The Entrepreneur DNA - How to Scale From a Business Owner to a Proper CEO | Brandon Dawson | EP 31

Episode Date: July 29, 2024

In this episode, Branden Dawson, a business scaling expert and partner with Grant Cardone, shares his journey of selling his last company for $150 million and offers insights on scaling small businesses. He emphasizes the importance of strategic planning, learning from failures, and the necessity of promoting, converting, and delivering effectively. Branden discusses critical growth stages, or "breakpoints," in business development, highlighting the need for a strong foundation and the role of mentorship. He also talks about his current ventures, including CARDONE Ventures, and his commitment to helping other entrepreneurs achieve scalable success through documented strategies and detailed research.   --- Connect with Brandon! Instagram - @brandonmdawson Website - https://bdawson.com/ Podcast - Building Billions Podcast    

If I can teach a million-dollar business owner the behaviors and characteristics of an entrepreneur, they can call themselves one, but if they don't know the competencies, the attributes, they don't understand, but if I can teach them that, and they can do that and think that way, they'll pop to 15 to 25 million. If I can teach the entrepreneur how a CEO runs a business, this is an entirely different mindset to make these massive movements from who you are to who you need to be in order to create capacity for the business to grow to its opportunity. And the business's growth and the opportunity for the business will only be limited to the extent that you're thinking small. What is up, entrepreneur DNA family? Welcome back. This is an incredible episode. I have an incredible guest. This gentleman sold his last company for $150 million,

77 times EBITDA, now partnered with Grant Cardone. Brandon Dawson is here. What is up, dude? Thanks for having me on your show. I'm excited to be here. This is incredible. So coming from my perspective, small multi-million dollar businesses, not in the nine figures yet. What does it take someone to gain that traction,

to go from, I got some things going, cash is going good, but man, you know this because we've talked before. There are several things that it takes to get to some of these bigger numbers. And let's jump into that to start with all these entrepreneurs out there that are getting going, making a couple bucks. Yeah. Well, there's 31.5 million businesses that are under 125 million in revenue. 97% of those businesses will go out of business every 10 years. Two-thirds go out in the first five.

98.2% of all those businesses are trapped at $3 million or less. So when you think about the difficulty to go from $3 million to $125 million, you're talking about a couple percentage points of the total number of businesses out of $31.5 million. And then the failure rate is unbelievable. And the problem with small businesses, it's usually 83% has what I call family orientation. So somebody in the family or somebody close or the family is directly affected by the business. So when the business suffers, the families usually suffer. When this family suffers, their communities suffer because it's just very hard to build a successful, profitable, valuable business. How did you do it? Well, the first one, I raised private equity. I was 26 years old. I had a dream. I bought 138 businesses. I rang the bell on the American Stock Exchange at

29 years old. And if you would have met me then, I would have told you I'm going to billionaire status. I got it all figured out. And I know how to play the game. Problem was, you never know what you don't know as an entrepreneur. And you usually realize it and figure it out after something bad happened. So at the peak of my career in 2001, May, I celebrated raising 20 million and basically free capital but in the agreement that I did the international world my first global deal it was this thick and I used the word temporary debt and by putting debt in there it triggered an agreement that was this thick with Warburg Pink as my private equity group equity group, that said, anytime you put debt in front of our preferred equity, we have the option

to sell your company. I missed, I could have called it a rebate, a pre-bate, advance. I could have called it a bunch of things,

but I used the word debt because I just, one word, out of an agreement mistake. So they sold my business and I had to start all over. The problem was when they sold my business,

I didn't get any money out of it. So seven years. That's pretty fun. Thinking I was on top of the world and I had it start all over. And the problem was when they sold my business, I didn't get any money out of it. So seven years. That's pretty fun. Thinking I was on top of the world and I had it all figured out. So I learned a valuable question or I learned a valuable thing at that point in time, which is even just about the point in time you finally think you figured it out. You're at the peak. It could all go away overnight. That created a whole new mindset for

me. And the mindset was, I will never not be in control of my equity. I'll never not be in control of my destiny. I will never use somebody else's money. I'm going to figure out how to engineer a business and build it different than how wall street tells you it needs to be. So I'm going to stay on this point because it's really important. It's of what i'm doing i'm on the junior version of brandon dawson i'm doing more in the space of joint venturing strategic joint ventures partnerships to grow versus to your point taking on capital taking on debt building out this massive organization because you already know what i think i know which is the growth and that expense and operating costs, whatever takes the debt to go that far. And if things crack,

