Dan Peña - 50 Billion Dollar Man Dan Pena QLA - A New Strategy For Growth Part 2 (Audio)

Key Takeaways

[Music] all right tell us about creating the Dream Team well that's step three now there may be a lot of smart people listening to this tape and I'm sure there are but I'm I'm here to tell you you can't do it alone you cannot take Quantum growth Quantum methodology and grow your business and do it by yourself you you have to enlist the the help of others and um the way I did it is that uh um I I found mentors and I had three mentors two of which are still alive and I found somebody that was where I wanted to be already that was significantly older significantly more successful and that um and I made it my business to become their uh the son they never wanted perhaps and uh I I I spent a lot of time with those three mentors I've already mentioned Jim Newman I had Jerry Orman the founder of Orman Industries which was a conglomerate on the American Stock Exchange in the oil business and I had Constantine gratos who is the Chief Executive Officer of Manassa Shipping Lines I was privileged for those three men to take an interest in me two of the gentlemen Mr Newman and Mr Orman are still alive and semi-retired and they still take an interest in me so that's the beginning of the Dream Team the second thing is that most of us are not dealing with banks or financial institutions that can take us to the next level most of you have what I call deposit relationships you don't have a banking relationship I mean every business business uh even if it's a little small business should have a line of credit you should have more than just a deposit relationship you should be dealing with a with a with a lawyer a law firm that can represent you uh and that has what I call the full quiver of of abilities to represent you they they have enough lawyers and enough expertise you should all run your business like you were going to take it public in so that means audited books uh yes I believe in audited books because number one it's you're probably at least twice perhaps three three times better off with financial institutions if you have audited books because they believe the audited numbers a lot more than they believe your own house numbers and if the audited books are done by a big six firm or a large Regional firm they're even going to believe in more because they know that uh the books are going to adhere to Gap General accepted accounting procedures so you've got now uh good accounting you've got uh good legal representation you've got a good bank you've got your mentors now you you have to understand that you have to determine where do you fall in your own Dream Team are you Mr inside Mr outside where are your strengths any founder any CEO any entrepreneur of even a little business the primary job should be trying to find Capital to to uh grow the business number one and two looking for opportunities to grow the business um I I myself attend a lot of meetings in a month's time because I'm continuing to look at transactions I'm to contining to look at opportunities because I want that my growth to continue whereas most of the people that are in business is sit and they as I've already pointed out they manag the company not to lose as opposed to win right I hired to my weaknesses that's what I felt that was my early training if and then fortunately been able to hire people that probably could have replaced me one replac me yeah did they yeah one of my one of my uh Team uh is CEO of uh great westling resources now in fact I talked to him uh not too many days ago he still bounced his ideas off me uh even though I'm gone I'm still the largest single shareholder of the company it's it's a it's a fairly large public company but um and surround yourself with people uh that are smarter than you as you just said and that gets back to the Comfort Zone you can't do that unless you're comfortable with yourself because you're always going to be worried about what are these people going to do if you have any sense of insecurity that'll be very difficult for you to do but I'm telling you it's the best thing to do to grow your business I recall you saying you had five people that wanted your job at all times yes there were were five sometimes more than five and one of them eventually got it and you like them yes they were breathing down your neck they made they made me uh they made me tow the line they made me a much better businessman uh than I might have been if I didn't have those five people high performance people want that kind of uh Ambiance they want that because it's it's like a think tank I mean uh we would come up with ideas and bounce them around and we would either decide to carry uh an idea to fruition or kill it within a matter of minutes as opposed to thinking about it myself and going through all the minations myself I had the ability to bring in my people in brainstorm instead of going to a think tank right in fact Sports again is another good analogy along that line in that uh golfers most of them prefer to play with a better golfer isn't that right absolutely and I know you're an avid golfer yes I mean I um my goal is to go down to be a scratch player and uh and right now I'm a single digit player and uh but I play with people that are better than I am I just played a couple days ago a good friend of mine that's a um a three handicap and uh I beat you a couple days ago by one stroke when we played