The Wealth Factory Podcast: Episode 4 – “Scaling Your Business for True Wealth”
Guest:Ā John Richards
Entrepreneur, investor, mentor, and educator who founded the first online Yellow Pages (led to IPO and multi-billion dollar valuation), served as Google Fiber’s head of operations in Utah, taught entrepreneurship at BYU, and manages a pre-seed venture fund.
Host: Scott Larsen Marketing Director of Wealth Factory
Episode Highlights:
[06:05] Introduction to John Richards and his extensive background in entrepreneurship
[08:01] John discusses his journey from pre-med student to entrepreneurship: “I was a pre-med in school. Actually, the place I taught Brigham University is also my collegiate Alma mater… my senior year, I just kind of discovered, maybe medicine’s not for me. And so I actually rediscovered a love for entrepreneurship and business.”
[10:12] How John launched the first-ever Internet yellow pages: “After about 12 years of doing print publishing, I realized the Internet was going to have a dramatic effect on that. So I launched the first, ever Internet yellow pages.”
[11:18] Insights on the profitability of the yellow pages industry: “The phone company phone books would run literally 50% net profit… when they got broken up and were disallowed to do those type of monopolistic practices, it became much easier to compete against them.”
[13:10] Financial lessons on ratio analysis: “We had a current ratio of 11 to one… I was able to say, ‘Hey, let’s not run it 11 to one current ratio. Let’s bring it down to a normal 2 to one.’ And so we went out and acquired adjacent competitors, and expanded.”
[15:34] John’s approach to cash flow management: “We collect $1,000 on contract, then $1,000 when we show them what the ad would look like when the book was published, and then the last third after the book was printed and delivered.”
[17:16] Importance of proper asset protection and estate planning: “Long ago, when I first sold that first print publishing company, I educated myself tremendously in estate planning and asset protection.”
[18:23] Cautionary perspective on wealth: “I’ve seen a lot of wealth create and been around a lot of people that became very rich, and I’d say somewhere between more than half and as high as 70 to 80%. The money actually destroys their life.”
[19:50] Advice on making businesses scalable: “To create wealth, you’ve got to introduce elements of scalability into it… there’s lots of different ways to do that.”
[21:36] The importance of working “on” your business rather than “in” it: “It’s more important to work on your company than in your company… a lot of people don’t get that.”
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