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Rich Habits Podcast
Crypto Treasuries, Amazon's Same-Day Grocery Delivery & Chinese Chip Sales
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- [00:00]
A
You say you'll never join the Navy, never climb Mount Fuji on a port visit, or break the sound barrier. Joining the Navy sounds crazy, saying never actually is. Learn why@navy.com, america's Navy forged by the sea. You say you'll never join the Navy, that you never track storms brewing in the Atlantic and skydiving could never be.
- [00:25]
B
Part of your commute.
- [00:27]
A
You'd never climb Mount Fuji on a port visit, or fly so fast you break the sound barrier. Joining the Navy sounds crazy, saying never actually is. Start your journey at navy.com, america's Navy Forged by the Sea Xena.com presents the rich Habits Radar a new Friday episode of the Rich Habits Podcast where every Friday morning we're coming at you with the biggest headlines impacting you and your money. My name is Austin Hankwitz and I'm joined by my co host Robert Kroke. The three things sitting at the top of our Rich Habits radar this week include the recent rise of crypto treasury companies, Nvidia and AMD's 15% revenue share with the US government on their Chinese chip sales, and Amazon expanding their same day grocery delivery to over 3,300 cities around the country by the end of this year. And be sure to stick around for the Q and A section of this episode where we answer a question from a small business owner who's trying to scale their revenue from 10 million a year to a hundred million dollars a year. So Robert, let's dig into our very first story.
- [01:37]
B
That's right, Austin. The rise of Crypto treasury companies. Why is this happening and what is the news around it? So since 2020, MicroStrategy has acquired 628,946 Bitcoin valued at approximately $75 billion. Their company's stock has surged 700% in the last year, over with a market cap of 84 billion despite annual revenue of only a half a billion dollars. And MicroStrategy is very much a company who's trying to grow in value due to the assets sitting on their balance sheet, not their underlying business operations.
- [02:15]
A
Yeah, it's actually really interesting, Robert, to compare MicroStrategy's strategy of trying to grow as a business to ExxonMobil just a few decades ago. I don't know if you guys knew this not, but ExxonMobil was one of the largest companies in the S&P 500 and that was because of all of oil, quote unquote, sitting on their balance sheet considering their drilling operations and things like that so it's really interesting to compare those two. But here's another one for you, Robert. Tom Lee, a highly respected Wall street titan, fund manager and what I like to call a perma bull. He's always bullish on the markets. He was actually appointed chairman of Bitmine Immersion Technologies in June of this year and is now steering the company toward becoming the microstrategy of Ethereum. Bit Mine recently announced a quarter billion dollar private placement to accumulate Ethereum as its primary treasury reserve asset. Kind of like how Michael Saylor is doing that with Bitcoin. But while also continuing the company's underlying Bitcoin mining operations, Bit Mine aims to.
- [03:14]
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Acquire 5% of the total Ethereum supply. The company, which already holds over 1.15 million Ethereum, valued at over $5 billion, is aggressively expanding its Treasury. This move has contributed to Ethereum's price surge, trading at nearly $4700, close to its all time high.
- [03:33]
A
And now in late July 2025, get this, Robert. CEA Industries with this new NASDAQ ticker BNC. That's the, that's the ticker for this company, right? They announced a half a billion dollar private placement to build a publicly listed treasury vehicle focused entirely on, not on Bitcoin, not on Ethereum, but binance coin ticker bnb on coinmarketcap.com David Namdar, the CEO of this company, emphasized that Binance Coin is underrated among Western investors, saying it's been cut off from the mainstream attention, a gap that he sees as an opportunity. Now the company completed their first purchase of Binance coin. They purchased 200,000 of these coins valued at $160 million, making it the largest corporate holder of Binance Coin. Of CEA still has access to up to 750 million more via warrants, potentially bringing their total Binance Coin capital deployment to over $1.25 billion. That is a lot of money to go buy Binance Coin with.
- [04:38]
B
The bottom line is that publicly traded companies are not just putting Bitcoin on their balance sheet, but also Ethereum and Binance Coin. Who knows what cryptocurrency will be next. But with tens of billions of institutional buying power flowing into the asset class, paired with 1K inclusion, according to last week's executive order. Crypto is certainly here to stay.
