Evolving Business Minds

Mastering Residual Income and Market Growth with Franco Lofranco | #128

• Andy Silvius • Episode 128

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How you could transform a career-ending injury into a springboard for phenomenal entrepreneurial success? Franco Lofranco, a former professional soccer player turned business magnate, shares his incredible journey from the soccer field to leading global enterprises with sales exceeding $200 million. Franco Lofranco reveals the pivotal role mentorship played in his transition and the core philosophies from his upbringing that guided his business ventures. Tune in to hear about the invaluable lessons extracted from his early failures, often described as paying an "ignorant tax," and the importance of staying connected for ongoing mentorship opportunities.

Why residual income business models are not just a luxury but a necessity for sustained business success? Franco shares compelling insights into the power of recurring revenue streams, the critical nature of meticulous bookkeeping, and how to capture a profitable share of large markets. Gain a deeper understanding of how to build a resilient business by focusing on essential services that clients continuously need and the exponential growth potential of duplicating efforts through team building. This episode is packed with actionable strategies that underscore the importance of consistent revenue for long-term success.

Intrigued by the seismic shifts AI is causing across industries? Franco dives into identifying growth opportunities, particularly those ripe for AI disruption, and shares his proven strategies for adding residual income streams. Learn about the process of validating business ideas through client engagement, maintaining focus on a single venture, and the necessity of building a supportive team. Franco also opens up about his experiences in healthcare and insurance, showcasing how innovative technologies are reshaping these sectors for the better. Don’t miss out on these transformative insights that could redefine your approach to business.

Episode Sponsored by: Olive Branch Bookkeeping, Inc

Message from our sponsor: A profitable business needs a tailored financial solution for growth. Understanding your needs and what matters most to you is our #1 priority. We have put together a bookkeeping service that will allow you to take control of your business and future growth.

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Andy Silvius:

All right, welcome to another episode of the Evolving Business Minds podcast. Today's guest is an entrepreneur and residual income creator that has built global organizations in excess of $200 million in sales. He has a passion for creating dynamic, self-sustaining businesses that allow you to be free. I want to welcome Franco LeFranco to the show.

Franco Lofranco:

Thanks, andy. Wow, you said my name so nicely. Very romantic, how you said that.

Franco Lofranco:

Well, that makes me feel weird, but yes, yes, I'm glad I said it correctly, because I have a bad habit of botching last names on uh me too, like it depends where they're from, like what country, a culture they're from. It's like I used to be, uh. I played uh professionally when I was young soccer yeah and I hurt one summer, so they put me as the announcer for the games oh man, I had to say all these names from all these crazy countries about it, these poor players.

Andy Silvius:

I butchered them all yeah, that's tough now, what I've, what I've done, like when I first started my podcast, and this has been I don't know how long I've been recording it I think from 2020, and uh, I didn't used to do a ton of research on the guests.

Andy Silvius:

I would just start recording because I was a newbie. Now I actually go through and I'll try to listen to other podcasts that the guest has been on, because I have messed up so many names and just it's terrible. So before we get going into the show, why don't you take a minute if you don't mind, and just let everyone know kind of an overview of what you do with helping entrepreneurs and where they can contact you?

Franco Lofranco:

Sure, I've been an entrepreneur since I was 22 years old. Love entrepreneurship, love everything about it. I admire people that become entrepreneurs. It's not easy. It can be scary. You know you're going to be a risk taker, you're going to get out of your comfort zone, you know so I just have a lot of respect for those. I know what it's like to go through that. A lot of lessons learned. So I'm here to coach and support and help entrepreneurs on their path to success. Help a lot of companies now. I'll coach and mentor a lot of founders getting themselves to the next level. Hit me up on LinkedIn, cam Franco, or on Instagram, cam Frago. It's funny. Nobody gives their contact information. Just get me on social media, message me there. It's so funny when I go out now and I meet people especially if they're young, right Like you're younger yeah, yeah. What's your Instagram, what's your LinkedIn versus? What's your cell phone number?

Andy Silvius:

Yeah, I'm still used to asking for cell phone number or email, but I don't know. I think it's different times for sure. So I should have mentioned this in your intro. But uh, you are a ex-professional soccer player, so how do you go from being a soccer player to as ingrained in business as you are right now?

Franco Lofranco:

it's called getting injured. So when that happens it's like all right, all right, I blow. I blow both my knees, my ankles. Like I can't believe my ankles still are in my body, it's still attached. Reminds me of Steph Curry. I think Steph Curry right Uses like pig tendons to keep his his tendons attached, if I'm not mistaken.

Andy Silvius:

So it's like yeah.

Franco Lofranco:

So it's interesting when you've got um, you know your body falling apart on you. What do I want to do? And my dad? So I. I'm originally born in toronto, canada. My parents came from italy when they were young and my dad always taught me, since I was a little kid if I can go always own your own company, if I can go always own your own business, that's just what he brain mush knew it. So it's 22 at the time and I said what am I gonna do now?

Andy Silvius:

I'm like, all right, start a company and so you don't know what to start.

Franco Lofranco:

You just and I've always been crazy that way let's just jump in. So I've started different. My first three companies all failed. They all went. They all went belly up, which is kind of like a right right of passage. Uh, before you go big, because you got to learn like you just got mistakes and it's okay to make mistakes you just got to accept that and part of the deal and just keep going and keep fighting, keep learning. That's the key to to success. And surround yourself with mentors. I had one mentor who owned 80 companies, very successful billionaire, and I would meet with him, you know, from now, now and again for lunch or meetings, and he would give me great advice on how to build a company, what to do. And even even with that advice, you still fail, right?

Franco Lofranco:

Because you've got to go through it. You've got to become that leader. You've got to go through your own personal growth and development and that's when I really went into the entrepreneurship, really got entrepreneurship is learning leadership.

Andy Silvius:

It's the ignorant tax we have to pay, and I always kind of refer to it as my tuition money instead of going to college, cause I didn't go to college for business or anything and uh, but I feel like you'll. You'll learn if you actually apply it and learn from the mistakes and not keep making the same ones. Um, there's no book that can teach you that stuff. Hey everyone, I have a quick interruption from the show, but I'll make it brief.