and much to his shini he's probably sick we're going to send him a copy of this Cas but um yes I mean hang around and and and do business and be with people that can get you to the next level all right let's talk about building the perception step for well perception is reality and um if you follow the first steps that we've already talked about people are going to think you're more successful than you are to begin with and that's good yes your banks are going to have more confidence your potential joint venture partners are going to have more confidence everybody will have more confidence and they have to have confidence in you you have to have confidence in yourself absolutely and and and if you'll let me share a story about perception is reality you and I had dinner not too many months ago and and and and you told the uh the Mater D you told the Hostess you told the waiter everybody to bring the check to you that's right because I'd heard you had paid everywhere you went that's exactly right and who did they bring the check to you brought to me so annoying yes and well that just happened to me uh in in Florida perception I look successful and U uh a gentleman in in um in Jacksonville Florida asked the the Mater D who do you think there was seven of us sitting all in suits in the morning for breakfast who do you think ought to get the check and she pointed to me him he says well why say well he looks like he ought to get the check he looks he looks the most successful at the table looks like the boss perception is reality now at that table I wasn't the boss the gentleman that was asking the question was the boss and but all his employees to his credit he he had the grit to ask that question but I mean people want to be in business with people that are perceived to be successful and I think you've got to expand on this because I noticed you're not wearing a Rolex watch no I'm wearing a $8 SW $12 SWAT SWAT I don't know if and a lot of people think that it's the jewelry or something else and what it re that isn't it what you're talking about is the inward uh strength and what yeah well that's that's part of it uh it's the um how you carry yourself but it's also how you dress right I mean nothing against Rolex watches but real high performance people don't not too many of them do wear Rolex watches because because I mean everybody's got one but it's how you dress how you come across at a meeting who takes control you know how you travel uh where you live uh when I travel I I don't travel and I travel a lot on planes it be a lot easier for me to wear running suit on planes but I don't travel like that because I don't know who I'm going to sit down next to I don't know what business opportunity I'm going to have it's how you're perceived and uh there are many personal development speakers that are perceived to be very successful because they the Ambiance that they surround themselves with I mean um Mr um Gates and Mr perau and Mr aak coken those kind of gentlemen Mr Scott more recently are perceived in one way and perception is reality Health Care deals now are brought to Rick Scott I mean and and this is a gentem used to work for Rick used to be my lawyer and he uh in in the late ' 80s went off in his own and and uh he has now made just a great deal of money and uh he's one of the most successful corporate CEOs in America today I just read about him putting some deal together which I thought was for multi-millions billions his company I think will do about 15 16 17 billion dollars in revenue and he started with an Al this sounds like a lot of money $125,000 life savings in 1988 when when he went out on his own and this is 94 yep late 94 that's correct and he has made a great deal of money and uh but Rick perception is reality even before he got to this point he had said by the way his goal was to control the health industry in the United States loofy goal that's right and I he didn't say by when right he's 41 years old now okay so I mean that that gets back to one his comfort level he felt comfortable he had a high self-concept he he didn't set time limits for his goals and he perceived he hung around with the people that could put him in the position that he could hit that kind of home run and he has he's been very successful it's perception is reality and what I would submit to the listeners they can become the part in their business they can become the successful adjunct to their business they can become the successful arm to their business if they think it and if they believe it they will do it right and that's as a result of encountering rejection and being comfortable with the rejection because during the obtaining of these rejections you also get some winds and and it puts you in a higher and higher level is that basically it yes that's basically it but in addition to that it's the idea that if you put yourself in positions where you're going to get anxiety you become used to the anxiety and anxiety ultimately disappears all right what is the next step step five your Quantum Leap action plan growth what is that well I mean the Quantum Leap action plan is the plan that we we we do at the seminar for each attendee but it's it's how we put together the specific objectives for the individual it's how you maintain increasing growth as opposed to getting satiated and letting it flatten out it's don't waste time on things you can't change you know I I Ed the example I'm not going to change my