Adam Lyons Top 20 Acquisition Strategies You Need to Know!

Summary

In this conversation, Adam Lyons shares his expertise in mergers and acquisitions, focusing on negotiation strategies, the importance of mentorship, and innovative approaches to customer acquisition through platforms like Kickstarter. He discusses his journey into the world of acquisitions, the significance of building a business ecosystem, and how he evaluates deals to avoid pitfalls. Adam emphasizes the importance of structuring businesses effectively and shares insights into his own business philosophy, which prioritizes employee welfare and sustainable growth.

Takeaways

Adam Lyons is a negotiation expert in acquisitions.
He emphasizes the importance of understanding a company's underlying issues before making deals.
Kickstarter can be used as a customer acquisition tool rather than just a funding source.
Adam's first acquisition was a learning experience that opened his eyes to creative deal-making.
Mentorship from Roland Frazier has been pivotal in Adam's success.
Building a business ecosystem with overlapping customer bases is key to growth.
Evaluating deals critically can prevent costly mistakes.
Adam has structured his businesses to minimize personal financial risk.
He prioritizes employee welfare and invests in their development.
Adam's business philosophy focuses on sustainable growth and strategic acquisitions.

Watch the interview:

Transcript:

Jon Stoddard (00:01.816)
So welcome to the top &A entrepreneurs. I've got Adam Lyons. He's the meminon from acquisitions, the Dynamo deal maker. And his reputation is just growing every day. There was a post at Epic where it was like, you are the man. Some guy from Epic brought you in. You negotiated something or you did something amazing with the art of the deal. And welcome, Adam.

Hey, thank you so much, man. I appreciate it. Yeah. So what was this deal that you worked on? You don't have to name the names, but it was somebody with Epic and they, yeah, it was a game board maker or something. Yeah. So I do, I do coaching inside the ethically profit program that's run by Roland Frazier and I'm the negotiations expert and I'm the deal acquisition expert. So I help people find deals and help them negotiate them.

And this one particular deal got brought to me. was, they're doing $3 million a year gross revenue on a board game and not just the board game, actually 15 different intellectual properties. And they were looking for an amount of cash to clear up some debt in return for equity. So it should have been a simple cash for equity deal. But when I go in and look at it, I realized that actually that's a really bad deal because if you give them this cash, they've got so many other integral problems in the company.

that it wouldn't fix it. You would end up back in the same situation except now you would own equity of a company that has financial problems, right? Even though the cash would have solved it, they're gonna be back there again. So it needed more hands-on. It needed somebody to tidy up the company. So I made an alternate proposal. It was very complicated how I got there, but over the course of an hour, we ended up with, they agreed to a zero dollar equity partnership.

where we would come in and tidy up the whole company. And by tidy up, mean, really tell them how to tidy up the company in return for a substantial amount of equity in the company without having to pay any money to pay back the debt. and, and that's a great question. No, they don't know who you are. How do they know you can do what you do? I mean, and also is

Jon Stoddard (02:18.926)
You know, I'm sitting on this sire as a buyer and I'm a little bit skeptical and saying, okay, this guy sounds really, you know, knowledgeable, you know, can do what he does, but what if I, can't give them for a year to do it or I give them six months to do it or two years. Yeah. So yeah, there's a lot, there's a lot of stuff that the key is, accurately predicting what's going on in the company. So from just talking to them for a few minutes, I said, can I make some assumptions about your company? And you just tell me if I'm right or wrong.

And then I started outlining common problems they may have. And I hit every single one nail on the head. So I predicted that they ran kickstarters and I predicted that they'd run kickstarters that at the end of the Kickstarter, they were out of pocket as opposed to being profitable. I predicted that there was nobody in charge of sales and marketing. I predicted that when they calculated their costs, they had at some point missed certain elements like shipping.

that would have been a huge factor. predicted the fact actually their board games are considered some of the most expensive in the world, but I predicted that actually because of the amount of stuff they put inside the board game, their profit margins are significantly lower compared on what people would think. I mean, some of these board games are four times more expensive than what you'd find a regular board game would be, but they're running them almost a loss because they're trying to pack everything in. It's why they're so expensive. I also predicted that a particular business model that they should employ

would be more profitable. And then they told me they already had employed it, but only in one intellectual property of the 15. At which point I said to them, I guarantee you that's your most profitable IP. And they said, it is, yeah. How did you know? And I was like, because that's the right model you should be using. by the time, you know, 30 minutes had been spent of me doing this business analysis, they were like, wow, you know so much about this. And I was like, yeah, because

