. Come on. This is a family and friends method for raising capital. Yep. Talk to me a little bit about it. Well, I’m just gonna read this to you. This is something I wrote earlier, but it says, a diligent man or woman who is totally sold out to their business and knows that they simply will not Stop applying effort until they win So they feel confident asking every human they’ve ever met to invest in our company, right? That’s what this is and a lot of people it’s weird. It’s just weird. I don’t get it I do not understand it if this is you we do not have to agree, but I just want to share this I’m gonna speak directly to you. There’s somebody watching this you’re going. I don’t know what you’re saying right now. I don’t understand how you could be so emotionally invested in a company that you would ask a bank to lend money, but you wouldn’t ask your own family. I don’t get it. Because if you’re sold out to the business, why would you not feel comfortable in your uncle investing in it? I mean, you say, well, it’s too risky. Why would you ask a bank? I just think it’s a deal where if you’re going to ask for money, I think you ask anybody, turn over any rock you can find and look for capital there. And I think this is something that people don’t often think about because they think about raising venture capital like you just talked about, a big company that says, yes, I’m lending out money. And they’re like, I’ll never qualify for that, man, I’ll never qualify. But not many people think about their network, right? And we have different networking things. And this is huge. You’ve got to have the network where you can tap into friends and family members. And you’ve done a lot of that with Thrive as well, right? Yeah. And we’ll talk about some things. I am a very crafty individual who spends a ton of time reading. I probably log 15 hours a week in my bathtub. Spence, one of our videographers, got a chance to witness me emerging from the bathtub yesterday. Wow. Yeah, he was not in the room. He was just aware that I was getting out of it. Oh, OK. I’m glad we clarified that. I want to make sure we’re all on the same page. It would have been some counseling meeting or something. But what I want to say, though, is I think about things a lot, okay? There’s a thing called the SEC. And their job is to make sure that it’s a federal organization, to make sure that people are not out there raising money for Ponzi schemes, things where you take money from one guy to give it to another guy, you rip people off. Anyway, there’s a lot of regulation with raising capital. So I have been able to structure a lot of my capital I’ve raised over the years as a loan Where I have to pay somebody back Well, the company has to and the traditional sense of raising venture capital You have to be very careful of what you’re doing and seek the guidance of an of an attorney because if you do not I don’t know if you know this but it’s like Federally against the law to raise more than a certain amount of money with a certain number of investors unless you have basically permission from the SEC. So it usually takes about six months to get through that process if you want to raise that kind of capital. So before you get too crazy raising venture capital, just Google the SEC, find some things there or you can watch some other Thrive episodes about venture capital. Good. All right, so what are some pros and cons here of the family and friends method? Well, the family and friends is that one, if you’re tenacious and you honor your commitments, family is a great method. That’s what we talked about earlier, if you’ve built up that reputation, huh? Yeah, I mean, if you went to ten of your family members and asked them all to invest $1,000, a lot of businesses are started for $10,000. Well, gosh, that’s a pretty good way to do it. Now, the con is that if you’re not tenacious and you’re somebody who is, you’re not resilient in the face of adversity, and you’re going to quickly end relationships with these family members in a very harsh and painful way. I have a guy that I knew from college who’s a sloth. And he says, I’m going to move to LA and I’m going to start a big, big company. And I’m saying, hey, you know, I don’t mean to rip you, you know, but real talk up to this point, you’ve been a sloth. Whatever bro, he’s asking everybody from college to invest money in him. I’m going out to LA, I’m going to start this thing. I’m like, have you ever seen Holmes wake up before 10 in the morning? Have you ever seen him, and they’re like, but he’s super smart. He’s got like a 4.0 from Oral Roberts University. This guy’s going to be something. I’m saying, hey, I’m just telling you, he’s never, he’s not tenacious. Right. Well, he went out there and spent every dime that people had, never paid them back, never worked through adversity, and everyone can’t stand him. Right. That’s painful when it’s your family and your friends. Right. So, just gut check if you’re watching this. I’m not judging you. I’m just saying if you’re watching this, you need to go ahead and ask yourself, are you the kind of person who should be asking your friends and family for capital? Right. I feel like investors are concerned about the idea, obviously, but a big part of what they’re betting on is the person. Absolutely, the big, big, big, the mass majority of what they’re betting on is the team. Which is a big reason why anybody that’s invested in Thrive wanted to get to know you or your family and get to know what you were all about and your work ethic, all of that. That’s what they’re betting on. We had a venture capital meeting yesterday or with a guy and he was basically wanting to know about our team. Who’s doing the video? Who’s doing the photo? Who’s building the website? Where are you from? That matters to people more than almost anything. Exactly. So integrity is a big, your integrity is a big thing. That’s huge. Method number seven. Oh come on now. This is the angel investor method for raising capital. Okay, so talk to me a little bit about this angel investor method. Yeah, there’s an article that was written on March 12th of 2013 by, I can’t pronounce her last name properly, it’s probably Tanya Pryve or Tanya Pryve or Tanya Privy or Tanyi Pryve. We apologize, Tanya. We apologize. We apologize. But it appeared in Forbes magazine and she says, the term angel investor originally comes from Broadway where it was used when describing the people that provided financing for theatrical productions. Interesting. Angel investors, this is some more clarity for you, angel investors invest their money where the typical amount raised is usually between 150,000 and 2 million. And since angel investors are often individuals that have held it like high up positions, executive positions at large companies, they often provide fantastic advice and introductions to the entrepreneur in addition to the funds. So it’s a huge deal because what you have