8 years ago I went to a Tony Robbins event that changed my life.

This month I brought my mother, and sister to the same event.

Who's Tony Robbins?

He's the most famous motivational speaker and coach in the world.

He has coached Serena Williams, Usher, Pitbull, Conor McGregor, and multiple US presidents.

You may think Tony Robbins isn’t for you.

His Ra-Ra energy is cheesy...

His tactics are salesy...

That’s all true.

But I recommend people go to life improvement seminars for the same reasons I recommend therapy.

I started talk therapy in my late 20s.

I didn’t have any particular problem I wanted to uncover. But I knew that life is long and there will be challenging times ahead. And I wanted to have the tools to deal with those challenges when the time comes.

Imagine you’re on a nice hike deep in Yosemite National Park.

All of sudden there is a storm. You lose the trail, and you’re lost in the forest for a week. You’ve never learned how to make fire. But now you’re alone, it’s cold, and you’re hungry. It may take you days to learn how to make a fire. And you’ll lose precious time and energy in the meantime.

That’s why they teach fire building in Boy Scouts. If you’re going to be in nature, you should be prepared with survival skills.

It's the same thing in life.

The only certainty is there will be challenges. And pain. And change.

How are you preparing yourself for these inevitable events?

I’m glad I experienced Tony Robbins in my early 20s.

He taught me there is a toolkit for overcoming any challenge. And I mean any challenge. Whether it is physical, mental, social, family…etc

I won’t spend more time on the virtues of Tony Robbins today. But I do want to share my favorite learning of the weekend that you can apply in your life immediately.

Before I get to that, I hope you get my point:

Life improvement is a real thing. It works. Even if you don’t believe in these types of seminars. There are thousands of stories of people who use these strategies to change their lives for the better. And if that means spending 48 hours with a bunch of strangers for a weekend to learn what’s going on here, I think it’s at least worth a try.

Now for my favorite takeaway of the weekend…

Take a moment to notice how you’re sitting, or standing right now as you read this.

Are your shoulders back or hunched forward? Are you standing tall or hunched over? Is your breathing shallow or deep? Is your energy low or high?

How would your day change if you decided to bring 20% more energy to this moment? How about 50% more energy?

How would your body position change?

Because physiology drives everything.

Try to change your energy state right now as you read this.

​
​Stand a little taller, as if you’re more confident. Imagine your energy going up.

Did you notice a difference?

When I'm aware of my physiology, I can take immediate action to stand taller and change my energy level.

Sometimes I’m sitting in a meeting, not paying attention to the speaker. I’m slouching in my chair.

I have to remind myself to sit up and become energized. There is no such a thing as "too tired". It’s unfair for the person in front of me to experience my low energy. I should bring my whole self to each interaction.

If you consciously bring 50% more energy into any interaction. Whether it’s a challenge or opportunity. Do you have a better or worse chance of success?

Better I think.

That's it.

That's the learning.

Bring more energy to the moment.

Now.

And you'll live a better life.

You don’t have to wait. You can do this now. And when you forget in a few hours, that’s ok. Remember this email, and push yourself into a high-energy zone again.

I forget all the time. Then I remind myself. Increase my energy. And move forward.

Now remember earlier when I said I started therapy in my 20s? I didn’t have anything I wanted to address, my life was good.

Well going to therapy not only gave me tools for dealing with future problems. But it uncovered some issues I had buried deep inside from my past. And gave me some tools to deal with those too. It improved my relationship with my parents, my sibling and my partner. It was unexpected but welcome.

Making yourself better isn’t just about you. It’s also about how your loved ones experience you. So if you’ve ever considered a life coach, a therapist, or similar, you owe it to yourself and the people you love to give it a try.

Even if there is a 5% chance that you meaningfully improve your relationship with your family, or friends forever, isn’t it worth the effort? It may not work, but I think it’s freakin worth a try.

🔑 An interesting HVAC company

Here is a playbook of how you can buy a business, and make $10 Million.

I know many of you are buying businesses, so I want to talk about a recent HVAC deal I saw.

This may be an interesting deal for an individual buyer. It’s much smaller than what we look for. We’re usually looking for investments in the $3M+ EBIT size.

