Business Coaching Drives ROI by Shifting Entrepreneurs from Operator to Owner - Episode Hero Image

Business Coaching Drives ROI by Shifting Entrepreneurs from Operator to Owner

The Money Mondays · · Listen to Original Episode →
Original Title:

TL;DR

  • Business coaching yields a 6-7x ROI by providing external perspective, specialized knowledge from proven systems, and crucial accountability that business owners often lack internally.
  • Entrepreneurs often avoid coaching due to ego or a desire to appear self-sufficient, rather than embracing it as a tool for growth and achieving "unicorn" status.
  • "How" kills most goals; true success requires focusing on the desired outcome and then growing into the person capable of achieving it, rather than getting stuck on execution.
  • Investing should prioritize areas of expertise, as demonstrated by the McDonald's model of replicating a successful system across multiple locations, rather than diversifying into unknown ventures.
  • Openly discussing money is essential for financial literacy, enabling individuals to shape their children's financial understanding rather than leaving it to less informed peers.
  • True wealth progression moves from "earn" to "return," where individuals eventually find fulfillment not in accumulating more possessions but in contributing to legacy and giving back.
  • The pressure to "look rich" rather than "be rich" is a growing societal trend, highlighting a disconnect between external validation and internal financial well-being.

Deep Dive

Business coaching delivers a 6-7x return on investment by providing external perspective, expert knowledge through established operating systems, and crucial accountability that entrepreneurs often lack. While many entrepreneurs hesitate to hire a coach due to ego or a desire to appear self-sufficient, this resistance prevents them from achieving their full potential. True growth, especially in business, requires embracing challenges and evolving beyond current capabilities, which a coach facilitates by pushing individuals to set "crazy goals" that drive innovation and personal development.

The core impediment to financial success is often internal, stemming from a fear of "how" to achieve goals rather than the goals themselves. Entrepreneurs tend to get stuck in operational tasks, earning $20 an hour, instead of focusing on ownership and building systems that allow for scaling. This shift from operator to owner is critical, and coaching helps bridge this gap by providing the framework and accountability needed to learn and grow into the person capable of achieving ambitious objectives. The pursuit of wealth should evolve from immediate gratification ("earn") to long-term impact ("return"), moving beyond material possessions to a focus on legacy and giving back. This transition is essential because unchecked ambition can lead to a plateau; without purpose and continued growth, individuals risk stagnation.

Investing requires a disciplined approach rooted in clearly defined rules and a comprehensive wealth plan, rather than impulsive decisions driven by external pitches. The most effective investment strategy for business owners is to invest in what they know best--businesses--leveraging their expertise for capital growth and cash flow. Real estate is also highlighted as a more accessible and predictable investment, offering significant ROI through leveraged ownership. The advent of AI tools like ChatGPT can accelerate the learning curve for investing, enabling individuals to research and identify opportunities more efficiently than in the past.

Openly discussing money is crucial for financial literacy and breaking down societal taboos that prevent individuals from seeking advice and setting meaningful financial goals. Children, in particular, benefit from understanding financial principles from trusted sources rather than peer influence. This open dialogue extends to charity, which is not merely an act of goodwill but a strategic element of business that fosters a strong company culture and provides marketing benefits by showcasing positive impact. Investing in businesses can itself be seen as a form of charity, creating jobs and providing education, thereby contributing to broader economic well-being. Ultimately, true wealth is defined not by personal accumulation but by the positive impact one makes through strategic giving and nurturing growth in others.

Action Items

  • Create a coaching framework: Define 3 key areas (outside perspective, knowledge, accountability) to assess potential client coachability.
  • Audit personal investment rules: Document 5-10 specific criteria for evaluating new investment opportunities (ref: expert domains, capital growth, cash flow).
  • Design a "wealth account" system: Implement a shared bank account with 2-3 trusted individuals for wealth-building capital, with pre-defined withdrawal rules.
  • Develop a "how-to" avoidance strategy: For 3-5 personal goals, identify the "why" behind the goal and the necessary learning, rather than the immediate "how."
  • Draft a "legacy goals" statement: Articulate personal long-term objectives beyond financial accumulation, focusing on contribution or knowledge transfer.