Andy Silvius:

Um, there's no book that can teach you that stuff of branch bookkeeping Inc comes in offering not just book cleanups for those behind on taxes, but also comprehensive monthly bookkeeping, payroll management, corporate structuring and the key to informed decisions detailed profit and loss reports. Imagine this your financial records spotless and strategic, paving the way for growth without the headache of entangling years of bookkeeping yourself. With all of branch, you're equipped with financial clarity to steer your business forward. So if the thought of sorting out your finances feels overwhelming, let Olive Branch Bookkeeping lighten the load. They're more than just bookkeepers. They're your financial clarity partners. If you'd like to see how our team can help you and your business, I'll include a booking link and contact information in the show notes so you can schedule a free discovery call.

Franco Lofranco:

Well, if this makes you feel better. I went to college and I studied probably the most useless subject, political science, like no value whatsoever. And then I went to MBA school and I won't mention the name of the school because I won't embarrass them, but I go to MBA school and I was there for a year and then after a year I realized I'm not learning from people that built companies. I'm looking for professors teaching us theory of people that built companies and if I'm going to spend a gazillion dollars in business school, you better have built a company and teach me how you did that. So I literally quit. I go, I'm not going back. This is a waste of my money, wasting my time and went right into business ownership myself. I might just learned myself and do it.

Franco Lofranco:

So I like people say to me should I go to college, should I not go to college? I said depends. If you want to be a great entrepreneur, all you need is a couple years of financial management and understanding your spreadsheets and finance and balance sheets. That's all you need. You can get a company. I can do a community college. You don't need to go to some fancy college.

Andy Silvius:

You don't need some fancy degree and then go nuts, yeah, and if you still don't understand it after that, I mean, that's when you hire companies like ours, we have a bookkeeping firm that'll actually walk you through the stuff that you don't understand and guide you. But you're right, I mean I'm not a huge proponent of college, for the individual wants to go to business. Um, we've had this discussion with our daughter who's she's only about 13, but it's one of those things that's going to be a subject over the next you know, five, five years or so, and, uh, you know, of course, if you're going to be a doctor or something like, college is necessary. But I think everybody defaults to going to college. And you're right, if there's professors there that have never built a business, then how are they going to know the things that they're not going to know, the things you don't know, unless you run a business?

Franco Lofranco:

Well, a funny true story. So when I studied political science, my dad in Canada was one of Canada's biggest lobbyist political fundraisers, so I learned from the inside how politics really works. So I go to college and I have these professors teaching me politics and I'm laughing my head off in the classroom thinking to myself this guy knows nothing. This professor knows nothing about politics really works because I used to see it every day growing up and exactly how it works and what they actually have to do to get deals done and get policies passed. And it was not what this professor or these professors were teaching. So to me I laughed at all the classrooms and then whenever I tried to bring it up to the professor, they were you don't know what you're saying. That's not how it works.

Franco Lofranco:

I'm like all right, buddy, whatever you say, I'm like you just like just okay, whatever, I don't want to. You know, it's like is this worth my uh mental capital to go argue with these people? It's not worth it. You have to pay to go argue with them. Yeah, you know. Yeah, that's. Yeah, that's exactly that's the. I gotta pay to argue with you.

Andy Silvius:

But what I actually know that I grew up in that versus your theory so I I was excited when I started digging into all of your stuff, because you're a big proponent of creating sustainable businesses that have residual income and I think, to clarify terms you know residual for you is. I think some people might think of residual as like a passive income, but that's not necessarily what you're talking about, right I don't know what is passive.

Franco Lofranco:

Does anything really passive like? Does anything really not need you?

Andy Silvius:

I'm glad you're saying this because it's this buzzword online is passive income with YouTubers and people that are pitching this thing where it's like, oh, you put zero effort in and you're going to make all this money Like it just doesn't work.

Franco Lofranco:

No, and if somebody's out there, please send me that business model. I'm anxious to see it. Right now there's residual income 100, which is awesome.

Franco Lofranco:

That's what you want, you want residual income or you can create this recurring income stream it's a great way of defining it where money keeps coming in through the work you did once or twice, so you keep putting that in.

Franco Lofranco:

Now you got to keep fine-tuning it and making it better and still working on it. And whatever you're doing whether it's sales, whether it's selling something, that a service, or whether it's creating a youtube channel or whatever it is that you're creating yeah, and it's going to be creating some income, which is great, but there's always good luck if you, if you, the minute you stop working anything, you become obsolete and you and you got to keep working in and getting better and sharpening your axe and improving your skills every single day, all the time, because if not somebody else behind you, and pretty soon you've lost your entire business and you don't even know what happened. So for people that are listening to this guys, please don't believe the stuff about passive income. Don't believe that If that was true, they'd be doing it. They wouldn't be trying to sell it to you, right? They'd be doing it on their own. They wouldn't even need to promote it, because if too many people are doing it, then you can't even make money on it right.

Franco Lofranco:

That's just the truth of capitalism yeah so understand that and just just pick a lane, get good at it and then from there you can expand and do whatever else you want to do yeah, I love that it is.

Andy Silvius:

Um, it's just kind of crazy how things have gone with people. People are selling courses to other people about that kind of stuff and they haven't actually built it themselves. I see these things, too, where it's like, hey, we'll build you this shopify store for free and we'll make you all this money, but it's like what's the catch? Because that's not how this, it's not how things work.

Franco Lofranco:

So I always I've I've trained myself to always say this great, show me how you did yours. Yeah, show me how you applied this. And they're like uh well, you know I do it for other. Oh, where's yours? I mean give me some examples, yeah, and then what? Even I asked for testimonials. Well, what, what? Why did I get the testimony? Oh, okay, buddy, like, what are we doing here? What are we talking about? Right, stop selling me something that you haven't done or you don't even know what you're talking about.

Andy Silvius:

Yeah. So, like I was saying, I'm excited to have you on because there's a lot of. I interview all business owners and I have the privilege of having people on my show and people I network with, and I think there's a lot of people that are. Most business owners are still just trying to figure out how to have a consistent revenue stream, something that doesn't necessarily make them have to work 20 hours a day. And it was one of my struggles in real estate was if you're not grinding after getting sales, you're not making money, so you have to always be searching for the next sale. So I'm curious what types of business models have you found that have that will produce residual income? Like what? Is there a certain business model that you look for when you're looking at a business?