But for someone looking to own their own business, this could be about the right size.

This HVAC business generates $650k of cash flow.

It’s 100% service business, which is important. For a first time buyer, I’d avoid anything construction related at all costs. It’s affected by macro conditions it’s more complicated. And if you estimate some work incorrectly a big construction project can ruin the profitability of your whole year.

Now as a side note, we own an HVAC business that we love that its half construction half service. One propels the other, and we have an incredible team running that business. But again, I’d avoid it for first timers.

Let’s start with the simple but important question of: how do I make money on a deal like this? You’re going to buy this business for 2.5-3.5x on EBIT. I think that is the right multiple here.

Price = 3 x $650,000 = $1,950,000

This is the size and type of business that is often bought with an SBA loan, so let’s plan on that.

A hypothetical deal here:

You’re going to ask the seller to hold back $300k as a seller note for 10 years, with 4% interest

You’re going to need $97.5k to buy this business.

The SBA will give you a loan $1.55M, over 10 years at the current interest rate (around 9%)

If you continue $650k of cash flow after you buy it, half of that will go to paying interest and principal per year.

Now the important part of this process is to grow the business.

Because if you can grow from $650k to $2 Million of EBIT, you can sell that business for 6-7x EBIT.

Sales price: 6 x 2 - $12 Million

Profit = $10 Million

This is a life changing sum of money for an entrepreneur.

Now a few important notes.

This is not easy. You’re going to work hard every day, and it’s going to be very stressful. But you’re doing it to make a life changing sum of money. And you don’t deserve that unless you put in this insane amount of effort and pain.

I don’t recommend selling businesses. We prefer to buy and hold. The above example is illustrative, and a path to show you how you can build personal wealth following this path. You can also keep the business after you hit $2M in EBIT, and generate cash flow for other investments (real estate, buying business, buying the S&P500)

Some important things to look out for when buying the business:

Make sure there is a salary for GM. Usually the owner will work 3-4 jobs. You need to figure out which jobs those are and price them in as a “Cost”

Explore the company culture. Company culture is one of the most important parts of the business. Ultimately you’re buying a group of employees. If they’re good, the business will workout. If you have people problems, you will have business problems.

Some useful questions to explore during diligence:

• Are the customers commercial or residential?
• Do they have a proven system to get new business leads? Paid ads? Referrals? SEO google?
• What software do they use? What important metrics do they track? If none, you could be in trouble
• Recurring revenue for service contracts? Are these a few large contracts or a bunch of small jobs? Small jobs usually will have less competition, and diversify your customer risk
• Ride along with their team. See how their techs are trained. Do they have a program for onboarding new apprentices? Hiring is the most important thing in the trades. If the owner is the only trainer, you’re in trouble. You want to see a process where the team recruits and trains new apprentices.
• How is the competition in the area? Are you competing with big strong brands, on unlimited budget? They can outspend you on marketing.
• How many technicians are on the team? What is extent of their knowledge and ability to self perform? rank each employee by their ability and knowledge. Everything from pricing to performing the work (w/o owner involvement)
• How is owner involved? Are they closing sales? Fixing legal issues? Dispatching people? The more the owner is involved, the more risk you have in the business
• How much revenue per technician? Compare that to other companies locally. If there is a big delta you may have a pricing problem or a systems problem.
• What are they charging hourly? How does that compare to 5 competitors in the area?
• If the owner owns the office space, are they paying themselves rent? Make sure that’s factored into the P&L
• Do they have a membership model? To get the valuation above you’ll need to implement a service membership model, and track its growth monthly. If you have thousands of customers on your memberships you are worth a lot more to a financial buyer.

Reminder, It’s going to be very hard. You will run into hundreds of issues. You will Personally Guarantee the SBA loan. So if it goes bad you can lose everything and end up in Bankruptcy. But you have to do hard things to end up with life changing sums of money. It's not for most people. But some of you will or have made this jump already.

This deal is too small for us. We look for $3M+ of EBIT. But if you enjoyed this write-up, and you want to see and co-invest in future deals I plan to invest in, sign-up here (accredited investors only).

Have a great week,

Sieva

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Disclaimer: nothing here is investment advice. Please do your own research. The information above is just for information and learning.