Dan Martell:
I should never deploy labor dollars to hire somebodyunless I've already figured out how they're going to make me 10 times what Ipay them.
Chris Dreyer:
Welcome to Personal Injury Mastermind. I'm your host,Chris Dreyer, founder and CEO of Rankings.io, the legal marketing company thebest firms hire when they want the rankings, traffic, and cases other law firmmarketing agencies can't deliver. On this show, I've been fortunate enough tolearn from some of the best minds and PI, and now we're bringing them togetherin one place at the first ever PIM conference. PIMCon is coming in Scottsdalethis September. We're laser focused on one thing, giving more leads. I'm nottalking about just any leads, but quality leads that actually turn into cases.That's it. That's our entire focus. It's not just theory.
We're talking about actionable strategies that have beentried and tested by the best in the business. If you're looking to conquerpersonal injury marketing and go from good to goat, PIMCon is where you need tobe. We've gathered the top of the PI marketing experts to share their secrets,and believe me, this is cutting-edge stuff you won't find anywhere else. Don'tmiss out on another potential client. Grab your ticket to PIMCon now and get readyto supercharge your practice, your future self will thank you. Go topimcon.org. That's P-I-M-C-O-N dot O-R-G. All right, let's dive in.
Dan Martell is a name you'll want to remember. His journeyis fascinating. He started his entrepreneurial path at 17 and by his ownadmission, faced two failed businesses before hitting his stride. But when hedid, he became unstoppable. By 27, he had his first million in cash in thebank. Since then, he's only picked up speed. He's buying and scaling softwarecompanies at an impressive clip. We're talking about acquiring a company everymonth. As the brains behind SaaS Academy, Dan's helped over 1,000 foundersskyrocket their growth. We're talking at 209% boost and recurring revenue injust a half a year. Dan's not just about tech. He's taking his hard-won lessonsand translating them into strategies for service-based businesses. Imagineapplying all those lessons to your law firm. Dan shows us how to overcome thosehurdles to keep most firms stuck in neutral. We'll explore strategies tomultiply your impact without multiplying your workload and learn how toreinvest your practice for maximum payoff. Here's Dan Martell on how he madehis first million.
Dan Martell:
I think I was 27 when my accountant called me up and he askedme, he's like, "You want to hear something cool?" I'm like,"What?" He's like, "You have a million dollars." And when Isay a million dollars, I mean like cash in the bank, taxes paid. Some peopleare millionaires, but it's not real money. It's like paper millionaires, realestate millionaires, et cetera. What changed for me, that company, becauseprior to that I had two failed businesses. Even though people that follow myonline stuff and I have millions of people follow me on the internet and I havemy own jet and supercars and beautiful homes and all that stuff, I'm not thatimpressive, and I'll tell you why. It took me almost a decade to finally figureout business. I started when I was 17 and it took till I was 27 to finallystart making any money and two failed companies.
What changed for Spheric Technologies was very simple. Iwas new to reading. It was funny, because I taught myself how to code and writesoftware at 17, but it wasn't until I was 23 that I actually read businessbooks, which sounds, again, I'm not that impressive. It's like, well, that'sweird. Why would you only read programming books? I thought that was a problemto solve. So what happened was is I read a book called The E-Myth, theEntrepreneurial Myth by Michael Gerber, which talked about building systems andplaybooks. And I'm like listening to this audiobook driving and I remember Iwas staying in Ohio and I was going to Greenbelt Maryland to meet with apotential business partner. And on that drive I'm listening to the E-Myth,because I didn't even read books, I listened to it while I was driving. It'skind of a captive audience, and it spoke to me.
I realized that this was how I did not build my previouscompanies, and it was 100% dependent on me and it was stressing me out. Sofirst thing I did is I hired a business coach, this guy named Bob. And at 23,$1,500 bucks a month, no business because my partner I was going to start thatcompany with, he didn't want to read the book. And I was like, if you don'tread the book, then I can't even start the business with you. And that's whatchanged. I mean, it sounds so funny, but having somebody who's been therebefore give you guidance, today I would never, ever do anything without that.That's the cheat code. I am literally a professional at saying, here's where Iwant to end up. Who's done it before? How do I get in front of those people?