Franco Lofranco:

That's a great question and yes, there is, and I've learned this the hard way because my first companies, when I was building them, none of them had residual income and without me they made no money and it was very frustrating. Without me they made no money and it was very frustrating. So it's got to have a couple of factors. Number one it has to have a residual component. What does a residual component mean? It means you're selling somebody a service and you have to keep reordering that service. And the more valuable that service, the more important that service is to their everyday life, the more likely they will stay on as a client, right. The less important it is to them, the less likely they're going to be on there and you're going to probably lose them and they need to replace them right. So if you want to replace less clients, have a really valuable service for people and maybe an essential service, something important to them, something that matters to them. That's key. That's the first part. So have an important service that matters in their life that they have to have. The second thing is it's got to be duplicatable. So can you duplicate that out? Can you build an organization or a team of folks doing the exact same thing and that you can also teach that.

Franco Lofranco:

Otherwise, you're always just you and that's fine. You just want to just be you. That doesn't interest me. Like just me is boring, like I want to be able to leverage and grow and potentially grow exponentially. But to grow exponentially, I need a team of people that can do their part and then be able to create it. So those are the two things I look for. They're absolutely essential. Then I look for a marketplace that can be huge, can be vast. There's like a monopoly or big players, and you can go in there, potentially disrupt the industry in a powerful way, or just get your little piece of it. Like, just get a little bit. So big it's a trillion dollar, get your little piece right, yeah, from that. Whether it's telecommunications or energy or whether it's health care, whatever it is. Go in there, because there's so many huge industries. Get your little little piece of it and get your recurring income stream set up.

Andy Silvius:

Yeah, I like that. So I mentioned we own a bookkeeping firm and I'm not saying this to plug it in here, but it's just. We found something that was a recurring revenue model as well, because we provide a service and typically when a business is working with you, there's no need for them to walk away unless you don't fulfill on your service. And typically when you, when a business is working with you, like, there's no need for them to walk away unless you don't fulfill on your service, we're ingrained. We're so ingrained in people's businesses that, um, that they're going to be with us month after month after month.

Franco Lofranco:

Yeah, and let me plug you guys right, because I'll tell you, a bookkeeper is critical to entrepreneur. Because you gotta have, you gotta keep good records. For records for many reasons. Number one to know what the heck's going on in your company. It's a snapshot of your business and what's happening, right, you got to keep good records. And if one day you want to sell the company, obviously you want to get the maximum of value you can get. Well, you need someone like you to be there to make sure you're creating maximum value by showing exactly where the profit is, how you're building it.

Franco Lofranco:

All that good stuff so a company like you to an entrepreneur is absolutely mad. I learned that, you know, unfortunately, after a couple of mistakes, cause I wasn't clear on my financials or where I was going and where the money was going. That's why, like guys like you and companies like yours, andy, you gotta, you need it from the beginning, day one, to help you manage everything A hundred percent.

Andy Silvius:

Yeah, and my wife's. My wife's the bookkeeper, she's the head bookkeeper, but we've, we're building our team out, so we've got I want to say we've got four or five team members right now, but it's one of those things, like you said, you have to be able to put a team in place to grow exponentially. Now we're not necessarily growing exponentially at the moment, but we're building all the foundations to be able to handle it. And anyways, I don't want to get too much on a tangent there, I want to pick your brain. So what are some common challenges people face when setting a business up that will produce residual income?

Franco Lofranco:

Well, understanding what's the first part is the industries to go into right. A lot of people. They make a mistake. They go something into they're passionate about. I am passionate about this or I'm passionate okay. Well, that's cool.

Franco Lofranco:

It doesn't mean it's the right business for residual income. Yeah, doesn't mean. It may not be. It might be, but you got to look at, okay.

Franco Lofranco:

So if this is the industry I'm passionate about, is there a way I can earn residual income in this industry? So example let's say you're a fitness junkie Great. Can I own a gym that gives me residual income from members coming into a gym and recurring? Or can I set up a model where people are paying me to coach them and teach them through an app that builds residual income, not coaching one-on-one? That's not real residual income. Because now you're exchanging time for money.

Franco Lofranco:

Time for money exchange is not residual income. Because you, now you're exchanging time for money. Time for money exchange is not residual income. Uh, residual income is all about you sign up the client one time they're doing what they're doing using whatever service you've got, without requiring you to help provide that service. That's residual income on the on the side end or the back end, right, so that's what matters. So the key is you want to get into it? Cool, but what is the way to do it now? If you can't find a way to don't force it? Or you may have to, like, create a whole new way of doing the business, which is tough because pioneers usually aren't the ones that make the most money.

Franco Lofranco:

It's usually become second right somebody, that pioneer that makes the money right. So what the key here is? Uh, there's tons of places I always say. Say like, to me, passion is great, making money is better, right.

Franco Lofranco:

So, I get very passionate about making money right. I can learn to like anything. If the residual income is great, the money's great. I can learn to like anything. The key is, are you in the right industry Is it growing industry, or is it shrinking industry? And you've got the right systems in place, all that stuff. So that's where I would start with. Is the industry for sure?

Andy Silvius:

Now let's hypothetically say you're in an industry that's trading time for money and you've been in it, and I think it's difficult for people who've been in an industry for a long period of time to step out of that and go do something completely new. If you were an industry that was trading time for money, what would you do to try to add additional streams of revenue that would become residual?

Franco Lofranco:

I would look at incorporating industries that have residual into my existing business. For example, I work with bookkeeping companies right that want residual income. So we are in different industries, including healthcare, and healthcare is one of the biggest costs for entrepreneurs. So guys in your business understand that. So to folks such as yours say, hey, listen, you can introduce this new technology, new AI helping companies save 50% on their healthcare costs and you would make the residual income on their healthcare bills. So now you've got a separate size and you're helping your clients save money. And just an example, obviously, of music but you can help your clients save money.