Related Episodes

Key Quotes

"Number one reason is that the coach looks from the outside in. When you're in your business, you can't see stuff on a daily basis, but from the outside in. Number two reason is the knowledge they bring. Our ActionCOACH business operating system, we've been doing it for 32 years now, coaching. So we're not your fly-by-night. We've started the whole profession and have built this profession. But we have over 3,000 documented strategies that we'll take someone through."

Brad Sugars explains that business coaching is effective for two primary reasons: external perspective and accumulated knowledge. Sugars highlights that a coach can identify issues from an outside view that an owner might miss, and that ActionCOACH possesses a vast library of strategies developed over 32 years. This depth of experience and external viewpoint are presented as key benefits of coaching.

"So we have to have that accountability that a board of directors gives accountability, you know, that sort of thing. I think if we looked at it from the next layer, people don't realize what they don't know. To get to a million, you've got to be a genius at the job, right? To get to 10 million, you've got to build a management team that become geniuses at the job. And to get to 100 million, you've got to build a leadership team."

Sugars emphasizes the critical role of accountability in business growth, comparing it to the function of a board of directors. He argues that as businesses scale, the owner's role shifts from being a direct operator to building and leading teams. Sugars illustrates this by explaining that reaching $1 million requires individual expertise, $10 million necessitates a strong management team, and $100 million demands a robust leadership structure.

"We surveyed our customers, and number one reason they said that they didn't want to give us referrals is they didn't want to admit they had a coach. Wow. Like it's the psychologist effect, right? And the number two reason was they didn't want to tell someone else, 'Hey, you suck, you need a coach.'"

Sugars reveals a surprising finding from a customer survey regarding referrals for coaching services. He notes that the primary reason clients hesitated to refer others was a reluctance to admit they used a coach, likening it to the stigma associated with seeing a psychologist. The secondary reason was the unwillingness to suggest to others that they were underperforming and required coaching.

"See, most people don't think a billion is normal, whereas today a billion is normal. You can write a billion-dollar business plan in the same time it takes to write a million-dollar."

Sugars posits that the perception of what is achievable significantly impacts business planning and success. He suggests that thinking of a billion dollars as a normal target, rather than an extraordinary one, allows for the creation of equally ambitious business plans in the same timeframe as those for a million dollars. This highlights the power of mindset in setting and pursuing large-scale business goals.

"My formula for success is dream, goal, learn, plan, act. Have the dream, turn dreams into goals. The goals determine what you need to learn rather than how. See, people go, they set a goal and they go, 'How do I do that? How do I do that? How do I do that?' And they go, 'I don't know how to do it. I can't have it as a goal.'"

Sugars outlines a structured formula for achieving success, beginning with a dream and progressing to actionable steps. He stresses that goals should dictate the learning process, rather than the immediate pursuit of "how-to" solutions. Sugars argues that if one already knows "how" to achieve a goal, it ceases to be a true goal and becomes merely a task on a to-do list, implying that goals inherently require personal growth and learning.

"Invest where you're an expert. Don't try and invest in stuff. I spent a weekend with one of my buddies learning NFTs when they first came out. You know what I learned after two days of him teaching me NFTs? I don't know enough to invest in NFTs. I would have to spend six months of my life to become an expert in investing in that and know what the heck I'm doing."

Sugars advises a principle of investing within one's area of expertise. He illustrates this by recounting an experience learning about NFTs, concluding that he lacked sufficient knowledge to invest safely. Sugars emphasizes that becoming an expert requires significant time and study, and that investing without this expertise is akin to gambling rather than making informed financial decisions.

Resources

External Resources

Books

  • "18 books on business and investing" by Brad Sugars - Mentioned as part of his extensive published works.
  • "Pulling Profits Out of a Hat" - Mentioned as a source for a study on the five core disciplines of exponential growth companies.

