Ami Kassar: You Gave Away Equity for Nothing

0:00I'm going to ask you a question that might sting a bit. How many holiday parties do you have booked for the month of December? Not like how many do you expect? It's how many are on the books right now with the deposits collected and the contracts signed. And for many of you, I worry that the answer is not enough. And here's why that matters. I think that the companies that are going to throw those parties are picking their venues right now. This is a sweet spot between August and September. And by the time you start thinking about December, the decision's already been made. You're not losing those parties in November.

0:34You're going to lose them this month. And that's why I built the Private Events Engine. It's a simple three-part system that leverages AI to do most of the work for you. And this month in the Marketing Masterclass, I'm going to walk you through it. It's going to show you how to package events, how to get in front of the people that are booking them, and how to close them without discounting. And you get the whole thing for free. So show up to this month's Marketing Masterclass. Go to restaurantbusinessschool.com today to sign up. Now here we go. We all have short memories when things are going well.

1:11Oh, you feel great. You feel awesome. Cash is flowing in and out. You're making payroll. You're growing. You're adding people. Things are groovy until they're not. Just remember, it almost always never goes in the straight line. And when the going is good, that's a time to take advantage of things. Welcome to Full Calm, a show offering insight into the hospitality industry, featuring restaurateurs, thought leaders, and innovators, served up on the house.

1:42What if the reason you gave away a piece of your restaurant is a myth you had never bothered to test? Most operators believe banks won't touch restaurants, so they go straight to investors, credit cards, and whatever money is the easiest to reach. Ami Kassar has placed over a billion dollars in small business loans. And he says the restaurant exception doesn't exist. In today's conversation, we get into why a line of credit belongs in your business before you need it, how the cash advance built into your point of sale locks you out of real financing, and why the monthly payments matter more than the rate.

2:16If you have ever asked yourself whether your restaurant is bankable, this episode is gonna answer that question.

2:28So I'd like to start with some context for the audience. And you were the chief innovation officer and one of the biggest insurers of small businesses in the country. You had this front row seat to watching the collapse of this company during the Great Recession. You got fired on a Friday and you started multifunding like the next day. And then over the last, which is wild, man. And then you spent the last 16 years on the other side of the table. So I want to start with perspective, because I think so much of what we do for a living is informed by like our life experience. So like what did watching a financial institution implode teach you about money and risk?

3:10First of all, it was just emotional, right? So before it was my turn to be let go, I watched 960 about people let go. Many of them were friends. They had mortgages. They had families. They'd worked there for 10, 20, 30 years. It was part of that was devastating. And then there was also that you couldn't feel it because we're in a corporate office, but a million small businesses lost their credit and it got shut down. And that was also very difficult. And the rates were getting jacked up. But we weren't too big to fail. Way bigger financial institutions than us were failing left, right, and center.

3:50We were, relative to the size of the crisis, we were a speck. Okay. So it's almost, are there lessons about money and risk? Sure. But no one anticipated a Titanic to come hit the financial system of the United States. And that's a risk that I think, I don't know if there's much hindsight around that. Yes. It was levered up, there was risk, et cetera, et cetera. And there was definitely a heavy concentration of predominantly one business line. But ultimately, a titanic hit the financial system at that time, and it was tough. When you started multifunding, I feel like whenever we start any business, when I started my restaurants, right, I had a song to sing.

4:35There was this thing that I wanted to bring out into the world. I felt like there was this expression of self associated with it. And I feel that same way about this show and my coaching and consulting practice. When you started multifunding, what was your song to sing? What was your perspective on financing and on lending and on risk that you wanted to share with the world? I think what I, in some ways, I was reacting to what I saw because the raw idea of multifunding when we started and it's evolved considerably with some ebbs and flows and twists and turns along the way was we wanted to be an advocate for the business owner and entrepreneur when they were getting financing so they could be assured that they were getting something that made sense.

