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Main Street Millionaire - 3 Flashcards

1
Q

What is the most common question new business owners ask?

A

How do I manage the damn thing?

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2
Q

What is the secret rule of ownership?

A

Hire a team that runs your entire business better than you.

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3
Q

What is crucial for managing multiple businesses as a beginner?

A

Start with one business.

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4
Q

Who is the all-star of your team in business management?

A

Your operator.

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5
Q

What does the author compare managing a new business to?

A

An oddly fun mixture of bull riding meets tequila shot drinking.

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6
Q

What did the author discover about their operator’s management?

A

The business was running on fumes and likely funding the operator’s vacation.

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7
Q

What is the relationship between an owner and an operator described as?

A

Symbiotic.

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8
Q

What does the author require before buying a business?

A

It must have $200,000 in annual profits.

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9
Q

What is the ‘Six Figures to Thee & Me’ rule?

A

The business needs to make enough profits to pay six-figure salaries to both you and your operator.

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10
Q

What are the three important words in investing according to the author?

A

Margin of safety.

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11
Q

How should an operator’s compensation package be structured?

A
  • Bonus incentives based on KPIs
  • Equity earn-in or buy-in options
  • Rewards for longevity and performance
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12
Q

What is a key principle for hiring top talent?

A

Play long-term games with long-term people.

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13
Q

What kind of job listing does the author recommend?

A

An advertisement for a thrilling opportunity.

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14
Q

What should a job listing include to attract applicants?

A
  • Compelling introduction
  • Company overview
  • Long-term vision
  • Salary and benefits
  • Application instructions
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15
Q

What is the best job listing attributed to Sir Ernest Shackleton?

A

Men wanted for hazardous journey. Low wages, bitter cold, long hours of complete darkness. Safe return doubtful. Honour and recognition in case of success.

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16
Q

What should you avoid when naming a job title?

A

Using trendy titles like ‘Ninja’ or ‘Unicorn’.

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17
Q

What is the primary focus of the job listing created for hiring an operator?

A

Build and run the next generation of business acquisition.

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18
Q

What is one responsibility of the GM/Operator in the job listing?

A

Develop and execute an acquisition strategy that drives revenue and growth.

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19
Q

What should due diligence include?

A
  • Reviewing detailed company information
  • Conducting in-depth industry analysis
  • Completing reference checks
  • Running debt models
  • Performing valuation analysis
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20
Q

What is a critical qualification for the GM/Operator role?

A

Minimum of 10 years of experience in the small-business acquisition space.

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21
Q

What does due diligence include?

A

Due diligence includes:
* Reviewing detailed company information
* Conducting in-depth industry analysis
* Completing reference checks
* Running debt models
* Performing valuation analysis (comparable and DCF)

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22
Q

What are the qualifications for the position?

A

Qualifications include:
* Minimum of 10 years of experience
* Significant experience at a top-tier venture capital firm or major corporation
* Deep understanding of the small-business acquisition space
* Proven experience from sourcing to exiting investments

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23
Q

What analytical skills are required for the role?

A

Highly developed analytical skills including:
* Defining issues
* Collecting and analyzing data
* Identifying alternative solutions
* Projecting consequences
* Drawing valid conclusions
* Proposing sound recommendations

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24
Q

What is Contrarian Thinking?

A

Contrarian Thinking is:
* A digital media company
* An education business
* An investment firm
* One of the fastest-growing business-focused media companies

