Welcome to the Deal Making with The Deal Maker the $1,000,000 to $10,000,000 journey in 12 months or less.

Can I turn a $20,000 relationship investment into $2,000,000 in 12 months or less.

Deal Background

This deal came to through Relationship Capital, which is one of my favorite lead sources!

I know the operator who actually worked for me 9 years ago, we got together for lunch at the first of the year, started talking about things and shared that I'd love to bankroll this to grow together if it made sense for both of us if aligned.

It is aligned ;) 

The Investment

I invested $20,000 for 50% of the company!

The Value I Bring To The Deal (My Value)

1. Money - as the initial investment is small but this will grow over time depending on lead flow.

2. Relationships to generate clients out the gate (Create instant revenue)

3. I’m not an operator my partner is and he’ll make a lot more money in this partnership than he does now. I’m not a micromanager and he’s an executor!

4. Knowledge - I have real World business experience in this space vertical and have been in it for many years so it’s in my wheelhouse.

5. Team - I’ll be bridging team members like accounting to take this pressure off him while he grows the company. 

The Value My Partner Bring To The Deal (Partner Value)

1. He has a unique skill set on marketing in a specialty niche (I love niches… a great saying is “Riches in the Niches” it’s true ;) 

2. He has years of experience in this vertical and is ready to take the leap from his current situation to become a business owner.

3. He is a great guy and is a beast at execution.

4. He’s NOT afraid to work.

5. He doesn't need to be micromanaged.  

The Deal Making Mind Map

I have a FAST way to see if I’m even considering a deal.

I look at 6 components to Quality or Disqualify FAST!

I call it the TORSCE Rating scale. 

T - Time - This is the most important for me at first glance as I’m busy as hell with companies I have now and I set this expectation up front as I’m focused on adding time to my life not sucking it away only to make a couple extra bucks. Don’t get me wrong I enjoy working towards a common goal with the team and all but we MUST be clear on where we’re at on this game we’re playing. I’m clear with myself and don’t try to talk myself into something because I can make a couple bucks if this is over 5 I’m going to pass and not even look at it.

We all have a measuring system. We use it or not when looking at opportunities. Mine starts with Time!

O - Opportunity Cost - this needs to be lower as well … If I’m stepping into a deal I want to make sure the opportunity doesn’t take away from my growth on what’s working in my existing businesses.

This for me is a BIG one that I wish I understood in my first 15 years in business. ;) 

R - Risk - I’m comfortable with risk and actually embrace it … many pass on amazing opportunities as they aren’t looking at risk properly.

Fun fact risk diminishes drastically if you understand the game you’re playing. ;) but be aware of the real risk associated with all investments.

Don’t run from Risk … embrace it and learn from it! 

I heard this from my buddy David recently and this resonates with me “Respect LUCK as much as you respect risk.”

S - Skill - What is your skill set for the investment you’re about to hop into? This is important as you have to realize have much skill you have in the vertical you’re looking to dive into.

Be real with yourself on what skill you’re bringing to the table. 

Fun fact - You DO NOT need to know 100% how to do the work but you must understand the functions of the operation. Know the Who to do the How! 

C- Cash Flow - This is a BIGGIE, many folks don’t focus on cashflow. If you don’t have cashflow you will strangle the operation. I don’t like startups typically for this situation. Lots of front end cash with little to no cashflow for long period.

I’m more of a simple guy that likes to generate revenue quickly. Faster the better. This business will generate cash flow within the 1st week.

E - Enterprise Value - We’re all going to work hard but many don’t think about the exit on the entry … I’m always very clear of an exit number. This isn’t exact ever but it’s a guage to see if we want to tackle. It’s fine to work for cashflow but you should be building with the exit in mind.

I mean … not ALL verticals are valued at the same multiplier. ;) Just know what you’re looking at when valuing the Opportunity.

What’s needed to run this business today:

1. No office - this company is ran 100% virtual

2. Team - 2 employees (1099) as they are VA’s and my partner the operator, 3rd party accounting company.  If you need a connection on a badass VA provider REPLY and let me know I’ll link you with my guy.

3. Monthly hard cost - $3,500 - sounds crazy huh? Well it’s not crazy when you understand the VA world exists as each person is around $1,200 a month for amazing work. (Not all VA’s are created equal) but at the end of the day this is a great hack. 

My partner needs these 2 folks to help him organize data while he executes. The goal is to stay lean and massively productive and profitable. - Too many people brag about having a huge team but are inefficient and less profitable - I know I used to be that guy ;) 

What’s the $20,000 for?

Great question. It’s to fund the company to get it rolling. We’ll park the money in that account to give the operator breathing room so he can focus on getting the LLC set up, the website, hiring the VA’s and software systems all set up.

What do you think?

Would YOU do this deal?

Reply to me and let me know …

I’m rooting for YOU,

Mark