5:24They understood what they were getting into and it was the best possible thing for them at the time. Now, let's face it, I don't really know how to do that. Those first few years were a brutal bloodbath, and it took a long time to get our feet underneath us and start to get into a rhythm. But that core value and principle of being that advocate for the entrepreneur has never left us, and that's who we are today. Lending money to people that are trying to do something that may or may not have been done before, but at least they're trying to do it their own way. It's noble, but there's risk associated with it.

6:04Well, I want to be careful, Josh. We don't lend the money. Right. We're not the lender. In a way, we're like a big money wholesaler. You're a facilitator, are you not? We're a facilitator. We're a coordinator. We're an advisor. We're a broker. We're a coach. We're a therapist sometimes. And there's two sides to the equation. First is like, it's like the dollars and the cents and lending markets are pretty rational. And we can pretty quickly figure out where a company based on the situation they're in, what box they fit in. And they might not like that. They might not want to hear that. They might not believe us, but we're right like 99 out of 100 times.

6:50And then sometimes a company's got to recalibrate against that. That's the one side of it. And then the other side of all the letting stuff is all the emotional stuff. Am I going to personally guarantee? Am I going to put a lien on my house? Do I want to take more of my savings and put it in the company? what does my spouse think about this? Are my partners nigh in sync with it? How's my ego? Have I had prior experiences with debt that didn't go well? These things are all part of what become very complex decisions for people, and they need help. And will you help them through it? It seems like they're like two sides of the spectrum, right?

7:32There's the people that have no debt, right? And they're stoked and they wear it like a badge of honor. I have absolutely no debt. And then there are people out there who leverage that and they're proud of it, right? Like, I leverage that to grow my business and they don't see debt as a villain. They see it as a tool. Can you bridge the gap between those for me? Well, you can. First of all, debt can be a villain if you're not careful. I see some people get addicted to it in ways that are not healthy it off or you get the wrong type of loan, it can become a villain real fast. Okay. So I'm not the one to tell you that debt is perfect all the time.

8:09It's not. Debt done well can be terrific. And there are definitely people who have that no debt badge of honor. And I see that hurting them sometimes. The way I see that often hurting them the most is that they're not thinking about having in a line of credit or liquidity or an emergency fund. So I've seen people who just refuse to have a line. I was at dinner a few months ago with a buddy of mine that runs a$25 million manufacturing business. Now, a manufacturing business where there's a lot of inventory and AR on goods out and out on the shelf, that's the kind of business that just eats cash, right?

8:49And this poor guy, he told me he'd been in and out of ER three times in the last six months. Okay. And I'm like, what's going on? I'm trying to like figure it out, figure it out. His wife was there. My wife was there. And then I asked him, Joe, what's keeping you up at night, buddy? He's like, cashflow. And I go, do you have a line? He's like, yeah, you had a nice size line. I go, are you using it? He said, no. And I go, do you want to kill yourself? He said, I don't want to be in debt. I go, you're the type of business where a line of credit is like part of the furniture. So you could be proud and not have more debt and land up with a triple bypass heart attack if you're not careful.

9:33And then there are other situations where I tell stories sometimes of a guy who owns a pizza shop on the New Jersey shore, right? And let's say, like many pizza shops, he runs cash and he does not very good at his books, okay? But then his air conditioner blows on a Friday and he needs 50 grand by Monday and it's the middle of season. And he calls me on Friday and says, I need 50 grand on Monday. And what's the lender going to smell that in that situation? Blood. Okay. You never want to be in a situation where a lender spells blood. Okay. Now, if that guy had been prudent, he'd have a line of credit sitting in his drawer and he could write the check and it would be 8%.

10:20If he needs money by Monday, it's going to be closer to 200 % and it's going to put him on a debt treadmill that he can't, almost impossible for him to get off of. And so I'm okay with the note debt badge of honor if you want to grow slowly and more steadily and you don't like the idea of growth through debt and investing in debt. But for God's sake, like a good line of credit is kind of like an umbrella and I encourage you to have it. And if it starts pouring rain, you kind of want that umbrella. We met in fourth quarter of 2019. And the reason I wanted to have you on the show is because we were at a lunch and learn.