Like in the last year, I've coached 700 CEOs through acquiring, negotiating and scaling businesses. I was like, this is all I'm doing all day, every day. I can see from a mile away what's going wrong. And then they said, well, how do you fix it? And I said, we've got two options. You can pay me a quarter of a million dollars, which is what I would charge you to come on board and do a consultation. Or if you're open to it, we can release some of the equity to, to have me come on board and help and my partner. So yeah, that's what happened. That's beautiful.

Jon Stoddard (04:43.147)
You know, I came across a company in Tucson, Arizona that did kickstarters to this fund their manufacturing. And I was always suspect of that. That that's like an, to me, that's a losing proposition. You can't have money donated to you to fund your manufacturing. You have to have customers do that. So yeah, so I've generated over $2 million on Kickstarter for successful, profitable Kickstarter. And every single time the way that we approached it was different.

We approach Kickstarter as a way to obtain customers that are actually willing to pay a premium. So a lot of people make the mistake of selling to Kickstarter people at a discount, right? Like you're going to be, if you get in the Kickstarter, you're only going to pay this price in the future, the price is going to be this. It's actually a lot better to be like, if you're on the Kickstarter, you're going to get limited edition versions that are going to be unavailable in the future. You can only get them today, right? Like the gold plated version, but they pay extra for it. And what's, what's important about that is that gives you actually a higher profit margin.

And all of those Kickstarter backers, they're not donating money for manufacturing. They're buying their pre-sale. It's pre-sale basically. So that way I know, like one of them we did like we were developing a robotics unit and we generated 560 grand, but we only needed a hundred for manufacturing. So all of that leftover was essentially profit. So we knew right out of the gate, we were going to make, I think we ended up with like $260,000 in profit off the Kickstarter. And we knew that straight away.

but that's because it was calculated correctly. And these were the limited edition beta test of this particular robotics unit. Well, that's a completely different perspective. I mean, I would have never thought like that. go like, yeah, you just can't keep having somebody else donate your manufacturing. Just go for it. Just, just, I do it as a customer acquisition source. Now this is where this gets really interesting in the Kickstarter game. Kickstarter will send an internal email promoting the fastest rising Kickstarter. So actually a cool trick you can use, I'm shipping it to Kickstarter strategies, but

A cool trick you can use is if you have a mailing list, you can make sure that your audience is warmed up, ready to start buying the beta test of whatever it is that you're going to release. And the minute you go live on the Kickstarter, have all those people buy, but also, and we've done this a few times, we'll get our internal staff to pay, we'll, we'll, we'll purposely put a thousand dollar item there and we'll have 10 staff members pay a thousand dollars each and get, so we get $10,000 right away. Like the top item is selling out and the combination of that.

Jon Stoddard (07:10.359)
plus all of our customers drives up the algorithm. Now, the whole purpose of this is to reach out to Kickstarter and say, within one hour, we achieved this much money. Kickstarter, which is 50,000 or no, 100,000 plus, sorry, 10,000 plus whatever the Kickstarter does, right? So it's a huge number. So Kickstarter goes, wow, that's amazing. Cause it's just an email person. And email person's like, we'll definitely include you in today's The money is going to go back to you. It's irrelevant. You are buying the limited edition items, but

that money just comes straight back around on the company credit card. But now Kickstarter is doing an internal email and now you're going to have all the Kickstarter fan people who are going to be all over you. Yeah. I looked at a business about three years ago called backerclub.co and it's just a group of people that get together and follow and buy into Kickstarter campaigns. And it was doing two million a year and the profits were 90, but the guy was spending about 80 hours a week on it. Just two guys. Wow.