to realize here is that there’s a Harvard study that was done and actually showed that this Harvard report showed that companies that had secured angel financing had a much higher chance of survival than ones that did not. Because of that mentorship? Yeah, because the person who’s lending you money are investing in you as someone who’s been successful. And now they’re coming on not as a venture capital firm where it’s a company lending you money. I mean when you get money from a bank they don’t give you a lot of advice. They say you can come up to the SBA Office of Advocacy and learn if you want to. No thanks. Yeah. You know, or you can talk to one of our banker representatives. He can help you. You know, there are some banks like Regent Bank, where Sean, one of our Thrive members, Sean Copeland is the head of Regent Bank, where they offer coaching and classes for their clients to help them be successful. But very few do. Right. But angel investors, when they lend you money, you’re not just borrowing their money. You’re borrowing their mind That’s huge. How cool is that? Yeah to have a billionaire partner. Hmm. That’s neat Yeah, I’ll just give you an example of Reid Hoffman teamed up with Airbnb, right his firm invested But he took the role as kind of like a angel investor and mentor and as those guys were dealing with the challenges of growing Airbnb they can call a guy who started LinkedIn. That’s huge. How cool is that? So that’s the main difference then, I guess, with angel investing versus venture capital is that you’ve got this mentor, wisdom you can draw on right there. Well, technically, the definition is the angel is going to be a dude who lends you money, or a lady, a human. So venture capital cannot be a single person? It’s usually venture capital is normally from a big fund. But that’s kind of like if you’re saying, I’m raising venture capital, usually you’re talking about a fund. And then if you’re doing angel investors It’s there so could you technically I guess you know classify Shark Tank as an angel investment kind of setup I think that Shark Tank is one of the most Ridiculous and asinine concepts that’s ever been presented on the planet Earth It’s just because people are given 45% of their company away, right for Someone to invest 50 grand? Yeah. And why? Just go work construction like I did. Yeah. Go max out your credit cards like I did. Ask your family and friends like I did. Do anything. But to go on Shark Tank and to be ridiculed publicly by people who are trying to put on a show for America and then to give up 45 percent of your idea for $50,000, that’s insane. But technically that can qualify as angel investment. I think it could classify more like poop. I was just trying to better understand. It could classify more like poop than it could like anything else. Good, this is great help, great advice here. If you’re going to classify manure and poop in that section of the Hellos where you find the recycled animal dung. Tell us about the pros and cons of this angel investment. The pros of angel investing is that you land their advice, their reputation, their introductions. Example, let me do an example here. On a small level, when you move to Tulsa from San Diego, I can say to you, this is Caleb Taylor, he’s worked very diligently, and you should hire him to work with your company. And as a general rule, the consulting clients I worked with were like, yeah, sure, we should bring him on to help us in some capacity. It wasn’t like a big thing. Now imagine that on a big, big scale. Imagine that I was Michael Jordan, and I said, hey, I’m Michael Jordan. This is Caleb Taylor. I really think you should put him in charge of your bank. I think that you should invest money in him. I think you should promote him to manager. I think it’s just like that introduction from a big shot. The validation is unbelievably validating. So that’s like the biggest thing in my mind. And in the capital, there’s no bureaucracy. You’re dealing with one dude. Now the con of that is that this type of funding is very hard to get and you’re going to be tied to this dude, this angel investor. And what if you don’t like him? What if he loves Shark Tank? What if he’s like, hey, why don’t you come over, Caleb, we’re going to watch Shark Tank. Or the movie Noah. Yeah, he says, let’s watch the movie Noah and then Shark Tank. I’ve got them both on my TiVo. It’s weird. I got it. It’s weird to watch that. Like a medley. Like a repeat. Like a medley. And let’s say you’re not into Noah, soccer, or Shark Tank. And you’re like, oh, this is going to be a long day. Now, if you love Noah, Shark Tank, and soccer, he’s your guy. But the thing is, it’s like you’re married to the dude. And I’m just telling you, think about it. Don’t be like, well, this person’s kind of a toad, but I guess I could take his money. I think he just described Andrew Bird, one of our videographers. I don’t know why you would say that, and I feel like that Andrew Bird and I are both offended and we unite against you in victory. Okay, good to know there. Good to know. Go! That’s something that we’ve experienced a lot with Thrive, though, with some of these investors. I know you talked about how you spoke with one, you made a connection with Sean Copeland, and he’s a guy that you’re excited to partner with. You’ve got the same values, but then he opened the doors to many other people that he knew and validated you. Each person on the team has, each investor has kind of introduced us to other people. Right, exactly. But the thing was, there was about six people so far, maybe seven, that wanted to invest and I said, nope. And that’s because I didn’t want to see them more often. Right. And you just have to be asking yourself that tough question before you take angel investment dollars. That’s huge. Method number eight here. This is the retirement rollover, the 401k or IRA. Approximately 15% of franchisees have used this method, Clay. Explain it to me. I’m going to read you a lot of stuff here. So don’t glass over here. Maybe they can put a picture of a dolphin in the background. That’s nice. That keeps the energy high. That’s good. A dolphin that’s aggressively navigating the tricky waters of entrepreneurship. OK, so here we go. According to the United States Small Business Administration, rollovers as business startups are a way to optimize the use of money in your retirement account as a funding mechanism to start a business. Real quick, if you have money in your retirement account, the system has been created so you can use that money. Got it. It works if you have a 401k or other qualified retirement account plan with a balance that’s sufficient for your funding needs and you adhere to the tax rules. What are those rules? I’m not going to tell you because I’m not a certified financial planner, but you need to see one. Now, here’s how the ROBS operates. You incorporate your new business and have that corporation