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25
What are some perks of working on the team?
Perks include: * Competitive salary * Flexible vacation policy and paid company holidays * Company-provided technology package * Relocation support for new hires
26
True or False: Proven talent is less expensive than potential talent.
False
27
What is a key strategy for attracting talent?
A key strategy is to actively seek out top competitors in the area and network with them.
28
Fill in the blank: The three filters valued in candidate selection are Known, ______, and Proven Talent.
Experienced
29
What should a high-standard interview include?
A high-standard interview should include: * Same questions for every candidate * Documentation of notes * Ranking candidates on core components
30
What are green-light answers in interviews?
Green-light answers include: * Detailed descriptions of roles * Specific achievements * Clear understanding of impact * Alignment with company values * Enthusiasm about company culture
31
What are red-flag answers in interviews?
Red-flag answers include: * Vague descriptions * Inability to articulate responsibilities * Focus on negative aspects of past jobs * Misalignment with company values
32
What is the typical compensation structure for an operator?
Typical compensation includes: * Salary * End-of-year bonus * Performance-related bonuses * Annual salary increase
33
What is the total potential compensation mentioned?
Total potential compensation can reach $280,000.
34
What is the importance of networking in hiring?
Networking helps find candidates who are already known, trusted, and proven in their roles.
35
What are the five categories used in the hiring matrix?
The five categories are: * Personal vouching by team members * Previous experience in the exact job * Industry or company type experience * Problem-solving experience * Company size experience
36
What is the significance of asking candidates about their past bosses?
It reveals their self-awareness and the perception of their strengths and weaknesses.
37
Fill in the blank: The best predictor of future behavior is ______.
past behavior
38
What should candidates demonstrate during the interview?
Candidates should demonstrate: * Fast execution * Self-awareness * Problem-solving skills * Leadership potential
39
What is the revenue target to hit by the end of the year?
$5 million ## Footnote This includes a $25,000 incentive.
40
What profit share percentage is earned on revenue over $4 million?
5% ## Footnote This is after the owner's salary distribution of $100,000.
41
How often is profit share paid?
Quarterly ## Footnote Bonuses are also paid on the completion date.
42
What is the bonus opportunity mentioned?
1 bonus opportunity + profit share
43
What is the recommended approach to succeed in business?
Hire smart people, pay them well, set them up to win, then leave them alone.
44
What is the purpose of the New Hire 100-Day Game Plan?
To integrate your operator into the business efficiently.
45
What are the key meetings to schedule for new operators?
* History of the business * Meetings with key team members * Regular progress meetings * Performance reviews against goals and KPIs
46
Who is the best person to coach a new operator?
The previous operator (former owner)
47
What is the rule of three in documentation?
If an action is repeated three times or involves more than three steps, it goes in the playbook.
48
What is the purpose of the Operator’s Playbook?
To guide daily decisions and document SOPs, strategies, and decision-making processes.
49
What tool is preferred for documenting SOPs?
Notion
50
What is the first phase of the ownership transition process?
Days 1–60: Transfer and Transition
51
What is the focus during Days 60–90 of the transition?
Stabilize and Systematize
52
What are the key objectives during the Power Up phase?
* Accelerate cash flow * Identify critical people * Begin implementing small changes
53
What is the 'Death Zone' in business acquisitions?
The year following an acquisition where many challenges arise.
54
What is the acronym S.A.R.A.H. related to employee reactions?
Shock, Anger, Resentment, Acceptance, Hope
55
What assignment can help identify employee sentiments post-acquisition?
Ask employees to write down their Roadblocks and Rockets.
56
What does a 30-60-90 Plan focus on?
Gradual integration, achieving clear goals, and documenting everything.
57
Who is quoted regarding the importance of knowing where north is in business?
Donald Park
58
What is Amazon's North Star according to Jeff Bezos?
Customer satisfaction
59
What is a CEO's primary role according to the text?
Remind people which direction to row ## Footnote This emphasizes the importance of guiding the team towards a common goal.
60
What is Amazon's North Star as mentioned in the text?
Customer satisfaction ## Footnote Jeff Bezos emphasizes an obsessive focus on customers over competitors.
61
What does the author suggest should be a key performance indicator (KPI) for a North Star?
A weekly growth number ## Footnote An example given is 3 percent weekly growth, leading to 351 percent annual growth.
62
What is the 24-Hour Rule?
Shrink weeks to days and increase urgency ## Footnote Reducing timelines increases the speed of execution and communication.
63
What should be included in 'the Compass' meeting?
Mission statement, highlights and insights, upcoming actions, making people better, and ending high ## Footnote Each section serves to align and motivate the team.
64
What is the mission statement of Contrarian Thinking?
"Free Minds and Build Bank Accounts" ## Footnote This reflects the company’s aim to impact users positively.
65
What should be assessed in the highlights and insights segment?
Wins and fails, business problems solved, team achievements, insights, products shipped, revenue and customer acquisition numbers ## Footnote This helps in determining team alignment and inefficiencies.
66
What analogy does Shaan Puri use for a successful business?
A steamroller in a field of flowers ## Footnote This represents being unstoppable in the market.
67
What is the purpose of 'Financial Fridays'?
Review the finances of all businesses ## Footnote This includes personal finances and investment overviews.
68
What is a Cash-Flow Business?
Get paid, then provide service; make monthly recurring revenue; have lots of clients ## Footnote This is contrasted with cash-suck businesses.
69
What is a Cash-Suck Business?
Provide service, then get paid; make money a few times a year; have one big client ## Footnote This type of business faces higher risks if the big client leaves.
70
What is the Cash-Flow Boomerang Process?
Imagining throwing out a product or service and getting paid quickly ## Footnote It emphasizes the importance of cash flow in business operations.
71
What was the problem Dell Computer faced related to cash flow?
They had an average accounts receivable of sixty-three-plus days ## Footnote Delayed payments can lead to financial instability.
72
Fill in the blank: The goal of making money in business is to _______.
[do great things] ## Footnote This highlights that money should be a means to create positive impact, not an end goal.
73
True or False: According to the text, financial independence stems from being financially aware.
True ## Footnote Awareness of finances is crucial for stability and growth.
74
What is emphasized as a crucial factor for business success?
Cash, People, and Change ## Footnote These are the three primary focuses for accelerating business growth.
75
What is the average A/R (accounts receivable) duration that caused Dell Computer to nearly go bankrupt?
Sixty-three-plus days
76
What is one strategy to improve cash flow by changing payment terms?
Take payment at the time of purchase instead of after service delivery
77
What discount can be offered to improve cash flow?
Discount for cash payments
78
What is a line of credit (LOC) used for in business?
Backup money from the bank for financial flexibility
79
What is the recommended percentage cut in costs during an expense analysis?
20 percent
80
What is the total amount saved monthly by cutting costs by 16 percent with monthly expenses of $600,000?
$96,000
81
What process is suggested for cutting costs in business units?
Review P&L or budget and set a target for expense cuts
82
What are three ways to cut subscriptions and recurring costs?
* Number of seats * Number of tools * Renegotiate rates
83
What is the term for the effect of having underperforming employees that require constant fixing?
Splinter effect
84
What does the acronym CADO stand for in the context of cutting costs?
Cut, Automate, Delegate, Outsource
85
What is the purpose of offering a $1K bonus for AI ideas in the company?
To cut manual tasks and reduce annual expenses by $100K
86
What is the process for hiring potential employees before making a decision?
Assign a role-specific trial project
87
What are the three key points to remember when firing an employee?
* Fair * Firm * Final
88
What should you do if you suspect an employee is not performing well?
Hold them accountable and consider letting them go
89
What technology is recommended for hiring, HR, and payroll in small businesses?
Deel
90
What is Jobber used for in service-based businesses?
Quoting, scheduling, invoicing, and payment processing
91
What tool is suggested for automating workflows across an organization?
Zapier
92
What is the best tool for reducing meetings and onboarding team members?
Loom
93
What is the benefit of using Superhuman for email management?
Makes responding to emails and inbox management 10X easier
94
Fill in the blank: Winners want _______.
Pressure
95
True or False: High standards in a team are necessary for growth.
True
96
What is the result of implementing the CADO process with manual tasks?
Increased efficiency and cost reduction
97
What is the significance of a 3X multiple in business valuation?
Reflects what buyers expect to earn in the future based on annual profit

Main Street Millionaire (5 decks)

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