And I hired a business coach Bob, and Bob taught me thebusiness side that I had never been taught, and he taught me how to think aboutmarketing and sales and finance and teams and all these different things that Ijust, I don't know, I just thought maybe I'd learn along the way. And withinour first year we did 970,000 in revenue. That was a big shift for me as hiringsomebody who'd been there before that showed me the way to do it and thesequences and the steps, it changed everything.
Chris Dreyer:
And you didn't stop there. So you've read over 1,800business books, probably over 2,000 now. So you had this unique concept thatyou referred to as the pain line as owners grow their business and can youreally expand on what that is and what causes founders to want to sell, stall,or sabotage their business?
Dan Martell:
It doesn't matter what level you're at, you could be300,000 a year as a specialist. You could be doing a million a year, you couldbe doing 3 million a year, you could be doing 10 million a year. And whathappens is if you don't build the business right, you'll get to a point wheremore growth equals pain. What most people do is they hit the pain line and theyusually do one of three things. They either decide to stall, they'll say tothemselves, "Last year I made the same amount of money, I was moreprofitable because I didn't decide to grow. So you know what? I'm going to goback to that." Problem with that is the market is not going to stopgrowing. So gross domestic product expansion happens every year. Yourcustomer's requirements on you providing a better service every year comparedto your competitors grows their expectations.
And the most important one is that your top people want towork in an environment where they have opportunity for growth. Because if yourvision for your business isn't big enough for everybody on your team's dreamsand goals that fit inside of, the best people will eat. So stalling is not anoption, although people think it is. The other option is sabotage. So sabotageis a funny one because unless you work with a coach, it's hard to know whenyou're sabotaging. So for example, one of my clients that I worked with, verysuccessful CEO, he built the strategies, implemented all the stuff I taughthim, and then got a bunch of time back and he texted me one day and he goes,his name was Trevor, and he goes, "Hey man, I'm about to go on vacationfor six weeks to Thailand and we're going to see how the team holds up. Thankyou for helping me build it so that I can leave for six weeks." And I justreplied, "Sabotage?"
Where in our coaching did you think it was a smart ideafor the CEO of the business not to be present for six weeks? That'sunfortunately not what leadership is about. So what happens in sabotage ispeople will make decisions to create chaos to then give themselves a reason tothen stay small and it's so subtle and it comes on a bunch of beliefs and mindsetsabout actually achievement of the success. But the big one I see is people haveopportunities in their inbox to go and grow their business and they drag theirfeet to reply, and by the time they reply, the person's like, yeah, we alreadysolved, we fulfilled that order, or we already found somebody. And they don'teven realize they're doing it.
They're just overwhelmed and they don't have time. Andthey're just like, "I'll get to it on the weekend." And that turnsinto next weekend because they're not ready and that's sabotage. And then thethird S. So we got stall, sabotage, and the third is sell. And I always get thecall. I have so many incredible entrepreneurial friends, but when they getoverwhelmed, I usually get the call and they usually say something like,"You know, Dan, I think it's time for me to sell." Usually myfollow-up question is, "Well, what's stressing you out about the currentbusiness?" And they usually say, "Well, this person quit and I'mdoing this and we had this happen and da, da, da, da." And I say,"Well, if those weren't true, would you want to build this business?"And the answer is always like, "Well, of course." I go, "Well,here's the deal, your frustration just uncovered your complexity ceiling."
So everybody's got one. Everybody has a level ofcomplexity that if they hit that, they feel overwhelmed. And I said, "Itdoesn't matter if it's this business or the next business, you've nowdiscovered what that ceiling is. So in this moment we can either decide toresolve this and I'll give you some strategies to overcome those challenges, orthat is just your limit. That is your upper limit of possibility of valuecreation and that's what it's going to be." So the pain line for me is abeautiful point for you to realize this is my opportunity to grow. And I teachit in the book, the buyback loop is how you fix it.