you're cracking with it. Now, the reason why I want to stay on that point is I do want to talk about Cardo Ventures and what you're now doing, because I think it's drastically different than what you did do. Yeah. So when I had that mindset shift, I've got to figure it out. I realized if I figured it out for me, I could figure it out for all small businesses. So I really paid attention to every little detail. I started cracking open books and reading about business and reading about leadership and reading about entrepreneurship, reading about a research and really understanding the finite, based on my experience, the experience of watching all this consolidation and rollout strategies happen around me and asking the finite, based on my experience, the experience of watching all this consolidation and rollout strategies happen around me and asking the question, how can you actually scale a

business up to 125 million? And the reason I say 125 million is Wall Street calls in business between 125 million and 175 million that's making between 18% and 40% profit. They call that company a platform company. And the reason they call it a platform company is it has all the elements needed to get to $125 billion. And now you can add to that all the smaller businesses and take it to a billion. But you can't be $125 million if you don't have the things required to be a platform company.

So I always had it in my head. Can I build a platform company without doing it Wall Street's way? Can I bring together enough businesses to create a business that's doing $125 to $175 million that's profitable, that has all the resources that $125 to $175 million business would have. And that's the first thought. So then it led me to the question, what doesn't 125 to $175 million business have that a small business doesn't have? And that put me on a research path while I was building my new company. So I started my new company using the principles, the business will fund itself. My people will be aligned. I'm going to use a shared equity strategy. In fact, I was the first one to use a decentralized equity platform. So I gave equity to my customers every year they did business with me. And when they stopped doing business with me, I had a callback position to bring the equity back. Interesting.

And so I would give equity if you did business with me and I give you today, it'd be called tokenization. But back then it was on the balance sheet as equity and using a step up in basis. Into an operating agreement. Yeah. In our operating agreement. I had a cap table. You'd come in and out of the cap table, depending on how much business you did with me. And my promise was one day when I sell my business or raise capital, I'll share the upside with you. And when I did, I sold my business for 77 times EBITDA, 151 million. And I sent $45 million out to my customers and all my employees. How good does that feel?

Dude, it was a single best day. Not only the fact that my model worked, okay, because it's hard enough to make things work, but to actually complete a cycle of a sale, the way I did it, 77 times EBITDA I won the highest values ever paid for a business because of the way I engineered it. And the promise that I made to the group that bought me, it was a public company out of Denmark, engineering the business for a high value transaction and have it be a home run. So the most important thing was after selling the business for one of the highest values, using a model I innovated that didn't exist at the marketplace, I was then told, look, if the buyer buys you and it doesn't work for them, no one else is going to buy anything else you've built. So I had a new problem. So I went in and integrated my business that I sold into the billion dollar

company. Within 36 months, they became worth four and a half billion. And we pushed out to eight countries. So I knew the stuff we built worked because it was based on research from 2009 to 2018. Sure. With FTI out of Chicago, billion dollar consulting firm and IGS out of Boston, I hired them and I force ranked tens of thousands of businesses. What makes them work? What causes them to fail? What decisions? Because I was searching for how do you build a platform company? What is a platform company? How do most people build a platform company? And how can I do it different? And now what I've done since partnering with Grant Cardone is we built Cardone Ventures from zero, my wife and I.

Zero invested capital, zero debt, same way we teach. This year we'll do 115, 120 million in revenue in our fifth year in business. Wow. Last year we made 55 million at EBITDA. This year we'll make 70 million at EBITDA. Launched a new format business in the healthcare space, bought a little $2 million business called Streamline, owned by Gary Brecken and his wife, Sage. It was $2 million.

We'll do $130 million in our third year. Did $75 million in our second year. And we've got a dozen other formats we're rolling out right now. So, from launch, we've done just under $400 million of revenue, $130 million of EMITDA in five years, no investment capital, no debt. So that is easy for you to say, but I want to make sure the listeners and the people watching this right now, I understand what you're saying.

But take us through like to go from zero to selling $150 million a year in five years like that is a herculean lift i did 150 million of revenue of revenue that's a herculean list yeah what's the secret sauce well the thing i learned in all that research um and in building multiple companies now, is there's a lot of moving parts and there's a certain place where businesses fail versus where they succeed. And after surveying thousands of business owners asking, at that point, what decisions did you make versus what decisions caused the businesses to go out of business? We started finding all these little golden nuggets. Like when confronted with this situation, the businesses that failed said, on average, we did this, blah, blah, blah.