Pretty nice little business, but I didn't want a job. Yeah. No, exactly. I think it works well. As long as you view Kickstarter as a customer acquisition tool and as a way of getting high profit sales by bringing out the limited edition items. Because when you're in the manufacturing stage, that's the time to create the limited edition prototypes and things like that. Yeah. So Adam, let's rewind a lot here and go back. When did you first make your first acquisition? My very first acquisition started in

2000 and, I want to say 2012, suppose. nine years ago and, I, Roland Frazier is my mentor. Roland is the one that taught me how to do this. He ran a two day workshop on how to acquire a business. And honestly, I signed up for it because it was the only one of his workshops I could afford. Everything else was like $10,000 or more. And a $2,000 workshop was just affordable. So it was two days, $2,000. I was in a room with 10 people.

and he taught mergers and acquisitions. And I went in there, just wanted to listen to the guy, because I love when he speaks. And I walked out knowing how to acquire businesses. I remember thinking, never going to do that. And then within three months, I was sitting down with Ty Lopez, and he had a project that he needed some help with. And they brought it to me. And I helped him out with the project. then

Jon Stoddard (09:30.277)
Tai Lopez became, I suppose it was a bit later on, but he blew up like maybe years later at this point, but he became sort of like big. at that point, the project that I was working on them with, Tai wasn't really interested anymore. He wanted to let it go. And he had another business partner in the project. So Tai says to his business partner, buy the project off me. And the business partner comes to me and it's like, hey, well, you're kind of doing a lot of the work on this. you want to buy?

the other half. And I was like, I don't have the money to buy the other half, but, and that's when I did the acquisition. said, but I tell you what I'll do is I'll work it off. I'll do an earning for the other half. And so that's what I did. So he fronted the cash to Ty and I did an earning to acquire a half the business. And I've worked on that business for many, many years and made some, you know, some great money on it while, Ty went off and did Ty's thing, but it opened up my mind to the fact that I could acquire businesses by

by trading work, I suppose. And then I just got, then I got tighter and tighter and I realized I didn't have to trade work. could trade advice. I could trade consulting. I could trade assets. I just didn't need to use money. And of course, you know, I could use money as well as part of that merger acquisition process, but it didn't have to be my money. And that's when I realized I could partner with someone who's got some cash that wants to make some money back and I can use their cash as part of the deal. So the long and short of it is I got better and better.

but it was always behind the scenes. I never really made a big deal of it. It was like my secret technique to grow my business. And one day, say one day last year, 2020, Roland phones me at the beginning of the year, Roland Frazier. Did you guys stay, were you guys friends and stay in contact and do deals together during that 2012 and 2020? Yeah, I'd continued like hiring him for advice, attending whatever events I could. And I ended up engaging him as a private.

a private consultant for me as well. Like I hired him for mentorship. Yeah. I just want to make, point out how important that is to, you know, bring by somebody's intelligence and experience. Yeah. paid for his hundred thousand dollar mentorship program. mean, as I, as I grew, I remember the day I turned around to my partner and I said, Hey, I just took our life savings and gave it to Roland Frazier. But

Jon Stoddard (11:52.321)
I mean, it was one of the best things I've ever done. Like, you know, I made that back. I made that money back. I mean, more than tenfold. know, like, I mean, yeah, I've made millions off the back of that information. So, and not just that information. I mean, I literally, it's funny before coming live with you right now, me and Roland, the text thing about an acquisition for a company that specializes in, supplements for the Olympics. Like that's a pretty big deal. And I can just text with him. Like now he's.

No, he's not someone who's who I'm taking your text calls. You don't have to go through Deanna. She feels it. And then it goes to maybe it goes to somebody else and it goes no, yes or no. And then it comes back. Yeah. Yeah. Me and at this point, me and Roland are friends. Like he helps me. I help him. He's amazing. You know, like, and yeah, that's why I'm so blessed to be to be part of this program. But yeah, Roland is, it was monumental in teaching me this stuff. So he phones me up one day and he's like, Hey, I'm going to do this challenge, the epic challenge. And

And he's like, would you like to come on board and be interviewed by me? that because I know you've acquired some interesting businesses and maybe talk about it. So I was like, sure. So I come on board and I, you know, he talks to me and I break down. There's a couple of my deals have become quite famous because they started very, very small and ended up very, big and they didn't cost me any money. And, I got the deals from my children. My children identified the opportunity. Right. They did the game store.

