In this Best of Series episode of The Inner Chief podcast, I speak to Roland Frasier, CEO of All Channels Media, on pulling off creative business deals with no money down and modelling your mentors.

At the time of our conversation in 2018, Roland was the CEO of War Room Mastermind.

He is currently the CEO of All Media Channels, and is also a Principal in DigitalMarketer.com, The Scalable Company, EPIC Network and Traffic & Conversion Summit.

Roland is the co-founder and/or principal of multiple Inc. Magazine fastest growing companies (e-commerce, e-learning and SaaS) and a serial entrepreneur who has founded, scaled or sold almost two dozen different businesses ranging from consumer products to industrial machine manufacturing companies with adjusted sales ranging from $3 million to $337 million.

His expertise covers digitally-centric customer acquisition, activation, referral, retention, revenue and growth strategies and plan implementation and he is a guru in the art of the deal. He is also one of the most humble and generous chiefs you’ll ever meet.

In this episode we talk about:

✅  How to buy property and businesses for no money down

✅  Infusing creativity into business deals and structuring deals even if you are a full-time employee

✅  What made his mastermind, The War Room, such a winning program, and 

✅  The lineage of his learning way back to the greats like Milton Erickson, John Grinder and Richard Bandler.

Deal hope,

Greg

Connecting with Roland Frasier

You can connect with Roland via LinkedIn, his podcast or his website.

Books and resources

• Business Wealth Without Risk – by Roland Frasier and Jay Abraham
• Nothing Down – by Robert Allan
• The Psychology of Winning (Audiobook) – by Denis Waitley
• Unlimited Power – by Tony Robbins
• The works of Milton H Erickson
• Measure What Matters – by John Doerr
• High Output Management – by Andy Grove
• Uncommon Therapy – by Jay Haley
• The 4 Disciplines of Execution – by Chris McChesney, Sean Covey, Jim Huling
• Love Yourself Like Your Life Depends On It – by Kamal Ravikant
• Rebirth – by Kamal Ravikant

Similar Episodes on Investors

• Jay Abraham, Founder and CEO of The Abraham Group on How to achieve business wealth without risk through acquisition and the most powerful marketing strategies in the world
• Bushy Martin, CEO of KnowHow Property on playing the long game and living a life by design not default
• Joel Holland, CEO of Harvest Hosts on Buying versus building a business

“I believe that everything that you want to accomplish can be accomplished with mentoring, modelling and masterminding.”

On early career lessons and NLP

• When I read Bob Allen's book on real estate, it was just amazing to me that you could buy real estate with no money down. The impact for me was ultimately I took those principles and said what if I just did that with companies and it turns out you can.
• No-one had before that exposed me to the thought of setting goals so the biggest thing that I got out of Dennis Waitley was that the people who set goals achieve them and people who don't, don't typically. You have to have something that you're working towards. He talked about visualisation, and athletes and astronauts and all these amazing people he trained, and actually did studies where they would visualise themselves on the bench pushing the weight up and that enabled them in their minds to go and actually lift the weights that they hadn't lifted before.
• And a corollary of that is a guy named Roy H. Williams, he's called the Wizard of Ads in Austin, and he says that for ads, you have to take the mind first to the place that the body will then go. So in your advertisements, you need to take people in their minds to the place that you want their fingers on the keyboard or their bodies or their dollars to go to in the future, because if you don't paint that story and take them there, then they are less likely to take action.
• Tony Robbins did a fantastic job of synthesising the work of Milton Erickson, and also Richard Bandler and John Grinder from Neuro Linguistic Programming (NLP) and hypnosis, into a very digestible, understandable, non-scientific layman's approach.