The 3% of the businesses that succeeded when confronted with this situation, we stepped back, we met as a team, we found a mentor. We went through this process and then we did that. Well, if you interview enough people, you start to find the commonalities behind the ones that succeeded versus the ones that failed. And what was interesting is the ones that failed, it was almost like intuitive, instinctive snap decisions. We need to do this. We need to do that. And the faster they made the decision with less input from the right people, the faster they went into decline. So what that sent us on was the intuition. I called it the entrepreneurial intuition. If you've never been there, you've never done it. You're not talking to people who've been there. You're not talking to people who have

done it, or you're talking to people that have a concept of it, but they can't exactly tell you how they did it. Because what we found is in those micro moments where you're making really super hard choices. If you're making them without the granular details that made it work versus caused it to fail, you fail. And you can be close to making a good decision. Have you ever talked to an entrepreneur and said, no, I tried that, it didn't work? Yeah, of course. Okay.

What we learned is to ask the question, did you try it right? Okay. How did you try it? And in the nuance of how did you try it, we found the granular, fractional way they tried it that caused failure versus success when we started mapping.

And from 2009 all the way up to 2018, thousands and thousands of businesses, millions of dollars spent, we mapped these little granular incremental choices along the growth spectrum that either plateaued your business, broke your business, allowed you to accelerate your business, and we just kept mapping and mapping and mapping and mapping, and we created a system on how to go from zero to 125 million. There's 10 elements, 76 sub-elements, and 240 specific things that we found that you have to do or you're going to fail. That's insane.

In that, it takes a lot of research that a lot of us are not willing to do. This is why you have to make, by the way, if you haven't yet started following Brandon Dawson, do that immediately on all platforms, YouTube channel, Instagram, every platform he's on. It's just Brandon Dawson, right? At Brandon Dawson. At Brandon M. Dawson. Brandon M. Dawson.

Make sure you're following him immediately. He is someone I heavily look up to. Obviously, he has the resume to prove it. You guys should be as well. And, he has the resume to prove it. You guys should be as well. And my podcast is Building Billions with Brandon. And you have an incredible book. We didn't even mention that. I want to make sure everyone goes out and gets. But let's talk about your book for a second. Yeah. Night Finger Mindset. The mindset thing is a big thing. I think as someone who coaches other entrepreneurs and I have for a decade now, the mindset,

I think that's the 99% to the success, in my opinion. Yep. The tactical is the 1%. Anyone can show you the strategy. If you can't break your own line and push through the tough times, you're going to break. 1,000%. And I extensively talk about my break. Yeah. And how I rebuilt. Yeah.

I wanted to encourage people. One of my closest mentors, dearest friends, is John Maxwell. And he told me last year, he and I have been working together since 2012. I came in and helped him with his business in 2013, so we became very close. And he's been mentoring me personally, and I've been helping his business. That's been our change. And I feel it's true. And so he told me two years ago, he said, you have to write. I've been working on my book since 2009, but I had never quite finished what I thought I needed to finish to suggest that what I believed could happen was actually going to happen.

So I had this little imposter syndrome thing saying this could happen. I wish I would have put it out because I predicted the future almost perfectly. Right. But John said to me, you need to put this book out because people won't understand how you got, when you do put the next book out, they won't know how you got there. So nine figure mindset is, is really one of a trilogy I'm working on. There you go. So the first book is nine figure mindset. It's how I broke, how I had the ideas, how I made all my stupid mistakes, how I learned from those mistakes, how I found my mentors, how I applied what I learned from my mentors and what happened. Okay. To give people the inspiration and courage to

understand the thing that you talked about, You need resilience. You need humility. You need appreciation and gratitude. There's certain things, you hear those things from other people, but what I try to do in my book is precisely show you how and why you need these things and how to deploy them actually in the business, making business work. The second book is going to be for lack of a better better way to describe it kind of the 10x operating system that allows you to go from zero to 125 million the break points that i've engineered actually go to a billion so it's zero to a billion there's 11 break points between zero and seven to 125 the second book is going to be how to do that it's the how-to book and the third

book is the 10-figure mindset because i I have taken my net worth from a target. I was $100 million when I partnered with Grant. I asked Grant. My next target was $350 million. I said, can you please show me how to do that? My target was three to five years. We hit that target last year. And now I have a billion-dollar net worth mindset.