- [05:00]
A
You know, I was thinking about this the other day, Robert. I don't know why someone wouldn't just put at least 1% of their net worth into cryptocurrency. If that's Bitcoin, if that's Ethereum or Binance Coin or some of these other things here. But just like if you don't already just have 1%, 1%, just go put 1% of your assets into this stuff. Let it ride. See what happens in the future. But it's just so obvious that between MicroStrategy and the other, I think there's like over 50 different publicly traded companies that are buying Bitcoin. And now we have Bit Mine Immersion Technology is going to go buy $20 billion worth of Ethereum. And now we've got CEA Industries buying, you know, 1 billion plus of Binance Coin. This is the, you know, the institutions that all these crypto investors have been wanting for the last decade.
- [05:48]
B
Yeah. Last night someone in the Rich habits live they brought up how much should I really have of my net investable capital in cryptocurrency? And I looked it up. I was like, what are all the big dogs saying right now? And you nailed it. Fidelity, BlackRock, they're all still saying 1 to 3% of your net assets should be in cryptocurrency. I think it should be higher. I'm a huge bull of cryptocurrency. But, but I agree. I don't understand a world where people are sitting on the sidelines still in cryptocurrency. It's here to stay, like we mentioned. And I think it's a great place to park some of your money for long term upside potential because adoption is happening right before our eyes. And speaking of 401ks, if you're a side hustler or you earn any kind of money Outside of your W2 job, you need to be using the Xena card to pay for and track your expenses. Xena is a business expense card that uses AI to help freelancers put expenses in the right spending buckets. Maybe you drive for uber delivering doordash or you have an online agency of some sort. Zena is how you track your spending and save more when tax time happens. Here's how I use my Zena card. You all know that I'm currently flipping homes in Toledo, Ohio and it's easy for me to mistake buying materials for one of the flips and then expensing it to another. Which is why the Xena card has been a game changer for me. Because now I have proper tracking in each of my buckets for for every flip and project I'm doing. I love the Xena card.
- [07:23]
A
I couldn't agree more. I also love using my Zena card. Christian and I have a marketing consulting business that we've been building for the last half decade. Xena helps us bucket our spending by customer, making it easy to track during tax time. Figure out who we paid, who paid us, and where to attribute those profits. So please go to zena.com forward/rich habits that is z e n a.com rich habits and open up a Zena Card. And when you use our Referral, you'll get 10% cash back on the first $500 you spend with your Xena card. And that's on top of the existing awesome spending rewards that you get just for using Zena. So seriously, if the Rich Habits podcast has provided value to you throughout your investing journey, do us a favor. Go open up a Zena Card. We are big believers in this partnership. We love what they're building and we firmly believe that Xena will positively impact millions of small business owners around the country. Now, with that being said, Robert, let's jump into our second story, which is Nvidia and AMD striking this unprecedented revenue share deal with the United States government. So in one of the most unusual tech trade deals that I've ever seen, Nvidia and AMD have agreed to give the Trump administration, specifically the U.S. government, right, a 15% cut of all revenue generated from their AI chips specifically sold to China. And in Exchange for that 15% cut, Nvidia and AMD will be able to continue selling their H20 and Mi308 chips to China. So here's why that's important. Both of those chips have been blocked as sales to China since about April. Since the US China trade tensions have been rising. But now that both these companies have the green light to sell to China again, it both unlocks billions of dollars of revenue to the companies and potentially billions for the United States. Since they're taken 15% Nvidia stock is flat on the while AMD is actually up about 10% this week.
- [09:24]
B
So let's discuss why does this matter? How does it move the needle for you? On the surface, this is about access to the world's second largest AI market. But strategically, it's all about control. The US is using licensing as leverage to keep a tight grip on the AI supply chain while ensuring billions in revenue flows back home here to the U.S. national security critics are still concerned these chips could strengthen China's AI and military capabilities. But the Trump administration argues the H2O and the Mi 308 are not top tier chips, instead designed more for inference tasks than for training cutting edge AI models.
- [10:04]
A
And for investors, this is Actually a double signal. First, Nvidia and AMD are proving that they're going to adapt and pay to maintain access to China. But second, Washington just set a precedent for monetizing export approvals in these high stake industries. So if this model does does work, which Treasury Secretary Scott Bessant we'll talk about here in a little bit, thinks it will continue to work, we could start to see similar revenue share arrangements in biotechnology, quantum computing and maybe even green tech in the future.