Yeah, the game store, which I don't know if you know now, the game store has now itself acquired a commercial property that's worth it was worth $600,000 when we bought it, but we bought it in the middle of the commercial property dip during COVID. It's projected to be worth a million within the next two years. And again, it cost us nothing because the game store bought it. I didn't buy the game store bought it. The game store. don't, I've never worked a day in that game store. I've never done. The only thing I ever did was help decorate. That was it. I've not worked a day. And, you know,

So when we first acquired it, I mean, it was struggling. had 5,000 in expenses a month and made 4,000, right? That was when we acquired it. We acquired it for no money down whatsoever. And then like last month, we did over $25,000. The expenses are the same. it's, know, in addition to now making large sums of money, it bought a commercial property for us. you know, this is another point too. Now I've done a

Jon Stoddard (14:15.029)
rehab too, it was an e-commerce company here in AIDS, and it was losing money and then I helped it, we did, but that was a lot of work. I probably won't do that ever again. I mean, you've got to have that certain ability about you say, I want to take a company that's actually losing money because I see all the opportunities. It's not something you could say, well, if you've never bought a business, I don't recommend it or what? Yeah, and that's something like I run

my own company called the smart blueprint. It's like the smart blueprint.com where it's the blue. We created that for ourselves. It's the blueprint we apply on any business to make it work. And we know as long as we follow this blueprint, the business works. So actually looking for opportunities to be simple. I look at their business and see if they missing any of the elements of the smart blueprint. If they're failing, but they've got all the elements of the smart blueprint, I'm out, right? I'm like, I'm not going to do this. On the other hand, if I look at the business, I'm like, wow, they're missing.

So it's S A R T. So I'll look at them and be like, they're missing S they're missing R and they don't do T at all, but they've got, know, A is good. And M's like 50 % now. I'm like, this is great. I'll just come in and go pop up, up, up and fix it. And the game store was exactly that the game store, the S which is star was terrible. No training, no standard operating procedures at all. So that was one opportunity. stands for marketing. There'd no ads, no outbound marketing whatsoever.

and they had no good internal marketing either. A is audience. They had a tiny audience of about 20 people, but they had an untapped audience of 400 people that they never communicated with who were all avid buyers. So their revenue was coming off of just 20 people with 400 waiting to buy. It was insane. Revenue is the R, which is the sales processes. And they had absolutely none. They relied purely on customers coming in saying, want to give you money. There was no like reach out whatsoever.

at like, know, self-processes and lastly testimonials that no testimonials, no evidence of, you know, no good reviews, nothing. So I look at this thing and I'm like, okay, it's losing a grand a month, but the opportunities are insane. And because of what we have with the Smart Blueprint, we can take a staff member, but we train up, give them the systematics of the Smart Blueprint and go and apply all this. And that's what we do. I mean, that's, I'm rereading a bunch of Buffett, Warren Buffett books and there's Discipline.

Jon Stoddard (16:35.533)
patience, flexibility, courage, confidence, and decisiveness. I gotta say, if you've got a checklist, like a manifesto, that guy who wrote that book, that's perfect. I mean, that's great. Thank you. Yeah, and it's been like one of the most important things for us is like following that checklist. So we like, okay, we know this is good. And so, yeah, so that's what we did with that. And so Roland asked me to share the story. So I shared the story at the time we hadn't bought the property, but the business was growing and Roland had been talking for like five or six hours. He was dying.

And he had 67 questions in a Q and a. And so he says, Adam, I'm kind of tired. How about you answer the 67 questions and every time you get one wrong, I'm going to make fun of you. And so I answered all 67 questions, one after the other. And at the end, Roland looks at me and he goes, dude, you got every single one right. Well done. He goes, but I you would you listen to me and you're a good student. And I was like, you know, thanks ever so much. I get off the phone call when I was, you know, off the zoom, I was so excited. Just, just, I did a good job.