11:00This was through the entrepreneurs organization. And I mean, how apropos. We're sitting there at this lunch and learning. You're explaining debt and financing and all of these different things. And one of the things you said is we were sitting across from the table from each other and you said it to the group, not just to me. You said at the best time to get money is when you don't need it, which totally resonated with me. And so I took your advice and I did nothing with it. And then a global pandemic hit and then everybody wanted money and everybody needed money and there was no money to be had.

11:35There are so many conversations I want to have with you over the course of the next 40 minutes, but that's the biggest take home really is that like a line of credit, like protecting yourself from any of the unknowns, especially in the restaurant industry, which has so many variables. I think that it is the best course of action because you don't know what you don't know. We all have short memories, Josh. I'm just as guilty. And when things are going well, you feel great. You feel awesome. Cash is flowing in and out. You're making payroll. You're growing. You're adding people. You may be traveling, going on vacation a little bit, things are groovy until they're not.

12:15Invariably, I don't know of any good businesses that never went through some speed bumps and hiccups, either created by something that they did or an employee or a key customer or some macroeconomic. It happened to us the year before the election. We froze out. We didn't see it coming. And we had name it. And so just remember, it almost always never goes in the straight line. And when the going is good, that's a time to take advantage of things. I want to talk about all of the different types of debt, all of the different like usage of debt. So let's talk about the positives, right? Like the positives are that my sales are growing, but my bank account is shrinking.

13:05My vendors are getting stretched. And so I'm telling myself, like, all I really need is working capital. And if I get the working capital, I'll be able to get through this. And so people come to you in this position, I'm sure, all the time. And I'm wondering, how do you differentiate between when somebody genuinely needs the capital, right, to grow the business, or when they're postponing, confronting what is probably poor unit economics? I think about it as what are we trying to solve for? First of all, a lot of times the finances, financials are messed up and it's hard to figure it out, right?

13:37What I couldn't reiterate more is how critical it is to take the time, effort, and invest in having your financials in order, because that's when chaos erupts, when you don't have a clear and coherent picture to tell a lender. But generally speaking, I think to partially answer your question, Josh, you got to think about debt in two general families, the line of credit or term debt. The line of credit is there for seasonality, working capital, and emergencies. And we talked a lot about that a few minutes ago. And then the term debt is for investments you want to make in the investment. And you want to be really careful not to use one versus the other.

14:21As an example, a few weeks ago, someone called me. They needed some liquidity. Cash flow was getting tight, and they wanted to expand their line. And I said, okay, well, how much of a line do you have? And it was about$150 ,000 on a$1.5 million business, which is about right. And I said, well, what did you use the line for? They said, oh, we use it for software development. So they had used their line for an investment, and now they had hit a time where they needed the line, and the line wasn't there for them. So what I recommended we do in that case is turn out the line onto an SBA loan and then reopen up that line.

15:00So it's more about being careful that you align what you're using the money for with the right interests. Now, a lot of the pandemic money, the idle loans, the restaurant relief, all that stuff, that screwed up a lot of that stuff because people poured money in for all kinds of weird reasons. And that makes some of this even harder and navigate. There also might be cases where the owner or the principals are just taking more money out of the business and the business can afford it. Those are also challenges which can be hidden without good and accurate numbers. Can we talk about the SBA for a second?

15:36Because I feel like most restaurants don't even consider the SBA. I would argue that what most restaurants do is they go after investor capital or credit card financing, whatever we can get, because like the old adage is at least that, you know, restaurants are unfundable through traditional banking means. And that if you even if you were to go through the SBA, that there are a ton of hoops, that it takes a really long time to get the money. What has been your experience with the SBA as it relates to financing? I want to get there, but I want to break out your question a little bit first, is that you need capital.

16:11There's always a decision between equity or debt, investors are dead. And that's something that everyone should evaluate carefully. Remember that investors want to make a return and lenders need to be paid back as you're on the hook to pay them back. And if you take an investor, you got them sitting at the table with you and they kind of generally have a vote or an opinion on what you do. It's absolutely very possible to get SBA financing for restaurants. And yes, it's a pain in the ass. Okay. However, once you get through it, you're going to love it. Because here's the thing about debt. I always encourage you to strongly think about what that monthly payment is going to be and how safe do you feel in your ability to make that monthly payment.