in-laws I figured that out 20 plus years ago yet in business we spend a great deal of time on things that we know we're not going to change we either have somebody that works for us in our employee that does certain things the way we don't like them yet we continue to go back and we try to change them I mean we're not going to change individuals we're not going to change the way they think so it's our job as the entrepreneur at the as the leader to develop a program around the people that we have and if we can't do that then we don't have the right people it's developing an obsession not just for ourselves but for our people I mean you cannot grow a business geometrically in a quantum way unless your people are obsessed they're in love with the idea it's your job as the founder of the of the company whether it's a grocery store or a real estate office to develop that Obsession to work through that Obsession and make sure that they have it because the idea is you must continue to grow you have to grow now it's also systematizing your organization so you find out what works basically high performance people find out what works and then they just do more of it they try to do less of what doesn't work and more of what doesn't word very good part of the action plan is knowing that you you should investigate before you invest I learned many many years ago I will reduce my losses in business my losses in investing if I do a lot of homework in fact I only make probably two or three Investments a year yet we have people that spend more time on deciding where to go have dinner where to go play golf or where to go on a vacation than they do in some of the investment decisions I hear people you know have being called up to buy stocks on on the telephone to make decisions now this is you know only caveat it depends on how long you've had a relationship with your financial adviser but with basically no homework that's not the way high performance people do part of your growth plan is building your dream team that we've already talked about and at the same time understanding that your organization is going to be no better than the people you have the two biggest leverages we have in life are other people in other people's money and and so that's how we we develop that growth aspect and that's in a positive way absolutely I I don't mean it in a negative way at all it's it's a very positive way the second part of the action plan is working capital and everybody's concerned where do I get money of course you don't need money I know Don there all that money you got in the bank but everybody everybody listening to this tape probably does need [Music] money it's a matter of exposure you know we've already talked about that I've made 300 Financial presentations I I can guarantee and there are very few guarantees I give but there are somebody someplace somewhere on the face of the Earth that will finance every funky idea that anybody that listens to this tape I mean make the presentation make the presentations it may be in Sian but I mean if you want the deal done bad enough you'll see enough people you'll turn over I should say enough rocks cuz most of the companies that are listening to this tape cannot grow their business by retained earnings they can't grow it fast enough to debt because that means they're going to have to carry the debt service and there's not enough equity in their organization to sell off to the public so you're going to have to make a lot of financial presentations that's it and and again you told me a story once about somebody that sent out 700 or what was that story I was asked and it gets back to making presentations I taught a course um where I went to undergraduate school Cal State University Northridge and um I had 15 students we were having a workshop at my home in pal veres and they were all down and they felt bad that they hadn't been uh they haven't received the number of job offers that they thought they should and so I had a young man who was a Harvard graduate a young man named Fidel Vargas he happens to be the mayor of baldon park outside Los Angeles youngest mayor in the United States and I asked Fidel to step in front of the class and I said uh after asking every member of the class how many rums they sent out 3 6 12 the most anybody had sent out was 30 and I asked Fidel how many rums did you send out and he says 700 sir and I said how many job officers did you get and he says one now my class all look very dejected but say he really wanted a job Del Vargas he sent out 700 right now and uh just the logistics of putting 700 rumes together is fairly awesome the same holds true for financial institutions you have to give a lot of financial presentations and you went all over the world that's correct yeah other than Antarctica I've been to every continent pitching for Capital Money debt anything any to grow the company I've looked at virtually all the financial markets you have to start with your own City though but I I can go to a phone book here in San Diego and I can go to any industry and I can find a half a dozen companies in any industry that's listening into this tape and find somebody that's beating the trend and doing very very well and that has found Capital to grow their business very good there's no question about it so I mean there there's probably 500 financial institutions in San Diego County let's regress a little bit and you said that the primary job of the