And Roland phones me and he's like, I'm looking for somebody to come internally and deliver the program. He's like, it will be, it'll be my face. I'm going to be out there as my content, but I want someone that follows my content closely who will be an internal trainer specifically for negotiation and deal acquisition. goes, you're really good at finding deals and you're really good at closing them. And he's like, would you come on board as a coach? And I was like, I would be, it would be my absolute honor. then it gets funny cause he says to me,

He's like, okay, cool. How much do you want? And I was like, I'm not going to charge you. was like, I'll just do it. Like, you know, I got your back. And he's like, no, he's like, I insist you have to get paid. And I was like, well, this is now a problem because you're hiring me to be a negotiator and you're telling me I have to get paid and I don't want to get paid. But if I can't join the program and then have a story about how I negotiate with everyone, but I didn't negotiate with you. And Roland's like, I'm hearing a lot of talk and I'm not seeing a lot of negotiating.

I think he's still the master negotiator, right? By far, by far. So and I'll tell you my favorite story about Roland is so I negotiate and I negotiate really hard and I negotiate for the one thing that of course you always want, which is gross revenue. And I was like, I want I want a piece off the top. I don't want it off the profit. You I want a percentage. And Roland said, I think I would lose respect for you if you asked for anything less. And so I asked for a number that I thought would be completely fair and that he would say yes to.

Jon Stoddard (18:55.737)
And, Roland says to me, wow, that's a, that's a pretty big number. And he goes, didn't you just have your fifth child get born recently? And I said, yeah. And he goes, well, then we're to double that percentage. And I nearly cried. So, so that means you are a staple of this training that comes in now. It's a, it's an 11, 12. No, you're on your 12th Epic. Right. And all the people that come through going, my God, this guy is dynamic. I want to work with him.

and deal flow flows your way. Basically. Yeah. I like that funnel. Yeah. It's pretty good. and you know, not, all the deals are perfect. I mean, I say no to a lot more deals than I say yes to, but every so often somebody will drop your favorite board game company in your lap, that needs help and they're based in Dallas and I live in, you know, I live in Texas just outside of Austin. So it's a great deal. you, we brought a deal to use that clubhouse for dating and that was just

That was just ugly. I mean, it looked great on the face, but, you know, diving in a few more questions, like, yeah, you're losing like $20,000 a month. You don't know the IP. It's funny. I think that's the value that people like from me coming on board is cause I'll tell you if the deal is bad and it's that's better than, doing it, you know, like, and I think, I think I've helped people not do deals a lot more than I've helped them do deals.

So it's funny, because I'll get paid to come in and negotiate, but once I pull it all up, I'll pull them to one side and be like, hey, we're to talk about this before we go any further. I'm going to feel really bad if you acquire this, even for no money. And then I'll show them. You know, Jason Calcanis, he's one of those investors that invested in Uber and turned $25,000 to $100 million. He said it is about swiping fast on the bad deals. Swipe, swipe, swipe, swipe, swipe, and double down on the great deals.

but you've got to be courageous and decisive about those bad deals and don't get attached to them at all emotionally. I find the easiest way to think about it is like real estate. just because a house is cheap doesn't mean it's good. And you know, we actually, it's funny that this is like my office, which I love this place, but we looked at a house that was one block over and it was half the price. And I remember being like, wow, it was the same size as this but half the price. And I was like torn between the two.

Jon Stoddard (21:16.237)
but I couldn't let it go that it was half the price. And so we got two surveyors come in and then found out it needed an entire roof and foundation replacement, which actually is a brand new house. And at that point, this house, which is more expensive, was a lot better. Yeah. So that's out of your deal flow, that type of deals. Yeah. So how many deals have you done or participated in since negotiation with Roland? Is it?

What are we talking about? You can't even count. It looks like you're getting the count. Yeah. My own deals, like my own deals. I mean the probably twenties of my 20s. Yeah. Of things that I've participated in or, or I'm part of, or what have you. but deals that I've been brought on for somebody else, hundreds, hundreds. I mean, I helped analyze and negotiate four deals this week.

to show you them because people are bringing me their deals to help them with, you know, I'm dealing with them via email, via text, some of them in person over the phone. It's nonstop. got, I got friends that phone me up. They're doing a $2 million deal and they just phone me up and were like, Hey, can you help us through this? know you're good at it. You know, like, and, because both parties were friends, I didn't charge them because I was like, I can't charge you guys, you know, like, and so I was like helping them negotiate between each other.