16:56The beauty of SBA loans is that they amortize usually over 10 years or if there's real estate involved over 25 years. And that's going to afford you the luxury of a lower monthly payment, which is certainly, in my opinion, less risky. The other thing about SBA loans is that people get confused about them because there's just a lot of mythology around them. And first thing to know is the government's not the lender. The lender is whichever bank or non-bank institute that you go to to get the loan. But sometimes you've got to kiss a bunch of frogs to find your prince. And I bet you there are a couple of hundred lenders out there in this country who don't do restaurants.

17:45But there are another couple of hundred who do. The lender does not have to be in your backyard. And what you want to make sure you do if you're taking the route of the SBA is you're picking a seasoned lender who's worked in those shoes, knows the ins and outs of the program, and can advise you and help you accordingly. and it's still going to be a pain in the ass, but it'll be worth it when it's done. Here's the other thing. I think that, and I always went through investor capital myself, but I'd be willing to bet that even if I had just done it as an exercise to see if I was lendable, that would have been a worthwhile exercise because then at least I would have known on paper, is this business a good idea?

18:28Is it the right plan from the outset as vetted by someone who has looked at hundreds, if not thousands of deals like this, it would have made the deal better. And if it's lendable, it's probably stronger. It doesn't mean you have to choose the debt, but if it's lendable, it's probably stronger and it's got more work. I joke about it, but I mean it, is that if you're not, I know maybe this isn't the right thing to say, the restaurant crowd, but if you're in a hurry and you go to McDonald's for lunch, you could give yourself indigestion for a few hours, but then you're going to be fine. If you're in a hurry when you make a financing decision, you could give yourself indigestion for a few years or ruin your business or go into bankruptcy.

19:15It's not the time to be hasty. It's an impactful and important decision that you should do carefully and get a couple different opinions and do on the solid footing. Can we talk about percentage? Because I also wonder as it relates to financing in general, but we could talk about debt specifically for this example. One of the hallmarks of me as a restaurateur is when I took on investor capital consistently, every time without exception, except for the last time, I didn't take enough. And I'm wondering if you see that, that what people are doing is when they're borrowing money, they're not borrowing as much as they need to actually get the business started.

19:58So we worked with that very carefully. Now, there's two sides to that. Let's say you borrow$500 ,000, right? And then you figure out that you're short$100 ,000. The bank's already kind of on the hook for that$500 ,000, right? So if you go to them and say, guys, I need a loan, they're going to have to think pretty hard to give that to you because they're 500s at risk if you don't get it. So that's part of the equation. But taking the time and giving yourself a buffer run to really think about what it's going to cost is, in my opinion, super important. Again, you could have that same problem with investors too.

20:43Sure. People go back to the investors and go back to the well a couple times. When you look at interest rates, I mean, there are just so many terms and interest rates and all of these things. How do you put together what you think is a good deal? What does a good deal look like for most people? To me, rates are a little important. But let me ask you something, Josh. If you go buy a new car tomorrow and they offer you 1 % for financing, you have to pay it off over a year. or 5 % financing when you have six years to pay it off. What's better, the 1 % or the 5 %? Depends. I mean, for me, I would take the 5 % because I know I can earn more off that money if it stays in my pocket.

21:27Right, and it's also that rainy day fund. It's that flexibility of the lower monthly payment. See, I like to encourage people not to focus as much on rate as as much on flexibility. A good balance sheet is structured like a good football team and no football team works well without offense and defense. You need flexibility to succeed. So what I'm much more interested in is, is the business going to get the capital they need to get to the next stage? And what's the lowest monthly payment? I want to go back to the blood in the water conversation, because I think that there's something there. So as I'm sure you're aware, like a lot of point of sale companies, and credit card companies as well.

22:11Like credit card processors in general will offer us a cash advance on sales because they know they can put the money directly from our sales. And it's this treadmill that seems almost impossible to get off of once you're on it is an industry. Is there ever a scenario where you would think that would make sense? And if not, what is the alternative to that? So my cell phone number is 215-460-1950. Am I telling the entrepreneur, day or night, if you're about to jump onto that freaking treadmill, call me first and let's talk about it. Okay. So the first thing is, there are often alternatives. Slow down your payables.

