What to Do When Business Gets Really Tough

0:00Eric Siu:You know that feeling when the strategy is done, the brief is written, everyone's aligned, and you realize someone still has to sit down and actually create all the content? That someone is you, and it's due tomorrow. Breeze Assistant can help. It works right inside HubSpot. Drafting campaign copy, blog posts, emails, all in your brand voice. All grounded in your actual customer data. So you don't just create content. You create content that converts. Check out HubSpot.com, the agentic customer platform for growing businesses. So I want to talk about one more thing because I was talking to an entrepreneur today and this is a good topic, right?

0:37Eric Siu:So what to do when things get really tough in business? So this is an entrepreneur and he's like, I'm really overwhelmed right now and this and that. And I think about, we can share our moments where we're most overwhelmed, right? I think about 2021, I'll go deep in here for a moment. We did two acquisitions, okay? Everything started crumbling. we had a uh a gm that was sabotaging the business right and so we're losing employees at the same that we're losing clients because of that sabotage that was going on um i had also um that's a very personal thing i'll just leave it at that um but i have a personal situation to deal with as well and so when everything was crumbling down you know i was like man i think i might just throw in the towel because there's a there's like you know there's there's like that situation as well.

1:20Eric Siu:There's just everything, like the walls were compressing on me, right? I told you to throw in the towel, remember? And Neil called me, he's like, hey, I have an idea. I was like, what? You should just bankrupt it. I was like, yeah, that's pretty reasonable, right? But like, in that moment, I'm like, you know what? If I keep going, right? And we make it work, it's going to be a great story at the end of the day. And I'm going to learn a lot too. Or I could just throw in the towel, right? Now, it's still debatable right now if that millions of dollars going back into things to save it was worth it.

1:53Eric Siu:But I will say that in terms of how I got through it, it's just every day, it's that you look at this as an elephant, right? Just a little piece of it every day, right? A little piece of it, just one step forward every day. Sometimes it might be 10 steps back, but just one step forward every day and things will get really tough. And I was just telling this entrepreneur today, I'm like, look, man, I get that you're overwhelmed and I get that you need to think about it on all these things. But the reason why people succeed is because they keep going, right? It's really, you don't have to be that smart.

2:21Neil Patel:You just have to kind of keep going. But in your situation, and you can cut this if you don't want this in here, you got royally screwed by someone. By many people. Yes. And they wanted money for something that they didn't deserve money for. And it was a lot of false promises. Eric's a nice guy. He can be stern. I would say I'm a little bit more cutthroat than you. Oh, for sure. I would have just been like, I'm suing you. I don't care. You're not going to get anything. Eric's much more nicer. I was like, you should bankrupt him and give him zero. And I'm like, you know, and there's other ways around it where he could have saved it or done some different structure things.

3:01Neil Patel:But I'm like, the other people are just trying to take advantage of him. They lied to him and they screwed him over and they didn't tell him, they didn't disclose everything that they legally were supposed to disclose.

3:10Eric Siu:Yep. No, it was, I would say one deal screwed me. The other one didn't. The other guy was like a good guy. I structured that wrong. I should have kept the founder there. That would have worked out. But then there's like the hire we made that had screwed, you know, like a mutual friend of ours in a company before. Oh, yeah, yeah, remember that. So, but that was a tough time in business where there's tough things going on personally. There's pressure coming in from all sides, but you either, you can throw in the towel or you keep going. And it's the people that keep, like you think about James Dyson, the Dyson guy, right?

3:37Eric Siu:14 years of failures, thousands of, I think it's 1400, something like that, vacuums that failed. And he He had three kids. His wife still stuck with him. And look at him today, right? I think it was a lion's share of the business. Although the last few years,

3:49Neil Patel:I don't think Dyson has been doing as well, but they're so big, they still do well relatively. It's okay. He has an exit every year. Yeah, yeah. No, they make a crap ton of money. But Dyson's had had a lot of competitors and companies that are just taking a good chunk of their market share. Like Shark is one. Melee has vacuums that are really popular and really good now. But there's tons of players who are copying Dyson. I like how you know the best vacuums. Dude, we have so many of them in my house. Yep. And they're expensive. You can have the one I told you to buy

4:17Eric Siu:and you still haven't taken it out of the box yet. I know. See, that's the one you can give to your kids and say, hey, you know, you can say, hey, Matic, follow me. And it just follows you around the house and you can clean this. But I have a full-time cleaner, eight hours a day, seven days a week. But it gives the kids something to do.

4:31Neil Patel:No, I want the kids to clean up their own stuff and do their own chores. Oh, you want to pick it up with their own hand? No, I make them do it. And my wife makes them do it. And then at the end of the day, After they make their bed, the housekeeper comes in and remakes their bed because the kids don't do it well. But it doesn't matter. They need to learn to go and do stuff. I'm not going to raise lazy kids. They need to have some grit and grind and they need to be responsible. And they need to understand that mom and dad worked hard to deserve this life. They did not work hard to deserve this life.