But the way I think about it is this is I think the worldpresents you circumstances to show you you where you're not free. So thinkabout this, the world as you live in the world, your fears, your frustrations,your emotional, I call it sometimes people get emotionally flooded and createemotional shrapnel. That emotional shrapnel is literally the world showing youwhere you're not free. And in that moment you can decide to go do the work tobecome free and become better, or that's your limit, that's your complexityceiling and the pain line will always be the maximum you're ever going to beable to build in a business.
Chris Dreyer:
When I'm hearing this right, it's natural to think aboutyourself, but I think about our audience too. It's like a lot of times it comeswith delegation. You worked the 100 hours just because no one could do it asgood as me, so they're doing it there. But then is it also the people componentof Dunbar's number where that becomes an issue and the interconnectedness andmaybe having a fully a large HR department, what would you see as the commonones that maybe you've experienced or you've seen that individuals have?
Dan Martell:
Yeah, I mean, I've experienced it all. That's why I wrotethis book is this morning I was talking with an entrepreneurial friend. I do ahike every Tuesday morning. So lots of conversations Tuesday morning helpingpeople. I just pour into people. I'm like, if somebody wants to learn from me,they can literally fly to my hometown Tuesday morning, 6:30 and we go hike amountain and it's open to the public. And so this one founder asked me, theygo, "Well, how do you know when you should decide to do something new?"Because that's usually the thing that gets people. Most people, if they'reactually focused on one business, over time they'll figure it out because it'sone thing. Where people get themselves in trouble is where they're successful,a little bit successful, let's say they start making a little bit of money inthe thing and then they decide to start doing other stuff.
And what I told him, I said, "See, the goal inbusiness for me is I'm a who, not how kind of guy now. So I don't actually tryto find out how to do something. I try to find somebody who's going to own itbecause that's actually how I buy back my time." And the problem is thatif you have a lot of little things, let's say I have a friend, he's got 30different businesses, but they're little businesses. They're tiny littlebusinesses. They do about a million to 2 million a year each. If any problemhappens in that business, he gets the call, because it's too small to haveprofessional management or a CEO in it, and he has all these little businessesthat he has to take care of and make sure all the plates are spinning. Thealternative is having what I have.
I have a lot of companies, but they're big companies. Andwhat's cool about having a big company and a real team is that when fireserupt, I don't get the call, because I hired somebody to run the company andthat person will try to solve it themselves and usually they can. And I neverhear about it and I don't need to hear about it. Why do I share this? If you'restarting off, there's skills that you need to stack to get to a place where youcan deal with the people problems. At the end of the day, that's all businessis. It's either a process problem or people problem. Some people blame thepeople, but it's just a process. They literally, I always say don't hiresomebody and tell them what to do, hire people and train them what to do, but Idon't tell people what to do.
If I hired you to do a role, I can't tell you what to do,because then I didn't actually gain any benefit of hiring you to do the work,then I got to tell you what to do. I'm allowed to train you. And I think that'sa very unique distinction that some people don't get. And again, in the book Italk about 80% done by somebody else is 100% freaking awesome. Learn the skillof recruiting, Chapter 6, Talent Pipeline. I talk about it, test first hiremethod. Recruiting, developing, and retaining talent. That is the job. What isan entrepreneur? Yes, have a vision, know we want to solve a problem, but atthe end of the day, you're not going to do it all yourself, which means you'regoing to have people that's going to support you. So to the degree you developyour leadership skills to be able to identify, recruit, develop talent, andretain talent, that's skill.
That was the unlock for me. That's what I didn't knowbefore I hired Bob, my business coach that he really dialed in. He goes,"For example, if you don't have some organizational chart that showseverybody what they're responsible for and then a document that explains how todo the work, then you can't be mad at the people that don't do the work the wayyou want to because they didn't even know that they were responsible for it,because you never told them." So it's like stuff like that that I thinkis, it's kind of a beautiful frame to think about it. It's like, my job is tobecome world-class at identifying, recruiting, developing, and retainingtalent. And if I can do that, every dream on my vision board that I can thinkof, everything I want to create, every nonprofit I want to support, all theimpact I want to have is on the other side of my ability to do that.
