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Nick
If you get to 5 million EBIT, the buyer pool opens up massively and I can get you 13x. So now I'm looking at $65 million, but I've got never have to work again money. If I live in relative modesty and I'm careful, the instant you have the ability to cash a check that really would satiate your financial needs for life, three to five million dollars is going to yield you enough. Again, it's not private jet money, but it's forever money.
Reuben
You were talking to me about your process of research and it was so similar to like a method actor.
Tim
Well, I need to know what they're doing, thinking and like what are they going through. If I can get on phone calls, I prefer that 10 times out of 10 a lot of copywriters will be like, just read Amazon reviews, it's great, but it's static and so I can't ask further questions. And I can't ask how did that make you feel and why did you feel? I can't go down like a rabbit hole with the person.
Nick
I met a guy named Reuben Handel. Who's the. He was the top M and A advisor in the agency space, period. And I talked to him, I wanted him to be my M and A guy when I thought my business partner or my business mentor wasn't gonna be able to do it. And Ruben goes, you're way too small for me. He's like, look, if you can get to 5 million EBIT, I can get you 13x because your agencies your size trade to 6 to 8, because 6 to 8 in M&A is low. You know, SAS trades at 30. So he goes, if you get to 5 million EBIT, the buyer pool opens up massively and I can get you 13x. So now I'm looking at $65 million in about two years time. Wow, $65 million. Now I've got money, but I've got never have to work again money. If I live in relative modesty and I'm careful. $65 million is a whole different stratosphere.
Reuben
I'm not lazy. I could spend it and I drive.
Nick
A four year old Honda. Here's what's funny about it though, is my advice to everybody. I'll go for the 65 million the second time. This, the moment, the instant you have the ability to cash a check that really would satiate your financial needs for life. Which by the way, I think for Everybody is about 3 to 5 million dollars after taxes, depending on where you live geographically. Because you can expect a 5% return after inflation and 3 to 5 million dollars is going to yield you enough. Again, it's not private jet money, but it's forever money. The thing about being an entrepreneur, I'm such an effective entrepreneur now because I'm not worried. I'm not scared of anything. I have my fortress of solitude. So if you have this shot at forever money, and again, I had what I had a low 8 figure exit potential on the table, Bird in the hand or 65 million in two years. And had I waited the two years, the agency would have crumbled. So on your first shot, cash the check, please, dear God, take, don't, don't try to time the market. Don't try to be smart. And oh, but if I do this, did you take the money? And then second, third, fourth, fifth, sixth time. Now you can gamble, but don't gamble when you can't afford to gamble.
Reuben
Actually, some really freaking great advice.
Nick
Do you think that makes you possibly more dangerous in, like, entrepreneurship or potentially more foolish in some of the things that you pursue?
Reuben
This guy is in a lot of people don't know. I know this man is an assassin in a few ways. I've gotten calls, and I know it goes. But this man is an assassin. So yes, I'm going to answer that on your behalf. Yes, he is dangerous.
Nick
I think the point that I'm making is like, you can get real foolish, overconfident sometimes. Without question. Without question. I'll tell you, the thing that I wish I had done is not deploy. You know, when you have money, first of all, you become a prey animal and really close friends, by the way, people I've known for 20 years, they just can't help themselves because it's, it's the big lick. So they come to you like, oh, this opportunity, this investment, this idea, this whatever. I wish I just kept the money because I went, I bought a bunch of real estate, did a bunch of syndications, bought a bunch of, you know, assets, annuities, whatever, whatever. I just, as an entrepreneur, I want liquid. I know the arguments. I'm a prepper. I understand fiat currency, I understand inflation. But there's something about money that lets us do things. So now I have the assets, and they're sound assets. And yet my advice, if you exit, just stay liquid. At least half if you want to go invest half.
Reuben
It depends on how much you get. Like, let's be sure. Yeah, so let's talk about that. So let's quantify that in time. So if I sell, if I exit how much money do I want for time? Like do I want to be able to pay for my entire lifestyle for 5 years, 10 years, 15 years?