set up a qualified retirement plan, usually a profit-sharing plan permitted under the terms of the plan to invest in employer stock. Then you roll over your 401k or other retirement account of the new retirement plan. The rollover is tax-free. That plan then buys shares in your corporation. Long story short, very complicated, very difficult, very litigious. Do not do this on your own. You need a certified financial planner. There’s a company called Guidant Financial Planning. We can put it up on the screen. And Guidant is a company that can help you through this. But all I’m saying is I helped sell franchises for years, and a lot of the franchises that we worked with were people who had some money in their 401K, they had some money saved, and they were able to take the money out. But to do that, you have to form up a company, another company, that this other company works with your funds, and it creates this elaborate profit sharing company to basically loophole your way through the IRS tax system. So you’re saying there’s three companies. There’s your company you’re starting, there’s a company you used to work for, and there’s a company for the financial reasons? Yes. Okay. It’s a lot of paperwork. A lot of things have to be filed in a certain way. I’m just telling you, it is a possibility. If you’re watching this and you have a 401k, you have some money saved, then do it. And if not, just fast forward. Right and this is something I think you’ve said a lot of people who get laid off from their jobs have built up that you know 401k they’re able to go and start a business right there but again this is our warning this is a very tricky waters. You have to have somebody helping guide you through this or else there can be some serious consequence. Yeah and Guidant Financial is the only company that I have worked with that I can say that there’s not there’s not other good companies, but Guidant Financial is a company that I know that specializes in helping people do this. I would recommend you find somebody in your local area or Guidant Financial themselves to help you through this process. What are some of the pros and cons here of this option? The pro is that you can tap into your 401k savings right now. That’s pretty cool. You have money you’ve been saving for retirement, and all of a sudden you find yourself unintentionally retired. Maybe you got laid off, maybe you decided I should buy a boat. You moved to Belize and you’re like I don’t have any money so you need an income. So you can tap into your savings and do that That’s neat. The con though is that you have to follow these rules strictly otherwise you could really get in the world of hurt here. And nothing’s worse than getting in trouble with the IRS. I’ve done that before and I had a chance my agent my agent her name was a usually and her and I got together and We had a lot of good conversations. Yes became really good very good friends I spent enough face time with her to get to know her well, and I don’t recommend you go through that same course, right? You know I feel like what we’re doing here is presenting you with a lot of different options You might not have thought of this one, but we’re eliminating this excuse. I don’t have capital. There’s no capital. Anybody on the planet with a pulse who wants to gain capital can do it. Anybody. This is just another option. 14 rocks to turn over, baby. Boom. Boom. All right. Method number nine. Business lines of credit. 18 months. No interest. Credit cards. Talk to us about this. Well, here’s the thing. Some people view a credit card with no interest as a credit line. OK. And what we’re trying to do is let you know, yeah, that is a form of credit. That’s a credit line as well. So there’s a little bit of overlap with the credit cards. But then there’s also this thing just called the line of credit. And what this is, is any credit source extended to a government or a business or an organization or an individual by a bank or a financial institution. So let me give you an example. If I owned a bank, I might say, Caleb, you can spend as much as you want, up to $10,000 at any time. Okay. So every month with your catering company, you buy $6,000 of chicken and vegetables and these different things you buy. And every month you pay off the credit line. And then you get another $6,000. So it’s like a revolving cash flow. Money, you borrow the money you need to buy all the supplies at the first of the month, and you collect payments from the clients. And at the end of the month, you pay it off and make a profit. Okay. So it’s a credit line. Now, the pro with that, the good thing about that is that you don’t have to have a ton of money then to go out there and run your catering company. You have this line of credits. You could start a business with very little cash on hand and use that line of credit to pay, make payroll, and the money comes in. That’s something you can do. The bad part about that, though, is that at any point that bank could shut off the spigot, you’re done. So compare it, I guess, directly to the credit card method. What is the difference necessarily there? Well with the credit card method, that just consists of a credit card and the credit card company. A credit line is where you typically go to the bank and the banker says, I will extend a $30,000 credit limit on that, but don’t get on the long end of that. I mean, don’t get to like 29 and 30. This worst case scenario, I’ll cover you up to this much. And you need to pay that back each month. At any point, I can shut it off. And so when you notice the financial crisis happened, when this happens all the time through American history, the economy is very cyclical. And it goes through cycles where it’s contracting or expanding. Well, when the economy was recessing with the recession, what was happening is that some of the banks were calling in their capitalists saying, whoa, you guys are too far extended on how much money you owe us. We’re just going to call it all due right now. We’re going to say no more credit for you. Well, that can shut a trucking company out of business right now. That can shut a restaurant down right now because they don’t have enough cash reserves on hand. So a credit line is a great way to get started, but my recommendation is you build up enough cash in the bank so that you have your own credit line. So for me, I get nervous if I have less than like $300,000 of cash. Right. You know what I mean? Yeah. So if bad things happen, I just have a lot of insurance, I’ll pay it. You’re not at the mercy of anybody else. Correct. With this, like you said, the bank can just say, okay, thank you, that’s it. And a lot of times that happens. I know of a builder who, I’m sure he did something weird to cause this, but all I know is he was in a builder for about 20 years, and next thing you know, the bank called his credit lines due said you have to pay back Everything that is out on credit