Living The Red Life - Secret Of The Rich - Synergies, Partnerships + Leverage

Episode Date: May 18, 2023

How can you exponentially grow your business by leveraging partnerships? Rudy is flying solo today, spilling the tea on a secret of the rich: synergies and partnerships.From licensing to affiliation partnerships, Rudy is making it all super understandable for us. Even Rudy wishes he'd gotten a jump on this earlier in his career! Because as entrepreneurs we want to do it all ourselves, but it's important to know when to bring in a partner so you can cut yourself a bigger slice of a future pie. From understanding selling valuations for a company, to how you get there by growing your personal brand, developing affiliate relationships, and growing the right partnership to ensure long-term success, Rudy's red-hot take will help you realize that it's not about owning 100% of your business and doing it all yourself. These are words to live by. Please join us! "I think it's really important that as early on in your career as you can, you can give up this ego thing around owning 100%." ~ Rudy MawerThe first 1000 to click here and send the promo code from the podcast can claim one of my courses for FREE!  - https://m.me/rudymawerlife In This Episode:The value of your network, your connections, and developing personal brandsUnderstanding selling valuationsHow to grow your company through affiliate relationshipsWhy people love affiliates Understanding how expansion is quicker through partnershipKnowing when to franchise: having a strong brand and a proven model What is a JV?  Connect with Rudy Mawer:LinkedIn - www.linkedin.com/in/rudymawer/Instagram - www.instagram.com/rudymawerlifeFacebook - www.facebook.com/rudymawerlifeTwitter - www.twitter.com/rudymawer

So partnerships, big picture partnerships and synergies is the first thing you've got to grasp and you've got to grasp also, hey, it's okay not to do a bunch of, you know, I don't need to just own 100% of one company. I can own fragments or segments of other companies through partnerships. My name is Rudy Moore, host of Living the Red Life podcast, and I'm here to change the way you see your life in your earpiece every single week. If you're ready to start living the red life, ditch the blue pill, take the red pill, join me in Wonderland and change your life. Hey guys, what's up? Welcome back for another episode of Living the Red Life. Today I'm going to talk to you about synergies, partnerships, and how you can exponentially grow utilizing leverage from licenses, from partnerships, from affiliates. It's one of the most key parts of business. And the more I've dived into businesses, learning about business, growing my business to, you know, millions and millions of dollars and on my way to 100 million and spending time with

billionaires, I've seen how most businesses grow exponentially through licenses, affiliations, partnerships, JVs. And I'm going to talk about that today and hopefully help you guys understand, right? I didn't understand any of this for about eight years of business and I didn't do any of it. And if I could go back in time and rebuild my businesses, I would have started all this stuff way earlier on. I'm going to talk about a few key buckets, how you can start today, how you can leverage it. Now I do a ton of it. It's super beneficial for me. It's beneficial for every party involved. It's helped exponentially grow my businesses, but also my connections, my network, my personal brand. And if you look at a lot of companies out there, they generally grow

faster by doing this versus just trying to grow by themselves. And most of us as entrepreneurs, if you're listening to this, you don't learn business from like a big business standpoint, right? You're generally like me, you want to quit that you don't want to be in the nine to five, you have a product idea, you like making money,, have side hustles, and you're kind of figuring it out as you go. You don't have this blueprint. And to kind of really start this discussion, I want you guys to understand if you look at most of the biggest businesses in the world, they have a lot of entities. They have a lot of aspects of their business. They have a lot of items that they sell products. But the one thing they don't have is them doing it all themselves. Right. But every entrepreneur is the opposite. the one thing they don't have is them doing it all themselves, right?