Franco Lofranco:

You've already got a captured database right that exchanges time for money for what you're doing. But what else can you offer them of value that then has a residual income component, because a lot of folks have a captured database. How can you leverage that with industries and partner with companies to do that, whether it's merchant services, services, whether it's other things that you can bring to the table right that they could use? They can have that brings value to them because obviously, as the person doing their financials, you see where they're at. Can you save the money, can you improve their EBITDA, can you improve their profitability? That becomes huge.

Andy Silvius:

does it ever become what would be the word watered down or like? Do you look at those items right? Like you just mentioned, healthcare for other entrepreneurs Does the residual income stream need to be closely related to the current business you're in or does it just need to help the clients, even if it's in a different realm of their business?

Franco Lofranco:

Doesn't need to be related at all. It's a great question, doesn't need to relate and it can be anything, anything that helps bring value to the client and you've got a good partner that you know you can trust with that, because obviously it's also your reputation at stake. So you've got to make sure whoever you're introducing to them is going to take really good care of them. That's all that matters. The rest does not matter.

Andy Silvius:

Okay, if you were to create a brand new business from scratch today, what steps would you take to do it?

Franco Lofranco:

By the way, I do that all the time, so I'm constantly creating new companies and there's a few years that I got stale and I wasn't.

Andy Silvius:

Yeah.

Franco Lofranco:

And my wife goes. You know, you may want to consider getting back and building more companies again. I'm like you know what You're right and I love it. I love building companies, I love creating companies. I love it's just, it's a passion of mine. So we always go back to first principles. Okay, what industry do we want to be in? Principles? Okay, what industry do we want to be in? What's growing?

Franco Lofranco:

Now we got to be careful with AI. So there's industries that AI is about to totally annihilate. Can you profit from that? Can you be participating in that? Then there's other industries where AI is going to enhance. Can I profit from that? Can I be part of that? Then there's other industries where AI is still not sure how it's going to. What's going to happen in that field. Those are the ones you're going to be the most careful with.

Franco Lofranco:

Right, because if there's industries right now like, for example, there's the solar industry, so a whole bunch of industries where AI still hasn't figured out how it's going to help those industries out, well, okay, or energy, or anything like that those industries, what's going to happen? How can that be the service? You have to be very careful playing in those fields because you don't know what's going to happen. So you got to look at the industry and today you got to look at AI more than ever how it's going to disrupt. Then, if you've got a plan, I'll say, okay, cool, here's what I'm doing, here's what we're going, okay, that's a good plan. Now I will say this A lot of successful companies come come from people that are in a company or selling something through a company and realize you know what? I can go off on my own and set up my own company in Google.

Franco Lofranco:

I can improve the software or I can improve this service and make it better, knowing what my client needs. And there's no solution out there, let me go create my own so I tell people what business are you in? What industry are you in Like you're in the bookkeeping business, can you come up with a software that's not available that you would love to have your clients have? Yeah, there's QuickBooks out there. I've got a better one. Can I improve QuickBooks? Can I have a better ad in that I can then sell my clients? So sometimes you can just look even within what you're doing right now your own industry. What can I make better? What value? If your focus is just on, just focus on what value, more value can I bring my client, the answer becomes self-evident yeah, I love that answer.

Andy Silvius:

Now I'm curious if you have a framework for identifying what and I might be jumping around a little bit Do you have a framework for identifying what industries AI is going to disrupt? Because from an outside, like looking at it at a glance, it's definitely disrupting the creator space, the editing, the writing, bloggers but when it comes to other businesses, how do you know whether it's going to be something that is disrupted down the road or not?

Franco Lofranco:

You don't know unless you're in it. Right Like for me, I'm not an automotive, I've never been an automotive, so I don't know how AI is going to disrupt that. I'm sure it is. I'm sure robotics is going to, just like the restaurant business. I've owned restaurants in the past so I can see where AI and robotics is going to. Totally. I can see restaurants going from 10, 20 employees to three. I can totally see that happening in the future. So if you've got experience with industries, then you can see in that. That's what I'm saying Sometimes just look where you're at.

Andy Silvius:

Yes.

Franco Lofranco:

Where can AI disrupt this? And if it can, and you see, okay, well, this can then go partner with some folks that are great at creating AI and say, listen, here's what I want to do. Let's partner up, let's do something in this space, because here's a good solution, here's some clients we can grow, and what you can do. What I love, what I'm a big proponent of, is, before you even start, go talk to companies that could use that service and ask them look, if this came out, what would you be willing to pay for this? What price? Reverse engineer, price reverse engineer all right, guys, here's our task. Andy's willing in his bookkeeping company to use this software, but it's going to cost this much. He wants it at 30 bucks a month, he wants it at 50. But can we deliver that?

Franco Lofranco:

And then you go talk to other companies, just like that, and you reverse engineer and say, okay, because now you know you've got a market. What happens? People start developing stuff. Then they go market and they realize, well, people don't really want it or don't want to pay for it or not interested, and they're perfectly happy with what they are. Well, now you just wasted all that time and effort. So to me, it's like you go talk to the clients. You go talk to the companies and see what you can create right now, what they're willing to pay for it right now. That's what they're going to.

Andy Silvius:

That's a great, great tip. I have made the mistake before of building things, thinking that there was a market for it, based on my own personal research and my own like oh, I don't know, like just my own want of like having whatever I'm going to build and then nobody wants it and so doing the market research and actually asking people hey, would this be a value to you and what would you pay for it?

Andy Silvius:

that's huge, because most of us, I think you know, if you're driven you just start jumping into stuff, thinking, oh, I can make this work and you're just trying to force it 100 and I can't tell you how many entrepreneurs make that mistake.

Franco Lofranco:

It's like they believe, just because you like it, that everybody else is gonna like it. No, that's what I'm saying. Like, if you're in a particular business, you can see these companies are paying for this, but if it was improved this way or this way or this way, then maybe they pay more, maybe they pay different or whatever. You can see it. But then go talk to them, go ask them, listen, test them out. That's the best part, because you know what they'll also tell you if you interview them right, what the solution should be, what they could really use, and then boom, you just build something they already want. It's like the short circuits, the entire process.

Andy Silvius:

Now I do want to mention this because I think I have had a bad habit of doing this and I've seen a lot of other colleagues, friends that have businesses, do this, where they have a business that may be producing residual income, but they get to a certain point in their business and then they pivot or they focus on something new, and if they would have just focused in the direction they were heading, they could have done a hundred times the amount they were doing. Does that make sense?