owner of the business or the CEO or the chairman is to search for capital is that right search for Capital search for uh growth ideas search for ways to make their business grow as fast as possibly can okay so that's why you were doing that at all times in my judgment and not just my judgment all the high performance people that we've alluded to today that's all they do that's all the gates the peros the SK that's all Scully that's all they do they looking look for opportunities to grow their business right and so they're not running their business absolutely not absolutely not I don't I don't know one high performance person that runs his business on a day-to-day basis and you were in the energy business but you you didn't really know how to drill the wells or anything like that or that's an understatement oh I'm not I'm not an engineer a geologist or a physicist I don't know how to drill the oil for the oil I didn't know how to do any coal mining I wasn't an engineer a co- engineer I didn't know anything about our construction pipeline I've been in the real estate business I've been in the entertainment business I've been in the insurance business I don't really know anything about any of those businesses what I do know is how to grow them by either acquisition and internal cash flow and going out and continuing to look at deals and that's what I do now and you're out right now looking at deals looking at other businesses to go into and you don't care what kind of business it is that's doesn't make any difference to you doesn't matter doesn't matter to me there are some industries that are hotter than others but I mean it doesn't matter okay and what size businesses are you currently looking for yourself right now does that matter well I mean is as little as a few hundred, and as much as many tens of millions okay so it it really doesn't matter and then you're going to apply these same principles to whatever that business is absolutely and so anybody that comes to your seminar doesn't matter what type of business they're in what size it is where they really understand that business if they're coming from let's say an outplacement agency and they're thinking about buying a local miniart that doesn't make any difference as long as they apply the principles that's correct the principles are Universal as Napoleon Hill said many many decades before I I ever thought of it the uh principles for Success are Universal they've been around for since time began since man first crawled out of a cave someplace there is no new thought Vis uh uh being successful and and in growing your business these are old precepts your application is a lot different than anything that I'd ever heard from anybody so your Quantum growth ideas were I believe unique to you alone well I agree with that but I the the basic precepts because mind isn't just work harder work SM it's work different and to think different but I mean people have been doing this since time began now i' I've Quantified it I've put it in seven steps and uh you know I've lectured about it the last 10 or 15 years around the world but um it's it's it's not difficult you know you heard me say this before I mean if it was hard as anybody that went to school with me would would attest to Pena couldn't have done it it was too hard so I would submit to anybody listening to the tapes that the uh Quantum action plan is very doable and you've seen me do it on the of occasions yes I sure have now let's talk about step six pay yourself first every entrepreneur every business owner I talk to they're highly interested when I mention this and this is what you teach tell us about that well it's not exactly how it sounds uh pay yourself first uh probably has uh different connotations to different people but the one thing that I've learned I'm on my um third or for Fortune depending on when how you want to categorize Fortune uh and uh through the economic cycles that I've been I've seen people put off hitting the cash register so to speak and taking money out they say I'm going to put all my money back in my business so so it'll grow that much better that much quicker I can't find Investments that are growing as well as my own well what happens is you get to the end of the cycle two things happen one if and when you decide to sell now you're at the end of the cycle your business isn't worth as much you've taken no money out so you try to squeeze the last penny out of the business and you can't you have trouble selling it and I know a lot of these people that are listening to these tapes sell buy and sell businesses yes they do so my recommendation is that I would submit that you should pay yourself take money out of the organization every time you make a little bit of money take a little bit of money out this does two things number one you don't have to sell the business for as much when you get ready to sell it and number two you've benefited in case you can't sell it all through the cycle why don't you tell the story about the meeting you were at where you the people were sitting in the audience and they mentioned that they really ought to just walked from their business but they just owned it too long and they couldn't I was um on the Das for the center for entrepreneurial management about a year and a few months ago and um we were going around and talking to various entrepreneurs there and one of the entrepreneurs had had lamented that in the last three plus