5:04Neil Patel:They got born into it. I do appreciate them. I brought them in so it is my responsibility. but that doesn't mean that they should just be spoiled and not have to do anything. So let's talk.

5:14Eric Siu:So I just gave an example. What to do when things get really tough in business. Why don't you go for one?

5:20Neil Patel:Mine's actually similar. Every time I've had things that get really tough, I push through. I usually figure out how to typically when things get tough, it's usually tied to money. Either you're not closing enough revenue or the profit isn't there or something bad is happening and that you could say people solve it or better product will solve it. But I look at the root as in if you had more money, it buys you time and you can hire the people or buy the companies that are competitors or build better products. Money comes down to a lot of it. What I usually do during hard times, I haven't done this in a long time, is I liquidate everything that I owe, like a home, literally my homes.

6:09Neil Patel:If you look at how many times I've moved, think about how many times I've moved. My average hold for a house is 1.5 years, 1.5 years. Anytime things get tougher in business or I see an opportunity, it's one or the other, I will liquidate whatever I need to so that way I can double down on the business. And that has worked out well for me, but I only do it when I really have conviction. But I will say this, the other day my co-founder asked me, he's just like, you got a mortgage on your house, right? And I was like, yeah. He's like, why'd you take out the mortgage? And I was like, dude, I get a really cheap rate.

6:50Neil Patel:Call it 4.5%. I believe it's interest only, which is dirt cheap in this economy. me uh and i was like dude there were some stocks that were i believe at 60 70 discounts that i just put the money into and he's like why'd you do that i'm like i believe i'll make more than the overall mortgage like the dollars that i owe like the debt i owe on the house and in 12 months i bet you i'll be able to pay off the mortgage and keep the same amount of money that I pulled off. And I only did it for that reason because I thought it was very low risk. But generally speaking, he's like, so then why would you want to pay off your home after?

7:32Neil Patel:And I'm like, well, whether I do that, the stock sells or not, I would just pay it off in the next 12 months. I don't want a mortgage. He's like, why don't you want a mortgage? I'm like, I have a family, I have a wife. If I pass away, I don't want less. I want less worries for my family. so then that way they don't stress out. So then he asked me, if we found this amazing business opportunity and it requires you to liquidate everything, would you do it? And I said, one, at this point in the business, I don't think that's realistic and we would have to, but two, I'm open to it. I would have a family discussion, but I don't want to.

8:08Neil Patel:And he's like, why don't you want to? And Eric mentioned this to me or it was someone, no, I think maybe Eric did, but also my head of AMIA, Mark Fagan mentioned this to me. He's like, have a nice home with a big backyard and a backyard's hard to find in Los Angeles. So that way your kids can run around and be happy. And they're so happy. And the moments I have with my son, when I'm home and I'm not traveling, I play soccer with him almost every single day in the backyard. We do foolish stuff, like trying to kick the ball on the roof or get it stuck in a tree. I know we're not supposed to do that and mess up the roof tiles, but I don't care.

8:47Neil Patel:Those memories to me are priceless and worth more than how much more I can make in the business.

8:52Eric Siu:Yeah, well also, they're old enough to know what's going on now, right? And like before when Neil built the home and he moved out like a month after he finished building it, like they didn't know what was going on yet. Now it's like they're building something here. They're like making friends and all that. You have a community here now. So it's harder to pull it out.

9:11Neil Patel:You nailed it. My son, when we moved into the house, You know what he said? Mommy, I love my room. I love this house, but don't let daddy sell this one. I want this one.

9:21Eric Siu:Yep. So when you say family meeting, it's never a family meeting.

9:24Neil Patel:It's Neil's decision. Yes. My wife would be down for whatever I want. She's always down for anything. And she doesn't care too much about homes and stuff like that. If she had to pick the number one thing she cares about other than health and family, it would actually be kids' education. If I said, hey, we had to pull our kids out of the school, that is a very hard conversation that I won't win.

9:45Eric Siu:It's nice to have stability, right? Speaking of stability, so we've been interviewing these people to join the company, right? And I always anti-sell them at the end. And this guy was like, you know, the company I'm at right now, this guy's an SEO leader, right? He's like, the company I'm at right now, they're just not AI Ford. I'm like, how many people are your company at AI Ford, right? Like he's like 5%. I'm like, he's like, yeah, you know, I really want to grow. And he's like, you know, what's also really important to me in this point in my career is stability. I'm like, wait, but you want to grow.