And then it's going to go to 10, right? Nice. And what I'm doing is I'm actually literally documenting every technical little move to do this so that and i'm speaking it publicly so when people go okay nine figure mindset this is how he got here and i'm like 10 figure mindsets coming that's my third book the middle book's going to be how i'm doing it but i have been speaking i do 108 events a year and i speak these things out and i had every video clip talking every business owner here's what we're doing here's what we're going to do next year here's how we're going to do it here's what we're going to do the year after

so that i could literally document that move to building billions yeah and then i have hundreds of business owners that are going from 3 million to 30 million to 60 million to 100 million and i'm documenting what they're doing so my goal is over the next five years is to create a documentary on exactly the precision behind building a business. I love that. And you say something, I actually want to get your input. So I have these five laws of success.

The first one is you got to decide what you want and who you need to be to get, that's one. What you want, who you need to be. Number two is you got to commit to it. Number three is you have to be to get that's one what you want who you need to be number two is you got to commit to it number three is you have to take massive action imperfect action just keep going number four is being extremely uncomfortable the entire way never quit never be okay with being uncomfortable and to me number five i think is so it could be number one meaning i think it's actually the most important which is remove your time expectation on your result to try and glitch you do you agree with those would

you add anything to those i have literally been speaking this from the mountaintops because i believe these are the five principles the five laws that genuinely if you encapsulate all fives you will reach wherever you want to go as fast as you possibly can get there etc i i agree with everything you said except for one thing, which is the precision. The third point, you had two points. You had massive action. Massive action with precision.

Okay. And what I can tell you is that there's no way to have precision when you're doing everything through trial and error. Sure. You've got to take the massive action and be okay with not having precision. Yep. But

you have to have the desire to take the things that are broken and figure out a way to make them precise. Amen. So if you're have the mic, cause what, what I find, this is a nuance, but what I find with people when they say the precision is they start looking for the precision before they take the action. Cause they don't want to make a mistake. I was just going to say, but don't you find when you say that word precision, to me, it's almost saying be perfect, get the thing done right. Yeah. And perfection's the enemy.

I'm good at that. That's the obstacle from getting going. That's the point. You have all these people that want to be precise, so they don't do anything. And then they never do anything. That's right. So I would tell people be reckless. Yeah.

Take massive action, be reckless, but have a team behind you measuring what is or is not working. So you can get there. Yeah. That's it. So it was a micro nuance. But here's the thing. Those five laws are phenomenal laws. What I find with business owners is they're like, okay, I got it.

I wrote them down. How do I do it? Yeah. What's the indicator? What's the lead indicator? I'm actually doing the five laws. Right. How do I graph it? How do I set the targets? How do I inspire the indicator? What's the lead indicator? I'm actually doing the five laws. How do I graph it? How do I set the targets?

How do I inspire the team? How do I communicate it without scaring? How do I hold them accountable? How do I? So now all of a sudden he goes, how, how, how, how, how, how, which is what all the business owners we interviewed. They're like, I want to get go from 3 million to 10 million, but how I want to be resilient, but how I want to be a great leader, but how? I want to be resilient, but how? I want to be a great leader, but how?

I want to have phenomenal books, but how? And so then you start looking, okay, how did the people that did it do it? Like people say to me, oh, you're so smart. I'm not actually that. I'm a 2.4 GPA. My intellect is actually in just understanding. I don't know anything.

Yeah. So I need to find people that are living proof examples. And here's the problem with finding mentors. And you're like, oh, I got a guy that I hear this all the time. I got a guy that built a hundred million dollar business. He's mentoring me. So I know I'm good. Phenomenal.

But the problem is you don't know what questions to ask a mentor. So if I've done research on thousands of businesses and I know a guy with a hundred million dollar business that makes three million dollars a year and sold it for ten million dollars because he got burned out. Do you want to learn from that hundred million dollar business owner or do you want to learn from the 50 million dollar business owner that sold their business for 150 million? So who you're learning from and the wisdom and the advice you're getting is directly relative to what you want to achieve. And just because somebody built something doesn't mean they built it right. Doesn't mean they even built it valuably. And it doesn't mean they built it well. Yeah.