- [10:36]
B
The bottom line is that Nvidia and AMD didn't just sell chips to China, they bought a permission slip from Washington to do so. And in the process they have rewritten the rules for how US Companies navigate geopolitics, trade policy and multibillion dollar market.
- [10:53]
A
I've got a feeling that we're going to see more of these revenue share arrangements in the future under the Trump administration. I think Trump right now is trying to figure out any which way to generate revenue for the United States. Obviously tariffs have generated a couple hundred billion. We talked about that. I think it was maybe two weeks ago on the rich habits radar episodes here. But I think the Trump administration is trying to figure out how do we generate revenue for the country right now to offset the ballooning debt and the interest pay that come with that.
- [11:22]
B
I agree 100% and I think it's great strategy. Find new ways to lower the national debt in the United States. And I think this is a good way to do it. And I agree with you 100%. We're going to see this across all sectors if this works out well with AMD and Nvidia, and I believe it will. So that leads us to today's third topic in the rich habits radar. Amazon just made a major move that could shake up the grocery industry. They're rolling out same day grocery delivery in more than 3,300 U.S. cities by the end of the year. This service is already live in over a thousand cities. But this expansion marks one of the biggest logistical pushes we've ever seen from Amazon outside of the holiday season. Prime members get it free on orders over $25 while non members pay $13 no matter what the order sign.
- [12:14]
A
This is great Robert, because like it's so funny. I tried to get coffee creamer from Amazon the other day and it's like a $6 coffee creamer but they tried to charge me like all in the price including the Delivery is like 40 bucks. And I'm like I'm not going to pay that. I'll just go to a Kroger and pick it up. But yeah, Amazon, they're now targeting that weekly grocery run. So think your produce, your dairy, your meats and other household staples all arriving at your door the very same day. That's a direct hit to our traditional supermarkets, which is why Kroger and Walmart stock are both down today on the news. Now, this move also puts Amazon in direct competition with deliver giants like Uber, Door Dash, and Instacart, all of which just posted strong earnings and confirmed US Customers are sticking with delivery despite economic worries and job loss and whatever's going on behind the scenes in the US Economy. Now, Amazon's unmatched logistics network means that they can undercut on both speed and pricing, making them a serious threat to players that have dominated this online grocery space in the past. So keep an eye on Uber, DoorDash and Instacart.
- [13:18]
B
Here's why it matters. For all you Amazon investors out there, like Austin and myself, the company's grocery footprint has always been the missing piece of its retail dominance puzzle. And if they can lock in the same loyalty they have in E commerce into Grocery a $1 trillion market just in the US it's game over. For a lot of those regional players out there, this is less about delivering bananas and more about capturing entirely new recurring revenue stream. Amazon just signaled they're coming for your fridge, your freezer, and maybe even your favorite local store. And they've got the infrastructure to do it faster than anyone else.
- [13:54]
A
I'll tell you what, Robert. I've got a ton of Amazon stock and now that I can buy my groceries on Amazon, I think I might just buy some more.
- [14:01]
B
I agree. We've been bullish on Amazon for a long time and this is another big, big move that they've been trying to do forever. And it's going to be interesting to see what happens with the stock price in the next 12 to 18 months.