Nick
No.
Reuben
Quantify that in a time period. So you're all the way to retirement.
Nick
You're not allowed to spend money. You're not allowed to spend non renewable money. Non renewable money. It's satanic and it's evil. If you want to buy a latte with non renewable money, you're expending life force. What you want is you want to go buy a house in Fargo, North Dakota, which is the number one recession proof city in the continental United States because of fracking and always probably will be or whatever, Whatever. It's easy. You go put it in T bills, right? Go put, go find renewable money. So you go the T bill was what? It got up to like 6% guaranteed by the federal freaking government. Are you kidding me? Go put your money in a T bill. And then the 6% that you get, that's what you buy your lattes with, right? If you spend non renewable money on anything, you are an imbecile and you deserve what's going to happen because it's just going to atrophy. The thing to do is to go get your 5% after inflation and you can do that in the market, just an S and P index fund. You can do that in real estate syndications, which is what I did. You can buy single family home. There's a, there's a billion, there's a trillion ways to just. I did a bunch of hard money loans. Right?
Tim
Right.
Nick
There's a trillion ways to have renewable money. You spend the money, your money makes you. And if you have $5 million, honestly, if you have three and you're frugal, you'll never work again. And the money, and you'll never touch the three. You'll always have $3 million adjusted for inflation. So the three will actually grow at a slow clip. And whatever it kicks off, that's what you spend. It's these, man. I can't tell you how many friends I have. They've got a beach house, they've got a Ferrari, they fly first class, they don't have shit. I have money.
Reuben
Yeah.
Nick
I have to fight with you.
Reuben
I have to fight with him. My customer. I bought you a first class ticket. Oh, no, don't do that. It's crazy.
Nick
I don't want to get used to it. I'd rather have the money. I've got real money. An opportunity shows up. We had an opportunity, it fell through but we had an opportunity to buy a $10 million business for a million dollars. You know what I'm talking about?
Reuben
I do.
Nick
It was a $10 million business for sale for a million dollars. But we needed the million dollars that day. Guess who has a million dollars to go and buy this $10 million? Oh, I'm. I'm liquid.
Reuben
The only one, so.
Nick
As a matter of fact, yeah, so, yeah, man. I just. Liquidity. Somebody put this to me, and I loved it so much. They said that money, liquidity is like oxygen. Oxygen's not the most important thing in life. Oxygen might be the least important. When was the last time you thought about oxygen? You breathe and you go. And then everything else, the oxygen kind of funds, let's say it's just when you don't have oxygen that all of a sudden you're like, oh, gosh, like, what am I going to do? So the money is the abundance of oxygen. It allows you to do anything you want to do, anywhere you want to do, any way you want to do it. And if you don't mind me soapboxing just a little bit, the impact you can make as an entrepreneur who's actually. I can hire people other people can afford to hire. I can wait longer for you to become productive. I can fire clients other people can't afford to fire. So if you're mean to my staff, big guy, stress me out. If I don't, just like your face or your voice, I can be like, hey, we're not a fit. Here's your money back. So being able to make those decisions, because those folks that keep themselves just so leveraged, that's what everybody does. They make a little more. They spend a little more. Make a little more. Spend a little more. Make a little more. Spend a little more, man. Just. Just stay. Stay your lane.
Reuben
I want to say four years ago, when you were on my original podcast.
Tim
Oh, I don't remember what I said. I probably said some crazy stuff.
Reuben
I could never post it.
Tim
Oh, did I say something wild?
Reuben
Oh, yeah.
Tim
Sorry.
Reuben
It's okay.
Tim
It's great.
Reuben
It was a great learning hour for me. I got to learn for free.
Tim
You got to see unrefined Nick. That was like. I was. I was 21, maybe.
Reuben
Yeah, yeah. It was brilliant stuff. But you said some things about some people I knew would come back to bite us both, so.
