https://www.youtube.com/watch?v=s3tH9Sz1fEc

1 00:00:00.000 --\> 00:01:00.000 in this video i'm going to show you how
to take an active business and make it into passive income so the goal
that most of us entrepreneurs have right is to is to is to have freedom
right so we want to not work or not have to work and have money coming
towards us and the thing is is what i have learned is that you can make
anything passive and you can make anything active and one of the
difficulties for entrepreneurs when you switch from entrepreneur to
investor is that you want to take your passive things and make them more
active in order to increase your returns and that's a very tempting
thing to do because we're entrepreneurial and we can see where the
margin is getting lost right but if you always chase time then you'll
always uh be able to make whatever it is like if you chase time always
then eventually you'll end up with all your time and you should have
some left over that is coming towards you right and so i'll give you a
quick example gym launch uh two years ago i think mates it made 17
million i mean according to our quality of earnings we made 17 million
in profit in uh 2019 2018 2018 excuse me 2018. and this year we'll
probably do 8 million ish

2 00:01:00.000 --\> 00:02:00.000 in profit so you're like whoa you cut
in half here's the difference when we did 17 million i was the business
it was 100 alex's face wrapped with a monetization structure wrapped
around it i was taking calls i was doing all of these things i was
definitely ceo i was definitely in front of the marketing i was also the
product i was doing all those things right right now the business
basically generates half the profit but it involves me for about 90
minutes a week and so my my dollars per hour are significantly higher
because now i also have all these other things that i can do uh with the
time that has earned back for me and so what i want to walk through in
this video is kind of the the process and how to do it and when to do it
and so one of the issues that i see people starting out and when i say
starting out you know making a million three million etc is that i'll
get messages from them and they're like dude i think i'm ready to
outsource my business and i'm like but why like i don't think you've
gotten to the i mean maybe maybe somebody who's at a zillion you know
says to me like why are you doing that now but i think for me i would my
answer would be like i've achieved the wealth that i that i want i don't
need to to guess it

3 00:02:00.000 --\> 00:03:00.000 anymore and now it's really using a
different metric for success which is like how how much can i spend you
know how much time can i spend with my life my wife how much time can i
spend um whenever i want in the gym uh working out uh eating the stuff i
want to eat et cetera right how can i have other metrics for success
spending time you know meeting people etc and doing stuff like this
which i never did while i was growing the business not in this way right
and so anyways the the thing that i see people do is they try and jump
out of the ceo seat too soon but what i want to do is give you the best
model for how to do it when it's right right because ultimately if you
can turn your active income into passive income i just love this quote
you get paid on what you do you get returns on what you own right gym
launch as an enterprise is far more valuable or my fitness companies
because there's a couple there are far more valuable now than they were
when it made 17 million dollars in profit because then no one would ever
buy it right because no one's going to buy me right it's just a producer
personality brand whereas now it is an enterprise that generates revenue
by providing value to customers on a consistent basis and i have nothing
to do with it and as a management team at place etc right and so as we
make these

4 00:03:00.000 --\> 00:04:00.000 transitions right going from ceo to
owner you have to go from active to passive so this is the mental
framework that uh that it took me a really long time to discover when
figuring this out all right so think about your trajectory as an
entrepreneur right so first you start you do everything right and then
all of a sudden you start delegating out the things that are the lowest
value time wise right if you can pay someone 10 an hour or 15 an hour to
do you know 10 10 hours a week of your work then you get 10 hours back
and then you can put higher value skills in those 10 hours and then make
more money and then fundamentally that's literally what entrepreneurship
is just arbitraging time over and over and over again and then leveling
up your own skill sets so that with the time that you get back you can
provide you can do more valuable things and that's i think one of the
bigger issues that i see a lot too is that people will outsource their
time and then not fill their time back up with higher value skills right
now if that's what you want to do for lifestyles that's cool but like in
terms of the game um if you if you seek to grow then you need to re re
put more things in your stack and take the extra 10 hours and do
something even more valuable maybe it's marketing again

5 00:04:00.000 --\> 00:05:00.000 or learning a new channel or improving
the product or whatever it is that's more valuable than maybe frontline
support right or whatever and so the idea here is going from active to
passive and so as i was saying when you replace that role right what you
did is you got time back right and so if you do that enough times um
you're always you know doing the next thing but here's what's kind of
funny and this is the mental framework that i want to give to you
imagine like let's say you look back at what you were doing a year ago
and it probably should look different than what you're doing today right
hopefully if you're if you're growing in your business what you're doing
then versus what you're doing now is different and so if you look back
to what you were doing then and you see the progress that you made to
what you're doing now then rather than saying okay well in 12 months i'm
going to be doing all these things and all these things are gone if you
can actually jump two steps forward then your business could be 100
growing at the same pace it is now with somebody doing both of these
things that you were doing and then you just owning it all right and i
know you're like wait what does he mean i'll try and explain