But every entrepreneur is the opposite. The one thing we do is we do everything ourselves. So if you look at, you know, a lot of the electronic companies, right? They'll build electronics and they'll have partnerships where they're combining, you know, Apple is combining with a celebrity or Dell is combining or merging with a gaming company. So they create these partnerships versus trying to do everything by themselves. And if you look at even Apple,

they have a lot of partnerships where it's more than just Apple. And if you look at many billion dollar brands, they aren't just their one solo billion dollar brand, right? There are lots of different entities. Another great example I use and I pull up a slide, you guys should Google it, is Richard Branson, who I just spent time with. And if you Google Virgin Groups percent ownership, you'll see a diagram, you know, a bunch of

circles going around the holding company and you'll see how much he owns or Virgin owns of that aspect of the business. So it might be something like Virgin health clubs, right? Or Virgin, the wireless phone service or Virgin trains or Virgin airways. You might assume, right? That's what I assumed that he owns 100% of all of those. In actual fact, he doesn't. And some of them he owns less than 50%. And it's the same with all of these billion dollar partnerships. So as early on in your career as you can, you can give up this ego thing around owning 100%. If you look at even a lot of the billion dollar exits, most of the founders, they don't own close to 100%. And that's what I think is fascinating, because you start thinking, wow, this person sold their

company for 100 million. And you go, they've got 100 million in the bank. Well, no, actually, they maybe only owned 30% by the time they sold. And they had to stay on for three years to get half of that 30 million. So they actually got 15 million on day one, which got taxed down to 11 or 12 million. And then they're going to get another 15 million over two or three years if they hit KPIs and the business still grows. So and don't get me wrong, 12 million is great. Right. But it's very different from 100 million. And that's why when you look at selling valuations, there's a lot more complexity. But my point being is they got to that point through bringing in partners, right? They might have had a business partner.

They might have raised several rounds of capital. And they might have also often exchanged a lot of shares to the company that bought them. So they might only get $12 million now, but they might have got a bunch of shares of a billion-dollar company that's public, and in three years they sell that, and they actually get three or four times more than what they would have got on day one. So there's so much opportunity in partnerships, whether it's bringing in celebrities, bringing in influencers, bringing

in synergies. If you're a software company that does email marketing, you find software companies that do tracking and analytics and Shopify stores. There's so many synergies there for you if you're smart about it. The next is affiliates. I have many friends that have made millions and millions of dollars online purely through affiliates. Now, I'm not saying you should only do affiliates by any means, these affiliates are giving you free customers. So imagine if you sell a fitness course and you have somewhat a bunch of affiliates selling that fitness course and you make all your money off supplements on the back end and high ticket coaching, right? You don't care if you give 100% to the affiliates. All you want is all the customers. So if you can get a thousand customers a week and you sell 10%, a hundred of

them into your supplements or your coaching, that's your win, right? That's your free, that's your revenue without any ad spend because these affiliates are pushing your product. So there's so many ways you can grow through affiliates and software companies do it all the time. If you look at ClickFunnels, they have massive affiliate contests. Tony Robbins did his big one with Dean and Russell. They blew up the internet with a big launch and it was all through or partly through affiliates. A big part was affiliates and they had a contest. And if you look at even billion dollar software companies and billion dollar brands, they always, always, always have the refer a friend, refer a friend and get X amount of credit, right? That's basically you becoming an affiliate. Now you're promoting them to friends and blah, blah, blah, in exchange for affiliates. And the reason people love affiliates is if you're an affiliate for a good company, you get tens of thousands, potentially a month back or thousands a month back from promoting a good product or

service. So you're getting paid for it just to recommend it, which you were doing already. And the company is getting all these free customers or they're obviously just paying you a small percent of the revenue. So they're not spending ad spend. They're just paying you a percent of money they were never going to get. So for you as a company, it's money you are never going to get. It's free customers. And it's a way you can use a big customer base to upsell into your other products and services. So partnerships, big picture partnerships and synergies is the first thing you've got to grasp and you've got to grasp also, hey, it's okay not to do a bunch of, you know, I don't need to just own 100% of one company. I can own fragments or segments of other companies through partnerships. The next part is affiliates. How many affiliates can I get promoting my products and services? And if you get aggressive with this, you can hire affiliate managers and the affiliate managers go out there and they actually hunt down the synergies, right? They hunt down the people