- [14:15]
A
All right, y', all. So let's now round off this sort of headline with the rapid fire section of the episode. Robert and I bring our three favorite headlines from throughout this week, give you the quick and dirty on them and then reflect a little bit at the end. So my three headlines are perplexity's 34 and a half billion dollar acquisition offer to buy Google Chrome. Treasury Secretary Scott Bessant asking the Fed to cut rates by 1 1/2% and Kava stock tanking 20% after earnings. So let's kick it off with the first one here, Perplexity. This is one of the boldest tech acquisition offers that I can recall in recent memory. AI startup Perplexity has offered $34.5 billion to buy Google Chrome's browser, probably the browser that you're watching this on right now, or the one you use every day. The funny part is Perplexity is only worth about $18 billion themselves. So how does that math shake out? You tell me. Now, the timing isn't random. The DOJ recently won an antitrust lawsuit, forcing Google to consider divesting Google Chrome, which accounts for massive share of global web browsing and ad targeting. Perplexity says their investors are ready to fund the deal, positioning it as a way to level the search playing field going forward. But Google hasn't shared any comments and this move, in my opinion, actually signals Perplexity's willingness to take some wild swings, swing for the fences and see what they can do. We heard, I think about was it Robert seven or eight months ago perplexity tried to merge with TikTok. So they they're just trying to figure it out and do what they can along the way. Now this next headline, Robert, really caught my eye. Scott Besant broke his silence about the Fed cutting interest rates and urged the Fed to cut interest rates by one and a half to 1.75%, potentially even a half a percent rate cut starting in September. Talked about how the labor data was showing a weaker job market. Hinted at this new revenue sharing model we just talked about with Nvidia and AMD and how that could expand to other industries. There's now a 95% chance of a rate cut taking place in September after we saw inflation come in lower than expected earlier this week. So I think rate cuts are around the corner. We need to be positioned accordingly. Now, the last thing I want to highlight here is Kava's stock price tanking 20% after their weak earnings. The main reason for this 20 drop in stock price was the company slashed their forward forecast of sales growth for the year from 8% growth to only 4%. Revenue during the quarter came in at 280 million, which was 5 million below expectations, although profits were slightly higher. Kava also announced an investment in Hyphen, a restaurant automation startup backed by Chipotle. To speed digital orders and prove accuracy. The stock is now down 40% year to date. I don't own this one. I don't think I'm going to own it anytime soon, but I do remember when it was valued at like $150 a share, it was implying that every location of Cava was worth about $100 million, which you could compare that to Chipotle, Jersey, Mike's, Lily, any of these like fast casual restaurants. It is just a bonkers number. So if Kavasak continues to drop, maybe I'll buy some, but I will continue to eat there because they have some really really good food.
- [17:23]
B
They do. And I remember when you brought this up the hundred million dollar per store value which is just absurd. There is no fast casual restaurant out there that has that unit price. So let's get into my talking points today. My three rapid fire moments and that is number one, the bullish IPO. The crypto exchange bullish IPO'd on Wednesday and they'd originally priced their IPO at $37 a share, which was well above the initial $29 expectation. They raised just over $1 billion from the offering. This included selling 30 million shares to the public plus a 4.5 million dollar allotment option. Institutions are lining up to invest, including heavy hitters like BlackRock and Ark. I didn't buy the IPO because so many of the IPOs we've seen over the last few months have been way overpriced, especially for retail. So it's a wait and see moment for me. For example, we talked a bunch about Figma and that climbed as high as $130 a share and now is back down 35% already to $80 a share. So just be patient. Now, speaking about IPOs, I am excited to learn more about StubHub IPO is on track for September after pausing in April due to Trump era tariffs, StubHub is restarting its IPO process and a public debut later in September. Under the ticker stub Q1 revenue grew 10% to $400 million. Operating income hit 27 million, but net losses widened to 36 million. The company faces heavy competition from Ticketmaster, Vivid Seats and seatgeek while aiming for a valuation that previously reached as high as $16.5 billion. I can't wait to dig into this further and see how this one shakes out in the coming months. And my last point today is FHA loan delinquency. 40% of FHA backed mortgage holders missed at least one payment in Q2 of 2025 alongside increased delinquencies on student loans, raising alarms for economists about possible economic stress triggers. I think this is a really good point to study because so many people are first time home buyers or lower income buyers using the FHA product. So I wanted to keep an eye on this and make sure you're all aware of it because like I said, it could be a trigger for worse things to come in the economy.
- [19:47]
A
Yeah, I mean, we're seeing credit cards at all time highs. The job revisions came down by a quarter million jobs. I think it was in May and June. And now to your point, you're saying between April, May and June, 40% of FHA loans are missed. Right. So I agree there's a little bit of turbulence happening in this market. I think we should cut these interest rates. I, I really hope that some of these deals that we're striking up in Washington are able to help the everyday person, if that is with lower taxes, more job opportunities, whatever's going on here. So fingers crossed for the economy for sure.
