We’ve all heard of Elon Musk — the real-life Tony Stark.
He’s all over the news…
He’s worth billions of dollars….
He’s created multiple brand-new companies — Tesla, SpaceX, SolarCity… the list goes on.
And EVERY business is about innovation, designed to pick up an industry and give it a MASSIVE shake.
That’s one thing we can learn from Elon… the importance of innovation — both in your deals and the businesses you buy.
Take the recent NASA-SpaceX partnership to put astronauts back into space from U.S. soil… Just look at how they innovated the space suits.
Here’s a picture of NASA’s suit — the one that was used when the U.S. space program sent astronauts into space 11 years ago.
Now look at the new SpaceX suit. It’s pure innovation: packed with modern technology, comfortable, lightweight and created by a fashion designer.
When you are doing deals, you can — and MUST — innovate.
Let’s look at an example…
One method of deal origination is the direct approach. The NASA version of this would be to carpet-bomb millions of businesses with a generic letter like this…
We are NASA. We want to buy your business. Call us.
WWSD — What would SpaceX do?
Tailor each letter to one business and the person who owns it.
It would compliment the owner on their business, citing specifics (customers, products, people, awards, etc.)…
It would tell the owner something about the business they may not know. Perhaps you go through the sales process and provide feedback on the experience…
It would leverage publicly available information on social media to determine the owner’s favorite sports team, vacation preferences, family life, etc. — anything to find a connection and start building a great relationship.
When it comes to structuring a deal — WWSD?
Let’s say you want to buy a business valued at $1 million.
The NASA way would be to cut a $1 million check.
But SpaceX would find a way to buy the business using other people’s money — seller financing, earn-outs, asset-based financing, SBA loans and more. These are all tools you too can use to innovate your deal structure.
Once the deal is closed, it’s time to grow and improve the business so you can sell it for a higher multiple in the future.
The key is innovation.
The majority of small businesses I see do little to no marketing.
When I ask a seller at the first meeting, “How do you currently win new business? What’s your marketing strategy?”
Most times the answer is, “That’s what is great about my business, Carl. We don’t have to do marketing. All our revenue comes from repeat business from existing customers and referrals they send from their networks.”
I LOVE these businesses — for TWO important reasons:
- A business that can trade comfortably has a solid core of revenue and profits. That money will continue to flow into the business no matter what.
- It tells you the business is doing something great to prompt customers to tell their friends about it and generate referrals.
When I buy a business like this, I simply plug in my marketing systems and all I see is upside — new products, new channels to market, new customers.
A higher valuation.
A bigger net worth.
All because of INNOVATION.
Innovation is key to betterment in all walks of life.
In our health, in our relationships — and in our businesses.
Anything you do in life, innovation will give you a massive edge. The edge to beat the odds… close the deal… grow the business… and start your empire.
Be like Elon. WWSD?
Until next time, bye for now.
Editor and co-founder, Dealmaker Wealth Society
P.S. Elon Musk is the KING of innovation — and what one of my colleagues learned during a closed-door event with Elon is about to shake up another essential industry with a MASSIVE breakthrough. No, this doesn’t have to do with self-driving cars or starting a colony on Mars… It’s something MUCH bigger. In fact, this innovation could completely change our way of living… See for yourself.