22:54Slow down your expenses. Okay. Stretch it out. Take a breathe. Are there better financing options? If you choose a merchant cash advance, which basically means that they're taking out a percentage of your sales, which is what a lot of these point-of-sale guys do, then you're no longer refinanceable with an SBA as long as you have that. So you're cutting yourself off from options, and invariably you're putting yourself on a treadmill that you can't get off of. I'll never forget, Josh, early on in my practice, there was a cleaning company in San Jose, and he needed money, and I got him a$900 ,000 SBA loan at 6 % interest.

23:34And it required a lien on his house. And for whatever reason, and I'm sure his reasons were legitimate, a lien on his house was a red line for him. It was non-negotiable. And the only other alternative we could get him was a one-year loan at 36 % interest for$350 ,000. He traded a$900 ,000 loan with a monthly payment of$10 ,000. And, okay, for a one-year loan for one-third of the money with a monthly payment three and a half times higher. Okay. And he got on that treadmill and he couldn't get off. Years later, I don't think he even remembered that first conversation. He called me and he was absolutely exhausted.

24:16He'd been through six, seven, or eight of these things, and they were all stacked up one on top of another. And I couldn't help him anymore. It was too late. and I believe I'm almost certain he declared personal backups and left his house. So these things, and they're embedded everywhere. I can't stand that they're embedded in QuickBooks. QuickBooks does like$4 or$5 billion of these a year. It's real money. And the rates are completely deceptive. I had a call the other day from an EO member, and it was a line of credit. She said, it's not so bad. It's a 4 % fee and 1.04 % a month, however it was presented.

24:53and we did the math and the APR was 74%. So I couldn't emphasize more. First of all, try not to get in the situation where you have to think about these things, which means a disciplined approach to understand your business and your cash and your bookkeeping and all that stuff and a line of credit. But if you do, stop. Stop if you possibly can. It's so tempting and it's so easy. Can we talk about that for a second? You mentioned that you kind of glazed over it, But I think that it's worth revisiting. To your point, everything has gotten so much easier, right? Getting debt, gambling, investing in the stock market.

25:30Like they've made it all so easy. It's also gamified at this point. You can just press a single button and they'll drop$30 ,000 in your bank account, right? And all of your problems are solved for just a moment. Talk to me about the pause, because I know that that is core to your practice is that people come to you, right? I can only imagine that so many of the people you deal with are in difficult situations when they pick up the phone to call. Talk to me about the power of pausing, re-evaluating your options, because I would assume that most people rush and end up making the wrong decision because they feel this need, this urgency to act.

26:11Right. And I mean, just to clarify, about half our calls are people in trouble and half our calls are people who are growing and expanding and doing great. So that makes it a little easier. Sometimes you feel like a ping pong ball on the emotional food train. But it's never really as bad as you think it is. And you've got to pause. You don't want to make a decision without a clear head. You've got to. Sometimes I'll tell people, breathe. I'll never forget it. And this call always sits in my mind. And I think it's impacted me in ways deeper than I think that. I was early on and it was Wednesday and I didn't have a big rant on Friday.

26:52Money was coming in the next week, but I didn't have it for Friday. And I was too proud to call my dad or my brother and ask for money. And I was literally sitting there about to hit that button because when you're in an emotional state, you're in an emotional state. And fortuitously, a mentor of mine, an investor in my first startup in the dot-com bubble days, just called me to check in on me. He said, how are you doing? I didn't tell him what I was about to do because he'd probably castrate me. But I said, I don't know, Arnie, I don't know how to make rent on Friday. Now at this time, the guy had like 700 employees.

27:30He built it from scratch. And he started laughing at me. And I said, what's so funny? He said, didn't they teach anything in business school? you're just going to pay the rent late you'll pay it next week call them tell them something happened you'll pay it next week and i was like that's freaking genius but in the heat of that moment i hadn't thought of that that's pause helped me and i've tried to give that to hundreds of other people doesn't mean they listen to me all the time it doesn't mean I can help them all the time, but you got to try and slow down. There's always usually more than one way to skin a cat.