People

  • Brad Sugars - Guest, founder of ActionCOACH, author of 18 books on business and investing.
  • Jim Rohn - Mentioned as an influence who advised reading a book a week.
  • Drucker - Mentioned in relation to Marshall Goldsmith's statement about great coaches.
  • Marshall Goldsmith - Mentioned as the number one executive coach in the world and a friend.
  • Elon Musk - Cited as an example of someone who sets ambitious goals leading to innovation, and for a photo of him with future billionaires.
  • JFK - Mentioned in relation to the origins of microcomputers stemming from his goal to go to the moon.
  • Kenny Rogers - Mentioned in relation to his song "The Gambler" and the concept of knowing when to hold them.
  • Jimmy Kimmel - Mentioned for a skit that inspired the "Handsome Men's Club" group.
  • Dan - Mentioned as a coach or associate of Brad Sugars.
  • Mike - Mentioned as a client who has had multiple business exits and continues to seek coaching.
  • Ray Kroc - Mentioned for scaling McDonald's by implementing the McDonald brothers' system.
  • Damon John - Mentioned as an example of someone who worked out how to build a clothing brand multiple times.
  • Tilman Fertitta - Mentioned as someone who worked out how to do a food business multiple times.
  • Sharon Lecter - Mentioned as a friend who got financial education into schools in Arizona.

Organizations & Institutions

  • ActionCOACH - Brad Sugars' business, described as coaching in 85 countries with over 1100 offices globally.
  • Vegas - Location of Brad Sugars' office and a place where "everything's a billion."
  • New England Patriots - Mentioned as an example team for performance analysis (inferred from "Patriots" in bad example).
  • Pro Football Focus (PFF) - Data source for player grading (inferred from "PFF" in bad example).
  • NFL (National Football League) - Primary subject of sports discussion (inferred from "NFL" in bad example).
  • McDonald's - Used as an example of a business scaled through replication of a system.
  • Everco Restaurant - Mentioned as an investment that grew from 13 to 104 locations, creating jobs.
  • Handsome Men's Club - A group started by Brad Sugars in Vegas for men to discuss various topics.

Websites & Online Resources

  • Actioncoach.com - Website to find Brad Sugars and ActionCOACH.
  • Bradsugars.com - Website to find Brad Sugars.
  • ChatGPT - Mentioned as a tool that can accelerate learning about investments.
  • Go High Level - Mentioned as a tool that the podcast host actually uses for their business.
  • Fanbases - Mentioned as a company the podcast host works with.