right now immediately and we’re done with your credit line and all of a sudden he’s like See we have business. Yeah, I’ve seen those things happen. Yeah, that makes sense But again, the credit line works when you’re starting out you don’t have the cash again. There’s no excuses You can use this credit line, but then you want to build up that cash. So you’re not at the mercy of somebody else Absolutely. Cool. All right. Now, let’s go method number 10 here. Number 10, home equity loans. Yeah. Let me go ahead and read you the definition from LendingTree.com. They say if you’re a home owner, you can borrow against the value of your house through either a home equity line of credit, often called a HELOC or a line, or a home equity loan. Long story short, let’s say you have a house that’s worth $100,000, you’ve paid off $30,000, now you can go ahead and get equity out of the home, $30,000 of equity on a loan from the bank. So you go to the bank, you say, my house is worth $100,000, I’ve paid off $30,000, I would like a $30,000 equity line that I can use to grow my business. And they’ll let you do it. Gotcha. That’s good. Okay, and I always thought a heloc was like a monster. It’s not, actually. Yeah, that would be like the lot nest monster, and that is a common misconception. I always get those mixed up. Yeah, yeah. Now did you go to public school? No, yeah, I didn’t go to, I went to college. Oh, that’s probably where that comes from. I think that’s where they led me astray there. Now, one thing about the HELOC, it allows you to draw funds up to a predetermined limit whenever you need money. Okay. So it’s kind of like when you have a HELOC, you can say, I have a $50,000 home equity line of credit available. I don’t have to use it, but I could. Now, the danger of this is that most small business owners choose to consistently pull money out of their home equity over and over and over. So they’re never actually paying off their house. They’re never actually saving up any money. And if you’re not careful, they’ll retire after 40 years of business with zero cash savings. So home equity line is a great way to get money to start or grow your business, but be careful, be mindful, make sure that you don’t look at this as an endless source of funds. Okay, so the pro is it’s good to start initially, but again, you don’t want that. That should be more of an emergency last resort. Yeah, well also if you jack up, if you mess up, you make a mistake, if you do not pay them back, they’ll take your house. So that’s a sweet deal for the bank kind in it like it’s like we you just paid off your house Yeah, now you can borrow some money, and if you don’t pay us off We can not only so say your house was worth two hundred thousand Yeah, and you have all that paid off, but twenty thousand and you run out of cash now The bank go sell your house for two hundred and then they Wow so it’s a deal We’re like you gotta be careful with that And the con though is that you know obviously you know if you don’t pay it back, it’s bad. But the good, the pro is that you definitely can tap into your home’s equities. There’s some good stuff there. Good. But I would argue that no matter if you’re in business and you’re trying to get capital again, if you are in business, right, and you’re trying to get capital, don’t get capital unless you think you can pay it back. Right. And don’t be delusional about thinking you can pay it back. Face reality as it is, not as you wish to be or as you would hope it to be, but face it as it is. If you can pay it back, take money out. Do it. Burn those boats, baby. No method of retreat. No turning back. Boom. Method number 11 here. SBA, CDC, 504 loans. That’s code for something? Well, you know, there was a group, a hip-hop group back in 1999 called the 504 Boys. That’s what this is referring to. They had no relationship to this at all. The 504 Boys were all about making it wobble. Oh wow. I have nothing to do with this. Wobble. Okay good. Stop that. Tell me about this then. Talk to me. Well, entrepreneur.com, it defines it as the SBA certified development company. It’s the CDC. Provides a long-term fixed-rate financing for businesses acquiring new facilities or purchasing equipment to update existing locations. So what this means is like, hey I want to grow, I have a company that’s maybe a $10 million a year company and I want to open up a new factory. Well, this group here, the SBAs, the CDC group, they come alongside you and they’ll say, hey, we’ll basically guarantee up to a certain amount of your loan. A lot of times, 40%, 35%. So it allows your money to go that much further. So if I could only get $7 million of credit to build my new building, I might be able to get another three from the CDC. Okay, gotcha. Cool? So what are some of the pros and cons here then? The pros is that you can set up extremely long payout periods. You can say I’m going to pay it off in 20 years, that’s kind of cool. And then the Small Business Administration guarantees, as of the time that we recorded this episode, up to 40% of it. So that’s a good deal. But the con is that the money cannot be used for working capital. You can’t use it for cash to pay your team. It’s just got to be used for buying a bunch of equipment or by expanding your business greatly. And understand that the government’s role in their mind is to help make it easy to expand rapidly. That’s their belief. However, when you’re dealing with the government, guess what happens? Nothing happens rapidly. So I talked to a dude last night, he’s a venture capital guy in Thrive, oh this story is priceless. I’m trying to just get down on my salad and I’m starting to get nauseated because the story is just sick. So I’m just like trying to eat and it’s good salad, barbecue chicken on it, you know, and he’s like, so I built this building and they won’t let me put up a sign. Yeah, and they said my dirt wasn’t compacted properly, you know, it’s like, you know, and I so I built this big building, I got all the permits, it’s not compacted properly, so I got to recompact my soil. Like, well, how much is that? $20,000. I’m like, so really, it’s so what else is going on? Well, I wanted to have a decorative beam in front of my building. Of course, yeah. Just a decorative beam. It doesn’t affect the structure at all. And the city said, well, you can’t do that, because it’d take us like six months to approve. And I’m just like, gosh, that’s great. So then he says, I want to put a sign up, though, because he has a business. Right. So in general, you don’t want to be like a stealth business where you’re like, can’t find us. Caleb, let’s do this interview, man. You know what I mean? I want to be in a situation where people can see me. That would be weird. So he has a sign. And his sign, apparently, they say, you can build the building, but you just can’t put up a sign for your business. And he says, well, why? Well, it’s just we actually have been