years three three and a half years he had lost or eroded approximately 60% of the retained earnings the net worth of the company that had taken him 30 35 years to build up wow and uh um that's sad it's very sad but I mean it's very it's it's very typical and I I commented to him and he was in a mature industry and I said that uh you don't need to be Einstein or uh uh gates to figure out that you probably ought to just turn the key and Clos the business down and um he told me that he couldn't he emotionally couldn't turn the key now and and that brings up an interesting point we have two checkbooks in life and in business we have an emotional Che checkbook and we have a financial checkbook most and it gets back to being comfortable with yourself most people have trouble growing their business past the initial stages because they're they're short of cash in the emotional checkbook not in the financial checkbook it's how comfortable you feel with yourself at the end of the day being a high performance super successful person is all about self-esteem and we have to do everything we humanly possibly can to develop that self-esteem so I mean it's paying yourself first and I don't mean just you I mean from the chairman from the founder from the business owner all the way down to the lowest employer so you share the wealth all the way down absolutely absolutely I I believe in even giving away Equity uh to employees to make them part of the team people don't work for me they work with me we're Partners right well as you know on my last company I gave away 15% of the company to my top person and actually that was really really smart I and you don't sell it you give it that I remember you just saying that one the big questions I'm always asked is do you really mean give it to do you mean did you give me a discount and they ask me 15 different ways the answer is give it free and clear and then the second question I'm asked what if I have to fire him five years from now what if he leaves well then he leaves with 5% or Rel leas with 2% or Rel leas with 10% uh being a minority shareholder at leas in the state of California doesn't give you too many rights so I mean it's not like they can disrupt the whole company just because somebody owns two or five or 10% so I mean give it but take the money out and and and and get used to those uh higher Lifestyles higher Ambiance all right then step seven is creating your exit strategy tell us about that well um it's it's sad but just as I have alluded to in Step six where the individual has not uh taken money out of his company and then when it comes to the time where he thinks he wants to sell it normally people want to sell their business when they get ill unfortunately uh most people's exit strategies dropping dead and um in fact the insurance industry is the only industry that I'm aware of that really addresses exit properly uh and of course they Haven an acts to grind and I'm not I'm not against it but they're trying to sell you insurance to pay your taxes but uh plan for your exit strategy I there's a blanket statement I use and again there I don't give many guarantees or many blanket statements but if you're in your 40s your next economic cycle up sell your business because you may not be around for the next economic upturn I hear people say well Dan what am I going to do with the money it's a lot better to have the money and have a problem on what to do with to not to have the money and try to sell your business in a down cycle right and and then lots of times as you stated they just kind of uh step aside I mean they don't want to sell it at the lower price and they just get locked in that's absolutely right but if you acted as you were going to go public from the very beginning you've got audited books you've got your house in order and you've had an active PR program if you will it's you continued to look for deals you've got a conduit of things happening in your business it'll be a lot easier for you to sell it as opposed to waking up one day because you find out that you've got ulcers or God forbid You' got something worse wrong with you and then trying to sell it so basically your advice to every business owner or even those contemplating into going into business is to really go in with the idea of either selling it or going public or passing it down to their children or employees or something but plan a strategy from the very beginning absolutely nothing's forever glory is fleeting virtually everyone that I know that's a high performance person with with very few exceptions one you know the Ford family and a few families like that that have built companies that last you know beyond their lifetime uh there's a time to buy a company there's a time to sell a company there's a time to buy a business there's a time to sell a business and I would I would submit that the people should focus in on their exit strategy maybe the exit strategies to sell the employees and some of their children but to focus on that and then have their plans directed towards that exit Dan I thank you very very much thank you Don Quantum Leap what a concept how can you apply this information in your business remember information is not enough it takes action to make your Quantum Leap how are you going to look at your business in a new way to contact Dan Peña call 1800 592 6886 or Max 713 933-6166 you can reach VR at 1 1800 377 8722 this concludes this edition of the VR Mentor series