Franco Lofranco:

Yeah.

Andy Silvius:

Just jumping around. How do you know, or how have you determined when is the right time to add a new service or product, or, you know, add another line of revenue to your business without without it, without it hurting the primary revenue source?

Franco Lofranco:

That's probably the hardest question for any entrepreneur to ask, because what an entrepreneur wants to do is do more and like, get excited. They're like squirrels, right Squirrel squirrel no opportunity, like they're always like. It's always like squirrels always chasing a nut right.

Franco Lofranco:

That's how an entrepreneur is with that opportunity. They're always chasing a new opportunity, they're always getting excited. And so there's there's different kinds of entrepreneurs. There's the entrepreneur who just has one company. They're happy with that company. They just want to build that company. They'll go invest in other people let them do that but they're just going to run their one company. It's one type of entrepreneur. Another type of entrepreneur is the one you're talking about. Is that they're a serial entrepreneur, like myself. I want to build different companies. When do you do that? When do you create that? And I will always say this Whenever you start a company, you better know your strengths and skills.

Franco Lofranco:

That's number one. And then, if you know that, for example, yours is sales and marketing good, who is going to run the ops of the company? Who's going to be behind you doing that? Or if your strength is finance and understanding the numbers great, who's going to do the sales and marketing for you? Right, who's going to be promoting the company, but promoting. So you've got to, as an entrepreneur, got to know your skills, what you're good at, and then what happens is you're going to get your goals. When you start a business, you got to go all out, focus on that literally 24 seven for however long it takes.

Franco Lofranco:

I remember listening to Jeff Bezos and he did a great interview on because he doesn't work on Amazon anymore at all. So and somebody asked him let you go sit on Amazon meetings and like what Amazon's doing right now? And he said no, because Amazon, the things they're doing today, was from two, three years ago, decisions they made. So they asked him well, what do you focus on, what do you work on? And he said the next two, three, four years new projects. And the guy asked him well, how do you do that? It was simple I spend three, four days a week literally all intensive just on that, because we got to get this off the ground and then, once it's off the ground, we got to make sure we put a team in place that can then run with it and then I can focus on something else, but that might take me four months, six months, take me a year, whatever it is, that's what I do now. I'm like oh, so he understands the power of intense focus, right.

Franco Lofranco:

So there's a three-step formula I use Focus, clarity, execution. First you focus and you'd be clear on what you want to build and what you want to create. Then you'd be clear on the plan. What's the plan? And then, third is execution. Go execute on it and once you see it's having success and you're achieving success, and then you can bring other people in to duplicate and run that for you. Now is when it's smart. Okay, now you can focus on something else. What happens to your point? A lot of times you'll have an entrepreneur come in and focus on what? Something else before those three things are fully implemented, and then they get themselves in control.

Andy Silvius:

Sorry, I don't know if that came through. I have a phone call started coming through my computer but yes, I agree with you. And that's they start switching. They start switching gears before they have the leverage in place and understand that they can have a team to do it. And it's difficult. I think as a business owner, especially a small business owner, that's newer, even if you've been doing it five, 10 years, adding leverage into your business and understanding that those positions should be able to help you move forward.

Franco Lofranco:

But this is why I said what we talked about earlier is so important. So remember, we talked about go talk to the potential clients that they're going to buy or do this, Because what happens is, if you start struggling, this is the mindset you have you start struggling. What's the natural tendency of an entrepreneur when you start struggling?

Franco Lofranco:

Switch gears Switch gears right Versus well, how do you know? No-transcript. That's why you win. To my opinion, to be an entrepreneur, you win before you start. I've identified your marketplace. I've identified what people are willing to pay for. Are you willing? Do you understand what you're getting yourself into and what it takes to execute on that before you even start? And if you do that, that, you dramatically increase your chance of success. By the way, do you know who understands this? Entrepreneurs that have failed, entrepreneurs that have failed, understand this right, because when they've usually failed we talked about this when you usually fail, it's because you learned this lesson. Oh my God, I didn't check, I wasn't't sure. I thought it was my gut told me this oh good for your gut, right, like my, I'm your gut. That would have been wrong. Well, yeah. Well then, yeah, what are you talking about, right?

Andy Silvius:

so which allows you to do a better job the next time around, if you learned from the first time if you learn, right, if you learn is there anything you look for to determine when is a good time to start scaling the business? And I know some of this kind of blends into itself. Right, but at what point do you ever look at a business and go okay, we've got enough revenue or we're missing out on revenue. We need to start adding team members and scale this faster.

Franco Lofranco:

Well, remember, you're always led by sales, right? So sales are always leading the way. So what there is to do is go all out on sales, sell, sell, sell, let's sell, let's sell, let's sell, let's sell, and I like to scale that urgently, quickly, fast, as fast as you can. So selling to me is the most important part, and then let everything catch up. I've never worried about selling too much. I don't worry. But we'll figure out the back end if we can sell on the front end. And so what's key is building teams of people that can go promote your company, go promote your service. Bring in the clients, the people that are excited that you have a good comp plan in place for people that they want to do that. So to me, that's always been the most important thing. I worry about the back-end ops. We'll figure that out, especially with today, with technology, with all the tools that are available to us. That's not a big deal. I never worry about that, uh, and what I worry about is selling like the one thing is killer companies.

Franco Lofranco:

Not enough sales, right, so too much sales. Always a good problem to have focus on. Well, how can I scale sales from day one, like, let's go, where am I going to be? What am I going to do? Obviously, if you're in producing a widget and you need, or you need something that's state dependent, like, that's different, but typically in today's world you know you could be selling anywhere and get product to anybody or service.

Andy Silvius:

This feels like a conversation I have with my wife, because we run the business together and I'm definitely the salesperson came from, you know, canick, but then went into real estate sales and and so I'm always pushing for more sales where she wants things more steady and calm and figure out how to make it perfect as it's going, cause she doesn't want anything to break.