Chris Dreyer:
I think that's incredible and that makes me think of therule by delegation, not abdication. And I think with your book, and I told youright before we started, I was like, it hit different the second time becausethe second time when I was reading it, I was experiencing a lack of freedom andsome of the burnout and stress. So buy back your time, it teaches entrepreneursat every level how to avoid this. So this was a lot of effort. 10 years of justputting all these lessons together, what caused you to break it all togetherand why did you decide to write the book?
Dan Martell:
You know what's interesting is if I would've wanted towrite a book four or five years ago, this wouldn't have been the book Iprobably would've wrote, but what happened was is I started building mypersonal brand and right now we have millions of people that follow me on allmy different social accounts and they were the ones that pulled the book out ofme. I've been teaching the buyback loop forever, for 15 years. Because it wasthe tool that I developed for myself to essentially build what I call theempire. And I know that word scares people, Chris, but the empire in my worldis a life of unlimited creation. You never have to retire from, at the end ofthe day, if you don't have an assistant, for example, you are the assistant. Sopeople need to understand. And guess what? You probably suck at the job andyou're overpaid.
My audience pulled the book out of me, but the way I wrotethe book was quite unique. I sat down and I wrote down about 25 people's names.These are people that are family members, my best friends, colleagues,investment CEOs that I've hired. They're people that I really have a lot ofadmiration for, but there's levels at the different parts of the strategies Iteach that where they were blocked and I wrote the book for them and Iliterally had their names and I would cross them out. I worked with my writingpartner, Paul, and it was just like, okay, we got my friend Nick and we got mybrother Mo and my wife Renee. I put all these people's names and I would makesure that's why the five time assassins came from, there was a swath of peoplethat it wasn't a tactical thing, it was a mindset issue.
It was self-inflicted time suckage that didn't fit from astrategy point of view. I was like, I got to write a whole chapter about thefive time assassins. It's become one of those things where I'm on a mission tohelp entrepreneurs build companies that don't grow to hate. I really think thatis, at the end of the day, what I want to do more than anything else in theworld. I want to help entrepreneurs build companies that they don't build in away that they grow to hate, because that's actually the biggest killer of abusiness is that entrepreneurs deciding to not want to do it anymore, notbecause the market's not there, not because they're not talented around theskill or the service, but because they built it in a way that feels horrible.And the truth is, if you follow the process in the book, it's impossible foryou to build a company that you grow to hate because the more you grow, themore time you get back, which is why we started companies in the first placefor freedom.
Chris Dreyer:
When that purpose and passion dries up, it's like the Venndiagram of purpose, passion, and profits just gone. You're off and that's wherepeople look to have the exit and then it's a painful experience going throughthat selling process. One of the things you mentioned, I love, I had Jack Dalyresonating too because I remember I was in Vistage and he was basically saidsomething along the lines about the assistant, if you don't have one, you areone. And that hit me. You talk about focusing on what you do best and lettingother individuals in and actually buying back your time to create freedom. Manyindividuals think of virtual assistants for the CEOs and the executives. ShouldPI attorneys be looking for virtual assistants for mid-managers? Maybe they'relitigators, maybe they're case managers. What's your thoughts on that?
Dan Martell:
So what's fun is, I didn't write the book for thispurpose, but the reason why it continues to sell more copies every week thanthe previous week is because great CEOs are buying it for their executive andleadership teams. The fundamentals are the fundamentals. At the end of the day,if I hired somebody that's talented, I want them to do the thing that createsthe most value for the business and nothing else. And if they can have somebodythat helps them with scheduling and research and management and follow up andpaperwork and all this other stuff so that they can do only the thing that theycan do, that's the best thing for the business. For example, I had a sales guy,Wendell and Wendell was watching my stuff. He was listening to my coachingcalls. He saw me teach these principles to my clients before I ever wrote thebook.
