00;00;00;03 - 00;00;26;21
AJ
If you are not okay with failure and being uncomfortable, then being a business owner is probably not the thing for you. People do it because they love to create. They love that my work is paying off for something that I did, that I made, that I'm building something for me and my family. Being an entrepreneur literally saved my family's financial life.
00;00;26;21 - 00;00;49;22
AJ
I became paralyzed overnight, hooked to tubes, and I lost my job in the hospital. But I had started other businesses and I had invested. One of my greatest, proudest moments. Sitting there paralyzed, not being able to do anything. And my family was okay.
00;00;49;24 - 00;01;16;23
AJ
Here's the truth and sometimes harsh reality of business ownership and entrepreneurship. Of course, everything that you see on Instagram here mostly talked on podcasts. It's all about the good stuff and all of the things that are great. Amazing how it changed their life. Statistics, numbers, showing off things online. But there's definitely a harsh reality that needs to be talked about more.
00;01;16;24 - 00;01;48;07
AJ
Why? Because you need to be prepared for it. Business owners, you guys are going to feel this deeply. And those of you that are looking to buy a business or become an entrepreneur, you just need to go in with your eyes open. Now, of course, this isn't universal. There's different circumstances and different businesses, but for the vast majority, these are things that business owners experience and the things that you need to know.
00;01;48;14 - 00;02;17;20
AJ
We can start right off with you. Get paid last. Business owners are the bottom of the totem pole when it comes to pay. Contrary to the belief that business owners are just making all of this money and working employees and they're not getting anything, and the boss is getting everything that is actually not only not the norm, it's very wrong.
00;02;17;21 - 00;02;46;17
AJ
In fact, most entrepreneurs and business owners get paid nothing. And then for the ones that are even successful. Most businesses in the United States, the owner gets paid less than if he went and got a job. That's because cash flow, how it flows, is not like an income. The business owner doesn't simply get a normal income that he puts way, way up.
00;02;46;18 - 00;03;18;12
AJ
Businesses fluctuate a lot. Accounts receivables come in at different time. Expenses go up, employees come, they leave, you get a new deal, you get a new vendor contract. You actually sell something. This creates ups and downs of revenue. Business owners May 1st quarter do very well, but they may go a lot of quarters without making anything. That's actually normal because they're getting paid on the business.
00;03;18;12 - 00;03;45;26
AJ
And starting a company out is expensive. Businesses gobble up money. They require a lot of resources. And when you're starting one up, you don't have that cash flow. So by the time that those entrepreneurs and business owners are making money, many of them have worked years on end with not only nothing, but they have put everything into it.
00;03;45;28 - 00;04;08;22
AJ
So the payoff is not distributed equally. That is something that actually drives me nuts about culture and how entrepreneurs and business owners are painted today, because it's just so false. The next thing two things that are just generally hit on is the risk. The risk is personal. It isn't like other things because you're directly attached to the business.
00;04;08;23 - 00;04;47;18
AJ
You're guaranteeing everything, and your money is the business's money and vice versa. Your bank account becomes the default reserves for that business. Now businesses grow and expand and they can grow beyond these things. But actually making $1 million in business in total revenue is so far out of the norm. You're talking about 1%. Most businesses, the vast majority, don't ever even reach $1 million in revenue.
00;04;47;19 - 00;05;26;17
AJ
In fact, a percent of all businesses that are listed in the United States go for under $500,000 on a sale price. The average is $350,000. Most people are comparing not just that 1%, but the .0000 1% that they see on TV on social media. We're talking about billionaires or tech giants, which is so far away from what 99% of all businesses and entrepreneurs live and do.
00;05;26;19 - 00;05;56;08
AJ
The next thing that entrepreneurs, business owners know and you need to be ready for growth can actually break you. A lot of people think that the company is growing. You're doing good, that it just means there's excess amounts of cash flow. And capital growth is really expensive. In order for a company to grow, in order for it to scale, it has to build out and have infrastructure to support the revenue that is yet to come.
00;05;56;08 - 00;06;27;02
AJ
So as sales are increasing, as revenue is expanding, what it takes to support that is expanding plus to support the future growth. This becomes a trap and a lot of businesses fail because they're successful. It's something that is not talked about a lot, especially amongst business owners, which it really should be. They get caught in the growth trap where everything's going up, everything's going great.
00;06;27;02 - 00;06;57;11
AJ
But that spread eventually collapsed them. Between growth expenses support, they're no longer able to service all of those orders. They can't get inventory. The space of inventory to actually sell is big, meaning cash flow gaps. I'm buying products, but I'm not selling them. But cells are going up so fast I have to order in exponentially more without those cells coming in.