Franco Lofranco:

And I'm like listen, you, you, you've got to just keep pushing, and that's how we figure it out as we go. Yeah, chaos is a beautiful thing, and I also tell people that I people and my teams and who I work with I tell them look, if you want to grow as a person, you have to get out of your comfort zone. If you don't get out of your comfort zone, you actually can't grow bigger and have more. You can't so only as you grow as a person, in your leadership capacity, in your personal development capacity and your ability to have more, can the company have more, because we're always the ceiling and the lid on our own company, unfortunately, right. So and how do you get out of there? You've got to force yourself to get out of that comfort zone. Sorry, that's just the way that it is.

Franco Lofranco:

Yeah, if you read any any of the, I'm a big. I'm a big proponent of reading. John maxwell leadership books is, to me, probably the best author on leadership ever, and he's got so many great books on this topic that I always tell people I recommend to read over and over again, explaining exactly this topic and how to grow and become more so that your yeah, I like it.

Andy Silvius:

Um, what industries have you been involved in? Because you you've had I don't know how many businesses. You've had quite a bit. I was trying to find the number online, but tons.

Franco Lofranco:

Yeah, I love, I love business. I look for residual income. When I first started, I was in. I built one of canada's very first high-speed internet companies. That's where I actually learned the concept of residual income. I go, go, oh, I signed up this client and they're paying me for this fiber system $20,000 a month. This is fantastic, right? This is great. Or I build a website and I post the website for them and they pay me a monthly fee on this website. This is awesome. That's when I first started to learn the power of residual income and recurring income. So love that.

Franco Lofranco:

So anything that's like important or valuable to people whether it's gas, electricity, telecommunications, internet, credit card, you name it those industries are all gold. Healthcare now. I'm involved in healthcare because I think AI is going to really disrupt healthcare in the biggest way. I see it totally happening. That's going to be huge because healthcare is one of those industries not been disrupted yet. It's about time and you're going to see AI disrupting in a big way. So that's another huge industry. It's a trillion dollar industry. So I look for large industries. I look for ways that you can get a recurring piece of the pie. I remember when I started my first internet company. It was really funny. It was back in the 90s, and when you're disrupting an industry, people will laugh at you. You're getting used to it. So people told me the internet is a fad. That's what they used to tell me Franco, why are you getting into the internet? It's a fad.

Andy Silvius:

Who's?

Franco Lofranco:

going to go online shopping. Nobody's going to do that. People have to go into the store, they have to physically touch something. I'm thinking to myself man, you don't know people very well, do you? You don't understand, right? And so the CEO of Bell Canada listen to this. The CEO of Bell Canada, canada's biggest telecom company, told me frankly, you're wasting your time with this internet thing. Now, two years later, he was fired and they had to go buy a company called uh, I think it was called I-Star for like 750 million, because they had no internet division, right? So it's, it's fascinating, interesting. So, to me, one of the things that I think you need in business is to have vision. You got to be able to see where an industry is going, what people want, what people are going to need, by asking questions Would you like this? Would you like this? And then some of it's going to be like, yeah, I think it's going to go here Like, right now, all this VR glass, all that stuff, people are making fun of it Like, oh, who's going to do that?

Andy Silvius:

Or it's uncomfortable because, yeah, because right now it's the first iterations of it, so it things evolve exactly, and the here's what's predictable, right.

Franco Lofranco:

As people get more and more accustomed to it, more and more used to it, more and more value out of it, the price starts to come down. You'd be amazed how many people then will adapt to it, right? So you've got to understand that human beings are. This is the good and the bad of people. We're very adaptable. That's good and bad, because we can adapt to bad things and we can adapt to good things. Right.

Franco Lofranco:

We have to be very careful what we're adapting ourselves to. But that's going to be, I, I think, one of those things that people, long term, we're going to adapt to well, you know, when you were mentioning all of this, it reminded me of the story with blockbuster, netflix.

Andy Silvius:

I mean, blockbuster was massive and they thought that you know, streaming was it was never going to take off. You know, kind of the same thing as what you said about people giving you a hard time about the internet, saying it was a fad. It's like, look at what happened to them. I don't remember the dollar amount, but they had the opportunity to buy Netflix for something like a couple million dollars. It was pretty low.

Franco Lofranco:

Really cheap.

Andy Silvius:

Exactly right, really cheap and now I don't know how big they are now, but they're one of the largest companies out there.

Franco Lofranco:

Well, you see it and you see an assuming, like I'm I where my business was up in canada was right near blackberry right, if you remember blackberry years and years ago, blackberry at one time uh owned more than 50 of all the cell phones in the world.

Franco Lofranco:

Think about that, they're one of the really okay, yeah, they were one of the most valuable people. People that are young don't know this about blackberry. They also were one of the most valuable people people that are young don't know this about blackberry. They also were one of the most valuable companies in the world way bigger than apple, way bigger than any company.

Franco Lofranco:

Right, they were huge yeah apple introduces something called the app and blackberry made fun of it. App, who needs an app? Blah, blah, blah. Right here comes apple. Literally within a few years, blackberry went from over 50 in the market to less than one.

Andy Silvius:

Done because they didn't want to get rid of their buttons either no right.

Franco Lofranco:

So they just they, because they were so convinced this is what people wanted, that people didn't want that or wanted this. They got totally annihilated by a technology called the app right totally, because people now saw the value of anyone so totally disrupted the entire industry. So you got to be careful with technology, because technology is accelerating faster than ever in our human history and so you've got to be very careful today what you go into. Now you can make a ton of money. The good news is it's going so fast that your company valuation can go from zero to 100 million overnight. If you got the right thing, the right technology, the right stuff, it's huge and people are willing to pay premium for that kind of stuff today. So that's the good news.

Andy Silvius:

But you got to be very, very careful what you're going yourself into I'm not sure if I already asked this, but what are some of the biggest challenges you faced in the beginning of your entrepreneur career and how did you overcome those?

Franco Lofranco:

Let's see, it depends on the time frame of my life. Right, as you grow and develop, there's going to be different challenges you're going to face. At the beginning, it was just being an entrepreneur, like the systems and the structures oh my goodness, what do I do? What needs to go in place? Like what you do, like bringing in folks to just being an entrepreneur, like the systems and the structures oh my goodness, what do I do? What do I? What needs to go in place, like what you do, like bringing in folks here to help me out? That was the biggest challenge at the beginning. Right, why? Why are you trying to generate revenue? Why are you trying? You have no idea about business systems right now. Those are like easy, they're automatic. You just put them in place.