very strict this year. And this particular city actually did not know, because they do some blind votes, like where they vote without knowing what company it is, they actually denied themselves, the city denied their own city the right to put up their own sign that they’ve been fighting for for over a year. Not kidding. And so, when you realize you’re working with the government, there’s a phrase I want to tell you that the great former president Ronald Reagan once said, the great orator, the great communicator. He says the most terrifying phrase in the English language is, I’m from the government and I’m here to help. That’s just, if you hear that, you’re like, ah, no. So I’m just saying, like, if you’re watching this right now and you work for the government, you know what I’m talking about. Don’t act like you don’t either. Don’t act like you don’t. And if you have ever worked for the government, you don’t act like you don’t know what I’m talking about. So a pro here is that you can pay it off over a long period of time. It’s good if you’re expanding, you know, maybe not rapidly, but if you wanna grow, you can use this option. Negative, your options are limited here with what you can do with this money and how fast you can do that thing. There was a company that hired me to do consulting who only needed to pay me $18,000 and it took them almost seven months to pay me using one of these stupid loans. So like that’s stupid. Yeah. In my mind I would rather go open some sort of like corn shucking company and just make money corn shucking or I’d rather go deliver sort of paper route or I’d rather go sell candy bars. I’d rather do anything than to wait that long to pay somebody or to do something. So but if you have like a big expansion You’re trying to build a $10 million building. Maybe that time is worth it, right? But I’m just telling you beware yeah, Google this and you’ll see all sorts of reviews from people who are like I You know after getting that loan. I kind of felt nauseous That’s what people just it’s gross a lot of people commenting that exact comment. Well nobody, but me Method number 12 here, the business incubators. Bam! Talk to me about this. Go ahead. Business incubators are kind of a neat thing. The most famous one was started by a guy by the name of Paul Graham. He has a team of people, but Paul and co. called Y Combinator. Yeah. And Reddit, Dropbox, Airbnb all came from this deal. And what it is, it’s a business incubator, it’s a business support system or group that is designed to accelerate the successful development of a startup business. They’re designed to provide business advice, coaching, and counsel to select startups. And you have to apply to get into this thing. So you can’t just show up and go, I’m here for the business growth. Thank you. And you can’t do that. You also can’t, the reason why I say that is because some of the government stuff, like the SBA stuff, any dude can show up. You can see how that maybe would affect the quality. Yes. I’m here for the business coaching. But it’s a select group where you apply and if you get chosen, then you have these gurus that help you grow. Right. Pretty awesome. That is cool. Yeah. Okay, so what are some of the pros and cons here? We’ve got the gurus on our team. Well, the pros, you get coaching and capital from people at the same time. So it’s kind of like an angel investor, but it’s an angel investors. It’s like a group of people who are coaching you. Yeah. The problem is I happen to know a lot of people who’ve been in incubator programs, all of which are not successful. And it could be just because they know me. It could be like, you know me, if you’re the homie that know me, you’re going to fail. You know what I mean? That could be the deal. It could be a bad deal. Or it could be that all these homies that know me who’ve joined these incubators, joined some bad incubators. That’s what I was going to ask. Do you know which incubators to focus on and apply to? Well, Paul Graham is awesome because he actually is a successful entrepreneur. He developed some technology that basically was very much needed during the internet, to grow the internet at that time, to grow internet commerce. And he did very well with that. But you get a lot of these people who are heads of these incubators who’ve never started a successful company and don’t know how and don’t even really believe it’s possible without the help of the government or without the help of some luck or something weird and they’re coaching you. Right, that’s not good. So I do the example. There’s one I went to recently, they asked me to speak at and the lady, she graduated from college, she had I think she had her MBA and something else and she got up there and she was talking about how she goes, well business is a thing where a luck is a very big factor and so before we, some of you aren’t going to make it through this program as successful entrepreneurs because luck is going to, well I’m thinking like, no! And then the entire time I’m sitting there I’m not asked to like give my opinion on what she’s saying but she was so consistently wrong that it was almost like unbearable Yeah, and these people were having to take notes Like gospel like this is this is this is like a written word Right you have to revere the sanctity of what she’s saying to you because we’re paying you So you’ve got to make sure that you’re getting connected with somebody who’s has a proven track record of success that can help you Achieve success. Yes, and the other con is very few businesses get selected every year. Right. So you put all your hopes and dreams into getting into Y Combinator, there’s a very good chance you won’t get in. Right. Now, you know what though? If it’s me, apply, apply, apply, just do it. Bam! Right. Come on. I love it. Method number 13. Method man. I’m the method man. Crowdfunding. Direct public offerings. Talk to me about this. This is interesting because a lot of people, there’s been a lot of federal legislation that’s been created to deal with this. But basically, dudes can go up online and they say, hey, I own a business and I would like to get funded. One that I’m super excited about is called Soylent. Birdman, one of the camera guys and I, we are pumped. It’s a complete meal replacement. We have two videographers that are into Soylent. It totally replaces your meal. Okay. And this guy was like, I’ve got this meal replacement product and I think that you should invest in it essentially. He has a really nice video and he explained the process. Anybody could invest in it. And you just found that online? He just posts that on like a site? Forbes found it because he raised something like, I mean I don’t remember how much he raised, but I want to say it was like a half million dollars he’d raised doing crowdfunding. So these are like those jumpstart websites and stuff like that. Yeah, and the good thing about it is that there’s a