On buying a business with no money down

• So the thing that I always look for is what are they going to do with the money? And then how much is it going to actually cost to do the next thing that they want to do? If they just want to have money for investments, chances are really good they'll carry back, so they will finance the acquisition for you.
• It's just being creative enough to find out what they actually want and work out what all the pieces that are available to you right now to generate the money without having to come out of your own pocket. And to me, it's a game. When I have the money to buy a business, I don't want to pay anything down for it because I want the business to pay for itself.
• An example:
  • So I coached this friend of mine through the process once, he was interested in buying a wholesale concreting business of this cool type of concrete, but he didn't have the money to do it. It was doing about $3 million a year. It was profitable at about $200,000 a year. The owner was interested in selling the business. At the time, tthe owner was only selling through print ads in magazines and selling direct to customers. So he had never sold directly to wholesalers and had never sold online. The owner said he was thinking of doing this other thing he had invented.
  • So one of the coolest things is when you find someone who's already in their mind sold their business, they're done, that's a really positive sign. I said, the first thing that I always like to ask people is, “What are you going to do with the money?” That way you can figure out what the owner is going to do with the money, then you'll find out exactly how much they actually need right now.
  • My client asked the owner, who told him that it's going to cost about $200,000 to do the mouldings for this new thing that he invented. And the rest of the money he was going to use for working capital or investments. So in theory, he should be able to buy that company for $200,000 down.
  • Now, he probably doesn't need $200,000 right now to do that. It turned out that he only needed $80,000 now, so let's let the business pay for everything except the actual cash dollars that he needs right now.
  • My client then said to the owner that if he transfers the business to him, he would assign him the money the business was making until he got that $200,000 that he needed and he’d secure the rest of the business with the stock in the business that he was going to buy. So if we could get a small deferral period then my friend could go out and go to all of the wholesalers who had already inquired about making wholesale purchases for the company and do deals with them to raise the $80,000 that he needed to put down. So all he needed to do was have a period of time where he could do that, so we negotiated a 60 day period, which was effectively like a due diligence period for looking at the company. And so then he was able to raise the money, cut the deal to get advanced purchase orders from the people who were the wholesalers who had already asked and inquired and then he went out and he did the deal with no money down.

On being 50% business, 50% creative

• I don't look at anything completely formulaically. I like puzzles. I like approaching things with an open mind, even if I'm sceptical. I’m happy to be open-minded, but hard to convince.
• If a business deal, a marketing problem, a business problem comes to me, I'm thinking about everything that I know that I've encountered before in every situation that is not business as much as I am business. And then it's identifying and not being constrained to a formula. For example, the way you traditionally buy businesses, you pay money for them, but I don't accept that. Or you get money from a bank or you get money from an investment banker or you get a loan – none of that is acceptable to me.
• A medical doctor was trying to explain to me the other day how a stroke affects people. He said that a stroke is like pathways to the brain. Imagine that you always go down the interstate but now you can't and you have to take the side streets. Could you get to that place by doing that? And the answer is yes.
• I said how about if you can go that side street way, but you can't take any of the main streets on the side streets that you're used to? Well, that's what happens in a stroke situation with our thoughts – they are not allowed to go down the main way. And so they start down the side streets but several of the main side streets that they know are now missing. And now what are you going to do? And that's why it's so hard to form speech when you go through something like that.
• If you can, simulate that a bit by removing all of the normal, easy, well-travelled roads to solve a problem that you're trying to solve, then you're forcing yourself to be truly creative in getting to the end result. And it might be harder, but it might be that in fact the main roads in that situation, like bank financing, is a perfect example if it isn't available to you for whatever reason. I like the creativity of challenging yourself to remove the easy ways to do things and think about how you can accomplish this a different way.

On the Five Buys

• If you look at the Toyota system of the Five Whys of getting to the root cause of any problem in manufacturing. For example, the machine failed. Why did the machine fail? The machine failed because the ball bearings failed. Why did the ball bearings fail? Because they were not properly oiled and maintained. Why were they not properly oiled and maintained? Because there's no system for doing that. And if you keep asking those questions, usually within five times of asking, you get an answer that is the true answer.
• And so I like to do that with buying a business. I call it the Five Buys. So I can buy a business for cash. What if I can't buy it for cash? Well, then you're gonna get a loan. What if I can't get a loan? Well, then you're gonna need to find another way. And at the end if you do that exercise with pretty much any problem that you're trying to solve and instead of accepting the traditional ways or the ways that you could do it easily, think about what if I didn't have that? What if that wasn't possible?
• And then it just really makes you think about all of the other things that you could do and you come up with a creative solution that can get you buying products, houses or companies. Or solving huge problems you might not have otherwise been able to solve, because it was too easy to do this. It's too easy to say, well, I need money to buy a business and I don't have it nor can I get it, so therefore I can't buy the business. No! Rather ask what if you couldn't buy businesses for money?

