What They Didn't Teach in Business School
Hey there entrepreneurs,
Welcome to the Better Business Brief, where I share takeaways from:
- running a business I’m building to sell for millions
- my consulting with business owners building to sell for millions
- tips and tricks you can use to do the same
I’m not one of those guys that’s going to tell you “school is useless” or “the only school you should ever go to is the school of hard knocks.”
After all, I got myself an undergraduate degree in finance, a certificate in digital marketing, AND a Master’s in Business Administration.
That being said, there was something they didn’t ever talk about in school, in any of my classes, that I had to learn in the real world. Something so essential for success in business that I would have never gotten anywhere if I hadn’t learned it.
So today, in less than 5 minutes, I’ll give you:
⚖️ WHAT They Didn’t Teach in Business School
📜 WHY & HOW to Build & Use it in Business
🛠️ The 3 Elements of Building it Up
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This is one that, for whatever reason, people don’t really enjoy talking about. Entrepreneurs can talk about tactics, strategy, and the brighter sides of human nature all day. But there is a less refined, more brutalized, darwinian side of it too. It’s called LEVERAGE.
The bad news: In school, they don’t teach you that the real way you get massive success in business is by building leverage. Or how to use it.
The good news: You’ve been building leverage anyway - possibly without realizing it.
Let’s talk about it.
The best example I can give to demonstrate the power of leverage is negotiations on Shark Tank. When an entrepreneur walks into the room, all bright-eyed and bushy-tailed, ready to pitch their company, there are first a round of formalities. Everyone is nice. They say hello. Smiles. Then the pitch happens, and the entrepreneur makes an ask. And all of that goes out the window. And the raw, unforgiving game of leverage takes over.
In the end, the entrepreneur that goes in with very little leverage will have to give up a large portion of their company to make any deal, while the one that has a lot of leverage might quite literally have these billionaires and hundred-millionaires eating out of their hands trying to make a deal. Think about the sheer difference there for a moment. The harsh reality in the world of business is that if you do not recognize where you do and do not have leverage, and if you do not continue building it and using it effectively, you will get chewed up and eaten alive.
In the United States, there are plumbers who make over $100,000 per year. This is for one simple reason - they have a SKILL that most people do not have (the ability to assess and fix plumbing issues) that is in very high demand, yet low supply. There aren’t enough skilled plumbers to fulfill the needs of how many plumbing issues need to be solved on a daily basis. Because of this, when there is a plumbing job that needs to be done, they have far more leverage than someone without those skills to be able to charge a lot of money to fix the issue. Skill = leverage = money. Spend time, money, and energy on building skills with high leverage.
Everyone’s heard the old saying “it’s not what you know, but who you know.” Although we disproved the first part of that with the importance of skills, the second part stands. WHO you know can get you into doors and earn you money that you simply could not otherwise. I am partnered with a business broker who advertises to a list of over 3,500 registered and qualified interested buyers of businesses any time he has one for sale. He ends up getting much bigger sales of these businesses because he is simply connected to the right people who are willing to pay more. This is leverage. The people that sell their business through him are willing to do so and let him take a generous cut of the sale because he has these connections. Without them, they wouldn’t be able to get the same results.
Money, businesses, equipment, marketing channels, etc. When business negotiations take place, a very real part of the conversation is around what resources each side brings to the table. On Shark Tank, the sharks often get offered generous deal terms just because they have access to distribution channels or marketing channels, or have access to something else that can blow up the product. These resources they bring allow them to command a better deal. Money is one of the biggest ones, but increasingly, attention is one that is becoming even more valuable than money. Some of the biggest investment firms are turning their sights towards those who have the ability to get eyeballs on their businesses rather than just having money to bring to the table. Understand what types of resources have the highest leverage in what you are trying to accomplish, go out and get them, and most importantly, use them.
All of these are useless if you don’t actually use them. As I bring this edition to a close, I’ll leave you with a piece of homework, Take an inventory of your personal leverage. Skills, connections, and resources. Which ones are you NOT using, and how could you begin to use them? How could they get you into doors you didn’t realize you could get into.
Rule #1 of entrepreneurship is to use what you’ve got. No one has 0 leverage. Start using yours TODAY to move up in the world of business, but also take inventory of what you DON’T have and still need, and go figure out how to build it.
There is a lot more to it than this, but those are the ones to focus on. In the meantime, if you’ve been following along, and are curious where I’m at with building my private equity company from scratch, I did an interview where I went in depth recently. Check it out here: https://youtu.be/NM4ZXHoFJhA
If reading this sparked ideas about how you might be able to better use your leverage or build some that you need to get further, or if you still have questions about all of this, I’d love to talk about it: Grab some time here and we can talk about how I might be able to help.
Be great. Keeping growing and aspiring. And as always: I hope you got something from this.
If you did, share it with a friend who may too, as this is the best way for me to grow it and make this better.
They can even sign up here :)
Happy value-building to all of you!
See you next time for Better Business Brief,
-Brody