So did you take a percentage though? I mean, that's the part of you don't charge no charge. Yeah. And this one, didn't take a percentage, but I'll you what I did is I got, I got the service for free because the business is actually a really cool business. And so they ended up giving me, what they deliver at cost for life. so that was pretty cool. that's cool. Yeah. Yeah. All of these deals, your deals, the twenties, are they earning type deals, part of equity, or have you done anywhere there's

Yeah. You need money down. I have managed to not spend a single dollar of my own money for any of the deals I've done. I'm, I'm a hundred percent, none of my own money being used. Some of them needed cash, but it was not my cash that got put forward. It was somebody else's every time. Every time. Yeah. That's amazing. Yeah. But that's like, how can you be Roland's protege and not prescribe the medicine? He's

Jon Stoddard (23:40.109)
Distributing. Right. Yep. And I remember there was one, there was one where like it absolutely needed cash to go through like a hundred percent. And I phoned a guy that I knew had a large sum of cash. I heard this one and you just like screenshot it as bank account or something, right? Yep. And I was just like, can you just give me the money? And he went, okay. But I had to ask, you know, how are, yeah, that's right. How are all these deals doing? I mean, do they,

all money making stable or is this kind of like a VC's portfolio where only you got to get 20 deals in it and only three are making money, right? My revenue increased 40 % last month.

Jon Stoddard (24:27.063)
So March, I made 40 % more than February. And it was one of the highest months I've ever had.

It's working. It's working. it's, I mean, it's consistently, it's consistently growing across everything at all times. Sometimes it doesn't scale. Like sometimes it's a percentage, not a multiple, but they're all getting bigger and better day by day by day. I mean, I remember my, my vice president, we were talking about, about, so, and that was March, sorry, March on February, not April, cause we're still in April. But my vice president said to me about April, she came to me and said,

This month was easy. And I was like, what do you mean? She was, I didn't really have to do anything this month. We just, made a lot of money and that's, that's a good sign, but it's also a sign for me that we're plateauing. So he, needed a, you know, we need to push again. but like, yeah, and that's because of these deals. That's because of how we're doing it. Like we have a, we have a seminar going on tomorrow in one of our brands. And I literally, the only thing I did was, I've mentioned this before, all my partners, they attend a free training on a Thursday afternoon.

So I have 20 seats at my free training that are available for all my partners to sit in and attend. So I think last Thursday was only five guys, but they can choose to come and sit in. And I do it every Thursday. It's like two to three hours. You can't pay to be part of it. have another, I have a second one you can pay to be part of that my partners also get, which is a Tuesday afternoon for one hour. So you can pay to sit for Tuesday afternoon for one hour and listen to me talk to my partners and I'll talk to you too. But Thursday afternoon, they get two to three hours and it's

They don't pay for it. That's like the equity earning and it's only my paid. It's only my actual partners. And, at that training for the last two weeks, I've been teaching this guy how we do our internal sales and how we make a lot of money with seminars. And so he's doing a seminar tomorrow. Now I own 40 % of gross of his business, of any money that comes in. So he's got X amount of hundreds of people attending this training tomorrow where he's going to be selling a $3,000 program.

Jon Stoddard (26:30.751)
of which 40 % of that will be mine. And the only thing I did is turn up on Thursday afternoon, as I always do, two to three hours and teach him and all my other partners what they should be doing. In two weeks time, another partner will be doing another one. That's lovely. Lovely. The type of deals that you look for, I interviewed Pat Baker and he refers to Richard Branson because of the ecosystem. They are all customer-sfeeded. So what do you prescribe to? How do you design that strategy?

I'm exactly the same as Patch. My customers all fit in the same ecosystem. Essentially the way I look at it is the same avatar. Every company I work with, the avatar will be identical. There'll be variants, but my avatar will buy from every single one of my companies. I gotta love that. mean, why not follow Richard Branson? He's worth five million or more. Yeah. He's pretty smart. Yeah. What about...

