16 Feb Brant Phillips Show 5: 7 Fundamentals
Welcome everybody to The Brant Phillips Show. What we’re going to talk about today are the fundamentals to building a successful business. I don’t care if it’s a real estate investing business. I don’t care if you’re in the service industry. I don’t care if you’re in internet marketing. We are going to lay out the seven fundamentals of a highly successful business. Before I do that, I want to bring your attention back to one concept that I’ve introduced before in a previous episode. If you hadn’t listened to the previous episodes leading up to this one, please go back and do so because these first five or six podcasts are really laying out just some foundational concepts and terminology that we’re going to use throughout future podcasts on The Brant Phillips Show.
Previously I talked about the F4. There’s two concepts we’re going to talk about. F4 and F7. The F4, it relates back to a daily commitment and investment into your faith, your family, your fitness and your finances. The four core areas or pillars of life if you will. Those are so foundational because what happens so often with entrepreneurs as we dive into the business world and starting our businesses and making money and investing in real estate. This happens so much that we lose focus of the things that are actually much more important to us but we’re so focused and driven on creating success and money that we really lose focus on those other three pillars mainly the faith, family and fitness. We really focus on making money and on our finances and on our business, we become what I like to call one-dimensional douchebag.
Go back and listen to the F4, relisten if you already listened before because it’s absolutely critical to creating true power. I like to call it power in our lives when we invest into all four of those areas. It’s a way for us to tap into a power and an energy. Then it creates an alignment and a clarity and a deeper sense of purpose when we are actively investing into those areas on a daily basis. That being said, it’s the F4. It’s important. Do it.
All right. Now, we’re going to talk about the F7. The fundamental seven key areas to build a successful business. For those of you that are real estate entrepreneurs and you are looking to flip some houses, this is where these concepts were born from, where whenever I was building my real estate investing business and I wrote my first book called How to Flip a House, subtitled Seven Fundamentals of a Highly Successful Flip. Let me lay out what those seven fundamentals are in relation to the real estate business. They are mindset, deal flow, evaluating deals, estimating repairs, financing rehab and income generation. You can learn more of those by reading my book. You can go to brantphillips.com/resources to get some information about that.
These fundamentals though, they’re essentially the same in any other business just with some different terminology. You see, when we look at the results that we have in our life and in our business, all of the results that we have are the result of some type of actions that we took that either created useful results or non-useful results. We are who we are today, when we look in the mirror, we are the sum of all of our previous actions, attitudes, beliefs and fundamentals. This is who we are. Who we are right now is because of things, the actions that we took in the past and the results that came about.
The actions that you’re taking when you’re building your business are either you’re just closing your eyes and throwing darts at a dart board hoping to get lucky or you’re building your business based on solid fundamentals. When it comes to building a business, it all begins with your mindset. If there’s one foundational piece of which your business is going to grow and expand or crumble and fall, it’s about your mindset. What is your mindset? What is your determination? What are your attitudes? What are your belief systems going into the venture that you’re about to take on. Once again, I don’t care if this is a real estate business. I don’t care if this is a service business. You’re in internet marketing, you’re coaching or consulting, whatever it is that you do, it all starts with your attitude, with your mindset.
After that, if you’re in a real estate, we talk about deal flow, generating leads. Whatever business that you’re in, you need to learn a marketing piece. You need to learn how to create deal flow to have deals, clients, customers, opportunities coming to you. Whenever you figure out a marketing piece and a marketing plan whatever that may be if you’re a business, you need to know how to analyze those deals. How can you quickly and efficiently analyze the deals to figure out what are the best opportunities for you?
When we get into the world of service-based industries or consulting type industries, I got news for you. I got news for you that every opportunity is not a good opportunity my friends. I like to actually rate clients and customers and figure out the typical characteristics of ideal clients, ideal opportunities. Of course with real estate deals, we have a clear established criteria of the types that we’re looking for and the types of deals that we’re actually not looking for. As you begin putting out your marketing, creating deal flow, you’re able to analyze those deals and analyze those opportunities to determine which clients and projects that you’re going to take on.
Whenever it comes to deciding on clients and opportunities and projects, in the real estate world, we would move to the next fundamental which would be called estimating the repairs. In the business world, this is just estimating your cost. This basically boils down to really knowing what are your hard costs? What are materials and labor costs going to be? Then another consideration is, what is your time investments into this opportunity or this client or this deal going to be? Because sometimes that’s a critical factor. Either you’re investing in a piece of real estate that’s local to you or that you’re going to have to drive hours each way or one way to get there, or maybe you’re going to have to set up a team wherever that is that that deal is located. Maybe that deal is or is not worth your time.
Hey, this is Brant. I hope you’re enjoying today’s show. If you’re in a place in your life or your business, or your real estate investing where you just feel stuck, maybe you don’t know what actions to take next to get you unstuck or just on that path of creating the results that you really desire, please take a few minutes and go to my website at brantphillips.com. There are some really valuable resources and information that may be able to help you out. If you’re interested in really speeding up results with the help of a coach or mentor and adding true accountability and guidance to your life and business, please reach out to me from my website. You’ll see a link at the top or by going to brantphillips.com/coaching. Now, let’s get back to the show.