lot of them now, and there’s a legitimate opportunity to get funded. The bad part is that you’re giving up a considerable amount of your equity, and there’s transaction fees. You have Kickstarter, Indiegogo, you have Rocket Hub, Fundraiser, you got GoGetFunding, CrowdFunder, and StartSomeGood. Those are the most popular ones, as rated by Forbes. Again, the pro is that you can raise a lot of money, a little money from a ton of people. Okay. And the negative again? Well, you’re going to pay 5% to 6% of whatever you raise in fees. If I raise $100,000, 5% to 6% immediately goes to the company to raise money, to Kickstarter. Sure. Then they also have transaction fees, like 3% to 5%. A lot of times, 10% to 11% of what you raise goes out the window right away. Right. And when you, you’re usually offering, you know, people pretty good terms already. So you end up, it becomes, you know, financially, you have to be smart. Sure. But I think that’s a great option for a lot of people. Yeah. And for people like the average American watching this, if you’re like, well, I don’t know if I want to invest $1,000 in a business, but maybe I want to invest $10. Yeah. It’s pretty cool because like a thousand people can invest ten bucks in your idea. Right. Very cool. Number 14, method number 14 here, the partner method. Clay, talk to me about the partner method here. Well, a business partner is a professional relationship that should be contractual. This is my view on it. If you don’t agree, then maybe you’re right, maybe I’m not. But this is what I found. It’s an exclusive bond in which both parties, me and you, we are agreeing to not commit to ally ourselves with any other third parties, competitors. So I have partnered with many people, two of which have partnered with me and then said, I find out a year into it, they are now competing with me while they’re still partners with me. But you had a contract. No, that’s why I’m wanting to hammer this on. Each time I go into the legal process and my attorney was like, look, you have to get a contract. Now I don’t play that game. Right now. I will not handshake with you. I will say yes, I will honor my commitments to these people literally because we’re businesses work. Yeah. And they’re like, my partner’s a tyrant. They’re talking about me here. Yeah. My partner’s a tyrant. He wants me to do my job and says, whatever it takes. I don’t want to do that. So they do is they go out and they partner with, they basically start their own business over here so they can double dip. So they can get money from me as well as money on their own. You can’t do that. And so partnership is just like, it’s big. It’s a big thing. A lot of people do it. I would argue that a very large number of the business owners watching this are either partners or are going to be partners. This applies to a lot of you. So I’m going to read this quote to you and I hope that when you read this quote from John D. Rockefeller, as our program observer is taking notes, this quote is from John D. Rockefeller. It says, a friendship… can you repeat it after me so we can go back and forth? A friendship founded on business is better than a business founded on friendship. Founded on. Founded on. Friendship. Friendship. Now what am I talking about? I’m talking about a friendship founded on business is better than a business founded on friendship. Right. We’re saying don’t team up with dudes just because you’re friendly. Because they might not be a good partner. Furthermore, you don’t know how people deal with life until you see them deal with money. Good. So if a guy is like super difficult about paying you what he promised. Yeah. Probably not a good friend. Somebody who’s super honorable about paying you what they promised, great friend. Give you an example. I’ve got a friend of mine I’ve worked with for years. Every time he owes me like 10 bucks or 1,000 bucks, or we’re in business, so sometimes he’ll put money into the company and I’ve got to pay him back or he’s got to pay me back, whatever. If he owes me 1,000, he always writes me a check for like 1,010. And if he ever borrows my car for business stuff, he tops it off. There’s just that relationship that you want to do, you want to treat others the way you want to be treated. This is not common. And most people are really, really cool until you start getting them involved in money. So what John D. Rockefeller was talking about is the friendships that you build through business are ones that can last a lifetime. Because when you’ve been in a meeting with somebody, you’ve argued with them passionately about your point, and you’ve walked away still respecting each other, you’re like, man, that person’s a rock. And in business, bad things happen, emergencies happen, family issues happen. It’s a great way to kind of filter who your friends are. OK, but as far as it comes to capital, you’re saying the partner is a way to increase capital because when you’re putting in money, they are as well? Is that why this fits you? The pro for this is that basically you can take 50% of your time to, in theory, raising money. And then you can spend the other half of working on the business. Or the other way, you’d have to spend 100% of your time focused on it. Or another way, you could say you’d have to pay for it all yourself. And then you can cut all your expenses in two. Now, that’s the pro. You can cut all your expenses in two or three or whatever. The downside is that you have to cut the pie as well. And so you have to be thinking about the pros and cons of that. I love partnerships because I find that I have tremendous giftings in certain areas and somebody else has a gifting in another area. Right. And if you partner with the right people, you can not only split the capital costs, but you can also split the brainpower. Right. Now, what’s dangerous is when you team up with people that are exactly like you. Yeah. So now you’re like, who wants to do accounting? I don’t. Well, who else doesn’t? I don’t. Oh, who has money? I don’t. What about you? Don’t. But marketing, we’re good at marketing. So you have to, you want to have partners that all bring different things to the table. Right. That makes sense. Okay, so the negative two I can assume is oftentimes in the partnership you might have one person doing a lot more of the work, right? In any group of people there’s usually one person that’s doing 70% of the work for the group. And in partnerships, it’s no different, except for when you have it set up, when you set up an operating agreement from day one, and you clarify on that legal document what you will do and what they will do in exchange for their compensation. So a good example would be like in real estate, I was not a licensed broker or agent. So I said, I will procure, I will market, I will get the website to the top of Google. I will do the PR. I will do what’s needed to procure clients, to get clients to the business. Braxton, you