And I remember one day he asked me, he goes, "Is itokay if I hire an assistant to help me with follow-up and sourcing and dataenrichment, all this stuff in the back office that wasn't anything to do withbeing on a call with a potential client?" And I was like, "You wantto pay for it yourself?" And he's like, "Yeah, I mean, if I could dothat, I could get 20 hours back a week and take those 20 hours and be on phonecalls, I think I could double my output." And I said, "As long asthey sign the agreements and all that stuff, I'm cool for them having access tothe CRM and all that stuff." So out of his own pocket, he went from a guythat was producing a couple hundred thousand a year to doing over 350,000. Heshared this with the whole sales team, and guess what? Nobody else followed hislead. Nobody else thought to themselves, "Well, I'm prospecting, I'm nottalking, and I make money when I'm talking. So how do I stop prospecting?"
So from a leadership point of view, myself, every one ofmy leaders have an assistant, every one of them I'm looking for what is theactivity that generates the most resources that they enjoy doing, and how do Isupport them from doing that the most? Obviously at the highest level, it'sgreat because our executive teams, we call them executive assistants becausethey truly are that, they help coordinate things behind the scenes so that meand my leaders, we're working on stuff that's just like high leverage, highenergy stuff.
I think the best CEOs do that. They understand at the endof the day, I've got people, I've got to unlock that resource and havingsomebody take over some of the low value tasks that can be done, especiallywhen you think about international, there's huge ROI of having somebody, well,you're done for the day. 5:00 P.M, you wind down, 6:00 P.M. you wind down andyou go to bed, or you go play with family and the next morning you wake up andthere's eight hours worth of work done, finished for you to review in themorning. That is, I mean, that is super strategic and valuable, and I think alot of businesses should consider it
Chris Dreyer:
Pricing arbitrage, and I think a lot of the PI attorneyslistening, it's the after hours intake on different time zones could be reallybeneficial.
Dan Martell:
Yeah, my philosophy, Chris, on hiring is this, if you doit right, every hire is free.
Chris Dreyer:
Oh, expound.
Dan Martell:
Every hire is free. I should never deploy labor dollars tohire somebody unless I've already figured out how they're going to make me 10times what I pay them, at least five times. Like you said, nighttime intake formsreplying, what's that sales velocity worth? If I can pull two or three monthsworth of sales into this calendar year, what is that worth? Why? Well, ifsomebody is doing nights and weekends, all of a sudden 30% of my week has nowgot coverage, I'm pulling 30% more of the opportunities into the week, themonth, then I have more bandwidth to do other stuff, whereas... You know what Imean? It's just fascinating that people don't think about that, because that isat the end of the day, one of the biggest opportunities. But yeah, every hire Imake, before I hire them, I figure out how does the equation work? Wherethey're going to buy my time back, what am I going to redeploy my time on? Whatare they going to do that's going to create value for the business? What's thatcontinuity worth? And if you do it right, every hire is free.
Chris Dreyer:
In the world of high performing businesses, time is morethan just money, it's the ultimate currency. Enter the buyback rate, arevolutionary concept pioneered by Dan Martell. This isn't just about knowingthe value of your time. It's about strategically investing your own freedom.The buyback rate is a powerful tool that helps entrepreneurs calculate the truecost of their time and make informed decisions about delegation and resourceallocation. It's the secret weapon and allows top performers to focus on whatthey do best while building scalable, efficient operations. As we'll hear, thisconcept isn't just about theory. It's a practical approach that Dan used to writehis book and scale multiple successful businesses.
Dan Martell:
The buyback rate's a formula, and I'll let them read thebook to get the equation, but essentially it's an argument that says every CEOor individual has a value creation score annualized, they create revenue everyyear. And so if you have a million dollar business, that's your value creationscore. You're a million a year producing person, and some people stay there forthe rest of their lives. If you know what your value creation score is, thenyou can figure out the math, and I teach you in the book where you can figureout what your hour's worth and then what your buyback rate is. So how muchshould you spend and only up to that amount to pay somebody else to takesomething off your plate? Because the other thing is, some people make themistake of like, I got a little business and I hire a COO.
Well, paying somebody 150 grand as a COO when yourbusiness does 300,000 a year does make zero sense. So the buyback rate isalmost there to protect entrepreneurs from themselves, from growing above theirabilities based on what the business is at. So some people run the numbers andthey go, well, my buyback rate is $4 an hour. What should I do? And usually myanswer is, raise your prices, fix your cost structure, increase your grossmargin. It's not my fault. You have a business that is not very profitable, fixthat. It's possible, and then you get to invest in buying back more time. Butonce you have that, then you get to deploy it. So when I was writing the book,I have this other principle I teach in the book called The 10/80/10 rule, is Iwant to do things that leverage my unique ability that creates value.