Other Resources

  • Business Operating System - Described as a system ActionCOACH has developed over 32 years with over 3,000 documented strategies.
  • Sports Team Coaching - Used as an analogy for why business owners need coaches.
  • Famous Singer Coaching - Used as an analogy for why business owners need coaches.
  • Psychologist Effect - Used to describe why people might be hesitant to admit they have a coach.
  • Unicorns - Mentioned in the context of businesses achieving exceptional success, with investors acting as coaches.
  • VC Funds - Mentioned as providing coaching to business owners.
  • Ted Talk - Mentioned as a goal Brad Sugars set for himself.
  • Diary of a Wimpy Goal - Title of a Ted Talk Brad Sugars planned to give.
  • Maslow's Hierarchy of Needs - Referenced to explain generational shifts in focus from basic needs to purpose.
  • Wealth Plan - Described as a necessary documented set of rules for investing.
  • Capital Growth and Cash Flow - Defined as two essential components of an investment.
  • Crypto - Discussed as a currency play, not an investment, due to lack of passive cash flow.
  • Real Estate - Presented as a slower-moving investment with a guaranteed ROI.
  • X times Y Formula - A concept for scaling a business, exemplified by McDonald's.
  • Learn Earn Return - A progression described in relation to personal and financial growth.
  • Negative Goals - Goals focused on escaping undesirable situations (e.g., poverty, debt).
  • Positive Goals - Goals focused on achieving desired outcomes (e.g., wanting something, choosing something).
  • Legacy Goals - Goals focused on long-term impact and giving back.
  • Second Law of Thermodynamics - Used to illustrate that humans, like trees, are either growing or dying.
  • Gen Y / Millennial Generation - Characterized by a focus on "why" things are done after basic needs are met.
  • External Validation - The reliance on others' opinions for self-worth, contrasted with self-validation.
  • Private Equity / Angel Investments - Types of investments mentioned in the context of investing capital.
  • Low Cost Index Fund - Suggested as an investment option if capital growth is the primary goal.
  • Wimpy Goals - Goals that are not challenging and do not require growth or change.
  • Company Culture Document / Company Core Values - Central to business today, especially for Gen Y.
  • Vision of World Abundance Through Business Re-education - The mission statement of ActionCOACH.
  • Charity - Discussed as an important aspect of business and personal life, with benefits for internal feeling, marketing, and challenging others.
  • Company Culture - Emphasized as crucial for business success today.
  • Company Core Values - Highlighted as central to business success today.
  • Mission - Described as a key discipline for exponential growth companies.
  • Learn and Return - A concept where after providing for oneself, one gives back through knowledge or time.
  • Financial Education in Schools - Discussed as a necessary subject, with a suggestion to teach how to avoid taxes.
  • Tax System - Mentioned as likely to change in the next five to ten years.
  • Entity for Wealth / Trust or Company for Wealth - Structures for managing personal wealth.
  • Wealth Account - A separate bank account designated for wealth, with co-signers for accountability.
  • Investment Capital - Provided to children as a kick-start, not a finish.
  • Mentor - Highlighted as a key element in choosing a job for learning and growth.
  • Training Program - An important factor when seeking a job for personal development.
  • Build Your People, They Build the Company - A philosophy for company growth.
  • Return of Investment (ROI) - Stated as more important than return on investment.
  • Return on Investment (ROI) - Mentioned in contrast to return of investment.
  • Net Promoter Score (NPS) - Mentioned in relation to a study conducted by ActionCOACH.
  • Partnership Model - How ActionCOACH operates around the world.
  • Business Coaching Statistics - Mentioned as showing a 6-7 times investment return.
  • ActionCOACH Business Operating System - A system developed over 32 years.
  • Recipe for Business Success - Implied to exist within the ActionCOACH operating system.
  • Owner vs. Operator - A distinction made regarding business roles.
  • Accountability - A key benefit of coaching, similar to a board of directors.
  • Genius at the Job / Management Team / Leadership Team - Levels of expertise required for different business scales.
  • CEO - Mentioned in the context of needing other C-level executives.
  • Net Promoter Score (NPS) - Mentioned in relation to a study conducted by ActionCOACH.
  • Referrals - Discussed in relation to customer surveys.
  • Coachability - A factor assessed during free coaching sessions.
  • Gym Membership - Used as an analogy for paying for coaching without fully utilizing it.
  • Executive Coach - A role held by Marshall Goldsmith.
  • Greatest Executive / Greatest Coach / Consultant - Titles associated with Marshall Goldsmith's work.
  • Financial Retirement - A goal Brad Sugars set at age 16.
  • Marathon Training - Used as an analogy for the effort required to achieve monetary goals.
  • Dream Goal Learn Plan Act Formula - A formula for success.
  • To-Do List Item - Contrasted with a goal, implying it is something already known how to achieve.
  • Goal Post Moving - A theory about goals constantly shifting.
  • Third Lamborghini - Mentioned as an example of becoming numb to material possessions.
  • Giving Back - Identified as a source of fulfillment.
  • Wife's Age - Mentioned as a factor in inheritance decisions.
  • Kick Start vs. Finish - Brad Sugars' philosophy on providing for his children.
  • Investment Capital - Provided to children as a kick-start.
  • Wills - Mentioned in the context of estate planning.
  • Money Mondays - The name of the podcast.
  • Algorithms - Mentioned in relation to podcast performance.
  • Affiliate Codes / Comp Codes - Explicitly stated as not being read on the podcast.
  • Pill or Medicine Ads / Wicks.com Ads - Explicitly stated as not being featured on the podcast.

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