- [20:20]
B
Yeah. We have to look at both sides of this. You know, you have the haves and the have nots, and the everyday person, it's no secret, has been struggling to pay bills with inflation and high food costs and everything else. So I think it is something for us to keep an eye on because some of these smaller triggers end up leading to bigger problems. So that's why I shared it today.
- [20:41]
A
So let's jump to our very first question of the Q and A section of this episode. Remember, these questions are all about small business ownership. If you're a side hustler, an entrepreneur, a small business owner, maybe you're the CEO of a publicly traded corporation and you want Robert and I's advice, we are here to give it to you. If you have a question to ask us, email us at rich habits podcast gmail.com put like business question Friday episode something in the subject line so we know it's about this type of topic or DMS on on Instagram at Rich Habits Podcast. Our first question was actually asked to us on Spotify, which we don't get that many Spotify questions, but this was a good one. The question is I'm a majority owner of a medium sized healthcare business with revenues of over 10 million a year. I love to work, but there never seems to be enough time to take care of my personal life. My goal is to grow the company to 100 million but also be the husband I know my wife deserves, spend time with my newborn baby, hit the gym a little bit more and make time for church. What point did you both decide to get personal assistance to help you coordinate life? Robert, I'd love to get your perspective on this question about the personal assistance and then also your perspective on how our friend here can grow his revenues from 10 million to 100 million.
- [21:58]
B
I think it's a great question, but I'm perplexed because these two questions, in my opinion are counterintuitive with each other. Other, you already have a company that's doing 10 million plus. I assume you're making really good money, but yet you want to grow it to 100 million. But then on this side of your life, you want more quality of life and more freedom. So I got asked this question by an ex of mine. She said, you're so smart, why are you not trying to become a billionaire? So I had to explain to her, I said, if you want this quality of life, I can't be working towards becoming a billionaire because I'm already happy with where I'm at that. So to cover the scale part, could you take this company from 10 million to 100 million? Absolutely. There are things you can do along the way to grow the company. But do you really want to? And you have to ask yourself why? Because on the other side of your brain you're saying, I want to spend more time on my health, my children, my family. So why do you want to scale and try to do this? I don't understand. So for me, I would pick which one is more important, Is it family and health, which I think is always the most important one because we can always make more money, but we only get one body and one family. So my thought would be focus on the family, focus on the health, and then introduce right now, today. Figure out where you're missing. Where are the gaps in your life that an executive or a personal assistant can help? You might want both. You might want to hire a COO or whatever position you have to replace you, and then you do it part time and then also have a personal assistant to help you with the day to day tasks like I do to get those off of your plate. But it's definitely time. And with all the technology we have in front of us right now, it's easier and easier to get an assistant that can help you do all the things and get them off your plate so you can enjoy a better quality of life.
- [23:49]
A
That's a great answer. So tactically speaking, here's where I am for both those questions. How do I grow my business from 10 million to 100 million? Assuming there is demand for your business where you can have a path to a hundred million dollars a year in revenue, it's very simple. How do you go from, from 10 million to 100 million, you hire 10 times more people than that, are probably working at your business right now. You, you decide to have a lower profit margin, right? A lower percentage profit margin, but you're, you know, adding a lot more revenue on the top line, which generally translates to more real number profits at the end of the day. A good example of this, right, is like Gary Vee, he has an agency, does a couple hundred million dollars a year. He's got like nine locations of this agency around the world. Hundreds if not thousands of employees working at this agency, right? It's like there's demand for your product, right? You can absolutely go from, you know, 10 million a year to a hundred million. You just have to surround yourself and hire a list awesome business executives and business operators that can help you scale your personal time. That's the only way that you can 10x your output as a small business owner, in your case, a large business owner, is by hiring the right people. And so in my opinion, that means maybe you need to now hire a chief operating officer. Maybe you need to stop being the CFO yourself. Go hire a cfo. You need a chief of staff now you need a chief business officer, a chief revenue officer. Maybe you need a chief HR person. Like, hire a team around you that's going to then hire more people beneath them to figure out how to now take this business from 10 to 100 million in a way that you are still spending the same amount of time every day on the business, but now fast forward, you're making 10 times more money. Now, about the person, Personal assistant reminds me of Harvey Specter from Suits and Donna, right? Like, Donna was that person who knew everything about Harvey, helped him with all the stuff. If it was personal, if it was business, like, they were connected on every type of, like, wavelength in their brain. You need to go hire a Donna. And Donna's are not 90,000 a year, they're 200,000 a year, right? So it's like, if you truly want to, like, if you value more time with your newborn, more time in the gym, more time to, to do things that make you happy, you need to figure out what that means to you from a dollar perspective. How much are you willing to pay someone to figure that out? At what point did I decide to get a personal assistant to help coordinate my life? I decided from day one that I need to have a co founder in my own business. And by the way, my business has millions of dollars a year, and that co founder allows me to step away from the business. When my dad dies, for example, and he runs it for a whole week by himself. Like, I have that flexibility because of that. And so like, if you're looking for that flexibility, you have to have someone that works alongside of you to make sure can run independently without you. That's what you're striving for.