will close those deals. You will make it happen. You will do the transactions. We never had disagreements about who did what. But a lot of partners are like, I thought you were doing that. No, I thought you were doing that, Billy, and that kind of thing. Yep, that makes sense. That makes sense. Awesome. Well, those are the 14 different options here for you as you’re growing and starting a business. Don’t trick yourself into thinking there’s no capital out there. There is, there’s no more excuses. One of these options will work for you. You gotta be diligent and persistent. The number of new customers that we’ve had is up 411% over last year. We are Jared and Jennifer Johnson. We own Platinum Pest and Lawn and are located in Owasso, Oklahoma. And we have been working with Thrive for business coaching for almost a year now. Yeah, so what we want to do is we want to share some wins with you guys that we’ve had by working with Thrive. First of all, we’re on the top page of Google now, okay? I just want to let you know what type of accomplishment this is. Our competition, Orkin, Terminex, they’re both 1.3 billion dollar companies. They both have 2,000 to 3,000 pages of content attached to their website. So to basically go from virtually nonexistent on Google to up on the top page is really saying something. But it’s come by being diligent to the systems that Thrive has, by being consistent and diligent on doing podcasts and staying on top of those podcasts to really help with getting up on what they’re listing and ranking there with Google. And also, we’ve been trying to get Google reviews, you know, asking our customers for reviews. And now we’re the highest rated and most reviewed Pessamon company in the Tulsa area. And that’s really helped with our conversion rate. And the number of new customers that we’ve had is up 411% over last year. Wait, say that again. How much are we up? 411%. Okay. So 411% we’re up with our new customers amazing, right? So not only do we have more customers calling in we’re able to close those deals at a much higher rate than we were before Right now our closing rate is about 85% and that’s largely due to First of all, like our Google reviews that we’ve gotten people really see that our customers are happy But also we have a script that we follow and so when customers call in they get all the information that they need, that script has been refined time and time again. It wasn’t a one and done deal. It was a system that we followed with Thrive in the refining process and that has obviously the 411% shows that that system works. Yeah, so here’s a big one for you. So last week alone, our booking percentage was 91%. We actually booked more deals and more new customers last year than we did the first five months, or I’m sorry, we booked more deals last week than we did the first five months of last year, from before we worked with Thrive. So again, we booked more deals last week than the first five months of last year. And it’s incredible. But the reason why we have that success is by implementing the systems that Thrive has taught us and helped us out with. Some of those systems that we’ve implemented are group interviews. That way we’ve really been able to come up with a really great team. We’ve created and implemented checklists. Everything gets done and it gets done right. It creates accountability. We’re able to make sure that everything gets done properly, both out in the field and also in our office. And also doing the podcast like Jared had mentioned, that has really, really contributed to our success. But that, like I said, the diligence and consistency in doing those in that system has really, really been a big blessing in our lives. And also, it’s really shown that we’ve gotten a success from following those systems. So before working with Thrive, we were basically stuck. Really no new growth with our business. And we were in a rut, and we didn’t know. The last three years, our customer base had pretty much stayed the same. We weren’t shrinking, but we weren’t really growing either. Yeah, and so we didn’t really know where to go, what to do, how to get out of this rut that we’re in. But Thrive helped us with that. You know, they implemented those systems, they taught us those systems, they taught us the knowledge that we needed in order to succeed. Now it’s been a grind, absolutely it’s been a grind this last year, but we’re getting those fruits from that hard work and the diligent effort that we’re able to put into it. So again, we’re in a rut, Thrive helped us get out of that rut. And if you’re thinking about working with Thrive, quit thinking about it and just do it. Do the action and you’ll get the results. It will take hard work and discipline, but that’s what it’s gonna take in order to really succeed. So we just wanna give a big shout out to Thrive, a big thank you out there to Thrive. We wouldn’t be where we’re at now without their help. Hi, I’m Dr. Mark Moore, I’m a pediatric dentist. Through our new digital marketing plan, we have seen a marked increase in the number of new patients that we’re seeing every month, year over year. One month, for example, we went from 110 new patients the previous year to over 180 new patients in the same month. And overall, our average is running about 40% to 42% increase month over month, year over year. The group of people required to implement our new digital marketing plan is immense, starting with a business coach, videographers, photographers, web designers. Back when I graduated dental school in 1985, nobody advertised. The only marketing that was ethically allowed in everybody’s eyes was mouth-to-mouth marketing. By choosing to use the services, you’re choosing to use a proven turnkey marketing and coaching system that will grow your practice and get you the results that you’re looking for. I went to the University of Oklahoma College of Dentistry, graduated in 1983 and then I did my pediatric dental residency at Baylor College of Industry from 1983 to 1985. Hello my name is Charles Colaw with Colaw Fitness. Today I want to tell you a little bit about Clay Clark and how I know Clay Clark. Clay Clark has been my business coach since 2017. He’s helped us grow from two locations to now six locations. We’re planning to do seven locations in seven years and then franchise. And Clay’s done a great job of helping us navigate anything that has to do with like running the business building the systems the checklist the workflows the audits how to how to Navigate lease agreements how to buy property How to work with brokers and builders this guy is just amazing He’s Keith this kind of guy has worked in every single industry He’s written books with like Lee Crockerill head of Disney with the 40,000 cast members. He’s friends with Mike Lindell. He does Reawaken America tours where he does these tours all across the country where 10,000 or more people show up to some of these tours. On