Franco Lofranco:

You're like I don't have to think about it, but back then that was really tough and then once that happens, right, then you learn about okay, what's the mindset that I need? Because you're going to have ups and downs, you're going to have successes. I remember one of my very first companies I was doing import export to mexico and my very first companies. I started and we did five million sales in our first year, right and then, and we were very competitive exporting uh product from canada to mexico. It was great. But then mexico brings in a new president that floats the peso from the us dollar, because up until that point they were tied together and so they were one-to-one.

Franco Lofranco:

So we were very competitive and the the reason why the Mexican government did that was to increase the earning capacity of the middle class. So the middle class was starting to make more money, which was great. The problem is, the rich people in Mexico didn't like that. Why? Because their businesses were getting annihilated from folks like me coming in there and taking away their business, and so they didn't like it. So the next president that comes in didn't like us. So the next president that comes in no, we're not doing that anymore.

Franco Lofranco:

We're now floating the peso and boom, devaluation, 100% interest rates crush the country and then literally I go out of business. Literally like overnight I'm out of business. I'm like what? What happened? But I couldn't predict back then. I wasn't thinking well, what happens if the government does this? What if the government? I wasn't thinking about foreign macroeconomic policies that could have been coming into place, or microeconomic policies internally that could have changed stuff. I wasn't thinking about that, and so you got to think about all those things as you build your business. So that's another thing that you've got to consider. Like in the healthcare space, right now I'm thinking, well, what can an insurance company do to stop me? What can they do to come in and and convince the government. This is bad. What we do is better, even though we're three times the price, even though healthcare is not as good. So, like you, got to think about these things from a macroeconomic standpoint what are you doing in the healthcare space currently?

Andy Silvius:

are you, if you want to share yeah, I'm happy to share.

Franco Lofranco:

Uh, we've uh partnered with an incredible company that there's this. So there's new generation of carriers coming to the forefront that are all running on tech with an app. So imagine having an app and you can do all your health care from the app, including seeing a doctor, everything from AI. Running an entire platform that's saving people up to 50% of their health care costs. Running an entire platform that's saving people up to 50% of their healthcare costs. You can go to any doctor or hospital. Days of the oh, this is on, network is off, network is out with lower deductibles, all that stuff like way better experience to it. It's huge. So I'm bringing that and partnering with folks, because what I love to do is partner with people that already sell, so the little we're talking about. So I'm doing it, I'm partnering with people that already sell, so the little we're talking about.

Franco Lofranco:

So I'm doing it. I'm partnering with people that already sell to companies, already sell to individuals, and I give them the residual income for doing that, while those folks are getting better healthcare. So it's a win-win. Obviously, the loser is the insurance company, the typical insurance company, because but it's like everything else right, when you, when a new generation of company comes into a space, I'm the first usually to get a board. I've done my research, understand it, and I'm a board working and promoting those, those companies, cause they're massive. It's like I remember. The best analogy I can give is do you remember the first time ever you used Airbnb not Airbnb Uber Do you remember the first time you ever used it?

Andy Silvius:

Yeah, I think so.

Franco Lofranco:

Okay, so before that I only used taxicabs. Right, taxicab is smelly dirty. I hate to generalize.

Andy Silvius:

They're not friendly at all. This is glass.

Franco Lofranco:

I feel like a prisoner in the back of a police car, like that was basically-.

Andy Silvius:

Yeah, bulletproof glass.

Franco Lofranco:

Right. So I'll never forget this. I was in Dallas one day and it was like raining and I needed a car. I needed an Uber, I'm sorry, a taxi. I couldn't find one. So I said, ok, I heard about this Uber. I was very reluctant, like I was just didn't want to do it Like it's like I'm going to get in a stranger's car. It's so weird, I'm desperate. It's like late at night. So go on there, put in my info. The car comes within like five minutes. I go, wow, this is cool. So the car there picks me up.

Franco Lofranco:

The guy gets out of the car in the rain. Here, let me help you. Here's my luggage. Let me put the luggage in. Wow, this guy's friendly. This is so nice. I get into the car. The car smells nice. I go, wow, this car smells nice. I've never been in a car that smells like this. My, that's nice, right. Then he goes sir, would you like a bottle of water? Yes, sir, do you need your phone charged, by the way? Well, as a matter of fact, I do. And then he drives me. So friendly, having a nice conversation, he drops me off and I get the bill. I'm like it's a third the price Normally I would pay for this taxi cab, right? This is unbelievable. So you think now I'm never going to go back to can help it? Absolutely not Right.

Franco Lofranco:

So that's kind of like what's happening with a lot of industries, including the healthcare space, right, once you go to these alternate carriers, you will not probably go back to traditional insurance ever again. So that's what I look from that experience that people are not what happens at the end of the day, if you provide somebody with that killer experience, that's it. They're yours because they want that, and if you're giving them better value at the same time, it's a home run.

Andy Silvius:

The insurance thing is. I like hearing this because I feel like insurance hasn't really evolved or gotten better in our lifetime yet. The premiums and the cost of it continue to go up. So they charge you more, but they're not actually providing a better value to the consumer Not in my opinion and so disruption helps create change for an industry.

Franco Lofranco:

Correct. I'll give you an example. I went from 600 a month to under 300 a month with better healthcare. So I've gone to these alternative carriers. They're amazing. They're the fastest growing in the industry Like they're awesome and I'll tell everybody that wants to listen how great they are. And especially for companies like we can save companies a ton of money, like literally up to 50%. We're on average. We're saving a company. That's an average of what we're doing and their employees are getting better healthcare. Because here's what's happening In the small business space. Listen to this, andy 90% of small businesses don't offer healthcare. They can't afford it, right, it's too, expensive, right?

Franco Lofranco:

Well, what if what it costs would be half, then could you afford it, because-.

Andy Silvius:

It's a lot easier.

Franco Lofranco:

Yeah, what's the biggest problem for small business owners? What's one of the biggest? Keeping their good people. Because what are their employees looking for? Healthcare is so dang expensive, right. So now I work with a lot of companies now that they're in their marketing. Here's what they say we cover you and your family, because what it costs now with these new carriers for them and the family is less than what it costs for one employee on average.