So if you don't know what questions to ask, you end up following people that look good. They sound good. And trust me, when I got into this whole business, my wife is half my age. She's like, we should look at some of these social media people to go big fast i'm like oh man i went through the whole list she made a list we went through most of her bullshitters most of them their whole business is trying to sell the concept that's it most of them have never actually done it their business is just coaching and mentor and masterminds and all this stuff and they're they're just talking

concepts and people get all excited which is fine but what i notice is very few people that give you the actual technical ability to do it and then we came across grant cardone she did the first video she showed me i'm like i never work with this guy it's just he was promoting and loud and shooting money guns and had his hat on. I was just like, what is this? Yeah. And she says, no, you got to look at the genius of how he's grabbing attention. So once I got over my own ego, this very important one side, it was like, okay, I'm willing to look, I'm willing to listen to this book, 10 X rule. As soon as I listened to it, as soon as I actually looked behind the scenes, I was like, this guy is a genius. He knows what he's doing. He was the only social media person

that actually had an operating company that precisely laid out how to do something. And it was in sales and marketing. Well, that happened to be my weakest areas. My strength was in all the other operating factors of the business, finance, people, leadership, strategy, data, technologies, investment, things like that. That's my strength. So we went to the GrowthCon in 2019 to say, okay, what kind of audience does he have? What does he really do? Does he really work with his wife? Can we complement his core business?

And then the fifth thing, could he help me actually create a $ to 500 million dollar network i went to growth con with those five things with my wife to find out could we get this these five things from here and within the first half of the first day at the 2019 growth conference 34 000 people marlon stadium we were like this is all we're gonna partner with grant and helena cardone and i told some people that i'm here to figure this out and then by by the second day, we're going to partner. And they're like, what does Grant think? What does Grant think? I'm like, Grant's never met us.

Yeah, yeah. I just heard that story recently right before you came in here. And I think that's incredible how you guys played Hot Girl games and it worked. That was my wife's idea. I was like, yeah, let's go talk to Grant. I'm so excited. She's like, slow down. That's right.

Back it down. That's it. It's indifference. Indifference has been a game changer for me. So let's dive in. I want people to get some of the tactical brilliance that is in your head that I've had the pleasure of experiencing. But let's talk about the breakpoints. We just talked about the questions about how do I do those things.

And I know through your at least seven breakpoints, I think we can review in a matter of time. That is part of it. It's how. And then there's the who and all those things but let's let's go through these break points so that people can leave here with like oh this guy's something yeah so so let me let me tell you um something really simple that all your listeners can do at home listening to this or while they're driving it's not going to take a whole lot of effort. But all it takes is for them to be honest with themselves. Anybody can be a founder or business owner, of course. And a founder is somebody who starts a business.

And a business owner is somebody who owns it. Simple, right? It's about $15 million to $25 million in revenue where you actually, something new happens. And if it doesn't happen, you generally won't get to $25 million in revenue. And that thing that happens is you move from a founder business owner at $15 to $25 million to an entrepreneur. And there's a very specific thing we found in our research that allowed you to make

the technical move, founder, business owner, to an entrepreneur. And that is where you're struggling and you're trying to push through and you've got a lot of people around you and you're frustrated and you feel like you're doing everything and you're talking to mentors, you're talking to coaches, you're talking to consultants, you're talking to your accountant, you're talking to mentors. You're talking to coaches. You're talking to consultants. You're talking to your accountant. You're talking to your lawyer. You're talking to your buddy. Somebody says, you know what you need? You need a strategy. And as soon as you start realizing, why am I doing anything without a strategy?

Because a strategy says you don't do anything if there's not an expected return. You don't do anything if there's not an expected return. You don't do anything if there's not a result. You don't do anything unless it feeds into the bigger picture or it's all wasted energy, wasted momentum. And now you're going to build your strategy. That happens in the 15 to 25 million range. And if it doesn't happen, you fail. And you can't get to 25 million if at some point you're not sitting there. Now, this is why I say any entrepreneur driving right now can go like, I remember that moment.

Or you're saying, hmm, strategy, we're just showing up every day and winging it. Yeah. A new thing happens at 75 to 125. The new thing is you become a CEO. Now, a CEO knows their job. They have a fiduciary duty to the organization to drive value. You have a fiduciary duty to investors or to the employees to drive value.

They understand that you would do nothing if it didn't drive value according to a strategy, and their job is to find the right people, hold the teams accountable, drive to value, have a fiduciary duty to make sure it's moral, legal, ethical, and compliant. Build teams that are thinking of the future, not thinking of the present. And so a CEO, a real CEO knows that's their job. Now, if you're driving your car right now and you gave yourself a CEO title at a $10 million business, and you're like, wow, I'm not spending my time doing that, then you're not really a CEO title in a $10 million business. And you're like, wow, I'm not spending my time doing that. Then you're not really a CEO. That is something that does drive me nuts. It's actually a weird pet peeve when people care more about a title.