Do some of these customers, when you look at them, well, actually the question is, are you buying businesses that overlap each other? I'm trying to be very, or are they completely brand new segments? Yeah, so no, they're often different. Like the core businesses, like my core brands, there's three dating companies that overlap each other, but have their own new products. So those three, I would say, are borderline the same, right?

But then there's a retail game store company, which is nothing like that, but does have the same avatar. Then there is a YouTube channel for gaming that kind of overlaps with the game store, but also they're completely separate business models. Then there's a wealth finance company, which is totally different, which is all about improving your credit score and your initial investments and financial trading. Then there's a FinTech company. Again, you could argue the FinTech company and the wealth finance company maybe go together, but...

You know, they're a bit different. There's a web hosting company. You know, you could argue there are websites for the others, but this is kind of how I, how I acquire is based on need, right? If I need financial technology in one of my companies, why not find somebody who has a financial technology company who's struggling and take a part of it rather than going and hiring a financial technology company? If I need web hosting rather than go to go daddy, why not start a web hosting company or in this situation, partner with somebody who already had one that wasn't growing.

Jon Stoddard (28:57.917)
Yeah. Interesting. Yeah. I was looking at a library of courses and his add-on or upsell cross-sell was a web hosting company because he sold a library of software courses. Like, well, what are those guys going to do? They're going to build, you know, parallel type systems on websites. So tell them web hosting. Yeah, exactly. I think, you know, that's, that's one of the key components is, and you know, Roland says this all the time. You want to be acquiring the costs in your company. So they become profit centers.

Yeah. And that's, that's like being my biggest lesson. Yeah. Just acquiring the cost of the company, just three or four words and it changes your perspective. Yeah. It's really easy. Like what are our biggest bills every month? Acquire that. Interesting. Yeah. Are you do a lot of outbound now or is most of your deal flow just organic from.

It's all organic. It's not really from Epic. Actually only one deal of my own came through Epic. Most of my deals, actually I'm more likely to get a deal from this than I would from Epic. Somebody watching me on a podcast somewhere else giving advice who then reaches out to me and says, Hey, I'd like to talk to you. That's usually where my deals come from. Which is I'm always so open to speak for free anywhere. Like I did a, I'm a member of Vistage. don't know you know Vistage is like a group of people.

Yeah, management CEO deal. Yeah. So Vistage is a great way to get deals because there are people in there that are looking to grow their company. That's why they joined Vistage. And I mean, 7,000 CEOs worldwide. you you and I talked about this, like where you have to one of the biggest problems the needs in Epic is helping people get deal flow because they, first thing they do is go over the broker dealer websites and they get

rabbit hole to that deal. Yeah. The best way I found the best way to find deals is in networking events with business owners who are trying to grow their companies because that's what you do. If you're going to sell your business or if you're trying to grow it you want to partner the very last thing or the very last thing you're to try is well, maybe I'll try and grow it. I'll sign up for this program and that you can find them. Yeah. So where are you at with this? Like you're

Jon Stoddard (31:24.491)
your long-term goal, keep and hold forever or? Yeah, I'm, it's a bit complicated. I could stop working tomorrow and be fine for the rest of my life. So that puts me in a unique perspective. I like, don't need to work ever again if I don't want to. So I only do things I like doing and I'm acquiring businesses that I like. And so I don't know if I would get rid of them just cause I like them, but that doesn't mean I haven't considered it. And

I might be interested. It's kind of like houses. I've got the same model of houses. Like I don't really sell my houses either. Cause I like them. I like, yeah. I own like four houses. Then was like an investment properties. And like, kind of, I kind of rent out rooms in them, but I tend to not let the whole building go because I like using the building as well myself. so I've got like this, this whole thing that I buy it cause I like it and I don't really need the money. but having said that I have definitely thought, well, maybe I'll sell two or three of the houses and buy.

one I really, really want. And I feel the same about the businesses. Like if ever the right deal came across and I really needed to sell some businesses just to free up bandwidth to work on it, I would consider. Yeah. Well, I guess you better do it before 2022 comes around in case of Biden's 50 % or 40 % capital gains tax comes in. You know, it's pretty funny. I find if your companies are structured correctly, like I'm an employee, like