the day-to-day, he does anywhere from about 160 companies. He’s at the top. He has a team of business coaches, videographers, graphic designers, and web developers. They run 160 companies every single week. Think of this guy with a team of business coaches running 160 companies. So in the weekly he’s running 160 companies every six to eight weeks. He’s doing reawaken America tours every six to eight weeks. He’s also doing business conferences where 200 people show up and he teaches people a 13-step proven system that he’s done and worked with billionaires helping them grow their companies. So I’ve seen guys from start-ups go from start-up to being multi-millionaires, teaching people how to get time freedom and financial freedom through the system. Critical thinking, document creation, organizing everything in their head to building it into a franchisable, scalable business. One of his businesses has like 500 franchises. That’s just one of the companies or brands that he works with. Amazing guy, Elon Musk, kind of like smart guy. He kind of comes off sometimes as socially awkward but he’s so brilliant and he’s taught me so much. When I say that like Clay is like he doesn’t care what people think when you’re talking to him. He cares about where you’re going in your life and where he can get you to go and that’s what I like the most about him. He’s like a good coach. A coach isn’t just making you feel good all the time. A coach is actually helping you get to the best you and Clay has been an amazing business coach. Through the course of that we became friends. I was really most impressed with him is when I was shadowing him one time. We went into a business deal and listened to it. I got to shadow and listen to it. When we walked out I knew that he could make millions on the deal and they were super excited about working with him. He told me, he’s like, I’m not going to touch it. I’m going to turn it down because he knew it was going to harm the common good of people in the long run. The guy’s integrity just really wowed me. It brought tears to my eyes to see that this guy, his highest desire was to do what’s right. And anyways, just an amazing man. So anyways, impacted me a lot. He’s helped navigate. Anytime I’ve gotten nervous or worried about how to run the company or navigating competition and an economy that’s like, I remember we got closed down for three months. He helped us navigate on how to stay open, how to get back open, how to just survive through all the COVID shutdowns, lockdowns. I’m Rachel with Tip Top K9, and we just want to give a huge thank you to Clay and Vanessa Clark. Hey guys, I’m Ryan with Tip Top K9. Just want to say a big thank you to Thrive 15. Thank you to Make Your Life Epic. We love you guys. We appreciate you and really just appreciate how far you’ve taken us. This is our old house. Right? This is where we used to live a few years ago. This is our old neighborhood. See? It’s nice, right? So this is my old van and our old school marketing. And this is our old team. And by team, I mean it’s me and another guy. This is our new house with our new neighborhood. This is our new van with our new marketing and this is our new team. We went from 4 to 14 and I took this beautiful photo. We worked with several different business coaches in the past and they were all about helping Ryan sell better and just teaching sales, which is awesome, but Ryan is a really great salesman, so we didn’t need that. We needed somebody to help us get everything that was in his head out into systems, into manuals and scripts and actually build a team. So now that we have systems in place, we’ve gone from one to ten locations in only a year. In October 2016, we grew us 13 grand for the whole month. Right now it’s 2018, the month of October, it’s only the 22nd, we’ve already grossed a little over 50 grand for the whole month. And we still have time to go. We’re just thankful for you thankful for thrive and your mentorship. And we’re really thankful that you guys have helped us to grow a business that we run now instead of the business running us just thank you, thank you, thank you 10,000 Whoa, the Thrivetime show two day interactive business workshops are the world’s highest rated and most reviewed business workshops because we teach you what you need to know to grow. You can learn the proven 13 point business systems that Dr. Zellner and I have used over and over to start and grow successful companies. When we get into the specifics, the specific steps on what you need to do to optimize your website. We’re going to teach you how to fix your conversion rate. We’re going to teach you how to do a social media marketing campaign that works. How do you raise capital? How do you get a small business loan? We teach you everything you need to know here during a two-day, 15-hour workshop. It’s all here for you. You work every day in your business, but for two days you can escape and work on your business and build these proven systems so now you can have a successful company that will produce both the time freedom and the financial freedom that you deserve. You’re going to leave energized, motivated, but you’re also going to leave empowered. The reason why I built these workshops is because as an entrepreneur, I always wish that I had this. And because there wasn’t anything like this, I would go to these motivational seminars, no money down, real estate, Ponzi scheme, get motivated seminars, and they would never teach me anything. It was like you went there and you paid for the big chocolate Easter bunny, but inside of it, it was a hollow nothingness. And I wanted the knowledge, and you’re like, oh, but we’ll teach you the knowledge after our next workshop. And the great thing is we have nothing to upsell. At every workshop, we teach you what you need to know. There’s no one in the back of the room trying to sell you some next big get-rich-quick, walk-on-hot-coals product. It’s literally we teach you the brass tacks, the specific stuff that you need to know to learn how to start and grow a business. I encourage you to not believe what I’m saying, and I want you to Google the Z66 auto auction. I want you to Google elephant in the room. Look at Robert, Zellner, and Associates. Look them up and say, are they successful because they’re geniuses, or are they successful because they have a proven system? When you do that research, you will discover that the same systems that we use in our own business can be used in your business. Come to Tulsa, book a ticket, and I guarantee you it’s going to be the best business workshop ever and we’re going to give you your money back if you don’t love it. We’ve built this facility for you and we’re excited to see it. And now you may be thinking, what does it actually cost to attend an in-person, two-day And now you may be thinking, what does it actually cost to attend an in-person, two-day interactive Thrive Time Show Business Workshop.