Tim
Okay. Appreciate you. Yeah, yeah.
Reuben
Because I'm not 20.
Tim
Yeah, yeah, you got it. Yeah.
Reuben
But anyway, so you were talking to me about your process of research, and it was so similar to Like a method actor who has to like, get into the role of the person that they're about to play. You kind of get yourself into the headspace and the role of the buyer. Talk me through that. I really wanna hear about that.
Tim
Well, I need to know what they're thinking and like, what are they going through. So I mean, like, if I can get on phone calls, I prefer that 10 times out of 10 over everything I like, you know, like a lot of copywriters will be like, just read Amazon reviews or whatnot.
Reuben
Reddit.
Tim
Yeah, it's great. But I, it's static and so I can't ask further questions and I can't ask, how did that make you feel and why did you feel, you know, like, I can't go down like a rabbit hole with the person. So I prefer to first do like five to eight phone calls.
Reuben
And I asked with current customers.
Tim
Yeah, like, like, I want different archetypes, though. Don't just give me the same person because you likely like how I look at it is a lot of the times think about it like oil. The customer is the client, like the business owner. They found oil in one area, so one customer base. And then they're like, well, but there's more oil around there. But we're tapping right here and this is working really well.
Reuben
So I'm only going to tap this one.
Tim
Yes. When there's five to six other people and they're sometimes hitting these other oil wells, but if they actually put a drill there, they get way more oil.
Reuben
Right.
Tim
So I try and get like the 4 to 5 ICPs, the ideal customer profiles that they have. And when I talk to them, I just psychoanalyze them. Like I, I don't like people probably have a methodology for it. I just ask kind of intrusive questions and I tell them, this is a safe space.
Reuben
You let the conversation drive you.
Tim
Yeah. I want to know why do you think that and what happened here and what were you thinking at this moment, et cetera. And so with their audience, I said, just connect me with five of your best customers who got the best results. And all of these guys were either a, a seven to nine figure business owner. All of them were married.
Nick
All of them.
Tim
All them. When I brought up addiction as the problem, every single one of them said they didn't feel like it was a problem. It was like it was a problem.
Reuben
Right, right.
Tim
Their problem was that their wife wouldn't stop complaining. Complaining about nagging, whatever.
Reuben
Yeah.
Tim
And they felt like they were getting in so many Fights.
Reuben
Functional addicts.
Tim
Yes.
Reuben
Are the hardest.
Tim
Yeah.
Reuben
Are the hardest.
Tim
Yeah. That's like. And I really related with it because I kind of came from that background. Like, my dad was a little bit like that. So I can see, See what denial looks like a bit.
Reuben
Right.
Tim
And it was.
Reuben
I work the hardest. I make tons of money. I'm the first one up, I'm the last one off. What is the problem?
Tim
Yeah. Why can't I just drink five scotches tonight? You know, like.
Reuben
Or 18.
Tim
Yeah, yeah, it's.
Reuben
That's my back. Yeah, exactly. Right.
Tim
So, yeah, so I was just. I was talking to them across the board. And I'll never forget, it was actually at Traffic and Conversion Summit in San Diego. I remember my friend was in the. In the other room, and I was sitting there on the call, like on Zoom, and with this guy. And this guy's like a steel company. They're doing like nine figures a year. They're massive. And he just. I asked him, like, well, you know, why was it that you decided to fix this? Like, you know, you've. You're on your third marriage. I'm sure you were like, I can find another girl. I don't need to do this.
Reuben
I'm rich.
Tim
Yeah, you're rich. You're super successful. Why does it matter? And he just said, for the first time in my life, I wanted to, like, really fix this. And I knew I was capable of fixing this. And I finally saw that it was me that was the issue and not everyone else. And I was like, boom, there we go.
Reuben
That's the message.