Like, I'm the CEO. CEO, are you really? Or are you just still operating a business? I can generate some revenue. I hear you. But look, if you go from zero to a million and you're striving and you're fighting and you get to 10, 10 is a huge number. A million to a lot. At the end of the the day my friends do not run any business that generates

millions of dollars like so i'm the king of that yep smaller circle right so i give respect to the people that are out there doing it right so i get it they want a title to it but it does drive me a little crazy when people are like oh i'm the ceo CEO of this company. It's $2 million in revenue. But here's the bigger problem. When they give them the CEO title, they give their bookkeeper the CFO title. Right. And they give their buddy the CEO title. That's it.

And the only people they're fooling is themselves. And then they wonder why, if you're in construction, I can't get an insurity bond. I can't get a loan to buy something. If you're in any business, you're like, the bank's not taking me serious. So you go get a lease and they won't give me the lease. And it's because here's the thing, the people you're dealing with, even if you've had success in your mind, in your business, the people you're dealing with, the professional world, they actually understand the difference between a founder, an entrepreneur, and a CEO.

They know based on how you're presenting your financials. Like, I don't need anybody to explain anything at all to me about their business. I just need them to hand me their financials. That's right. Once that happens, I know everything I need to know about the competency of the leader. Okay. Well, so does everybody else that's in that space. So when you're in business and you're giving yourself big titles and you're telling everybody

how successful, you're actually creating an enormous amount of resistance in the ability for your business because the business isn't supposed to be you. The business is like a little baby you birth and you're supposed to nurture it. You're supposed to lead it. You're supposed to protect it. You're supposed to be you. The business is like a little baby you birth and you're supposed to nurture it. You're supposed to lead it. You're supposed to protect it. You're supposed to guide it. But one day it should be able to take off

and run by itself instead of you holding everything back and misguiding it, okay? And so now what happens when you're the CEO? Well, something magical happens at 150 to 250 million if you make it there. And that is you move to the investor. Because you start realizing, I don't need to do all the work anymore. I've got a team on average of 12 to 15 people. So at $15 million,

you have to have a leadership team of three or you're out of business. At $25 million, you have to have a leadership team of five or you're out of business. At $75 million, you have to have a leadership team of five or you're out of business. As 75 million, you have to have a leadership team minimally of seven or you're out of business. At 125, it's 12. And at 250, it's 15 to 17, 18 people. If you don't know that, you don't know what those roles and responsibilities are, and you're going to ad hoc it and wing it and hope it finds itself, you're going to go out of business. So what is important is depending on the type of business you are, you know what the three people are, you know what the five people are, you know what the five people are, you know what the seven people are, you know what the 12 people are. If you know that all the way down at a million dollars and you understand why would I do anything without creating value? Why would I do anything without a strategic plan?

Why would I do anything without having the intentionality behind it? You start having those conversations with yourself and you're like, because here's the other thing. You ever heard of anybody that ever built a business, sold it, started over, built one bigger, faster, and made more money? Yeah. Have you ever heard anybody selling their business to a third party for a lot of money? They break it. They step back in, buy it, spend it on the dollar, grow it back up, and sell it again?

Barstool Sport. Because they have moved to understanding what an investor decision-based process is, a CEO decision-based process, a founder process, or an entrepreneur process, and a founder process. Well, here's the thing. If I can teach a million-dollar business owner the behaviors and characteristics of an entrepreneur. They can call themselves one, but if they don't know the competencies, the attributes,

they don't understand. But if I can teach them that and they can do that and think that way, they'll pop to 15 to 25 million. If I can teach the entrepreneur how a CEO runs a business and they're willing to make, because you're talking about mindset. Yeah.

