How To Invest In Companies Without Working For Them

Want to get ALL the tips that Roland shared with us on the go? Check out the entire podcast episode to learn the secret to owning companies without every working in them!

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If you're stuck in a time for money mindset, you’ll never build real wealth.

I recently had the opportunity to discuss with a top expert how to build wealth in a way that requires little to no time but still provides you with a huge reward.

Roland Frasier was kind enough to have a discussion with me about building wealth through building equity in a business and then allowing that equity to make you money.

Roland Frasier is the CEO of the War Room Mastermind, Principal at DigitalMarketer and an absolute master of business. He's built an amazing amount of wealth by securing equity in businesses and then taking a chunk of the profits and sales of those businesses.

And he typically never works as an employee.

Let’s go over what Roland and I discussed so you can learn how to own companies, make money and never actually work in them!

Step #1: Get Your Foot In The Door

Before you can enter into a business venture, you need to get your foot in the door.

Roland gave me some tips that have helped him get to know business owners and build equity in their businesses.

Here's an example of a scenario that Roland provided me with that I found useful. 

Let’s say you want to get in with person X.

Let’s call him Bob.

Bob has a big program, and you know you want to connect with Bob, so you buy his upper-level program. Once you show up to the program, you know you want to speak with Bob and put together some sort of business deal.

But how do you get in front of him?

Roland suggests that—when you're looking to work with someone—to go in with value first.

Most people are thinking, “What’s in it for me?”

If you go in thinking, “What kind of value can I provide for Bob as soon as I get in the door?” you’ll be setting yourself apart from the rest of the crowd. This includes thinking both about how to help Bob and how you might help his team.

Also, make sure you're kind to every member of the team—word travels fast about whether or not you're pleasant to work with.

So, how do you provide that value?

(RELATED: The Benefits Of Attending Networking Events (Hint: It Made Me My First $3 Million)

Step #2: Do Your Research

Before even going to the event, take some time to research what the host of the event may need help with and what kind of value you can provide them.

You can use platforms like:

  • LinkedIn
  • Facebook
  • Twitter
  • YouTube

To find out what type of work people are doing and where they may need some assistance.

The more value you can provide, the better.

Step #3: Create Group Value

You can make some great connections by providing other people in the group with value.

You never know when one of these connections may lead to something major in the future.

By helping others, you also encourage others to pay it forward. This is not only good for your community, but it may also lead to referrals in the future.

So, think about how you can serve:

  • The host
  • Their team
  • Fellow group members

If you go in with a service mindset from the beginning, you'll be amazed at what you can accomplish and what other people want to do in return.

(RELATED: The Law Of Reciprocity In Business (My $60k/Year Strategy))

Step #4: Go In With The Right Mindset

It's important to go into this with the mindset that nothing may come from your support at all.

And that’s okay.

If you provide enough value, you’ll likely get people's attention.

This may lead to you getting to hang out with them and their team, which will remove you from 99% of the other people there.

If nothing comes from it, that’s okay too.

You’ve still added value, and that’s a good thing for everyone.

If you do this enough, at least one of the times you do it will pay off—and that’ll make up for all of the times that it didn’t.

It just takes time and patience.

 

how to invest in companies in 9 steps

 

Step #5: Look For The Right Opportunities

Some people get caught up in trying to take advantage of every opportunity that comes by them.

This is a mistake.

There are some opportunities that will truly be once in a lifetime, and you need to make sure you're available when these opportunities come around. You only have so much bandwidth, so you need to keep it open so you can jump on great opportunities when they arise.

This is especially the case once you’ve got your income covered.

Instead of trying to find ways to make a quick buck, start looking for opportunities to build wealth.

Don’t let a great opportunity slip by because you were wasting your time on a lousy one!

Step #6: Decide On Compensation

At this point, you may be wondering how exactly it is that Roland makes money.

It isn't actually that complicated:

  • He receives a portion of the company's profits
  • He makes money on the exit

Before Roland gets involved in a business, he looks at what a potential exit would look like for the business and how much money it would make.

This is important because he takes a cut of the sale in exchange for his expertise.

Certain business models lend themselves better than others to making money on the exit, so Roland is careful when becoming involved with a business. He ensures that their products and services allow for them to make a profit when they sell the business. 

He then builds a portfolio of companies that sell every few years.

As each of these businesses sell, he finds himself making multiple years of income. Keep in mind that Roland suggests selling since you can often make more money selling than holding.

He also doesn't have an active daily job in these companies since the goal is to not work in the business.

He will often help in an advisory role or when specific services are needed, but he doesn't make regular commutes or work any specific “job” at the companies that he's involved with.

This allows him to have ownership in a variety of different companies and continue to make passive income without having to do much (if any) work.

Step #7: Find Companies To Invest In

If you want to become an investor, you need to get out there and start looking for investments.

You also need to let people know that you're looking to invest.

A lot of people are looking for investors or are open to the idea of investors, but they may not want to start the conversation. By letting business owners know that you're looking to invest, you offer them a chance to discuss any opportunities they may have.

However, you’ll need to make an effort to provide value.

By providing value, you’ll be able to get the attention of the owners of businesses you want to invest in.

Also, make sure that you're investing in niches that you're interested in and understand. 

Because you understand these niches, you can provide the most value.

You may even want to consider a joint-venture with someone.

Even if it fails, you’ll be able to see what failing with that person is like. How your partner reacts to failure will help you to determine whether or not they're a good partner.

If you succeed, the upside is making some money.

Another extremely important part of investing in businesses is to look for businesses that lend themselves to multiple exits.

This may include different areas of the business:

  • Media
  • Events
  • Sponsorship
  • Event management

You aren't looking for one-shot exits!

Instead, you should be looking for multi-threaded exits.

Step #8: Consider Providing Sweat Equity

While investing in businesses is a quick way to start building money, it’s not the only way.

You can also build equity through sweat equity.

Sweat equity refers to buying into a company through your work instead of with money.

For bigger businesses, this may not be the best strategy. For small- to mid-sized companies, you may be able to offer your services for a piece of the business.

Roland stressed that he never comes in saying he wants to take a piece away. Instead, he offers to help companies build, and then he takes a cut from what he helps them build.

Step #9: Increase Revenue

When I asked Roland for some tips to add revenue, he provided so many I could barely keep up.

Here are some questions to ask yourself to help you and the businesses you invest in increase revenue:

  • Can you expand internationally?
  • Are there product extensions or new products you can sell to your existing markets?
  • Could you sell your existing products to extended or new markets?
  • Can you change your model to monthly recurring?
  • Are there points of entry to your funnel that you can maximize?
  • Who are the strategic partners that you should have that already have a giant group of existing customers?
  • Are you selling physical products in addition to your digital products?
  • Are you selling digital products on the backend of physical products?
  • Are you outsourcing to reduce costs?
  • Have you considered franchising or licensing?

These questions should lead you down a path of ideas that will help you expand the business.

(RELATED: Why (& How) To Start Your Business Exit Plan Today)

How To Invest In Companies Without Working In Them

Your time is valuable, and you shouldn’t be wasting it working in a business—even if you're an owner. Instead, you should be looking at different ways that you can buy into a business and take a portion of the profits and the sale.

And don’t stop at one business!

Keep adding to your portfolio so you can keep making money as each business sells.

By buying into companies or building sweat equity, you can start making money by being a passive owner.

You can then take that extra time and invest in even more businesses.

(NOTE: Want to get ALL the tips that Roland shared with us on the go? Check out the entire podcast episode to learn the secret to owning companies without every working in them!)