Tim
So I started to find the. I look at it as like a through line. What is everyone saying? So, like, I have an offer right now that we're working on that's like a relocation service. So if you want to get like a visa in Europe, like, how do you go about doing that? And they have a great offer. And when I'm interviewing everyone, what everyone feels like, because it's a lot of LGBTQ crowd and a lot of more liberal leaning people, they don't feel safe in America. Everyone says that I can sit here, you know, so let me go to.
Reuben
A place that isn't actually safe.
Tim
You know, that's what I mean. Like you. I'm a liberal, by the way, but it's. Yeah, yeah, like, I could sit here and disagree with that person. But the reason why I try and be as unbiased as possible in there is because I can't project. If I project my reality onto them and say, like, surely you don't feel XYZ or whatever. They're gonna, they're gonna react based on that question.
Reuben
Right? You have to be open ended. There's no, there's no judgment. This is just absorption.
Tim
Yeah, exactly.
Reuben
Right.
Tim
So after I kind of get that through line and I understand who the person is, I just really try and understand what it feels like in a, just from the feeling itself. For a lot of these guys, it's pride. So for that, that beyond driven offer, it was pride. They, they had so much pride in their system and they want peace because they like they work all day. But what is stopping them from you know, getting that, like what's that gap right there? And it's them. So I went to the offer owners, I said, okay, here's what I found. I really do think that the best thing that we could do is reshape the messaging and, and I want to appeal more to wealthy individuals and I want to talk about how they have created a perfect external world for themselves. But because their internal world is chaotic, everything else is chaotic. And we called it, the mechanism was the inside out method. You have to go inside first before the outside can be perfect. You can't just buy everything like that's going to go wrong. So they scaled aggressively with the new messaging. They're still to this day. That's what I like about them. There's some guys who will scale boop back down, you know, right after because they couldn't take the operational, logistical intensity of everything. You need to hire someone like you to come in and like, you know.
Reuben
It'S why I make money.
Tim
Yeah, exactly.
Reuben
So shh.
Tim
Yeah, yeah, yeah, exactly.
Reuben
You go keep helping them and then leave them my card.
Tim
Yeah, exactly. I'll slide it over. Yeah. But they, they, they scaled to right about, from 60,000 to right around I believe last time we talked was like, it was close to like 400. And they're consistently hitting every month too. It's not like 4, 450, 20, 400. Like they're hitting it every month because they're, I mean the guy who's running it is a genius. Like he's genuinely a phenomenal business owner. Both the guy who's the face of it and the operator behind it, they're just phenomenal people. And I think Tim, Julian, all them, like they're just really good people and they care about their audience a lot. So they really. The thing that got them from that point, I think from 60 to that, I think it was whatever, 340, 400. I don't check every day with what my clients revenue is. But I think a lot of what it was was that they started speaking to a bigger problem. Because it's like, yes, addiction is a very big problem in everywhere. But for a man who's successful, who now it's like his marriage is on the line, another divorce, another I have to take half my kids, My kids don't like me and everything. That's such a bigger problem. And all I did was just speak to. What's that gap right there? What's that like? Literally just talking with Tim, you know, and figuring out what's his methodology. Because I can't just come up with everything. I have to like base it off of what their stuff is, you know, I just got really clear on what his thing was. Like, what is what his M.O. was, what was it? And his was about inner peace, to create external peace in the world. And I was at a event with Taylor Welch, probably about. I would say this is, I mean, like a year ago. Yeah. Because it was around February. So fricking cold in Nashville. It's just I remember that specifically is how cold it was. And Tim was.
Reuben
I forgot that you were so sensory when you recall, you're so sensory.
Tim
Yeah, I forgot about that. I just like everything is like, that's what I remember. That's interesting.
Special Ops Podcast Episode Summary
Episode Title: What Happens When You Hit $5 Million Dollars in Profit
Release Date: July 1, 2025
Host: Emma Rainville
In the latest episode of Special Ops, host Emma Rainville delves into the critical milestone of achieving $5 million in EBIT (Earnings Before Interest and Taxes) and its profound implications for business owners. Through an engaging conversation with guests Nick and Tim, the episode explores strategic decisions, financial management, and personal insights that come into play once a company reaches this significant profit level.