This is an entirely different mindset to make these massive movements from who you are to who you need to be in order to create capacity for the business to grow to its opportunity. And the business's growth

and the opportunity for the business will only be limited to the extent that you're thinking small. Because if you're thinking big, everything, everything moves with belief. The higher you believe, the higher you achieve. Operational effectiveness is moving you towards reaffirming that belief or pulling you off of it. And me, we, then us leadership is the thing you have to develop for it to breathe and grow. And John Maxwell says, 21 eerie funeral laws, first law, law of the lid. The lid is the cap. If you're not elevating your

lid, you can't elevate the lids of the people below you, which means you're stagnating your growth. Three lids, belief, operational effectiveness, and leader. That's incredible. I mean, in everything you said, it kind of brings me back to encapsulating the five laws. So you have to decide who you need to be to get there. So what do you want? Okay, great. Let's just use a billion dollars. Who do you need to be to get there? I'm watching from the sidelines. I'm seeing how often you guys are working weekends. I'm how many often you guys are working weekends. I'm how many people put in 108 events you're speaking at this year. Name other people that do that besides maybe Grant, right? My point being is who do you need to become? You're sacrificing

your Friday nights and drinking because you are on stage on Saturday morning. Now that may not be your jam anyways. I'm just saying. No, but you're right. You'd have to give something up to get something new. So the person going today, zero to one million, what's the first break point they're going to go through? One million. Okay. Zero to one million. You need two to four employees.

Yeah. You need to be generating 250 to 500,000 revenue per employee. You need to be running somewhere between 18% and 45% profitability. And that will get you, and the product and service that you deliver or sell needs to be delivered and sold and delivered effectively. There's three things you have to master to get to a million. One, you've got to be able to master your promote. You've got to be able to convert and sell, and you've got to be able to deliver operations.

And that will actually take you, if you can build that business to a million, two to four employees, 18 to 40% profitability, and you can get that system to work, that system will take you to 3 million. Should they all be focused on sales? I think that's a big, I think that's a good question. Should all four of those people be focused on sales and driving revenue? Well, one or two of those have to be operationally sound.

Yeah, Think about it this way. If I'm promoting, I'm grabbing attention and people say, well, what's promotion? Promotion, they go, well, I do marketing. Well, marketing can be promotion, but it can also not be. Promotion is a very specific thing you do for a very specific result. There's actually seven promotes in business. Okay. Promote who you are. Promote what you do. Promote why you do it. Promote the value proposition. Promote why somebody should join your team.

Promote people to take over your roles and responsibilities and then teach everybody the six promotes. That's the seventh. There you go. If you just live by that every day, which means I would never hire anybody without teaching them the six promotes. Got it. That means when my service guy goes out to somebody's house, they're promoting because

I've taught them how to do it. If I'd hire the service guy and say his job's to do service or her job's to do service, the dental hygienist or the front office person, no one's out promoting. Everyone shouldn't be promoting. That's strong. Because they should be aligned with the success of the business. So that's the next piece. So marketing and promotion, everyone.

Conversion. Everyone needs to be able to know how to ask the question, have you heard enough to make a decision? Would you like to move forward with us? What's stopping you from moving forward? Who do I need you to get in contact to make so you can make a confident decision in moving forward with us so we can answer whatever questions you might have?

Like teaching people how to communicate is not difficult. Not teaching them how to communicate, let them all practice on your customers or butcher your business case in the community. That's not difficult. Not teaching them how to communicate, let them all practice on your customers or butcher your business case in the community. That's not good. Yeah, that'll take you out of business. It'll take you out of business. So really, and then you got to deliver on your promise.

Those three fundamental things, you got to learn how to promote. Everyone needs to understand their responsibility to promotion. Now, a business owner will say, but how do I get my people to promote? They're just showing up for a job. Well, that moves over to the thing you learn in breakpoint two, which is personal, professional,

financial goal planning, actually including your people in the success of the business, giving them a clear picture of what the business looks like. There was a study done where they took a big jigsaw puzzle and they shook it up and threw it down in one room with a bunch of competent people. And they went over to another room, did the same exact jigsaw puzzle, shook it up, threw it in the room, put the box in the room so people could see it. The room with the box organized and did the

puzzle super fast. The room that had no box, they were all fighting. What is it? It's this, it's that. Move this piece. Because that led me to this statement. Where there's confusion in business, there's always failure. So, if you can learn that out of a million, you're going to move to a million super fast. And if you live by the rules I just described, you'll pop to 3 million.