00;06;57;16 - 00;07;24;15
AJ
These cash flow gaps and traps are normal, especially for companies that are growing. The next thing it's lonely. It just is. You go home. There's nobody to really talk about with your problems that can understand it or see it the way you do, or you don't feel like you can talk about it with your friends and others. People don't want to hear a business owner complaining because they're like, you know what?
00;07;24;17 - 00;07;56;05
AJ
You're lucky. Your business owner. You can't complain. You don't have any rights to it. So it becomes very isolating. This is why groups, masterminds, these kind of things are really important, and business owners and entrepreneurs tend to gravitate towards them. Organizations like EO, which is made for business owners and entrepreneurs somewhere where they can go be shielded from everybody else, know that what they say is protected, and they can be open and honest about what's going on.
00;07;56;12 - 00;08;19;10
AJ
That is not something that is common. If you are becoming an entrepreneur and you want to start something up, if you're already a business owner, you need to find those places. Places where you can talk about your issues that are really real to you, what it's doing to your life, how it's making you feel with other people that know and understand.
00;08;19;17 - 00;08;51;28
AJ
One of the biggest effects on and entrepreneurs life, though, is not actually theirs, it's their families. Now, this is something that I know and have experienced over 20 years starting owning operating service based business investment businesses. I have product companies, I have software companies. And the family is all obviously affected by it. It affects everything. The businesses take over and take precedence.
00;08;51;28 - 00;09;18;24
AJ
They take your time away. They take your mind away. What you're focusing on, you have to be diligent about making sure you're allocating time and attention to the family. But the truth is, it still takes precedence. You have a responsibility to your employees, your businesses, and the family needs to kind of be united. Understand that the sacrifices that are made our not yours alone.
00;09;18;26 - 00;09;48;00
AJ
A lot of those sacrifices are greater on the family. It's one thing I've been very fortunate. I have tremendous support in that when times are tough in business, they weigh on you heavily. They're harder. The family has to sacrifice once again, going back to remember that your bank account is also kind of the business's bank account. In most cases, it is the last resort reserve.
00;09;48;00 - 00;10;10;10
AJ
It is what gets tapped when things go wrong. It's also what gets tapped with a shortfall. If you're growing, it needs to get tapped. You're personally guaranteeing things, which means your family is to this one dynamic. Right here ends a lot of business owners and entrepreneurs. It's actually the outside things that they have to stop because of those outside things.
00;10;10;10 - 00;10;32;09
AJ
They have to stop. It's actually the thing that says family, we're done with this no more. We want you to stop. This doesn't work because those sacrifices are so big. It can also become very hard and difficult when that business owner is carrying all the weight. When they have to fire somebody, let somebody go make those hard decisions, and then they have to come home.
00;10;32;09 - 00;11;01;15
AJ
And you don't just get to brush your problems off, you don't get to brush the business off at the end of the day and clock out. You have cell phone that is blowing up emails coming in. When there's a crisis. It's a crisis and it doesn't care about your time, nor your plans or family's plans. Now, the goal is that through this creation process, buying a business, that you actually end up in a place where it's the opposite.
00;11;01;16 - 00;11;23;18
AJ
You have all of this time you live a lifestyle that you couldn't of ordinarily, but that is the goal. It doesn't magically happen. And don't be delusional to think that because you're a business owner that that is just given to you, you will be in for a world of hurt. If you or your family thinks that that's true.
00;11;23;21 - 00;11;42;06
AJ
The next thing time is so much longer than people think. Everyone thinks, oh, I have a business. I'm just going to grow it here in the next year. I'm going to start a business, and in 2 or 3 years, I'm going to retire. That's not how business works. That's not how the economy works. That's not how compounding works.
00;11;42;12 - 00;12;05;09
AJ
Growing a business takes time. It takes time to get it profitable. It takes then money and cash flow to actually grow it. There's always problems coming up. There's always delays hiring people, training them, building processes, systems and infrastructure for that business to run. That doesn't happen magically. It takes a lot of work and a lot of time to get it right.
00;12;05;09 - 00;12;34;11
AJ
And failures and turnarounds, that's part of it. It isn't. Oh, that's something that happened. It's actually a part of the process. It happens. It's supposed to. It's through those failures and turnarounds that you would just make your business better and you grow. If you are not okay with failure and being uncomfortable and having it pretty much constantly, then being a business owner is probably not the thing for you.
00;12;34;12 - 00;13;02;23
AJ
Not only that, other people's failures are yours. The buck stops with you. You take responsibility and own it. Your employees, when they make mistakes. Your business and others feel the repercussions for it. So failure all around at the end of the day is yours. That can be hard. And the expectation that I'm someday I'm not going to fail.