Nick opens the discussion by highlighting the transformative impact of attaining $5 million in EBIT. He emphasizes how this threshold significantly broadens the potential buyer pool, enabling business owners to command up to a 13x multiple on their earnings.
Nick [00:00]: "If you get to 5 million EBIT, the buyer pool opens up massively and I can get you 13x. So now I'm looking at $65 million, but I've got never have to work again money."
Nick elaborates on the financial freedom this level of profit can provide, describing it as "forever money" that secures long-term financial stability without the need for extravagant expenditures.
Nick [00:23]: "It's not private jet money, but it's forever money."
The conversation shifts to the strategic choices business owners face after reaching the $5 million mark. Nick advises against delaying the decision to cash out, stressing the importance of seizing opportunities when they arise to avoid potential pitfalls that could undermine the business.
Nick [02:50]: "Just stay liquid. Somebody put this to me, and I loved it so much. They said that money, liquidity is like oxygen."
He shares a cautionary tale of an opportunity to purchase a $10 million business for just $1 million, highlighting the critical role that liquidity plays in capitalizing on high-value deals.
Nick [06:14]: "We had an opportunity to buy a $10 million business for a million dollars. But we needed the million dollars that day. Guess who has a million dollars to go and buy this $10 million? Oh, I'm. I'm liquid."
Nick underscores the importance of maintaining liquidity and making informed investments to preserve and grow wealth. He advocates for investing in renewable money streams that sustain financial health without depleting the principal.
Nick [05:33]: "I have real money. An opportunity shows up... I'm liquid."
He advises entrepreneurs to avoid non-renewable expenditures and instead focus on investments that generate steady returns, ensuring financial longevity.
Tim introduces a methodical approach to customer research, likening it to the techniques used by method actors. He emphasizes the necessity of understanding customers' thoughts and emotions through direct interactions rather than relying solely on static data sources like Amazon reviews.
Tim [08:15]: "I need to know what they're thinking and like, what are they going through. So I prefer to first do like five to eight phone calls."
Tim shares his experiences conducting in-depth interviews to uncover the core challenges and motivations of his target audience, revealing insights that drive effective business strategies.
Through interviews, Tim identifies that even highly successful business owners face significant personal challenges, such as marital issues stemming from pride and work-related stress. This revelation underscores the importance of addressing internal conflicts to achieve true peace and stability.
Tim [09:16]: "Every single one of them said they didn't feel like it was a problem. It was like it was a problem... their problem was that their wife wouldn't stop complaining."
Tim connects these insights to his own background, highlighting the universal nature of these struggles and the importance of overcoming personal barriers to foster business and personal growth.
Tim discusses the strategic shift in messaging to better resonate with wealthy individuals grappling with internal chaos despite external success. By adopting the "inside out method," the focus shifts to achieving internal peace as a precursor to external prosperity.
Tim [12:11]: "We call it the inside out method. You have to go inside first before the outside can be perfect."
This approach has enabled businesses to scale effectively by addressing deeper issues within their client base, ensuring sustainable growth and operational stability.
The episode wraps up with reflections on the importance of liquidity, strategic investment, and deep customer understanding in achieving and sustaining business success. Nick and Tim emphasize that reaching the $5 million EBIT milestone not only opens up significant financial opportunities but also necessitates thoughtful decision-making to preserve and enhance wealth.
Reuben [07:59]: "Yeah."
Nick [07:59]: "I have to fight with you."
These insights provide invaluable guidance for entrepreneurs aiming to elevate their businesses to new heights while maintaining financial security and personal well-being.
For more actionable strategies and to download the free playbook mentioned in this episode, visit Special Ops Podcast. Subscribe on Apple, Spotify, or YouTube to stay updated with Emma Rainville's expert advice on growing your company through action, not words.