S2 EP 26 The $5 Trillion Opportunity Hiding in “Boring” Businesses

WEBVTT - S2 EP 26 The $5 Trillion Opportunity Hiding in “Boring” Businesses Welcome to Building Billions. Building a 10 million, 100 million, billion or multi-billion dollar business is actually based on three things consistency, velocity, and results. I built, scaled and exited and rebuilt many businesses in my career. If you're serious about creating something that has real enterprise value, stay tuned.

This is building billions with Brandon Dawson. Everyone wants to build the next big app. Meanwhile, a person building a non-glamorous business, they're accumulating an enormous amount of wealth. There has never been a better time to buy a business.

And there's 5 trillion of wealth transfer right now. In the small business space, you could be worth 50 to $100 million within 3 to 5 years. In a traditionally old boring business, I got a buddy that owns a pool business, and he's servicing a lot of very expensive houses. This guy's making a few million bucks a year, paying himself about a half a million a year.

Now, that's not a huge wealth, but it's certainly better than going broke trying to do something else or trying to boil the ocean, spinning a bunch of money to produce something that has no value. So where there's creativity, you're going to find success, where there's already economics flowing, and you have somebody who doesn't want to do the hard work, you're going to find the biggest opportunities. Garage doors. I mean, people are like garage doors.

That's not very sexy. But guess what? I got another buddy. Think of Tommy at A-1 garage doors.

He'll be one of the first biggest billionaires in home services doing garage doors. And it's not like he's been doing it for 50 years. He's been doing it for probably the last 10 or 12. I have friends with car washes.

Think about this. You own a few car washes and they're paying you a half 1 million to 1 million bucks. I own mini storages. Those mini storages pay me 50 $60,000 a month for 20 plus years and have given me all my money back.

And you're like, yeah, but how do I buy them? I don't have any money. You're probably not going to do what I did in storage 23 years ago because the opportunity is different. But how did I do it?

I didn't put any money up. I found a handful of deals. I locked them up in due diligence, and I went to some of my friends that were wealthy. Older investors gave them a preferred return on it, and they put the money up.

The only reason I can risk all the things I did do is because I had those storage units paying me back then, 20, 30 grand a month, so I knew I had a backstop. Go build your backstop and build it in a boring business where you have a great income, and actually use that as an opportunity to learn to build a business. Home services, Hvac, about a $5 million busted business, grew it over eight years and sold it for, I don't know, half $1 billion. Those are not sexy businesses.

Most businesses, let me phrase it that way in current times, require people, systems, operations, strategy, all these things to get big. And it's probably a safer bet that you'll become a millionaire or multi-millionaire doing something boring, but you can still innovate on top of that to do it bigger, better, faster, more valuable. More money will be made by people figuring out how to do traditional jobs that seem boring better. And there's 5 trillion of wealth transfer right now in the small business space, we've bought some of these aging businesses with some of our blue collar business owners, innovated it with inbound outbound agents, finding leads, attracting people into the lead funnels, communicating to them back and forth, setting appointments, helping with estimation, and watching roofing businesses go from a million and a half to 10 million, and watching Hvac businesses go from three or 4 million to 10 million pretty quick.

So taking the skill set of today's opportunities and not being constricted with old thinking, heavy lifting, hard to do things. So you could take that ability to create AI agents, buy a business that's not making much money, that's doing 2 or 3 million in revenue with 12 employees, reduce 12 employees down to six and get five X the performance ten X opportunity or what we're calling the silver tsunami, which is $5 trillion of wealth transfer happening in the small business space.

Most of those businesses are between $500,000 and 2.5 million, and they have no exit strategy and they have no value. Imagine a world where you could be buying those businesses for little to no money down. You're able to build technology using AI agents to streamline workflows, and then you take Profitabilities from 100 grand or 200 grand that the 3040 traditional year old business owner had been doing it the old way.

And you five x the profitability and start making a half 1 million to $1 million a year. Those kind of opportunities are going to be a dime a dozen. So where you combine technology combined current thinking, combine attack speed. As a young person who understands how to put all this stuff together, putting those combinations together, man, there's going to be more wealth created there than innovating the next global platform for AI.

So this is definitely not a problem. In fact, I would say there has never been a better time to go into business learning skills, to streamline workflows, to drive higher impact with a historically aged business, a silver tsunami owned business that has no value, but it's doing a few million of revenue. Imagine a world where you could go accumulate 5 or 10 of those. Double them with agents doing work for you instead of people that are messing things up and then multiplying the profitability.

You could be worth 50 to $100 million within 3 to 5 years in a traditionally old, boring business. So I get asked all the time, what is the process or system to build that business to a modern, new, high value business? You need to understand four specific things. First, revenue.

You have to understand what drives revenue. Then gross margin. You have to understand what attributes, competencies, skill sets and deliverables, products and services. Things like this drive the highest value in margin.

So you're not doing things that cost money and you're giving away profitability. You have to understand profitability. How all that mechanically through your profit and loss statement drives value and where those value drivers are. And then fourth, cash reserves.

How much money can you build over time every month to build your investment thesis? So you can then use that cash without stress or duress on the organization until such time that you build a predictable algorithmic based outcomes through your business. So you can then go borrow and build faster, but you're never going to borrow if you can't make money. And if you can't make money, you're not going to have the confidence to expand.

So those four things you have to become an expert at is what's necessary to move from learning, developing, and scaling a business to creating a portfolio of massively valuable businesses. But once you make that transformation, there'll be no turning back and no lack of significant opportunity. Don't go into a business that's not making money, that's been in business for 20 or 30 or 100 years and assume the people there know how to build it because they don't. Don't assume you're going to go into that business that's been around forever, not making money, and it's just going to magically all of a sudden make money because there are certain implications in business that operate exactly like gravity.

No matter what you do, it's going to pull the business down. You should assume when you find a business that's been in business for a long time, it's generating two, three, four, 5 million in revenue, but it's not profitable that none of them know what they're doing. Everyone that's been there, what do you think we should do? What to do?

Eliminate those people as fast as possible. You don't need to tell them you're eliminating them. You just need to know. You need to eliminate them as fast as possible.

Remember, the boring businesses are always going to win, so why not start there? And what the heck? There's 5 trillion of them that are giving their businesses away right now. So it's an easy, great way to learn how to build a business.

And then once you have a high net worth, you can do anything you want for the rest of your life.