- [26:32]
B
I want to click back on this about two quick points. When I built Silly Bands and we went from 17 employees to over 3,000 employees in the course of 18 months, I didn't move fast enough. So I want to put that out there for anyone growing. Move quicker. Like Austin said, hire the experts, hire the A team members. I was slow. I was trying to raise up people that had already worked for me, family members and train people in jobs that they weren't used to doing. And I didn't move fast enough. And that was a big mistake that cost me a lot of money. And then number two in your instance, as is in mine, make sure you understand the difference between a personal assistant and an administrative assistant. Donna is the administrative assistant. A personal assistant is someone that does your dry cleaning, washes your car, and maybe get your coffee. You need an administrative assistant because then they can take off all of these duties that happen day to day that are in your life to help you be able to have the quality of life you desire.
- [27:28]
A
Every successful CEO that I've worked alongside of and worked for have had personal assistants. And those personal assistants get paid hundreds of thousands of dollars and they do business and they do personal and they do all like it's, it's a, it's a mix, right? Go find a person that can do that for you. Pay them what they're worth, which is hundreds of thousands of dollars and find time in your day to unlock to do the things that you want to do do. Really good question. Our next question comes from an anonymous listener. They asked to stay anonymous and we respect that. They say. Hey guys, I love the podcast. I've been listening since the beginning and I've shared several episodes with friends and family. I'm a first time mother, struggling to gain and retain clients in my business as I'm trying to work remotely until I am emotionally ready to go back on site to a job. I have my BA in Accounting, MBA in Accounting and Finance and I have various experience from accounting and auditing. I have an accounting, bookkeeping, financial management and notary business, but for years I've been struggling to retain monthly clients. I tend to only get business during tax season. I've tried Facebook, groups, social media, upwork and Fiverr with no results. I've also tried the friends and family thing, but that didn't Work out either not really good or comfortable with networking events either. With you both offering financial consulting, I want to know, how did you gain your clientele? I know my business can thrive and give me the flexibility and freedom I'm looking for as a new mom. I have tons of experience, knowledge and products that should be profitable at this point. But I just am not looking for tips and advice and actionable insights that I can use to work on building my business. Robert, kick this one off.
- [29:04]
B
Yeah, I'm gonna have to give a little tough love here. I think there's probably something wrong either in your delivery, your services, or your pricing because you offer great services that we all need. But you're missing something if you're losing the clients. Now I get it. Seasonal. But generally people that find an accounting firm stick with them for a very long time. So if you're losing these clients year over year, you're probably doing something wrong. The second part of it for me would be eyeballs. Eyeballs. Eyeballs. You say you're not good at networking, but you can hire somebody for very little money. That's good. With social media marketing, what sets you apart? What about your service is different or better or. Or just gives you the eyeballs you need to find new clients and retain them. Because you have to think of it from like these multi billion dollar companies like Nike and Lululemon. These companies advertise year in and year out, week in and week out, all the time, for decades because they want to make sure they stay relevant and in front of people's eyes. And that's what I believe you're probably lacking. We have limited information here, but I would say look at your marketing. What are you doing to become relevant and stay relevant? Look at your pricing and do comps with other companies around you in the region to see if your pricing makes sense. And then also maybe do outreach to some of your clients. Hey, Bill. Hey, Betty. I saw that you didn't do work with us last year. Just wondering what we did wrong or what we didn't do to retain your business. Because I'd like another shot with you. Could you give me some insight of why you left the company? I would do all of those things and look from within first because you're in a great industry and you should be thriving and making money.