that have your audience. So they'll actually set up these referrals, these deals, and they'll get a small percent as an affiliate manager. And they'll do a lot of the hunting. There's websites where you can find great affiliates. And there's so many resources out there to find affiliates. There's hosting platforms such as ClickBank that host products where you can become affiliates. You can find products to promote. If you're the opposite, you have a big

email list and you only sell one or two products and you want to sell more, well, you can add in affiliate offers into your business. So affiliates is another big hotspot. The next one I want to talk about is license deals. A lot of the big companies, they do very well with licensing. That's where they take their name and license it out. Hey, you want to promote you want to, you know, launch a gym, right? Floyd Mayweather is a business partner of mine on all the education info product side. OK, and if he's if you followed Floyd, you'll have seen he's got a lot of gyms around the country, right? Boxing studios.

And if you look at what he's done, he isn't in the studio running each and every studio. He's not flying to each studio, building the team, launching it. He's too busy for that, right? What he's done is he's found great partners. And then he's created a license or franchise-like deal. So his name, his reputation is being leveraged to promote these gyms. And it's great for both parties involved. For Floyd, you know, I don't obviously know his exact deal structure, but for Floyd, he is getting a residual income from every expansion, every gym, probably revenue for the partner, right? That

opens those gyms. They are versus just opening a gym that's called Rudy's Boxing Gym. They're opening a gym franchise with his name, right? So it's going to bring in an audience way quicker and they're able to expand way faster for a franchise model because other people would love to own a Floyd Mayweather boxing gym, right? Those individuals. So it's great for the location if you want to create a franchise. And then also for the individuals that have always wanted to open their own gym or boxing gym. Now they get the benefit of using a big name too. It's just imagine if I started a boxing gym called Rocky, right? If I partnered with MGM and Stallone and I opened this gym called Rocky, the Rocky's gym, right?

That would blow up way faster than Rudy's gym, right? And of course, I'm not saying I'm doing that or anything like that, but that's just another example. If you were trying to do bodybuilding, imagine if you did Arnold's gym, right? So you can take these big names and obviously you have to do it legally and build a deal with them and a contract and clear terms. But you can take these names and you can create these partnerships. And whether it's a celebrity, an elite athlete, if you drive around and go to all these food outlets, some of them are owned by the company. Some of them are franchise-like deals where they're actually bought in a franchise. And one of the biggest downsides to that is they have quality control of thousands of locations where they have to keep their standards up so it doesn't hurt the brand. But it allows them to have much bigger expansion and it allows people to buy into that business model

versus them just starting a random burger joint. They can start a big franchise, piggyback off that brand name, all the cost analysis side. So they're going to get way cheaper deals on all the food because it's through wholesale with big vendors that Burger King says already established. And they're also going to get all the operating procedures, the SOPs, the health benefits when they hire people and all the employment benefits. So there's a lot of benefits there for both sides too. Whoa, whoa, whoa, wait a second. Before we go into the rest of this episode, I'm going to interrupt abruptly and just ask you one big favor.

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30-second review. It would mean the world to me. Send me that screenshot. I would love for you to leave that review and I would appreciate it very, very much so we can keep growing this show and make it awesome. So let's get back into the episode. I appreciate you guys and let's dive back in. So we've talked about general partnerships, understanding expansion is often quicker through partnerships. Next, we've talked about affiliates, how you can get affiliates promoting your offers and products and services. After that, we've talked about licensing model, which leads into franchising. I've already kind of touched on in licensing, but when you have a proven model, franchising is a super popular way to grow.