So at the end of the day, the book had to be promoted, thebook had to be written. Those are the two things I'm responsible for. Dan isthe face of the promotion, so I need to be the person on the podcast. I can'tbuy back that time until we get AI good enough where I'm not here. Maybe I'mnot, you never know. Woo-hoo. Is Dan really on this call? I don't know, but fornow it's me. And so I focused on relationships and promotion, and then what Idid is I built a book team. So I had Lucinda, my agent, Ron, my book CEO, I hadPaul, my writing partner, we had a researcher, Chris, we had a bunch of peoplesupport the book, but I was still involved in every aspect of it. The book iswritten by Dan. It was videos in different parts, and when we transcribed itand then edited it together, then I would sit down and I would only be involvedon certain writing sessions with Paul once the processing was done, theresearch was done.
And it was more the first 10% of the ideation of the bookoutline, the last 10% of the integration of the big ideas, and that's how thebook got written using my buyback rate, because I know what it is and how Icould deploy that to buy back time with talented people. Now, I'm not startingat zero. I'm a first-time author, I'm not a first-time entrepreneur, so mybuyback rate is very, very high. Somebody asked me, I had an event once, and Itold them, and it made everybody feel uncomfortable. But that's just thereality because I know what level of income my empire does. So every hour I'mnot doing something to increase the value of the empire, that's not a good useof my time. That's the way I think about it and the book was no different.
Chris Dreyer:
I think that's incredible. And I want to circle back tothe point where you said like, hey, an individual's got a decent business andhe goes to start the second one, and right before he knows it, he's trying tohire this executive, but maybe there's not enough revenue. You talk to aboutyour friend that's got 30 individuals. I mean, you hear stories about AndrewWilkinson and Tiny and Buffett and all these guys.
Dan Martell:
I know all these people.
Chris Dreyer:
Yeah.
Dan Martell:
If you talk to Andrew, the first thing he'll tell you is,I hire a who before I buy a company
Chris Dreyer:
Before.
Dan Martell:
Yes, he knows who's going to run the company before hebuys it because he's not running the company. Andrew's like me, I buy softwarecompanies. We do a company a month. I'm not running those companies. I have ateam of CEOs that we've identified that we've got on the bench ready to go sothat when we find an opportunity that fits what they want to do, we put themtogether. But that's a who, not how thing. The how process is building thepipeline. I did a whole video on this, how we buy a company a month, but it wasbuilding the marketing engine, the deal engine to be able to identify, and thenthe due diligence involved in purchasing a company.
And then what do we do in the first 100 days to make itviable? But no part of operation is done by myself or my business partner. Webring in CEOs that are talented to do that because that scales. You build anengine to identify acquisitions, you put them through the machine on the otherside, you pair the company with the CEO, and you do one a month, you get it totwo a month, you get it to one a week. All of a sudden you've got a pretty coolbusiness.
Chris Dreyer:
As kind of a separate, just wanted to hear your thoughtprocess on this is because you said, hey, if you didn't have the stress, you'dnever want to sell your business. You've got Felix Dennis, and I think it's Howto Get Rich, or I don't know the exact title of that book. He talks about truewealth is through ownership, but you hear these individuals like, oh, you gotto have an exit before you can get wealthy. You listen to Sam Parr or whoeveron My First Million, they're always talking about the exit. And this isdifferent, you're acquiring, you're holding. So how do you think it-
Dan Martell:
I'm buying revenue. So I don't know what Sam or Sean'sperspective is on this. I mean, I know they like to talk about the exit,because it's chocolate, people want to watch that video. But I mean, they'veinterviewed a bunch of my friends that have very healthy cash flowingbusinesses like Syed Balkhi. I coached him in my program SaaS Academy and he'sgot 100 million in revenue every year. I can't believe he shared that. Iremember when we coached him, he was very, don't tell anybody, but he's growingup. He's feeling comfortable with it. There's two parts to this, because again,this morning I had this conversation on the hike, these hikes, if anybody'sinterested, you're invited, whatever, it's there. Because somebody asked methat, they said, "How do you think of increasing your wealth? What do youinvest in?"
