You’ve heard all about it no doubt. As a ‘budding entrepreneur’ as they say, you’ll have stumbled across various courses in many industries promising to ’10X’ or ‘explode’ your business overnight with ‘one easy trick’. I’m of course talking about the ‘get rich quick’ scene. But how do you really become wealthy?
In today’s society of instant gratification culture, where you can buy something online with Amazon and have it arrive the next day, or Google where every question is answered in seconds, this might seem a welcomed prospect to young hustlers who want to prove to their friends, family and peers that they are doing well. But how well are they actually doing? Social media has made it almost impossible to distinguish those who look like they are doing well from those who actually are doing well.
People often ask me, “how can I do what you do” or “how can I do big business deals and make lots of money quickly” – but they ask me with zero experience in the field, or any demonstrable track record, no knowledge, no team – then they are disappointed when I tell them it takes years/decades of getting it wrong, practice, teamwork and graft. And I’ll be honest, yes it can be a bit of a cop-out answer, but it’s true!
In our business, we do multimillion pound deals – not because I have stumbled on some secret formula, but because I have an incredibly skilled and experienced team working for me, that it’s taken well over a decade of making mistakes and failure for me to find and build, as well as grow my business. And whilst I may not be a traditional rags-to-riches story, I didn’t start off like this or with some head start, absolutely not. You can read more about that here.
But can you actually get rich quick and become wealthy? I’d say it’s certainly possible, even from individual deals, but with caveats. We recently did two deals in October 2021 that added almost £2million of equity to my business. I’d say yes, that is get rich quick, but I was able to do that deal because the banks saw my credibility from the previous 12 to 13 years of my management and investment experience, as well as my team structuring the deal in a way that facilitated the transaction… I don’t believe you could have done that from a standing start. It’s just not possible. So I’d agree with the ‘get rich quick’ if we redefined it; ‘get rich quick off deals that require you to demonstrate a strong track record in the industry and in dealmaking in general’. I’ll admit it doesn’t have the same ring to it.
People want the result without the hard work, but those are exactly the people that don’t have what it takes, in my opinion. Then you have those that just crack on building up and being successful in the background. A little bit like Kevin De Bruyne.
If you want my advice, I suggest you start a business in your industry and interest. Or, if you already own a business, build on it. Below is my checklist that will [hopefully] accelerate your path to your goals:
- Decide what interests you
You must first identify what interests you. Because if you don’t have a passion for what you do, then you have no chance in surviving the tumultuous terrain of becoming successful, whatever that might be.
- Start a business
Next, it’s time to just do it. Stop thinking about it, just get started. Nobody is asking you to quit your main source of income. Just supplement whilst you get started. Remember – good entrepreneurs take risks, but the best entrepreneurs don’t like or take risks – they mitigate/manage them to stack the cards in their favour to help them become wealthy.
- Aim to cover your basic subsistence
Now for the hard part. Covering your daily living expenses from the business or venture. Now think hard about what you need, not what you want. Work in a bit of a ‘have a life’ fund for the odd social drink or going out, add this to your basic living costs and that’s your goal. Let’s aim to grow to that level. But when you do, still don’t quit your job or main source of personal income. Because why? The aim is to become wealthy, not voluntarily give up income if you don’t necessarily need to.
- Start saving
Yes. Start to save money. Aim to have a reserve that equates to 3 months of your living costs plus a contingency. This is well known good practice when in business. It saves you from becoming insolvent in hard times, which avoids potential bankruptcy.
- Sales, sales, sales
Now it’s time to be a sales person – whether you are or not. It’s about promoting your business, even promoting you. Get family and friends to support. It’s all about getting money in. Forget saving on costs, just book receipts, takings, revenue, whatever you want to call it. If your business focuses on recurring products or services then invest in good customer relationship management. If your business needs you to keep booking new sales, then invest in good sales practices. If you are to become wealthy, you need the income first! See my book recommendations below.
- Scale your business
Your business is now sustainable and you feel comfortable? Great – now is the time to scale. Bear in mind, this is if you want to. By this point I’m sure a lot will have changed and you might be happy with where you are – siphoning off your profits to buy properties and other investments. If that’s what you want to do, then great. If you do want to scale to build significant wealth, then it’s time to scale to work towards selling your business (nothing else produces as much money as selling a profitable business in the right way). Start employing people when the time is right, work on structuring and systemising your business. Make it so you could retire from your business without it falling apart. None of this ‘can you be away for 6 months’ rubbish – you need to be able to quit forever and it still work. If you think you might need investment, look for an investor. See my tips on raising private investment.
- Sell your company
This sounds easier than it is. But part of marketing yourself and your business gets you on people’s radars. Then, as you grow, you catch people’s attention. You ‘turn heads’ as they call it today. Start speaking to private equity firms like mine, and see what their criteria is for acquiring businesses. Start tailoring what your business looks like to attract acquisitive parties. They will then value your business, before making you an offer. Once you sell, you’ll experience what most entrepreneurs look forward to – a significant liquidity event. Better known as a huge dollop of cash to you and me. For all intents and purposes, you have become wealthy.
- Invest your new found wealth
Well done, you have now become wealthy. I presume you’ll have left your job somewhere around Step 6, I should imagine. So you’ll be needing income again, because you don’t have any. So invest for income – buy property, dividend-yielding stocks etc. Buy outright depending on how much liquidity you have at this point, unless you’re going again! You can essentially do what you want now. If you are crazy like me, you start more businesses to sell, or invest in other people’s businesses when they are at Steps 5 and 6. Enjoy yourself!
Going back to my original discussion, Steps 1 to 8 may take you 10 years, 5 if you’re good and 3 if you’re working smart. The idea is to build trading income to become wealthy. Everything is possible with trading income – you can borrow more, invest more and build more. For example, if I want to buy an investment property, I can borrow 100% of the purchase price against my business. Trading income is powerful. Of course, there are other ways to become wealthy, but by far the biggest and quickest way is to build, scale and sell a business. In conclusion, business FIRST, investment SECOND.
If you haven’t already, take a look at my video on the subject:
My book recommendations on how to start and scale a business, click to see more: