Transcript
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John Hope Bryant (2:07)
Welcome to Money and Wealth with John Hope Bryant, a production of the Black Effect Podcast Network and iheartradio. Yo yo yo. This is John o' Brien and this is the Money and Wealth podcast series season two on the Black Effect Network on iHeartRadio and I wanted in this episode which is being recorded during Black Business Month. It's not well known that August is Black Business Month. And I want to commend iheart and Black Effect Network for focusing on it. I wanted to address the obvious and I also owe you an apology. As an entrepreneur and a businessman, I think I've taken some things for granted and many others have taken it for granted. I think we take for granted that people open the Wall Street Journal and know what's being said in it. These phrases, these euphemisms, these, you know, what's the sec, what's the fdic, what's a spec, what's a, you know, what's, what's a leverage buyout. So I've tried to break down some of these myths. If you go to season one, I go through a lot of the basics, right, about how what does this mean and what does that mean? And you're going to start seeing me go from industry to industry and break this down. But one thing I've never broken down, and it just dawned on me that I needed to do this because I never really broken down how to start a business like the basics. And one of the reasons this became so powerfully important was recently I was having a discussion with somebody I love and care for and respect who is highly intelligent. And we had an actual debate about what they thought they were doing in building a business. And it took me a while to understand that they didn't understand what I was saying. And it was my fault. I had never explained, no one's ever explained it to even successful black people, educated black people, what these terms are again. And so this individual is incredibly, incredibly smart. One of the most smartest people I know had a history of running up really professional services contract enterprise where they got contracts for their talent, but they weren't on a payroll with someone. They were effectively a self employment project. They had no employees, they in most cases had no contractors. It might be episodic from time to time when there was an event or something. They had no health insurance responsibilities, they had no payroll responsibilities, they had no property tax responsibilities. They had no balance sheet and income statement other than make sure their inflow exceeded their outflow. They had a contract with in many cases a corporation or government to provide a service. And the presumption was that's a business. Well, it is a form of business, but that's not building a business that you can sell, right? And the whole point of building a business, please hear me, is to monetize it, create value and to have a liquidity event to sell it. Right now somebody's going to say no, no, no, no. John Walmart never sold or Amazon never sold, or Microsoft Bill Gates never sold or Meta Facebook never. So they'll come up with these examples. But the very fact that those companies have gone public means that they sell every day. They sold when they went public. The founder got, our founders or founding family got a check. Probably a big one. Probably they got a big one and they're still getting checks. Their families do dividend payments, et cetera. They still own shares. But the public is buying and selling that company every day based on its perception of its continuing success. So whether you're a small business and it's private equity, private equity, literally your cousin, your father, your friend or, or, or a firm that's in the private equity business giving you an investment, private equity or it's the public equity market going public, right? The whole point is there is they're backing this enterprise to grow it so that the leader of the enterprise prize can sell it. So everybody wins. Right now you can't do that. You make money during the day, you build walls in your sleep. In order to do that you need compounding, you need employees, you need infrastructure, you need real estate, you need locations, you need something other than you running around with a personal service contract. So I'm not today talking about what most black businesses are comprised of.95% plus of all black businesses are effectively self employment projects. They have no employees. And so when you wonder why we are not building wealth and I'm also going to break down in a separate podcast how to own and buy a home, that's another presumption I think we make that's incorrect. We should not assume people know the hows here or the whys or the what's. So I'm breaking this down. And by the way, being a small business owner, which is incredibly important, is very different from being an entrepreneur. They're first cousins but they're different. And I go through that also in season one. This is season two of Money and Wealth. So tell all your friends to download Money and Wealth and go back to season one. I'm giving you an entire university, a library, a ministry of finance if you will, in free enterprise and entrepreneurship and capitalism, even in bite sized chunks. So now before I get into how do you start a business, whether it's a self employment project, a personal services contract fulfillment firm of one, or whether it's a business with that has scale, employees and infrastructure, I'm going to walk you through literally the steps of taking your dream and Making it real, okay? Because that should not be presumed that people know how to do that. And that doesn't mean that somebody's unintelligent because they don't know how to do that. It means no one's taught you. It's what you don't know that you don't know that's killing you. But you think you know. By the way, I'm an entrepreneur. I'm a. I'm a business owner and I used to be a small business owner. I grew a small business into a boutique business, into a reasonably sized business. I would think it's a big business