Like really super fast. And then what's the break point of 3 million? 3 to 8. 3 to 8, okay. Now you have to shift from the what you do, the idea, and the delivery of the what you do with your 2 to 4 people. You get up to 3 million. Well, if you're running two 50 at 3 million, you have 12 employees. If you're at 500,000 at 3 million, you have six. So as long as you're living in those rules and making 18 to 40% and you're, you're understanding the algorithm of how to, how to take certain

amount of your profit every month, you don't, you don't spend it all and give yourself raises and go, you take it and you start throwing it in a reserve account with the goal to build 90 days, then six months, then a year, then 15 months and 18 months of cash reserves. And that becomes a target. The cash reserve target for the first three to five years becomes a target. You always want to have six to nine months of cash in a reserve account. Now it doesn't mean once you do that, you can't spend it, but you know, you can do it and you could invest it. You would never spend it. You'd invest it. And you'd only invest it like the CEO would. And something's going to create massive value. See, you start

thinking differently. Yeah. So your five rules are the right rules, but it boils down to the fact there's three to five things and break point one, three to five things and break point two, three to five things and break point three, three to five things in break point two, three to five things in break point three, three to five things in break point four. And it goes all the way up to break point seven. And if you bypass or you stop doing the three to five things, think of it as the thickness of the concrete and you're building extra levels on your house. At some point, if the thickness of the concrete will not support the growth of the future growth, your house will collapse. You have to understand, this is to what you said earlier in your five laws, have to decide where you're going. I would never start constructing a building

and say, I don't know, I might want it to be three stories or 10 stories or 15 stories. If I thought I'd want it to be 15, I'd engineer it to 15, but I could stop at three. That's right. I'm going to invest more on the front end. You're going to have to suck it up because the number one thing that causes businesses to go broke is they don't understand the rules and the laws of investing. Yeah. They think of it as spending and you hear from them. What you think is what you say. What you say is what you do. What you do is what you're known for. You know how much money I spend in

marketing. It's like, okay, I already know you don't know what you're doing. You should never be spending money in marketing. You should be investing in marketing. Right. Right? 100% right. And if you're investing, you're looking for the returns. If you're getting the returns, it's an investment.

It's not a spend. That's right. The language you use directly correlates to your knowledge of if you're a founder, an entrepreneur, a CEO, or an investor. Yeah. And the sooner you can learn what those people think and what that means they do, you can choose to be that before you even start your business. And it's been proven that people that know how to do that can go start a business from scratch, build their second, third, fourth, fifth, eighth company and sell it.

Yep. Because they think by the time they do that, they're thinking like an investor. An investor says, how do I put money in? How do I get the most amount of money back? How do I leverage all my resources? How do I leverage all my assets? How do I make sure the right people are doing the right thing at the right time? And I have downside protection.

I've hedged it. And I have upside maximum opportunity. And then I'll go do something. That's how an investor thinks. They don't think like a founder. I'll start it and hope it works. Let's go. So we've gone through two.

And what I want you guys all to do, just for the sake of time, because he could do this for an hour straight, two hours straight, bdawson.com. Yep, that's what I need to find. I think he even has those on another separate video. Make sure you find it there as well. This is something all of you, if you're just starting today or if you are 3 million or you're at 8 million, what are the breakpoints again? One, zero to one? No, that's a sub breakpoint. It's zero to 3 million, three to 8 million, eight to 15, 15, 25, 25, 45, 45, 75, 75, 125, and then it goes up to a billion.

Yeah. If you're anywhere in any of those, so if you're going, you're there, make sure you're reaching out to brandon him and his entire team they're doing hundreds of events a year go to their events reach out to him this just keep going so there's got to be an end and i love this you know this is i love helping yesterday at our event a guy walked up to me and he's like man i paid four hundred thousand dollars with you guys over the last two years. All my friends were telling me, what were you thinking? What were you doing? My family's like, why are we putting the stress? Because he took a second loan out of his house two years ago to do his first thing with us.

He goes, I came to you. I had a bad partnership. He told me exactly what to do. I resolved the partnership. The guy left. I took all the friction out of my life. I listened to all these people telling me, you're wasting your time going to all those events, just taking money from you. Boom, boom, boom. He goes, I just got $70 million for my company. Let's go. That they told me. That just gave me shivers. Two years ago, I bought a partner out, the guy that you told me to get rid of, how you did it. And I paid him less than 500 million. That's incredible. And I just got 70 million. I live for those moments, dude. Yeah.

It's just one decision, one technical decision for making a good choice or a bad choice. Yeah. And my commitment is to help business owners learn the rules to make the best choices possible. Make sure you are following my guy, Brandon. He's a wealth of knowledge, someone I look up to, mentored by. Go to bdawson.com. Go to Brandon M. Dawson all over social media, his YouTube channel. This is the guy, the scaling expert, Brandon Dawson. It's been a pleasure, bro. Thanks for having me on your show. Absolutely. All right, guys. If you like this, share it with two of your friends and make sure to be ready for

the next incredible guest on the next one. See you guys later.