6 00:05:00.000 --\> 00:06:00.000 this again so this is like if you can
understand this concept it will set you free and allow you to turn your
active income businesses into passive income uh things that you get
returns on these become assets that become sellable one of the number
one issues that people have is like you can't sell personality brands
you can't sell their own businesses because they're so integrally
involved in them right and this is one of the mistakes a lot of people
make especially smaller entrepreneurs is they're like you know my
business makes let's say three million dollars a year right in in net
profit well if if it would cost you know a million and a half to get all
of the leadership and executives in order to do all the stuff that
you're doing which is which is very realistic you might need four or
five high level leaders to do that stuff then your business is actually
making a million or a million and a half in profit so it's actually half
as valuable so you're doing a million and a half dollars a year of
payroll work because you're getting paid for that and then your business
is returning you an extra one and a half million so your your total as a
person are netting three million dollars but the business is generating
1.5 and you are generating 1.5 if you can delineate that concept it will
serve you

7 00:06:00.000 --\> 00:07:00.000 very well in business and especially
with the concept i'm saying right now so the idea is what we want to do
is take two steps forward from where we're at right now not one because
if you take one step forward you delegate what you're doing now and then
you start doing the next thing right that you need to do but if you
delegate what you're doing now and then you get someone else to do the
thing that you should be doing next then you can take a step back and
now you're owning the business while this person now does the thing that
you were doing before and that is ultimately how you can take your
active thing and turn it into passive and now you're an owner who looks
at the enterprise and then what's crazy about this is that you can
actually see the weaknesses of your own business far better when you're
outside of it looking in and see you can see the marketplace better you
can see what your customers are saying better you just get so much more
perspective and then you really become the chairman of the board and
then you're really meeting with the ceo and you're you're talking to the
ceo about their direct reports how they can improve as a leader and what
they need to do um in order to kind of like and help them cast the
vision for the company that's really it and the thing is the vision
doesn't change that frequently

8 00:07:00.000 --\> 00:08:00.000 and so you need to be smart about why
you're choosing to go in the direction you are but once you've made the
decision there's not a lot of change that has to happen right it's
really like how can we execute consistently to get there and so big
picture to wrap this puppy up if you want to go from business running to
business ownership one don't do it too soon and this is the probably the
number one mistake that i see people make is that they do it too soon
two if you are going to do it then if you can think about what you get
paid on versus what your returns on then you can separate what you do
versus what you own within the value that you have in your own net worth
like you are valuable because you have skills i i own that like i love
this quote and i'll say it again poor people do the wrong things rich
people do the right things wealthy people own the right things and so if
you can think through that within your own life it's like well i need
right now you're probably doing the right things and you own some of the
right things right but you're doing both of these things you're getting
paid here you're getting paid here and you're getting returns here so we
want to put someone in place to do

9 00:08:00.000 --\> 00:09:00.000 the things that we're getting paid for
and then continue to keep the things that we're getting returns on now
mind you at some point that means that you might lose half of your
income if this if it's 50 50 right if if your business makes you a
million dollars a year and then you make a million dollars you're
working your business and the business nets you two million then you
quitting right quitting and hiring somebody else to do this thing
because you take two steps forward if you do that then all of a sudden
you'll get a pay decrease but your dollars per hour will go up your
enterprise value go up because now it is something that is sellable that
operates without you all right and so that actually means that your net
worth increases even though the the profit of the business decreases and
then here's what's cool is that once you've done this right once you've
eliminated the step and now you just own the thing that you get returns
on now you can focus on how can i how can i increase revenue here trying
to put more fingers on my on my revenue right how can i increase the
revenue that i'm making here without me being involved because it's all
about the constraints that we can put on ourselves so if i can

10 00:09:00.000 --\> 00:10:00.000 increase the revenue without me doing
anything how would i do that and then you ask better questions and then
you get better answers and then that is ultimately how you can grow the
wealth of the business without you spending more time or making more
trade-offs that you don't want to make because you've got in this game
for freedom right and so anyways hope this is valuable for you hit
subscribe because it was check out the next video that comes up because
i'm sure it's sweet and if you hated this uh then i would ask that uh
you can you can also tell me that you hated it and um i will send you
love either way so anyways keeping awesome let's look at you next video
bye