Andy Silvius:

Yeah, and most businesses don't offer healthcare unless they're a larger corporation. There's, there's always this threshold when you you have to be a, you know, a larger, medium to large size business to offer it.

Andy Silvius:

Yeah, Unless you're able to understand you know increasing customer LTV, you know the lifetime value and raise prices and do those things to generate more revenue. But the next thing that needs to be disrupted is the automotive and home insurance space, because I don't know if you've been paying attention to what's going on there, but I think they haven't collected enough premiums over the years with all the policies they've written, and now they're denying policies. They're not covering things like. It's way worse right now than it was, you know, for the last handful of years.

Franco Lofranco:

It's insane. I'll tell you a couple of stories. So right now I've had a lot of those folks selling that pivoting and working with me now in the health care space because they're just struggling right now they're losing so many clients like a lot of them, for example, are getting out of the luxury car market like good luck if you've got a lamborghini getting health or car insurance right now.

Andy Silvius:

because like what for a tesla.

Franco Lofranco:

You know, like a tesla window cost to replace because it's such a unique thing and it costs so much money. So have you ever seen the rates on a tesla for car insurance? People are looking at the car. Oh yeah, it'll be a couple hundred bucks a month for a tesla. Uh, nobody, it's not going to be a couple hundred bucks a month for tesla.

Franco Lofranco:

So people don't get right now and what's about to happen with both to your home. There's a friend of mine was telling me that's in the space. He owns a big agency. There's a. He's got a hit, a policy in california. The house was valued at two million but the payout was six. Why was the payout? Says the house burned down because of everything inside the house. Well, it's valued at. Well, how do you make money? What are you going to charge these people? If you're, if your loss is six million dollars, like what are you going to be charging these people? A lot like what you can't. It's almost impossible to make money that way, and so that's why for them it's easier just to leave.

Andy Silvius:

Yeah, so we're getting close to wrapping up. I usually ask.

Franco Lofranco:

I'm like that's such a blast. It goes by fast.

Andy Silvius:

Man, if I have another appointment a little bit, otherwise I would say we keep talking all day. So I typically ask everyone this AI question. I feel like we've already kind of covered it, but I'm going to ask you anyways, just to see if we have a different, more of a different answer. But what are your thoughts on AI and how do you think it's affected business owners and entrepreneurs currently and how do you think it will affect them in the future?

Franco Lofranco:

I'll answer it this way how it should affect entrepreneurs versus how it will. Okay, how it should affect entrepreneurs is be paranoid of it and embrace it at the same time, right, so like, okay, you got to be like, like, literally like this could be the thing that blows up your business in a good way or destroys your business in a bad way, and you've got to be diligent as to where ai is going and what that means for your business and how it is Like, for example, in real estate folks in the real estate business. Right, if I were them right now, I'd be paranoid about AI coming in and doing all my research, all the work for a buyer, does all the documents, does everything. I don't need an agent anymore. Basically, I'd be like terrified of that right now If I was that.

Franco Lofranco:

Same with the mortgage space. Like I give an example. There's a company in Canada Listen to this. That's an amazing mortgage company. What they did? Let's look at their AI. Their technology connects to the top 70, 80 lenders in the country, okay, and all you do is put your information in one time, one time, so one credit check, but then what comes back is the best offer for you based on your needs and wants from those 70 lenders versus each one independently, which is crazy.

Andy Silvius:

That's a disruptor for sure, because I know there's a lot of moving parts when it comes to real estate. But one of the biggest struggles is getting pre-approvals and then obviously things can change in the person's finances. But if you're trying to shop around, you have a small window before it starts hurting your credit. So you have a small window for everyone to start running all your credit and then checking, and then you're going through all these correspondence between a bunch of different lenders to see what rates can be better, what's not. And then you know hopefully they're honest, but there's a lot of lenders that won't tell you about the hidden fees and things that are in there. So they'll say, oh, we can get you this better rate. But what they don't tell you is hey, I got to, you got to buy this rate and you got to pay all these other you know service fees along with it.

Franco Lofranco:

Yeah, and I'll tell you how good their technology is. And you're talking about them. I won't mention their names, but they're improving on average people's cash flow by the 20% per month.

Andy Silvius:

That's crazy.

Franco Lofranco:

That's crazy, but that's the power of technology really making an impact. So that's where you've got to be careful, be paranoid, look at it, embrace it and learn how to use it for your own sector and your own industry.

Andy Silvius:

Yeah, all right. One last question before we wrap up. If you could leave listeners with one actionable item that would have a positive impact on them today, what would it be and why?

Franco Lofranco:

You know I always say this look, whatever you do in life, nurture yourself, take care of yourself, meaning go into personal growth and development, take courses, read books. The rest of the stuff you'll figure out. But if you're happy, you're growing, you're not taking things personally, you're not getting stressed out, you're enjoying the journey. It's all about the journey. We can't take our money with us. We can't take our success with us. It's all good. It's not about making your neighbor happy or somebody else happy. It's about making yourself happy. Get into personal growth and development whatever money you got to on that. That is the best time and money you'll ever spend in your life I love it.

Andy Silvius:

Franco, I appreciate you being on today. This was a great conversation. I uh. I wish it could be longer.

Franco Lofranco:

I've had uh in the hey we'll get back in a few months and do it again.

Andy Silvius:

Yeah, especially since we don't live that far from each other too. Hopefully we're neighbors.

Franco Lofranco:

basically, this is fun.

Andy Silvius:

Yeah, hopefully next time I'll have a studio again, cause I used to have one up in in Idaho where I could actually have in-person conversations and not have to do the remote thing.

Franco Lofranco:

So I'd be fine do it.

Andy Silvius:

Yeah, Awesome man.

Franco Lofranco:

Well, thank you again and we'll plug all your information in the show notes, for everybody as well. Awesome.

Andy Silvius:

Thanks, andy, absolutely, and I want to thank you for listening today. If you've enjoyed the show and felt like it provided you value, I'd love to hear in the comments what stuck out the most to you. We'll see you on the next one. Outro Music.