10:11Eric Siu:And you kept using the word stability, right? And so at the end of the interview, I was like, look, man, I'm going to anti-sell you right now. And this is for anybody that wants to join and work with us, right? First of all, if you're going to work with us, it's not a nine to five. It's a startup environment. Okay. So don't expect a clock in, clock out. So the second thing is don't expect stability, right? It's like when you're growing very quickly, I would say that, you know, it's, it's stable from a, you know, you're going to learn a lot. It's a good job. And, um, you know, we have, we have great clients and all that, but inherently if you're trying to grow, like if you're lifting weights, for example, you're, you're tearing muscles in your body all the time, right?

10:46Eric Siu:Like that part is unstable. Um, and I also said, what else did I say? I said, Oh, expect direct feedback and expect it in public sometimes too. Right. So by the way, Neil does a good job with anti-selling people. Sometimes, sometimes it works, sometimes it doesn't. But you're better off from a toughness standpoint doing that because if you end up hiring these people and they're not a fit, it's way more painful. So stability is not something that's necessarily in my vocabulary right now because of the nature of where things are.

11:14Neil Patel:You have quite a bit of stability. You and I are actually very similar. If you think about it, either we're stable on our personal life or stable on our business life. We're very rarely ever stable on both. You are stable right now on your personal life. I'm very stable right now on my personal life. Both their businesses are chaotic. I wouldn't say they're chaotic in the way they're doing bad. We're just changing a lot of stuff. We're pushing, we're putting a lot of pressure. We're trying to grow faster. There's a lot of chaos in business. I would say personal life is very stable. I prefer the chaos in business.

11:48Eric Siu:So yes, I don't know how to create chaos, the good chaos, not the bad chaos. Not the whole like five years ago. No, no, no. Yeah, yeah, yeah.

11:55Neil Patel:I don't consider that chaos. I look at that as a disaster. Yeah, yeah, yeah. I look at chaos as in like, you're changing a lot of stuff so it creates pressure, people get uncomfortable, but from that, usually causes more growth. So I like that. Dude, yeah, no pressure, no diamond.

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13:00Neil Patel:When things, I've never had both very stable. I have to have one that's somewhat chaotic because I get bored.

13:07Eric Siu:As long as I've known you, you've mostly have had stable, you know, personal stuff for the majority. Yeah. It's usually business. Yeah, you've never, on a personal side, I've never seen you that unstable. Yeah, it's usually business. Business side, but the business instability is caused by you wanting to grow. So it's been good.

13:27Neil Patel:The business chaos is usually stuff like me yesterday. I get my CEO on the phone. I get my CFO on the phone. I get our head of legal on the phone because we have an in-house counsel. And I'm like, hey, I got a deal. A buddy wants to sell his company. These are the numbers he told me. He needs to close in 30 days. Let's make it happen. you have the data room access. See you guys later. In less than three hours. And I'm right. I was like, see you guys later, but let me know if you want to call. They're like, how about we have a talk tomorrow morning? I'm like, analyze the data room today. But I was like, I'm speaking in the morning, so I won't be able to do the call.

14:05Neil Patel:We did analyze the data the day it came into the data room within an hour or two. And then the chaos went away because we quickly realized the numbers don't work out. And it wasn't that it's a bad company. The numbers that I was told over the phone versus what the numbers were really were two different things. So then...

14:25Eric Siu:Isn't it funny? What percent of the time are the numbers that they tell you versus the real numbers accurate?

14:30Neil Patel:Dude.

14:31Eric Siu:Zero percent.

14:32Neil Patel:No, not zero percent. Are you talking about banker processes or non-banker processes? Let's go both. Non-banker processes, almost 100 % of the time, their numbers are off. That's what I'm saying. banker processes the numbers aren't really off it's just how they move around numbers but in non-bank processes someone could be like i'm doing three million a year in profit or five million a year and you look at the numbers you're like this is not five million a year in profit this is three million a year in profit you're off by two million dollars you know when you do three million i don't know how you think three million is five million there's a big difference you should know the cash flow and i saw this firsthand when i was talking to someone and we were trying to do a deal they're like yeah we grew really fast in a year and a half we're now at uh three million dollars a month so they're growing extremely fast more than tripling and we're trying to analyze see if we can do a deal and then within a few weeks they're like oh we were off by numbers by eight figures and i'm like how the heck are you off by your numbers by eight figures eight figures is more than$10 million.

15:38Neil Patel:You should know in your bank account if you can see the money or not. Non-banker deals almost always are off. Banker deals, they're pretty accurate on their revenue. They're not as accurate on their profit because it's what they classify as profit. I had another deal that we were about to do. We walked away from two deals literally in two days that we thought we were going to do. The one yesterday, it was a long shot. We didn't really think we were going to do it. We're like, if the numbers are true, I told the person on the phone, And I'm like, we'll do the deal. The numbers weren't, so I don't feel bad.