And I laughed because I said, "Look, here's the deal,first thing about wealth..." And you can study all the top people,including Buffett, including Bogle, including whoever, they made it make doingone thing really well. And I think the best thinking around this is actuallyone of my mentors where he talks about the idea of equity ownership, but hesaid, every one of these wealthy people did it by getting really good at athing and doubling down on that and then figuring out how with that skillset,could you, because you're really good at a thing. For me, it's software forother people, it's real estate, some other people... But the fallacy is peoplego like, oh, most wealth was created with real estate. No, it wasn't. Mostmillionaires were created because of real estate, but anybody that's built like100 million dollars net worth, it came from ownership of a business andvaluation of the business, meaning they created a business they could sell.
See, a company you could sell is a great company to own.So even if you never plan on selling it, you should build it in a way where itcould be bought because it's valuable. So when I look at my PNW, my personalnet worth, which I think active income is, it's something you should aspire tountil you get enough cashflow in your active income to be able to live a highquality life, then you should focus on PNW, your personal net worth. When Ilook at the growth in my PNW year over year for the last 20 years, the big winscame from ownership equity in businesses and for me, software businesses,because that's what I know really well. And so at a certain point, my lifestyleis covered by my active income and my cashflow, then I take my know-how, and Igo apply it into acquiring these assets that I know how to do.
That's what I mean. You look at private equity firms, whatdo they do? They buy a company, it's a platform. Then they do roll ups aroundthat platform. Then they take that revenue and then they sell it to somebodyelse. So you could do that yourself in your own business, but I mean, mostpeople, it's funny, because they're like, "Oh, should I invest in indexfunds or should I invest in this and that?" It's like your biggest ROI isinvesting in your business. If you don't know how to invest money in yourbusiness, then go figure out how to build that skill.
So Warren Buffett always looks at ROE, return on equity.ROE in a business at the low end is 50%. I don't know what kind of deals yougot in the market, but nobody's doing consistently 50%. Now, is there a risk inhaving 100% of your personal net worth tied up in the equity in your business?Yeah. Could you get some liquidity? For sure. You could sell a piece of it ifyou want, and then share those distributions. But in regards to, I've got a$1.00, where should I invest it to get a $1.50 next year? Most people should beinvesting in themselves, become better, and then their business.
Chris Dreyer:
I think that pairs so nicely with your book Buy Back YourTime, and especially you choosing the SaaS from a leverage perspective andRavikant, you get a ton of leverage of SaaS and the ownership there a uniqueconversation that I don't think is talked about enough. It's like, but I agreewith you. A lot of people when I'm hearing when they're talking to even me whenthey're wanting to sell their businesses is because they don't like somecomponent of it or they feel that it's at risk.
Dan Martell:
Those are things they can fix if they want to go andinvest in themselves and then invest in the business. And that's, to me, it'slike either somebody else is going to do it. The person that buys it is goingto do it, or you could do it. And I love the fact that, again, going back tothe world will show you where you're not free. Your business is this perfectdojo for personal development if you look at it through that lens. It's justsome people stress themselves out over opportunities that they should begrateful for.
When I run into a big challenge, I actually say to myself,cool, worthy opponent. It's been a while. I love this. I get an opportunityright now to show myself I'm as good as I thought I am, or I don't, and Icrumble and I feel bad for myself and I retreat and I don't want to sell. Ijust think that people got to decide. If you want to give a gift to anotherperson, one of the most important things, inspiring things you could ever do isthe gift of inspiration, but nobody's going to inspire another person byplaying small.
Chris Dreyer:
What new projects do you have that you're excited about?And just one final question, where can our audience go to learn more about you?