00;13;02;24 - 00;13;31;02
AJ
I'm someday going to be so good at this. Well, it doesn't mean that's in your control. Markets change and you do not get to control what people do say, where they go, where they buy, what they want. That's all the market. You're building a vehicle within that marketplace, and you are trying to go as fast as you can and take advantage of what the marketplace wants and what it's doing, not you.
00;13;31;09 - 00;14;06;13
AJ
You are simply trying to service the market, deliver products, goods and services to it. When the market changes, you don't have a say or control on that. It is your responsibility to adjust and adapt, meaning that that learning, constant failing, adjusting and adapting it doesn't go away. It's always there. You have to become comfortable with that, realize it and actually leverage that, not have it use or destroy you.
00;14;06;19 - 00;14;32;01
AJ
The more comfortable you are with failing, turning around, fixing things that are broken, the better entrepreneur business owner you will be, the more successful you will be. Now with all of that. Why do you do it? So I understand when we look at it, we look at the statistics. We look at the reality. We look at what it takes.
00;14;32;03 - 00;15;02;06
AJ
What you give up, the sacrifices that you make. And I'm not talking about just monetary. People do it because they love to create. They love that my work is paying off for something that I did, that I made, that I'm building something for me, for the future and my family. That's why it's so important to have a long term vision and plan and adjust in the short term.
00;15;02;06 - 00;15;35;03
AJ
When you're successful, you can be very, very successful, but when you fail, it's also on you. But building something that's bigger than you, that outlasts you. Seeing your work turn into something that you own control and services. The market does good, helps employees, helps other people. That's making an impact outside you. That's addicting and entrepreneurs thrive for it despite all the challenges.
00;15;35;04 - 00;16;06;22
AJ
They learn to see those challenges as opportunities, advantages, something that they can take and use. Being an entrepreneur literally saved my family's financial life. I became paralyzed overnight, hooked to tubes, and I lost my job in the hospital. But I had started other businesses and I had invested. So at a time when I could no longer take care of my family because of my past work, I was still taking care of my wife and kids.
00;16;06;25 - 00;16;44;07
AJ
One of my greatest, proudest moments sitting there paralyzed, not being able to do anything. And my family was okay. Building something that impacts others. I have built something that people have retired from, that people have created wealth from. I've created opportunities for people to come in and be successful or fail opportunities that they didn't have. One of my companies has helped people invest and buy in storage, and they have bought over 300 million in assets, created 100 million in equity.
00;16;44;09 - 00;17;13;26
AJ
That's not things that I own. That's things that they own. Created organizations within industries that help everyone in the industries to fight against the big boys software technology that businesses used to own and operate, giving people advantages, control and a future. And it's not a small amount of people. And that goes beyond my employees in what I'm talking about, the greater impact it's been thousands of people.
00;17;13;27 - 00;17;38;07
AJ
That fills me with a huge amount of pride. It's why I do what I do. And that's the thing that you'll notice about real entrepreneurs. They don't stop. They don't know how to. The goal is to be building and creating, and that goal never goes away. So when people ask, what's your number like, what number are you going to stop at?
00;17;38;08 - 00;18;03;20
AJ
I don't have one because that's actually not the end goal. It was probably when I started, but I fell in love with the process, what the process made me become, who I was becoming and who I was helping and affecting. And I love it. It's the greatest game in the entire world. And if you're a business owner, you so get everything I'm talking about.
00;18;03;20 - 00;18;26;05
AJ
And if you want to own a business or start one, you need to be ready for it. You need to be patient and love the process. If you don't, you'll never get the outcome. The people that are successful, they do it for more than just the dollar and they'll always do it. Not everyone should be business owners and entrepreneurs at all.
00;18;26;05 - 00;19;02;17
AJ
I don't even think that. But for so many of us, it's really the only way to live. And for those that want it and want to have that lifestyle, those rewards, that upside and are okay with that risk and failure. Absolutely. You've got to do it. Don't live a life and regret not doing it. And I hope with my content, the podcasts, everything else that we do, we're helping others, supporting them in their journey and also sharing in that experience because it is lonely.
00;19;02;17 - 00;19;23;22
AJ
But it doesn't have to be. Let me know in the comments. If you're a business owner, what was the thing that surprised you the most? What was the biggest challenge or the hardest thing about owning and operating a business that you weren't prepared for? Let others know. Also, of course, make sure you guys like and subscribe. Thanks everybody.
00;19;23;25 - 00;19;24;13
AJ
It.