On being beware of the dancing bear

• It started out as a conversation between Tony Robbins and Dean Graziosi, who's a well-known real estate person here. And Tony told Dean that we're the dancing bears: as long as we're out there doing our thing, people are going to throw money at us. But the minute that we stop, the money stops. And so we needed to find a way not to do that.
• People think that their path to freedom is either they're going to save enough money and have enough great investments that they go through the process and they get their gold watch or whatever the prize when they retire. 
• Instead, what if they switched to being an entrepreneur? In companies they typically call those intrapreneurs. So for those people, my advice would be to find the thing that you're really good at, assuming that you like that stuff that you're doing now, and within there, look for the opportunities where you and the company can find opportunities to do things differently, and then turn those into an opportunity to be an entrepreneur within the company. That way, you have the company's resources to fund you and assist you and you have a built-in buyer for the products or services and that way you can convince your company to be an investor in you and in the venture that will make the life of the company better.
• Create your side hustle that has the potential to take you out of that dollars for hours trade – that dancing bear situation that you're in – and then make your play there.
• If you want freedom from that then you've got the best partner in the world in your company. If your company is a good company and you like what you're doing, they can help fund you into something that will be freedom for you.

On building an asset out of nothing

• When you're thinking about what you want to do next or even what you're doing now, thinking about the possibility of building an asset that you can sell while you are receiving income is very, very smart.
• There are three typical ways that companies are valued in terms of exit:
  • Seller distributable cash: this is a smaller company that doesn't have a very deep management team and maybe doesn't have systems and procedures, and one person is responsible. So that seller distributable cash is the cash you took out of the business in the last year, basically. It's profit, but maybe not quite profit because you didn't take all the profit out.
  • Selling for multiple of EBITDA, Earnings Before Interest, Taxes, Depreciation, and Amortisation: basically, this is profit and they will sell for a multiple of that, meaning you can get paid at some point when you decide you don't want to have that company anymore, several years of income. A multiple of years of income.
  • Sells for a multiple of revenue: typically these are subscription recurring revenue businesses such as software companies and media companies.
• A consulting business doing under a couple million dollars a year is going to be worth whatever you're actually taking out of it and it's going to be really hard to sell.
• If you could say, within this company, identify how to automate these five things, then that would enable them to be significantly more efficient, save them money and increase their profitability and it would also reduce their dependence on staff and have a reduction in the cost of benefits that you have to pay employees now etc. So could you design software around that? Because you can consult on it or you can hire people to come in, but instead if you were able to develop software that would do that on a monthly recurring revenue basis, software typically sells for a multiple of revenue, especially if it's got monthly recurring revenue and relatively low churn.
• So, you can actually steer that consulting contract into a software development deal where you keep equity in the company and maybe you and the company co develop it together. And now you've got something that's an asset that will generate income for you, but also has exit value at a multiple of revenue, which is the highest possible exit that you can get. That's kind of a cool choice to make.
• So I'm always looking for how I can exit at a multiple of revenue.

On leading v lagging indicators

• People get so caught up in what they're doing, the whirlwind of activity that's around them that they have to do.
• Rather than looking at lagging indicators, like what percentage did the sales in your business increase by this year, you should be looking at leading indicators, ie. what are the things that are going to cause you to increase sales, and how are you monitoring those on a week-to-week basis to be sure that those things happen.

Final message of wisdom and hope for future leaders

• The most important thing that I've learned is that momentum is everything in business. And if you can structure your life in such a way that you can maintain your momentum, that's really key for entrepreneurs in particular.
• I live in a neighbourhood where lots of people have retired, they've made their money and they exited businesses, but they're bored to tears. So they either get involved in bad things or they're bored out of their minds and they wish they could get back. And if they had only structured themselves so they could keep the platforms that had their momentum.
• What that means is that you should design your business as if you have a separate sales department, media department, event department, etc. If you sell one of those business units, you won't lose all of the other things that you had. When we sold our event, we sold a domain name, a customer list and a trademark, but we still have our sales team, our sponsorship sales team, our media company, all our marketing company, all of that. We didn't lose any of it. And that's a big deal. Being able to focus on momentum, that's key.

Deal hope,

Greg