It's not really going to affect me because I am an employee of my own company. My company is their own corporate entities. And because we look after our staff, we perfect. Like, so I, I got my own viewpoint on this. The valuation of your company is based on a multiple of your EBITDA, right? Which is your profit. It, why would you ever run a company at profit if you weren't planning to sell? It just to me doesn't really make sense. So we keep our profit low on purpose and reinvest the cash into our staff and systems that way.

there is nothing really worth taxing, but we don't hide. And I that would call that compounding. Right. And I would much, I would much rather do that. So we do it like all of our staff get five weeks vacation, all of them. that's beautiful, man. Five weeks. Yeah, exactly. Right. So we give them five weeks vacation. They, we pay full medical for them, the highest level medical that we can get in Texas. we pay for all of them, full expenses paid. they have to pay the copay, but we pick the highest amount. So that copay is the minimum.

Jon Stoddard (33:46.925)
They get virtual doctors for free. pay for that service with doctor on demand. So if our staff is sick, they don't have to take a sick day. They can from their home use their phone, talk to a virtual doctor who can make the decision on whether they need to or not. We always tell them to take a sick day though. Yeah, we have annual bonus every single year based on percentages, pay rise and pay review every single year, plus onsite training, plus additional cash available for training. like my film guy who set up our beautiful little camera here.

he has a budget every year to go and spend on his own training to learn audio or graphic design or whatever he wants to learn. He chooses his own trainings that he wants. He runs it by the financial department. They get, give approval on that. So, I mean, we're pretty, we're pretty good at putting the money into the employees and into the systems and structure of the company. Yeah. And I'm paid a, like I said, I don't have to work, but that's cause I've got a nominal salary. Like I get paid a

But it's cool because if I ever wanted to fire myself, I could hire a CEO at my salary and it would be set in stone. It be like, we know how much the CEO gets paid because that's how much Adam gets paid. It's a good salary. You know, I'm not going to get a stimulus check, but it's not terrible. And the taxation on that would fall way under what Biden's looking at. think that like, most important is that what you've created is working above the business and the time, because the times are the only commodity else. Everything else is

you can't buy more of the time. How are you? Yeah. How are you doing this structure in this business? it's. I'll give you one other little piece, which is key. If I ever wanted to sell them, I would take one year and bump up the profits. That's all I would do because your valuation is based on your last year. And when I came to sell, if someone's like, why did you have no profit or minimal profit for this many years? And suddenly your profit margins are through the roof.

And I would say to them, the profit margins could always have been through the roof at that point. We compounded it to grow the company. You're welcome. You can either take it exactly as it is and scale it yourself and just enjoy that massive profit margin, or you can sink the profit back into the company and scale it through the company. These are both options for you and they're both mapped out. This will make my company sell for a high multiple if I ever did want to sell it. Just for the record. The way my company is structured is it's very complicated.

Jon Stoddard (36:11.693)
I actually have a legal team that manages the legal structure of it. So we have multiple corporations that own shares in each other. have special purpose vehicles to acquire our acquisitions. And depending on the grade of the acquisition, whether it's a partnership and what percentage will depend on which company owns it. So it's pretty robust, almost too long to sit and explain. Yeah, I do have to map it out. It's like an infographic. Yeah. But the summary is I have a full C-suite and my C-suite

works for the core company and they are fractional C-suites for each individual company. So, you my CFO doesn't need to spend 40 hours a week on each brand. So he'll spend X amount of hours in this one, X amount of hours on that one, and we'll build for his time where it makes sense as well internally. So that way there is actually a paper trail of that work being done, which again makes it easy if we ever want to expand it, bring somebody else in, et cetera, et cetera.

Yeah, I think that's the most one of the most important thing. I had a conversation with Sharon Brown and she's it's all about putting that infrastructure in place too, so that she's not spending in a new job. Correct. Yeah, that's amazing. Hey, Adam, we're at, you know, 40 minutes. So I want to thank you, man. This has been a addition. I just love hearing your talk. And I think I think out of all the ones I watch, I watch Roland, I watch you and

You know, I think kind of in that order. Yeah, yeah, me too. I watch him first. Hey, I want to appreciate, man. Thanks for the time. I appreciate it. That's the top &A entrepreneur. Appreciate you. Have a great day. All right. Take care.