Franchising is more often seen in like old school businesses, restaurants, local businesses. But I think there's a massive opportunity online that most people aren't using yet where it's not adapted. So if you look at, like I said, gyms, food outlets for sure are often franchise models when you eat in a lot of these places they're not they're often a franchise model and they have strict guidelines they have to follow so you can't really tell but often they're not owned by you know or they're only partly owned by the holding company so have a thing because you're you know and this is big picture thinking right but you you might not be in a position to do it yet but if you have a proven because you're, you know, and this is big picture thinking, right? But you might not be in a position to do it yet. But if you have a proven model and your only problem expanding is personnel or capital, you might have a great model to one day franchise. Now, franchising,

there's laws, there's regs, there's a, you know, legal side. It's not something you can just randomly do. But if you're starting to do 5, 10, 20 million a year, and you want to go to 100 million, but you can't imagine yourself doing it 20 times over or 10 times over, well, it's super easy to get 10 partners that can now franchise. I've seen a lot of people do this with gyms in our industry. It's not as hard as you think once you are established. And it really boils down is, do you have a strong brand and a proven model? If you have a strong brand and a proven model, franchising is awesome. It lets you grow your brand much quicker. And really, you're selling a buy in so you can sell.

Hey, to start the franchise, it's one hundred thousand dollars or five hundred thousand dollars. So if you get a buy in and then you're giving them the process and the support. But at the end of the day, you're getting residual income, right? Usually a few percent, 5%, 2%, 10%, you're getting residual income forever. And also, often you're getting better margins within your business. So say you franchise a gym, well, you might say, hey, you have to buy in our supplements.

So now you're getting all the income from the supplements that goes to the gym that you still partly own because it's franchise. And then you also get an override on total revenue. So it's a really smart way of doing it. It's a way that you can expand and maybe get to that bigger level, 50, 100 mil much faster. Obviously, it doesn't fit for every business, but there's some business models where they can really be duplicated multiple times and they get limited by capital. I was actually spent two hours today with a big A-list celebrity where we're thinking about starting multiple entities where we build out one or two. They'll only make a few million, so it's not super sexy for either of us. But the $100 million play there is the franchise model of, hey, let's build out a couple, get a couple of years accounting books, showing the proof of results, showing the strength of the brand.

And then we could blow this up to 100 mil for a franchise like model. And that's a really quick way to grow, especially if you have a bigger name behind you, a celebrity name or a very proven and replicable system, it's a very attractive model and something you should definitely learn more about if you fit that criteria. The last one I want to talk about is JVs, so joint ventures. Joint ventures are kind of in line with what I said around partnerships when I first opened today. But joint ventures are where you join up with someone on a venture, right? That's the name JV, called JV in our world.

And they're similar to affiliates too, but they're kind of in the middle. It's not a full equity partnership. It's more than an affiliate because you're not just promoting each other's stuff. You have skin in the game. So one recent joint venture I've done is with a big marketer and sales business guru in the Spanish speaking market.

I want to grow more in the Spanish speaking market. I have a skill set that their audience needs. They need a lot more around the ads, the funnels. They teach more general business mindset sales. So super synergistic, right? They go hand in hand. And I want to expand there. They like my name, my reputation, my celebrity clients and partnerships. I bring something to the table as well. So we created this joint venture. It's very low cost from a legal setup. It's very easy to set up and get started. It's low risk because if it doesn't work, we just dissolve the joint venture and then it can lead to a full company and equity and all of that jazz if everything goes well, but without the initial time, energy or risk. Some of my full business partnerships, they take three, six months to close. They'll cost 30 grand in legal fees. You have LLCs,

you have tax registration, you have maintenance of all that. And if anything goes wrong, you both have liability. The JV side is somewhere in the middle where it's more than an affiliate, but it's much lower risk. You still own your own individual assets, etc. So joint ventures for many of you listening today is a great hybrid. It's a great place to start that could lead to more bigger possibilities. You want to have great contracts and clear terms. What happens if we split up and it doesn't work? What happens if it goes great and we roll it into a new company? How is all that divided? But I think for a lot of you, especially when you have a good product and it's selling well, there's a lot of joint venture stuff to be had. There's a lot of maybe your product adds something to an audience. Maybe your audience adds a lot of great stuff to

someone's product and service. So look at joint ventures, be strategic and look at how can I leverage other brands, other people, other businesses to grow much faster with those sort of joint ventures and partnerships. And then obviously the partnership side goes great if you're trying to build to sell, right? That's when you're really doing that. And it's a full equity partnership is you want to grow it, you want to sell it, and you want it more of like a marriage.