28:12If he hadn't called me and I'd hit that button, I'd have probably put myself on the treadmill. And there's just no getting off. It's really hard to get off. Now, occasionally, one in a hundred loans that we do, and we do about 150 loans a year, so it's not many of them. We put some in one of those loans, but it's for a very specific reason. And there's a very specific exit ramp. So it's not necessarily a bad thing that those loans exist, but it's, in my opinion, an awful thing how easy they've gotten and how abundant they've gotten. Let's go back and talk about growth. So like you said, 50 % of the people that come in, they're capitalizing a new unit, right?

28:55For restaurants, it could be a second location. I mean, I can only speak from my life experience as a restaurateur. It's very hard to estimate how much money you're actually going to need, right? Because there are construction overruns, opening delays, working capital, training, the seasonality based on the overruns of when you're actually going to open. First six months are almost always dog shit with incredible expenses. You know, when I opened the fine dining restaurant, we figured out within the first two weeks of opening that we needed a secondary walk-in cooler. We had not built or run the lines for it, so we had to figure that out.

29:31It's just, it's nightmarish. How should people budget for growth? How do you figure out if you're taking out a loan for the right amount of money? It's super hard, but let's pull out, away from that startup, how much budget do you need for that startup phase? Because I think that's an important conversation, but a different conversation. But let's say your business has been going for two years and you're pretty solid. And I'm just going to make up a hypothetical. You'd like to move on and add the next unit or the next unit, but you're spending 12, 14, 16 hours a day managing the unit. And you want to put a management team in place to manage that unit so that you can free yourself up to go do the next one.

30:21okay but you're scared of the understandably of the cash flow implications so you're going to add three people and i'm making it up a quarter million dollars of overhead so you're adding 25 grand a month to your nut it's pretty scary you could consider getting an sba loan for a quarter million dollars or less and get an sba loan for a hundred thousand dollars to work you through that first four months and you'd have a monthly payment of like 1300 bucks and you can sleep at night and take that leap to let you go and expand and push to your next location or let's say there's a marketing campaign or initiative that you want to do that you're absolutely convinced will quadruple the return on the investment this i don't know if there's ever proof but they say there's proof And you're scared to do that because where's that 50K coming from?

31:17Well, you could borrow that money and cost you like$650 a month. Now, I always say about these scenarios, when you're thinking about investing for growth or borrowing for growth, you got to think about what good could happen and what bad could happen. So in either one of those scenarios, if it works, the debt will be a no-brainer. But you also have to think about if it doesn't work, how comfortable are you on handling that monthly nut that you've added to your overhead? And then I always encourage people to think about a middle of the road scenario, which is likely where I'll end up. And usually that middle of that road scenario is really good also.

32:01And then on the other side, to answer the second half of the question about people, I would assume, tell me if I'm wrong, but people come to you and they're like, I need$500 ,000,$750 ,000 for this expansion, for this thing I want to do. How do you validate that that's the right number for them as an advisor? Well, the first thing is, well, okay, like, what do you do with that money and where is it going to get you? And if they don't know how to answer that question, you tell them to go back and do their homework. and many people can't answer that question, right? So you want to say, we're the storytelling business.

32:36When we present a deal to a lender, we got to tell them your story, okay? And it's got to be good, and it's got to be accurate, and it's got to be thoughtful. So you got to convince us that your numbers are accurate and thoughtful and mindful, and if not, we're sending you back to the drawing board. We send a lot of people back to the drawing board a lot, And we're actually, they might temporarily hate us for it, but we're saving them a lot of pain down the line. In that initial presentation that I saw years and years ago, one of the things that you said, and I mean, I remember it like it was yesterday.

33:14You said, have you ever done a risk audit? And then you kind of looked at the group and you said, like, what could bring this business to its needs? And I had never thought in those terms. And again, like all of the foreshadowing, right? Like this is right before the beginning of a global pandemic. Like I knew. I mean, my God. But if the people listening wanted to start this process of evaluating their own business by running a risk audit, how would you whiteboard that out for them? It's an interesting question. And I think about it a lot in my own business. And I write about it a lot. I think about it once a year.

