Here's the hidden thing
that most people don't know about the split.
It sounds more difficult. Mm-Hmm.
I gotta work with the credit card processor
and they're supposed to send me my percentage.
I don't know how to do any of that stuff.
That's where people get lost. I don't want to know.
I don't want to do the technical stuff,
and I just wanna debit the bank account.
Okay. Well, you're doing yourself a real disservice.
Let me tell you about why the split was so good
beyond just worrying about the cash flow.
Credit card processing is its own very,
very lucrative industry.
Mm-Hmm. A trillion dollar industry. Yeah. Okay.
And a lot of people sell credit card processing to stores.
How do they make money? You wanna know how they make money.
How do they make money? They take a percentage
of every credit card transaction that a merchant does buy,
sign up a restaurant to accept credit cards.
I get them the machine. Right?
I get them the POS system or whatever to sign up through me.
I just work for a company.
It doesn't have to be me as the
company, but I work for a company.
I sign 'em up to take credit cards
and debit cards through me going forward.
Every time they process the transaction,
I'm gonna take an a fraction of each sale that they do,
no matter what not because they're repaying something.
That's essentially my commission.
That's what I get paid in perpetuity.
If the restaurant is around for a hundred years
and they never switch their credit card processing
away, guess what?
I just automatically get paid a percentage
of your sales for a hundred years.
I don't have to do any work. So guess what?
That's a pretty good business to be in. Yeah.
If I sign up a hundred restaurants, I could just retire.
I don't have to work anymore.
Everyone stays where they are and they don't switch anything
and they're happy with the service.
I could just get a monthly payment
from all those micro percentages every month
and just live my life.
People do that. That's what people did.
You can do that with thousands of businesses
and create a whole portfolio
and become a millionaire almost passively.
People then can sell those portfolios for multiples.
Say, Hey, I'm predicted
to own X amount over the next few years
based upon my portfolio.
I'll sell it to you today for X.
This is a gigantic industry. Yeah.
In fact, this was the most lucrative part about the
small business finance industry.
MCA industry. In the beginning,
the commission on the funding was a distraction.
Mm-Hmm. The real secret was making money on
this is called a residual.
The residual on their merchant account.
You sign a merchant up
for your credit card processing service.
It's actually not that hard to do.
It's easier to to do than it used to be. Yeah.
And you make a percentage on every sale they do
without having to really do anything at all.
The fact that you're getting a commission
for funding them was just a distraction.
A nice upfront lump. Lump sum payment.
Let's not, let's not diminish
the value of those commissions.
Yeah, yeah, yeah. Those commissions have driven
this entire business.
But guess what? Imagine
if you could just say, you know what?
I don't want to do this anymore.
Trying every month, start over.
Trying to get to more funding. Right? Mm-Hmm.
You don't have to do any of that stuff. Yeah.
You could sign up a thousand merchants
and then say, I have, not only did I get a thousand
commissions out the funding,
but now I have this million dollar portfolio.
I make a million dollars passively just
'cause I signed up a thousand businesses
to accept credit cards through me.
I might be exaggerating with a million.
But the point is, it could be a large number enough
to sustain yourself, and you might not have to work anymore.
Of course, customers do drop off.
They go to competitors, they stop using
your credit card processing service.
They go outta business. There's all these other type
of things that come into play.
People say, Hey, I wanna lower my rates, yada, yada, yada.
But the real secret
of the business was the merchant account.
Back when I was in the business,
I didn't wanna do a CH as a sales rep.
That was the worst thing you could do
because the real money was in getting that residual,
signing a merchant up for credit card processing,
and if they stop getting funding from you, it didn't matter.
I made a percentage of all
of her sales forever and ever and ever.
For years. They didn't have to talk to 'em ever again.
It didn't matter. That's what the business was based on.
If you think, well, okay, yeah, that was long ago.
You know, no one does that anymore. It's all changed.
Strong, wrong. The largest funders in the industry right now
all do splits.
I mentioned it at D Bank Connect Miami.
Who are the largest funders in the industry?
The ones that do splits. Look it up.