Whereas joint ventures is kind of like dating and affiliates is kind of like a little more like one night stands or an open relationship, right? So you've kind of got these different like trios and different stages of a relationship, just like any normal relationship. They all have benefits. They all have pros.

They will have cons. And you probably in life go for a mix of all of them, right? And it's the same in your business. You're going to want to use each one of them strategically. If you're starting out, if you're just trying to start a business, also don't be narrow-minded that you have to just start your own business 100%. Everything I just said today is true where you can slide in in one of those avenues. You could become an affiliate

for a really established business like myself, or you could sell products that are mainstream. It's much easier to do that than you make your own product, right? And there's less risk and less time, you could get good at marketing, and then eventually build your own product. You could JV with someone, you could find someone like me and go, Hey, Rudy, I have this amazing idea. I'm ready to work 80 hours a week. I know you need this, I'm going to do it for free. And then I want to do it together. And I'll take a small percent. You can keep 80%. I'll take 20%. And we'll make a million dollars. You'll make 800 grand. I'll make 200 grand.

That's way better for you than starting a new business probably. And it's great for me because I have majority ownership, majority control. It's my audience, my brand. And I get a free $800,000 just for saying,

yeah, let's try it and promoting it, right? So there's a lot of benefits still if you're small, you probably don't want to come in there and say, hey, I need 80% because if you've not established anything, you have no proof of results, no name, someone big isn't going to give you that. But it's a great way for you to expedite your success, right? Because imagine if you worked with me for a year or two, and then you'd meet all my friends, partners, my network, you'd have my brand name behind you, you'd learn a bunch from me. So there's a lot of, and I'm not saying do it with me, I'm just giving you an example, that there's a lot of big benefits of partnering with someone big and doing that sort of joint

venture. And Grant Cardone's done a lot of that. And you see those people he partnered with, no one knew who they were four years ago. Now, a lot of people know who they were, right? That's true of many celebrities and many brands that have took someone as a partner under their wing, maybe, and helped them grow. So as a newbie, there's a bunch of benefits and affiliates. It's kind of a good testing ground for you as a business. Joint venture is the next step where you can really piggyback, which could lead to a full partnership, right? Where you're full equity partners. And some of the people with Grant have done that. And now they're going to Europe with Grant and his family and hanging out on a yacht with him for a week and speaking on his 10X stage.

Imagine how many years they've expedited success, right? They've achieved more success through four years of a partnership with Grant than most people will ever achieve in 40 years of business, right? And obviously Grant's very selective. He won't just do it with anyone. There's a methodology on who he partners with and why, but that's a prime example

of how you could leverage that, right? So there you have it, multiple ways to grow much faster through partnerships, affiliates, JVs, licenses, franchising. I really wish I listened to this episode by myself eight years ago because I didn't know how this world worked.

I had a limited mindset that thought this was just for Fortune 500 billion dollar firms. It's not, it's accessible. You can all do it now you just needed to get permission from me and understanding of how it works so there you go here it is you can do this now you can start looking into this you're not too small you're not too inexperienced all of these avenues are open for you today and they can get you to achieving

your goals your revenue goals your, explosive business growth much, much faster by leveraging those channels. I hope that was a great episode. I hope you got some knowledge and I hope you keep living the red life. Until next time, guys, take care and I'll see you very soon. Bye.