33:51Like three, four years ago, I thought about it. And I said, what could bring my business to its knees? And I came up with two things. One was we'd been in business 12 years and we never upgraded our cybersecurity. We were still working on the systems in the back end that we started with. And I thought, that's insane. Okay. The amount of tax returns and documents that are going through. And we did the work. It's expensive and we feel stronger for it. And then another thing that could bring your business to its knees is this whole idea of diversification, right? So what was scary to me that 90 % of our business is with the SBA.

34:34So we're deeply dependent on the government programs. And one day some lawyer or regulator or policymaker in Washington could come up with a new rule that could screw us. Today, 80 % of our business comes from business acquisitions. Okay, that scares the daylights out of me. So taking the time to think about what some of the fundamental risks are and then trying to diffuse them or almost try to think about your business like a portfolio is, in my opinion, super important. You supported so many people in getting the financing that they needed. And I mean, you would know better than me about which way it cuts.

35:16But I would assume that for so many of those people, they get that financing and they're able to leverage that capital to create the freedom that they so desperately desire and deserve. But I can also imagine that you've seen a bunch of people that have taken that capital and used it to build themselves a more sophisticated prison. What's the difference between those two in terms of mindset? Who's taking the money and actually building something that creates freedom with it? And who, for someone else, it just ends up being one more thing? It's an interesting question. I didn't really think about it.

35:51And I will think about it. We'll talk about it some more because it's a good question. It certainly upsets me because some of our loans go bad. And that's hard for people. And I try to study those loans when I find out about them hard to figure out what did we miss something in our advice. Now, we're in the lending business and invariably a percentage of everything we do is going to go bad. Okay. But I never liked that feeling. So I do think your question brings me back a little bit to, Josh, the economic injury disaster loans after COVID, where the government literally handed out money like cotton candy.

36:34Okay, without proof of your ability to pay it back, you didn't have to pay interest for three years. And the rate was so low and the amortization was so strong that so many people took it. and it's really interesting to see people who used it for legitimate purposes to like survive. There's some crazy foresters out there that, in my opinion, belong to jail, and then there were people who suddenly got caught away with it and sort of thought about it as free money and used it for a bunch of things in their business that never really materialized, and now they're stuck with those payments. So I guess the message is don't take the money unless you feel that you've got a really good, thoughtful and mindful plan for it because you're on the hook.

37:25Don't take it just to take it. Got one last question for you. Your business feels a lot like my business in the way that it touches so many other businesses. You know, and you learn. I think it makes you a better entrepreneur when you see all of these different mindsets. You get to learn from everyone's best practices. You get to learn from everyone's mistakes. And I'm sure that informs how you function and move through this world as an entrepreneur. What should we steal from you? Like, what are the tactics, the tools, and the strategies that you've adopted through so many seasons that have helped you succeed in life that we could internalize, that we could adopt, that would make us better entrepreneurs as well?

38:05So I don't know if I have all the answers, and I don't know if my business mirrors other people's businesses, but I have a couple of general philosophies that have served me well. First of all, I try to build a business that will survive 100 years. I want it to be bigger than me and last longer than me. I've built an incredible team around me that we trust each other, we respect each other, and we help each other out. And I've also built a team with highly complementary skills. Okay. So I know that I'm a great idea guy and I'm a pretty good people person. I don't like doing the same thing twice and I'm a horrible detail person.

38:47Most of the people around me compensate with me for my differences, but our core values and the only other thing I would say, find something you're passionate about. If you're not passionate about it, don't do it because I feel very lucky to have found a business that I'm totally passionate about.

39:30find the show. Also, if you want to take the stuff that we're talking about in these episodes from idea to execution, head to joshcopal.com. There you will find a ton of free templates and tools and all the details on upcoming learning events so you can keep building momentum. I know you're busy and so I don't take your time for granted. Thank you again for listening and I'll see you on the next episode.