- [30:48]
A
You definitely are in a great industry. There's a lot to be excited about. A couple things I want to call out. You mentioned not being emotionally ready to go back on site to a job. That might be because you are a First time mom, newborn, like I can't relate to that. So only you know the answer there. But if it's something else, you know, you mentioned that you're not comfortable going to networking events. Maybe that's an anxiety induced. So maybe there's therapy that should start to kind of come into equation here that can help you transform into the best version of yourself so you can become this incredible business owner. I would highly recommend that or you know, explore that. The next thing I'd think about here is and maybe this is like not the answer you want, but for example, I use Stephen Gabrielson, he's my accountant and he owns Creative Advising, that's his firm. And they've got, I don't know, four or five employees. They all work remote, they're all incredible. So maybe there's a world where you shouldn't be the overall business owner, but maybe you should be the, the kind of person that works at one of these as a part time employee. But you're still remote because you mentioned the flexibility of a new time mom and like wanting to have that like. So maybe there's a world you can do both, right? Maybe there's a world where you can take the skills you've already learned from, you know, your, your bookkeeping and your strategy and things like that with accounting and financial management. Go take that over to a firm like Creative Advising or some other, you know, some of these mom and pop firms that have, call it 50, 60, 70 clients that they do bookkeeping for and financial management and tax pre. And you can be one of this hybrid, right? It's maybe best of both worlds. I would highly recommend looking more into that. Now, assuming you don't want to do any of those things and you still want to try and figure this out. Eyeballs, that's it, right? If it's social media, if it's mentioned, Facebook groups aren't working for you. Maybe there's Reddit subreddits, maybe there is documenting the journey of trying to become a stay at home mom that is doing all this stuff like just make content about what you're doing. Get that content in front of hundreds, if not thousands of people. People. One of those 1,000 people that watch that might be a business owner that you might now have a warm lead to having a new customer. That's how anyone gets customers, right? They have marketing, they spend money on getting eyeballs and then 1% of 1% of 1% actually turns into a customer that saw the ad. That's really the name of the game. There. So if I were you, I would explore therapy, I would explore working under an existing mom and pop type accounting firm that could give you the flexibility that you're looking for. And if none of those things really make sense and you truly want to just like work on this on your own. Marketing, marketing, marketing eyeballs, you know, make sure you've got the right delivery, the right packaging, the right pricing, everything of that nature.
- [33:23]
B
So it takes time and it takes diligence to get those eyeballs. And then once you do, then you can snowball that into more and more business and more and more growth. Just like we have to build this into a top 10 business podcast on Spotify, you can do the same with your business.
- [33:39]
A
Now our final question comes from Brad C. Brad says, I'm looking at a potential business opportunity and I would like your input. There's an established Edible Arrangements for franchise for sale in my town. Listed at $175,000, it's currently the only location serving two counties and from what I've learned, it ranks at the top 10% for sales in the state of Florida for this brand. I've worked part time for the current owner for the last three years, so I know the operation fairly well and I've seen the opportunities and inefficiencies firsthand. The owner is only about 25% involved in the day to day where I would be 100% engaged as a full time owner operator. There are three delivery vehicles that are well maintained but they do have high mileage so I'll likely need to have them replaced eventually. The lease is in place for the next few years. I'm transitioning out of my current part time role and hoping this can be my return to full time business ownership. I'd be content with a take home income of 80 to 100,000 a year and I come from the restaurant and bartending background so I'm extremely detail oriented when it comes to food safety and cleanliness which works in my favor. My partner has 23 years of leadership experience in the corporate world with a deep understanding of business P and L and would be a sounding board and a support system system when it comes to this. How do I determine if 175,000 is fair? How do I make sure that I make 80 to 100,000? How do I think about franchise specific costs and obligation if owner financing isn't available? How do I finance this? Give me the breakdown of how I can turn this idea into reality.