Dan Martell:
What I'm excited about is building teams. So I just gotback from spending two days with John Maxwell. He's become a mentor of mine. Heis a leadership goat, 77 and going strong. He's written 90 books. So spendingtime with John and seeing how he shows up, that's the thing I'm most excitedabout. I realized a long time ago that my ability to impact the world is goingto come on the back end of reach and reputation. So do you have a goodreputation? If not, fix that, that's character. And reach to the degree that youbuild, an audience that you can then plug things into.
So that's what I've been building for the last year, justa media company, increasing our reach and then learning from people like John,how to produce more content and serve more people and be a leader, not becauseof a title or a position, but because of the influence you have through yourcharacter and your experience and how you help people before they ever get achance to meet you. That's why I do podcasts. I love it. I love talking todifferent communities of entrepreneurs trying to help them out. I just want tosee everybody win. I mean, anybody follows me online, hopefully you get afeeling real quick like, I'm Dan and I'm your friend. I want to see you winprobably more than anybody you have in your life. I will be your biggestcheerleader, and I just think that's my favorite thing to do in the world.
Chris Dreyer:
I love that. Love the enthusiasm and the candor. Just the,hey, this is what worked for me. This is what I see. Just-
Dan Martell:
That's all I can ever share. This is what worked for meand it may work for you. I'm never going to teach you stuff I don't do, and ifit works, use it and if it doesn't, discard it, and that's fine.
Chris Dreyer:
Thanks so much to Dan for coming on the show. As a specialgift, Dan is offering listeners his internal executive assistant, SOP for free.It's 37 pages of pure gold. All you need to do is follow Dan on Instagram andDM him the letters EA and he'll send you the doc directly. No opt-ins, no signups,nothing. His Instagram link is in the show notes. All right, Dan had so much toshare. Let's hit the takeaways.
As you grow your firm, more cases, more staff, moreeverything, it can feel overwhelming. That's the pain line, the knee-jerkresponse to sell, stall, and sabotage. When you're drowning in cases, yourinbox is exploding. It's tempting to just maintain the status quo, but that'snot how we build a seven-figure firm is it? Next time you're feelingoverwhelmed, take a step back and ask yourself, what's the systems can I put inplace to handle this growth? Maybe it's time to invest in better casemanagement software or bring on a rock star office manager. Remember, growingpains are just opportunities in disguise.
Dan Martell:
What happens in sabotage is people will make decisions tocreate chaos, to then give themselves a reason to then stay small. So we gotstall, sabotage, and the third is sell.
Chris Dreyer:
Come to terms with your buyback rate. Figure out what yourtime is really worth. Use it to inform your hiring decisions. Start thinkingabout hiring before you're drowning. Look into virtual assistants or paralegalswho can take routine tasks off your plate. Every hour you're not spending onteachable work is an hour you can dedicate to landing big cases or refiningyour trial strategy. That's how you 10X your firm's growth.
Dan Martell:
I've been teaching the buyback loop forever, for 15 yearsbecause it was the tool that I developed for myself to essentially build what Icall the empire. And I know that word scares people, Chris, but the empire inmy world is a life of unlimited creation you never have to retire from. At theend of the day, if you don't have an assistant, for example, you are theassistant, and guess what? You probably suck at the job and you're overpaid.
Chris Dreyer:
Reinvest, put money back in your firm. Think about how youcan supercharge your practice. Maybe it's time to upgrade your space to impresshigh value clients. Or how about investing in some cutting edge digitalmarketing strategies? The point is, you know your business better than anyone.Chances are reinvesting in your firm will give you a much better ROI than anyoutside investment. Remember folks, the goal here isn't just to run asuccessful firm. It's to build a scalable, efficient operation that maximizesyour impact and your income. Keep pushing those boundaries, keep innovating,and never stop learning. That's how we achieve unreasonable success in thisgame.
Dan Martell:
Your biggest ROI is investing in your business. If youdon't know how to invest money in your business, then go figure out how tobuild that skill.
Chris Dreyer:
For more information about Dan, check out the show notes.Before you go, do me a solid and smash that follow button to subscribe. Don'tmiss the next episode of Personal Injury Mastermind with me, Chris Dreyer,founder and CEO of Rankings.io. All right everybody, thanks for hanging out.See you next time. I'm out.