Then we begin really crunching the numbers into that opportunity. The next fundamental is financing. This could be financing, this could be called funding, this could be called capital, and this is a critical piece. This is a critical piece because in the world of being an entrepreneur, Robert Kiyosaki says that, “The ability to raise capital is the number one skill of an entrepreneur. The ability to raise capital is the number one skill of an entrepreneur.” Where you’re currently located in your business life, this is either a skillset that you have or don’t have quite frankly. Even if you don’t have it, it doesn’t mean that you can’t acquire it with a little bit of coaching, a little bit of reading, a little bit of action and effort. This is something that anyone can do.
I will tell you also that when it comes to financing and funding deals, business opportunities, and I’ve raised capital not only for real estate deals which we’ve borrowed with private lenders mainly also with banks, with lines of credit, with hard money lenders, somewhere in the $40 million range is what we’ve parted with and borrowed and had others invest into our business over the years.
Also, I’ve raised capital for other business ventures that are non-real estate related. I will tell you this. Whether you believe that you can raise the capital that you need for your business or you don’t believe it, you’re right. You’re absolutely right. If you believe that you can raise the capital that you need or that you can’t raise the capital that you need. Whatever your belief is around this concept, it’s absolutely true.
It’s absolutely true because if you don’t believe in what you’re doing in your ability to raise that money, no one else is going to believe in you because see, I’ve learned two things. I’ve learned two things when it comes to borrowing money from others. Here are the two things. One, money is attracted to two things. Money is attracted to good deals and trustworthy people, good deals and trustworthy people. I will tell you that trustworthy people is so much more important than the good deals. Now, they’re both necessary but when it comes down to it, your lenders are going to analyze you harder than they are the deal, because if they trust you and they believe in you, they are going to trust your judgment, they’re going to trust your actions and they are going to invest in you.
You see in the real estate world, even though when they invest with you that their investment is backed by that real estate, this is assuming that you’ve done your paperwork the right way and whenever we do deals with private lenders, we always close at a tie into a company and a real estate attorney always prepares our documents so that our lenders are protected in that their assets, their investment is secured by the piece of real estate by that asset.
Here’s what I found out, is that lenders look at us as the asset. Much more so than the physical piece of real estate. Keep that in mind that money is attracted to good deals and trustworthy people. Ask yourself, “Are you bringing good deals to the table? Are you operating your life and your business in a trustworthy fashion?” Because if you’re doing those two things, guess what? You have the ability within you to raise all of the capital that you will ever need for your deals if you operate by those principles and you’re running a business that is based on fundamentals.
Let’s say that you’ve acquired your financing, your funding. Now, this moves into the fulfilment stage. In the real estate world, this is the rehab portion. This is where we’re calling contractors. We’re kicking down walls and we’re doing rehab on this piece of undervalued real estate that we’ve bought and we’re bringing value to it. This is where if you have a business that you are, this is where you are investing money that you are creating and adding value into your business so that you can add value into the market place for your customers and your clients and begin to generate revenue and turn a profit. This is the fulfilment stage.
This is where, of course depending on the type of business that we have, this is where typically the most work is going on. This is where systems are absolutely critical. This is where team work is absolutely critical. This is where having good managers in place, having a good team, having good contractors, subcontractors and just being able to lead and influence others to carry out and fulfil what your vision is as the entrepreneur.
I will tell you, and this is the sixth fundamental. If I go back over them again, it’s mindset, deal flow, evaluating deals, estimating repairs, financing and rehabbing on the real estate side of things. I will tell you that if you’re operating your business with solid fundamentals and you’ve done all six of these things correctly, then number seven which is simply generating income, maximizing each customer and opportunity, making sure that you are not dropping the ball on the fulfilment side of things or on the rehab side of things, this is the easiest part of the business. Making money is so incredibly easy my friends whenever we are operating our business on solid fundamentals. When we’re not deviating from good decisions, trustworthy principles, proven fundamentals, making money can be so incredibly easy, so incredibly easy when you operate with fundamentals.
It all starts like I said. It starts with a solid mindset. It’s going to require you to create effective marketing to get lead generation coming in. You’re going to have to be able to analyze opportunities, evaluate deals. You’re going to have to learn how to estimate repairs, estimate your costs, what are your materials going to cost? What is labor going to cost? What is your time going to be in that deal? Are you going to be able to raise the capital? To generate funding and financing for your deals?
Then you got to carry it out. You have to fulfill. You have to build your teams up so that you can rehab, so that you can renovate, so that you can execute on the contracts and the opportunities that you have so that you can get the dollars in the bank account because that’s what it’s all about my friends, creating a successful business. The F7 backed and built on a foundation of F4 which is going to create your power, create energy, create clarity, create focus and help you create something that’s much bigger, much bigger than just making money. You’re creating an impact on your family, your friends, you’re reaching your market place in society, in your neighborhoods.
Let’s not just make an impact. I challenge you, don’t just make an impact financially, because every single time I’ve read stories or talked to people about people who’ve been on their death bed and they’re lying there breathing in what’s possibly their last breath or it turns out to be their last breaths, they always talk about making more money. No, they don’t. They talk about, “I wish I would have spent more time with my family. I wish I would have had a bigger impact. I wish I would have given more.” They talk about all these things my friends. They don’t talk about making more money. “I wish I had more money in my bank account,” because they can’t take it with them. That my friends is the lesson today about the seven fundamentals intertwining that with the F4. I appreciate, honor and love each and every one of you. Now, go out, take action, create results in your life and in your business.