- [35:08]
B
I'll take this one Austin, because you know I've owned franchises for the last 10 or 12 years. And I've had some wins and some losses. But let's start at the beginning here. First of all, let's talk about sales. We don't have that listed in the question, but I'm going to assume, based on the numbers I looked up, the average Edible arrangements does between 420 and $690,000 a year. So with that being said, let's say it does $525,000 a year in gross sales at 175k, that would seem like a pretty good price. But you have to understand the profit margins as well, because remember, remember, Edible Arrangements is very seasonal, so you're going to have a lot of down months with high labor, probably losing money, depending on how good the lease is. So you need to be careful there, because this is kind of like, I look at it like a yogurt shop. I don't want to own yogurt shops because they're not busy all year round unless you're in Florida or some really hot state. So that's why in Edible Arrangements, I'd be careful. So the first thing I would look at is, is I would ask the owner for the last three years of books to find out what the owner's income. What is that net net profit on this business to the owner? Because assuming you do 500,000, 550,000 in sales, and let's say you have a 15% margin, so that's going to get you close to that 75 or $80,000 that you want to earn. But that's under the assumption of a 15% net net profit margin margin. So that's what I would do. First and foremost, go get a look at those books, have a professional look at them, make sure that they're correct, and you can figure out what is the profit of the business. Then I would start searching around. Do you have a friends and family person or people that could help you buy it? Or maybe look at an SBA loan. That is another way you could possibly get the funding for this. But also go to some of the smaller regional banks. Maybe there's a world where they would give you a small business loan directly from the bank or the credit union union, rather than going through the SBA process, because that can be lengthy and sometimes arduous from a paperwork perspective. But that's where I would start. What are the profits? Understand the lease terms. Make sure you understand all the overages, if there are any, in the lease, so you can get a true north Star of what the profit is currently and you know, to to really know where you're at because sales don't mean anything if the profits aren't there.
- [37:33]
A
And the last thing I want to add there to your awesome summary Robert is you mentioned these vehic schools, right? The high mileage, things like that. If I were you, I would open up a Zena card and specifically use it for some of that delivery and transportation expense. Right? Because in a perfect world you're able to expense away and completely understand how much were these oil changes, how much are you spending on gas, how much are you spending on insurance like things like that. And sometimes business owners aren't able to properly track that expense. So if I were you, I'd make sure to open up a Zena card. I'd have one of the buckets, spending buckets be transportation and delivery of these edible arrangements so you can properly track your expensing on that category so you can write it off your taxes come tax time and you're saving more every single year going forward. Robert, what a great breakdown you shared.
- [38:19]
B
Thank you, I appreciate it. Just make sure any of you getting ready to buy a business or renew a lease, have a professional take a look look through everything. I looked through a lease yesterday and we did a call for 45 minutes going over the terms of a deal, a very large deal for me and they never mentioned the added rental amounts that we would have to pay in the lease. They gave me all the terms, we went through them. Then I look at the lease last night, it had an entire addendum of other charges where I had to pay the pro rata share of this entire building for fire and insurance, property taxes and all these other things that completely changed the scope of what this business could make profit wise wise. And they didn't even mention it. So always remember in a negotiation these are not your friends. They are people that you know, maybe you've worked with them and worked for them. But at the end of the day you have to protect yourself. So make sure you understand all the terms and you get all the proper paperwork before you sign anything.
- [39:19]
A
Thank you so much for joining us on this week's episode of the Rich Habits Radar. Be sure to let us know what your thoughts are on this new third episode in the Spotify comments below and vote in the poll below. Did you buy stock in the bullish ipo? Did you not let us? We always want to know what our audience is thinking and doing on a week to week basis. So vote in the poll. Leave us some comments and feedback on what you guys thought about this episode. And if you have a question for future episodes, email us@richhabitspodcastmail.com ask us via Instagram dms@rich habits podcast and don't forget go to xena.com richhabits and open up a Zena card for yourself if you're earning money as a small business owner. Side Hustler Solopreneur Whatever you're doing, Zena is going to be able help to help you.
- [40:02]
B
So thanks everyone. Starting a business can seem like a daunting task unless you have a partner like Shopify. They have the tools you need to.
- [40:11]
A
Start and grow your business.
- [40:12]
B
From designing a website to marketing to.
- [40:14]
A
Selling and beyond, Shopify can help with everything you need. There's a reason millions of companies like Mattel, Heinz and Allbirds continue to trust and use them. With Shopify on your side, turn your big business idea into Sign up for your $1 per month trial@shopify.com specialoffer and.
- [40:32]
B
We'Ll see you on Monday.