because one of my businesses I sold for $120 million. Maybe it's a mid sized business by big boy standards. And then one of my enterprises is a large enterprise because that budget is north of $65 million a year. So I have experience from the smallest to the largest. But an entrepreneur is somebody who creates something from whole clothes. Whereas a businessman or businesswoman takes an existing business plan and scales it and operationalizes. So a businessman, businesswoman is taking basically an existing concept, a dentist's office, chiropractor office, a healthcare office, whatever, right? A service and making that thing work. Franchise businesses are good examples of existing business plans. An entrepreneur like me is nuts. Creating new ideas from nothing and backing, backing them with, in my case, my own and others, private equity. Okay? And so in some cases I'm my own venture capital firm, if you will. For myself at least, that's what I have been. So let me now give you first a brief history of business and why this is relevant to you, particularly during Black Business Month. Business has always been one of the most powerful ways to build wealth and independence in America and around the world. I'm thinking about my friend, my brother Strive Masiyiwa, who is the Bill Gates of Africa, who's a billionaire and an up from nothing entrepreneur from Zimbabwe. So successful in Zimbabwe, they don't. The government is afraid, I think that he wants to run for political office there. So he can't even go back to his own country. Not because he's a criminal, but because he's so successful, folks are intimidated by him. But he is doing fiber optic cables throughout the African continent. He was one of the first to bring cell phones to the African continent. I believe the first cell phone provider in Nigeria. And he runs a multiplicity of businesses there. Is enormously successful. You find your hero, your she roll, whatever continent you live on and study them. Okay? So this is a way for independence. All money is Is freedom right in the and and you cannot have freedom without self determination. And you can easily understand financial literacy. Hello. What we're talking about here. Financial literacy is a civil rights issue of this generation. Why I founded Operation Hope and why I want you to go get financial coaching and counseling. Why I've raised and deployed $50 million plus a year in in money used for scholarships for coaching is building economic infrastructure. 1500 offices across the country for you to plug into the one million black business initiative. One MBB as an example, is a resource for you to plug into in partnership in that example with Shopify. Okay. In early America, immigrants, settlers and free and freedmen alike often turned to business when other doors were closed. Owning a shop, a farm or trade gave families not just income, but dignity and independence. For black Americans, business was often the only path after slavery. Many could not access land ownership or fair wages. We literally worked for free. That was sort of the whole point of slavery. It was bad capitalism, wasn't personal, became personal later on. But it started. It didn't start out personal. Started out as just bad capitalism, free labor. So they built their own when they could not get that opportunity from others for their own barbershops, beauty salons, insurance companies, newspapers and banks. And because no one else would serve our community, people didn't want to cut our hair. So we had to cut our own hair. They didn't want to give us medical services. We had to do that for ourselves. That closed market, okay, that segregated market created wealth for those who serve with excellence the black community in that example, because no one else would serve them. And so people who did well were looking for quality services. And smart black businessmen and women fulfilled that. And so thus you had black Wall street in Tulsa, Oklahoma, which is cited often, which became a symbol of this power. And there are other places, by the way, places in the Carolinas and others and of course Harlem later on. But the entire communities, one in South Central, by the way, that was very impressive and little, little well known on Central Avenue. Entire communities built on ownership. Ownership that happened to be black. Globally. The story is the same from Jewish merchants in Europe, by the way, it was illegal for Jews to own land in Europe. They were discriminated against. It ran all around the world for most of 6,000 years. So they had to learn finance and financial literacy because they couldn't own land. So they figured if they financed the land and understood how to. Banking was not a dignified business back then. Investment banking less so. Being a merchant banker even less so. These folks took these Businesses that nobody else wanted and became experts at that through financial literacy and through finance controlled land and businesses. And it's one of the great success stories in the world for a group that was and continue unfortunately to be hunted around the world and discriminated against. But still they rose and I commend them for that. Goldman Sachs. By the way, did you know that half of all Jews are dark? It's a whole nother conversation another time. That's literally true. Goldman Sachs was a guy named Goldman and a guy named Sachs who could not get a job on Wall street. No one would hire them. So they literally just went door to door selling financial services and build that up slow by slow, little by little. And that became, well, Goldman Sachs, the firm you know of today as an institution. Every big business was once a small one. So you have the example of Jewish merchants in, in in Europe. By the way, blacks and Jews share a shared history, even a shared DNA going back 6,000 years. And I will do a separate podcast just on the history of business and trade and commerce and capitalism. So come back for that and how it crosses with culture and how some folks want us to all be in a constant argument with each other.